Warning from Wallingford mayor despite budget surplus

As published in the Record Journal Tuesday January 1, 2013

By Laurie Rich Salerno
Record-Journal staff
lsalerno@record-journal.com
(203) 317-2235

WALLINGFORD - The town more than doubled its operating surplus for fiscal year 2011-12 over the total from the previous 12 months, closing out the year $1,682,000 under budget, according to an annual audit.

Still, even though the town closed out in the black, Mayor William W. Dickinson Jr. warned that looming state and federal budget cuts could be a problem.

“Given what’s going on at the state level and the federal level … there could be a reduction of services,” Dickinson said. “At what point in there is the town going to need to pick up those previously funded services?”

Dickinson and Comptroller James Bowes presented the results of an audit done by Blum Shapiro of West Hartford during an annual end-of-theyear press conference Friday. A handful of town councilors were there, as well as some town staff.

Wallingford’s total operating budget for 2011-12 was $141,448,848.

Bowes said the surplus was primarily the result of two major factors: a mild winter that required little in the way of supplies, equipment and overtime costs for snow and ice removal; and a municipal revenue sharing grant the town received from the state to plug some of the financial holes created after the state ended a longtime program that gave cities and towns money in exchange for not taxing machinery. The town had approved its budget for the year before the new grant was included in the state’s budget, and had planned to lose the $800,000 it ended up receiving.

Bowes said he was unsure whether the state would be providing a similar grant in the coming year.

In other increases, the town’s tax collection rate was a bit higher than budgeted, Bowes said.

But there were losses, as the town’s interest revenue continues to decline. It earned about $100,000 less in interest in fiscal year 2011-12 than in previous years, Bowes said.

Bowes said the fiscal picture was in doubt at times during the year as the town waited to hear if it would receive reimbursement money from the Federal Emergency Management Agency for Hurricane Irene and winter storm Alfred.

“If the federal government doesn’t come through with FEMA … it can swing you from a healthy year to a loss,” Bowes said.

The town eventually received the reimbursement it sought.

The surplus, $1,682,000, will go into the town’s general fund.

“The credit ratings agencies like to see that you have funds in reserve, that you are not on the brink of borrowing money whenever anything occurs,” Dickinson said.

But Democratic Town Councilor Jason Zandri said he’d like to see the roughly $1.7 million surplus go toward improving parking in the downtown area.

“This is like found money,” he said. “Rather than putting it into the general fund — where it almost never comes out — why not utilize it?”

Republican Councilor Craig Fishbein said he supported putting the money away to prepare for possible cuts in state aid.

“We have to protect our taxpayers,”he said. Democratic Councilor John Sullivan said he was pleased to see a surplus in tough economic times. “Most people should be happy,” he said.

And as for putting the money away or spending it, Sullivan said money should be saved because there is “too much uncertainty” at the state and federal level.

“We don’t know if what was funded this year will be funded next year,” he said.

The audit Friday also covered the town’s utilities. The Electric Division saw a net loss in the 2011-12 fiscal year of $565,000, which Bowes said was anticipated and due mostly to power purchase costs. The Sewer Division also had a net loss, of $230,000, which Dickinson attributed to the values of its equipment depreciating. The Water Division had a surplus of $436,000.

Dickinson was pleased but cautious.

“We’re holding our own,” Dickinson said. “We’re able to address the needs of the community, but again this current year had a tax increase; that’s a reality that goes along with good finances.”

To balance Wallingford budget, mayor had to dip into rainy day fund

As published online at MyRecordJournal.com

By Mary Ellen Godin
Record-Journal staff
mgodin@record-journal.com
(203) 317-2255

WALLINGFORD — The mayor’s proposed budget for 2012-2013 includes adding $4.3 million from the rainy day fund to maintain services without costing taxpayers more.

“It helps balance the budget,” said Finance Director James Bowes. “It’s considered a tax savings while helping provide services.”

It’s not unusual for Mayor William W. Dickinson Jr. to use surplus funds to cover shortfalls in other areas. This year those shortfalls are created by a $5.2-million increase in department requests, fewer state and federal grants and unfunded mandates, Dickinson said at a budget presentation Monday.

Had he not dipped into the fund, it would have meant another 1-mill increase for taxpayers or drastic cuts in services. As proposed, the budget comes with a .76-mill increase to 25.98 mills.

The rainy day or surplus fund now has $14.8 million, or $10.5 million if the budget is approved, Bowes said. The town works to keep more than $9.8 million in reserve to maintain its AAA credit rating, Bowes said.

But town councilors are worried about rebuilding the rainy day fund in 2013-2014 when town employees who did not get raises this year have wage increases negotiated for next year. A large concern is teachers, who are set to receive close to $2 million over the next two years. Three other unions representing managers, clerical staff and police and fire department employees are also in negotiations and could be in line for two-percent wage hikes.

“With eight, nine percent unemployment, you have everyone functioning like everything is normal,” Dickinson said. “Wages should be tied to the private sector.”

Town Councilor Jason Zandri said the rainy day fund can be likened to a personal savings account. If mortgages and utilities increase and a person continues to dip into it, it’s going to wither.

”You’re taking more out of the bank and eventually run out of that savings,” said Zandri, a Democrat. “You need to put it in every day.”

Town Councilor Nicholas Economopoulos said the fact that the rainy day fund had to be used to pay for existing services shows that this budget challenged Dickinson, a Republican.

“He’s definitely aware of it,” said Economopoulos, a Democrat. “He has his back against the wall. He has a challenge to make it more efficient and accountable. We may have to turn to fire and say, we can’t do it for you,” he said referring to plans to build a new firehouse.

