Mayoral Candidate: Overhead Costs, "Just a Million Dollar Shell Game"
Mayoral Candidate Ronald Churchill asks Attleboro Mayor Kevin Dumas to make his case on water and sewer rate increase to tax payers.
My opponent has asked for a clarification of my position on the allocation of City Hall overhead expenses (sometimes referred to as indirect costs) to the water and sewer enterprise funds.
It is really quite simple. The water and sewer rates are higher than they should be, because an unjustifiably high amount of City Hall overhead expenses is being charged to these two enterprise funds.
How much is being charged? In the fiscal year 2012 budget, the total amount is $1,198,157.
By charging these overhead costs to the enterprise funds, they don’t appear in the city budget, and therefore they don’t impact the tax rate. It creates the illusion of fiscal responsibility and tight budget control, but it’s really just a million dollar shell game. Overcharging the city water and sewer enterprise funds takes money from the taxpayers’ pockets as certainly as a Proposition 2 ½ override does (unless there is a taxpayer who drinks only bottled water and rarely flushes).
When the overhead rates were established in 2004, a total of $725,852 was allocated to the two enterprise funds according to the reports filed by the city with the State Department of Revenue.
That amount represented 13.88 percent of the total operating expenses of the Wastewater Department and 14.36 percent of the total operating expenses of the Water Department. For the past eight years, Mayor Kevin Dumas has used those same fixed percentages to determine the proper allocations each year – without auditing or updating the actual city hall costs of enterprise-related services. As operating costs of the Water and Wastewater Departments increased over the years, the fixed percentage of indirect costs transferred to city hall increased from $725,852 per year to $ 1,198,157 per year. That’s a 65.1 percent increase.
I understand that the Mayor might have good reasons to increase revenues. If so, he should have been more candid, and made his case for the increase to the taxpayers. The people of Attleboro deserve no less.
Ronald M. Churchill
Candidate for Mayor of the City of Attleboro