North Castle Fund Balance Restored to Healthy Level
North Castle’s auditor reported last week that the town is in improving financial shape after it ended 2011 with a positive variance of more than $1 million.
Auditor Alan Kassay, of O’Connor Davies of White Plains, told the town board at its April 20 work session that between expenditures that came in under budget and revenues that were higher than projected, North Castle had $1,026,000 more on hand than had been budgeted at the start of last year. The figures are for the general fund.
As a result, the town’s fund balance, which stood at a little more than $400,000, or about 2 percent of its general fund budget in 2009, is now at about $2.4 million, which represents 17 percent of the 2012 budget.
Kassay said the town is now in the desirable 15 to 20 percent range for a municipal fund balance, which is generally the recommended level.
“You have a growing fund balance and it’s in accordance with state fund balance policy,” Kassay said.
Although the general fund has been restored to health, the highway department’s fund balance took a hit in 2011. The $550,000 one-time cost to settle the aborted Westwood organic recycling facility behind town hall as well as clean-up expenses from storms combined to drop the department’s reserves from $824,000 to $106,000, about 2 percent of its current budget, Kassay reported.
However, with a quiet winter and otherwise sound highway budgeting practices, Kassay said he was confident the fund would begin to be restored in the coming year.
Other hurdles for the town to overcome is the growing costs for benefits, particularly for its retirees, he said. Last year, it cost North Castle $942,000 to pay health insurance benefits to the town’s retired workers. Kassay said that while the town has more than $37 million in total liability for current and future retirees’ health care costs, those are not annual budgeted expenses. That figure takes in projected lifetime health benefit costs based on life expectancies for all current and future retirees.
Town officials said they hoped that the positive outcome from the 2011 general fund will help North Castle regain its Triple A bond rating. Supervisor Howard Arden said after the report was made public that the town is on the right path.
“I think it’s a good base, a very good base, and we’re confident as we look at the benefits and the expenses we will become more productive,” said Arden, who credited the previous town board for helping the North Castle regain stronger financial footing.
Councilman Michael Schiliro said he was pleased that the fund balance policy, which was approved by the town board in late 2009, as well as the slowly improving economy helped to increase the fund balance to a healthy level in such a short amount of time. Originally, officials hoped to reach that level after five years, not two.
Schiliro said the policy requires the town maintain at least 10 percent of its general fund budget in fund balance.
The auditor’s report is scheduled to be presented at the town board’s May 23 meeting.
Adam has worked in the local news industry for the past two decades in Westchester County and the broader Hudson Valley. Read more from Adam’s author bio here.