[R]UTLAND — The previous fiscal year ended June 30 in Rutland, but bills racked up during those 12 months still kept coming in.
As a result, a projected $90,000 general fund surplus that was factored in when setting the tax rate last month is now a $153,352 general fund deficit.
The greatest portion of that $243,352 swing is a result of a bill that City Treasurer Wendy Wilton said she did not initially plan on. The bill was for about $150,000 for paving on Dorr Drive.
Wilton updated the Board of Aldermen on the latest financials for fiscal year 2017 at a meeting Monday night. The swing in the general fund won’t change the tax rate the board set.
Instead, it will reduce the money kept aside as “working capital” or cash on hand that the city expected to have at the start of this fiscal year. That amount will drop from $1.8 million to about $1.6 million.
Wilton told the board Monday night that she tried, at the time the tax rate was being set last month, to project expenses that had yet to come in for fiscal 2017.
“Unfortunately, there was a lot more coming through the accounts payable than I had predicted,” she told the board. “I really tried my best at the time we set the tax rate to figure out how much more would be coming.”
Those included the paving bill, she said, among other expenses and year-end adjustments.
When setting the tax rate, the board debated a great deal over how much working capital to keep on hand for the start of the current fiscal year. The board decided to reduce that number from about $2 million to $1.8 million, or from about 10 percent of revenues to 9 percent.
That $200,000 cut meant a reduction in property taxes for a home valued at $150,000 in the city, turning what would have been a projected increase of about $24 to a decrease of $6.
The move to reduce the working capital to $1.8 million came over Wilton’s objection. She pointed to a Board of Aldermen policy from 2010 that calls for keeping 10 percent of revenue on hand for working capital, or about $2 million.
The purpose of keeping that working capital on hand, the city treasurer said, is to hedge against cash flow problems that may develop through the year and result in the city having to borrow to meet expenses.
However, the board unanimously backed cutting back that working capital to 9 percent of revenues.
Board members at the time talked of wanting to save as much money as they could for taxpayers as well as sending a symbolic message that taxes were going down, not up, in the city.
Wilton said at the meeting Monday night that a general fund surplus for fiscal year 2018 won’t be easy to obtain.
Money the city used for buying down the current tax rate won’t be available this year, she said, including about $475,000 from fiscal year 2016 that was budgeted for a legal fight but never used. That case, having to do with water quality in Moon Brook, ended in a settlement with the state.
