Opinion: Amherst Has Got Financial Trouble. We Deserve Full Disclosure

Local election season is upon us, and with 10 of the 13 Town Councilors running for reelection on November 4, chances are that many candidates will be describing the state of the town in rosy terms.

But the reality is that Amherst does not have enough money to pay for the services that residents expect, and it can be argued that leaders have not done a stellar job in managing the town’s finances.

See related: Finance Committee Sees ‘Rocky Road Ahead’ for Amherst Budgets

Problems range from the widely decried state of Amherst’s roads, to cuts to school staffing and the public education program, to an under-resourced CRESS community responder department.  The inability to fund these needs has prompted the Finance Committee to discuss whether to recommend a Proposition 2 ½ tax override this fiscal year.

An obvious contributor to the town’s money shortage is the controversial decision by the Town Manager and Town Council to commit to a $55 million demolition, renovation and expansion of the Jones Library.

Shouldn’t the council have recognized the bind in which it was putting the town?  Yes, they should have, but they have a small excuse.  They were given bad advice by people in whom they had placed trust.

Real Fundraising Numbers Needed
One source of bad advice was the repeated claim by the Jones Library Capital Campaign (JLCC) that it was well on its way to raising the library’s share of projects costs.  In April, two weeks before the Council voted 10-3 to allow the construction project to proceed, the JLCC reported that they had raised 87% of their target.

The report neglected to differentiate between donation pledges and actual gifts received, did not identify fundraising expenses that had accumulated to more than $600,000 by April, and included grant funds that had not yet been received in its total.  By April 1 the library, which had signed a memorandum of agreement to remit funds to the town as soon as they were received, had only remitted $1,650,000.

It is time for the town to take over the reporting of fundraising progress, and it should simply use the amount transferred to the town treasurer as the measure of success.

In August 2024, former Finance Director Melissa Zawadski calculated the trustee commitment to the library project to be $13,822,518.  To date, the trustees have remitted $3,710,661 to the town.  Simply stated, the total commitment divided by the amount remitted represents the library’s fundraising progress.  This stands at 26.8%, with $10,111,857 remaining to be remitted.  With the Jones Library endowment currently valued at $9.1 million, there is no way the trustees can make up the fundraising gap unless very significant sources of revenue are found.

Where’s the Cash Flow?
Another vital bit of intelligence that would have helped the town council understand the viability of the library project is a cash flow model. Town Manager Paul Bockelman provided a cash flow memo to the Town Council as input to their decision on December 18, 2023 on whether to authorize the supplemental appropriation of $9.860,100 to cover the unexpected increase in the project cost estimate.  It indicated that the library trustees would transfer $6.5 million to the town by January 2025, and that the town would incur $8.7 million in interest payments on top of the “not a penny more” than the town’s $15,751,810 obligation approved back in April 2021.

All 13 councilors were persuaded to approve the supplemental borrowing.  Curiously, no minutes of the two meetings in December 2023 where the motion was debated – perhaps the most impactful town council financial decision in its history – are found in the archive of minutes.

Concerned citizens and councilors pointed out that an updated cash flow was needed when the Town Council met on April 14 to vote on a motion to rescind the $46.1 million borrowing authorization, an action that would have killed the library project.

A Response to Questions in the April 14 Town Council packet assured that the cash flow and principal interest projections “will be updated when the project is ready to move forward and on a regular basis until the project is finished and fully paid for.”

With the demolition phase of the library project nearly complete, there has been no report of any cash flow being prepared by the Town Manager or his Finance Department.  This failure to conduct what might be considered basic financial planning before committing to a construction contract and provoking new discussions of a tax override is irresponsible.

The citizens of Amherst deserve better.

See related: Letter: Is Anyone Keeping Tabs on Jones Expansion Project Accounts?

Jeff Lee is a resident of Amherst’s District 5 and a frequent contributor to the Indy.