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TOWN OF WATERFORD, CONNECTICUT
ANNUAL COMPREHENSIVE
FINANCIAL REPORT
YEAR ENDED JUNE 30, 2025
TOWN OF WATERFORD, CONNECTICUT
ANNUAL COMPREHENSIVE FINANCIAL REPORT
YEAR ENDED JUNE 30, 2025
DEPARTMENT OF FINANCE
KIMBERLY ALLEN
DIRECTOR OF FINANCE
INTRODUCTORY SECTION
TOWN OF WATERFORD, CONNECTICUT
TABLE OF CONTENTS
YEAR ENDED JUNE 30, 2025
INTRODUCTORY SECTION
LETTER OF TRANSMITTAL
I
LIST OF ELECTED AND APPOINTED OFFICIALS
V
ORGANIZATION CHART
VI
FINANCIAL SECTION
INDEPENDENT AUDITORS’ REPORT
1
MANAGEMENT’S DISCUSSION AND ANALYSIS
5
BASIC FINANCIAL STATEMENTS
EXHIBITS
GOVERNMENT-WIDE FINANCIAL STATEMENTS
STATEMENT OF NET POSITION
I
16
STATEMENT OF ACTIVITIES
II
17
BALANCE SHEET – GOVERNMENTAL FUNDS
III
18
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES – GOVERNMENTAL FUNDS
IV
20
PROPRIETARY FUNDS
STATEMENT OF NET POSITION
V
22
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN
NET POSITION
VI
23
STATEMENT OF CASH FLOWS
VII
24
FIDUCIARY FUNDS
STATEMENT OF FIDUCIARY NET POSITION
VIII
25
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
IX
26
NOTES TO BASIC FINANCIAL STATEMENTS
27
REQUIRED SUPPLEMENTARY INFORMATION
GENERAL FUND
SCHEDULE OF REVENUES AND OTHER FINANCING SOURCES
– BUDGET AND ACTUAL
RSI-1
87
SCHEDULE OF EXPENDITURES AND OTHER FINANCING USES
– BUDGET AND ACTUAL
RSI-2
89
PENSION TRUST FUNDS
TOWN OF WATERFORD, CONNECTICUT
TABLE OF CONTENTS
YEAR ENDED JUNE 30, 2025
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND
RELATED RATIOS – PENSION TRUST FUND
RSI-3
95
SCHEDULE OF EMPLOYER CONTRIBUTIONS – PENSION
TRUST FUND
RSI-4
96
SCHEDULE OF INVESTMENT RETURNS – PENSION TRUST
FUND
RSI-5
97
SCHEDULE OF THE DISTRICT’S PROPORTIONATE SHARE OF
THE NET PENSION LIABILITY – MUNICIPAL EMPLOYEES
RETIREMENT SYSTEM
RSI-6
98
SCHEDULE OF EMPLOYER CONTRIBUTIONS – MUNICIPAL
EMPLOYEES RETIREMENT SYSTEM
RSI-7
99
SCHEDULE OF THE TOWN’S PROPORTIONATE SHARE OF THE
NET PENSION LIABILITY – TEACHERS RETIREMENT SYSTEM
RSI-8
100
SCHEDULE OF CHANGES IN NET OPEB LIABILITY AND
RELATED RATIOS – OPEB TRUST FUND
RSI-9
101
SCHEDULE OF EMPLOYER CONTRIBUTIONS – OPEB TRUST
FUND
RSI-10
102
SCHEDULE OF INVESTMENT RETURNS – OPEB TRUST FUND
RSI-11
103
SCHEDULE OF THE TOWN’S PROPORTIONATE SHARE OF THE
NET OPEB LIABILITY – TEACHERS RETIREMENT SYSTEM
RSI-12
104
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
GENERAL FUND
SCHEDULE OF EXPENDITURES AND ENCUMBRANCES
COMPARED WITH APPROPRIATIONS
A-1
108
REPORT OF PROPERTY TAX COLLECTIONS
A-2
109
SCHEDULE OF SEWER ASSESSMENTS RECEIVABLE
110
NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
A-3
B-1
115
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
B-2
121
FIDUCIARY FUNDS
COMBINING STATEMENT OF FIDUCIARY NET POSITION –
PENSION AND OTHER EMPLOYEE TRUST FUNDS
C-1
130
COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET
POSITION – PENSION AND OTHER EMPLOYEE TRUST FUNDS
C-2
131
TOWN OF WATERFORD, CONNECTICUT
TABLE OF CONTENTS
YEAR ENDED JUNE 30, 2025
STATISTICAL SECTION
TABLES
FINANCIAL TRENDS
NET POSITION BY COMPONENT
1
134
CHANGES IN NET POSITION
2
135
FUND BALANCES – GOVERNMENTAL FUNDS
3
137
REVENUES, EXPENDITURES, AND CHANGES IN FUND
BALANCES – GOVERNMENTAL FUNDS
4
138
REVENUE CAPACITY
ASSESSED VALUE AND ESTIMATED ACTUAL OF TAXABLE
PROPERTY
5
139
PRINCIPAL PROPERTY TAXPAYERS
6
140
PROPERTY TAX LEVIES AND COLLECTIONS
7
141
DEBT CAPACITY
RATIOS OF OUTSTANDING DEBT BY TYPE
8
142
SCHEDULE OF DEBT LIMITATION
9
143
LEGAL DEBT MARGIN INFORMATION
10
144
DEMOGRAPHIC AND ECONOMIC STATISTICS
DEMOGRAPHIC AND ECONOMIC STATISTICS
11
145
PRINCIPAL EMPLOYERS
12
146
OPERATING INFORMATION
FULL-TIME EQUIVALENT GOVERNMENT EMPLOYEES BY
FUNCTION/PROGRAM
13
147
OPERATING INDICATORS BY FUNCTION/PROGRAM
14
148
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM
15
149
(i)
December 19, 2025
To the Honorable First Selectman, Representative Town Meeting and the Citizens of the Town
of Waterford:
State law requires that every general-purpose local government publish within six months of the
close of each fiscal year a complete set of audited financial statements. This report is published
to fulfill that requirement for the fiscal year ended June 30, 2025.
