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Audit finds little room for tapping reserves

For several years, Town of Tonawanda officials have dipped into the general fund balance to keep a lid on property tax increases.

And that's fine, according to an accountant who audited the town's books at the close of last year.

"You really did use the fund balance the best you could," Thomas P. Malecki, of Drescher & Malecki, told town officials in a recent meeting during which the audit was reviewed.

But he warned, "I certainly wouldn't want to go much lower."

In each of the past five years, $3 million has been appropriated -- but not necessarily spent -- from the general fund balance. At the end of last year, the balance stood at about $3.5 million, including $800,000 in undesignated funds.

According to Supervisor Ronald H. Moline, the fund balance has been used to reduce the impact of rising health care insurance and retirement costs, as well as to offset reduced assessments for entities such as the NRG Huntley power plant, formerly owned by what was then Niagara Mohawk Power Corp.

Similarly, the balance in the town's self-insurance fund has decreased yearly.

"You're not in any danger at this point," Malecki said, but down the road, more money must be raised through taxes.

The era of single-digit tax increases may be waning.

Malecki suggested increasing rapport with residents to find out what level of services they want. Town officials should communicate what they can provide and how much it will cost.

"I think it gives people a better understanding of what's coming down the road," Malecki said.

In general, auditors gave the town a passing grade for its fiscal recordkeeping and praised employees for their cooperation in the audit.

But Malecki said some changes should be made, including:

* A regular inventory of water and sewer assets, including fire hydrants and pipes.

* Charging interest on money loaned from one department to another, particularly if the loan extends for more than a year.

* A cash audit of the Youth, Parks & Recreation Department, which takes in a significant amount in fees.


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