MARCH 2005

This month, 'Town Works' visits with John McMahon, Chairman of the Board of Finance. McMahon has served on the Board of Finance for six years; is a former member of the Housing Partnership, the Board of Directors of Youth and Family Services and the Killingworth Scholarship Committee. He is currently a member of the Lions Club and the Republican Town Committee. He and his family have lived in town for 27 years and he works in Bristol as a sales representative in the steel industry.

The Board of Finance is the third branch of the Town's government. The Board of Selectmen was discussed in January and next month the Town Meeting will be reviewed. The Board of Finance holds regular meetings once a month, adds meetings as needed during the budget discussions, is responsible for holding a public hearing prior to the Annual Town Budget Meeting in May, and for preparing the Town Report.

The BOF is the chief financial authority of the Town and has three main responsibilities according to the Town Charter: Preparation of the budget for the following fiscal year; the management and monitoring of the budget for the current fiscal year, and the development of long range financial planning for the Town. The BOF essentially pays the Town's bills. It monitors how the money is spent and makes sure there is enough left over to leave in the bank to earn interest. McMahon said he is very proud of the work the BOF has done over the years. He said the Town is in great shape financially and has very little debt. The only major debts are the bond anticipation note from the purchase of the 133-acre Bosco property and the rental costs for the addition to the Town Offices.

McMahon said the goal of the BOF is to spend enough money so that the quality of life of the Town's citizens doesn't decline and to keep the big picture in mind. Just like the budget for a family, how much money the BOF has to spend is determined by the amount of money the Town brings in. The Town Assessor produces a report every year called the grand list. The grand list determines how much income in taxes the Town can expect based on an evaluation of real and personal property and motor vehicles. Just like when a family member gets a raise in salary, an increase in the grand the list means the town has more money to spend or invest.

When a fiscally responsible family sets up its budget, it plans out the family's needs and wants. Needs are mortgages, electricity, car payments and house painting; wants are new televisions, cars, vacations or maybe a new kitchen. The Town needs to pay people to help the town run smoothly; it needs to maintain its equipment, roads, bridges and pay on any debts it has acquired. Town 'wants' can be things like ball fields, improvements to town buildings and additional funding to organizations like HK Recreation and the library. If the town wants to fund a big project, it does so through low interest municipal bonds. These are similar to a home mortgage that you pay back over time. The new intermediate/middle school is being built by bonds taken out by the school district.

Each year the BOF reviews the long-term plans of the Board of Selectmen, the Fire Department and the Highway Department. Hearing each of their lists of priorities allows the BOF to look ahead and budget for big and small expenses now and in the future. Each area that needs to be funded is called a line item. These line items are divided into two categories: the capital budget for things like bridges, highway trucks and computers, and the operating budget for salaries, office expenses and funding of community groups. The Board of Selectmen prepares the budget and presents it to the BOF in early March. The BOF then carefully looks at each area of spending, gets input from the public at a Public Hearing, and then prepares a final budget that is voted on by residents at the Annual Town Meeting.

At the end of the year, the BOF hires an independent auditor to check that the Town's money was spent according to the budget or to balance the Town's 'checkbook'. If line items are overspent, the auditor can recommend moving money to pay that ‘bill' from another line item. If the town spends more than $10,000 over the budget line item, the Town has to vote to move money to pay for it. This often happens with line items like snow removal; especially this year. If the money is not spent and not moved to pay another bill, it goes into an account called undesignated funds and earns interest like a savings account. The Town can use this money for emergencies or for things the town needs during the year but were not put in the original budget.

Next month ‘Town Works' will visit with Town Clerk Susan Adinolfo. She will explain how a town meeting works. If you have any follow up questions, please email the editor@killingworthtoday.com. Please include your name, grade and teacher.

Previous Town Works articles:

February 2005 Planning and Zoning Commission
January 2005: Board of Selectmen