standing Letters

At a special meeting conducted on Monday, the Westerly Town Council amended the town ordinance that established the transfer station fee schedule. The amending of the fee schedule was precipitated by a cost overrun of half a million dollars. Thus, the Town Council, in crisis-management mode, determined that the shortfall of half a million dollars would either have to be paid for by raising taxes or raising the fees charged for using the transfer station. At the special meeting the Town Council opted to raise the fees.

The transfer station operates under the town-adopted and -owned Municipal Enterprise Fund, which establishes a separate accounting and financial reporting mechanism for municipal services for which a fee is charged in exchange for goods or services. The MEF must abide by the same generally accepted accounting principles that private companies do. The MEF accrual-basis accounting methods and procedures are supposed to be used to track the revenues and expenditures of the transfer station. The expectation is that the fees collected will pay for the operation of the transfer station.

Once adopted, the process of establishing the enterprise fund should begin by using accounting records and identifying the assets (capital items and infrastructure), liabilities and equity. The objective of the accrual accounting methods and procedures is to track the performance of the enterprise to budget. Therein lies the problem. A cost overrun of half a million dollars stands as mute testimony that town management is not tracking the performance to budget monthly. A monthly analysis of the variances in the budget should have revealed the cost overrun much sooner. While it is now recognized that the major cause of the overrun was the result of the state’s decision to stop purchasing recyclables, the slow response time reveals another deficiency. It appears that an analysis of budget variances was not performed monthly. An earlier detection of the impact of the state’s decision might easily have resulted in a smaller increase in the fees. We will never know.

Jim Angelo

Westerly

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(1) comment

Snappy

Sheer incompetence by everyone involved with the management of the transfer station. Incompetence abounds within the municipality of Westerly.

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