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Audit finds Town of Tonawanda in ‘good financial shape’

While the Town of Tonawanda has managed since 2007 to get its financial house in order, that good news should be met with a word of caution, according to an accountant who audited the town’s books at the close of last year.

“You’re in good financial shape,” Thomas P. Malecki of accounting firm Drescher & Malecki told town officials Monday afternoon at a work session during which the 2012 audit was reviewed.

“The problem is the future,” he added.

Health care costs rising faster than inflation and municipal worker retirement pensions – two problems not unique to Tonawanda – will make the next budget more challenging, Malecki said.

“You’ve got your work cut out for you,” he said.

The town is also in the midst of several necessary and costly infrastructure projects including the Parker Fries Interceptor Project, a four-part initiative to replace the main sanitary sewer serving the eastern part of the town.

Following four straight years of surpluses in the town’s general fund, the audit showed that expenditures last year surpassed revenue.

But town officials noted attributed the lost revenue to an extenuating circumstance – a one-time refund of property taxes in 2012 to NRG’s Huntley power plant.

And they promised to continue controlling spending by cutting, consolidating and sharing services where necessary.

“I meet every two months with our department heads, and we go through to make sure they’re spending in line with their budgets,” said Supervisor Anthony F. Caruana, who noted that property taxes decreased last year for the first time in 13 years.

While the outlook is uncertain, the town’s condition is presently stable, said town Comptroller Edward D. Mongold.

The town’s unreserved fund balance in 2006 was 9.4 percent, which is below the recommended 10-20 percent, said Mongold.

Now it’s just over 20 percent at $19.7 million, he said.

The auditors’ positive opinion of the town’s financial statement will help it maintain its Aa2 bond rating — its highest ever — from Moody’s Investors Service and borrow money at lower interest rates, ultimately saving taxpayers money, he said.

“The big takeaway is that we have a clean audit, which is what we want to have when we go out for bond sales,” said Mongold.

In general, auditors praised the town for its fiscal record keeping and employees for their cooperation in the audit, which should be released in a week.