Management assumes full responsibility for the completeness and reliability of the information
contained in this report, based upon a comprehensive framework of internal control that it has
established for this purpose. Because the cost of internal control should not exceed anticipated
benefits, the objective is to provide reasonable, rather than absolute, assurance that the
financial statements are free of any material misstatements.
CliftonLarsonAllen LLP (CLA), Certified Public Accountants, have issued an unqualified opinion
on the Town of Waterford financial statements for the year ended June 30, 2025. The
independent auditors’ report is located at the front of the financial section of this report.
Management Discussion and Analysis (MD&A) immediately follows the independent auditor’s
report and provides a narrative introduction, overview and analysis of the basic financial
statements. The MD&A complements this letter of transmittal and should be read in conjunction
with it.
Profile of the Government
Waterford was incorporated in 1801. Covering an area of 33.2 square miles, the Town is located
in the southeastern region of the state. Waterford is bordered by the Towns of East Lyme to the
west, New London, Groton and Ledyard to the east, and Montville to the north. It borders Long
Island Sound to the south.
The Town has a Selectmen/Board of Finance/Representative Town Meeting form of
government. The Representative Town Meeting exercises the legislative authority of the Town.
The Board of Selectmen is composed of three members who are elected at large for four-year
terms. The Representative Town Meeting is elected for two-year terms. The First Selectman is
the head of the administrative branch of the Town Government and is responsible to the
Representative Town Meeting for the administration of all affairs relating to the Town.
The Town of Waterford provides a full range of services, including police and fire protection; the
construction and maintenance of highways, streets, and other infrastructure; municipal solid
waste and recycling collection; recreational and cultural activities. The Town’s one business-
type activity, municipal water and sewer services, are provided through the Town’s Utility
Commission.
(ii)
By Charter, the Representative Town Meeting must hold its Town Budget Meeting no later than
the first Monday in May each year. If, within fifteen days of the budget adoption no referendum
is called, the budget is considered approved. The annual budget serves as the foundation for
Town
of
Waterford
financial
planning
and
control.
The
budget
is
prepared
by
Department/Agency at an object level. With the exception of the Police, Recreation and Parks,
Senior Services, Utility and Planning and Zoning Commissions, Board of Finance, Board of
Education, Board of Assessment Appeals, Zoning Board of Appeals, Building Board of Appeals,
Economic Development Commission, Flood & Erosion Control Board, Conservation
Commission, Retirement Commission, Harbor Management Commission and Ethics
Commission, all other Town Boards, Commissions or agencies report to the Board of
Selectmen. The Board of Selectmen, however, reviews and recommends to the Board of
Finance the level of appropriation for all municipal budgets with the exception of the Board of
Education. All budget transfers within series are approved by the Board of Selectmen. Transfers
out of series, however, require special approval from the Board of Finance.
Local Economy
Waterford is unique in that its major taxpayer is a nuclear power facility. However, numerous
retail sales outlets, a production/software development company, several utilities, and financial
institutions provide a good mix to tax base diversification. The Waterford Tax Base has a
diversified tax base with immediate access to Routes 1, 95, 395 and 85 all of which are major
Connecticut arteries.
Below are specific updates for Waterford’s local economy.
Dominion Power Facility (Millstone)
•
Impact Analysis Completed
•
Increase Economic development
•
Continues to be a Viable Tax payer
•
2-Year Tax Deal Signed
Economic Development Commission Master Plan
•
Town Plan of Conservation and Development now in draft form and being
reviewed by commission members
Regulation Amendments
•
Various zoning regulation amendments including updates to Outdoor
Dining and Parking at multifamily residential properties to facilitate new
projects.
