By Terry Duffy
As it looks toward the fall and budget preparation time, the Town of Lewiston received some good news from the Dresher & Malecki audit team with regard to the town’s 2019 audit.
Carl Widmer, partner with Dresher & Malecki, visited Monday and advised the board the audit work itself was wrapped up in early June, with the actual presentation before the town being delayed due to pandemic guidelines covering meetings.
“We’re hired by the town to come in an provide an independent look at the financial statement for the year, so that the users of your financial statement, whether it be your resident taxpayers, the bond market or granting agencies – they want that third-party, unbiased opinion that these financial statements can be relied upon, and accurate and being fairly stated,” Widmer said.
Reviewing the audit, he noted, “I can confirm both in fact and appearance, myself and everyone at the firm … is independent from the town; we have no conflicts of interests with boards or any members of the town. So, we’re in the right, unbiased position to provide this external audit opinion.
“I can report that we received full cooperation and access to all the financial records at the town. … It was another successful year as far as that goes.”
Examining the five major operating funds overall, Widmer said the town was doing well – particularly with regard to its management of fund balances in its various accounts.
Starting with the general fund, he told board members, “Focusing in on 2019 you can see an increase in both revenues and expenditures. The primary reason for that was shift of the library contribution; that was $350,000 from the part town fund to the general fund of the town.
“That was the big reason for the expenditures, and to support that increase there was a property tax increase.”
Widmer said other increases included Modern Disposal tipping fees and finding fees from the Justice Department over the prior year.
“Total revenues came in over expenditures by $538,000. That’s the number, the total balance in the general fund is going to increase as of Dec 31, 2019,” Widmer said.
He told the board the town’s fund balance has recorded five years of growth, pointing to a $1.3 million balance in 2018 that has grown by a little over $500,000 to $1.9 million.
Discussing the town’s “unassigned or available fund balance,” Widmer said a key element to consider was “how much unassigned fund balance do you have in comparison to the next year’s budget. So in other words, compared to a budgeted one year of spending, what percentage does this unassigned fund balance represent.
“This year, that $1.7 million represents just about 58% of next year’s budget. We cannot say what’s right or what’s wrong (here), it’s just a board preference where you like to go, but I can say that’s at the higher end or the positive in comparison to other locals.”
Looking at the “part fund” – the town outside village fund – Widmer said activity here included the aforementioned Lewiston Public Library move into the general fund, which reflected a dip in its activity.
“Overall, you can see that revenues were ahead of expenditures, and total fund balance increased $410,000 for the year,” he said.
Widmer explained the fund balance in the town outside account has grown over each of the past five years: “The fund balance in this fund is representing about 71% in next year’s budget – again a healthy balance of fund balance in this fund.
Reviewing the highway fund, he said activity was similar to the prior year with a small decrease in revenue: “As property taxes were decreased, a short-term BAN was paid off,” which account for the tax decrease in the fund. The town also experienced a small increase in sales tax to help offset expenses. “In the end, revenues came in (at) $107,000 over spending” for a total fund balance of $1.1 million for highway.
He said the account contains $782,000 in available fund balance: “That represents approximately 24% of the 2020 adopted budget.”
Widmer said the water fund reflected “a spike in activity, primarily driven by an increased amount of a transfer to pay for capital projects.”
The transfers amounted to an $800,000 increase over 2018 levels and there was an increase in spending coupled with an increase in property taxes and water rates to support that $800,000 increase.
“This fund just about broke even. It used $3,000 in fund balance on a budget of $3 million,” Widmer said. It was a figure he called “negligible."
Widmer said the $367,000 fund balance in the water account represented 13% of next year’s budget.
“Of the numbers I’ve been providing tonight, that’s a lower number. One fund to keep an eye on is the water district fund,” he said.
As to the sewer district fund, Widmer said its activity was “rather consistent” with prior years, with some savings in employee benefits.
“Revenues came in at $200,00 higher than spending. Total fund balance grew to about $2.9 million – $2.8 million of that is in the available portion, and that’s 63% of next year’s budget.”
Wrapping up, he recommended the town “continue working on formalizing the fund balance policy” and to focus more on cyber security measures for the town’s IT operations.
“There’s an increase in risk of safety information,” he said, suggesting Lewiston needs to focus on the training of town users in its financial software, concentrating on protocols such as when the town encounters online problems with scams via emails, etc., and what its response will be to address it.
“To establish a protocol and a training people what to do, could save the town should they fall victim,” he said. “It’s a realistic issue that could come up and we think it’s easy to accomplish.”
“Overall with all things considered – COVID 19 in the midst of this audit – the town, they put forth the extra effort to keep it a smooth process. Compliments to the supervisor and the staff,” Widmer said.
He said Dresher & Malecki planned on issuing the financial statements prior to the town’s issuance of water line bonds for bid sale, which was expected to occur on July 29.