Town of Granby digs into reserves, but not at alarming rate
May 17, 2009
During a Granby audit review last week, the Granby Town Board experienced what could be considered a wake-up call.
Auditor Paul Backes of McMahan and Associates, Avon, didn’t say the town’s unrestricted reserves balance was in crisis, but he did say, “It will be if the town is not careful.”
The town spent 33 percent, or $551,000, of its general reserves fund in 2008 on parks projects, building purchases, building improvements, equipment and downtown improvements.
Backes pointed out he’s not alarmed because a Town Hall “disaster relief” fund of $1.15 million cushions the reserves since that money will be transferred into the general fund, effectively doubling the reserve.
Even so, a $1.3 million Jasper Street paving project the town has been planning for eight years may deplete $800,000 out of the 2009 fund balance.
Backes suggested towns should have about a 30 percent to 70 percent fund-balance cushion, but Granby’s audit of 2008 finances shows the town has about a 20 percent cushion.
For 2009, budgeted unrestricted and restricted reserves show $715,000 after the street project, reflecting a 15 percent cushion. In 2007, reserves were up to 47 percent.
Trustee Ed Raffety, for one, said town spending should be a key topic in the town’s upcoming town-board retreat.
Overall, Backes commended the town and Finance Director Sharon Spurlin for having a “clean audit.”
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