Rosy Financial Report for 2014-15
In the past year and a quarter, East Hampton Town has kept spending down, reduced costs, and accrued surplus in its various budget funds, Len Bernard, the town’s budget officer, told the town board last week.
In a report on the town’s financial affairs in 2014 and 2015, to date, the town’s Finance Department credited “prudent and conservative budgeting and close budget monitoring” throughout the year.
“A large reason for our good fund performance is because we spent less than we budgeted for,” Mr. Bernard told the town board.
The practices, under Town Supervisor Larry Cantwell’s administration, have led to recognition by agencies such as Moody’s Investors Services, which, in a report last month, said the town has “strong management and [a] demonstrated ability to restore financial flexibility,” and the Government Finance Officers Association, which, for the first time, last year recognized East Hampton for the caliber of its financial reporting.
Last summer, the town’s credit rating was upgraded to Aa2 by Moody’s, and another upgrade is expected this year.
All of the town’s budget funds built up surplus in 2014, Mr. Bernard said — with the exception of the Highway Department, which tapped $195,851 in surplus to pay for the extensive snow removal services required over the harsh winter.
The fund balance across the town’s major funds grew by more than $2 million last year, according to the budget officer, with all but the scavenger waste fund reaching the 20-percent surplus goal set by the town.
Mr. Bernard said the town was able to reap savings by refinancing bonds and by closing the septic waste transfer station at its old scavenger waste treatment plant, which had been inoperable.
Supervisor Cantwell said at last week’s meeting that he was pleased with the positive financial picture. “A lot of progress was made over the last two years,” he said.
He said he had pinpointed “the need to lower the overall indebtedness of the town” when a review revealed that $1 in every $5 spent was going toward debt repayment.
At 2014’s end, the town’s total indebtedness was more than $109 million, according to the Finance Department report. That was more than $10 million less than the town owed at the end of 2014. About $6 million of the decrease was due to the board’s capital borrowing policy of limiting annual borrowing for capital projects to about $5 million, less than the amount of capital debt being retired for the year.
By the end of 2015, Mr. Bernard reported, East Hampton’s debt is expected to go down by another $6.2 million, and by the end of 2018 the town’s overall indebtedness is expected to decrease to just over $80 million.
“That’s going to free up a lot of flexibility for the town,” Mr. Cantwell said.
Other positive financial factors the Finance Department report pointed to were the recent settlement of two of three union contracts, which the report called “fair to the employees and financially sound for the town;” the 2015 operating budget, which stayed below the state-mandated tax levy cap and contained a 3-percent spending increase, and a “flawless tax billing and collection season” so far this year after the appointment of a new tax receiver and the institution of new processes and controls.