Friday, Dec 25–Berlin Fiscal Health Called Strong

BERLIN – Despite the economy, Berlin achieved a surplus of $6.9 million in the last fiscal year, according to auditors.

At last week’s meeting, Berlin received a clean bill of financial health from auditors, who pointed out some highlights of the town’s financial picture.

“We feel the town’s financial position is very strong,” said auditor Mike Kleger of Pigg, Krahl, and Stern.

The town started the year with $6.9 million left over from the previous year.

“This is the surplus carrying forward, available for the subsequent fiscal year,” said auditor Leslie Michalik of Pigg, Krahl, and Stern.

 Berlin’s financial highlights also included a $1.2 million increase in the general fund.

“This is a 19-percent increase over the previous year,’ said Michalik.

 Last year, Berlin collected $5.4 million in revenues, with 61 percent of that number derived from property tax, 21 percent from intergovernmental funding and 7 percent from service charges on utilities.

“Revenues increased $113,000 or 3 percent,” Michalik said.

Property tax revenue went up, while building permits, user fees and liquor board sale revenue fell.

Berlin spent $4.1 million in the last fiscal year, with 44 percent of that spent on public safety, 22 percent spent on general government and administration and 18 percent spent on public works. Town salaries and benefits increased 28 percent, an added expense of $487,000, according to the audit.

The town also spent $372,000 on capital projects, $270,000 of which came from Program Open Space grant funding.

Overall, Berlin’s expenses increased $71,000 or 2 percent.

Berlin’s electric utility brought in a net income of $210,000, auditors said, compared to a $570,000 loss the previous year.

The electric fund owes the general fund $104,000, a marked reduction since the prior year, when electric owed the general fund $412,000.

The water enterprise fund showed a loss of $86,000, vs. a loss of $78,000 the previous year. The water fund also owed the general fund $1.3 million.

Sewer also showed a loss, $495,000, but a smaller debt than the prior year when that fund lost $514,000.

Enterprise fund debt overall is $12.4 million, which has been reduced by $671,000 since the prior fiscal year. Debt service takes up 16 percent of the town’s revenues.

No new debt was issued in the last fiscal year.

“The general fund looks good but water and sewer are not too hot,’” said Councilwoman Paula Lynch.

Kleger agreed with Lynch, but pointed out that the water and sewer losses are less than in prior years.

Michalik suggested that the town forgive the utility debts to the general fund or develop plans to repay that money through additional revenue.

“It’s been kind of ignored because there’s been so many higher priorities,” said Mayor Gee Williams.

The town cut the budget by $750,000 last year, Williams said, which is a large part of the reason for the town’s current financial health.

The auditors did sound a negative note over some of the town’s internal procedures.

“Your financial performance is good. I think your internal controls need some work,” said Kleger, noting some issues with reconciling ledgers and accounts that have since been corrected.