By Dawn De Busk

Staff Writer

CASCO — The Town of Casco was sitting in a much better financial position in 2017 than during the previous year; and that is partly due to unspent bond money in the bank and improved assets like the new town office building.

The Casco Board of Selectmen heard recently from the town’s auditor Bruce Nadeau, of RHR Smith.

“I am pleased to report that the Town of Casco is doing better in 2017 than in 2016,” he said.

In 2017, that balance sheet grew by $2.6 million in growth and assets, he said.

The town started off the year with a partial debt, he said. And, the financial picture improved. Later in the year, the bond money became available — allowing the town to pay off its bond anticipation notes (BANs). In addition, some of the bond money was put in the bank for future use.

“Your fund net position grew by $700,000, some of that was the investment in a new town office,” Nadeau said.

About half of that was investment in capital assets and other contributing factors to growth in the town’s net position which included capital project funds, permanent funds and special revenue funds, he said.

For 2017, the town’s total assets were more than $10 million ($10,230,260) compared to its total liabilities which were slightly more than $3 million ($3,034,850).

“The general fund increased,” Nadeau said. “Some of the money was the residual of the bond money that you borrowed in 2016. That cash was still sitting at the end of 2017 in the bank,” he said.

The Town of Casco improved its collection of taxes in a timely manner. Nadeau said factors leading to that might be an improved economy, which allows people to pay tax debts sooner. Also, the board of selectmen put policy changes in motion regarding the nonpayment of taxes.

“Your tax lien notes went out early. There were better collections by far,” he said.

Nadeau addressed the revenues, expenditures and changes in the fund balances.

“The town builds a budget and assigns an amount to be raised in taxes. Whatever doesn’t come in in the next 60 days is called deferred revenue.

“We want to recognize that as deferral so that at the town meeting people don’t get aggressive and spend the funds” that have not come in as revenue.

“The town was able to shrink that deferral by about $250,000…due to better collections,” he said.

“Also, the excise tax collection has increased. People are replacing their vehicles sooner,” he said.

“A couple departments ended the year under budget,” he said.

According to the document “Budgetary Comparison Schedule, Schedule 1,” the public works department ended the year with $237,000; public safety had $77,000 left over; social services did not spend $55,000; parks and recreation, which includes cemeteries, ended the year with a surplus of $6,000; and the general government fund had a positive balance of $189,000. (The previous dollar amounts were rounded up or down to the nearest thousand.) Also, it should be noted, these become carry forwards for the 2018 budget.

A piece of good news in the financial world: the town has a healthy surplus fund.

“Surplus — those are the dollars that are available without restriction. Surplus funds are for an unforeseen event that you didn’t expect. This is more common in the town, you have a thunderstorm that washed out roads,” Nadeau said.

Having a surplus means that the town does not need to borrow on taxes that have not yet been paid. In other words, the town does not need to approach the bank and apply for a Tax Anticipation Note (TAN).

“We are big fans of surplus,” he said.

“As much as you can, make sure that your day-to-day expense are covered by your day-to-day revenue like taxes,” he said. “You don’t want to borrow from your surplus.”

However, using surplus funds for big ticket purchases has its advantages.

“At the end of the day, whatever you address, a tractor, road work, if you use the surplus, you save the interest because you don’t have to go to the banks to address that need,” he said.

Earlier in the auditor’s report, Nadeau told the board that year’s end Unassigned Fund Balance was $3.1 million dollars or more precisely $3,082,760.

Selectman Mary Fernandes asked about the Unassigned Fund Balance, toying with the idea of possibly using a portion to address road improvements.

“The Town of Casco should keep three months of operating costs,” she said, asking if that was a hard and fast rule.

“There are no fund balance police,” Nadeau said.

Fernandes asked, “Could we take one month and put it toward road work?”

Nadeau said that was a possibility if the board decided two months operating expenses was an appropriate and safe amount or if the board decided to use only the money in excess of three months operating expenses.

Casco Town Manager Dave Morton spoke.

“We have $3.1 million in the Unassigned Fund Balance now. We have a little better than three months operating expenses,” Morton said. “We could go to [the annual] town meeting to assign” a portion of the Unassigned Fund Balance to roads.

Nadeau said that is an approach “to address one-time expenses” rather than to cover a line item that has a constant cost.

“If your revenue stream starts to shrink, you have to cut back on services,” he said.

“In my estimation, the Town of Casco has made a positive step forward in F.Y. 2017,” he said. He summed up some of those positive steps as borrowing $3.1 million dollars and improving the collection of property taxes.

Selectman Grant Plummer agreed.

“I am pleased with the work we did. Some of the putting our foot down with unpaid taxes has whipped taxpayers into shape,” Plummer said.