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Town of Lewiston: Marra, Winkley dispute budget shortfall

by jmaloni
Sat, Jun 28th 2014 07:00 am

by Terry Duffy

The saga over Lewiston's finances took on a new turn this week.

Council members Mike Marra and Ron Winkley presented numbers at Monday's Town Board session disputing Town Supervisor Dennis Brochey's and Town Finance Officer Paul Kloosterman's analysis showing a $700,000 budget deficit for 2013 and similar projections for 2014.

Marra opened with a detailed explanation of the town's budget picture - one that point by point challenged Kloosterman's analysis heard at the May 29 Town Board session.

"At the April board meeting, our finance person (Kloosterman) said that 2013 went pretty well," said Marra. "At the May board meeting, he reported there was a $700,000 deficit for 2013 and the town had the same shortfall thereabouts for 2014.

"We (Marra and Winkley) did some research ... and set up a meeting with Patrick Brown of Brown and Co., and asked that if he could explain some things with the Town of Lewiston. (We) inquired if there was a deficit for 2013 or projected one for the current year.

"The answer was no on both counts.

"These are the facts," he continued. Marra said Brown reported that the Town of Lewiston was favorable to the overall 2013 budget by $460,541. He added that if the town adheres to the 2013 budget for this year, there would be no shortfall for the current year."

Marra presented data showing a $2.8 million surplus in the town's New York Power Authority infrastructure H-97 account that covers such items as sewers, roads, capital improvements, economic development and debt service. There's "a healthy $2.8 million surplus," said Marra. He added that Lewiston would be receiving an additional $850,000 from NYPA this year as part of its annual benefits package from NYPA as per the 2007 federal relicensing agreement that allows the Power Authority to operate its Lewiston facilities for the next 43 years.

Further Marra said the town has favorable ratings from Moody's Investment Service. "Moody's expects that the town will maintain a strong, healthy financial position, with healthy revenue notes, given the history," said Marra.

As to earlier concerns by Kloosterman regarding over-bonding, Marra said it simply wasn't accurate. "Mr. Brown said that this is not the case, and Moody's said that the town has a very manageable debt position," said Marra.

Marra said that according to Moody's, Lewiston has a short term rating of Prime 1 - "the highest rating," he said. Further he said the town's long term rating by Moody's was at Aa, which it termed "high quality and subject to very low credit risk."

But Marra said the town does have some challenges in managing its A fund, according to Brown's findings, that need to be addressed. He said it stems from Lewiston, like other communities, of having to contend with fixed costs such as health care and pensions. Marra said that, according to Brown, Lewiston is currently carrying a 12 percent fund balance in its A fund and the state recommends municipalities carry a 10 percent fund balance in such accounts.

Still Marra said that according to Brown, the town was not in bad shape. He added that Brown would be doing a detailed presentation on the town's financial picture at the July Town Board meeting.

"Brown said the town was pretty strong," said Winkley, who added that Lewiston does need to work on its challenges. "It can be done, and it will be done."

As to the $700,000 disparity in the town's A and B accounts, provided earlier by Brown to Kloosterman, which served as the basis for the deficit and shortfall forecast, Winkley said the town was awaiting Greenway funding that would in turn reflect the favorable $460,541 mentioned earlier.

Kloosterman admitted that total would reflect a favorable balance based on town income and expenses, but cautioned that was not the best way to manage its budget. Further he said the town still needs to address problems in its A, AB, and BD accounts. "That's where Lewiston is in a dangerous area - when it comes to planning and the need for taxes," he said.

Winkley reiterated Brown's finding - that the town is doing OK. He suggested the problem may center on a misunderstanding by Brochey and Kloosterman of information relating to the town's practice of using its fund balance to offset shortfalls.

Kloosterman, a CPA who is relatively new to the job of town finance officer, said that he, Brochey and board members need to come up with a better approach to avoid going into the fund balance issue further.

Winkley responded, "Fixed costs by the state are what are hurting us."

Marra reiterated, "There is not a $700,000 deficit for 2013."

The discussion closed with Marra saying again that Brown would be visiting with the board at next month's meeting to provide a full report.

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