2009-01-08 / Front Page

Auditors give town high marks

Cash surplus is "very good"
By Sam Bari

The Town of Jamestown is fiscally sound, according to a report issued this week by an independent auditing agency.

Paul Dansereau, of the auditing firm Parmelee, Poirier and Associates, gave the town high marks for the audit of the budget year ending June 30, 2008. The presentation of the audit preceded the regular Town Council meeting on Monday, Jan. 5. Dansereau said that based on an annual budget of approximately $18 to $19 million, the town had a cash surplus of $495,701. This increased the beginning fund balance of $4,059,000 to $4,554,701.

He said that the surplus reflected 20 percent of the budget with a $3,850,000 unreserved fund balance for the year.

"That's very good," Dansereau said. "Eight to 10 percent is normal. Financial institutions are impressed with anything over 12 per- cent for a town this size."

The auditor reviewed the government and business funds in an overview of the overall budget before asking if the council had any questions.

Town Council member William Kelly said the council needed to schedule a workshop to discuss the audit. "There are a lot of questions, but I don't think we have time to answer them in the half-hour allotted," he said.

Council President Julio DiGiando agreed and said that a workshop would be scheduled to examine the audit in detail. Dansereau said he would be available to accommodate the town's needs.

Council member Robert Sutton asked if a five-year analysis of the surplus fund growth was possible. He asked if the surplus was due to over-collected taxes, back taxes, or more-than-anticipated funds from the state.

Town Finance Director Tina Collins said that the surplus of the last few years was attributed to a combination of the reasons that Sutton mentioned, as well as monies accrued from investments.

"This year, $110,000 came from funds the town received from tax sales," Collins said. "In 2006, we anticipated the need for funds that included the fire truck that wasn't purchased until after June of 2008, when the audit had been completed." Collins also said that in past few years, money was accrued from positive interest on investments. She said she does not anticipate seeing as large a return on investments this year.

Town Administrator Bruce Keiser said that only 1 percent of tax revenues resulted in excess surplus based on budgeted expectations. "So it isn't a question of significant overtaxing that is the cause of the surplus," Keiser said.

Dansereau said that the town had $264,000 more in collected property taxes than was budgeted. He also cited $105,000 in interest income from debt service that was accrued because of good timing.

The interest is generated from investments made from the reserve funds, Collins said.

Dansereau also said that for the year, the harbor management fund had a surplus of $4,000, the water fund had a surplus of $23,000, and the sewer fund had a surplus of $242,000, all of which contributed to the town's accumulative net assets.

"These are departments that are supposed to maintain themselves and not rely on property taxes," he explained.

Dansereau also said that the funds are used to pay expenditures and as a basis to re-evaluate sewer rates. He added that the town is running its employee pension funds as an asset rather than a liability, which he said was exemplary because in most towns the situation was just the opposite.

Without giving details, the auditor told the town council the school surplus of $196,000 approved its undesignated reserve to $835,846, which can be used for unanticipated expenses and contingencies.

Dansereau thanked Collins, Keiser, and the town administrative staff for their contributions to helping finish the budget on time for the state mandate of Dec. 31 of last year.

Kelly concluded the meeting by saying that in these difficult fi- nancial times it was important for council members to study the audit so they completely understand the town's financial situation. "We have to properly plan our budget for next year and that is going to be a challenge," Kelly said.

In addition to the audit presentation, the council interviewed attorney Dean Wagner for a re-appointment to the Zoning Board of Review as a first alternate, attorney and chairman of the Zoning Board Thomas Ginnerty for re-appointment, and Patrick Driscoll for reappointment to the Conservation Commission.

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