Friday, July 27, 2018

Enterprise funds, fees and cost accounting:

Right from the Selectmen's handbook:

User Fees and Enterprise Funds
Property tax revenues derive from a tax rate and property values, with little or no link to the cost of
specific government services. In contrast, user fees and charges support the provision of a specifi
municipal service, with the users paying for the service based on the cost of providing it.


A user fee is simply a charge to the user of a specific government service. Th underlying philosophy
is that those who use or benefit from a program or service should pay for it. Th direct and indirect
costs of various services are analyzed, fee mechanisms studied, and fees and rates established to
recover the full cost of service delivery.


It is essential to distinguish between the types of user fees. User charges are based on the goods
and services used by an individual, group or business (e.g., sewer and water user charges). Other
fees, such as licenses and permits, might reflect the costs of the government’s review and regulatory
processes.


User Charges
User charges introduce a business relationship between the user/customer and the governmental unit
imposing the charges. The customer has the option of avoiding both the service and the charge, and
the governmental entity provides only the level and quality of service for which users are willing to
pay.



. . . . Enterprise Funds
An enterprise fund accounts for the income, expense, assets and liabilities of financing specific
services to the public, where the governing body intends to recover the costs of providing the services
through user charges. Governmental units operate and finance these service activities in a manner
similar to a private business or enterprise. Rates and user charges are established, either as part of
the budget process or as a separate, formal rate-setting procedure to cover direct and indirect costs,
including depreciation of assets, expenses, replacement or improvement of assets, and efforts to retain earnings for future capital investments.


While sound business practices and long-term financial planning might dictate the creation of an
enterprise fund, municipalities may also do so to achieve some broader public policy objectives.
Some elected and appointed officials believe that those who benefit from a particular government
program should pay for the program through user fees. These officials may conclude that an
enterprise fund is the best mechanism for systematically accounting for all direct and indirect
operational costs and revenues. Thus, an enterprise fund not only yields the financial data needed
to periodically determine the required level of revenue, but also responds to public policy goals,
management control, accountability and other objectives.


The Templeton Town Administrator and members of the board of selectmen have been making the argument for moving collections of the sewer dept. from the sewer dept. office to the Templeton collector's office, citing past audit management letters and it would save money.

Selectmen also told voters they needed a certain amount of dollars to pay for an infield groomer and they told voters they need certain dollars for Assessors new software and then told the Assessors the funding was in place. Both turned into to, in my opinion, lies. Did not need the amount of money asked of Town Meeting, the funding source for Vision software was not there, so now you want voters to trust you, the selectmen, on this issue.  Sorry, ah, no, I believe the office of the board of selectmen is built on a foundation of lies! (in my opinion)

I believe denying a person of a certain department a pay raise for no real good reason, could lead to an MCAD complaint, as that action, or lack of, could be taken as discriminatory, in my opinion, any way.

Bottom line, I do not believe this board of selectmen can be trusted.




3 comments:

  1. I believe the residents that voted,voted for an infield groomer, not a tractor too !

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    Replies
    1. Isn't that called bait and switch !

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