By JOHN T. WARD
Debt is down, cash is up, and the outlook for Red Bank’s finances is much improved, the borough auditor told town officials Wednesday.
Delivering the results of his 2014 audit in the form of a 139-page report [see link below], auditor David Kaplan said the current-account balance, from which the town pays most of its bills, was $1.62 million at year-end, up, $164,500 from a year earlier, and that bonded debt dropped to $17.3 million, down from $19.6 million.
“Obviously, that doesn’t happen by magic,” Kaplan said, referring to the current account surplus.
That balance, he said, was the highest in eight years, and helped enable a 2015 budget that included no local property tax increase.
The surplus, he told redbankgreen on Thursday, “is really like savings you have available for future use. But obviously, you don’t want it to be too high, because it is taxpayer money.” He said Red Bank’s “was right in the sweet spot.”
The borough’s finances “have continued to improve” since the global credit crisis of 2008, which prompted a downturn in real estate values that led the town to institute employee furloughs and other austerity measures, Kaplan said.
Property tax appeals, however, “continued to be a drag” on the town’s recovery last year, Kaplan said, prompting the town to return $1.3 million. But a revaluation now underway, along with a new system aimed at keeping assessments current, should tighten the gap, he said.
“All in all, the financial condition of the borough remains strong,” he said.
Kaplan’s analysis found just three shortcomings in the town’s handling of money. His recommendations:
• That the borough institute a stronger review process over the water-sewer billing process to ensure that the correct fees are being charged to each customer.
• The borough institute a stronger accounting process for the recreation department programs to enable programmatic break-even analysis.
• That the municipal court institute stronger controls over the process for disbursing funds within timeframes required by the Administrative Office of the Courts.
“The problems and weaknesses noted in our audit were not of such magnitude that they would affect our ability to express an opinion on the financial statements taken as a whole,” he wrote.
Menna said it was not uncommon when he was a councilman in the 1990s for the audit to contain 20 or 30 recommendations. And of the three shortcomings, he said, two were related to personnel transitions.
Menna credited borough Chief Financial Officer Eugenia Poulos, Administrator Stanley Sickels and Councilman Mike DuPont, who oversees finances, for the improvement.
The full report can be found on the finance department web page; scroll down to 2014 Audit Report in the left column.