Savings used to reduce taxes while keeping safe fund balance
SATISH MOHAN Amherst Supervisor
Ihave submitted my 2008 preliminary budget for $115.8 million, which is $2.37 million or 2.1 percent higher than the 2007 budget.

Of this total, $67.8 million or 59 percent of the total expenditures will go toward personnel services: wages and benefits for the town employees. These costs went up by $3.7 million (5.8 percent) in one year. The remaining reduced by $1.4 million.

We had $17.3 million or 15.4 percent in fund balances, and I used about $6 million from fund balances. Estimated revenues increased by only $0.25 million or .7 percent. All this reduced the tax levy by $0.9 million. The Amherst taxpayers will see a slight decrease (1.2 percent) in their 2008 taxes if my budget is approved.

Budget management is a two-stage process. In stage one, we develop a budget based on estimated expenditures on various services, as submitted by our 19 department heads. The stage-one budget includes contingency amounts and some built-in cushions; I would guess about 5 to 7 percent. Then, the budget monitoring and control are done throughout the year to save monies through personnel attrition, efficient purchasing and competitive bidding of contracts.

This stage-two process may affect savings, which can be used toward the next year's budget. This is exactly what I did. Instead of raising taxes, I decided to use savings from the previous year and reduce taxes, while leaving a safe 10 percent fund balance.

This 10 percent fund balance is in line with our minimum fund balance policy that the Town Board unanimously adopted in January 2007. The Moody's bond rating service recommends 5 to 10 percent, and the Government Financial Officers Association recommends 5 to 15 percent of regular general fund operating revenues or no less than one to two months of regular general fund operating expenditures. These recommendations would require a maximum of $9.2 million

as our 2008 fund balance against the $11.5 million that I have provided.

In the last six years (2002-2007), we maintained a fund balance of 10.92 percent on the average, and in the last several years we have had a minimum cash balance of $21 million in our treasury. Following the above recommendations and statistics, I used my best judgment to retain 10 percent of the total budget, $11.5 million, as a fund balance for 2008 and to return the remainder to the people to whom it belongs. The budget provides $190,000 for replanting trees damaged during the October 2006 storm. A sewer truck costing $250,000 has been included to clean storm water drains. Meals on Wheels, snow removal, police and other essential services have been funded in full.

The budget includes $7.6 million in bonds for Capital Improvement Projects. Quality-of-life necessities such as storm drainage ($2.4 million), sanitary sewers ($2.4 million) and waterlines ($1.4 million) had high priority. Leaky waterlines on Hopkins Road, Chestnut Ridge Road, Campbell Boulevard, and John Glenn Drive will be replaced in 2008.

Volunteer fire companies had a preferential treatment in that their budgets were approved in full, and three-year budgets were approved with a 3 percent increase in 2009 and 2010.