To the editor,
At last week’s Village Board work session, the Board met with the Village’s auditors to review their audit for FY 2014/2015. One of the items on which there was much discussion was the Village’s Fund Balance.
As background, the General fund is the Village’s operating fund for which property taxes are levied. Taxes are levied to pay for expenditures that are anticipated to be greater than revenues. At the end of each fiscal year, any money that was levied and not used, is put into the Fund Balance account. It is an operating surplus. There are many reasons why there can be a surplus including warm winters, or higher sales tax revenue, unexpected income, among others.
Not all of the Fund Balance account is available for spending, however. For instance, monies assigned to advance purchase orders, added to the budget appropriation, advanced to other funds, reserved for future benefits, etc. are not available for spending.
As of the end of the Fiscal Year 2014/2015 the Village’s total Fund Balance was $7,068,091 but the amount that was unreserved or undesignated was $4,934,653. This amount of Fund Balance represents about 29% of the total appropriations, a little higher than is the standard recommended.
Developing a Fund Balance Policy to plan for the use of operating surpluses is recommended by both the auditors and the NYS Comptroller. Such a policy would specify how the available Fund Balance might best be allocated. The policy could identify some long-range projects that will require large expenditures and direct some money to that future use when there is a surplus. In the long-run, this would provide a cushion against the future expenditure for those projects and possibly reduce the amount of bonding for it.
As a Board member over the last several years in which the Village has consistently met the Tax Cap and Tax Freeze requirements and the Fund Balance has continued to grow, I am in favor developing such a Fund Balance policy to plan for major future expenses. I believe everyone at the meeting was on-board with this direction. I look forward to the development of a Fund Balance policy for the Village.