Village fund balance takes hit over extensive capital projects

By MARTIN WILBUR

Mount Kisco’s unassigned fund balance has been markedly reduced the past two years to help pay for assorted capital projects but the village remains on solid financial footing, its most recent auditor’s report found.

While the end of fiscal year 2025 fund balance stood at $2,656,087, a little more than half of the nearly 17% level that the Government Finance Officers Association recommends for Mount Kisco, there were no major red flags, said Carl Widmer, a CPA and partner at the accounting firm Drescher & Malecki, which conducted the annual audit. Mount Kisco’s fiscal year runs from June 1 through May 31.

By comparison, at the end of fiscal year 2024, the village had more than $7.8 million in its unassigned fund balance, about 27% of that year’s budget, and roughly $9.9 million in mid-2023 when that year’s fiscal cycle ended, around 41%. 

Widmer said the village consciously drew down its general fund to help pay for one-time projects, a strategy many municipalities use. In the fiscal year that ended May 31, 2025, the village used about $4.9 million in fund balance, all but $200,000 of which was dedicated to capital projects. The village also has lent money to the library, water and sewer funds when work in those areas needed to be done, he said.

This is the first time that the village has had an unassigned fund balance fall below the GFOA recommended guideline of having two full months of operating expenses on hand, Widmer said.

“Operations are going well in here,” Widmer said. “We didn’t find any major problems that we need to report on.”

Village Manager Ed Brancati said new debt is soon scheduled to be issued to replace the last haul of debt that needed to be taken. Also, the upcoming 2026-27 fiscal year will see the completion of the debt service on the library, which costs the village $670,000 a year, he said. There was also water fund debt that expired.

The long-term capital projects plan established in 2018 factored in extensive use of fund balance to help with the financing of a slew of projects throughout the village in recent years, Brancati said. These past two years were forecasted to have a robust use of fund balance, temporarily drawing down the available money.

“Forty-one percent was a very high percentage of operating in an unassigned fund balance,” Brancati said. “So, it was intentional to drop that over time to minimize the impact on taxpayers because we knew the debt is going to drop off, and when it does, we start to climb back up, we start building back fund balance. So this has always been the plan and this is where it’s at.”

Despite the lack of alarm, Mayor J. Michael Cindrich called on Brancati and village Treasurer Alexandra Graniero to compile a report for the board that tracks the capital expenses and fund balance expenditures since the capital projects over the past decade.

“We’re going to deal with my concern over using capital reserves to balance the budget for the next fiscal year,” Cindrich said.

When asked by the mayor about whether Mount Kisco’s financial position will affect its bond rating, Widmer responded that the ratings agencies will make that call and the village’s bond counsel will be able to shed more light on that assessment. They typically look at several factors, including fund balance, debt load and willingness to increase the tax levy when needed.

“They will be studying this report. I’m sure they have a checklist of things when they’ll thumb through this report that goes into the bond rating of the village,” Widmer said.

Before the end of March, Brancati will be presenting Mount Kisco’s proposed budget for 2026-27.