Auditors say town finances look good
The independent auditors are comfortable with Ridgefield’s finances and bookkeeping for the last fiscal year. And First Selectman Rudy Marconi likes what the auditors’ 2017-18 Comprehensive Annual Financial Report — or CAFR — has to say about the town.
“It looks good, healthy, strong,” Marconi said. “We’re a healthy community, financially. The ratings bureaus love it.”
Marconi offered those thoughts on Wednesday, Feb. 20, the day after the Board of Finance had discussed the financial report with Vanessa Rossitto of Blum Shapairo & Company, the independent auditing firm that reviewed the town’s books for the fiscal year that ran from July 1, 2017, to June 30, 2018.
“We’ve given the town of Ridgefield a clean, unmodified opinion,” Rossitto told the finance board — meaning the firm found no significant problems.
The town had budgeted $141,648,000 for 2017-18, finance board Chairman Dave Ulmer said, and it spent $140,853,000 — so expenditures for the fiscal year were $795,000 less than what had been budgeted.
“The unassigned fund balance is just over $14 million,” Ulmer said.
“$14.05 million,” confirmed Rossitto.
The ‘unassigned fund balance’ is money the town is holding that it hasn’t designated for any purpose — it might be thought of as the accumulated unspent surpluses from past years. It’s sometimes viewed as a kind of unofficial rainy day fund. The report shows the town ended the fiscal year with an unassigned fund balance of $14,052,897.
Most years, the finance board tries to hold down the tax rate by tapping into that fund balance and using a portion of it as non-tax revenue. That money — a total of $1,830,000 in 2017-18 — is designated for use, so it’s “assigned.” The “unassigned fund balance” is what’s left.
The finance board doesn’t want the fund balance to get too big — it’s informal guideline is for the fund balance to be equal to 8%-to-9% of the annual budget expenditures. With a fund balance of just over $14 million and a 2017-18 budget of $141 million, the fund balance is a little over 10% of expenditures — slightly above the 8%-to-9% guideline.
The finance board calculates that using a small slice of the fund balance as revenue each year holds down taxes, keeps the size of fund balance reasonable, and returns taxpayers’ money to them.
While the state of Connecticut may be saddled with mounting pension liabilities, the town of Ridgefield closed the last fiscal year in the enviable positions of having pensions for its major employee groups all funded at over 100%.
The town pension plan for most municipal workers had a “total pension liability” of just over $61,308,000, while the “plan fiduciary net position” is nearly $61,914,000 — for a “net pension asset” of almost $606,000. The pension plan’s net position as opposed to liability is 100.99%, so the plan is essentially 101% funded.
The firefighters union pension plan had a total pension liability of almost $19,470,000, a plan fiduciary net position of nearly $19,951,000 for a net pension asset of just over $481,000. The plan was 102.47% funded.
The police union’s pension plan had a total pension liability of almost $31,937,000, a plan fiduciary net position of close to $32,412,000, for a net pension asset of nearly $476,000. The plan is 101.49% funded.
“It’s extraordinary,” said Rossitto, who’s been involved in auditing numerous municipalities for many years. “Maybe one other case I’ve seen over 100%.”
Finance board member Sean Connelly asked if the recent retirements of a number of town workers in an effort to hold the coming budget down was likely to affect the status of the pension plans.
“It should be a net push,” said Controller Kevin Redmond. “I don’t think it has any impact.”
Teachers are in a different position, because it is the state that is responsible for all teacher pension liabilities.
“The teachers of Ridgefield, their liability the state is currently responsible for is $141.5 million,” Ulmer said.
“What percentage of that is funded?” asked board member Dick Moccia.
“Fifty-two percent,” said Rossitto.
The auditors reported that the town’s outstanding debt is $60,370,000 as of June 30, 2018. The outstanding debt was equal to $42.9% of the year’s $141.5 million budget.
Debt service in 2017-18 was $11.5 million.
Of the more than $60 million in bonded debt, $43,149,000 were general obligation bonds for various town projects, $16,371,000 were school improvement bonds, and $849,000 were sewer bonds.
“Schools are down to, basically, a quarter of our bonded obligation,” Ulmer said. “They used to be higher.”
The town’s debt peaked at almost $148 million in 2003, when borrowing for the $90 million school bundle followed just a few years after the $34 million in borrowing for construction of Scotts Ridge Middle School.