The Center Road: In Gray, let’s look out for later

19

One of the most difficult things for elected officials to do is to plan for the long term.

Of course, that’s one of the most difficult things for anyone to do. Thinking beyond the next few days requires judgment, responsibility and resources to work with. It requires setting priorities. It requires looking beyond immediate needs and desires.

As town councils and school boards put together budgets for the upcoming year, preparing to present them to the voters during the next few months, some of the most consequential and weighty decisions are in the large spending initiatives, or the so-called Capital Improvement Plans.

A CIP predicts major infrastructure needs over future years, in order to plan for future costs. This provides an opportunity either to borrow or to save funds in advance. An ideal plan looks ahead for all major purchases that are predictable based on their expected lifetimes: bridges, vehicles, buildings, roadways, sewer lines and so on.

These plans are updated every year as projects are completed, as the condition of infrastructure is re-evaluated, and as cost estimates are improved. A plan with a long outlook, say 15 or 20 years, reduces the likelihood that an unexpected expense will arise.

Of course, having such a plan also means that the bad news is right there in black and white (or more likely, red). Items which last a relatively long time are often very expensive. An aerial ladder truck may last 10 or 15 years for some towns, but it may also cost $1.5 million. Scary stuff to budget.

When I moved back to Maine 20 years ago, the town of Gray was setting aside money each year in a reserve account designated for future purchases of fire trucks.

A little more than 10 years ago, a tax revolt in town resulted in significant cuts in the town budget and tax rate. One means to keep the tax rates low was by no longer putting much money into savings for future needs.

Later, it was easy just to continue this new tradition of not saving. Further cuts in services could be skipped. There was still a balance in the reserves that could be used for projects for several years. And taxes could stay low.

This was, of course, shortsighted.

Eventually, as it became time to purchase dump trucks or build bridges, with reserve accounts drained, the town started to borrow more money by issuing bonds and by signing lease-purchase agreements. Currently, the town of Gray’s annual spending budget is around $6 million (not counting the school system). Of that amount, more than $1 million each year is for interest and principal payments on the municipal bonds that have already been issued.

I should quickly point out that all of this has been occurring openly, publicly and with the approval of the voters. This practice has been the will of the majority, both of councils and of the electorate. Although some of us have voiced our objections, it has become out of favor to worry much about the longer term. Gray’s plan used to look 15 years in the future, but now looks ahead only 5 to 10.

Indeed, in the recent public workshop dedicated to capital planning, there was little if any discussion of the plan beyond the new budget. Regarding the budget for 2017, at least two Gray councilors used the phrase, “that’s next year’s problem.”

I am grateful to the town for publishing the draft plan on its website for all to see. Examining that document, “next year’s problem” will be that the remaining reserve fund balance will drop from a half-million dollars…to zero.

That’s not a plan. It’s just a wish list for future spending without a means to pay for it.

For once, there are no trucks or bridges that need replacing in Gray. This year, we lucked out. This year. This year also, the council learned that there was $300,000 “left over” from a bond that authorized more borrowing than was required.

The council is proposing to use that borrowed money to cover the roadwork that is needed. The voters will be asked to use that bond, payable over 10 years, for repairs that may not even last that long. This is not a sustainable plan, because the town needs to spend $300,000 each and every year for major road upkeep. You can see the problem.

If you found out that you had borrowed more money than you needed, would you spend it on something else or would you pay down the loan that you just took out?

I don’t think that it is fair for me to point out problems without offering solutions. Next week’s column will focus on some proposals for consideration. But you may find them unsettling.

Mark D. Grover is a resident of Gray and a former elected official.

NO COMMENTS