Fraser dips into town reserves to preserve services in 2009
December 4, 2008
To offset an expected drop in tax revenues due to the economic downturn, the Town of Fraser plans to tap into its financial reserves to maintain services for its residents next year.
That was the decision made by the Fraser Board of Trustees as they approved the town’s 2009 budget at Wednesday’s meeting.
“There will be no cutbacks in services,” said Nat Havens, the town’s Financial Director. “However, our budget is still $500,000 in excess of what our projected revenues are for next year.”
Havens explained the half million dollars will be taken out of the town’s $2.3 million in reserve funds.
The rest of the town’s budget expenditures will come from an expected $2.3 million in revenues that the town predicts it will take in during 2009.
Next year’s $2.3 million in revenue, which primarily comes from development and sales taxes, is a decline of about $200,000 from this year. The town’s 2008 income is expected to total $2.5 million.
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“Since 2007, our revenues have fallen about $250,000 compared to this year,” said Town Manager Jeff Durbin. “Fortunately for us, two years ago we put half a million dollars into our reserves. Thank God, we did that. If we hadn’t, we might have been forced to consider some cuts in service now.”
A year ago, the Town of Fraser’s had budgeted to spend just over $3 million, but Durban said the town has trimmed its expenses. By the end of 2008, it will only have spent about $2.6 million.
In formulating its 2009 budget, the town decided that it needed to spend $2.8 million, which is a combination of the $2.3 million in expected revenues and $500,000 in reserve funds.
Durban explained next year’s budgeted rise in expenditures over the current year is due to increased costs for police and other services as well as capital improvements such as the purchase of emergency generators for the town’s water system and major street repairs.
“Am I comfortable using our reserve funds?” Durban said. “On the one hand I’d have to say ‘yes, because that’s what reserves are for.’ We have certain projects that we have to fund as well as certain services we have to continue for our residents.
“On the other hand, I’d say ‘no, I’d rather not use those funds,” he said. “While $2.3 million may sound like a lot of money, it’s really not. But because of the economy, we have to use it now. When we’re finally out of this economic downturn, we have to make building up our reserve a priority.”
Havens, the town’s finance director, told town board members that he would continue to monitor the budget and give them updates throughout next year. He said adjustments may be required including the approval of a revised budget possibly by next September.