three+one

The Town of Batavia’s money management policies are having a significant impact upon its bottom line, so much so that it is being recognized by the Pittsford firm that has helped guide the municipality’s investments in recent years.

At Wednesday night’s Special Town Board meeting at the Town Hall on West Main Street Road, Alex DeRosa, relationship specialist with CashVest by three+one, presented the town with the “90+ CashVest Award” which is given to public entities that received a CashVest score of 90 or higher for four consecutive quarters.

“This score takes into consideration everything from the way the town receives payments, makes payments, what you're doing with your cash while it's at the bank, ensuring you have the appropriate bank account structure and a fair banking relationship,” DeRosa said. “The town has hit this mark above 90, not only just for four quarters, but for actually more than eight quarters consecutively.”

DeRosa said the town has gone “above and beyond the normal line of duty.”

“I don't think there's anything in legislation or law that states a town must do everything they can to maximize the value of cash; it just seems like the right thing to do,” he said. “But over the past 18 months, we've actually seen audits from the New York State Comptroller on some small towns, villages and school districts that really gave those towns a red mark on their audit saying they didn't go out and try to maximize value, they did not talk to multiple things, they did not have cash flow forecasts into the future.

“And that's the type of thing that can make headline news, not only for finance staff, but the whole town board and the town as a whole. This work is appreciated by three+one because of our mission. And it should be appreciated by every taxpayer in the Town of Batavia, that you all are going above and beyond to consistently maximize that value.”

Town Supervisor Gregory Post said he believed the town has earned almost $300,000 in unanticipated interest on investments since contracting with three+one.

“… I don't have the numbers exactly in front of me, but I believe our last quarterly report shows that since our inception of working collaboratively on this account have realized nearly $300,000 in interest above and beyond what was anticipated or budgeted,” Post said. “So, that's real dollars and real cash that have assisted us in our migration through the COVID pandemic as well as into the 2022 fiscal year.”

Photo: Hiedi Librock, secretary to the Town of Batavia supervisor, accepts the 90+ CashVest Award from Alex DeRosa of CashVest by three+one. Photo by Alecia Kaus.

Genesee County Manager Matt Landers said he finds some good and some bad with the proposed New York State fiscal year 2022 budget with the “good” connected to a suggestion made by Genesee County officials to loosen the restrictions on municipal investments.

“A suggestion that actually came from Genesee County was the ability to invest our money a little more, I don’t want to say aggressively, (but) the restrictions that governments – counties and municipalities – in New York State had was one of the most restrictive in the nation,” said Landers, reporting to the Genesee County Legislature this afternoon during its meeting via Zoom videoconferencing.

Landers said if Gov. Andrew Cuomo ultimately accepts the suggestion to give local governments more flexibility in their investments, it could lead to a six-figure increase on Genesee County’s bottom line.

“I don’t have an exact figure, you’d have to talk to Treasurer Scott German about that, but I do know that we budgeted $150,000 in 2021 and that was just in the general fund,” Landers said, noting that investments are volatile depending upon interest rates.

Last summer, Landers and German looked into the county’s investment strategies – it has a contract with the three+one firm out of Pittsford – and found out that New York’s investment regulations were the most restrictive in the nation.

“I passed that along to NYSAC (New York State Association of Counties) and they passed it along to the (NYS) Division of Budget, and lo and behold, it came out as one of the governor’s suggestions in his budget to loosen up the restrictions,” Landers said. “So, there’s evidence that ideas coming out of Genesee County can actually have an impact on the state.”

Landers said news of the governor’s support in the investment arena puts the county in prime position to generate additional revenues.

“I’m sure Scott will be pleased to put three+one to work if we get this additional relief in how we can do investments,” he said.

Sticking with the “good” part of the state budget, Landers said the county now is projecting a 5-percent reduction in state aid – down from the 20 percent it put in its 2021 budget.

“This is assuming that the state gets $6 billion in stimulus money from the federal government,” he said. “If the state gets nothing, then we would be looking at the 20 percent (decrease).”

Landers also mentioned the state’s reconfiguration of its Aid and Incentives for Municipalities program – action that will affect counties that have towns and villages receiving AIM funds.

“We’re still trying to figure out how the AIM impact will be – the state is shifting – taking some of the sales tax proceeds from counties and making towns and villages whole through AIM,” he said. “More than half the counties are going to benefit from this shift, but some counties are going to be hurt depending on the makeup within their county of municipalities that are receiving AIM.”

