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Auditor says North Belle Vernon needs financial cushion

| Wednesday, Oct. 20, 2010

NORTH BELLE VERNON - The president of an auditing firm on Tuesday said council must consider ways to increase the borough's financial reserve.

Steve Cypher, of Canonsburg-based Cypher and Cypher, said at council's meeting that the borough has had an unstable fund balance for several years.

Cypher made the comment while delivering a report on the audit his firm conducted for the 2009 fiscal year.

Municipalities should maintain fund balances equal to about 10 percent of budgeted expenses for a year to cover emergencies and unexpected expenses, Cypher said.

The fund balance is $180,000, an amount borough secretary Lisa Pollock said should be mostly used by year's end.

The 2009 budget was $664,410. It is $653,165 this year.

Councilman Craig Ambrose asked Cypher if he was suggesting council raise real estate taxes to increase the reserve.

Cypher's partner, Charles Rupert, said it would be up to council to come up with a plan.

"They are tough decisions and all governments are facing the exact thing, so you're not alone," Rupert said.

Cypher said the 2009 budget "didn't come close to what was actually spent."

"With the exception of health and sanitation, every area was over budget," he said.

Cypher said council must improve expense projections in budget formulations.

One mill of real estate tax revenue generates about $13,600.

If the fund balance is exhausted by year's end, council would have to increase the property tax rate roughly 5 mills to make the reserve equal to 10 percent of the budget.

Last night was the second time the auditors presented 2009 findings to council members.

During last month's council meeting, Pollock said Cypher and Cypher requested only one or two council members attend an exit meeting about the 2009 audit and specifically asked that Mayor Ed Lyons not be included.

Councilwoman Betty Shine-Hill, council President Dennis Simboli, Pollock and a borough clerk met with the auditors Aug. 4

Lyons complained last month that he shouldn't have been excluded and that all council members should have been present at the audit presentation.

In response, Cypher and Rupert appeared last night to present findings to a full council.

Council did not vote to accept the audit report.

Simboli said the board needs to review it before action is taken.

Pollock said delaying approval of the report is a problem because the federal Rural Utilities Service and the Pennsylvania Infrastructure Investment Authority - the agencies that helped to fund the borough's sewer project - have been demanding since June that the documents be mailed to them for reporting purposes.

Council scheduled a special meeting 7 p.m. Monday to vote on accepting the audit.

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