Signed Final Report and Financial Statements

TOWN OF WATERFORD, CONNECTICUT 
 
 
 
 
 
 
 
 
 
 
ANNUAL COMPREHENSIVE 
FINANCIAL REPORT 
 
FOR THE FISCAL YEAR ENDED 
JUNE 30, 2022 

 
 
 
 
 
 
 
 
 
 
 
Town of Waterford, Connecticut 
 
Annual Comprehensive Financial Report 
 
FOR THE FISCAL YEAR ENDED 
JUNE 30, 2022 
 
 
 
 
 
 
 
 
 
 
 
 
Department of Finance 
 
Kimberly Allen 
 
Director of Finance 

 
 
Introductory Section 

 
i 
TOWN OF WATERFORD, CONNECTICUT 
TABLE OF CONTENTS 
JUNE 30, 2022 
 
Introductory Section 
Page 
 
 
 
 
Table of Contents 
i-ii 
 
Organizational Chart 
iii 
 
List of Elected and Appointed Officials 
iv 
 
Transmittal Letter 
v-ix 
 
 
 
 
Financial Section 
 
 
 
 
 
Independent Auditors’ Report 
1-3 
 
Management’s Discussion and Analysis  
4-12 
 
 
 
 
Basic Financial Statements 
 
 
 
 
Exhibit 
 
 
 
Government-Wide Financial Statements: 
 
I 
Statement of Net Position 
13 
II 
Statement of Activities 
14 
 
 
 
 
Fund Financial Statements: 
 
III 
Balance Sheet - Governmental Funds 
15-16 
IV 
Statement of Revenues, Expenditures and Changes in Fund Balances - 
 
 
Governmental Funds 
17-18 
V 
Statement of Net Position - Proprietary Funds 
19 
VI 
Statement of Revenues, Expenses and Changes in Net Position - 
 
 
Proprietary Funds  
20 
VII 
Statement of Cash Flows - Proprietary Funds 
21 
VIII 
Statement of Net Position - Fiduciary Funds 
22 
IX 
Statement of Changes in Net Position - Fiduciary Funds 
23 
 
Notes to Financial Statements 
24-70 
 
 
 
 
Required Supplementary Information 
 
 
 
 
RSI-1 
Schedule of Revenues and Other Financing Sources - General Fund - Budgetary  
 
 
   Basis 
71-72 
RSI-2 
Schedule of Expenditures and Other Financing Uses Budget and Actual -  
 
 
General Fund - Budgetary Basis 
73-76 
RSI-3 
Schedule of Changes in Net Pension Liability and Related Ratios -  
 
 
Pension Trust Fund 
77 
RSI-4 
Schedule of Employer Contributions - Pension Trust Fund 
78 
RSI-5 
Schedule of Investment Returns - Pension Trust Fund 
79 
RSI-6 
Schedule of the District’s Proportionate Share of the Net Pension Liability - 
 
 
   Municipal Employees Retirement System 
80 
RSI-7 
Schedule of Employer Contributions - Municipal Employees Retirement System 
81 
RSI-8 
Schedule of the Town’s Proportionate Share of the Net Pension Liability - 
 
 
   Teachers Retirement System 
82 
RSI-9 
Schedule of Changes in the Net OPEB Liability and Related Ratios - OPEB 
 
 
   Trust Fund 
83 
 
 
 
 

 
ii 
Exhibit 
 
Page 
 
 
 
RSI-10 
Schedule of Employer Contributions - OPEB Trust Fund 
84 
RSI-11 
Schedule of Investment Returns - OPEB Trust Fund 
84 
RSI-12 
Schedule of the Town’s Proportionate Share of the Net OPEB Liability - 
 
 
   Teachers Retirement System 
86 
 
 
 
 
Supplemental, Combining and Individual Fund Statements and Schedules 
 
 
 
 
 
General Fund: 
 
A-1 
Schedule of Expenditures and Encumbrances Compared with Appropriations 
87 
A-2 
Report of Tax Collector - General Fund 
88 
A-3 
Schedule of Water Main Assessments Receivable - General Fund 
89 
A-4 
Schedule of Sewer Assessments Receivable - General Fund 
90 
 
 
 
 
Nonmajor Governmental Funds: 
 
B-1 
Combining Balance Sheet - Nonmajor Government Funds 
91-95 
B-2 
Combining Statement of Revenues, Expenditures and Changes in Fund Balances  
 
 
- Nonmajor Governmental Funds 
96-100 
 
 
 
 
Fiduciary Funds: 
 
