continued Freitag said his company did not, but said that the town had asked them to give an opinion on how it would be reported in the financial statements. He said that BST became curious once the contract had come in but said it would be something that will be figured out during the months of April and June of next year.
Dustin than asked how the town would be able to account for the money coming in from the landfill deal properly, as he said the town is treating the payments as income coming in each year. Freitag said the town must put together the proper accounting treatment and present it to an outside certified public accounting firm to make an analysis.
“It is the obligation of a CPA that if your treatment is improper than this is what it should really fall under,” Freitag said. “The outside CPA firm basically says, ‘this is how you’re supposed to account for this.’”
Dustin then asked whether BST would be able to provide that analysis before the town’s public hearing on its 2012 tentative budget, and Freitag said it could be supplied.
The town’s spending versus its revenue was also discussed by looking at areas where the town budgeted for incoming revenues in 2010 but never ended up realizing it. One of the examples Person used was the sale of Heritage Park, which he said the town never ended up closing but budgeted it to pay off a recurring cost. He then clarified that the landfill was not considered the same thing.
“If the landfill is used to reduce the deficits, that would not be a bad situation,” he said. “You’re using the revenue to finance a non-recurring expenditure.”
Supervisor Paula Mahan assured the auditors that the $23 million up front from Waste Connections would not be considered a one-shot deal, as the rest of the contract states there will be guaranteed annual payments to the town.
“There will be income coming in every year for the life of the contract,” Mahan said. “At the end of the agreement, the town still owns the landfill. That asset belongs to the town and it’s making money off of it every year.”
She then added that the $10.8 million governmental fund deficit will be paid by part of the $23 million while $11 million will have to go into escrow, as the town still has to pay off bonds on the landfill that have yet to be satisfied.