Town of Gray Fund Balance Anlaysis, 2000-2004

Revenue forecasting is not an exact science. Each year, when the Manager and Council project revenues, they use historical trends and best estimates for figuring out how much money may come in over the course of the year in the various taxes on which they base their budget.

Historically, Gray has under-projected revenues. When more money comes in, the extra goes into an account called the Undesignated Fund Balance. The UFB has accumulated almost 4 million dollars ($3.956,000) and represents money that is not dedicated to any particular project.

The June 2004 Town Meeting did authorize expenditures for public safety ($116,000) Post Office payment ($66,000) Tax Reduction, ($55,000), Bridges ($300,000), Public Works vehicle ($105,000) and Sand and Salt shed ($200,000), according to Town Manager Mitchell A. Berkowitz. The total for these projects is $838,204 and the money will come out of the UFB over the course of the year, Berkowitz said.

The Town Auditor finished checking over the town books and delivered the hard numbers to the Council at their regular meeting on October 19. The Monument reviewed the numbers and created several graphs from the Auditor's numbers in his report, "Town of Gray: Financial Statement Presentation." His summary, as well as his full report, is available at Town Office at 6 Shaker Road.

The first chart, above,shows the Town of Gray's Fund balance analysis. This is a re-formation of the same chart that is on page 7 of the Auditor's analysis. In his chart, there are stacked bars to illustrate the three portions of the financials, the UFB, the Reserve Fund, and the Designated Fund. The Monument's chart takes the three elements apart and shows them independently from each other.

The second chart, below, shows two lines. One is the Composite of Fund balance from the Audit and the second line is cumulative data from the Capital Investment plan. The Capital Investment Plan (CIP) is a Manager and Council produced plan that shows projected capital investments over the next 10 years. Plans to buy vehicles, refurbish buildings, etc. are described in the CIP. The CIP is available at Town office.

In looking at the CIP projections, there will be a major outlay of cash for several projects in 2006 and 2007, along with forecast for additional debt, $1,675,000 and $2,650,000 respectively. The projects listed for funding in 2005 are $250,000 for a town office, another $250,000 for town office in 2006, and $1 million for town office in 2007. Thus, the CIP plans for a $1.5 million town office over the next two years.

Additional projected projects are $1.675 million for Library improvements in 2006, $1.25 million for a new Public Safety Building in 2007 and $400,000 for Public Safety building addition in 2007.

If you look at the Capital Expenditure total line on the graph, you can see it rising until 2007, when it begins to level off a bit. That is when the projected projects described above are planned to come to fruition either through either straight expenditure or borrowing.

SOURCE DATA: Town of Gray Financial statement from Runyon Kersteen Ouellette, and Town of Gray Capital Investment Plan.