FY2027 Budget & Fiscal Policy (Part II)

New Fire Station

• The bonding which was approved a few years ago by the voters has not been drawn down.  In simple terms, we have not borrowed the funds yet.
• The operating costs of operating a fourth station is not included in the budget.  It is "assumed" that no operational costs are included in the FY2027 budget because it is unclear whether the building would be operational and opened in FY2027.

As the BFRB, here is what we are doing …

• We are going through line items in the budget we have NEVER reviewed before.
• Example … we have looked at the total of all Office Supplies … and flat lined that budget.  I hope that the taxpayers and government officials understand the time that this requires from volunteers?

Why is the Fund Balance So Important?

• Think of your household.  The net income from the household leaders.  So, assume the combined net pay of the individuals is $8,000.
• In June, they spend $9,000 ... where does the money to pay those bills need to be taken from?
• Credit cards, home equity loan or savings bank account.
• The fund balance is the municipal savings account.
• If you borrow funds, your total debt increases.
• If you continue to spend more than you make, you continue to reduce your savings and/or increase your debt. That is defined as a structural deficit.

What happens?  

• Your credit rating (FICO) will decrease.
• Your ability to borrow at a reasonable interest rate will decline.
• You may not be approved for loans, mortgages or leases/rental agreements.