Surplus criticized at county budget meeting

Board approves budget for fiscal ’19 of just under $8.7 million.

Dukes County Treasurer Noreen Flanders, a 27 year veteran of the position, at the County Advisory Board Meeting last Thursday. — Rich Saltzberg

The Dukes County Advisory Board approved a fiscal 2019 budget of $8,696,905 at a meeting inside the Center for Living on Breakdown Lane in Tisbury last Thursday. The budget projected expenses are $8,679,722.

The otherwise humdrum meeting grew contentious when advisory board member Skip Manter, chairman of the West Tisbury board of selectmen, accused the county of breaking the law and the county manager of conduct unbecoming a public official, after he learned fiscal ’18 generated a large unreserved fund balance, i.e. free cash, of more than $1 million.

The issue arose during deliberation and ahead of the vote on the FY 19 budget. The board learned there was a budget surplus of $1,051,311. Manter pounced on the figure,

“I just don’t understand how we end up with that much surplus,” he said.

By his interpretation of state law, Manter said when a surplus is more than 10 percent of the overall budget, the overage is supposed to be returned to reduce county assessments. By this metric, the sum left on the books as surplus should not exceed $49,000, he said.

Manter based the figure on the FY 18 budget, which county treasurer Noreen Mavro Flanders later told The Times amounted to $9.2 million in revenue and just over $9 million in expenses.

County manager Martina Thornton balked at Manter’s $49,000 figure. She pointed out several unanticipated expenditures, like water damage and an alarm replacement at the county courthouse, exceeded that figure and if a surplus wasn’t on hand, there wouldn’t have been available funds to meet those needs. The $1 million figure isn’t what it seems, Thornton said. It includes revenue surplus from the registry, and is smaller still because of other expenditures that aren’t accounted for in it, like $150,000 earmarked for the towns for economic development, she said.

Advisory board member Art Smadbeck, an Edgartown selectman, said he thought the actual, adjusted surplus was significantly lower. “It was down in the threes if I remember correctly,” he said.

At least one board member and one county commissioner said they thought the county has established a fund double Manter’s $49,000 figure.

“I think we agreed on a higher amount,” advisory board member Bill Rossi, chairman of Chilmark’s board of selectmen, said.

Commenting from the audience, commissioner Tristan Israel, a Tisbury selectman, said a surplus figure of $100,000 was established precedent.

“At least a hundred,” Rossi said.

“State statute says you can’t keep anything over 10 percent,” Manter said. “It has to be used to reduce the assessment.”

Thornton suggested an amendment be sought. “It seems to be archaic,” she said.

“In the meantime, we should follow it,” Manter said.

Manter pointed out the county has a revolving fund replenished by the state.

Flanders later told The Times the county does not have a revolving fund per se, but it receives what is essentially quarterly rent for the courthouse from the state. The payment is calculated at 87 percent of the overall expenses of the courthouse. Since the last payment hasn’t been made for FY 18, Flanders could not say what the county’s return would be for that year. However, in FY 17, the county received $100,416 from the state for the courthouse, she said.

Flanders weighed in at the meeting by stating Plymouth County pushed for legislation that allows for counties to have stabilization funds.

“And that is how we could keep some money, legally, Skipper, in a fund that would allow us to continue with the cash flow,” she said, referring to Manter.

Flanders went on to point out that since the county receives its funding from the towns only in May and November, funding can run dry in the intervening months. Since the fiscal year begins in July, the county is essentially unfunded until November, when towns make their first payments for the new fiscal year, she said. Money on hand until then is from the previous year’s budget. Without extra funds tucked away to account for that, certain programs would inevitably run out of cash, she said.

Flanders later told The Times the county must make payments well over $500,000 each July and still somehow keep all its programs afloat for four months until the November payments are remitted.

County commissioner Leon Braithwaite said that when the state enacted law regarding county surpluses, counties’ sole source of revenue came directly from the towns. Now the counties have other sources of revenue the state didn’t anticipate, like license plate fees — a complicating factor.

Manter was unswayed by this argument. “You’re not wrong, but the statute is still the statute,” he said.

The advisory board went on to approve the fiscal ’19 budget 3-1, with Manter opposed.