The county manager also reported that the allocation of the county’s extra 1 percent in sales tax no longer will need state approval, but on the “bad” side, said the county is looking at the possibility of losing $160,000 in Video Lottery Terminal revenue generated by patrons at Batavia Downs Gaming.

In legislative action, the board implemented a Rule 19 resolution to ratify prior measures that grant Legislature Chair Rochelle Stein emergency powers as they pertain to financially protecting non-county workers – both volunteer and professional -- at COVID-19 testing clinics.

The resolution gives Stein authority in two circumstances beyond a Jan. 14 resolution that granted emergency powers for the chair to execute necessary COVID-19 documents – an agreement for services for COVID-19 volunteers and an agreement for paid services for COVID-19.

On another front, the legislature set a public hearing for 5:30 p.m. on April 28 at the Genesee County Old Courthouse as part of the mandated eight-year review of Agricultural District No. 4.

The district was created in December 1980 and, under Article 25AA of the New York State Agriculture and Markets Law, Section 303-a, it must be reviewed eight years after the date of creation and every eight years thereafter. Property in Agricultural District No. 4 is located in the towns of Byron, Bergen, Elba, Stafford and Le Roy.

In other action, the legislature passed the following resolutions:

• A construction contract with Union Concrete and Construction Corp, West Seneca, in the amount of $1,767,387 to replace bridges on Meadville Road over Canal Feeder in the Town of Alabama, Sharrick Road over Murder Creek in the Town of Darien, and Tower Hill Road over Spring Creek in the Town of Byron.

The resolution also called for a consultant agreement with CHA Consulting Inc., of Buffalo, for the three projects for an amount not to exceed $340,000.

Union Concrete and Construction Corp. submitted a bid that was around $400,000 less than the engineer’s estimate of construction costs. Ninety-five percent of the capital project will be paid by federal aid, with a 5 percent local match taken from the 1 percent sales tax fund.

• A consultant agreement with C&S Companies, Rochester, for an amount not to exceed $109,000 in connection with the replacement of the Upton Road over Bowen Creek bridge in the Town of Batavia.

Work, which will be covered by federal aid at the 95 percent level, is expected to start immediately.

• Payment of $4,535 in costs related to dental surgery for K9 Rayzor, with fund coming from the K-9 Donations Reserve Account (gifts and donations that were made to the K-9 program).

Expenses consisted of $2,317 for the surgery plus costs for his handler’s lodging, vehicle fuel and food to transport Rayzor to the hospital where the surgery was performed, as well as a recovery bed for the dog.

• A contract extension through Dec. 31 with the New York State Office of Indigent Legal Services, Albany, in the amount of $170,672.

This money funds the county’s full-time assistant public defender, part-time assistant public defender, investigator and paralegal’s salary and fringe benefits as well as a parity stipend for an assistant public defender, cell phone service for one, landline telephone service for two, the investigator’s mileage and investigation online service software.

• Contracts with SkyMark Refuelers LLC, Kansas City, Kan., in the amount of $324,590 for ground service equipment, broken down as follows: $189,600 for a Jet-A refueler (diesel option) and $134,990 for an AvGas refueler (diesel option).

The cost for these contracts is partially covered by a state grant.

• A change order to a contract with Suburban Electric, Albion, in the amount of $65,302 in connection with work being done at pump stations in Churchville and Mumford to expand water supply capacity under Phase 2 of the Countywide Water Supply Program.

The change order calls for the installation of a different Programmable Logic Controller (PLC) within the Motor Control Center (MCC); eliminating the power management system; modifying the MCC; increasing the height of the telemetry tower from 50 to 70 feet, adding an additional telemetry tower at the Riga Pump Station and adding a backup power system for the MCC.      

This is the second change order on this contract and brings the total contract cost to $832,984.50. The original award of the contract was for $759,000.

• Allocation of up to $300,000 to support the Genesee County Chamber of Commerce for publicity and tourism services connected to the “I Love New York” program through Dec. 31.

Funds from the county’s 2021 hotel and motel tax receipts (bed tax) will be used, with the stipulation that the county will only fund tourism activity to the extent actual revenues from bed tax are realized, not to exceed the fiscal year appropriation of $300,000.

• The creation of two temporary full-time clerk-typist positions, effective from Jan. 25 until July 23. The clerk typist salary and fringe ($38,707) are allocated in the 2021 Health Department budget.

