The recent flap over whether new equipment would be funded to replace a damaged highway department truck and lawn mowing equipment has escalated the issue of whether or not Lansing should have a fund balance policy in place.  What to do with Lansing's fund balance is only the latest of a string of issues that has split the board along political lines for the past six years.

Democrats want a fund balance policy that maintains the unassigned fund balance at levels recommended by consultants and Albany, then puts any left over money into assigned reserve funds to be used later to purchase equipment like snow plows, trucks, park maintenance equipment and so on.  Republicans want to keep the money unassigned so they can be more flexible in addressing needs as they come up and mitigate tax rises by supplimenting the budget and thus reducing the levy on taxpayers.


Kathy MillerSupervisor Kathy Miller (D) says she and and Councilwoman Ruth Hopkins (D) have advocated for such a policy for three years, but the Republican majority on the board have preferred to keep fund balance monies unassigned.  Councilman Ed LaVigne (R) has been most outspoken about maintaining flexibility rather than assigning funds for specific purposes.  Both Miller and LaVigne say their approach will benefit taxpayers.

"We can put the Town on good footing," Miller says.  "So many of the towns I've talked to have fund balance policies, and they have restricted funds for equipment and things like that.  It is a way to control the tax rate and to not have to borrow."

But LaVigne says that the Town has too much money on hand, and should continue to use the money to keep taxes down, while still maintaining a healthy fund balance to take care of emergencies.

Ed LaVigne"One of the consultants we used recommended we keep 25% of what you had to pay in taxes in our fund balance," he says.  "That's about $1.25 million.  We have $3.1 million in ours.  My primary responsibility is to provide services and see to the safety of the town and the voters.  He recommended that we keep $1.25 million for emergency funds.  We've got $3.1.  I could not see overtaxing people to put money in these funds when we have enough."

The fund balance is the amount of money that is left at the end of each budget year if the Town either underspends the budget or collects more revenues than expected, or a combination of the two.  Historically Lansing has budgeted very conservatively, and that accounts for the current fund balance being so high.

"A budget is a best guess of what you're going to do for a year," Miller explains.  "You can have more expenses than you bargained for.  You can find out you have less revenues.  Most of the time we do have leftover money for one reason or another.  But we could be in the opposite situation.  When you look at what they budgeted as opposed to what they spent, these departments are pretty close.  They do a pretty darned good job of estimating what they are going to use for the year."

That is part of the reason she wants a policy that will maintain approximately $1.25 in the fund balance, but assign any amount above that to town department reserve funds.  She says doing so will provide a way for departments to plan three to five years ahead for equipment replacements and capital expenses.

She points to Tompkins County's fund balance plan, a a short document that includes a procedure for calculating year-end fund balance targets, and assigns 10% to the general fund, an administrative procedure for determining airport funding needs, 10% for the Solid Waste fund, 5% for road and highway equipment, and 10% for the County's debt service fund.  The policy isn't overly detailed, but acts as a blueprint for how less than half of unused monies will be assigned.

LaVigne says that while money in assigned reserves can be reassigned, keeping the money in the fund balance gives the board more flexibility in controlling taxes and the town's spending.  He points to figures showing that funds have been available when needed and insists the key to responsible stewardship of taxpayer money is being 'fiscally disciplined' rather than relying on a policy.

"We only used $182,000 on top of paying for a $300,000 culvert, on top of the fact that if you look at the fund balance this year compared to other years, it only went down a little bit, maybe $100,000," he notes.  "We used less fund balance this year than in the last two or three years because we have become very fiscally disciplined."

Miller took her staff to training offered by the NYS Comptroller's Office for training on fund balance policy.  Councilwoman Hopkins also attended.  Deputy Supervisor Sharon Bowman, who is also the Bookkeeper/Personnel Officer in the Supervisor's Office, says that regularly putting available funds into reserves not only allows departments to plan for replacement and new equipment, but can be used to help control taxes.

"Ultimately having monies tucked away in reserve funds eliminates the potential for having a skyrocketing levy or your tax rate going up over the long haul," Bowman says.  "Because you have planned for it."

LaVigne says a form of long term planning is already happening, although it isn't part of a town policy.

"When I fist got elected I sat down with the highway people, because that is the most expensive department," he says.  "We went through every piece of equipment and assigned an expiration date.  Of course those aren't written in stone because sometimes things last longer than you hoped.  Every year I review the mechanic's sheet to see what the work on these machines is."

