An accounting firm Thursday night presented two years of audit figures and advised Olean officials to make a number of changes in the way budgets are prepared.
Dave DiTanna of Buffamante Whipple Buttafaro told the mayor and Common Council that a $3.05 million difference was found between actual expenditures and the budgets adopted between the years 2003 and 2006.
Also, operating deficits starting at $450,000 more than was budgeted in 2002 grew to $1.4 million more than was planned in 2006, partly due to the lack of any surplus funds carried over from the previous years. He said that deficit is equal to 10 percent of the city's budget. Furthermore, accumulated deficits totaled $5.9 million, with $4.4 million tallied in the 2004-06 audit period.
DiTanna advised city officials to try to build up some surplus funds to help pay off the past four years of accumulated deficit and explained that postponing a pension payment caused a larger deficit in 2006.
The presentation is another step in sorting out the city's financial woes, which have prompted officials to borrow $3.8 million to pay for current year operating expenses.
Mayor David Carucci called in the state comptroller's staff to audit the current budget year and has stated he will use those figures to prepare his 2007-08 budget, due in draft Feb. 15, but the comptroller's report has not arrived yet. DiTanna's report alludes to the comptroller's audit, stating more deficits are expected to surface in 2007 due to a lack of money to fund retirement buyouts authorized in 2006.
In the interim, Carucci has unsuccessfully asked the Council to borrow another $3.4 million to cover previous deficits.
DiTanna advised officials to make short-term and long-term financial plans and to consult with the city's bond attorney about what effect future borrowing will have on government funding and debt service. He stopped short of advising Carucci and Council members on exact steps to cure the problems.
While the reports help officials see how previous actions caused the current financial problems, it is uncertain whether they will raise taxes, cut costs or borrow to pay back the deficits that are seen in the general, water and sewer funds.
Both the Council members and the mayor said they have learned a lot about finances in recent weeks.
Carucci vowed to have his budget drafted on time but expressed disappointment that only six residents came to the meeting to learn specifics about the city's deficits.