David Irwin Jr. of Adelson & Co. goes over the fiscal 2019 audit with the Board of Selectmen on Wednesday.
ADAMS, Mass. — The Board of Selectmen heard mostly positives from certified public accountant David Irwin Jr. regarding the town's most recent audit of town financials.
The representative of Adelson & Co. performed the breakdown of fiscal 2019's books as he has for the past few years and the results are fairly consistent with recent audits.
The town is adhering to all required regulations, there are no accounting irregularities, debt service is being met, benefits of current and retired employees are covered. Irwin did however mention deficiencies in the same areas that have come up in years past: free cash and the stabilization fund.
"Free cash should be about 5-15 percent of your budget. Free cash is a little light right now although it's at more than 5 percent, it's at 5.75 percent. We like to see that a little bit higher. That's how you're going to get through your rainy days," Irwin told the board on Wednesday. "Your stabilization fund is 2.7 percent of your fund balance. It's been steadily increasing over the last five years. We were at 1.4 percent back in 2015. We want that number up towards 5 percent and greater. Between 5-15 percent is a comfortable number for a town."
A town's unused funds at the end of a fiscal year are put into free cash and are unrestricted as to what they can be used for. Any expenditure from free cash must be approved by town meeting, however. Adams and other cash-strapped municipalities have in the past used free cash to balance the budget, a practice which is generally frowned upon in accounting circles.
A stabilization fund can be created by town meeting and can be funded through a variety of mechanisms: one-time transfers, percentages of revenue, etc. Stabilization funds are more commonly used for just what they say, stabilization. In times of slow growth or budget crunches, funds can be allocated by town meeting vote to avert a one-year tax hike to alleviate a burden on property owners.
Irwin said although both these accounts are lower than towns are generally comfortable with, they have been consistently moving in the right direction.
He specifically mentioned Town Treasurer/Collector Kelly Rice and her staff's efforts in increasing their percentage of property tax collected. The lion's share of a town's revenue is provided by real estate and personal property taxes.
"For the 2019 year, the commitment was $10,699,000, that was the commitment done by the assessors in town. You collected $10.2 million of that assessment, that's a 96 percent collection rate, that's fantastic," he told the board.
Irwin said he went back as far as 2015 and the number has hovered right about 96 percent. He also cited a 99 percent return on personal property taxes. Out of $655,000 assessed, only $4,000 was left uncollected.
Overall it was a generally healthy picture. Irwin couldn't give it a completely clean bill of health, however, as one important piece to the puzzle is missing. While municipalities are required to perform audits annually by the commonwealth, pension funds and the entities in charge of them are not. Adams is one of the few municipalities, and the only town, in Berkshire County to still manage its own pension fund, the others being the cities of Pittsfield and North Adams.
The fund is managed by the Retirement Board and is a separate entity from central town government. There has not been a recent audit of the pension fund and Irwin said performing that process would help him in being able to present with more confidence a solid financial snapshot for the town. He stressed several times that this would not affect the town's bond rating or borrowing capacity, it would just be another tool at his disposal.
"We do work over the pension assets, we confirm the balances, I do a lot of tracing of members coming in and members going out. But unfortunately we don't do enough work ... over the pension liability side of it, we only can do enough work over the asset side of it," Irwin said.
Town Administrator Jay Green, during his report, said the state is no closer to providing any insight on possible cuts to state aid due to revenue shortfalls caused by the pandemic. That fact, along with the uncertainty regarding the town's ability to use CARES, or Coronavirus Aid, Relief, and Economic Security, Act funding to offset any budget cuts, is still an impediment to the town setting a date for the annual town meeting to set a hard budget. The board did approve a 1/12th budget for August of about $1.3 million.
He also relayed some good news regarding newly hired interim Police Chief Troy Bacon. Bacon arrives highly certified but those certifications come from the state of Indiana. Many times the commonwealth requires out-of-state officers to complete the Massachusetts Police Academy regardless of how experienced they might be. Green was happy to report that this will not be the case for Bacon.
"Today myself and Chief Bacon participated in the Massachusetts Police Training Committee monthly meeting where they handle exemptions to Massachusetts required training as well as temporary waivers for other officers. I'm happy to report that the board voted unanimously to exempt Chief Bacon from the Massachusetts Academy requirements. We won't have to send him away for 18 weeks for basic recruit training," he said.
The next regular meeting of the Adams Board of Selectmen will be Wednesday, July 29, at 6 p.m. and will be held virtually. Visit the town website for login information.
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Adams Votes for North Berkshire EMS
By Tammy DanielsiBerkshires Staff
ADAMS, Mass. — The Board of Selectmen on Thursday voted at the end of a 2 1/2-hour meeting to designate Northern Berkshire EMS as its primary provider of emergency services as of Jan. 1.
The vote was 4-0 and comes two days after the Cheshire Select Board unanimously voted the same.
Members and supporters of the Adams Ambulance Service asked the board to hold off on its decision but officials were not confident that it would be able to rectify its financial woes within a four-week timeframe. Or if the state Department of Public Health would allow it to continue operation since it had notified the DPH that it would close Dec. 31 if not earlier.
The service is also under a corrective order by the state for failing to develop a state-approved plan to prevent coverage from being disrupted. It has a deadline of Dec. 20 to comply.
"The Department of Public Health says we cannot move forward assuming that Adams Ambulance Service will be allowed to continue to provide coverage to the town," said Town Administrator Jay Green. "That is the context of the hearing."
Green stressed that Adams Ambulance is a private non-profit that is not operated or funded by the town and that the change in service provider does not mean it will cease to function. Rather, Northern Berkshire will be the first dispatched for 911 calls; Adams will still be part of mutual aid, will be able to take transports and continue to cover Savoy and Hawley.
Selectman Howard Rosenberg said the lack of information coming from the ambulance service over the past 18 months played into their decisions.
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