Both give high praise to the departments for maintaining their equipment well and adding years to their estimated lifetimes.  When it comes time to replace the equipment it commands higher prices at auction because it is in such good shape.

Miller says money in the fund balance money is for emergencies, and the rest should go into assigned reserves to be used for planned purchases.  She note that frost heaving from this year's uncommonly cold winter may cause more damage than the Town currently has assigned funds to cover.  An enormous culvert, not even a year old, on Triphammer Terrace was damaged by the weather this winter, partially caving in and causing a sink hole.  Highway department staff repaired it a week ago.

Miller notes the first thing that was said in the state training session she attended is that municipal budgeting is nothing like budgeting in the private sector.  But LaVigne says that private sector budget experience is an asset.

"We were told by other people on the board that we won't have enough money if we continue down this path, and will go bankrupt," LaVigne says.  "I simply don't believe this is true.  These figures tell a different story, that if you are fiscally disciplined you can still provide excellent service to this town yet not burden taxpayers with excess taxes."

The board is politically split, as well, on who has attended state fund balance management training sessions.  Miller and Hopkins attended.  LaVigne and fellow Councilmen Robert Cree (R) and Doug Dake (R) did not.  But LaVigne says the information is easily accessed on the Internet and documents provided to all the board members.

"I get tired of these games: you didn't do it and we did," he says.  "The bottom line is you go online and you look at it.  Most of the information is right online.  What concerns me is that you only get one side of this in training sessions.  You don't need to go to a formal conference at the taxpayers' expense.

"One of the things they recommend in the Comptroller's booklet is a (fund balance) policy," he continues.  "The bottom line, though, is that you happen to have some experience and if you happen to be in the private sector, it's a tremendous help, because we do budgets every year and we're accountable every year because if we're not we won't survive.  Government will never go bankrupt."

Both sides agree that whether the town has a fund balance policy or not, whether it has an equipment replacement plan or not, any future board could change it or eliminate it.

"The complicated part is we can work to put the Town on solid ground and have this policy," Bowman notes.  "But a new group can be elected that can control the policy and change it."

She adds that even when a Town Board has used fund balance monies to lower the tax levy it doesn't always use all the money expected when the budget is developed.

"At budget time when we are planning for the next fiscal year, in those instances where we determine we are going to use the fund balance to keep the levy and the tax rate down, many times we don't actually use the whole fund balance that we allocated," she says.  "An example of that is that in 2014 only a portion of the $287,000 that we appropriated to balance the budget was used.  We didn't use $96,000 of that."

Will a fund balance policy that feeds money into assigned reserve funds on a regular basis raise taxes?  Will a policy of using the extra money to lower the tax levy relieve Lansing's tax burden?  Miller says the opposite is true.

"No, it has the potential to stabilize them," she says.  "But electricity and expenses go up every year.  To expect that we're never going to have to raise taxes... well, what do we do?  Turn the heat down?  Don't mow the lawn?  We have all of those expenses that everybody else has and we're juggling them."

Bowman adds that raising taxes when needed isn't necessarily a bad policy, within reason.

"It's not a bad thing to raise the tax rate a penny or two," she says.  "If you look at the town's historical tax rates we are well below what we were in '05 and '06.  We brought in a consultant to make sure what we thought we were looking at wasn't out in left field.  He said we're not."

But LaVigne says a few cents matters to taxpayers.

"When people say it's only a few cents here and a few cents there I say if you think you're being under-taxed then cut the town a check for that difference," he says.  "I daresay very few people would actually do that."

Are the two approaches simply six of one and a half dozen of the other, just another excuse for political opposition?  Neither side will cop to that, but both are optimistic the Board factions can compromise.

"I think we will," LaVigne says.  "We may put some into reserves for specific things down the road.  Highway equipment is the biggie, because, having gone over that schedule three years ago, I saw where these things fall in line."

Miller is also hoping for the best.  She says the first step is to put a fund balance policy in place, and then she hopes the departments will come up with at least a three to five year plan.  She says she wants Republicans and Democrats to participate in reaching these goals.

"We would really like the whole board to join in this conversation and come up with a plan, some results," she says.  "This isn't something that Ruth and Sharon and I want to do ourselves.  We want the whole board to participate.  Say what you think is good about it, and say what you think is bad or wouldn't work for us.  Every town is different."

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