New critics of the Town of Berlin’s purchase of the former Tyson chicken processing plant in 2015 are mistaken, when they argue that passing on that purchase would have eliminated the current need for a tax increase and higher sewer and water rates.
The property, which was bought for $2.5 million drawn, in part, from the town’s general fund reserves, is not connected to this year’s budget difficulty. That problem is due to losses experienced by the financially separate water and sewer operation, not because of this or that general fund expenditure.
Simply put, it has cost more for Berlin to deliver these utilities than the town has received in water and sewer fees, which are deposited in a budgetarily separate enterprise fund. To make up for those losses, the town transferred money from its general fund to its water and sewer fund, a practice that could not go on indefinitely without somehow raising more revenue.
Not buying Berlin Falls and using that extra general fund money to continue subsidizing the water and sewer fund would do nothing to fix the problem of fees that are too low. All it would do is postpone the inevitable. Sooner or later, the town would have to replenish its general fund via a tax increase, and raise water and sewer fees to where the utility can support itself.
In other vein, neither can the town use the Berlin Falls bond or grant revenue for anything but Berlin Falls. That money is locked in by the town’s pledge to spend it for that one specific purpose. To break that pledge would invite trouble that’s more serious than the town’s current circumstances.
This doesn’t mean that acquiring the Tyson property was a good or bad financial decision. All it does mean from the financial standpoint is that Berlin could have used that general fund money to delay tax increases and higher fees for a couple more years, when the town and its taxpayers would find themselves in the exact same position they are now.
To suggest otherwise is either mistaken or misleading.