As Franklin County officials had predicted, the county remains on the state’s list of communities “susceptible to fiscal stress,” but is close to having that designation removed.
And while the county’s numbers are improving, the town of Moira found itself added to the list for the first time.
State Comptroller Thomas P. DiNapoli implemented the stress rating system in 2013 as an “early warning” mechanism to alert municipalities to potential problems with their finances. Municipalities and school districts are classified as significantly stressed, moderately stressed or susceptible to stress based on a scoring system that looks at several factors that affect a municipality’s financial health, including year-end fund balances, operating deficits or surpluses, the municipality’s cash position and its use of short-term debt for normal cash flow and fixed costs, among other factors. Environmental indicators such as the area’s employment rate and the amount of sales tax revenue are also accounted for in the score.
Franklin County’s score of 47.9 places it in the low end of the “susceptible to fiscal stress” category. Municipalities with scores below 45 are considered free of fiscal stress.
County Treasurer Fran Perry said the county has taken a number of steps to improve its stress score over the past several years and “it seems to have worked.” The county was listed as significantly stressed in the first several years of the state report, which began in 2012, but improved its stature to moderately stressed in 2016 and 2017. In 2018, the county’s stress score dropped it to susceptible.
The report released Thursday examined county finances as of the end of 2019.
The report left the county in the susceptible category, but its score fell 3.4 points, leaving it only three points away from being removed from the list entirely.
The county is “well on our way” to having the “stigma” of fiscal stress removed, Perry said.
One of the biggest reasons for the county’s improvement was the growth of its fund balance, Perry has previously said. The fund balance in 2019 grew by roughly $1.5 million to $8.6 million, bringing the county close to the 10% of the budget total the state recommends that municipalities maintain, Perry has said.
The fund balance had fallen below $1 million before turning around over the past half-dozen years.
While Perry said she was pleased with the results of the state report, she noted that the COVID-19 pandemic has created significant financial concerns for every level of government in New York. Whatever their scores in the comptroller’s report, all municipalities are under significant financial stress, she said.
A too-low fund balance is also the reason the town of Moira appeared on the state’s susceptible to fiscal stress list, town Supervisor Justice Martin said. The town received a score of 53.8 in the comptroller’s report.
The town had been drawing down its fund balance in an effort to keep taxes low and then was hit with a few unexpected expenses that dropped the balance below what the state found acceptable, Martin said. The state generally recommends municipalities maintain a fund balance equal to roughly 10 percent of their total budget in case of financial emergencies.
In response, the town will look for additional grants and other outside fund, such as the $80,000 grant it recently received to help pay for a new truck, Martin said. He also said he could not rule out a small tax increase to help build the balance back up.
The county and Moira were the only two North Country municipalities named in the stress report. The town of Waverly and the village of Saranac Lake were among 21 North County communities that failed to file the required paperwork for the state to determine a fiscal stress score, the comptroller’s office reported.
Waverly Supervisor Chad Rivers said Thursday the paperwork is nearly complete and should be filed by the end of the month. He added that he is working to bring the town’s required financial reporting current.