Town Closes Out 2011-12 Nearly $1.3 Million Surplus

By John Voket

Finance Director Robert Tait has closed Newtown’s financial ledger for the 2011-12 fiscal year, reporting a $1,277,182 surplus. After final transfers, the largest of which covered a shortfall against town teacher retiree health claims, about $970,000 was left in the fund balance.

Mr Tait’s report to the Board of Selectmen September 17 noted that while he estimated a $700,000 surplus during the budget process, several unforeseen or unanticipated revenue sources developed between the time the budget was passed and when he closed out town accounts in late August and early September.

During that meeting, Mr Tait explained that expenditures are much easier to project than revenues, and that his expenditure forecast was “pretty accurate.”

Among the revenue sources that boosted the budgeted surplus were tax collections of about $100,000 more than in the prior year, and $125,000 more in revenue for police special duty services. The latter Mr Tait called a one-time anomaly because of all the extra roadside duties local officers were called upon to monitor after the two catastrophic storms in September and October of 2011.

Those receivables were not booked until mid-August, Mr Tait said.

In addition, interest on investments were better than forecasted because of an increase in the market value for certain CDs. Those revenues were not booked until the end of July and amounted to $50,000.

Landfill revenue that was booked in late June was $40,000 more than budgeted, and the cancellation of previous year’s purchase orders added another $29,000 to the surplus.

Mr Tait said part of that landfill revenue came from the town getting a higher than expected return on a load of collected scrap metal it sold at the end of June.

And an unanticipated surplus payment received in mid-August from the state’s sales tax revenue sharing fund was $75,000 more than the town was told to expect earlier in the year.

Mr Tait said the largest transfer he was able to make from the gross surplus was a $250,000 contribution to the “Other Post Employment Benefits” or OPEB fund. About $10,000 covered additional health plan claims over budget for police department retirees, with the balance covering shortfalls against retired teacher health claims.

During the meeting Selectman Will Rodgers asked if there is any way to create revenue projections that might be more accurate, and Mr Tait replied that despite his access to a ten-year tax forecast analysis, “There was no way to tell there would be more than was budgeted [this year].”

First Selectman Pat Llodra said that the extra revenue would take a bit of pressure off the town, which is aggressively working to exceed an eight percent ratio in its fund balance.

Mr Tait also said he is planning to reduce the budgeted tax collection ratio from 99.1 percent to 99 percent in the current fiscal year to achieve a more realistic revenue projection, partly because last year’s collections were $50,000 less than budgeted.

Other year-end transfers included $41,000 to make up a shortfall against budgeted fees for Parks & Recreation Deaprtment use of the Newtown Youth Academy. Mr Tait said he and Parks & Rec staff and commissioners would be meeting to “prevent this from happening again.”

An additional $45,677 was transferred to cover nominal pay increases and one-time adjustments in pay scales for about 30 municipal employees.