by Geoff Fox
Hancock town officials received good news during the February town meeting on Tuesday, February 18, after the annual audit of the town’ s books came back with a clean opinion and their finances were correct.
Cheryl Dodson of Albright, Crumbacker, Moul, & Itell, LLC presented the report early in the meeting.
This is the third year the firm has prepared the town’ s audit.
Dodson told town officials there were some “big changes” between fiscal year 2023 and fiscal year 2024.
She said the big swings were from the town’ s capital investments and assets purchases.
“So your assets are up, your cash is down,” she said.
Dodson also noted there was a negative change in the fund balance as well.
When it comes to operating income from the utilities fund, Dodson pointed out those funds – water, wastewater, and trash – had a loss.
“Their revenues are not covering the operating expenses of your funds,” she said
Taking depreciation out, it gets a little better for the sewer, she added, and then the sewer fund would cover its cash expenses. ater fund is still falling short.
For fiscal year 2024, the sanitation fund costs were $157,593 with the revenue at $157,450.
“So you’ re not even charging enough in that fund to cover the cost of the service itself, let alone any of the costs it takes to operate in that fund,” she said.
Town Manager Mike Faith said during the meeting when the deal was made a few years ago with the trash company, there were escalators put in and the town knew an increase was coming.
Dodson noted the town was taking some money from the general fund to cover some of the costs that were happening in the other utilities funds.
She said it was completely fine, but the town might want to start looking at raising costs on their utilities.
In theory, she said, the utilities should be able to operate on their own.
Dodson said three years ago, when they first did the town’ s books, there were several pages of issues and last year there were several points that needed attention.
However there was only one this year – revenue recognition. A lot of that was going to be the grants the town would be receiving.
Councilman David Kerns said a lot of the categories show they don’ t bring in enough money to cover them because the town didn’ t track water issues like they’re supposed to do.
Now that they are tracking, they are able to track every water leak, every piece of equipment going to that, and every man-hour going into it, they can have a place to start for those funds.
“I’m actually pleased that we’re getting better,” Kerns said. “That’s a good thing.”
On Monday, Faith explained Dodson’s work a little more.
The town has an accountant who goes through the books, doing the pre-audit work and making sure everything is ready to be audited.
The accountant is not an employee of the town, Faith said.
Faith added the audit has to take place each year by state law and is a condition for grants the town applies for.
Faith also gave Dodson credit in how she prepares the town’s audit.
He said she spends about a week at Town Hall and is “pretty in depth” with how she does everything to the point of pulling out individual timecards to verify times are correct and that Faith and the supervisor have signed off on the card. He said she’s even pulled random records as well.
During the meeting, Dodson had mentioned the possibility of the town raising their rates for water and sewer, which Faith admitted town officials knew was coming.
She had also mentioned the sanitation fees weren’t enough to cover those costs as well. Again, Faith admitted town officials knew a possible rate hike was in the future.
“We knew that eventually we’d lose ground on that,” he said.
He did say there could be a sanitation increase in the future, but the town would hold off as long as they can before doing so.
Faith also noted there could be increases to the water and wastewater fees in the future as well, but town officials want to hold off as long as they can on those as well.
Those rate increases are coming, though, in part due to the new water and wastewater system that has been in development for a number of years.
Right now, Hancock has the lowest water and sewer rates in Washington County.
One concern Dodson had was in the area of grant money.
Faith said when the town receives a grant, it’s on a reimbursement basis.
He gave the example of receiving a $300,000 grant in fiscal year 2025.
Even though the town wouldn’t have the money, it would be described as an asset.
Faith said it wasn’t recorded correctly in the town books this past fiscal year as an accounting error.
He said the town would have to work with the accountant before the next audit to get everything correct.