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Thursday, September 4, 2014

Straying from the beaten budget path

Telegraph Editorial

There is sometimes a tendency, when it comes to the public’s money, for departments with the biggest toys to act like black holes. Once they enter into the picture, they exert a gravitational force from which it becomes next to impossible to escape and they suck up all the stray money, while less powerful departments have to make do with less.

We thought of that black hole analogy when we learned of the Merrimack Town Council’s deliberations over how to spend the $854,000 that the town had left over at the close of the fiscal year. ...

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There is sometimes a tendency, when it comes to the public’s money, for departments with the biggest toys to act like black holes. Once they enter into the picture, they exert a gravitational force from which it becomes next to impossible to escape and they suck up all the stray money, while less powerful departments have to make do with less.

We thought of that black hole analogy when we learned of the Merrimack Town Council’s deliberations over how to spend the $854,000 that the town had left over at the close of the fiscal year.

That surplus, according to Town Manager Eileen Cabanel, came about as a result of motor vehicle registrations that were about $400,000 above projections, as well as unspent money that had been set aside for staff positions that were not filled, or were filled at a lower salary than budgeted.

The town administration deserves credit for keeping a rein on spending, and the Town Council wisely set most of the money aside as a reserve balance – a hedge against the time when the town faces an unexpected expenditure and times aren’t so flush. That falls under the category of fiscal prudence. Merrimack’s fund balance – augmented by the $509,000 that councilors opted to put in there this week, stands at just over 4 percent of the net school, net county and gross general fund.

That strikes us as about right.

We’ve seen some towns and counties try to park as much as 10 percent of their operating budgets in such funds. The problem with putting too much away is that when reserves reach a certain point, they no longer become instruments of strict fiscal prudence and, instead, may veer into the realm of overtaxation. Having an excessively large surplus may also make it easier for officials to circumvent the accountability process. There’s a fine line to be walked when it comes to surplus money, and less often really is more.

We think Merrimack officials struck the right balance.

They’re using some of it for paving, which is always a safe play, even if paving does sometimes seem to be one of the black holes we mentioned earlier. Putting the $250,000 toward townwide paving projects brings the total paving budget to about $925,000, most of which wouldn’t be necessary were it not for the fact that people continue to insist on driving.

It’s also rare for people to show up and complain about the fact that their road just got paved or that the plows cleared away snow in a timely fashion, which makes the highway department a popular target for additional money.

Merrimack councilors had a discussion, too, about whether to spend $30,000 on the redesign of a new highway garage in anticipation of seeking another bond issue.

Instead, councilors did something we probably don’t see enough of in the public policy arena: They opted not to spend more money on the highway department, and instead allocated money to a park – in this case, Wasserman Park, which includes extensive play areas and fields, the town beach, and trails for hiking and other activities.

Matthew Casparius, the town’s parks and recreation director, said they haven’t decided exactly what to do with the additional money, but “We’re looking at a lot of things.” That list includes some much-needed building repairs and, perhaps, improving access to and around the park.

Whatever they end up using it for, it was good to see councilors stray from the beaten path a bit in dealing with the town surplus.

We suspect the other places the money could have gone will still be there the next time the town finds itself with a few extra taxpayer dollars.