Municipality weathers first months of pandemic
By Joshua Maloni
The Village of Lewiston made it through the beginning of the coronavirus outbreak in fine fashion. How the numbers look for the brunt of the pandemic is yet to be fully determined.
Accountant Pat Brown of Brown & Company presented the Board of Trustees with analysis of the municipality’s audit dated May 31, 2020 on Monday. For that fiscal year, elected leaders expected to need $285,260 in appropriated fund balance to even out the $3,718,986 million budget. As it turned out, expenses were $404,677 lower than projected. Revenue also was higher than anticipated – by $17,550 – leading to a positive variance of $422,227. Overall, revenues exceeded costs by $136,967.
The 2019-20 fiscal year saw a tax increase of 19 cents, to $7.57 per $1,000 of assessed valuation. Residents are currently paying $7.66 toward a 2020-21 budget of $3,918,756.
Total fund balance as of May 31, 2020 – including general, water and sewer funds – was $2,042,905, an increase of $136,968 from the 2018-19 fiscal year. Unrestricted fund balance was $1,501,765.
“The village is in good, stable position,” Brown said. “All funds have surplus fund balances” and there is a “very solid fund reserve.”
Trustees have projected a need for appropriated fund balance in each of the past five budget cycles, but, “You can see, from 2016 right up to 2020, we’ve operated at favorable operating surpluses,” Brown said. “So, what that means, each of those years we’ve operated as a surplus. Your revenues exceeded budget.
“And, really, you’ve held tax increases to a minimum. Some of the years none. You’ve been operating within budget – better than budget.
“But, like I said before, that can change dramatically. We may see that with this (uncertain economic time). Keep in mind, this is 5-31-2020, before the effects of the pandemic. So, we’re going to see how that’s shaping out for this fiscal year. Anyways, you have good fund balances to handle that.”
The clerk’s office will be releasing updated numbers in coming weeks, as the board members begin to consider a budget and tax rate for the next fiscal year.
Looking ahead, the Village Board, led by a Deputy Mayor Vic Eydt subcommittee, is discussing ways to shore up the firefighting water supply for Center Street, as well as water infrastructure improvements on Ninth Street. An idea suggested this week was using a bond anticipation note.
Brown also recommended beefing up the water account, which has operated at a loss for five consecutive fiscal years.
Last July, trustees adopted local law No. 2-2020, section 20-102 (water, sewers, sewage disposal of the village code), to add a surcharge of $10 per billing cycle for capital water/sewer improvements. That billing was effective Oct. 1.
“Water system ended up having a shortage, so we had to reimplement that surcharge to cover that,” Brown said. “But also, more importantly going forward, I just told you the water fund itself, the operating fund, does not have adequate fund balance to address what I’ve heard … (is) the major water line replacement and things of that nature. …
“That surcharge goes directly into this fund. It gets collected as part of the water and sewer (fee). But, quarterly, it will get transferred from the water and sewer bank account into (a) capital project account. So, we’re going to start building fund balance. …
“Any expenses that come out of there, they will not be for operations. They’ll be for, basically, starting to accumulate money for this water line.”
With such a project forecast to cost around $1 million, Brown said now is a good time to take out a BAN.
“What I had suggested is a bond anticipation note be issued. Interest rates on borrowing right now are at record lows,” he said.
“It’s like below 1%,” Mayor Anne Welch said. “We are (also) looking into infrastructure grants.”
The Free Dictionary defines a BAN as, “A short-term municipal security that has its principal repaid from the proceeds of a long-term municipal bond issue that is sold at a later date. Essentially, BANs represent debt that is used until long-term funding is available.”
Terms could be a year, 10 years, or even longer.
Brown said, “You really have very little debt outstanding, and those bonds that are outstanding are going to be paid off (in the near future). …
“It’s not unusual at all to finance projects like this – I mean, you have to. Especially with the rates the way they are.”
“It’s foolish not to now,” Welch said.
The Department of Public Works also is nearing completion of a project to replace the water meter heads. Superintendent Larry Wills said this new technology would create a more accurate meter-reading system, while identifying leaks more efficiently, resulting in less infiltration-related costs.