Council Undesignated Fund policy raises eyebrows
By Elizabeth Prata

Gray-At last Tuesday's Council meeting, citizens objected to sections of a proposed policy that would outline how undesignated funds are to be controlled. The policy was drafted at the recommendation of the Town Auditor, who noted that the Town's Undesignated fund balance was increasing to embarrassingly high levels. The fund balance was at 23% of budget, due to higher than expected revenues than were projected. [see chart below] The Auditor had recommended in his presentation to Council in September 2003 that the Town devise a policy that caps the amount and explains to taxpayers how these surplus funds are to be handled.

Gray resident James Monroe said that he was glad the council had drafted this policy, but objected to policy section five, which Monroe said takes away the ability of the taxpayers to decide what to do with excess funds. The policy as drafted would funnel surplus into reserve accounts. Reserve accounts are earmarked for specific long-term projects. Which account the extra money would go into would be at the recommendation of the Manager and the action of the Council. Any action taken would then be reported to taxpayers at the next town Meeting.

Monroe said that there was no provision in the policy to return the money to taxpayers. "It's our money. You simply administer it," Monroe said. "Giving yourselves authority to create any number of reserves, put the money in there, and report to us at Town meeting what you did is an after the fact action that constitutes taxation without representation."

Councilor Lynn Olson, who is a member of the Council's Finance Committee that drafted the policy, said that the Auditor looked at the policy and they were comfortable with it as drafted. She explained that putting surplus funds into reserves is, in a way, returning the money to taxpayers, because "it's working for us."

Councilor Richard Barter said that he respected Monroe's right to have an opinion but "I hope you respect the professionalism of the Council's Finance Committee, a committee you voted to elect. The procedures proposed are prudent and conservative. We are doing the best fiscal job for the Town of Gray."

John Welch spoke against the policy. "I hardly know where to begin. It is my understanding that it is the people at Town meeting who approve a budget. The Town meeting is the authority on what is spent in town government. This policy is an extra-budgetary means of appropriating money. You're taking money that has not been raised for a specific purpose. I object to that."

Also speaking against the policy, particularly section five, were Fran Monroe and Wade Trudel. Trudel asked the Council what the hurry was. "Why don't you wait until Town Meeting to transfer the funds?" He agreed with the previous speakers that taking the surplus money in mid-year and placing it into reserves without citizen approval seems like it "usurps the taxpayer's right to decide how to spend their money."

Barter again took issue with Trudel's use of the word 'usurp.'

"You were a former town manager, you understand fiscal policies. You should know that this does not usurp the process," he said.

After over an hour of comment from the public, the Council took a motion to approve the policy. Welch asked if the Council was going to take any of their comments into consideration at all. Council Chair Pam Wilkinson said that they will have the Town Attorney look at the policy as recommended by Welch and then they voted 5-0 to approve with no discussion among themselves.

The Policy is available to view at the Town website, www.graymaine.org, click on 'Municipal Reports' and then "Undesig Fund.doc"

The Policy's stated purpose: