HomeMy WebLinkAboutShaun Moran
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Only $28,000 in Reserves in a $286,000,000 Budget
Our Finance Director said at the last City Council meeting that Ashland has over
$42million in unappropriated fund balances. What wasn't sufficiently explained
was that most of those millions sit in specific enterprise funds, like water &
wastewater, earmarked for future CIP projects. Based on that discussion it was
easy to draw false conclusions about those reserves and more importantly what
that means.
Citizens can easily be led to believe those fund balances can be comingled with
other funds to run the day-to-day operations of the city but that is not the case.
To move around those millions would take a specific ordnance and or an act of
the council; in many instances accessible only in the case of emergencies. An
unwillingness to admit to Ashlanders, right before a city election, that we face
severe fiscal hurdles is troubling enough yet to contend that the city can just
change the name of "ending fund balances to reserves" and pretend the city has
adequate funds in the budget is dangerous and irresponsible.
If that $42 million is a "reserve fund" as was implied, why didn't council opt to
extend low interest financing to cover the $525,000 loan to the Health Benefits
Fund, instead of forgiving the loan, eviscerating $525,000 in hard earned taxpayer
funds?
Over the last several years the yields on the 10yr US Treasury bond hit the lowest
levels since 1791 so cost to fund big CIP projects has never been cheaper. With
the cost of money, the lowest ever, it is hard to comprehend why you insist on
using utility rate hikes to pay for future CIP projects. Data provided by our city
shows residential water and sewer bills have both increased nearly 140% since
2009. As public officials with a fiduciary obligation to insure sound fiscal
stewardship, please explain how Ashlanders benefit from your insistence on
funding CIP projects through regressive utility rate hikes rather than through
cheap and easily accessible debt? Ashlanders deserve to know.
Most would agree that re-designating fund balances as "rainy day fund reserves"
to be spent on anything other than how they were originally represented would
constitute extremely poor fiscal stewardship. So to tell Ashlanders now that the
millions of dollars in additional taxes, surcharges and fees added to their utility
bills over the years, for CIP projects, can and should now be used as reserves to
cover shortfalls in the operating budget or for a new city hall or other things,
would be a violation of sound and honest governance and a betrayal of citizen's
trust. As an Ashland citizen and a member of the Citizens' Budget Committee I
would strongly object to this.
Thankyou
Shaun Moran
10/16/2018
Question is If that $42 million mentioned by our Finance Director was indeed a "reserve fund"
as implied, why didn't council opt to extend a low interest loan to cover the $525,000 loan to
the Heath Care Fund, instead of forgiving the loan?
Question 2: With US interest rates at historic low levels why are utility rate hikes being used to
fund CIP projects rather than through debt offerings, which wouldn't necessarily increase utility
rates? If we know when construction will begin what is the reasoning and justification for not
using debt to fund these CIP projects?
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