Town Councilor Craig Fishbein, a Republican, said the rainy day fund is designed to cover shortfalls in the budget and prevent tax increases, but he’s more worried now.

“As I pointed out last year, that money is dwindling,” Fishbein said. “You don’t have that money next year to pad the budget.”

The most effective way to replenish the rainy day fund is through the town’s grand list, Bowes said. This year’s grand list growth generated $900,000 at the current tax rate. A residential and commercial real estate market that’s slowly stirring back to life could boost revenue, he said. But there is no magic bullet.

“It’s a multi-faceted question and there is no one answer,” Bowes said.

The town’s residential and commercial tax burden doesn’t fluctuate wildly even after revaluations, he said. In 2010 commercial property values dropped from 65.1 percent of the town’s tax burden several years earlier to 64.18 percent. In 2011, it was 64.05. Commercial and industrial property owners picked up slightly more of the burden in 2010 and 2011, but personal property or equipment taxes declined due to depreciation.

“Businesses have to replace those assets with newer assets at a faster clip,” Bowes said. “That’s a large component.”

Businesses moving in and moving up also help that number grow. The town also has to see some return of state and federal grants, instead of one- or two-year programs that evaporate leaving the town to support new hires, or new programs, Dickinson said Monday.

Fishbein said the town needs to take another look at agencies and programs it’s sending checks to and stop paying the state $70,000 a year for bus service, among other changes.

Economopolous said it might be time to say no to large projects such as the fire station, while Zandri said it’s time to review agreements with local non-profits for payments in lieu of taxes.

Keeping jobs unfilled yields town surplus

As published in the Record Journal, Thursday January 26, 2012

By Russell Blair
Record-Journal staff
rblair@record-journal.com
(203) 317-2225

WALLINGFORD — The town ended the 2010-11 fiscal year with a surplus largely due to town employee positions’ remaining unfilled, a practice that has become more common in tough fiscal times. According to an audit of Wallingford’s finances released in December, the town ended the fiscal year $671,000 in the black. But a large amount of the surplus can be attributed to the retirement of 10 town employees who weren’t replaced.

“No amounts were budgeted for 10 open positions in the General Government: three in Public Works, three in the Comptroller’s office and four police officers,” the audit said. “These positions were vacated by retired employees and will probably remain unfilled until the economy recovers.”

In the current fiscal year, the Police Department’s salaries budget was cut by $170,106. Police Chief Douglas Dortenzio said Wednesday he wouldn’t be asking for additional officers in next year’s budget. The request has been denied in the past. The department has 71 sworn officers, including Dortenzio, and a total of 91 positions including clerical staff.

Dortenzio said that when a position remains vacant for a year, it is generally eliminated from the budget. Staffing is down about 6 percent from a couple of years ago, he said.

The department has had to shift officers around and make changes, including reducing the size of the detective bureau, to get more uniformed officers on the street.

“We do the best we can with what we have,” Dortenzio said. But, he noted, “the town has grown, and we have not kept pace.”

Mayor William W. Dickinson Jr. said that, in tough economic times, the town has had to cut back to avoid increases in taxes, and he doesn’t expect many new hires.

“Chances are, some, if not all of these positions will remain unfilled,” Dickinson said. “The police no longer has a DARE program; Public Works has lost positions that handled landscaping duties.” But John Sullivan, a Democratic town councilor, said he doesn’t think a surplus matters if it comes at the expense of public safety officers.

“I always have concerns about police, fire and emergency response,” he said.

According to the audit, public safety expenditures in 2010-11 were $708,000 below budget due to $412,000 less in police wages, “due to the time lag in replacing employees who retired or resigned and less overtime.”

Dickinson said that the town isn’t getting any new money, and that, short of a large increase in the grand list, services have to be trimmed.

He said the departments have been continuing to provide services but that they’ve had to “get back to core missions.”

“Just the essentials,” Dickinson said.

Sullivan said that other budgets have ended in a surplus for similar reasons, and the extra money isn’t always a good sign. “This is typical every budget year,” he said. “And who is the big loser? The people in Wallingford.”

Dickinson countered by saying that the $671,000 surplus didn’t tell the whole story, and that $4 million to $5 million of the town’s general fund was used to cover expenses and stave off a tax increase.

$671G surplus up in Wallingford, but mayor still cautious

As published online at NHRegister.com on Wednesday, January 04, 2012

By Luther Turmelle
North Bureau Chief
lturmelle@nhregister.com
Twitter: @lutherturmelle

WALLINGFORD — The town finished fiscal 2011 with a $671,000 surplus, compared to $406,000 during the previous fiscal year, according to the annual municipal audit.

Usually, even a modest surplus is reason for some cheer among town officials. But Mayor William Dickinson Jr. said Tuesday that without significant new revenue coming in, the surplus doesn’t tell the whole story.

“I think the town is in sound fiscal health,” Dickinson said. “But our fiscal decisions are dependent upon the local taxpayer footing the bill and the worry is there is not an indication of new revenue coming in. So, we’ve got to be very cautious about how we spend.”

Dickinson acknowledged he won’t know for certain whether the town’s tax revenue will increase until the end of this month, when Wallingford files its grand list with the state. Last year, for the first time since Dickinson took office in 1986, the town’s overall value of taxable property went down.

The audit also revealed that the town’s net assets — which represents the combined dollar value of government and business activity — increased by $3.43 million to $353.48 million in fiscal 2011, which ended last June 30, said James Bowes, Wallingford’s comptroller.

“The fact that out assets are still growing, given the difficult nature of the economy, is good news,” Bowes said.

The town’s debt load decreased by nearly $2.74 million in fiscal 2011.

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