Louise Durfee, newly appointed Budget Committee member, while in the process of suggesting to the Town Treasurer the possibility of refinancing a $3.7 million bond this spring, stated that the potential savings of $200,000 would begin to address the “Justin Katz deficit,” referring to the Elector Petition for a tax levy increase of 0.0% submitted by Justin Katz, and further suggested the refinancing would help raise the town’s slightly less than perfect financial credit rating. The Budget Committee meetings are public and taped, available for all to attend or watch; the information given should be correct.
The argument the Elector Petition would cause a deficit did not fool the voters last May (1,234 for Elector Petition, 698 for Budget Committee’s recommendation); the inference voters hurt the town’s credit rating last May is wrong.
Here are the facts. The Elector Petition, in limiting the levy increase to 0.0%, fully funded the Budget Committee’s recommendations; it kept the spending exactly the same. (In fact, according to the audit report filed on December 30, 2014, the town recorded a surplus of $245,038.) The Budget Committee, in its recommendations, incorrectly indicated the amount the town had to keep in its Unreserved General Fund account as 3.5% of the current operating budget, when the correct figure is 3%. At the Financial Town Referendum, taxpayers simply voted to keep that misstated 0.5% in their own pockets, to spend as they see fit, rather than have it sit as a slush fund in the town coffers.
Further, the argument that Tiverton didn’t match Little Compton and Portsmouth, for instance, with the best credit rating because voters rejected a General Unreserved Fund 33% higher that the Charter requirement is not true. The credit rating recently done by S&P gave its most significant bad factor to Tiverton’s “financial management,” ranking it as “adequate.” Better fiscal management, and increased prosperity, would result in larger reserves.
Ms. Durfee’s suggestion that the Treasurer look into refinancing a bond at a lower interest rate is the kind of action one would expect the Treasurer would avidly pursue if it resulted in saving money. The reasons stated for the need for this refinancing were incorrect, and soundly rejected by the voters at the 2014 Financial Town Referendum.
Nancy Driggs is a member of the Tiverton Budget Committee and President of the Tiverton Taxpayers Association.