GREENVILLE, Maine — For years, town officials have dipped into the surplus account to fund unanticipated expenses and to reduce taxes, and that, along with over estimating revenues, has left Greenville with a fund balance deficit of about $135,000 that could increase as much as $190,000 by year end.
Selectmen will hold a special meeting at 4 p.m. Wednesday, Jan. 14, to review each of the municipal accounts in an effort to curb spending before the fiscal year ends on June 30.
“What has happened is we’ve spent more of the fund balance on the townspeople to lower the mill rate than we should have,” Greenville Town Manager John Simko said Friday.
Simko, who last week gave selectmen a history of the fund balance since 1989, said there are basically two problems. There has been an over reliance on the fund balance, also known as the surplus account, and more revenues have been projected than received.
A projected loss of revenue is expected this year that ends June 30, Simko said. “We are identifying about $80,000 in shortfall in revenue,” he said, but that’s an educated guess. He said the town won’t know for sure until year-end. What is known is that excise taxes are down and so are building permits because of the economy.
It isn’t the first time the town has been in the “hole,” according to Simko, who said the town had a deficit fund balance the year before. The fund is meant to be the shock absorber or cushion for the town, he said. For example, surplus should help a community if it budgets $900,000 in revenue to help offset the budget but only receives $800,000.
The fund balance is effected by revenue and expenses, Simko said.
“If you keep cutting your expense budgets right to the bone and you have things that cost more than you anticipated, you’ll likely run over,” Simko said. An example of that is sand and salt. Town officials typically base the budget on the previous year’s cost because they unanticipated the continued rise in price, he said.