Crystal Mall
•
Ongoing conversation with the ownership interests at the property to
modify zoning to support future mixed use development.
(iii)
New Developments
•
Completion of 40 (32 affordable 8 market rate) apartment units at 908
Hartford Turnpike.
•
Work completed on phase 1 and 2 for apartment complex on Willets
Avenue (phase 3 underway).
•
Completion of self-storage facility on Rte. 85
•
Approval of 40 (4 affordable, 36 market rate) single family units at 48
Great Neck Road – Ivy Hill – 5 units occupied, construction ongoing
•
Approval of new Chipotle franchise 124 Boston Post Road – construction
complete business open
•
Approval of pickleball club at 365 Mago Point Way –construction
complete business open
•
Approval of new gas station and convenience store 118 Boston Post
Road – construction ongoing
•
Approval of new gas station 809 Hartford Turnpike – construction
complete business open
•
Approval of new car wash 890 Hartford Turnpike – construction ongoing
New Industry
•
Approval granted for Safe Futures on Rte. 85
Long Term Financial Planning
In 1998 the Representative Town Meeting formed its Long Range Fiscal Planning Committee.
In FY01 the Board of Finance appointed an Ad Hoc Long-Range Fiscal Planning Committee to
analyze the town’s future economic growth, revenue streams and project expenditures for the
financial planning moving forward. This proactive approach to long-range operational budget
planning, combined with multi-year capital planning, has become an effective budgetary
management tool. The Long-Range Fiscal Planning Committee remains active and is in the
process of developing an updated long-term financial plan based of GFOA guidelines.
The Town implemented a Fleet Management Program that served as the basis for sizing the
fleet and provided a 5-year approach to managing a fleet valued in excess of $4.4 million. This
program allows the Town to undertake a needs assessment of its rolling stock, and based upon
established life-cycle parameters, provided a forty-year replacement plan that uses a
combination of residual values, investment income, vehicle rental revenues and an equalized
level of budget over a sustained period of time to fund all rolling stock replacements.
Major Initiatives
Increase school enrollment
◦
Attract students from neighboring districts to Waterford High School on a tuition
basis
Eco Friendly Town
◦
Achieved Bronze Certificate as a Sustainable CT Community
◦
Land Preservation
(iv)
◦
Easements, Purchase and Donations
◦
Plan of Conservation and Development
◦
Energy audit of buildings
◦
RTM Ad Hoc Energy Task Force Created
Affordable Housing Plan
◦
Assessing housing needs for the future
◦
The town continues to collect data to fit into regional area needs
◦
The town applied for a moratorium to allow necessary time to review its
affordable housing plan
Town Center Improvements (“Main Street”)
◦
Committee Formed in June 2020
◦
Improved Recreational Amenities
◦
Accessible walking paths, sidewalks, and boardwalks
◦
Improved Fiber Connectivity
◦
Adoption of the Community Waterford Park Master Plan
Acknowledgements
Although the preparation of the comprehensive annual financial report is primarily the
responsibility of the Director of Finance, it could not have been accomplished without the
support of numerous town staff. Special recognition goes to the Finance department staff.
Without their dedication, oversight and hard work the Town could never have achieved this
prestigious award. I appreciate the unflagging support of First Selectman Robert Brule,
Superintendent of Schools Thomas Girard and his staff, as well as the entire Board of
Selectmen, Board of Finance, and the Representative Town Meeting who continually show their
commitment to fiscal integrity and financial leadership.
Respectfully submitted,
Kimberly Allen
Kimberly Allen
Director of Finance
TOWN OF WATERFORD, CONNECTICUT
PRINCIPAL TOWN OFFICIALS
JUNE 30, 2025
(v)
Robert J. Brule, Jr.
First Selectman
Thomas W. Giard III
Superintendent of Schools
Kimberly Allen
Director of Finance
Abbas Danesh
Treasurer
Jonathan Mullen
Planning Director
Gary Schneider
Director of Public Works
Marc Balestracci
Chief of Police
James Bartelli
Chief Engineer, Utilities Commission
Alan Wilensky
Tax Collector
Paige Walton
Assessor
Ryan McNamara
Recreation and Parks Director
David Campo
Town Clerk
Daniela Gorman
Director of Human Services
Steve Cardelle
Building Official
Christine Johnson
Library Director
Michael Howley
Director of Fire Services
Christine Walters
Director of Human Resources
TOWN OF WATERFORD, CONNECTICUT
ORGANIZATION CHART
JUNE 30, 2025
(vi)
FINANCIAL SECTION
CLA (CliftonLarsonAllen LLP) is an independent network member of CLA Global. See CLAglobal.com/disclaimer.
