Auditors gave the village of Mineola a clean financial bill of health. CPA William Barrett of the Mineola-based accounting firm of presented the audit of New York State financial statements as well as audit reports on the village justice and another on the village finances itself for the fiscal year ending May 31, 2012 to the village board before its regular meeting on October 10 at the village hall.
The 56-page audit report contains the original proposed budget, revised version, actual results and difference between the actual and the entire budget. Mineola has three major funds – the general fund, work fund, and the capital projects fund - and several major non-governmental funds which include the community development fund, the library fund, water fund and the pool fund.
“There’s been a very slight change, a slight increase... in the overall fund balances of all the funds put together,” Barrett said.
Overall the governmental funds went up by $47,000 reflecting increase in all the funds “except the general fund,” Barrett said, “and the only real reason for that is because you decided to pay off the New York State Retirement Incentive.”
In terms of liabilities, the village’s outstanding amount of serial bonds “is going down at a pretty good rate,” to the tune of about $1.8 million per year. Judgements and payable claims are also decreasing due to the reassessment, Barrett noted.
The New York State retirement incentive showed a $248,000 liability at the beginning of the year for the village as it related to the 2010 retirement incentive. The village would have incurred a 7.5 percent interest rate on the amount if it was left unpaid
A number of supplementary materials were also included such as a report on employee pension plan obligations for the last 3 years, required supplementary information from the budget, actual results from general fund and water fund, and a detail report on the capital projects fund – which is financed with bond anticipation notes.
“You don’t recognize the revenue until the bond anticipation note is payable to become a bond, which the village hasn’t done for many years, or you pay down the bond anticipation note,” Barrett said. “There’s a tiny difference, it shows that there’s a deficit and then your schedule shows exactly when the bond anticipation notes were redeemed, everything’s fine.”
A separate report on village justice cash from June 1, 2011 to May 31, 2012 was also prepared.
The auditor “did not identify any deficiency in internal control of the financial reporting that we consider to be material weakness,” Barrett said, reading from a letter which will also be submitted to the state. “The results of our tests show no instances of non-compliance or other items that are required to be reported under government-audit standards.”
There are two letters that Barrett actually submitted, one to the board with items pointed out that there was “no significant difficulty with dealing with management,” “no disagreements with management and accounting matters” and that the financial statements do contain estimates such as appreciation and post-employment benefits.
The second one, described as a letter of management, recommended two items last year with one of them being implemented, though details on the items were not specified at the meeting.
Mayor Scott Strauss questioned how the village’s reaffirmed bond rating of AA3 was in comparison to other municipalities.
“That’s a good rating,” Barrett said. “Because of the 2 percent cap, it’s tended to look at New York State local governments in a negative outlook, so for you to have that rating is good.”
The village does have one bond anticipation note left to pay off. Mayor Strauss said that he is considering asking the board to pay it off in January 2013. As of May 31, 2012, the bond had a balance $357,000 yet to be paid. The village is currently making principal payments of $119,000 per year with a “negligible” interest rate according to Barrett.
“That one’s going to be a little bit tougher to swallow,” he said. “It looks like it has 3 years to go, roughly. So should you decide to do that, you’re done with your obligation, you don’t have to worry about paying the interest, but all things being equal, your fund balance would decrease that amount.”
The village’s unreserved fund balance in the general fund is about 13 percent of its total expenditures for the year, the equivalent of 2 months, “which is healthy,” Barrett said. “Two months gives you a lot of flexibility and you’re right there.”
Trustee Lawrence Werther asked if Barrett was aware of the state comptroller’s proposal to rate village government as far as fiscal stress.
Barrett said that he was aware of the proposal, but had not placed the village’s numbers into the equation.
“I don’t think you’re going to get a report,” he said.