The position’s salary is partially funded by state aid/performance funds. The cost to the county will be approximately $22,158.

 

With a company name of three+one, it was appropriate that four members of the Pittsford investment firm’s leadership team traveled to Batavia on Wednesday to present Genesee County Treasurer Scott German with the National Leadership Award for his role in maximizing the municipality’s assets.

Company CEO/Co-founder Joe Rulison, Vice President Garrett Macdonald, Relationship Specialist Alex DeRosa and Public Partnerships Director William Cherry each spoke of German’s exemplary efforts.

The presentation took place at the start of the County Legislature’s Ways & Means Committee meeting at the Old County Courthouse.

“This is a really special time for us to come together and honor the county … honor Treasurer Scott German for excellence in leadership across the nation,” said Macdonald, a Batavia native. “We have partnership with the National Association of Counties and we’re looking for counties that have exemplified strategic liquidity management for their taxpayers. We really couldn’t think of a better treasurer to honor than Scott German.”

The county treasurer’s office has been working with three+one for just over three years, Macdonald said, adding that his firm has agreements with county governments across the United States.

He credited German for considering any and all prospects of saving money for taxpayers.

“When it comes to looking at every single opportunity to earn and save on the taxpayer dollar, whether it be investment for a week, two weeks, a month, two months, longer, it’s a lot of work to look for opportunities to create value for the taxpayers,” he said. “And that’s what we’re all here for – to create value for taxpayers.”

Macdonald said that over the past 12 months, the county’s liquidity analysis and management practices have resulted in a benefit of $1 million “when (interest) rates were little to nothing.”

“That one million dollars, looking at the county’s tax levy for 2021 of about 31 million dollars, equates to about 2.89 percent – which would mean having to raise taxes in order to generate that kind of income,” he said.

Rulison emphasized German’s commitment to the firm’s “cutting-edge” strategies and recognized the impact German has had on other financial officers.

“It’s amazing to know that you adopted it (three years ago) and he (German) has taken it and implemented it,” Rulison said. “I can’t tell you how significant that is. There is only one person in the country that gets this award. And we’re thrilled for it to be able to be your treasurer, Scott German.”

Rulison recalled a phone call he received from a person from Washington who attended, along with German, a conference in the Midwest.

“Who is Scott German, the person said. I said he’s the treasurer of Genesee County. He goes, ‘He resonates what is a best practice that should be followed nationally.’ And he goes, ‘I think seeing that he is able to give and show his experience to others, is what really is going to be incredible – and that helped us to become a part of the National Association of Counties.’”

Cherry, retired Schoharie County treasurer and former president of the New York Association of Counties, said that he has known German for about 20 years, noting the latter’s participation in the state County Treasurers Association.

“Scott is always the first in line to want to learn how to do something better – best practices put into place – and he’s recognized throughout the country,” he said.

DeRosa said Genesee County has set a great example for him in his two years with three+one.

“I couldn’t think of a better example, a better county government for me to learn from – not only in your liquidity management practices but just how you treat your staff and it’s clear that you are a family together,” he said. “It’s truly going above and beyond the call of duty to make sure the taxpayers are getting that maximum value – and it’s an incredible example for counties across the state and the country.”

Afterward, German said he was surprised to learn that he was this year’s recipient of the award and said it is all about being responsible to county residents.

“I worked with them now for just over three years, and it’s a lot of work, but it’s worth it to my taxpayers. They pay me to do what I do so I’m doing what I can for them,” he said, noting that the county has earned around $3 million through its partnership with three+one.

Photo: From left, Alex DeRosa, Joe Rulison, County Treasurer Scott German, Garrett Macdonald and William Cherry. Photo by Mike Pettinella.

The Town of Batavia has the financial strength and stability to weather the inevitable loss of income brought on by the COVID-19 pandemic, according to the certified public accountant assigned to review the municipality’s books.

Reporting during a Town Board work session on Wednesday, Laura L. Landers, MPA, CPA, director of government services practice for Freed Maxick, said that the Town has “adequate assets … to absorb” a blow to its balance sheet.

“Management believes that tax revenues will be lower in 2020 than anticipated in the adopted 2020 budget,” she said, “but they’ve also assessed the financial condition and the potential impact on revenues, and it has been determined that the town has adequate assets of fund balances to absorb this potential decrease in revenues.”

