CLERMONT TOWN BOARD
SPECIAL MEETING
AUGUST 13, 2010
The Clermont Town Board held a special meeting on Friday, August 13, 2010 at 6:00 P.M. at the Town Hall. Those present were Supervisor Raymond Staats, Councilwoman Dianne O’Neal and Councilman Robert Desmond. Councilwoman Moore and Councilman Jones were absent.
There were six residents present.
Supervisor Staats opened the meeting with a salute to the flag.
The purpose of this special meeting is to review the audit by the NYS Comptrollers Office titled "A Final Report of Financial Conditions and Internal Controls Over Financial Operations" for the Town of Clermont covering the period January 1, 2008 – September 17, 2009. The Supervisor feels it is very important to have our opinion of the audit and corrective action plan known to the public. There will be a public comment period at the end of the meeting. The Supervisor handed out copies of the current bank account balances and attachments on Fund Balances for the General and Highway Funds.
A. Financial Condition: The State Comptrollers Office believes our fund balances are excessive. The Town Board does not feel this way. We feel we are in a comfortable financial condition at this time. He feels that this is a good audit and that we came out very good and in good financial condition.
- Page 7 - 2nd paragraph: The Board asked the auditor what would be a reasonable fund balance and the auditor mentioned 10%-15%, which would only be approximately $45,000.00. This would get us through one year. If we reduce this amount, taxes would be raised 100%. Bob Desmond is thankful that the previous administrations did hold the balances, which were earned through higher revenues. Supervisor Staats said that the audit makes it look as though we were raising taxes, which is not the case. Supervisor Staats stated that of a budget of $500,000.00, we collect $190,000.00 in taxes. Councilman Desmond mentioned about establishing special funds and if this done and an emergency comes up, you cannot use these funds for an emergency, without a referendum which takes time. If the revenues supported the budget, we would not need this fund balance, but the auditor did not portray this in the report.
- Page 7 – 3rd paragraph: There was a FEMA grant received in the amount of $54,000.00 for the December 2008 storm which was unexpected and this is reflected in the balance of the Highway Fund in 2009. In 2012, we need to purchase a ten wheel dump truck, this money will be appropriated over the next few years, and reduce the fund balance further. There will be a pick up truck purchased this year from the Highway reserve balances. The report refers to the Capital Reserve fund not being properly established and many of the comments do go back to prior administrations, but the report does not explain this.
- Page 9- Highway Revenues: Again, refers to the Federal grant reimbursement in 2009.
- Page 9 – Highway Expenditures: Shows that we over estimated expenditures but it is less than 1%.
- Highway Sales Tax Revenues: Report shows that revenues were underestimated by 19%. This years budget sales tax revenues were increased and sales tax revenues have declined. One year monies were taken and levied for Highway fund more than general fund. It was taken from general fund for the highway fund and the audit is misleading that taxes were raised unnecessarily.
- Risk Assessment: The auditor goes through all accounts of the Town Clerk, Tax Collector, Judges, Supervisor and bookkeeper, which took the majority of the time. If any flags were raised he would look back and target those areas. There is nothing in this report that refers to our bookkeeper. As Councilman Desmond pointed out, if anyone does not know the process, you would not know that they looked at these things.
- Page 11 – Capital Reserve Fund: The Capital Reserve Fund was not properly established and the transfers into the Capital Reserve fund were not made in 2004, 2005, 2007 and 2008 as should have been. In 2006 and 2009, the transfer was done. Recommended increasing necessary reserves, financing one-time expenses, reducing property taxes, adopt more accurate revenues and expenditures estimates for the highway fund budget and insure that transfers are done. The Supervisor does not see how we can reduce town taxes as it wold jeopardize our future. Councilwoman O’Neal stated that she thought that the state has a nerve, when the state is in a bad financial state.
- Procurement: This section refers to attorney, engineer, insurance and bookkeeper. We did obtain quotes for all of these services every year. Amounts being paid by other towns were verified and they would like to have this in writing in the procurement policy. This has been corrected so that salaries will be verified every year.
- Paver which was purchased by three towns for $28,000.00 for joint municipal agreement. The town initially had three prices, but one was from the same vendor, which disallows that quote. The town only spent $9,333.00 which is under the $10,000.00 procurement limit, the auditor stated it is the total price, which they look at. We should have gotten three prices to be in compliance. Our attorney disagrees.
- Community House work: Our attorney wrote the Request for Proposal and contract for the purchase of the paver to pay $6,000 at the start of the project, $6000 midway and $6,000 at the conclusion. The auditor found that a payment was released before job was started. Under GML you cannot make payments prior to work being done. Councilwoman O’Neal asked the auditor how we would know this, and the response was to ask your Town Attorney.
