On slush funds and Article 7 – Vote NO

Posted this on the listserv on Wednesday. Thought I would also post it here.

Norwich has had a slush fund for years. It’s called the undesignated fund. VOTER approval is needed to spend that money. Under Article 7, the Selectboard is given control of up to $800,000 of that cash, limited by only an extremely broad purpose statement. Sadly, this shift in control from Voters to the Selectboard is not explicitly mentioned in the Board’s video presentation on Article 7. That’s a big oversight. Plus, the Selectboard presentation never explains why this sea change in policy is needed or useful. **

I use the term “slush fund” to refer to a pile of money kept in reserve to handle expenses outside the scope of a budget. Families might have a slush fund to cover an emergency expense or a spur-of-the-moment vacation. Businesses might use one for cost overruns or on a new project.

The reserve fund created by Article 7 strikes me as a slush fund, because its use is largely left to the discretion of future Selectboards.  The reserve is not limited to dire emergencies, where money is needed yesterday.  Also, the Town Manager has suggested that “other unforeseen circumstances” in the purpose statement is broad enough to cover any item not in the budget.  Pet projects? Project overruns?  

Our Town Treasurer says in a listserv post that the purpose of the Article 7 fund is “not specific enough and leaves room for subjectivity.”

One item not covered by Article 7 – reducing the property tax rate. Swell. What’s more, although the Article 7 reserve fund is capped at around $800,000, spending of that reserve can be manipulated to further access the undesignated fund.

Should voters worry about a future Selectboard that is not thrifty? Voter oversight is a good thing. Checks and balances.

In Norwich, the undesignated fund consists of accumulated budget surpluses – taxpayer money. I don’t see the need for the broad sweep of Article 7.  The Selectboard has not made any case for giving up voter control, whether the fund is a slush fund or something else.  Article 7 is a bridge too far.

– – –

** Statements along the lines of ‘reserve funds are established by voters’ are incomplete. It doesn’t inform voters that, in the case of Article 7, that voters cede control of funds to the Selectboard. Also, statements such as ‘Article 7 ensures the Town maintain reserves’ are similarly problematic. Leaving the money in the undesignated fund accomplishes the same thing.

* * *