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Excess spending the cause of 'crisis'

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Budget committee tells town revenue is not the problem

By M.K. Luther -- mkluther@nvdaily.com

FRONT ROYAL -- The town's current budget crisis is a result of spending, not a lack of revenue, according to a presentation from the Blue Ribbon Budget Committee.

The committee was formed to find $1.2 million in the fiscal 2012 budget and make recommendations on how the Town Council could improve the budget process.

Committee Chairman Matthew Tederick and panel members former Mayor James Eastham, former Finance Director John O'Neill, Wilma Swiger and Jim Kelly spent six weeks analyzing data before making a presentation at Monday's council work session.

Tederick, saying that the town was in "a spending crisis, not a revenue crisis," said that income had gone up during the past 10 years. However, the spending increase had been disproportionate to revenue, inflation and population increase, Tederick said.

From 2000 to 2010, the town had a population growth of roughly 8 percent, and inflation of 28 percent. The town's estimated population in July 2009 was 14,573. Revenue increased $13.6 million, or 68 percent, while spending increased by $13.2 million, or 66.9 percent.

"There had been a lot of spending going on, let's leave it at that," Tederick said.
The committee made 17 recommendations, including using a mid-year budget review, re-thinking civic spending, re-evaluating employee benefits, cutting departmental spending and creating a rainy-day fund.

The committee recommended establishing a minimum three-month cash reserve in the general fund. As much as $4 million from the reserve could then be transferred to the newly created rainy-day fund. The fund's unspent balance would be refundable to taxpayers by check, tax reductions or decreased fees.

"We believe you need to get a handle on the expenditure side of the budget and not be so concerned with the revenue side," Tederick said.

Over the years, administration took an increased role in the budget decision-making process and gave "limited information" to the council, Tederick said.

The committee recommended taking a more active approach and using the previous method of having department heads present individual budgets to the council.
"We believe the council used to have a much greater hand in the budget process," Tederick said. "A lot stopped as far as your planning and the way your budget was presented."

All town departments except the police significantly increased spending, Tederick said. The committee recommended looking for potential reductions in departments and possibly outsourcing some services.

The town spent $5.9 million for employee benefits in 2000, jumping to $10 million in 2010, with an increase from 146 full-time employees to 157 by 2011, Tederick said.

The town is spending $1.8 million per year for health insurance. By switching to a $1,000 deductible plan instead of the current $100 deductible, the town could save $328,452.
A 1-percent wage reduction would produce $108,000 in savings, Tederick said. The committee also recommended considering furlough measures and hiring freezes.

The committee also advised reviewing the amount the council spent on consulting and legal fees, which totaled $3 million from 2006. The town spent $682,000 on Blue Ridge Power, the town's electric consultants, and $182,000 for the solar project alone, Tederick said.

The committee also said the council should reconsider civic and community organization spending, such as funding for the Front Royal/Warren County Tree Stewards, the Blue Ridge Arts Council and Town Trolley, which totaled $167,500.

Mayor Timothy Darr, thanking the committee for its work, said the council would review the report before making any final conclusions on using the suggestions during the budget cycle.

"One thing I want to make sure is that everyone understands is that the recommendations are solely and only recommendations," Darr said.


First and foremost, there isn't a crisis. The town budget has DECREASED for the last three years. That fact was never mentioned.

Only a very few comments ...

New departments were formed to better recognize the costs of certain services that the town is offering. As a result, the percentage increases in those departments were through the roof. The percentage increase from nothing to something is always going huge. It doesn't mean that something shady is going on or that we are running amok.

Inflation was measured using the CPI-U. This index is a measure of the inflationary pressures that an urban wage earner would feel. It looks only at the rise in the cost of clothing, food, housing, transportation, and health and recreation. It does not look at the commodities that town departments are spending their money on. It therefore does not accurately reflect the inflationary pressures that a town department might feel.

