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Comptroller: Town of Saugerties needs larger “rainy day fund”

by William Dendis
April 18, 2016
in General News, News
0

dollar budgetThe state says the town of Saugerties is operating without an adequate reserve fund for unexpected expenses, but the town supervisor says town finances are improving.

The State Comptroller rated Saugerties as being under “moderate fiscal stress,” mostly due to a limited fund balance (also known as a rainy day fund) and cash-on-hand. Saugerties was one of 44 municipalities in the state to be labeled with some level of fiscal stress.

The state recommends municipalities maintain a fund balance of at least 10 percent; meaning 10 percent of its funds are not allocated to any particular budget item. The town’s general fund-plus-Highway-Department fund balance for 2014 was .9 percent.

Evaluations of the town’s cash reserves, a measure of liquidity, were another major source of stress cited in the report. The Comptroller broke out average monthly expenses vs. the amount of money the town had available for use in accounts, and found the ratio was five percent. Anything less than 100 percent results in stress indicators in that category.

Comptroller spokesman Brian  Butry said these factors are important for a municipality’s long-term financial planning.

They answer questions such as:

“Does the municipality have enough money on hand to weather any unforeseen circumstances during its fiscal year? So should something happen, do you have the necessary reserves to deal with that? Do you have the necessary reserves to make sure maybe if you have any delay, that you’re not having to rely on borrowing or you’re not having to go into any sort of debt or deficit situation during your fiscal year to balance your books?”

Though  Butry mentioned borrowing as a possible consequence, the report did not take any issue with the town’s debt, and the town hasn’t had to float any short-term bonds to pay its bills.

Supervisor Greg Helsmoortel doesn’t dispute the numbers, but he does dispute the conclusions. He said municipalities with healthier fund balances most likely raised taxes during the worst years of the recession, a time when Saugerties used its fund balance to cushion taxpayers.

“We knew things were going to get better,” he said. “Debt was going to go away. We were fighting to get rid of safety net and election costs, which we knew we’d be successful on. It had to improve, and it slowly is improving. We hit the black, and we’ll hit black more next year.”

Helsmoortel said he didn’t have a firm number on what the fund balance would be for the coming year’s budget, which the board is now finishing.

“It’ll increase a little bit but the budget is not built to increase that tremendously,” he said.

What about the criticism that the town used its fund balance to keep taxes low for the sake of political popularity and winning elections?

“I’ve never played with my budget to make us look good, in any way,” he said. “That’s irresponsible financing.”

He said the state makes things difficult.

“We are slowly building back our fund balance. Will it ever be what it was years ago? Probably not with the constraints and the unfunded mandates that continue to increase and the tax-caps that don’t take into account health insurance and retirement cost increases, utility increases.”

For example, he said, one day he had two meetings with the State Comptroller’s office. In one, he was told the town’s tax cap this year would be .7 percent. In another, he was told the town should invest in a full-time IT employee at a cost of $60-70,000— an amount that would eat up the entire allowable budget increase.

“One hand doesn’t know what the other’s doing,” said Helsmoortel.

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