Apparently St. Lawrence County needs to get a “long-range financial plan.” That’s according to an audit of the county’s financial situation that New York State Comptroller Thomas DiNapoli issued today (interesting charts within!).
In a press release on the audit, DiNapoli is quoted as saying the county is “walking on a financial tightrope…without sufficient cash available for managing unforeseen events or closing budget shortfalls.” That sounds terrible. But what does it mean, and how did we get here?
State auditors found that between 2007 and 2011 the county’s fund balance in its general fund decreased 68 percent from $21.3 million to $6.9 million. Unexpended surplus funds, which are the portion of that balance that’s not allocated for another purpose and is available for use, went from $11 million in 2007 to -$1.7 million (that’s $1.7 million in the red) at the end of 2011.
How? DiNapoli’s report says that county officials “relied heavily” on those funds to close budget gaps and keep tax rates stable. And they’d included a nearly-$4 million appropriation from those same funds for the 2012 fiscal year, which means at the end of that year there would be a deficit of $3.6 million.
Here’s a little more from that press release:
Audit findings also included:
· In September 2011, the county incurred a cash flow shortage in the general fund that required the issuance of a revenue anticipation note of $8.5 million against the state and federal aid revenue to be received in 2012. This cost the county $260,742 in interest payments;
· The Board of Legislators has requested state legislation that would allow it to increase its sales tax rate from 3 to 4 percent, which county officials project would initially generate an additional $12 million annually;
· The board passed a local law to override the state’s property tax cap and increased the county’s tax levy by $6.7 million (14 percent) to $53 million for 2013; and
· The county is deferring some work on roads and bridges and delaying purchases of vehicles, equipment and computers because of its cash shortfall.
The report’s not all about being hard on county officials, though. It acknowledges a number of demographic issues that have “contributed to St. Lawrence County’s poor financial position:” A population that’s not growing; “relatively low” median income ($49,390 versus an average of $56,951 for counties across the state); and a relatively high poverty rate (17.6 percent versus 14.5 percent statewide); and a high (10.2 percent versus 8.2 percent statewide) unemployment rate.
DiNapoli recommends something I’m sure county officials will find very simple and easy to do (this doesn’t always come across in print, but I’m being sarcastic): “develop a fund balance policy that establishes a reasonable amount of fund balance to be maintained in order to meet the county’s needs, provide sufficient cash flow, and reduce or eliminate reliance on short-term borrowing.”
I’m sure said county officials will have something to say about this.