CliftonLarsonAllen LLP
CLAconnect.com
(1)
INDEPENDENT AUDITORS’ REPORT
Board of Finance
Town of Waterford, Connecticut
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, the business-
type activities, each major fund, and the aggregate remaining fund information of the Town of
Waterford, Connecticut, as of and for the year ended June 30, 2025, and the related notes to the
financial statements, which collectively comprise the Town of Waterford, Connecticut‘s basic financial
statements as listed in the table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, each major
fund, and the aggregate remaining fund information of the Town of Waterford, Connecticut, as of
June 30, 2025, and the respective changes in financial position, and, where applicable, cash flows
thereof for the year then ended in accordance with accounting principles generally accepted in the
United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States
of America (GAAS) and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States. Our responsibilities under those
standards are further described in the Auditors’ Responsibilities for the Audit of the Financial
Statements section of our report. We are required to be independent of the Town of Waterford,
Connecticut, and to meet our other ethical responsibilities, in accordance with the relevant ethical
requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinions.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with accounting principles generally accepted in the United States of America, and for the
design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud
or error.
In preparing the financial statements, management is required to evaluate whether there are conditions
or events, considered in the aggregate, that raise substantial doubt about the Town of Waterford,
Connecticut‘s ability to continue as a going concern for twelve months beyond the financial statement
date, including any currently known information that may raise substantial doubt shortly thereafter.
Board of Finance
Town of Waterford, Connecticut
(2)
Auditors’ Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that
includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance
and, therefore, is not a guarantee that an audit conducted in accordance with GAAS and Government
Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Misstatements are considered material if there is a substantial likelihood that, individually or in the
aggregate, they would influence the judgment made by a reasonable user based on the financial
statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
•
Exercise professional judgment and maintain professional skepticism throughout the audit.
•
Identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error, and design and perform audit procedures responsive to those risks. Such
procedures include examining, on a test basis, evidence regarding the amounts and disclosures
in the financial statements.
•
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of Town of Waterford, Connecticut‘s internal control. Accordingly,
no such opinion is expressed.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.
•
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate,
that raise substantial doubt about Town of Waterford, Connecticut‘s ability to continue as a
going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit, significant audit findings, and certain internal control related
matters that we identified during the audit.
Board of Finance
Town of Waterford, Connecticut
(3)
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management’s discussion and analysis, the budgetary comparison information, and the pension and
OPEB schedules as listed in the table of contents, be presented to supplement the basic financial
statements. Such information is the responsibility of management and, although not a part of the basic
financial statements, is required by the Governmental Accounting Standards Board who considers it to
be an essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic, or historical context. We have applied certain limited procedures to the required
supplementary information in accordance with GAAS, which consisted of inquiries of management
about the methods of preparing the information and comparing the information for consistency with
management’s responses to our inquiries, the basic financial statements, and other knowledge we
obtained during our audit of the basic financial statements. We do not express an opinion or provide
any assurance on the information because the limited procedures do not provide us with sufficient
evidence to express an opinion or provide any assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the Town of Waterford, Connecticut’s basic financial statements. The combining
and individual fund financial statements and schedules are presented for purposes of additional
analysis and are not a required part of the basic financial statements. Such information is the
responsibility of management and was derived from and relates directly to the underlying accounting
and other records used to prepare the basic financial statements. The information has been subjected
to the auditing procedures applied in the audit of the basic financial statements and certain additional
procedures, including comparing and reconciling such information directly to the underlying accounting
and other records used to prepare the basic financial statements or to the basic financial statements
themselves, and other additional procedures in accordance with GAAS. In our opinion, the combining
and individual fund financial statements and schedules are fairly stated, in all material respects, in
relation to the basic financial statements as a whole.
Other Information
Management is responsible for the other information included in the annual report. The other
information comprises the introductory and statistical sections but does not include the basic financial
statements and our auditors’ report thereon. Our opinions on the basic financial statements do not
cover the other information, and we do not express an opinion or any form of assurance thereon.
In connection with our audit of the basic financial statements, our responsibility is to read the other
information and consider whether a material inconsistency exists between the other information and the
basic financial statements, or the other information otherwise appears to be materially misstated. If,
based on the work performed, we conclude that an uncorrected material misstatement of the other
information exists, we are required to describe it in our report.
Board of Finance
Town of Waterford, Connecticut
(4)
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
December 19, 2025, on our consideration of the Town of Waterford, Connecticut‘s internal control over
financial reporting and on our tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements and other matters. The purpose of that report is solely to describe the
scope of our testing of internal control over financial reporting and compliance and the results of that
testing, and not to provide an opinion on the effectiveness of the Town of Waterford, Connecticut‘s
internal control over financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering Town of Waterford,
Connecticut‘s internal control over financial reporting and compliance.
CliftonLarsonAllen LLP
West Hartford, Connecticut
December 19, 2025
TOWN OF WATERFORD, CONNECTICUT
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)
JUNE 30, 2025
(5)
This discussion and analysis of the Town of Waterford, Connecticut (the Town) financial performance is
prepared by management to provide an overview of the Town’s financial activities for the fiscal year
ended June 30, 2025. Please read this MD&A in conjunction with the transmittal letter and the Town’s
financial statements, Exhibits I to IX.
