Finance director reports Bedford’s finances in good shape
BEDFORD — Healthy fund balances, rapid paydown of debt and relatively low delinquent tax collections have helped keep the town’s finances stable.
Finance Director Crystal Dionne presented the 2012 end-of-year report to the town council at its July 17 meeting. The 2012 report audit, published June 21, was conducted by Melanson Heath and Co.
During her presentation, Dionne outlined the general fund, the total fund balance and property tax revenues, and listed her departmental goals for 2013. She emphasized that the town’s healthy finances result from keeping debt low, issuing bonds at low interest rates and maintaining strong fiscal policies.
In 2012, the town’s general fund increased by $1.4 million to $8.27 million, mainly because of excess revenues from motor vehicle and building permits, about $200,000 in FEMA reimbursement from 2011 and employee vacancies, including the town manager position.“
We have a significant surplus at the end of the year,” she said. “We typically would add $200,000 to $300,000, but we had some significant changes in 2012 which increased our fund balance significantly.”
The total fund balance of $14.8 million, or 10.9 percent of total appropriations, includes prepaid items for future purchases; self-sustaining funds adding $1.16 million, including BCTV, the sewer fund and camp employee detail; and capital reserve funds held by trustees.
“We’re still within our range of fund balance. The town council set a range of 8 to 17 percent to maintain as fund balance,” she said. “We have approximately six to seven weeks of expenditures in the bank in case we have some kind of emergency.”
Though the 13.4 percent ratio of debt service to expenses is high, Dionne said, the town consistently pays down its debt.
“Typically, anything over 10 percent is viewed as high. That is comparing the percentage of your debt to your total budget,” she said.
The town issues debt on a 10-year basis, allowing rapid pay down.
“We’re debt free in 10 years. Our debt service payments will be significantly higher than a municipality that spreads it out over 20 or 30 years,” she said.
Dionne addressed Moody’s Investors Service reaffirming the town’s Aaa rating bond because of its low debt burden, healthy reserve levels, conservative budgeting and diverse tax base. The town was able to secure bond financing at a low interest rate of 1.43 percent, and an anticipated premium of about $200,000 helped reduce the bond. The town received nine bids on the open market.
“Bidding was extremely competitive,” Dionne said.
Also discussed were property tax collections, which for 2012 are consistent with recent years.
In 2012, taxes levied were $68,336,044, with $66,270,488, or 97 percent, in payments received. Outstanding property taxes amounted to 2,065,556, or 3 percent.
“The lowest I’ve seen is 95.7 percent in 2010,” she said. “We are at fairly healthy collections at year end.”
Dionne also presented her goals for 2013 – work with the new CIP Committee, address possible change to the town’s fiscal year, enable credit card processing, purchasing and investment policy revisions, and look at structural balance budgeting.
“You make a commitment to balance your budget structurally. You don’t consider uses of surplus or uses of one-time revenues over the long term, so you don’t have fluctuations in the tax rate,” she said.
At the end of her presentation, Dionne received kudos from the council, but she said the credit is not hers alone.
“The finance department is just a part of it. The demographics of the community, the growth of the community and the very stable tax base, and things I don’t have anything to do with, play a significant role. The whole community should receive the accolades,” Dionne said.