According to an independent auditors’ report of Johnston’s financial statements for the 2016 fiscal year, the town now finds itself in better economic shape.
“First of all, we find surpluses in this town all over the place. It’s a testimony to the management of the town. It’s well managed in our opinion,” said Bernard Poirer, managing partner at Parmelee, Poirier and Associates, the firm that conducted the audit.
The 234-page report presented to the town council on Monday by Poirer and audit partner Jo-Ann Newton provides a narrative overview and analysis of the financial activities of the town for its fiscal year ending June 30, 2016.
There are still minor changes that need to be made to the audit, which, according to Poirer, will not substantially alter the report. A final draft of the report is expected today, with a final report planned for early next week where a print version of the findings will be presented to the town.
According to Nelson, the town has resources totaling approximately $56 million, with outstanding liabilities of about $24 million.
“It’s a healthy balance sheet compared to other communities, so that is a tribute to the people in the room here and the people that work for you,” she told the council.
Nelson told the council that the town was doing a good job collecting currently owed taxes plus outstanding taxes. Inspection fees from building, trash tipping fees and interest and penalties were up for the year, while fees collected from the court were down. The town’s legal expenses were more than budgeted, with a variance of about $200,000 for hourly-billed legal expenses.
Public safety divisions had overtime that exceeded budget estimates, however, severance payments were below budget. Nelson advised the town to keep track and review staffing and overtime levels. The fire department’s salaries, according to Nelson, were under the projected budget, however, callbacks and overtime salaries were “way over” the budget, while severance for that department was over budget.
The fire department’s budget was set at $15,293,573, with $12,704,886 allotted for the police department.
Street lighting costs, which Nelson said was budgeted for $500,000, exceeded estimates; however, she said there are ways to recapture some of those funds through rebates.
The Johnston School Department’s revenue was on budget, and while salaries and benefits were over budget schools were under budget for supplies. The total school budget last year, including state aid, was $52,313,304.
“There’s nothing in that audit that should come as a surprise,” said Mayor Joseph Polisena in a recent interview. “There’s no ghost in the closet that’s going to come out and bite anybody. We’re very conservative in what we do and we’ve done a lot of good things in town.”
Last month, Randy Gomez of Nyhart Actuary reviewed pension and other post employment benefits before the council. At the time, he reported that there was unfunded liability of $228 million, attributed mostly to Johnston police and fire pensions.
“We’ve just had a financial improvement plan approved by the fire department and their retirees, and we’re going to sit down and meet with the police,” said Polisena. “In 20 years we’ll be funded sixty percent, and four years later we’ll be funded eighty percent. So I’m very, very confident that we have that monkey off of our back, that 800-pound gorilla. We’re addressing it.”
The mayor stated that most benefit arrangements were agreed to prior to him being elected to office, when health care and benefits were much cheaper. He also highlighted the benefits of placing employees on Medicare, and he does not believe that previous agreements need to be broken at this time.
“We’re chipping away at it, but it’s something that I inherited. It’s not just Johnston where this is happening, it’s every city and town,” said Polisena. “We’re on our way towards better days, and we have been I think for the last few years. I think the town is in good financial shape.”
The administration is currently working on a budget for the next fiscal year, which will soon be presented to the town council.
“At this point in time, I don’t see a tax increase, but we’re trying to get the numbers in now,” said Polisena.
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