FINANCIAL HIGHLIGHTS
•
The Town’s net position decreased by $3.3 million this year. While net position of our business-
type activities decreased by $2.2 million, or 4.6 %, net position of our governmental activities
decreased by $1.1 million or 0.1 %.
•
During the year, the Town had expenses that were $1.1 million more than the $124.7 million
generated in tax and other revenues for governmental programs.
•
In the Town’s business-type activities, revenues and transfers in increased by $149 thousand or
3.4%, while expenses increased by $1.5 million or 27.1 %.
•
The total cost of all of the Town’s programs was $132.2 million, with no new programs added
this year.
•
The General Fund reported a fund balance this year of $19.2 million.
•
The resources available for appropriation were $2.3 million less than anticipated for the General
Fund. There were additional appropriations of $4.8 million, of which, $4.7 million was for
transfers out to the Capital Improvement and Capital and Nonrecurring Funds. Unused
appropriations of $1.3 million were returned to fund balance at year-end. Overall, the operating
results decreased the General Fund balance by $5.8 million.
OVERVIEW OF THE FINANCIAL STATEMENTS
This annual report consists of a series of financial statements. The statement of net position and the
statement of activities (Exhibits II, respectively and II, respectively) provide information about the
activities of the Town as a whole and present a longer-term view of the Town’s finances. Fund financial
statements are presented in Exhibits III to IX. For governmental activities, these statements tell how
these services were financed in the short term as well as what remains for future spending. Fund
financial statements also report the Town’s operations in more detail than the government-wide
statements by providing information about the Town’s most significant funds. The remaining
statements provide financial information about activities for which the Town acts solely as a trustee or
agent for the benefit of those outside of the government.
Government-Wide Financial Statements
Our analysis of the Town as a whole begins on Exhibits I and II. These statements include all assets
and liabilities using the accrual basis of accounting, which is similar to the accounting used by most
private-sector companies. All of the current year’s revenues and expenses are taken into account
regardless of when cash is received or paid.
These two statements report the Town’s net position and changes in it. Over time, increases or
decreases in the Town’s net position are one indicator of whether its financial health is improving or
deteriorating. The reader needs to consider other non-financial factors, however, such as changes in
the Town’s property tax base and the condition of the Town’s capital assets, to assess the overall
health of the Town.
TOWN OF WATERFORD, CONNECTICUT
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)
JUNE 30, 2025
(6)
In the statement of net position and the statement of activities, we divide the Town into two types of
activities:
•
Governmental Activities - Most of the Town’s basic services are reported here, including
education, public safety, public works, recreation, library, social services, and general
administration. Property taxes, charges for services, and state and federal grants finance most
of these activities.
•
Business-Type Activities - The Town charges a fee to customers to help it cover all or most of
the cost of certain services it provides. The Town’s Utility Commission Enterprise Fund is
reported here.
Fund Financial Statements
The fund financial statements begin with Exhibit III and provide detailed information about the most
significant funds - not the Town as a whole. Some funds are required to be established by Charter.
However, the Board of Finance establishes many other funds to help control and manage money for
particular purposes or to show that it is meeting legal responsibilities for using grants and other money
(i.e. grants received for education from the State and Federal Government). The Town’s funds are
divided into three categories: governmental, proprietary and fiduciary.
•
Governmental Funds (Exhibits III and IV) - Most of the Town’s basic services are reported in
governmental funds, which focus on how money flows into and out of those funds and the balances
left at year-end that are available for spending. These funds are reported using an accounting
method called modified accrual accounting, which measures cash and all other financial assets that
can readily be converted to cash. The governmental fund statements provide a detailed short-term
view of the Town’s general government operations and the basic services it provides.
Governmental fund information helps to determine whether there are more or fewer financial
resources that can be spent in the near future to finance the Town’s programs. The relationship (or
differences) between governmental activities (reported in the statement of net position and the
statement of activities) and governmental funds is described in a reconciliation included with the
fund financial statements.
•
Proprietary Funds (Exhibits V to VII) - When the Town charges customers for the services it
provides, whether to outside customers or to other units of the Town, these services are generally
reported in proprietary funds. Proprietary funds are reported in the same way that all activities are
reported in the statement of net position and the statement of activities. In fact, the Town’s
enterprise fund (a component of proprietary funds) is the same as the business-type activities
reported in the government-wide statements, but provide more detail and additional information,
such as cash flows, for proprietary funds. Internal service funds (the other component of
proprietary funds) are used to report activities that provide supplies and services for the Towns
other programs and activities - such as the Towns Insurance Administration Fund.