The town just got a very generous donation of $30,000 for a new Police vehicle. That money will have to be taken into the budget as revenue and then when the vehicle is purchased, it will be shown as an expense. How much of the spending increases criticized by the committee can be attributed to donations made by our fine citizens?

Lastly, how can anyone say that we shouldn't be concerned with revenue? Anyone who tries to run his/her household knows that there are two sides to the equasion ... how much is coming in and how much is going out. Many of our citizens know that it's a real crisis when the stack of bills exceeds the paycheck. We aren't there in the town and won't be.

The committee made some very good suggestions and we will consider and likely implement many of them. Very clearly, the Council needs to get more involved in the budgetary process and each and every council member needs to understand the budget. In my opinion, our fiduciary responsibilities are the very most important part of our jobs as Council Members.

Town Council = High Drama
Blue Ribbon = Higher Drama
Matt Tederick = Highest Drama
Observers = Snoring

Town Council = Preparing for a party
Blue Ribbon = Prepared balloons and cake
Matt Tederick = Prepared marching band
Observers = We missed Dancing With The Stars for this???

Town Council = We Didn't Do It
Blue Ribbon = Somebody Did It
Matt Tederick = I Know Who Did It
Observers = Was It Boss Hogg and his merry band of Good Ol' Boys?

"All town departments except the police significantly increased spending, Tederick said."

Let's bear that comment in mind. If you have an increase in population, yet the Police Department spending is still the same...is that logical?

If you are going to have ANY department that needs to keep on top of a growing population and the problems that they bring to this town from where they come, it is the police department.

New people from other municipalities coming to Front Royal bring with them the issues from that place they left. This presents the Police Department with new and ever growing types of crime...we are not forever going to be a 'sleepy little town.'

The police department is on duty 24 hours a day, the patrolmen, the dispatchers, they don't sleep. They deserve consideration when it comes down to making cuts and amendments to spending. If anything, they deserve raises and incentives to keep the good people they have...lets see if anyone follows through on that thinking. And if not, what they will do when its 2 a.m. and they need help.....

"the council should reconsider civic and community organization spending"

Did the Blue Ribbon commitee consider the reduction of revenue that would occur if Front Royal abandoned all of these programs which improve the quality of life for citizens and attract tourism?

"A 1-percent wage reduction"
The town employees have not been given a COLA/raise for several years. When wages don't keep up with inflation, the result IS a wage reduction. Further reductions/freezes will cause the town to lose some of its most valuable and experienced employees who will seek employment elsewhere. If this happens during a hiring freeze, the positions will not be back filled which will cause a huge burden for the remaining employees and a reduction in the quality of services provided. Many of the over burdened employees will burnout or quit.

If a wage reduction is implemented in concert with an insurance deductible rate hike, this would be a real kick-to-the-gut for our valued civil servants.

Tom Conkey: I guess you just don't get it either.

SPENDING IS SPENDING no matter how the money was added to the account (i.e. donation). Don't you see it that way????

New departments were formed to better recognize the costs of certain services that the town is offering. As a result, the percentage increases in those departments were through the roof. The percentage increase from nothing to something is always going huge. It doesn't mean that something shady is going on or that we are running amok.
But yet you are still spending our tax dollars but don't want to look at it that way, huh?

Inflation was measured using the CPI-U. It therefore does not accurately reflect the inflationary pressures that a town department might feel.
THEN stop using it as reference!!!!!!

Lastly, how can anyone say that we shouldn't be concerned with revenue? Many of our citizens know that it's a real crisis when the stack of bills exceeds the paycheck. We aren't there in the town and won't be.
WHY don't we JUST WAIT until that time comes, huh? And how do you know if the town will ever be there? Do you have a magic ball you look into?

Idiots are the ones that wait for something that they know is coming down the road to destroy you and not do anything about it.

