EASTON, Pa. — A preliminary review of Easton’s 2021 budget shows the city, despite ramifications of the coronavirus pandemic, finished the year in perhaps its strongest financial position in 24 years, officials announced Tuesday.
- Easton's 2021 audit is near completion, and shows debt restructuring in 2020 has "positioned the city well for 2021 and the coming years"
- Revenues exceeding expenses, along with a surplus and unused funding, have kept the fund balance higher than anticipated
- The final audit will be released within two weeks, after which the 2022 audit will be prepared for fall
Mayor Sal Panto Jr., City Finance Director Mark Lysynecky, City Administrator Luis Campos and Councilman Ken Brown announced the initial results of the audit during a City Hall news conference, calling attention to $712,000 in unspent and surplus funds that have elevated the fund balance to “higher levels than originally anticipated.”
'Strongest position in 24 years'
Highlights of the review included the city’s government and business-type activities — including enterprise, internal service, fiduciary and non-major funds — finished in “strong positions.”
Also, a surplus of $179,000 grew the fund balance to $6 million, in addition to a $533,000 in unassigned budgetary funds that were unneeded.
“Mayor and councilmen, congratulations," Campos said. "Because of your leadership, this is the strongest position the city has been in in probably 24 years.
”It’s not only just the staff. I acknowledge the staff, which does a lot of work on the finances, but it also takes two, it takes the administration and also the leadership on the dais right behind me.”
“This is important to us as an administration and a council, that we're accountable for what we do with taxpayers money."Easton Councilman Ken Brown
Brown acknowledged government transparency as an integral part of the process to keep all parties, including the public, informed on the state of the city’s finances.
“This is important to us as an administration and a council, that we're accountable for what we do with taxpayers money,” Brown said.
Helping ease financial disasters
The audit, originally intended to be completed in 2022, was delayed because of the city seeking out a new firm that summer.
Once public accounting and consulting firm Barbacane Thornton was secured, it was found that existing client engagements would push the city’s audit off to the end of 2022.
Barbacane Thornton recently released preliminary figures to the city, with the expectation of a completed audit expected in a week or two.
Campos noted the city’s response to the COVID-19 pandemic and anticipated revenue losses — including the reduction of all discretionary spending and short-term furloughs with support — helped ease any financial disasters.
By taking advantage of low interest rates to restructure existing debt — all the while funding a new parking structure — also alleviated the potential depletion of reserve funds.
“The plan was to look at the debt service, the entire debt service, and not really just the short term — you know, ‘What are we going to do for 2020?’ But let's look at the overall plan."Easton Finance Director Mark Lysynecky
Before the debt restructuring, the city faced a $2.8 million debt payment that would have depleted those funds.
According to the group, the restructuring led to a cash flow savings of $10.4 million in the first 11 years of repayment, “allowing for much-needed relief amid the uncertainties of COVID,” a presentation slide at the conference read.
'Worst financial hardship since the Great Depression'
Lysynecky pointed to Easton’s preparation for the 2021 budget, which featured the administration recommending setting aside $533,000 of the fund balance in the general fund to day-to-day expenses, allowed for a balanced budget and a targeted city fund balance of 10%.
Also, $2.2 million was assigned for employee health care costs and capital needs.
“The plan was to look at the debt service, the entire debt service, and not really just the short term — you know, ‘What are we going to do for 2020?’ But let's look at the overall plan," Lysynecky said.
"And again, not knowing what the future was going to hold, let's give ourselves some breathing room until we get our feet back under us and figure out where we're going. So it really set us up well, the city as well for the coming years.”
Once the 2021 audit is finalized, the city administration will focus on finishing the 2022 audit for the early fall.
"My theme of my State of the City [address] was we didn't just survive COVID, we thrived, and we still now have a basis that we can continue to thrive.”Easton Mayor Sal Panto
Easton’s Finance Department noted there are no anticipated concerns with the 2022 results, going so far as to state that preliminary reviews of earned income tax revenues suggest strong growth over 2021’s figures.
Following the presentation, Panto commended his compatriots for their work during the pandemic, and crediting them for funding that can be used for capital projects such as fire department improvements in the coming years.
“This team got us through the worst financial hardship that this city has faced in over since the Great Depression,” Panto said. “And we came through it with flying colors.
"My theme of my State of the City [address] was we didn't just survive COVID, we thrived, and we still now have a basis that we can continue to thrive.”
