Audit shows increase in fund balance

TownSeal

PROSPECT — The town ended fiscal year 2013 with an increase of nearly $440,000 to its fund balance, according to an audit.

Prospect’s fund balance stood at $757,332 as of June 30, 2013, a rise of $439,345, according to an audit performed by Michael Battista, a Northford-based certified public accountant.

That’s a change from last year when the town ended fiscal year 2012 with a decrease of $184,527 to its fund balance.

Battista completed the audit late last month. He is expected to present the audit to the Town Council at 6:30 p.m. Tuesday at Town Hall. Once that is done, the audit will be available online at www.townofprospect.org.

Mayor Robert Chatfield said he is pleased that the town more than doubled its fund balance.

He said the fund balance increased primarily due to the collection of back taxes, a spending freeze, a Federal Emergency Management Agency grant for the February 2013 blizzard, a grant from the state Department of Transportation for the October 2011 storm and a refund from Bristol Resource Recovery Facility Operating Committee and Tunxis Recycling.

He also attributed the increase to his office’s and other town departments’ frugality.

Tax collections were $142,932 higher than anticipated, and grant revenue also came in $297,573 higher, due to additional FEMA funds of $208,842 and $100,443 higher than anticipated State Municipal Revenue Sharing.

The audit states that the town received $60,809 from Bristol Resource Recovery Facility Operating Committee and Tunxis Recycling.

According to the audit, that represents the first of a number of fund balance distributions to participating towns upon the closing of the facility and end of the town’s contract as of June 30, 2014. Prospect has signed a 20-year agreement with Covanta Energy for solid waste disposal.

While the town’s fund balance has increased, Prospect’s rating on its general obligation bonds has been downgraded by Moody’s Investor’s Service from A1 to A2.

According to a release, the A2 rating applies to $1.6 million in outstanding general obligation debt as of June 2012.

Chatfield said Moody’s used the town’s audit from fiscal year 2012, not fiscal year 2013. The new audit wasn’t available to Moody’s at the time of its review, he noted.

This won’t affect any current projects, he said. By 2016, the town will make its last debt payment, Chatfield said.

Town Council Chairman Thomas Galvin said the town’s outstanding debt now rests at just under $1 million.

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