The Town of East Hampton’s financial condition is sound, its budget officer told the town board on Tuesday.
In presenting an annual update document, which he called the first look at the prior year’s financial performance and which must be provided to the New York State comptroller as a precursor to an annual audit, Len Bernard said that it demonstrates a healthy financial performance in 2018, which ended “with ample balances in all major funds.”
“Financial performance was strong in 2018 with revenues exceeding expenses in all but one of the major funds,” that being the general fund, Mr. Bernard said, “and in that fund we almost broke even.” The town spent less than budgeted while receiving more revenue than was projected, he said, with property sales at East Hampton Airport accounting for much of that revenue. “But even without the airport, the positive variance was almost $2.4 million in total across all other major funds,” he said. This, he said, is one reason that the Moody’s bond credit rating business issued the town an Aaa rating, the highest on its scale.
The first of two deficit bonds, issued in 2010 and the following year in the midst of a financial crisis, was paid off in full last year, Mr. Bernard told the board. The bond issued in 2011 was almost 80 percent paid off, he said. “As we approach these repayment milestones, Moody’s, I think, was impressed with the fact that as we were paying off the deficit bonds, we were maintaining our good fund balance, which was created by borrowing the money to begin with. Our fund balances were really credible fund balances, not remnants of the borrowing in 2010 and 2011.”
The town repaid the deficit bonds at a rate of about $2.5 million a year, Mr. Bernard said. “I don’t think the town gets enough credit for being able to get out of the mess it was in and maintain the kind of fund balances that Moody’s wanted to see. . . . 2018 was the culmination of that.”
The bottom line, he said, is that “performance was great for the year. Our fund balances were up overall.” He predicted that an independent auditor will confirm the conclusions of the annual update document.
The document, said Supervisor Peter Van Scoyoc, is “a tribute to the very careful planning, budgeting, and conservative approach to the budget and town finances over three consecutive supervisors. It’s a tribute to you and our Finance Department, and all of the department heads who’ve kept their budget lines within budget.”