Tonawanda News —
TOWN OF TONAWANDA — Auditors delivered a positive yet cautionary financial report to the town board Monday afternoon during a work session.
"You are in a good financial state," Tom Malecki, of Drescher and Malecki, said while delivering the 2012 audit. "But we're not out of the woods."
Malecki said he expected some of the town's fund balance to take a hit last year, and many of them did, largely as a result of the 2008 settlement with Huntley Power Plant that took effect in 2012.
Per the agreement, the plant is now under a payment in lieu of taxes agreement instead of paying real property taxes. In 2013, the classification change reduced the town's tax levy by more than $2 million.
In 2012, the town's fund balances helped make up some of the loss in revenue.
The balance for the town outside of village fund, for example, went from $3.1 million to $3 million.
"You'd like a little more, but it is stable," Malecki said.
The general fund balance went from $3.9 million to $1.7 million in 2012.
"That is a little bit on the light side, but again, given the circumstance of what you went through in the past year, it is an acceptable level," Malecki said.
Malecki cautioned the board to examine the town's upcoming budgets to ensure that the reliance on the fund balance doesn't become a trend. He pointed to future challenges, such as the Department of Environmental Conservation consent order for millions of dollars of sewer work, and an increase in employee retirement obligations, which have doubled in the past three years.
"You have your work cut out for you, as do most towns," he said.
Town Supervisor Anthony Caruana pointed out that the town's overall fund balance still stands at $19 million, well within the state's recommendation.