TOWN OF WATERFORD, CONNECTICUT
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)
JUNE 30, 2025
(7)
Fiduciary Funds (Exhibits VIII and IX) - The Town is the trustee, or fiduciary, for its employees’
pension plans. It is also responsible for other assets that, because of a trust arrangement, can be
used only for the trust beneficiaries. All of the Town’s fiduciary activities are reported in separate
statements of fiduciary net position and changes in fiduciary net position. These activities are
excluded from the Town’s other financial statements because the Town cannot use these assets to
finance its operations. The Town is responsible for ensuring that the assets reported in these funds
are used for their intended purposes.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
The Towns combined net position decreased from $211.8 million to $208.6 million or 0.1 %. The
analysis below focuses on the net position (Table 1) and changes in net position (Table 2) of the
Town’s governmental and business type activities.
Table I (in thousands)
Governmental
Business-Type
Activities
Activities
Total
2025
2024
2025
2024
2025
2024
Assets:
Current Assets
52,583
$
62,538
$
5,836
$
7,472
$
58,419
$
70,010
$
Capital Assets, Net of
Accumulated Depreciation
224,205
223,870
40,483
41,657
264,688
265,527
Total Assets
276,788
286,408
46,319
49,129
323,107
335,537
Deferred Outflows of Resources
18,632
19,259
-
-
18,632
19,259
Liabilities:
Long-Term Debt Outstanding
113,146
120,825
228
348
113,374
121,173
Other Liabilities
12,215
13,036
414
907
12,629
13,943
Total Liabilities
125,361
133,861
642
1,255
126,003
135,116
Deferred Inflows of Resources
7,166
7,796
-
-
7,166
7,796
Net Position:
Net Investment in Capital Assets
171,592
167,448
40,483
41,656
212,075
209,104
Restricted
2,592
2,310
-
-
2,592
2,310
Unrestricted
(11,291)
(5,748)
5,194
6,218
(6,097)
470
Total Net Position
162,893
$
164,010
$
45,677
$
47,874
$
208,570
$
211,884
$
Net position of the Town’s governmental activities decreased by 0.1 % ($162.9 million in 2025
compared to $164.0 million in 2024). Unrestricted net position - the part of net position that can be
used to finance day to day operations without constraints established by debt covenants, enabling
legislation or other legal requirements – decreased by $5.6 million, -$5.7 million in 2024 compared to -
$11.3 million at the end of this year.
By far the largest portion of the Town’s net position is its investment in capital assets (e.g., land,
buildings, machinery and equipment). Since the Town’s investment in its capital assets, net of
accumulated depreciation, must also be reported net of related debt, it should be noted that the Town’s
outstanding debt is related to bonds payable as of June 30, 2025.
The net position of our business-type activities decreased by 4.6% ($45.7 million in 2025 compared to
$47.9 million in 2024).
TOWN OF WATERFORD, CONNECTICUT
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)
JUNE 30, 2025
(8)
The Town’s total revenues (excluding special items) were $128.9 million. The total cost of all programs
and services was $132.2 million. Our analysis below separately considers the operations of
governmental and business-type activities.
Table II (in thousands)
Governmental
Business-Type
Activities
Activities
Total
2025
2024
2025
2024
2025
2024
Revenues:
Program Revenues:
Charges for Services
4,352
$
3,839
$
3,849
$
3,861
$
8,201
$
7,700
$
Operating Grants and Contributions
13,512
11,930
-
-
13,512
11,930
Capital Grants and Contributions
4,305
3,654
-
-
4,305
3,654
General Revenues:
Property Taxes
98,702
96,206
-
-
98,702
96,206
Grants and Contributions Not
Restricted to Specific Purposes
426
936
-
-
426
936
Unrestricted Investment Earnings
3,437
4,301
283
326
3,720
4,627
Loss on Disposal of Capital Assets
-
-
-
-
-
-
Miscellaneous Revenue
6
73
-
-
6
73
Total Revenues
124,740
120,939
4,132
4,187
128,872
125,126
Program Expenses:
General Government
16,629
17,265
-
-
16,629
17,265
Public Safety
13,578
13,087
-
-
13,578
13,087
Public Works
10,641
10,725
-
-
10,641
10,725
Recreation
2,319
3,304
-
-
2,319
3,304
Library
1,248
1,047
-
-
1,248
1,047
Social Services
1,649
1,380
-
-
1,649
1,380
Education
78,282
71,966
-
-
78,282
71,966
Interest and Fiscal Charges
1,057
1,153
-
-
1,057
1,153
Utility Commission
-
-
6,783
5,335
6,783
5,335
Total Program Expenses
125,403
119,927
6,783
5,335
132,186
125,262
Excess (Deficiency) of Revenues
Over Expenses Before Transfers
(663)
1,012
(2,651)
(1,148)
(3,314)
(136)
Transfers
(454)
(250)
454
250
-
-
Change In Net Position
(1,117)
762
(2,197)
(898)
(3,314)
(136)
Net Position - Beginning of Year
164,010
163,248
47,874
48,772
211,884
212,020
Net Position - End of Year
162,893
$
164,010
$
45,677
$
47,874
$
208,570
$
211,884
$
Governmental Activities
Approximately 79.1% of these revenues were derived from property taxes, followed by 14.6% from
operating and capital grants and contributions, 3.5% from charges for services, and 2.8% from
investment and other general revenues.
