Town of Evans emerges from financial brink

Evans, N.Y., was so broke after years of fiscal mismanagement it couldn't get a loan because its credit rating had been withdrawn.

But today, after pinching pennies, searching through the pockets of financial statements to find metaphorical loose change, and raising taxes, the bond rating has been restored with an A rating.

"We're definitely on the recovery side of the balance sheet," said Supervisor Mary K. Hosler, the former bank vice president who steered the town toward solvency.

With the payroll and bills piling up, the town turned to Erie County for help in 2016.

"It was about 10 at night and I was on the couch with a horrible flu," Erie County Comptroller Stefan I. Mychajliw said, remembering the phone call from Hosler.

Mychajliw said he tells every town supervisor to let him know if they ever need anything.

"That night I had three or four conference calls with three of my most senior staff," he said.

By morning, there were three possible plans for the town. And the one that saved the town from the brink was an unprecedented $980,000 short-term loan from Erie County.

Hosler knew when she ran for office in 2015 there were financial problems, but she never suspected the depth of the issues until she got into office: thousands of missing financial transactions, internal audits never completed and a $2.6 million deficit.

The town's financial problems were sparked in 2007 when Evans borrowed $12.6 million to install new water lines, hydrants and a water storage tower. Instead of putting that money in a separate account, as required, the town combined the money with the rest of the municipal funds.

A state audit showed that $2 million of that money was used to cover operating expenses, mostly for the town's troubled water operations. Ever since, the town has relied increasingly on revenue- and tax-anticipation notes to make ends meet -- until the ends had disappeared.

"Not six months into office, I'm thinking 'Holy Lord, this is a big climb,' " Hosler said. "We had to keep moving on all fronts."

But now, 18 months after the meltdown, the town sought a bond rating so it can borrow $5.2 million for a new water tower, and S&P Global Ratings has given the town an A rating.

"The stable outlook reflects S&P Global Ratings' view that Evans' has implemented various corrective steps to restore structural balanced operations over the past three audited fiscal years," the company stated in its ratings note. "It also reflects our expectation that the town will likely maintain strong budgetary performance, which will likely support its efforts to eliminate its negative fund balance and rebuild its budgetary flexibility."

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The Standard & Poor's Financial Services LLC logo is displayed in front of the company's headquarters in New York, U.S., on Thursday, July 28, 2011. U.S. stocks slid, dragging the Standard & Poor's 500 Index lower for a fourth day, and six-month Treasury bills sank as lawmakers indicated they were no closer to an agreement to raise the debt ceiling. The dollar gained and commodities retreated. Photographer: Scott Eells/Bloomberg

The $2.6 million deficit is down to $320,000, and Hosler is hopeful it can be erased by the end of this year. And with the credit rating, she's hoping to get a lower rate on water bonds to hopefully lower water rates.

"I'm just thrilled for her and the town," Mychajliw said. "This is how government should work."

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