Let's face it, while Mr. Graham was the Town's Manager alot more money was going out the door than was coming in. And Mr. Conkey knows thats the truth, and he's always trying to protect his buddy. Don't forgt this Conkey wanted to raise our taxes. That was his answer, along with Mr. toot his horn Hrbek. Don't worry Mr. Conkey, maybe you can do the news at noon with Mr. Hrbek after we send you out the door.
THANK YOU MR. TEDERICK FOR OPENING SO MANY EYES IN OUR COMMUNITY!!! Hey Mr. Tederick, I guess you probably answered Ms. Hobsons question also, why Mr. Graham was fired.

The town council in my opinion are idiots. Hiring Tederick and his merry band of ??? are any of these people really qualified to make these determinations? An independent review from outside this town would have made better sense. A qualified CPA may make a difference too in comparing numbers. For that matter, the town council could have done what this blue ribbon committee did, or could they? They [town council] felt the need to SPEND more money to learn they were in a spending crisis! Can anyone say, mismanagment?

Absolutely disgusting the town council stoops to this level. It is a well worn and often used political trick to create a many-faced committee to do the dirty work of a two-faced politician.

Boss Hogg.... Boss Hogg.... come out, come out, wherever you are. Front Royal wants to play with the big kids.

Thanks for all the good feedback. I use my whole name in this venue because I want people to know what I think ... whether you agree with me or not. As an elected official, I think that's important.

We engaged the Blue Ribbon Committee ... as a completely volunteer group of concerned citizens ... because we wanted to make sure we never found ourselves in a crisis and to give the citizens an opportunity to have a more direct voice in the budget process.

We are required by law to have a CPA audit our books every year to ensure that the taxpayers' dollars are properly accounted for. As a result of those audits, our finance department has been recognized for its excellence for the last 21 years in a row.

I did want to raise taxes. The 3 cent tax increase I advocated would have cost the average homeowner $45 a year. Instead of raising real estate taxes last year, we loaned ourselves money from the Electric Department surplus. It will still have to be paid back and furture budgets will have to include that payment.

The committee recommended that the Council get more involved in the budget oversight. Based on comments from some of our members in this paper and the radio, that recommendation is clearly appropriate.

So ... here's the deal. The town budget has been reduced every year for the past three years. There hasn't been a Real Estate tax increase in the town for the last eleven years. We have money in the bank and we have an award-winning cost accounting system. We've been improving our infrastructure and even using previous year allocations to improve roads. That doesn't sound like a crisis to me.

Well Mr. Conkey, I for one would'nt agree or believe anything that comes out of your mouth.

Kudos to you Tom for chiming in, defending, positioning, explaining, or whatever word you want to put on your comments. Maybe you can encourage you other Town Council Brethren to to chime in once in a while. What a novel idea to have members of the elected body actually comment on the managment of the town!

Isn't it interesting how Ego, Arrogant, Ignorant, Proud Peacock and Pure Screaming Hell push on. It appears that nothing will stop them to their end. The Blue Ribbon Committee was basically their brain child to find solutions - and now they whine and complain about the good suggestions and results?
Sounds like people who lose an election and don't know how to handle it. My what wicked webs we weave we at first we seek to deceive.

Mr Conkey, can you please suggest to SOMEONE that the Town Employees at least get a raise this next budget year? It seems as if they have given and given and its time for them to be rewarded for hanging in there......make some cutbacks in another area.....

Without regard to facts, supporters insist their Blue Ribbon Champion is the greatest person to never walk on water. Blind faith, as the term suggests, renders facts unnecessary to the dialogue. Blind faith actually precludes thought, especially thought that takes the form of questions. Convincing others requires more than bald statements of personal belief. Old timer car salesmen used numbers to pencil whip unwary customers into believing a deal was good. The deal always falls apart when pointed questions are asked. Mr. Tedericks assertions of a "crisis", made without evidence, can also be dismissed without evidence. The unanswered questions demonstrate the truthfulness of that.

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