Tryon’s fund balance expected to drop over next fiscal year

Published 3:02 pm Monday, March 16, 2009

The Town of Tryon is expecting its fund balance, or reserves, to drop over the next fiscal year, but it still has more than recommended by the state for emergency funding.

Tryon Town Council last month received its fiscal year ending June 30, 2008 audit report from auditors Bowman Pegg & Starr that showed the town ended with a 19.6 percent fund balance, or 336,487 of undesignated funding. Undesignated fund balance refers to funds that are not restricted for a specific use.

That reserve dropped slightly from the previous fiscal year when the town had 21.3 percent of its general fund expenditures in undesignated reserves.

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The town recently enacted a hiring and spending freeze because of the current economic situation and a drop in revenue from the state, especially in sales tax.

The town&squo;s fund balance will drop again by the end of the current fiscal year after taking approximately $27,000 out for Harmon Field open-air gym roof repairs.

Interim town manager Justin Hembree estimates a deficit of approximately $50,000 for the current fiscal year, which will end June 30.

The town ended fiscal year 2008 with a $285,936 total deficit, compared to ending fiscal year 2007 with a $184,318 surplus.

The state recommends that municipalities keep an amount equal to at least eight percent of total general fund expenditures in fund balance, although towns as small as Tryon historically keep about 20 percent or more in reserves.

A deficit in the current fiscal year could drop Tryon&squo;s fund balance to the lowest it has been in the past six years.

The town&squo;s highest fund balance over the past 10 years was recorded in 2005 when the town had $465,761, or 30 percent in unreserved fund balance. In 2001, Tryon&squo;s fund balance was negative $525,951, the town&squo;s lowest fund balance, after it discovered numerous financial problems.

For six straight years from 1997 through 2002 the fund balance was a negative, according to a report previously provided by the town.

This year&squo;s audit report also included four findings. Most of the town&squo;s findings were internal control related, which is common for small towns with small staffing. One finding was noted because the town failed to properly monitor and amend its budget as necessary.

The audit detailed some of the projects the town was able to complete during the year that impact finances. The projects included: the continued rehabiliation of the town&squo;s water plant, obtaining new emergency communication equipment and life saving apparatus, the purchase of the Carrie Lee Massey building, an extension of new sidewalk and drainage improvements along N.Trade Street, receiving Main Street designation, receiving a N.C. Rural Center grant and work to install an emergency water line from Tryon to Saluda, improvements to sidewalks on Melrose Avenue and numerous recreation projects, including for sporting equipment, drainage and landscaping at Harmon Field, a Rogers Park stage shelter, tennis court renovations and improvements to Bryan Park in the eastside neighborhood.

Tryon finished fiscal year 2008 with total debt of $1,282,132, down from $1,525,698 in 2007 and $1,378,421 in 2006.

The town collected 98.03 percent of its property taxes last year, according to the audit.