By Dawn De Busk

Staff Writer

NAPLES – The first budget committee meeting of the Town of Naples had some historical significance.

Naples’ Interim Town Manager Mitch Berkowitz brought up the noteworthy observation.

He made a reference to the movie Back to the Future, which some people may remember watching in the ‘80’s.

“For our folks in this community, this will be the only time you will see the past, the present and the future town manager in one room,” Berkowitz said.

In some cases, an incoming and an outgoing town manager might sit in on the budget process at the same time. However, because the Naples selectmen opted to hire an interim town manager, a third person was added to the equation to make for an unusual situation.

During the Naples Budget Committee Meeting on Jan. 18, former town manager Ephrem Paraschak and future town manager John Hawley were present in the audience while Berkowitz took his seat at the meeting table. Paraschak attended the initial budget meeting to answer questions about the 2017-18 budget. Crawley, who has been hired as the Naples’ full-time town manager, begins the job in late February. Therefore, the activity of preparing a budget for residents’ approval at Annual Town Meeting will be one of Crawley’s first takings-on.

While there was an abundance of town managers, there is a shortage of budget committee members. There are two open seats on the seven-person committee. One of those seats is available after the resignation of Dan Craffey. People who are interested in serving on the budget committee may call the town hall, 693-6364.

The next meeting is Feb. 7, 10 a.m. to noon.

On Jan. 18, the budget committee discussed the Undesignated Fund Balance (UFB) also known as the surplus fund, the role of an overlay to the mil rate, whether or not to get tougher on tax debtors, the importance of keeping stable the tax rate – a zero increase, and the current state of the economy.

Also, the members set times and dates to hear presentations from the representatives of non-profits and community groups that are asking for funding this fiscal year.

The Town of Naples looks good on paper with an accountant-approved Undesignated Fund Balance amount and a decent tax rate.

Earlier, in the conversation, Paraschak estimated the UFB is more than $2 million.

“The town has a healthy surplus fund,” Jim Grattelo said, adding that the amount would cover two to three months of operating costs.

“The town is in a very healthy position fiscally. You want two to three months in the bank,” he said.

The committee’s priority is to maintain the current tax rate of $13.35 – a goal pointed out by Jim Turpin.

Using the current tax rate of $13.35, Berkowitz supplied paperwork reminding members that for every $10,000 the committee recommended spending, it would add $.013 to the tax rate. Likewise, a reduction of $10,000 to the budget would reduce the tax rate by $.013, he said.

“Let’s keep it simple,” he said.

“I don’t want to bore you with jargon. What does our budget make up: county budget, the total town budget, TIF District fund accounts, and the education budget,” he said. “In most communities, the education budget is 60 to 70 percent of everything you do business with.”

The budget committee members were presented with Berkowitz’s handout of the year-to-date summaries of expenditures including department expenses and year-to-date revenues. The summary timeline is from July 1, 2017 through Dec. 31, 2017

“This is just a six-month look at a 12-month budget,” Grattelo said.

“We have an additional overlay that is built into the budget. The overlay is the same amount of money year after year. When the overlay really comes into play – these numbers become important in March, April and May, the months that lead up” to the dates taxes are due, Gratello said. Also, the overlay covers taxes that are not paid or are paid late.

“Depending on whose budget it is, you might spend 80 percent in the first six months. Or, you might spend 80 percent in the last six months,” Grattelo said.

“Taxes – we never collect 100 percent,” Berkowitz said.

Grattelo continued “The way a town runs – because it is illegal to not pay your taxes, they book that at 100 percent.”

However, not all taxes are paid, he said.

“We have taxes still on books that go back to 1996, 1997,” he said.

Write offs are one solution to quit carrying tax debt on book, he said.

It has been pointed out that a write off does not stop the town from collecting the tax debt later.

Budget committee member Bob Nyberg asked about the possibility of threatening foreclosure to tax debtors.

Everyone agreed – while it is prudent for the town of follow through with tax lien process, it is best not to evict residents living in foreclosed homes.

The committee discussed the difference between personal property tax also known as business tax, and real estate tax. Personal property tax makes up a small percentage of total budget revenue.

Paraschak said, “The board was fairly aggressive with larger personal property tax bills that were past due. But there will always be overdue taxes.”

And, there will always be some sources of revenue. The committee reviewed the town’s revenue for the past six months.

“Ultimately, the biggest revenue is real estate taxes,” Turpin said.

“To decide how much to spend, you have to figure out what revenues are,” Turpin said.

Berkowitz said, “2018 is supposed to be a good year economically. You should be able to see some progress in real estate and in your personal property tax.”