LEWISTON — Last year’s decision to pay off $3.48 million in Colisee debt 10 years early paid off, city councilors were told Tuesday night.
Councilors reviewed the annual financial report for the 2014-15 fiscal year and the official audit at their meeting Tuesday night.
According to that audit, the city ended the fiscal year with $12.9 million in its fund balance — right where it should be, despite paying off that debt early.
The annual report is available online at the city’s website, www.lewistonmaine.gov.
Auditor Greg Chabot of RHR Smith & Co. said the city was buoyed by better city revenues and lower government spending.
“That allowed you leeway to pay off some debt and that will result in future savings,” Chabot said.
Finance Director Heather Hunter said paying the bond off early saved the city about $2 million in interest that would have been paid over the next 10 years.
City Administrator Ed Barrett said it was a tough decision last January to pay off that debt. Councilors agreed at the time to dip into the city’s fund balances to pay off the 20-year bonds that were sold in 2005 to fund renovations at the Colisee.
“We really sweated over that,” Barrett said. “The council sweated over it considerably, deciding whether they should take that risk to pay that debt off.”
Chabot said the city received about $370,000 more in excise tax payments than budgeted.
“We are seeing this across the state, as things picked up in auto sales,” he said.
Lewiston schools also received an additional $350,000 in charges for services. Combined with $94,911 more in property taxes and small increases in city fines, fees, rents and other revenues, the city closed the fiscal year with $902,865 more revenue that it had budgeted.
Frugal spending at the Lewiston School Department saved about $2 million, Chabot said.
“A big part of that was saving in special education, doing more of the services in-house,” he said. “Not going outside for those saved quite a bit of money.”
Combined with $213,594 in savings by the Public Works Department and smaller savings in other areas, the city spent $3.1 million less than it had budgeted.
Hunter said the revenue and savings allowed the city to keep the fund balance reduction from the bond sale to a minimum. According to the audit, the unassigned fund balance went from $13.3 million to $12.9 million.
That made the bond sale an even better benefit for the city, Barrett said.
“We spent $3.4 million pay that debt off and I’m glad to say we made back $3 million,” Barrett said. “It was a shock to me. We don’t normally celebrate a drop in fund balances, but it turns out this was a very positive result.”
Councilors accepted the report, but Finance Committee member Robert Reed warned them that he had interpreted the report differently. Reed said he thinks a $12 million fund balance — designed to fund city services for several months in case of disaster — is too high.
“A surplus could be thought to be an overcharge,” Reed said. “So when you hear the word ‘surplus,’ ask the question: Is too much being asked of the taxpayers?”
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