C-1 
Combining Statement of Fiduciary Net Position - Pension and Other 
101 
 
  Employee Benefit Trust Funds 
 
C-2 
Combining Statement of Changes in Fiduciary Net Position - Pension and Other 
 
 
  Employee Benefit Trust Funds 
102 
 
 
 
 
 
 
 
Statistical Section 
 
 
 
 
Table 
 
 
 
Financial Trends: 
 
1 
Net Position by Component 
103 
2 
Changes in Net Position 
104-105 
3 
Fund Balances of Governmental Funds 
106 
4 
Revenues, Expenditures and Changes in Fund Balances - Governmental Funds 
107 
 
Revenue Capacity: 
 
5 
Assessed Value and Estimated Actual Value of Taxable Property 
108 
6 
Principal Property Taxpayers 
109 
7 
Property Tax Levies and Collections 
110 
 
Debt Capacity: 
 
8 
Ratio of Outstanding Debt by Type 
111 
9 
Schedule of Debt Limitation 
112 
10 
Legal Debt Margin Information 
113 
 
Demographic and Economic Statistics: 
 
11 
Demographic and Economic Statistics 
114 
12 
Principal Employers 
115 
 
Operating Information: 
 
13 
Full-Time Equivalent Government Employees by Function/Program 
116 
14 
Operating Indicators by Function/Program 
117 
15 
Capital Asset Statistics by Function/Program 
118 

ORGANIZATIONAL CHART TOWN OF WATERFORD GENERAL GOVERNMENT
Elected Board
Appointed Board
Appointed Official
Appointed by
Reports to
Elected Official
Personnel
Review Board
Ethics
Commission
Police
Chief
Police
Commission
Director of
Senior
Services
Senior
Citizens
Commission
Chief
Engineer
Utility
Commission
Building
Commitee(s)
Representative
Town Meeting
Board of
Education
Zoning Board
of Appeals
Flood &
Erosion Control
Board
Waterford
Shellfish
Commission
Director of
Finance
Department
Waterford
East Lyme
Shellfish Comm.
Harbor
Management
Commission
Youth
Services
Advisory Comm
Housing
Code
Appeals Brd
Building
Board of
Appeals
Housing
Authority
Planning &
Zoning
Commission
Director of
Public Works
Department
Town
Attorney
Director of
Recreation &
Parks Dept.
Recreation &
Parks
Commission
Operations &
Administrative
Officers
Director of
Emergency
Management
Board of
Selectmen
Tax
Collector
Treasurer
Town
Clerk
Assessor
Ledge Light
Health
District
Youth Services
Director
Director
Human
Resources
Director of
Planning
Building
Official
Emergency
Management
Advisory Coun.
Fire Service
Director of
Fire Services
Economic
Development
Commission
Conservation
Commission
First
Selectman
Registrars
of Voters
Board of
Assessment
Appeals
Board of
Finance
iii

 
iv 
Town of Waterford, Connecticut 
Principal Town Officials 
As of June 30, 2022 
 
 
 
Robert J. Brule, Jr.  
Thomas W. Giard III 
Kimberly Allen  
Abbas Danesh  
Abby Piersall 
Gary Schneider 
Marc Balestracci 
Neftali Soto 
Alan Wilensky 
Vacant 
Brian Flaherty 
David Campo 
Daniela Gorman 
Steve Cardelle 
Christine Johnson 
Michael Howley 
Christine Walters 
First Selectman 
Superintendent of Schools 
Director of Finance 
Treasurer 
Planning Director 
Director of Public Works 
Chief of Police 
Chief Engineer, Utilities Commission 
Tax Collector 
Assessor 
Recreation & Parks Director 
Town Clerk 
Director of Human Services 
Building Official 
Library Director 
Director of Fire Services 
Director of Human Resources 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
v 
 
 
 
December 19, 2022 
 
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, 2022. 
 
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, 2022.  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 
 
The Town of Waterford separated from the City of New London, the neighboring 
urban seaport, a century and a half after European settlers arrived.  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 

 
vi 
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.  Municipal water and sewer services, the Town’s one business-
type activity, are provided through the Town’s Utility Commission. 
 
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 agencies have the authority to transfer 
within series any of the budgeted appropriations under their control.  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, large retail sales outlets, a production/software development company, 
several assisted care facilities and numerous 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 
 
Viable Tax payer for at least ten years – Declining tax revenue  
 
10-Year Deal 
 
$50M in updates since agreement signed in January 2019  
 
 
 
  

 
vii 
Economic Development Commission Master Plan 
 
EDC will be working with a consultant to set specific goals and 
implementation actions for the short (1-2 year), mid (3-5 year) 
and long (5-10 year) terms.  
  