Major factors affecting operations include:
•
Property Tax Revenues were up by $2.5 million due to a mill rate increase of 5.2% for an
increase of $4.8 million and a decrease of $2.3 million due to tax adjustment credits.
•
Operating grants and contributions were up by $1.6 million due primarily to the following:
There was increase in the State’s on-behalf contribution for the Teachers’ Retirement System of
$921.2 thousand and an increase in the State’s on-behalf contribution for the Teachers’
Retirement System OPEB of $1.2 million. There was an increase in the Excess Cost grant of
$77.8 thousand. There was a decrease in Special Assistance grants of $626.9 thousand. There
was a decrease in assistance to the School Cafeteria fund of $173.6 thousand.
•
Capital grants and contributions increased by $709 thousand due mainly to the following:
TOWN OF WATERFORD, CONNECTICUT
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)
JUNE 30, 2025
(9)
Public Safety Capital grants increased by $1.4 million in FY25. Most of the $1.4 million was for
the transfer of the Oswegatchie Fire building and Land. There was also a $13.0 thousand
LOCIP grant for the Quaker Hill Fire alarm system.
Public works capital grants were up by $323.6 thousand. The Cost Sharing PRR grant
decreased by $812.7 thousand. LOCIP funds decreased by $131.3 thousand. LOTCIP funds
decreased by $142.4 thousand. American Rescue funds for Public Works Projects increased
by $927.8 thousand.
There was also an increase of $432.5 thousand for the Mago Point Project and another $49.7
thousand for the LOCIP grant for the 8 Goshen Road Demo project.
Recreation Capital grants were down by $1.1 million for the Civic Triangle project funded by
American Rescue and LOCIP funds.
Social Service Capital grants increased by $65.2 thousand. This is due to a grant for a new
theater at the Senior Center for $58.2 thousand and $7 thousand for a CT Foodshare
Community Impact grant for assets and signage.
•
Investment earnings were down by $864 thousand due to lower interest rates and lower
investable balances.
Grants and contributions not restricted to specific programs decreased by $510 thousand. The
town did not receive the Municipal Revenue Share grant in FY25, which was down by $493.8
thousand. The telecommunications property tax payments were down by $19.0 thousand.
Miscellaneous Revenue is up by $6.0 thousand
Table 3 presents the cost of each of the Town’s five largest programs - education, general government,
public safety, public works and recreation - as well as each program’s net cost (total cost less revenues
generated by the activities). The net cost shows the financial burden to the Town’s taxpayers by each
of these functions.
Table III (in thousands)
Total Cost of Services
Net Cost of Services
2025
2024
2025
2024
Education
78,282
$
71,966
$
64,263
$
59,511
$
General Government
16,629
17,265
14,891
15,888
Public Safety
13,580
13,087
11,650
12,548
Public Works
10,641
10,725
7,699
8,323
Recreation
2,319
3,304
1,364
1,115
All Others
3,952
3,580
3,367
3,119
Totals
125,403
$
119,927
$
103,234
$
100,504
$
TOWN OF WATERFORD, CONNECTICUT
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)
JUNE 30, 2025
(10)
Business-Type Activities
Net position of the Town’s business-type activities (see Table 1) decreased by 4.6% ($45.7 million in
2025 compared to $47.9 million in 2024). Revenues and transfers in for the Town’s business-type
activities (see Table 2) increased by $149 thousand ($4.6 million in 2025 compared to $4.4 million in
2024). Overall expenses were higher than revenues and transfers in by $2.2 million. The factors
driving these results include:
•
A decrease in sewer use fee revenue of $12.0 thousand.
•
An increase in transfers in of $204.0 thousand.
•
A decrease in investment earnings of $43.0 thousand.
•
An increase in expenses of $1.5 million.
TOWN FUNDS FINANCIAL ANALYSIS
Governmental Funds
As the Town completed the year, its governmental funds (as presented in the balance sheet - Exhibit
III) reported a combined fund balance of $34.3 million, which is a decrease of $8.5 million from last
year’s total of $42.8 million. Included in this year’s total change in fund balance is a decrease of $5.8
million in the General Fund, a decrease of $1.0 million in the Capital and Nonrecurring Fund and a
decrease of $1.7 million for Nonmajor Governmental Funds.
Capital Projects Funds:
•
The Capital and Nonrecurring Fund balance decreased by $1.0 million due to revenues of $948.7
thousand plus transfers in of $4.3 million and expenditures of $6.3 million.
Non-Major Capital Projects Funds:
•
The Fleet Management Fund decreased by $852.6 thousand due to expenditures of 2.2 million,
which was reduced by revenue of $326.6 thousand and transfers in of $1.0 million.
•
The Capital Improvement Fund decreased by $795.0 thousand due to expenditures of $2.3 million,
which was reduced by net transfers in and out of $1.5 million.
