Town Manager offers mea culpa

GORHAM — Gorham's Town Manager Robin Frost acknowledged on Tuesday that she had erred last week in stating that the town's proposed 2012 budget was down 10.9 percent. The statement had been made at a budget committee work session last Wednesday, during a contentious exchange between town leadership and the committee.

“I own the mistake,” Frost said, adding that it was not intentional and she was not trying to mislead the board. “My message was a response to an accusation that the selectmen and town manager did not do their job,” she explained. In crafting that response, she said, she used the bottom line figure on the budget worksheets to formulate the percentage. Her error was in neglecting to remove the capital outlay funded by capital reserve funds from the equation.

“She didn't mislead or lie, it was misinterpreted (by the board),” said Budget Committee Chairman Bruce Lary, who said that many in the committee had assumed that Frost was talking about the operating budget. He said that committee member Jeff Schall had gone over the numbers and brought the matter up at Monday night's work session. “I applaud Jeff for doing his actual work. It was in our book the whole time. Any budget member could have looked,” Lary said.

Town Finance Administrator Denise Vallee explained that capital outlay funded by capital reserve is money appropriated in prior years and then spent in a single year, much like saving for a vacation for four years and then taking that vacation in the fifth year using the money you saved. Those expenses do not affect the amount of money to be raised by taxes or offset by revenue in the budgetary year and are therefore not considered part of the increase or decrease in a total budget.

With the capital reserve spending included the budget had appeared to drop $497,589. In fact it had gone down $286,889, according to Vallee, a difference of $210,000. That puts the 2012 budget down 6.3 percent from 2011, not close to 11 percent as Frost had stated earlier.

The budget committee has closed that gap through recent changes. In work sessions last week and this week, the budget committee recommended cutting an additional $33,560 from the budget. The bulk of that figure reflects that committee's recommendation to cut $20,000 in personnel benefits and the entire appropriation of $13,260 from the building inspection line.

The budget committee also voted against recommending $152,000 in capital reserve spending, meaning they recommend the town does not appropriate placing those monies in capital reserve (saving) accounts for future capital outlay use. This further reduced the 2012 budget proposal by $142,000 beyond what the selectmen had recommended. With the capital reserve recommendations and the additional budget cuts from the budget committee so far, the proposed 2012 Gorham budget is down $462,449, or 10.1 percent.

“What we're doing right now is what is supposed to be done,” Lary said. He explained that historically the selectmen's proposed budget has been presented at the annual hearing prior to town meeting, and then budget committee recommendations followed.

“It's never been done the way its being done this year, where the budget committee votes to recommend before the budget hearing,” said Lary, who has been involved in overseeing or forming local budgets for nearly 30 years. He said prior practice didn't violate any laws, but now the committee more closely follows the recommendations of the Department of Revenue Administration.

Gorham's budget committee will meet again on Thursday evening, Jan. 26, at 6:30 p.m., at the Gorham Town Hall. The Gorham public budget hearing is scheduled for Feb. 8, at 6:30 p.m., also at the Gorham Town Hall.