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.  
 
New Developments 
 
Redevelopment of the Mobile Gas Station and Starbucks 
Drive-thru on Rte 85 is approved and under construction. Land 
use permits in place to expand the site to include a car wash. 
 
Site work beginning for 40 affordable apartments on Rte 85 
 
Approvals granted for new cafe at Mago Point 
 
Approval of self-storage facility on Rte 85 
 
New Industry 
 
Approval granted for Safe Futures on Rte 85 
  
Electric Boat 
 
$5.1B Navy Contract – estimated 2,000 to 5,000 jobs 
 
Building of Columbia Class Submarines to begin in 2023 
 
Current impact – Increased housing activity 
 
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 Budget 
Planning Committee to analyze the impact of the annual tax revenue loss due to the 
Dominion deregulation and to provide guidance in developing budgets that would sustain 
a consistent level of service with a declining revenue base over the ten-year period.  
This proactive approach to long-range operational budget planning, combined with multi-
year capital planning, has become an effective budgetary management tool.  Despite the 
fact that the Town has successfully absorbed the impact to its tax base due to 
deregulation, the Long-Range Budget 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 
 

 
viii 
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 
 
In compliance with GASB 54 and to strengthen Waterford’s commitment to sound 
financial management and fiscal accountability, the Town still maintains the adopted 
fund balance policy from 2015.  In that regard, the Town’s 2022 Audited Financial 
Waterford has an Unassigned Fund Balance of $22,339,086. 
 
6n May of 2019, the Town began the first phase of the construction on a new 
Municipal Complex project for the Public Works Department.   The project 
consisted of a full demolition of the existing structure and construction of a new 
60,100 sq. ft. facility. The building project was completed in June 2022. 
 
Increase school enrollment 
◦ 
Attract students from neighboring districts to Waterford High School 
on a tuition basis 
◦ 
6 students enrolled in 2022 
Eco Friendly Town 
◦ 
Achieved Bronze Certificate as a Sustainable CT Community 
◦ 
Land Preservation  
◦ 
Easements, Purchase and Donations 
◦ 
Plan of Conservation and Development 
◦ 
DEEP analysis 
◦ 
Fall 2022  
◦ 
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 
Town Center Improvements (“Main Street”) 
◦ 
Committee Formed in June 2020 
◦ 
Support Infrastructure for Farmer’s Market 
◦ 
Improved Recreational Amenities 
◦ 
Accessible walking paths, sidewalks and boardwalks 
◦ 
Improved Fiber Connectivity 
◦ 
Board of Selectman adoption of the Community Waterford Park 
Master Plan 

 
ix 
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 

 
 
Financial Section 

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1 
Independent Auditors’ Report 
To the 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, the aggregate discretely presented component units, each major fund, and the 
aggregate remaining fund information of the Town of Waterford, Connecticut, as of and for the year 
ended June 30, 2022, 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, the aggregate 
discretely presented component units, each major fund, and the aggregate remaining fund information 
of the Town of Waterford, Connecticut, as of June 30, 2022, 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. 

 
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. 
 
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. 

 
3 
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 nonmajor 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 nonmajor 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. 
 
Other Reporting Required by Government Auditing Standards 
In accordance with Government Auditing Standards, we have also issued our report dated 
December 19, 2022, 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, 2022 

 
4 
 
TOWN OF WATERFORD, CONNECTICUT 
MANAGEMENT’S DISCUSSION AND ANALYSIS 
JUNE 30, 2022 
 
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, 2022.  
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 increased as a result of this year’s operations.  While net position of our business-
type activities decreased by $6.9 thousand, or 1.4 %, net position of our governmental activities increased 
by $5.0 million or 3.2 %.   
 
During the year, the Town had expenses that were $5.0 million less than the $111.5 million generated in 
tax and other revenues for governmental programs.   
 
In the Town’s business-type activities, revenues and transfers in increased by $534 thousand or 13.7%, 
while expenses decreased by $359 thousand or 6.6 %. 
 
The total cost of all of the Town’s programs was $111.0 million, with no new programs added this year. 
 
The General Fund reported a fund balance this year of $23.8 million.   
 
The resources available for appropriation were $1.1 million more than anticipated for the General Fund.  
There were additional appropriations of $1.8 million to transfer funding to the Capital and 
Nonrecurring Fund.  However, unused appropriations of $1.0 million were returned to fund balance at 
year end.  Overall, the operating results increased the General Fund balance by $350.6 thousand. 
 
