It all started at the10/12/2022 Guilford Selectboard Meeting when Chairman Zon Eastes states: The first issue we are going to talk about is this Vermont Bond Bank loan. Which is the $195K (…) we discovered was sitting in a bank a couple of years ago. That loan final payment is due. Unfortunately, (…) there were no funds budgeted to pay this final loan payment. That payment is $19,793.28.

​So, while we have the funds to pay for that, the selectboard, um is not a budgeted item. So, we need to consider the reallocation of some funds in order to pay for that, um, that a, that loan. (…) Now, we understand and are looking at this. Sheila and I, Sheila’s done all the work on this, uh thank you very much Sheila.

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​At the 47:00 mark, Sheila Morse states: So, as of last November there was one final payment owed (…). The Budget, which was also created last November neglected to include that payment for the town vote. So, the payment was going to be due this November. So, (…), the 19 thousand and something was not included in the budget 

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​Dolores Clark asks: Why was that?

​Zon: Oversight.

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So, it’s clear that Zon and Sheila both agreed "someone" neglected to include the last payment in the operating budget for the Waterline fund. This lie alone convinced the SB to use the principal of the loan to make the last payment.

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However, after the transaction was executed, residents pointed out that someone had budgeted $24,500 to the “Waterline Fund” because it was listed in the Town Report. Morse and Eastes had to change their tunes.

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​At the 02/13/23 SB Meeting at the 43:00 minute mark, Morse states: The $195k just wasn’t identified properly. How we had paid for it, again it was in the budget it just wasn’t named properly so people didn’t understand where the debt was going.

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​Morse first stated that the payment wasn’t budgeted, now she claimed it wasn’t identified properly. Remember, Sheila and Zon set the budget numbers and labeled the items. Did they label and then budget for an item that they didn’t identify properly? Is that even possible?

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Nevertheless, Tammy Sargent asks a seemingly harmless question at the 56:00-minute mark.

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​Tammy: Fairly recently you guys decided to take money from the bond to make the last bond payment.

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Zon: Right.

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​Tammy: Because you said the last bond payment hadn’t been budgeted for, but it had been budgeted for.

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​Zon: I don’t think we said it hadn’t been budgeted for. We knew it was budgeted for; we knew it was budgeted.

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​Remember, Zon said: “there were no funds budgeted to pay this final loan payment.” He also said it “is not a budgeted item.”  Now he is saying it had been budgeted and they "knew it was."

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​Tammy says: OK, so why did we make the last payment with money from the bond, why didn’t we make the last payment from the money we budgeted?

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​Zon became hostile and replied to Tammy by stating:

Yeah, I don’t know the answer to that right now Tammy. I will have to go back and find it, I’m sorry. A, a, a, that’s the kind of question that… this is the kind of question that, I know there is an interest in trying to make the selectboard look like as if we don’t know what we are talking about. This kind of question is precisely the kind of question that you could send to me, and I could research and get you a very good answer. Right now, I’m caught with my pants down (…)

​We are Sooo trying to do the right thing and get Guilford onto a better standing from a financial point of view. So please all of these questions that some of you have, about what dollars have, aim those at me in emails and I’ll be glad to take them. We are not going to spend any more time here talking about those questions.

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And that was the end of the discussion until a recent audit disclosed the actual numbers involved in the fund transfers.

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The "Waterline Fund" had been budgeted with $24,500 in operating funds and labeled the same for years unchanged. Each year the operating budget covered much more than the principal ($19,500) and the interest, which was reduced annually. 

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In fact, Guilford Residents Paid, with interest, $221,882.74 for the $195,000 bond that is now valued at $175,500.00. They were taxed $268,000

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So, what really happened and how much money was involved?

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Here’s the point. Residents of Guilford were taxed $268,000.00 for a $195,000 loan that is now valued at $175,500. If the budget of $24,500 had been put towards the loan each year, it would have been paid off 2 and a half years in advance without using the principal for the last payment.

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If Zon and Sheila had used the operating budget (they created) Guilford would still have been overtaxed at $268,000.00 for a $195,000 loan, but the loan value would have remained at $195,000.

 

Option 1 Use Principal of Loan to Make Final Payment

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$268,000 Taxes Paid – $175,500 Ending Loan Value = $92,500 Tax burden

$221,882.74 Total paid for loan with interest for $175,500 loan value 

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Option 2 Use Operating Budget to Make Final Payment

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$268,000 Taxes Paid – $195,000 Ending Loan Value = $73,000 Tax Burden

$221,882.74 Total paid for loan with interest for $195,000 loan value 

 

In both scenarios Guilford residents were taxed $268,000 and paid $221,882.74. That amounts to $46,117.26 in excess taxes. ​Using the principal of the loam for the last payment increased the tax burden further while simultaneously reducing the value of the bond.

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Here are some simple questions:

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Since Zon and Sheila created the budget, why did they lie and say the Waterline fund wasn't budgeted for when it was listed in the Town Report?​

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Why did Sheila and Zon simultaneously insist on using the principal of the loam for the last payment which was clearly not in the best interest of the Town?​