Auditors give town clean bill of health
Albrecht Viggiano Zureck & Co. auditor Jeffrey Davoli answered questions at Tuesday’s Town Board work session about the audit of Shelter Island’s 2013 financials.
Shelter Island’s external auditors from Albrecht Viggiano Zurek & Co. gave the town a clean bill of health after reviewing its 2013 financials.
“The Town Board is very pro-active in addressing concerns that we have,” AVZ’s Jeffrey Davoli said.
But he and his colleague, Kevin Tyburski, offered two areas of caution — one of which, the general fund balance, could affect budgeting for 2015. Most municipalities maintain an unassigned fund balance of between 10 to 20 percent of their overall budget to address unforeseen needs.
Shelter Island’s unassigned fund balance was at $679,000, just under 10 percent at the end of 2013, Mr. Davoli said. It has been dropping year to year as the Town Board has dipped into it to close a budget gap without having to add more to property taxes at a time, they’ve said, when money remains tight for many Islanders.
The proposed budget submitted by Supervisor Jim Dougherty called for adding $370,000 in fund balance to cover the 2015 spending plan and that’s something Councilman Ed Brown has questioned.
The other issue for the auditors is the town’s not fully funding the state retirement system for its employees. The state is asking for $8.6 million. That number has grown since the 2012 financials were audited by about $1.5 million.
However, other municipalities have also not been funding the state retirement system, Supervisor Jim Dougherty said.
“We look like pikers” compared with larger towns like Southold, he said.
Not so, said Southold Supervisor Scott Russell.
“We pay every dollar that’s asked for by New York State,” he said.
Retirement system payments are calculated on a complicated formula and vary from year to year, partially affected by the rate of return the state realizes on investments. After the 2008 recession, resulting low returns resulted in higher estimates of what it would take for municipalities to make the obligation viable.
But with market recovery in the last couple of years, that figure is likely to fluctuate and reduce that obligation.
And, of course, everyone doesn’t opt for retirement at the same time, so what’s necessary is to have enough funds to cover obligations for employees already retired, and those who will retire that year.
A combination of a slow recovery from the 2008 crash and the state-imposed 2 percent tax cap has forced municipalities to cut amounts to the retirement system and also to look to negotiate with unions to reduce obligations for future retirees.
