Auditors Give Town Kudos
Auditors who have completed a review of East Hampton Town’s financial status and practices for 2015 strongly complimented town officials when presenting their report on Tuesday.
Budgeting and spending practices, including a debt-reduction policy, fiscal checks and balances, and transparency and detailed reporting of financial matters paint a positive picture that is quite different from previous years, when consistent overspending under a previous administration without raising taxes and misappropriation of funds resulted in a $27 million deficit and a need to borrow $21 million to balance the books. Those bonds are still being paid off.
“Where the town was previously, and where the town is now, is just polar opposites,” said Dave Tellier of Nawrocki Smith, the firm that did the audit. “I think a lot of kudos goes to everyone in the town, to make this happen. The Town of East Hampton should be really proud of where you stand right now.”
“Everything that we see is operating efficiently now,” Mr. Tellier said; the audit listed no “material weaknesses or deficiencies.”
East Hampton has a good ratio of financial assets to liabilities, Mr. Tellier said, with $334 million more in assets than in liabilities.
Balances in the town’s major funds have been building for the last six or seven years, Town Supervisor Larry Cantwell said, with a total combined fund balance of more than $69 million at the close of 2015, an increase of $5.6 million from the previous year. That includes money in the community preservation fund, which comes from a 2-percent real estate transfer tax and is dedicated to land and historic preservation.
The town spent $28.2 million in 2015 for the acquisition of open space using the community preservation fund. At the end of last year, the preservation fund held $47 million.
A $6.5 million balance in the general operating fund represents more than 25 percent of that fund’s annual expenditures, “well above the town policy of maintaining 20 percent fund balances,” the audit says.
Total town indebtedness was just over $104 million at the end of 2015, down by $6.4 million since the end of 2013, the audit notes.
Overall town indebtedness is projected to decline to less than $100 million by the end of this year, from a high of $146 million at the end of 2009.
The total cost of debt service last year for the town’s governmental funds was $15.2 million. The auditors said that the amount spent annually on debt should continue to decrease as the town implements its recently updated capital plan and follows a policy of retiring more debt each year than it creates, and not increasing its debt by more than $6 million a year.
For the fourth year, the town has adhered to enhanced standards in financial reporting, said Charlene Kagel, the town’s chief auditor. East Hampton was previously awarded a certificate of achievement for excellence in financial reporting from the Government Finance Officers Association of the United States and Canada.