The work session was conducted via the Zoom videoconferencing service.

Landers said that the Town, at the close of 2019, had unrestricted net funds of $9.8 million and a general fund balance of $6.6 million, with $5.4 million of that in the unassigned category.

Favorable percentages realized

“That unassigned equates to about 138 percent of expenditures versus the prior year when it was 140 percent, and total fund balance of a little over $6.6 million is 171 percent of expenditures versus 164 percent in the prior year,” she said.

She also noted that the Town has set aside a bit more than $1 million to balance the 2020 budget, a prudent move in light of the prospect that sales tax revenues will decrease.

“Unlike years past, I don’t see (sales tax increasing) in 2020. And even in 2019, where the general fund ended up with an excess of revenues over expenditures of about $983,000, I don’t see that’s going to happen (in 2020),” she said. “There may be some surplus; we’re going to have to wait and see where sales tax comes in.”

Landers also predicted that New York State would withhold most or all of the Video Lottery Terminal funds generated by Batavia Downs Gaming. In 2019, the Town received $160,000 from the VLTs.

Other pertinent financial figures:

-- On the revenue side, sales tax came in about $492,000 over budget in 2019, an increase of about $140,000 from 2018.

-- The Town received about $302,000 from state sources -- Revenue sharing, $29,000; VLT, $160,000; CHIPS (highway improvement grant), $58,000; and records management grant, $55,000 for records management grant.

-- General fund reserves are $130,000, with $56,000 for park improvement and $73,000 for economic development.

-- General fund revenues were $4.8 million and expenditures were $2.9 million, prior to the transfer of $942,000 to the highway/townwide fund.

-- The highway/townwide fund had a surplus of $129,000 in 2019 compared to $335,000 in 2018, and the highway/townwide capital reserve fund balance was close to $760,000.

Landers said that both the water and sewer funds ended 2019 with more revenues than expenditures, with water at $725,000 and sewer at $386,000. The unreserved fund balance for the water fund was at $1.7 million and for the sewer fund was at $2.1 million.

Tapping into fund balances is possible

“Overall, the Town as it stands at 12/31/19 has good fund balances and has built up its fund balances, but I see that – depending upon economic recovery – some of those fund balances are going to be utilized in 2020 because of the decrease that I see in state funding … and sales tax,” Landers said, adding that the financial statement referenced the impact of the coronavirus.

She said a single audit was conducted since the Town spent more than $750,000 (actually $1 million) in federal funds for highway planning and construction.

“The result of that audit we did not note any significant or material weaknesses in the internal control over financial reporting or compliance, or on compliance related to the federal programs that were tested,” she said.

On a separate management report, Landers said she found “one minor control deficiency” connected to utilities reporting, but no significant deficiencies or material weaknesses related to the operation of the Town or as a result of any audit procedures that were conducted.

First quarter investment review

Town Supervisor Gregory Post followed Landers’ presentation by reviewing the Town’s 2020 first quarter investment report prepared by the three+one investment consulting firm of Pittsford.

Per the report, the Town had an average of $9.8 million invested into certificates of deposits, ending the period at $10.8 million. This is up from the last period average invested of $9.1 million.

In the past 12 months, the Town has earned $176,625 in interest, with $29,674 being earned in the first three months of 2020. A key factor in the amount of interest earned is the Town’s policy of locking in CD rates for various periods of time, the report indicated.

The Town received five-star ratings from three+one in terms of percent of funds invested, liquidity proficiency and effective interest rates earned.

It fell just short of five stars in cash flow optimization, with a recommendation to use more electronic payments, and in investment policy, with a recommendation to update the list of allowable investments, including using pooled investment services.

'Well-positioned’ going forward

Post said he is encouraged by the Town’s financial standing.

“You can see that we’ve grown our cash position substantially in the last couple of quarters, and are well-positioned to meet the pandemic crisis financial concerns,” he said.

“That return on investment, coupled with not spending money appropriated for the design and construction management of the Town Hall expansion, should keep us in pretty good fiscal shape throughout this year and well into next year – even with as much as a 35 percent loss in sales tax revenue and no anticipated increase in property taxes.”

Post also addressed the “repopulating” of Town Hall, saying that the plan is “to bring back one or two staff members at a time as needed to get everybody in the building and inspection departments in as they need to be.”

He said health department officials have indicated they will be monitoring businesses and agencies in two-week intervals to watch for any medical problems that might arise.