Less than a week before their annual town meeting Edgecomb officials received word the town’s financial situation was not as dire as they have been led to believe.
On April 6, during a review of a partially completed audit for the 2013-2014 fiscal year, the town’s auditor, Fred Brewer informed the board of selectmen the town’s surplus account was in the negative.
Brewer maintained the surplus account would be in the negative as he continued to work on the audit throughout the month of April. This week, the town received a still incomplete audit, but with a finalized balance in the town’s surplus account.
According to a balance sheet that will be distributed at town meeting Saturday, May 16, the surplus account has a positive balance of $44,904.
The audit is still in progress. According to Brewer, the amount in surplus has since been revised and is actually $47,838.
According to Brewer, the surplus account swung into the positive once surplus funds designated for municipal departments in 2013-2014 were transferred to the general surplus account. If the excess funds were not “lapsed,” or applied to surplus, the surplus account would have remained in the negative, Brewer said.
According to the balance sheet, before the surplus municipal funds and deferred property tax payments were applied to the general surplus account, the account was negative by $95,079.
“I’m happy to see the surplus account in the positive,” Selectman Stuart Smith said. “It’s definitely not as dire as it was made out to be. I wish we had this information earlier. There’s been so much back and forth with the audit. It’s been really frustrating.”
Smith said he received the balance sheet May 12.
Stuart Smith is up for re-election and is being challenged by former budget committee and school committee member Mike Smith. The vote for municipal officials in Edgecomb will be held Friday, May 15.
The belief that there was a negative balance in the surplus account has had an impact on the election, with letters to the editor calling for a changing of the guard on the board of selectmen.
Stuart Smith said, if re-elected, he would discuss changing auditors with the other selectmen. Brewer has been Edgecomb’s auditor for a number of years. Last year, Brewer switched accounting firms to PFBF.
According to Brewer, setting up the audit on the software used by the new firm was the cause of the delay in completing the audit. “It will make it faster in the future,” Brewer said. However, the switchover in companies and software slowed the 2013-2014 audit, which is still incomplete, Brewer said.
Selectmen previously said the sand and salt account in the 2014- 2015 fiscal year was overdrawn by approximately $40,000, which would have compounded the deficit if the surplus account was negative. According to Treasurer and Town Clerk Claudia Coffin, the actual amount the sand and salt account was overdrawn in 2014-2015 was $10,491.64.
“We’re going to be okay,” Smith said. “It’s been really frustrating, but the situation is not as dire as it was presented to us.”
According to Smith, selectmen will most likely increase the amount raised through overlay to replenish the surplus account. Brewer was asked to review the amount selectmen planned to raise in overlay for the 2014-2015 fiscal year, Smith said.
“If we were that close [to using all of the surplus], we should have been warned,” Smith said. “There was definitely a breakdown somewhere.” The increased amount raised through overlay will result in a rise in the mil rate, Smith said.
“We didn’t want to overburden the town by increasing the mil rate a lot in one year,” Smith said. “It’s a burden no matter what, but it’s better to increase it a little each year than a lot all at once.”
Voters will decide at town meeting whether to use a to-be-determined amount from the Woodend Boat Fund to rebuild the surplus account, as well. There is approximately $180,000 in the Woodend Boat Fund. Voters will determine what amount, if any, to transfer to surplus.
