HOULTON, Maine — The town’s financial condition appears to be in solid standing, based on the most recent audit received by the Houlton Town Council.
Ron Smith of RHR Smith and Company of Buxton informed councilors of the favorable audit during a June 27, 2016 meeting.
In 2014, the town had about $950,000 in its undesignated fund balance. For 2015, that surplus account has grown to roughly $1,450,000. Smith said the town was able to grow its surplus account by $500,000 by favorable revenue collections and from not spending the full amount budgeted for the past two years.
Despite the increase, Smith said the town, ideally, should have even more money set aside in its undesignated account. Towns typically should have between 30-90 days of operating expenses available in the event of an emergency.
“Based on an annual budget of about $10 million, that would be a floor of $800,000 (for 30 days), $1.6 million for 60 days and about $2.4 million for 90 days,” Smith said. “You are at about 50 days. It’s not where you want to be, but you are close.”
Several years ago, the town had no money set aside in a surplus account as the council consistently dipped into those funds to help offset tax increases.
“I remember standing in front of you when you had no money,” he said. “A lot of that money had been used for budget relief.”
Five years ago, the council approved a policy to establish a 60-day threshold for setting aside money. Since the town is currently at the 50-day level, additional money will need to be saved in the 2016 budget to meet that goal.
The town also has a policy which states the fund balance will never dip below 30 days of operating expenses.
“Certainly you have put a lot of hard work and effort into saving,” Smith said. “The taxpayers need to know, that money is there to give you some options. If that money wasn’t there, you would have no option but to raise taxes.”
