At a meeting of the county advisory board Wednesday afternoon, Dukes County commissioners and the board learned that the county currently enjoys a surplus of more than $300,000, left over from fiscal 2012. The advisory board is charged with oversight of the county budget.
Added to large surpluses for the previous two fiscal years, the county has a total surplus of $572,726, at a time when county government is shifting the cost of county programs to Island towns, struggling to fund the few remaining services it provides for Dukes County and maintain the county courthouse. The county advisory board had directed the county commission to keep a reserve of just $100,000 on hand for unforseen projects or expenditures.
“What stands out about FY12, there are some items in there that might have been budgeted better, and we would have discovered a surplus a whole lot sooner,” said Walter Vail, advisory board member from Oak Bluffs. “For FY11 and FY10, I don’t understand why that’s just coming to light now. Those audits were done a long time ago. How come we didn’t know that back in early 2011? It’s awfully late to get that information.”
Advisory board members said they have not been given figures on the growing surplus on summary sheets issued by county treasurer Noreen Mavro-Flanders.
“The confusion began, unfortunately, because these unreserved fund balances have not been presented before,” said Art Smadbeck, advisory board member from Edgartown. “I have not been presented with these numbers before. It might have been in the audit.”
Good news? Or is it?
“We’ve over-assessed the towns by $300,000 they didn’t have to pay,” said Jeffrey “Skipper” Manter, advisory board member from West Tisbury, referring to the FY12 surplus.
Thomas Hallahan, the county commission chairman, and commissioner Lenny Jason, who attended the meeting, said they were also unaware of the large surplus. Mr. Hallahan said the surpluses were reported in annual audits, but went unnoticed.
“Myself and other commissioners being at fault, when we do the exit audit, we tend to focus on the management letter,” Mr. Hallahan said. “I, for one, never looked at the financial statements. I need to be more mindful.”
The advisory board members voted Wednesday to return $150,000 of the surplus to Island towns, which fund much of the county’s operating budget. They will discuss in future meetings how to use the rest of the surplus. Much of the discussion centered on a project to create a building for the Center for Living, an Island-wide organization that provides services for older residents who need specialized daily care.
How could this happen?
Ms. Mavro-Flanders outlined how surpluses in several county revenue sources added up to the large surplus. She cited revenue from closing out the sheriff’s account that was not accounted for in the FY12 budget. Revenue from deeds excise taxes, license plates, and alarm fees were significantly higher than projected in the budget. She said many of the unexpected surpluses are one-time revenue sources that will not continue into the next fiscal year.
The county assesses each Island town annually, based on the proposed county budget. The figures released by Ms. Mavro-Flanders at Wednesday’s meeting show that in some years, the county substantially underspent its projected operating costs, contributing to the growing surpluses.
Following the meeting, Mr. Smadbeck said the county advisory board bears some responsiblity for the unnoticed surplus. He said he depends on the county treasurer for financial information.
“I asked for a little more guidance and a little more help from the county, from the treasurer’s office, to be much more proactive in pointing out to all of us, the county advisory board, and the county commission, the salient points in these complex financial documents,” Mr. Smadbeck said.
Dukes County commissioners had been considering a $1.5 million draft budget for the next fiscal year that would reduce the assessment to Island towns and reduce the overall operating budget by 18 percent, reflecting the full effect of the Dukes County Sheriff’s Department’s transfer to state control.
Under the current draft budget, which now will be retooled, the seven towns of Dukes County will pay $491,829 toward the county’s operating budget, down 24.2 percent from the previous year, reflecting the transfer of the sheriff’s department.
Edgartown will pay the largest assessment, $179,674, calculated by a formula based on assessed valuation of property. Chilmark will pay $77,834, Oak Bluffs $72,985, Tisbury $71,28, West Tisbury $64,498, Aquinnah, $18,761, and Gosnold $6,789.
Each town’s county assessment comes directly from state aid to the towns, known informally as “cherry sheets.” The assessment cannot be amended on the town meeting floor and does not show up on the town operating budget.
Taxpayers must rely first on the county commissioners to exercise fiscal oversight and ultimately on the members of the county’s finance advisory board, who approve the county budget. The advisory board includes one selectman from each town.
The county commissioners’ administrative budget totals $182,128, down 1.5 percent from the previous year. The bulk of the administration budget, 94 percent, is for employee costs, including salaries, benefits, and insurance.
The largest department in county government is the treasurer’s office, whose costs are to increase three percent next year.
Holding her cards close
Ms. Mavro-Flanders, the elected county treasurer, oversees a treasurer’s department budget of $245,137. Her salary is $96,327, plus benefits, and she is responsible for financial administration for most county functions, including the airport, parking tickets, payroll, and until this year, the sheriff’s department.
Despite repeated requests from the Times, Ms. Mavro-Flanders has not released any of the public documents related to the audit.
County officials were alerted to the surplus by the audit.
“It’s still in preliminary form,” Ms. Mavro-Flanders said Monday.
The Massachusetts Public Records Act is unambiguous on the status of communications to public officials, describing them as public records.
“Every record that is made or received by a government entity or employee is presumed to be a public record unless a specific statutory exemption permits or requires it to be withheld in whole or in part,” according to the Massachusetts Secretary of State’s guide to the Public Records Act.
The law makes no exception for withholding public records in draft form, preliminary form, or uncertified form.
Financial management review
Several years ago, at the request of the county commission, the Massachusetts Department of Revenue (DOR) conducted a financial review of Dukes County, to examine what role the county might play in expanding regional services.
In a harshly worded report issued September 27, 2010, DOR made 18 specific recommendations to improve county government.
And, the report added, even if the county embraces all recommendations, there is no assurance of improvement. The DOR recommended the county consider an entirely new form of government.
The review highlighted deficiencies that undermine confidence in county government and put it in a poor position to assume regional services, the study’s authors said.
They wrote, “Looking ahead, it may seem reasonable to envision the county, with thoughtful planning, offering additional services under similar management and cost sharing arrangements. However, there are obstacles. The current organizational structure is one. The lack of universal confidence in county government is another, as is disagreement on the role of county government on the Island.”
Among the specific recommendations, the DOR urged that the county establish a formal budget process, issue quarterly revenue and expenditure reports, conduct quarterly budget projections, review progress on recommendations made by independent auditors, and publish an annual report.
The DOR report called Ms. Mavro-Flanders a valuable asset to the county, but recommended that, at an opportune time in the future, the county commission change the county treasurer job from an elected to an appointed position.
Mr. Hallahan spearheaded efforts to establish a more formal budget process, but a committee of county commissioners dismissed most of the DOR review’s recommendations in July, 2011.
The committee and Ms. Mavro-Flanders said most recommendations in the report were either already in place or were made without a clear understanding of county government.
The seven county commissioners, elected for concurrent two-year terms, are Mr. Hallahan and Christine Todd of Oak Bluffs, Tristan Israel and Melinda Loberg of Tisbury, John Alley and Leon Brathwaite of West Tisbury, and Lenny Jason of Chilmark.
The county advisory board includes Art Smadbeck of Edgartown, Jeff Kristal of Tisbury, Walter Vail of Oak Bluffs, Jeffrey “Skipper” Manter of West Tisbury, Bill Rossi of Chilmark, and Jim Newman of Aquinnah.