County borrowing request opens Pandora's Box

  • Published in Local News

LACONIA — The  Executive Committee of the Belknap County Convention met yesterday for the annual ritual of authorizing the treasurer to borrow in anticipation of collecting property taxes at the end of the year only to find itself embroiled in a debates about the budget process being a "sham" and a "vendetta" against the Register of Deeds, all amid a charge that the meeting itself was illegal.

All but four of the 18 state representatives who make up the convention were in ...

LACONIA — The  Executive Committee of the Belknap County Convention met yesterday for the annual ritual of authorizing the treasurer to borrow in anticipation of collecting property taxes at the end of the year only to find itself embroiled in a debates about the budget process being a "sham" and a "vendetta" against the Register of Deeds, all amid a charge that the meeting itself was illegal.

All but four of the 18 state representatives who make up the convention were in attendance, though only seven of them have a vote on the executive committee.

The county operates on a calendar year and, like many towns, adopts its budget in March. However, municipalities do not pay their share of the county budget until December, after their property tax rates have been set and their tax receipts collected. Consequently, to meet expenses during the year the county regularly borrows by means of "tax anticipation notes" (TANs), which are repaid when tax revenues are received. Each year, at the order of the county commission, the county treasurer formally seeks the approval of the executive committee to borrow the necessary amount.

This year when the treasurer requested to borrow $10-million, Representative Bob Kingsbury (R-Laconia) asked. "Does that mean the county is broke?"

Referring to the statement of projected cash flow, Finance Director Glen Waring replied "by the end of April, yes." 

Representative Colette Worsman (R-Meredith) expressed concern that the county was growing more dependent on borrowing, which she called "a monster." She claimed that excessive borrowing led to the downgrading the county's bond rating and asked "how can we wean ourselves off this?" 

Waring explained that in 2008 and 2009 the county borrowed $10-million and was able to borrow somewhat less in 2010 and 2011 because its cash flow was strengthened by the receipt of federal stimulus funds through the American Recovery and Reinvestment Act.

Waring suggested that increasing the size of the undesignated fund balance or collecting taxes twice a year would reduce the need to borrow.

County Administrator Deb Shackett dismissed Worsman's claim that the county's bond rating had been downgraded. In fact, she said that Moody's raised the bond rating  to  AA2 with a negative outlook in 2009, which she called "a very good rating for any county or city." After reviewing the financial condition of the county this year the agency chose to maintain the negative outlook, primarily because of the level of the undesignated fund balance and  prevailing economic conditions in the county.

The Executive Committee unanimously approved the borrowing.

Representative Harry Accornero (R-Laconia) turned the focus of the meeting to the Register of Deeds, reminding the delegation that it added money to the budget for a part-time position in the department over the objection of the county commission. Then he read from an e-mail, in which Shackett told the Register, Barbara Luther, that although the position was funded in the budget, she was not going to fill it without approval from the commission.

"This is a slap in the face of the county delegation," Accornero charged, hinting at a "vendetta" against Luther, presumably referring to litigation brought against Luther by the commission over her refusal to comply with cash management procedures recommended by the independent auditors.

Shackett replied that at the time she was reminding Luther that no county employees are hired without the approval of the commission. She said that the commission has since discovered the matter is governed by state law (RSA 478:2-a), which stipulates that "the register of deeds may employ individuals to assist him in the performance of his official duties. The salaries of the assistants and any other expenses of the office of register of deeds shall be paid by the county."

Undeterred, Accornero bridled at the notion that the delegation could earmark funds only for the commission to refuse to apply them to the intended purpose. "It's a sham on the people of Beknap County," he declared "Why do we waste our time? It's crazy. We are part of a scam on the people of Belknap County."

"It's not a sham," countered Representative Jeffrey St. Cyr (R-Alton), who explained that the county budget process mirrored those followed by municipalities and the state. The Legislature, he explained, grants the authority to spend but the executive manages expenditures. If the budget were spent just as the delegation stipulated, he said, there would be nothing left at the close of the year.

With that Accornero folded his papers, tilted his chair forward and left the room.

Noting that the delegation must approve the budget, Representative Bob Kingsbury (R-Laconia) asked "what does that approval mean?"

"It means we make a motion and vote," replied Representative Alida Millham (R-Gilford), who chairs the delegation.

"That's the mechanics," said Kingsbury, but not what it means."

"What do you think it means?" Millham asked him.

"If I knew, I wouldn't ask," he answered.

With that Tom Tardif, the conservative activist who has taken to riding herd on county government, stood to declare "this gathering is an illegal meeting." He said that while a meeting of the Executive Committee gathering was posted, of the 18 members of the delegation — all Republicans — 14 were present and many of them spoke in the course of the meeting. The later group included Representatives Kingsbury, Worsman and Accornero.

"I get tired of going to court," Tardif remarked.