State flub puts town in arrears to VTA
More than $300,000 owed; Chilmark hardest hit
By Aubrey Gibavic - October 19, 2006
Due to a breakdown in communication between the state treasurer's office and the Massachusetts Department of Revenue's Division of Local Services (DLS), four Island towns collectively owe more than $300,000 in local assessments intended for the Vineyard Transit Authority (VTA). Chilmark alone owes nearly half of the calculated shortfall.
The DLS contacted officials in Aquinnah, Tisbury, Edgartown, and Chilmark this week, detailing the amount of money they must pay the state. The shortfalls date back to 2000.
"Starting in 2004, we put into place a check and balance system to make sure the treasury knows exactly what we know, and that we knew exactly what the treasury knows," said Lydia Hill, a spokesman for the Department of Revenue, in a telephone conversation yesterday. "However, from 2000 to 2004, that was in not in place."
The DLS's letter to the four towns states, "We apologize for the inconvenience that this has caused and have implemented measures to ensure this does not happen in the future."
Angela Grant, head of the VTA, was off-Island and unreachable yesterday. Lois E. J. Craine, an assistant administrator at the VTA, said the transportation agency has been trying to bring the discrepancy to the DLS's attention for several years. "It was hard to get anybody to research it at their level," Ms. Craine said of the DLS. "Because that's where the problems lay."
Ms. Craine said since 2000, receipts from the state for VTA funding have not added up to the amount billed for service. The state assesses a certain percentage of money from each Vineyard town and passes it on to the VTA.
The VTA sent an inquiry letter to the treasurer's office on June 29, which set into motion the detailed response they received this week. The VTA's letter was accompanied by several pages of documents outlining how various funds were never paid to the VTA by the state. According to a spreadsheet displaying the amounts the VTA should have received, compared with the amounts actually received, the VTA alleges that they are owed $571,263 for fiscal years 2000 through 2006.
Shortfalls for years 2000 through 2004 were the only ones acknowledged in the response from the DLS.
"Another fundamental difficulty may be related to the unique nature of Martha's Vineyard and our member municipalities," the VTA's letter reads. "The attached DLS web site information shows that some of our member municipalities clearly receive enough money to pay their full assessments, while others do not. To resolve this problem in the past, DLS used to bill the towns that were short the difference, and the towns would send DLS a check. This process worked well, assuring that all charges were paid in full and the VTA received our whole assessment. To my knowledge DLS hasn't sent any bills on a regular basis for the past six years, and I believe that this is at the heart of the problem." Ms. Grant, who initiated the inquiry into the missing funds, signed the letter.
Through the state accounting system, the DLS compared what part of the assessment was paid each year with what should have been paid. They determined that the four towns collectively owe $338, 062. Chilmark alone is responsible for $171,074; Aquinnah $67,638; Edgartown $61,664; and Tisbury $37,686, according to numbers supplied by the DLS. The unpaid funds date back to 2000.
The weakest link
Each year, the state's Cherry Sheet sets out how much state aid will go to individual cities and towns, according to the DLS. It also provides an estimate of charges for state services, such as the VTA, over the next fiscal year. A subset of a state agency, the VTA determines what the cost will be each year for the service provided.
Each Island town contributes financially to the VTA. To determine how much money each town will pay, the VTA uses a formula that assesses the amount of service in each town. Edgartown and Tisbury provide the bulk of the funding at 26.6 and 25.1 percent respectively, while Aquinnah provides just 4.3 percent.
Each town's assessment is deducted from each town's state aid, when available. When the town's state aid is not enough to cover the assessment, it creates a shortfall and the town must pay that amount.
Only Oak Bluffs and West Tisbury collect enough in state aid to cover the shortfall each year. Chilmark, on the other hand, receives almost no state aid, so the assessment cannot be taken out of that fund.
In the past, the DLS sent the shortfall information to the state treasurer, who was then supposed to notify the towns of their debt. More recently, a new system was created that instructs the DLS to alert the towns directly when they have a shortfall. The town must then pay the state treasurer the amount of the shortfall.
Ms. Hill said that dating back to 2000, the DLS thought the treasurer's office was alerting the Vineyard towns of the shortfall, and vice versa.
A large sum for a small town
Officials from Island towns had varying reactions to the news. Aquinnah town administrator Jeff Burgoyne said he was completely unaware that the town owed the state any money. Aquinnah must write a check to the state for $67,638.
"The bottom line is, that represents a sizeable amount of money that at this point we really would be hard pressed to come up with," Mr. Burgoyne said. "I'm sure that the board will want to have staff look in to it and be in touch with the state treasurer's office to see if perhaps some kind of scheduled payment may be able to be worked out, something to at least lessen the impact." He said that Aquinnah received notification from the DLS about the shortfall on Monday.
The situation in Tisbury is quite different. Town accountant Suzanne Kennedy said she has been aware that money was owed for this purpose since 2002. She said at the end of that year, they noticed that the state had not taken enough money out of their entitled state aid allocation to cover the VTA's assessment. She said the town wrote a check to cover the shortfall, but it was never cashed.
The following year, Ms. Kennedy said, the town's auditors were concerned that there was an uncashed check on the books. When it still was not cashed later that year, they were advised to cancel the check, which essentially put that money into the free cash fund.
Luckily, Ms. Kennedy said, the town has enough free cash to cover the $37,686 the state is demanding.
"We knew we owed it, it's not a question of that," Ms. Kennedy said of the shortfall, adding, "I'm surprised they even sent us a letter, I'm surprised they didn't just take it."
Similarly, Chilmark officials said they had a check on the books from 2002 for approximately $32,000 for half of their annual assessment, which was never cashed, according to town treasurer Melanie Becker.
"The Department of Local Services said that it would be cashed in the state treasurer's office and that the state treasurer had dropped the ball there," Ms. Becker said. "They didn't even know if they had the check anymore."
Ms. Becker said at that time they also closed out the check, and were told that current billing would now move forward. "There wasn't any indication at that time that they were going to go backwards," Ms. Becker said, citing her surprise that Chilmark is now expected to pay the shortfall dating back to 2000. Chilmark's total debt for 2000 through 2004 is $171,074, according to the DLS.
"The reason that it has impacted Chilmark so much is because Chilmark gets very, very little, virtually no state aid," Ms. Becker said. "We're in conversation with the selectmen and the state to try to verify that it's the correct amount and what the process was for how they determined it." She said the information from the DLS was passed on to town secretary Tim Carroll for discussion with the selectmen.
Edgartown town treasurer Sharon Willoughby said she knew very little about the situation, and that town administrator Pamela Dolby was handling the issue. The Times was unable to reach Ms. Dolby, but Ms. Willoughby said the town hopes to figure out a payment plan for its $61,664 debt.
