The Town of Evans provides an important object lesson to other towns and villages in how not to manage municipal funds. A much-awaited state audit has determined that the town lacked financial oversight and made multiple accounting errors over the past five years that left officials without the reliable information needed to make informed decisions.
The State Comptroller's Office examined the town's finances from 2007 to March of this year, and the verdict is shockingly bad.
The town of 16,000 along Lake Erie is teetering on the edge of a financial cliff because of the way officials handled its multimillion-dollar water project and water system.
In 2007, the town borrowed $12.6 million to install water lines, hydrants and a water storage tower. Problem is, the town officials didn't put that money into a separate account, as is required.
Instead, the town deposited it with the rest of the town's funds. That made it possible for more than $2 million designated for the capital projects to be used to cover other expenses - particularly the money-losing water operations.
The financial hole the town dug for itself is so deep that town leaders can't see daylight. In fact, they were forced to take out a short-term loan of more than $2 million to keep the town afloat this year.
To make matters worse, there are at least three supervisors, past and present, pointing fingers every which way. When the money problems connected to the water project came up last year, then-Supervisor Francis J. Pordum blamed his predecessor, Robert Catalino II. Supervisor Keith E. Dash, who took over in January, blamed both of the previous administrations.
But there's plenty of blame to go around.
Dash was on the Town Board before taking office as supervisor, and even though he complained that there was a lack of communication between the directors of finance and the rest of the board, he was in a position to push the issue.
Town officials, according to the audit, allowed the water fund to sustain repeated operating losses. If that wasn't bad enough, the town entered into a questionable lease-purchase agreement with a third party to reimburse the town's highway and general funds. Problem is, the town does not have statutory authority to enter into a lease-purchase agreement for reimbursement from a third-party financing agency for the machinery and equipment it acquired.
After Dash took over, an outside consultant was hired to keep the town's books. But untangling this mess will take time. Now it is incumbent upon the elected officials to follow through on the comptroller's recommendations.
The audit was one of hundreds done by Comptroller Thomas DiNapoli's office in its role as taxpayer watchdog. This critical report should be a warning to other municipalities not to wait for the comptroller to show up before tightening financial controls.