- Outside Service Organizations: This refers to donations to the Veterans, Library, Park Program and Village Green Committee. The report states that $24,000.00 is appropriated to these outside organizations. It stated that over $10,000.00 for the Village Green Committee’s events were inappropriate. We are allowed to donate to the Village Green Committee but separate what we are funding, because they do not want us funding the Election Day dinner or the barbecue unless it furthers a town purpose. Councilman Desmond thinks there might be another alternative by passing a resolution, which demonstrates why those activities are furthering town purposes. This is a small town, with three school districts and four or five post offices and people have many different interests. If you have people focus on their town then they might be more apt to be involved in service activities. To have these events may further a town purpose with the Election Day dinner and Community Day. This was brought up in the exit session and they said it might come close. They would like to see a written contract, the Supervisor believes it will be acceptable explaining what we are donating to and what will be done. We have no intention of discontinuing donating to these events. We will have a written contract. There was no problem with the Easter Egg Hunt or the Christmas Party.
The Town has responded to the draft report and it is included in the report.
RECAP:
The Board has looked at the numbers with the auditor, and the Board feels comfortable with the finances of the town. We have some plans for use of the money for the purchase of a dump/plow truck, pickup truck, painting the buildings. We are using the fund balance as a budgeting tool to get us through while revenues are down. We will not accumulate a fund balance over the next few years as was in the past. If locked up in reserve accounts and not used for budgetary purposes, we will have to raise taxes. We will be looking at this more during the budget process and come up with the corrective action plan. We will be moving funds from the general fund to highway truck fund for purchase of truck.
Councilman Desmond would like the agreements with Village Green, resolution that they further town purposes and a resolution to indicate an appropriate fund balance and establishing the Capital Equipment fund included as part of the corrective action plan.
COMMENTS:
- Eileen Cassidy: She feels that the board missed the point that revenues are underestimate and expenditures are overestimated and it results in excessive amounts. It also resulted in a tax increase of over 65.7% in 2009. Supervisor responded that revenues plummeted in that time. If taxes were not increased, reserve amounts would not last four years before being depleted. At last meeting the Supervisor reported that the sale tax budgeted was $120,000.00 and $117,000.00 was received. Supervisor Staats said that was for the first two quarters. We will be very close if it maintains.
Mrs. Cassidy asked how the town lets the residents know of funds being expended, particularly the town garage and salt shed, plans to purchase a truck, recreation area with no plans of usage with no plans of how to remediate it or maintain it. How does board make the residents aware of these expenditures and the plans to pay for these? She believes it is incumbent of the board to let the residents be aware of what is going on in the town. Councilman Desmond explained that a new garage has been talked about for years. It was in very bad shape and a new town garage was discussed. Instead of spending three quarters of a million to a million, it was decided to repair the current garage, which was budgeted at $235,000.00 and there is still money left in that fund. Mr. Cassidy asked how many miles of road in Clermont. There are twenty-two miles of road in town. Mrs. Cassidy asked if there could be a used truck purchase. Supervisor Staats explained that it is a necessity that they maintain good equipment. He hopes that most residents would agree. The Highway Superintendent has come up with a ten-year plan to rotate trucks. There is one truck that is twenty year’s old which is still being used. Mrs. Cassidy thinks the people need to have a say on how much is spent.
Mrs.Cassidy knows that there is a law, in which residents vote. Informing the people is very important, she has no problem with replacing a truck and repairing the garage, but there isn’t enough information to keep people informed. She feels that with the audit, the board finds a lot wrong with it but she finds a lot right with it because of underestimated revenues and overestimated expenditures. The Supervisor believes the audit is misleading and that the fund balances have not been increased over the last several years. Councilman Desmond explained that it is difficult to get a reading on revenues and expenditures because you could create a shortfall, which would be a problem. Over many years, prior administrations built up the funds, which we can use now to stretch out during difficult times. Mrs.Cassidy asked if we get professional advice, because this audit might imply a criticism of our advisor. Our bookkeeper looks at it and finalizes it but has no direct input.
- Judy Neary: Although our bookkeeper was not mentioned in three other town audits where he did not catch some things, and was let go by these town and he should not be advising the town. She feels that if he is reviewing that he should be advising the town. Councilwoman O’Neal said that what was in the report, was not his responsibility. Supervisor Staats stated that the bookkeeper does not go over or troubleshoot. He is a bookkeeper, he does the reports for us. The auditor said that he could not be both the bookkeeper and accountant. Judy asked about backdating and he is allowed to do that in January back to December. On sharing the paver with Livingston and Germantown, Judy asked if the cost of repairs and maintenance is shared. The paver is stored in Livingston and all costs involved are shared. Judy noted that Bill Banks allocated to different funds and did not raise taxes. As was explained, once these funds are put into a reserve fund, they can only be used for that purpose.
A motion was made to go into executive session at 8:00 by Councilwoman O’Neal, seconded by Councilman Desmond to discuss possible litigation. All in favor. So carried.
A motion was made to come out of executive session at 8:20 P.M. by Councilwoman O’Neal , seconded by Councilman Desmond. All in favor. So carried.
A motion to adjourn was made at 8:20 P.M. by Councilman Desmond, seconded by Councilwoman O’Neal.
Respectfully submitted,
Mary Helen Shannon, RMC
Town Clerk