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 I 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. 
 
 
 
 
 
 
 

 
5 
 
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 Town’s other programs and activities - such as the Town’s Insurance 
Administration Fund. 
 
 
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. 
 

 
6 
 
GOVERNMENT-WIDE FINANCIAL ANALYSIS 
 
The Town’s combined net position increased from $208.4 to $212.7 million or 2.0 %.  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. 
 
Governmental
Business-Type
Activities
Activities
Total
2022
2021
2022
2021
2022
2021
Current assets 
$
61,002
       
$
54,085
           
$
5,858
         
$
5,413
             
$
66,860
       
$
59,498
           
Capital assets, net of
 accumulated depreciation
236,256
     
241,132
         
44,691
       
45,671
           
280,947
     
286,803
         
Total assets
297,258
     
295,217
         
50,549
       
51,084
           
347,807
     
346,301
         
Deferred outflows of resources
12,765
       
18,301
           
-
                 
-
                     
12,765
       
18,301
           
Long-term debt outstanding   
116,220
     
135,326
         
431
            
316
                
116,651
     
135,642
         
Other liabilities
13,886
       
11,226
           
374
            
330
                
14,260
       
11,556
           
Total liabilities
130,106
     
146,552
         
805
            
646
                
130,911
     
147,198
         
Deferred inflows of resources
16,949
       
8,998
             
-
                 
-
                     
16,949
       
8,998
             
Net Position: 
Net investment in capital assets
166,836
     
165,530
         
44,690
       
45,670
           
211,526
     
211,200
         
   Restricted  
1,612
         
1,440
             
-
                 
-
                     
1,612
         
1,440
             
   Unrestricted
(5,480)
        
(9,002)
            
5,054
         
4,768
             
(426)
           
(4,234)
            
Total Net Position
$
162,968
     
$
157,968
         
$
49,744
       
$
50,438
           
$
212,712
     
$
208,406
         
 
 
 
Net position of the Town’s governmental activities increased by 3.2 % ($163.0 million in 2022 compared to $158.0 
million in 2021).  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 – 
increased by $4.2 million, ($9.0 million) in 2021 compared to ($4.8 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, 2022. 
 
The net position of our business-type activities decreased by 1.4% ($49.7 million in 2022 compared to $50.4 
million in 2021). 

 
7 
 
The Town’s total revenues (excluding special items) were $115.3 million.  The total cost of all programs and 
services was $111.0 million.  Our analysis below separately considers the operations of governmental and business-
type activities. 
 
Governmental
Business-Type
Activities
Activities
Total
2022
2021
2022
2021
2022
2021
Revenues:
Program revenues:
Charges for services
$
3,232
        
$
3,346
        
$
3,798
        
$
3,841
        
$
7,030
        
$
7,187
        
Operating grants and contributions
11,664
      
19,990
      
11,664
      
19,990
      
Capital grants and contributions
1,858
        
578
           
16
             
1,858
        
594
           
General revenues:
Property taxes
94,070
93,198
94,070
      
93,198
      
Grants and contributions not  
 restricted to specific purposes
376
356
376
           
356
           
Unrestricted investment earnings
226
133
12
             
3
              
238
           
136
           
Miscellaneous revenue
55
175
55
             
175
           
      Total revenues
111,481
    
117,776
    
3,810
        
3,860
        
115,291
    
121,636
    
Program expenses:
General government  
14,481
      
15,705
      
14,481
      
15,705
      
Public safety  
11,579
      
13,999
      
11,579
      
13,999
      
Public works
8,803
        
8,780
        
8,803
        
8,780
        
Recreation
1,836
        
1,763
        
1,836
        
1,763
        
Library
1,002
        
1,156
        
1,002
        
1,156
        
Social services
1,303
        
1,285
        
1,303
        
1,285
        
Education
65,499
      
74,351
      
65,499
      
74,351
      
Interest and fiscal charges
1,363
        
1,393
        
1,363
        
1,393
        
Utility Commission
5,119
        
5,479
        
5,119
        
5,479
        
      Total program expenses
105,866
    
118,432
    
5,119
        
5,479
        
110,985
    
123,911
    
Excess (deficiency) of revenues over expenses
before transfers
5,615
        
(656)
         
(1,309)
      
(1,619)
      
4,306
        
(2,275)
      
Transfers
(615)
         
(31)
           
615
           
31
             
-
               
-
               
Change in Net Position 
5,000
        
(687)
         
(694)
         
(1,588)
      
4,306
        
(2,275)
      
Beginning Net Position
157,968
    
158,655
    
50,438
      
52,026
      
208,406
    
210,681
    
Ending Net Position
$
162,968
    
$
157,968
    
$
49,744
      
$
50,438
      
$
212,712
    
$
208,406
    
 
Governmental Activities 
 
Approximately 84.4% of these revenues were derived from property taxes, followed by 12.5% from operating and 
capital grants and contributions, 2.9% from charges for services and 0.2% from investment and other general 
revenues. 
 
