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Friday, June 9, 2017

Smoke & Mirrors...

Have you heard about the $2 million in fund balance that Supervisor has been boasting about? Chances are you might see some campaign literature telling you how he lowered taxes and increased the fund balance, among other things.

Really? My, my Supervisor, why not tell the rest of the story. I am surprised that the discussion hasn't already taken place at the town board table, in the view of the public.

An audit is divided into parts...for today's blog, I will focus on the Town-wide Financial Statements; the Statement of Net Position. According to the 2016 DRAFT financial report:
The Town~wide financial statements are organized to provide an understanding of the fiscal performance of the Town as a whole in a manner similar to a private sector business. There are two Town-wide financial statements - the Statement of Net Position and the Statement of Activities. These statements provide both an aggregate and long-term view of the Town's finances.

These statements utilize the accrual basis of accounting. This basis of accounting recognizes the financial effects of events when they occur, without regard to the timing of cash flows related to the events.
According to the Statement of Net Position, the Town of New Hartford's net position is in the negative at ($663,944). That's right, we have more liabilities than we have assets!

The audit continues by giving the reader an understanding of what that number represents:
The Statement of Net Position

The Statement of Net Position presents information on all of the Town's assets, deferred outflows, liabilities and deferred inflows, with the difference between the two reported as net position. Increases or decreases in net position may serve as a useful indicator of whether the financial position of the Town is improving or deteriorating, respectively.
Knowing that one year doesn't really tell the whole story, I went to my files and gathered up FINAL audits prepared by D'Arcangelo & Co. to see if there was any indication of what may have occurred in the previous years.

The FINAL audit reports I used were prepared by D'Arcangleo from 2009, with 2008 numbers available as part of the 2009 audit, up to the "DRAFT" 2016 Financial Statements.

Below is what I found when comparing the Financial Analysis of the Town As A Whole over several years:

Let me reiterate the quote from D'Arcangelo's 2016 DRAFT audit:
Increases or decreases in net position may serve as a useful indicator of whether the financial position of the Town is improving or deteriorating, respectively.
One year in the negative, maybe does not indicate a problem depending on the cause; several years of declining net assets plus a current negative is clearly an indication that the Town of New Hartford is headed for some real problems. The Total Net Assets position of the Town of New Hartford has been steadily declining over the last nine (9) years; a pretty darn good indication that we are heading for trouble.  Please keep in mind that Tyksinski is planning to bond for another $1.25 million in the next few weeks.

This is just the tip of the iceberg. I have many more things to show you in this "Draft" audit and I will do so over the next week or two.

Since my time is somewhat limited by my business, if you can't wait until my next blog, perhaps when Tyksinski knocks on your door looking for your support for another four years as Emperor Supervisor, ask him to honestly explain where the town finances stand!

Here's a pdf copy of the above chart in case you want to show it to him while you ask for answers.

Stay tuned!


We're Broke Again?? said...

This is interesting. Thank you for compiling it and putting it up.

PS, inside information I heard is that the town employees call him the Ayatollah, not the Emperor. (That term is used for another area politician)

A loss of more than 5 and half million on his watch. But he says he has saved the town!

If there is anything this information says... It looks like Ralph Humphrey was the last good Supervisor we had.

Don't bet on Pat coming to your door anytime soon now. He's too busy cooking the you-know-whats. He'll probably send you a nice color glossy card in the mail telling you how he alone saved the town from disaster, and put up big signs in the village (while regulating how small the town political signs will be!)

Vote for Paul on Primary day. Please, lordy lordy, vote for Paul. The town needs to be saved again (from the last "Savior" no less!)

Anonymous said...

So with these numbers how does this relate to the contingency account? Has there been too much rainy day money set aside and not enough tax income?

New Hartford, NY Online said...

This doesn't directly relate to the rainy day fund. I have more to show everone.