Town Comptroller Michael Cohen explains financial factors impacting Bethlehem in 2018 and beyond. Photo by Ali Hibbs
#TownofBethlehem #MichaelCohen #Comptroller #FinancialReport #AliHibbs #SpotlightNews
BETHLEHEM — The Town of Bethlehem was left with less of a budgetary surplus after 2017 than it has had in years past.
Town Comptroller Michael Cohen said there was no need to worry when presenting the information to the Town Board on Wednesday, May 23; however, it is the first time in four years the town’s fund balance has dipped below the maximum percentage identified under a spending policy it established in 2012.
The fund balance percentage is calculated by taking the unassigned fund balances at the end of each year, as a percentage of the following year’s budgeted appropriations. In 2012, the town decided that 15 percent is optimal and 20 percent should be the maximum. Conversely, the minimum is set at 7 percent.
Beginning in 2013, the town has been able to maintain the maximum balance at the end of each year in each of its funds—general, highway, water and sewer. When the fund balance exceeds 20 percent, the additional money is put into a capital reserve fund to be used for infrastructure projects, thereby reducing the amount of money the town has to borrow to pay for those larger projects.
While, “despite weather-related challenges,” the town still ended 2017 with a net surplus across all four funds, the balance in the general fund dropped to 17.3 percent due to increased debt service costs, primarily related to two things:
Appropriations grew by $849,000 due to the renovation of the Adams Street building to be used by Delmar-Bethlehem EMS and the Delaware Avenue Streetscape Enhancement project, as well as increased police operating costs after the department added staff; and
The town pre-paid a $992,000 workers comp invoice, which allowed savings of 2 percent, but rendered that money “non-spendable.”
Cohen discussed several changes that affected town finances throughout the year: bad weather, which required more highway resources and reduced solar power generation; decreased mortgage taxes, which Cohen called “very difficult” to predict, and decreased composting sales; decreased water and sewer revenues; and a variety of other variables, none of which were entirely unexpected.
Cohen also spoke about the current fiscal year and beyond. New debt payments will cost $561,000 annually, across all four funds, beginning this year and lasting through 2042—”Long after I’m gone,” he said. The final payment on a 10-year police pension bond, however, will be made this year, freeing up $263,000 in the general fund annually.
Based on a consumer price index projected to be “quite a bit” above 2 percent, Cohen said he expects the calculated 2019 tax cap will be 2 percent — the first time the town has been able to levy the full 2 percent — since 2013. A 2 percent tax levy increase, he said, would net the town approximately $274,000 to be shared across all four major funds, as well as the EMS fund. That amount, he explained, is a little more than half of what it would cost to give town employees a 2 percent cost-of-living wage increase.
Cohen also noted that an expected savings of $73,000 has not materialized in 2018, as the progress on a tri-county shared emergency dispatch and records system spearheaded by Albany County Sheriff Craig Apple has been stalled.
Upcoming projects expected to incur more debt include replacing gutters at the town pool complex, installation of a roundabout on Route 9W, replacement of water mains and upgrades to the Clapper Road Water Treatment Plant.