Ogden officials say they agree with the findings of a recent State Comptroller’s audit which found internal controls over financial management and court operations are not adequate and have contributed to the town levying more property taxes than necessary.
“We agreed with the audit,” Supervisor Gay Lenhard says. “We are not unhappy at all. We’re doing what they’re asking us to do.”
The state recommended that the town develop long-term financial plans, policies and procedures to govern developing and monitoring the budget estimates and the amount of unexpected surplus funds to maintain; and ensure the supervisor provides all Board members with accurate and complete monthly financial reports which are to be used to monitor the town’s financial position and budget status throughout the fiscal year.
The town has provided the state with a Corrective Action Plan which is already being implemented, according to officials. Taxes have been reduced in the 2015 budget for residents who live outside the Village of Spencerport from $5.70 to $5.53/$1,000.
Supervisor Gay Lenhard and Paula Parker, Director of Finance, say the part-town (town outside the village or TOV) fund will have a zero levy and the highway fund has been significantly reduced in the 2015 budget.
“The Board has been responsible,” says Parker. “Taxes have been very stable since 2009. The town has stayed within the tax cap since it started.”
She explains that the town is working to develop a fund balance policy which includes reasons why a designated amount is necessary. The town will then stay within those amounts.
“We will systematically review the policy over the next 3 to 5 years and slowly correct it in the way it was created – over time,” Parker says. “We will continue on the road to reduce taxes, reduce expenditures and use the surplus in the part-town and highway funds. The general fund needs an adequate balance for the needs of the community.”
The audit was critical of the town’s $4 million in unexpended surplus funds in the town-outside-the village (TOV) funds and town-wide drainage fund as well as $1 million in TOV reserve funds, which the state says should have been used for authorized purposes or to reduce property taxes. The audit also found the town had underestimated sales tax revenue by more than $1.8 million.
Parker and Lenhard explain that under state law, there is very little flexibility in how revenues are used. Sales tax revenue must go into the TOV or highway funds, it cannot go into the general fund.
Parker says the general fund (the town-wide tax base including the Village of Spencerport) must be used to fund police, the library, building maintenance, highway buildings, the court system, recreation, highway administration, the town clerk, nutrition/seniors, and park acquisition and development of land.
“We can’t take from the highway or part-town (TOV) to put in the general fund because they are different tax bases,” Parker says.
“We can’t use it for what we want to use it for,” Supervisor Lenhard adds regarding surpluses in the part-town and highway funds.
As a result of adjustments made since the audit, Village of Spencerport taxes will be increased from $3.68 to 3.98/$1,000.
Supervisor Lenhard says the town should have been watching that area more carefully. “We could have raised (taxes) more incrementally,” she says, noting the increase is a large one.
“We are continuing to smooth everything out,” Finance Director Parker says. “We will have to keep raising village taxes until it gets fair.”
The town has no debt service and the audit found no instances of missing funds. Lenhard says the town’s record-keeping has made audits easier for the state.
“In the end, people will see some rebates and the town will be in a good position to meet state constraints,” Parker says.
She explains that the town does have some flexibility in moving funds between the part-town (TOV) and highways funds and observes that, “apportionment between the part-town (TOV) and highway funds might have been better,” in the past.
Parker says the town is also working on resolutions for reserve funds that will bring them up-to-date as well as establish a more formalized plan for funding and usage of reserves.
The state audit additionally found that Ogden Town Court justices failed to implement corrective action to address issues identified by the annual external audit, allowing errors to occur and remain uncorrected and resulting in the poor accountability practices continuing unabated.
Both elected town justices have submitted a separate Corrective Action Plan to the state and Parker says, “… the judges are committed to working with the clerks.
There are now fail-safes in place … (the clerks) understand what the state wants them to do.”
