Countering the Arguments (Part 7)

Can't use Fund Balance?

In the prior post, an image from the District Vetted Document cautioned on the appropriate use of Fund Balances for operational uses. According to the statement, only unexpected events would be the recommended triggers for tapping into those reserves. But then the following bullet item was listed:

Before demonstrating the inconsistency with this statement, it is important to point out that one of the key recommendations for the use of Fund Balance is the existence of volatile or unexpected revenue impacts. Thus, a municipal budget referendum that has only occurred 3 times since it went into the Charter could be considered completely appropriate to trigger Fund use. To compound matters, in this piece describing how to use it, the recommendation was to simply use it as a placeholder, and return it once operational considerations were reconciled.

Add to this the above statement. The projected balance of $1.1 million is significantly below the $2.7 million where it was at the beginning of this fiscal year. The only way that balance could go down is if the district used it. And if so, are they projecting a $1.6 million spending deficit this year? What unexpected one time costs happened this year? And should we pretend the $17 million fund balance in the town doesn’t exist?