Shelton audit shows growing fund balance, low debt

SHELTON — The city’s general fund, which had dwindled to nearly zero only two years ago, now sits at $7 million, according to city audit data. The same audit showed Shelton had “extraordinarily” low debt.

Dave Cappelletti of Clermont & Associates LLC, presented details on the city audit for the fiscal year ending June 20, 2021, to the Board of Aldermen, with the results showing the city collected $9.3 million more in taxes than it spent.

In approving the 2021-22 fiscal year budget, the city set aside $1.6 million of that general fund money, if needed. That, combined with $650,000 of other required assigned expenditures, leaves the unassigned fund balance at $7.2 million, including the $161,395 which carried over from the 201920 fiscal year.

The 2020-21 city budget, on which the audit focuses, was approved at $128.2 million, and the city spent about $118.5 million.

Mayor Mark Lauretti said he does not expect to need the $1.6 million for the present fiscal year budget, so that money will then become part of the unassigned amount, bringing the available general fund to nearly $9 million.

“You have to focus on the results of revenues, the operation of the budget, what we didn’t spend and that was $9.3 million,” Lauretti said. “We knew that there was money there, so we appropriated $1.6 million toward this year’s budget to balance the budget, which we are probably not going to spend.”

Cappelletti also noted that the city’s debt stands at about $17 million.

“I would be surprised if someone half your size would have that debt,” he said.

Lauretti said Shelton was “extraordinary” in its low levels of debt.

“The reality is, if we don’t borrow another penny for three years, we will have no debt. We will have no debt,” he said.

Cappelletti said historically the city had larger general fund balances. But over the years, officials decided to use this fund balance for capital projects to reduce borrowing.

“You can blame me for the low fund balance,” Lauretti said. “I do that by design. I have never believed that we need to stockpile money. If we need it, if we have a rainy day and we need money, we have the ability to raise money. We have a couple of different sources to go to get money.”

Lauretti said there was no value to the city in having millions of dollars in surplus, when the city could use the excess funds for other projects.

“We have taken those surplus monies and bought things with them. Simple as that,” he said.

Board of Aldermen President John Anglace Jr. said five years ago, the state was “breathing down our necks and the neck of every municipality in the state” for money. That was when the board decided not to carry a large fund balance, he said.

“The state was hurting for money, and they were looking for ways to recoup their fund balance,” he said. “So, we decided consciously that we would spend down the general fund surplus.”

While the mill rate remains relatively low at 24.02, Cappelletti said the city has a growing grand list, tax collections are increasing and building permit income went is “way up.”

According to the audit, the grand list increased 1.87 percent in 2019, and 1.49 percent in 2020, with the total standing at just under $4.9 billion in total assessments. The number of building permits the city is issuing also points to greater grand list growth in the future, Capelletti said.

“So, what you are going to see probably in the future is maybe a steady grand list, but all of a sudden it is going to start going up very steeply and quickly, if you haven’t seen it already,” he said. “You can just notice that with the number of building permits that went out during this audit here. There is a little bit more comfort in a growing grand list.”