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Audit finds Tonawanda's 2024 finances "stable" but cautions over reliance on one-time revenue
Summary
An independent auditor told the Tonawanda common council that 2024 closed with a roughly $10 million unassigned general-fund balance and a $1.7 million increase in the year's fund balance — driven largely by $1.2 million in one-time ARPA money — and urged the city to prepare for tightening recurring revenues and rising recurring costs.
An audit representative presented a draft independent audit to the City of Tonawanda common council on the audit firm's view that the city's general-fund financial position for 2024 is stable but relies substantially on one-time revenue sources.
"We are in draft form, but we're in a position where we feel like the audit results are fair," the audit representative said, summarizing the work and the deliverables the firm will provide, including a management letter and an audit communication letter.
The presentation showed a five-year trend in the general fund in which revenues and expenditures narrowed. The auditor said 2024 produced roughly a $1.7 million increase in the general fund; about $1.2 million of that amount came from federal ARPA funds and should not be expected going forward. The audit representative said the city's unassigned fund balance is "just over $10,000,000," about 34% of the budget, which the auditor described as a strong position compared with many other New York municipalities.
"Right now, I would say stable," the auditor said when asked to summarize the city's financial condition, while warning that recurring revenues such as property taxes (subject to statutory caps), sales tax and state aid are largely flat and that recurring expenditures (salaries, benefits, contracts) are increasing.
Council members asked how the balance and recent appropriations would affect future years. The auditor noted that planned appropriations in the 2026 calendar could reduce the unassigned balance and urged continued monitoring, strengthened internal controls in the treasurer's office and additional staff or cross-training to speed reconciliations and reporting.
The auditor said the firm plans to issue final reports within the next couple of weeks to allow the city to submit required documentation to its regulatory body and proceed with budget work.
The council acknowledged the audit presentation and thanked the auditors. Council members and staff also discussed the timing of the credit rating and whether maintaining a larger unassigned balance could improve borrowing costs; no formal action to change policy was taken at the meeting.
The council is expected to receive the final audit report once the auditor completes outstanding bank reconciliations and management-level communications.
