Hebron Dollars & Sense

This fund needs to be watched. I still cannot understand how it operates. It is not a simplistic issue of dollars in and dollars out. The explanation of the "flow" of dollars around this fund are so convoluted I am not sure anyone but the individual penciling the numbers into the reports "really" knows what is going on. I need to check out budgets from prior years, read through audits and re-read the audit report on the Finance Department's page and be mindful .. the procedure in place has been there for quite a few years (before the current employees were in place). They are NOT responsible for this.

I asked about it at the public meeting and couldn't even form a clear question. The entire BOF appeared fluster and someone even passed a paper over to the chair with a word that was suppose to help explain this fund. Ms Feree offered to answer my question but I really have no idea what she said. Wish my question was more direct and intelligent. Obviously, it was a question the BOF did not expect to hear.

I thought a portion of our town was paying on this debt (according to prescribed payments). Now there is a "deficit" in the fund (doesn't that imply some funds are NOT THERE), The confusing slides were #24-26. Even the column titles are not self explanatory but one note on the side attracted my attention: "Taxpayers benefited from the contribution into the general fund for nineteem years, with a reduction to the tax rate." I am still not sure why that is even posted. Side notes on the charts add to the confusion - no one knows what they are referring to.

You can view these slides on the finance departments page on the town website under "Proposed Hebron Budget 2011-2012" -- CLICK HERE.

Actually, I found a reference to the sewer fund and the deficit on the live streaming meetings on-line. Check out the BOS/BOF meeting (March 22, 2011) on the home page ... from approximately point 124:12 forward in the tape. Their discussion is also pretty muddled. Ms. Ferree questioned why funds were moved into the general fund from a fund running a deficit. I knew I had heard this conversation before and searched for it tonight again. There needs to be a better explanation of the accounting for these dollars. Be sure to move the time marker ahead to at least 123 minutes.

Click here for the link to the March 22nd meeting

Thank goodness reporters show up at our town meetings. The two articles (one on front page of the Hebron Bulletin) and the other in the Hebron section of the Rivereast News Bulletin - April 15th) appear to validate some of my thoughts.

Some statements in the articles:

(1)depletion of funds that, in the past, have offset taxes; (2)hundreds of thousands of dollars from the payments were transferred into the general fund as a way to offset tax increases; (3)money ran out a few years ago and now has a deficit of about $330K; (4)"mismanagement" throughout the years was a quote from the BOF chair; (5)money was treated as extra revenue and shouldn't have been

The quote, in News Bulletin, is rather unique: assessments were collected in full rather than over 20 years. (Since when is early payment a BAD THING??) Do the citizens who paid off their debt also face increase taxation because those funds are GONE? It appears they paid once and will pay again now to cover the shortage in the fund? Since only part of the town paid into the Sewer Assessment Fund, it also appears, they (alone) were subsidizing projects for everyone else in the town. Although the BOF spin is it "... was beneficial to all residents because the tax rate was kept down...". No mention that not everyone paid into the fund, so where is the equality?

Monies collected and earmarked for the sewer fund should have been used solely for the sewer fund debt. It certainly "appears" those funds were diluted in the general fund and considered "revenue". Does this sound like the correct interpretation?? I asked about a paper trail and believe there is none. Thoroughly disgusted ... if someone noticed this happening a few years ago, corrections should have been made. This sounds like an old shell game!!

Mombert wrote:



woulda coulda shoulda

My understanding on this is that it is a sewer issue - it stinks!


I recall hearing that the "prepayment" on assessments happened because of property sales and/or mostly refinancings.

Monies for this project have been collected and spent, for the benefit of ALL Hebron taxpayers - including those in the Sewer District.

However, since these funds were already spent for all taxpayers benefit on general fund projects/items, then all taxpayers (both those in the sewer district and those not) will be asked to pay for these other expenses when money isn't there to pay the sewer expense.

The folks in the sewer district are not being asked to pay twice for the same thing - they were asked to pay for the sewer expense, and they previously were not asked to pay for things like education, snow removal, etc. When the sewer payments are due, and the money is not there, then ALL taxpayers have to pay because the prior year's taxes for everything else were in effect too low.

I understand it was a conscious decision years ago to keep taxes as low as they have been - perhaps simply a way to get budgets approved. More likely just another part of the historical pattern in Hebron to always focus on short-term solutions instead of ever considering the longer-term impact. Worry about it next year, or the year after.

I disagree ... everyone paid the SAME tax rate for the last 19 years. The slide (#24) at the budget meeting was what caught my eye: Taxpayers benefited from the contribution into the general fund for nineteen years, with a reduction to the tax rate." Those who paid into the sewer assessment fund were "paying more than" the person not assessed a fee.

This is true because only "those paying the sewer assessment fee were feeding extra $$ into the general fund ... NOT everyone in town". Yet they and all the other residents had the same basic tax rate obligation. So few contributors were paying and the entire town was reaping the benefits. The finance department forgot to ADD that fact.

I have that presentation saved on my machine in a pdf format. I cannot find it on the town's web site any more.

WE NEED CHANGE ... we need our elected officials and volunteers to think outside the box. We have (if I read minutes correctly) over 2% more than the required cushion for low bond rates. WHY NOT USE THAT 2% (monies already paid by the tax payers) to clear some of the short-changed projects off the table. I believe Ms. Ferree suggested that too but the BOF Chair talked this down. I see nothing wrong in using those dollars. WHAT is the reasoning for maintaining a higher cushion .. no one has explained that.

Mombert wrote:


Aren't you forgetting that those who paid the sewer assessment also got a benefit that the rest of the town did not get? The town spent a lot of money to improve that district. They determined the fairest way to pay for it was to assess $8000 per property affected, to be collected over 19-20 years. When there was higher than expected new construction, through the growth years, coupled with rapid refinancing, more folks paid the balances of their full assessment before the term expired. This early repayment was then used in the general fund - to the benefit of all taxpayers. Now, because it was not kept in a seperate account, all taxpayers will have to pay it back as there is a shortfall on the remaining payments due.




I am not sure I am understanding you properly - is your concern perhaps in the amount of the assessment itself? The amount was set in I think 1992-3, and expected to cover the long-term cost of the project. $8000 per property over 20 years is $400 per year. When there was higher than expected new construction and prepayments, are you suggesting that the remaining assessment payments should have been adjusted, perhaps each year, and then tracked only for the remaining properties on the assessment list? Maybe it should have been revised to $396 after the first year, then $402 the second, then perhaps only $372 another year, and so on. I'm just making these numbers up, but the whole point of spreading the assessments over a long timeframe was to provide stability.

Another problem with this, in addition to the huge administrative complexity, is that the cost was based on the intial expense allocated over the initial expected number of affected properties. With the added construction/subdevelopment etc., there was also an added expense of adding to the system, which of course depends on the property details, etc.

If you are saying that the funds should have been kept seperate to allow for a true-up reconciliation by property after the last debt payment is due in 2012-13, it misses the point that any across the board assessment is inherently unfair anyway - those that were in smaller properties in the sewer district arguably received a smaller benefit than those in the larger properties, but when all was said and done, all in the district will have paid the same $8000. Those that benefitted the full 20 years got more of a benefit than those who built only in the most recent years - but both paid the same assessment. Everyone in the sewer district benefitted, and everyone in the district paid.

If your point is merely that those outside the district also benefitted from the cash flow surplusses in the earlier years, you neglect the fact that those outside the district also have to pay for the cash flow shortfalls in the later years.



Most towns maintain a higher than minimum cushion, in case an unexpected need comes up, it would allow them to still qualify for favorable bonding rates.