•
The Sewer Maintenance and Development Fund increased by $189.9 thousand due to revenues of
$294.5 thousand, which reduced by expenditures of $104.6 thousand.
Non-Major Special Revenue Funds:
•
The Water Fund decreased by $156.3 thousand due to revenues of $39.6 thousand and
expenditures of $196.0 thousand.
•
The Nuclear Safety Emergency Preparedness Fund decreased by $68.0 thousand due to grant
expenditures that had not been reimbursed by the end of the year.
•
The Cafeteria fund decreased by $60.0 thousand due to revenues being $60.0 thousand less than
the $1.3 million of expenditures.
•
The ARPA Senior Center Grant Fund decreased by $58.2 thousand due to grant expenditures that
had not been reimbursed by the end of the year.
TOWN OF WATERFORD, CONNECTICUT
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)
JUNE 30, 2025
(11)
Proprietary Funds
The Town’s Proprietary Funds provide the same type of information found in the government-wide
financial statements, but in more detail.
Overall, proprietary funds net assets total $49.5 million at the end of the year, which includes a $3.9
million fund balance in the Internal Service Fund.
Net position of the Utility Commission Fund at the end of the year amounted to $45.7 million. Factors
affecting the balance of this fund are included in the discussion of the Town’s business-type activities.
In fiscal year 2025, net position of the Internal Service fund decreased by $668.4 thousand from fiscal
year 2024. This is due to $14.2 million in contributions and other revenues (an increase of $679.2
thousand over fiscal year 2024), reduced by expenses for claims and program administration of $15.1
million (an increase of $353.4 thousand over fiscal year 2024).
General Fund Budgetary Highlights
Revenues were lower than budgetary estimates by $2.3 million and expenditures were less than
revised budgetary estimates by $1.2 million. Overall expenditures over revenues on a budgetary basis
were $5.9 million. In the current year, revenues increased by $1.3 million or 1.3 % over the prior year
and expenditures increased by $5.8 million or 5.5%.
The major factors affecting this year’s annual operating results are as follows:
•
Property tax revenue was under budgetary estimates by $2.0 million and over prior year revenue
by $2.4 million. The biggest factor in the shortfall of revenues was due to a stipulated agreement
that produced credits of $966.7 thousand. The mill rate for FY25 was up by 5.2 % over FY24.
•
State and Federal grant funding was under budgetary estimates by $376.7 thousand and under
prior year revenue by $425.1thousand. This is mostly due to not receiving the Municipal Revenue
Sharing funds, estimated at $316.0 thousand, in FY25. LOCIP revenue was down from estimates
by $177.5 thousand due to being budgeted in the General fund, but subsequently being
accounted for in a new capital fund for LOCIP projects.
•
License and permit revenue is over budgetary estimates by $418.4 thousand and over the prior
year by $204.7 thousand. The building department revenues increased from FY24 by $311.2
thousand. Recreation and parks revenue is down from FY24 by $123.9 thousand. Conveyance
tax revenue is up from FY24 by $23.4 thousand. Liens fees paid by the Utility Commission were
down by $5.3 thousand from FY24. Planning & zoning had a decrease of $3.5 thousand over the
prior year. Miscellaneous fees and permits were up from FY24 by $1.7 thousand. Town Clerk
fees are up from FY24 by $1.1 thousand.
•
Fines, Penalties and Charges for Services are over budgetary estimates by $17.5 thousand and
under the prior year revenue by $93.7 thousand. The biggest change was a decrease for
miscellaneous revenue of $86.7 thousand, due to revenue from the sale of One Hamel Court of
$114.7 thousand in FY24. Tuition fees decreased by $33.9 thousand. Recycling revenue
increased by $18.4 thousand. Fire Service Inspections & Plan fees increased by $7.5 thousand.
Bulky Waste fees were down by $6.5 thousand. Senior Services program revenue was up by
$4.3 thousand.
TOWN OF WATERFORD, CONNECTICUT
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)
JUNE 30, 2025
(12)
•
Other sources of revenue were over budgetary estimates by $119.6 thousand and under the prior
year revenue by $14.7 thousand. Rental of Buildings was down by $2.2 thousand. The New
London Radio fee was down by $9.7 thousand. Sale of Equipment was down by $11.6 thousand.
The BOE custodial stipend increased by $2.7 thousand. The SCRRRA rebate was up by $1.0
thousand. The Eugene O’Neill Lease was up $0.5 thousand.
•
Investment income is over budgetary estimates by $402.0 thousand and under prior year revenue
by $689.6 thousand.
•
Other Financing Sources, which consists of the cancelation of prior year encumbrances and
transfers in from the capital improvement fund, was under estimated revenue by $857.7 thousand
and under the prior year by $52.5 thousand. The appropriation of fund balance accounted for $1
million of the shortfall.
Overall Expenditures came in $1.2 million under revised budgetary estimates. The largest amounts of
unused appropriations returned in the current fiscal year are as follows:
•
The Public Works Department ret