Budgets and Financial Reports

A – Not yet, as of September 30th, but anticipated soon. Recall that the previous administration read a letter from our auditor that announced that the 2018 financial books “were a disaster” and had caused last year’s delays in the AUD. That disaster was never corrected in our financial system though the auditor provided the necessary documentation. The disaster was very seriously compounded in 2019 by further bookkeeping neglect. That clean up is now concluding, after hundreds and hundreds of hours, and the AUD report is anticipated soon. The annual audit is also delayed, though the Office of the State Comptroller is well aware of these delays and their underlying circumstances.

Q – How much money was left at the end of 2019 and of that how much was “encumbered” (spoken for)?

A – The annual AUD will give us precise numbers, and so current estimates are based upon cash balances and certainly not final. However, our very preliminary estimate is that the available fund balance will be in the neighborhood of $1.5 million, hopefully more. The unavailable reserve/encumbered amount was about $358,000. However an additional amount of $950,000 is reserved and used to support the current budget. I was double what has been used in the past and was the cause of the 60% tax loss.

Q – Is there a $1 million “Capital Reserve” for Highway Department Equipment?

A – No. In fact the only Capital account for the Highway Department has a balance of $82.90. The Highway Supervisor and I are developing a five-year plan of equipment replacement based upon his assessment of cost/benefit and a review of his large equipment inventory.

Q – How much cash do we have?

A – This was initially answered by Councilman Coughlin and I believe his answer was in the neighborhood of $2,600,000.

The answer to this changes everyday because our cash flow is constantly in play. For instance, On September 29th, we had $2,520,319.08. If you substract the encumbered $295,502 you have a balance of $2,224,817. If you remove the money that is restricted to the Highway Fund [$153,637] you have a balance of $2,071,180. If you set aside the funds restricted to the Transfer Station [[$119,748] you have a balance of $1,951,432. In the last three months, we have spent $616,149 on expenses and payroll. Use that as a reference for the last quarter of the year, and we might have $1,335,283. at the end of 2020 in the bank. Plus revenues. But, it is only at the end of the year that we can actually know how much “available” money we have to add to our savings. Cash is important to your cash flow – “Do we have enough cash to meet payroll” for example, but it has little to do with end of the year savings, balances, “retained earnings”, or other similar concepts.

Q – Are you tearing down the Haunted Fortress?

A – Absolutely not. What we are finally addressing is the hazard of the Old Highway Garage which has been sitting waiting for an accident to happen since 2018. This is a cost that exemplifies why we need to have reserve funds or “rainy day” accounts.

Q – How much money do we have in the bank?

A – There is an important and very simple analogy to help answer the question. We are similar to a family that has two bank accounts: a checking and a savings account. Monthly social security income, for the example, arrives at the beginning of the month and the account is full of money. But only at the end of the month, when all of the bills are paid, do we know if we have any money left over. If we do, we deposit it into our savings account. For a town, with much of the money coming in in the early months, we can know for sure whether we will have any to place into savings only at the very end. The books for 2019 are not yet audited, but we think we have about $1.5 million in available “savings” at the end of 2019.