Smoke & Mirrors Budgeting

This is in response to Randy Farkas’ letter of 10/28/08 which appears in the Milltown Voice and addresses the monumental electric utility rate increase suffered by the residents of Milltown this year. Unfortunately, Mr. Farkas does not provide all of the information necessary to properly analyze the actions taken by the council earlier in January of this year. 

During the 2007 campaign, Mr. Farkas and the two Republican Candidates, Mr. Harto and Ms. Waters, criticized the council for utilizing the prior year’s electrical utility surplus to offset the municipal tax increase. It was indicated that the municipal budget should be examined and areas found to control spending. I wholeheartedly agree with each of these sentiments. 

However, what I do not understand is how after criticizing the last council, the present council did exactly the same thing. When imposing an electrical rate increase earlier this year, the council did not limit the increase to the actual bulk rate increase paid by the Borough. Instead, the current council increased the electrical rate to provide for additional surplus from the utility.

This fact is evidenced in the adopted budget which states that in 2007 $773,226.00 of surplus was budgeted, while in 2008 $1,122,800.00 of surplus was budgeted. The $1.1 million figure was introduced with the budget in March 2008, demonstrating that as early as March, the council was aware of the increased profit margin for the utility.

Similarly, in 2007, $881,200.00 of the year’s surplus was utilized in the budget, while in 2008; $531,700.00 of the prior years surplus was utilized in the municipal budget. This means that the 2007 Democratic Majority funded the municipal budget with $1,654,426.00 of electric utility surplus and the 2008 Republican Majority funded the municipal budget with $1,654,500.00 of electrical utility surplus. Almost the same amount.

Clearly, the current council has not taken the necessary steps to curtail municipal spending, for which it criticized its predecessor council. Additionally, the council attempted to hide its funding of the municipal budget through the electrical utility by blaming the prior Democratic Majority for the rate increase. The council cannot continue to balance the budget on the back of the electrical utility. The residents of Milltown deserve better.

Respectfully,

Ronald Dixon

Democratic Candidate for Council