Financial Report Commentary

For a short report, this one packed a lot of meat. Others will see different issues, but here are some points that I found interesting:

• The main point is we need the Point Ruston development to survive. From the report: “Simply stated, it does not appear that Ruston is financially viable without the Pt. Ruston development.” That means we should be doing everything we can to make this happen NOW – not throwing up roadblock after roadblock. I know we need to find balance and be reasonable, but that’s just the point; let’s get reasonable. Right now the Town is making the process too costly and taking way too long.
• The Current Expense Fund is loosing money annually. Just a note, utility funds pay for themselves from user fees, the majority of the rest of town services are budgeted out of the Current Expense Fund. Right now, about 32% of that fund comes from property tax, which has a voter-approved growth limit of 1%. Local inflation is at about 4.5%. Not a good combination. We gain a bit from new construction, but until both the Commencement and Point Ruston developments are built out, this fund is not self-sustaining. The good news is that once those developments come on-line, we cross that threshold without tax increases (at current service levels).
• Administrative functions (both people and facilities) are currently stressed. We had a wonderful opportunity to build a new town hall facility at the school, but it has gotten lost in the squabble between the mayor and the council. Maintaining our current staff, with their institutional knowledge, is vital. Yet the non-uniform staff just unionized. I think that’s because they don’t feel they are being treated fairly and valued. Again, not a good combination at a critical time. This appears to be yet another point in the mayor/council squabble.
• It didn’t look like the report considered the positive impact of the Stack Hill development, unless it part of the ‘construction’ growth. That would bring needed tax dollars sooner than Phase 1 of the Point Ruston development.
• It doesn’t look like the study author had read the fire committee report. The fire committee addressed his concerns about emergency medical/ fire services and needed growth (and financing of that growth). Police services need to be analyzed, but we moved to 24-hour coverage in the last few years. That’s a big step (and costly) that has already been made.
• The study notes that periods of growth for municipalities require some up-front costs that are recouped after the growth has slowed. For instance, new infrastructure cost hit but are paid over time with increased property values. Ruston currently has no debt, but there is proven business wisdom to use debt to maximize growth periods. The report outlines some great financial polices, including some for using debt to our advantage.
• One of the revenue sources the report discusses is increasing the tax for our current small businesses. Our current businesses operate on a shoestring as it is. We need to encourage them, help them grow as a way to increase our tax revenue, not throw an additional tax burden on them.
• One final note – I can’t believe we still haven’t figured out how to use the Harbor Improvement Funds. The question has been around the 20 years I’ve been watching – let’s get moving on that one!

Those are my initial thoughts. What do you think? ~ Karen