Riverhead Town preps to sell $24 mil in bonds as audits wrap up
Riverhead Town’s 2009 audit is now complete.
Auditor Jeff Davoli of Albrecht, Viggiano, Zubreck and Company delivered that news to the Town Board at Thursday’s work session, where he also said the 2010 audit should be finished by the end of November, although Town Supervisor Sean Walter is hoping the group will do so by the end of September, since he must present a proposed budget by Oct. 1.
The 2008 audit wasn’t completed until March of this year, and the 2007 audit wasn’t done until December 2009.
The town fell behind on the audits when its prior finance administrator, Jack Hansen, became ill and later died. The town asked AVZ to do three audits this year and Mr. Davoli says the firm is on schedule to do so.
“It’s my position that we are completely on time at this point and we can now sell bonds,” Mr. Walter said.
The failure to complete the audits on time meant that the town couldn’t sell bonds to pay for capital projects it had built. About $24 million in bonds are waiting to be sold, he said. The town had paid for those capital projects by borrowing money from different funds prior to his taking office in 2010, Mr. Walter said.
Not having the audits up to date also could have negatively impacted the town’s bond ratings and led to higher interest rates on borrowings, the supervisor has said. The supervisor said Thursday he has received preliminary word that Standard and Poor’s, one of the bond rating companies, will retain Riverhead’s prior bond rating of AA-, which it issued in 1988 when the town last sold bonds.
The town’s fund balance decreased by about $10 million in 2009 as a result of spending surplus money to pay for capital projects, Mr. Davoli said.
Mr. Davoli also said the town sewer district has a fund reserve of $6 million, which surprised town officials.
“That can’t be accurate,” Mr. Walter said. Mr. Davoli assured him that it is accurate.
The town is under federal and state mandate to upgrade its sewer plant, a project that is estimated to cost $18 million, and would raise the sewer district tax rate by 554 percent, according to Mr. Walter, who said the surplus money could be applied toward that project.
The most significant flaw cited by the audit was the town’s computer system.
“The town’s software system is 25 years old and no longer supported by the vendor that developed it,” the audit stated, recommending an upgrade.