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September 19, 2012

The Fact Checker: Did Wilton Turn Rutland's Deficit Into a Surplus?

Factchecker-debatable

With the 2012 campaign season in full swing, Seven Days has teamed up with VTDigger.org to create a fact-checker feature to test the "truthiness" of claims made by the candidates who want your vote this November. This week's Fact Checker was written by Paul Heintz.

CLAIM: “As city treasurer, Wilton turned Rutland’s $5 million deficit into a $3.8 million surplus.”

— Television commercial supporting Republican state treasurer candidate Wendy Wilton, paid for by the conservative super PAC Vermonters First.

FACTS: When Wilton and Rutland Mayor Christopher Louras took office in March 2007, the city was reeling from years of sloppy bookkeeping.

 Due to an improper commingling of accounts, the city’s general fund had been depleted to cover deficits in its water and sewer funds. The situation grew so dire that Rutland had to borrow $5 million in 2006 to plug a hole in the general fund.

When Wilton took office, she implemented new accounting practices and began providing regular, accurate reports to the board of aldermen, the mayor and the public. Over the next few years, Louras and the board — with input from Wilton — brought the budget under control by trimming expenses and raising property taxes and water and sewer rates.

In 2010, Wilton refinanced the remaining debt from the $5 million loan, along with $3 million in new expenses stemming from a 2004 roof collapse at Rutland’s water-treatment facility. Water and sewer ratepayers — who include residents of several neighboring towns — are still paying off that $6 million debt today.

According to Wilton, the $3.8 million surplus mentioned in the Vermonters First advertisement — and used in her own campaign literature — refers to Rutland’s fiscal year 2011 general-fund balance. That figure does not factor in the city’s long-term debt, which totals $15.13 million.

Rutland’s general-fund balance has not increased dramatically during Wilton’s tenure. According to revised figures from a 2008 audit, Rutland’s general-fund balance was $2.7 million three months after she took office. It has since grown to the current level of $3.8 million.

SCORE: The ad raises two questions: Did Rutland in fact transform a $5 million deficit into a $3.8 million surplus? And does Wilton deserve credit for it?

On the second question, Wilton receives near universal acclaim from Louras and members of the board of aldermen for enabling them to take the necessary steps to stabilize Rutland’s budget. But several aldermen argued that Rutland’s turnaround was a team effort and that the super-PAC ad inflates the role Wilton played. 

While the ad was developed independently from Wilton’s campaign, the Rutland city treasurer stands by the accuracy of the claim.

On the second question, the figures cited in the Wilton ad are an apples-to-oranges comparison. The $5 million figure refers to a loan the city took out before Wilton took office to recover from a predecessor’s bad bookkeeping. The $3.8 million refers to the general-fund surplus — the city’s annual revenues, minus expenses — but does not include long-term debt obligations.

The numbers used in the ad paint an incomplete picture of Rutland’s overall financial picture, which is more nuanced. For that reason, we rate the claim “Debatable.”

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