Selectman review ‘clean’ outside audit report
By Tom Reilly
An outside auditor discussed with Selectmen the funding of the town’s Other Post Employment Benefit (OPEB) liability and a modest increase in the unassigned fund balance in the town’s general fund.
Alan Goodwin, of Melanson and Heath, delivered the town’s annual outside audit report at the Board’s Feb. 3 meeting where he explained that the town’s current OPEB liability was about $5.7 million which was up $964,000 from the prior year and the unassigned fund balance was up about $570,000.
Goodwin said OPEB liability would continue to grow at a rate of between $900,000 and $1 million per year. He said that as this was a longterm liability that the rating agencies would not look at this as critically as they would at the general fund balance sheet. He added later that the town did a good job this year in putting $200,000 toward this liability – $160,000 came from the general fund in the form of free cash while $40,000 was investment income. He said that the town should be commended for starting a trust fund to deal with the liabilityand said it would eventually grow to about $14 million over time.
The total fund balance came to $4.6 million, up about $460,000 from last year while the unassigned fund balance was up about $570,000. Goodwin said that the unassigned fund balance is used to certify the town’s free cash and it also contains the money for the rainy day stablization fund of $2 million. Total revenues came in at $480,000 more than the town budgeted for while expenditures were $183,000 less. He said that this resulted in a positive variance of $663,000. Overall he said, the town had had a good year.
Goodwin said that the town’s stablization funds for sewer enterprise and the transfer station had a good year, breaking close to even as they are designed to do. He also noted that starting with the next fiscal year the town will assume another liability—about 2.5 percent of the Worcester Regional Retirment fund deficit of about $12 million on a longterm basis.
Goodwin recommended that the town come up with formalized deparmental receipt policies and an audit of the school’s student activity fund every three years.
Town Accountant Tim Harrison and selectmen had positive comments about the speed and accuracy of the audit. Selectman Dave Hall said he was impressed by the way Harrison came so close to balancing the budget at the end of every year. Selectman Paul Maynard asked what the audit would do to help impove the town’s AA bond rating, but Harrison said that it would be difficult to get much higher than that with the taxbase the town currently had. The best thing was to continue to be stable, he said, at least until Route 146 was fully developed. Town administrator Jim Smith thought that putting money in the OPEB liability fund was another positive step. He also praised the makeup of the town’s financial team and its consistent management of the town’s finance.