When new Town Manager Tarr read his manager's report to the audience last night (1-11-10) at the selectmen's meeting, he presented a pretty grim forecast for the financial landscape of Paris. Indeed, budget cuts at the state level are having a devastating effect on municipalities across the board. It is only prudent to be concerned.
However. statements reflecting detailed financial workings of a town - indeed, any institution - require a careful, in-depth inspection. It would suggest a need for caution and step-by-step examination of the fiscal planning and history of the town's workings in a broad range of areas.
State cuts notwithstanding, and any discussion of budget oversight in the interim town manager's office for the last 6 months aside, there is an error in Mr. Tarr's report that must be corrected.
In his list of payments, principals, and budgeted items, Mr. Tarr said: "We have a couple of other things you need to know about. The bond payment for the fire station [referring to a General Obligation Bond, taken out by the town in 2003 to pay for 2 things: (1) the new fire station on Western Avenue; and (2) a utility project for KBS Builders on Route 26] which has 2 payments per year - one is an interest payment of about $33,000, the other, an interest and principal payment that totals about $150,000. Only the $150,000 payment [ due Jan.1]was budgeted for this year. The $33,000 payment [due July 1]which was the sole interest payment, was not included in the budget....we will need to revisit that before the end of the year and cover that as an overdraft." [For further comments check NPC-TV recording.]
The statement would indicate some very careless budget planning...if the implications were true.
Based on the cost of the project funded by the bond, the division of payment for the two items being funded in the 2003 bond agreement worked out to (1) new fire station = 81% of the cost, to be repaid annually by Town of Paris tax payers; (2) Rt. 26 TIF = 19% of the cost, to be repaid annually by taxes paid to the Town of Paris by Paris Holdings (KBS).
That 19%, or the $ amount Mr. Tarr referred to, would not be listed in the line items of the town budget. It would be found in line 9 on one of the Mill Rate Calculation forms where the TIF amounts are recorded. This was prepared by former tax assessor John Brushwein. This form is a public document, and is on file in the tax assessor's office. The figure in question, listed as TIF Financing Plan Amount , has been planned for, since 2003, and is known as the Rte. 26 Tax Incremental Financing District (TIF). The amount of the TIF is taken off the top of the bond payment amount, so to speak, and included with the County Tax, Municipal Appropriation, and School District to calculate the mil rate.
Mr. Tarr is newly on board, and most likely did not have an opportunity to investigate in depth as he might have wished. Did any other individual steer him on a certain path? Surely not....
