This is a wonkish post. Read no further if you don’t want to delve in the details of the the Town’s Master Financial Policies, unless you suffer from insomnia and need somnolent reading material.
Listed as agenda item number 8 for the Selectboard meeting on Wednesday, March 10, is the topic: Reaffirm Master Financial Policies. I don’t recall reaffirmation of the policies as an annual housekeeping event in Norwich. But, it’s a good idea. A nice project for Finance Committee input, when that group reconstitutes.
On Saturday, I emailed the Selectboard with my public comment on the agenda topic. My goal was to highlight areas where concerns had arisen regarding the Master Financial Policies over the last year. These are not issues that I think necessarily need work. However, the fact that I recall the matters coming up on the listserv or at meetings probably means the topics resonate with me.
My list of five, as lifted from my email
- Purchasing Policy. I believe the Selectboard expressed concerns whether GHG emissions “could or should” be a consideration in identifying the winner of a competitive bid process. As you may recall, this issue arose with respect to the contract to purchase road salt. Then, the lowest price bidder was shipping salt from South America. The source of the salt from the next lowest bid was New York State. My recollection is that the Board questioned whether lowest bid could be rejected on environmental grounds under the Purchasing Policy. The issue was avoided by the next Selectboard meeting, because in the interim, the DPW determined the salt from the low bidder was of inferior quality, though it met VTrans standards. The issue may also arise with respect to the purchase of vehicles that are greener than gas-powered vehicles, but more expensive.
- Debt Management Policy. During the election cycle just completed, an issue was raised whether the guideline regarding the Town cap on debt (1% of Grand List) is consistent with the advice of the Town’s auditor.
- Capital Budget. The policy requires the Selectboard to adopt annually a capital budget, as part of the annual budget process. The Town has not had a capital budget for a number of years. In order to avoid the time crush of budget season, the Finance Committee recommended that the “capital budget should be reviewed prior to the regular operating budget.” It also recommended the creation of a Capital Planning Committee. The memorandum by the Finance Committee is in the Selectboard meeting packet for January 6, 2021.
- Fund Balance Policy. During the election cycle just completed, a concern was raised by a former Selectboard member. The issue relates to how the Town may access money in the Undesignated Fund Balance. As I understand this complicated issue, the problem begins with the seemingly incorrect treatment by the Fund Balance Policy of the Undesignated Fund Balance as a reserve fund under 24 V.S.A § 2804. No such reserve fund has been a created.
- Balanced Budget Policy. This policy contains no guidelines on the timing of the budget process. The Finance Committee memorandum referenced above proposes a timeline. “We strongly recommend that the budget process begin earlier, using internal pre-audit financial reports, and that it only include operating line items. Capital planning should be a separate process altogether, given its long-term nature, and should be moved to the Spring.”
Thanks for reading. Contact me at norwichobserver [at] gmail.com.