 
Major factors affecting operations include: 
 
Operating grants and contributions were down by $8.3 million due primarily to the following: 
There was a decrease in the State’s on-behalf contribution for the Teachers’ Retirement System of $9.5 
million and a decrease in the State’s on-behalf contribution for the Teachers’ Retirement System OPEB of 
$1.1 million.   There was an increase in Special Assistance grants of $788.5 thousand. There was an 
increase in assistance to the School Cafeteria fund of $895.1 thousand.  
 
Capital grants and contributions increased by $1.3 million mainly to the following:     
Public Works LOTCIP grant for Cross Road Grant was up by $1.6 million. 
 

 
8 
 
There was a decrease of $249.8 for the Thames River grant that ended in FY21. East Lyme Capital 
Sharing decreased by $20.5 thousand.  A donation from Chelsea Groton Bank for the Eugene O’Neill 
Barn roof by $25.0 thousand. 
 
Property tax revenues were up by $872 thousand.  
 
Investment earnings were up by $93.0 thousand from FY21 due to increasing interest rates and an 
adjustment for Lease receivables under GASB87. 
 
Miscellaneous Revenue was down by $120.0 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. 
 
Total Cost of Services
Net Cost of Services
2022
2021
2022
2021
Education  
$
65,499
   
$
74,351
   
$
54,613
     
$
54,693
   
General government
14,481
   
15,705
   
12,225
     
13,826
   
Public safety   
11,579
   
13,999
   
11,144
     
13,337
   
Public works  
8,803
     
8,780
     
6,270
       
7,341
     
Recreation
1,836
     
1,763
     
1,614
       
1,647
     
All others
3,667
     
3,835
     
3,245
       
3,675
     
Totals
$
105,865
 
$
118,433
 
$
89,111
     
$
94,519
   
 
 
Business-Type Activities 
 
 
Net position of the Town’s business-type activities (see Table 2) decreased by 1.4% ($49.7 million in 
2022 compared to $50.4 million in 2021).  Revenues and transfers in for the Town’s business-type 
activities (see Table 2) increased by $534 thousand ($4.4 million in 2022 compared to $3.9 million in 
2021).  Overall Expenses were higher than revenues and transfers in by $695 thousand.  The factors 
driving these results include:  
 
An increase in Sewer use fee revenue of $43 thousand. 
 
An increase in transfers in of $584 thousand  
 
An increase of investment earnings of $9 thousand. 
 
A decrease in expenses of $359.0 thousand. 
 
 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 $38.8 million, which is increase of $3.2 million from last year’s total of $35.6 million as 
restated.  Included in this year’s total change in fund balance is an increase of $64.1 thousand in the General Fund, 
an increase of 298.3 thousand in the Capital Improvement Fund, an increase of $1.7 million in the Capital and 
NonRecurring Fund and an increase of $1.7 million for Nonmajor Governmental Funds. 
 
Capital Projects Funds: 
 
o The Capital and Nonrecurring Fund balance increased by $1.7 million due to expenditures of $1.6 million 
and revenues of $278.6 thousand plus net transfers in and out of $3.0 million. 
 

 
9 
 
o The Capital Improvement Fund increased by $298.3 thousand due to expenditures of $3.1 million, grant 
revenue of $1.6 million and net transfers in and out $1.8 million. 
 
Non-Major Capital Projects Funds: 
 
 
The Fleet Management Fund increased by $508.8 thousand due to expenditures of $481.7 thousand being 
offset by revenues and transfers in of $990.5 thousand. 
 
The Sewer Development and Maintenance Fund increased by $48.2 thousand due to expenditures of $80.4 
thousand being offset by revenues of $128.6 thousand. 
 
Special Revenue Funds: 
 
 
The Cafeteria fund increased by $494.4 thousand due to revenues of $1.7 million, offset by expenditures of 
$1.2 million. 
 
The Senior Services fund decreased by $49.0 thousand due to revenues of $19.8 thousand and 
expenditures of $68.5 thousand.   Net transfers in an out resulted in a decrease of $316 thousand.  
 
The Nuclear Safety Emergency Preparedness Fund increased by $84.8 thousand due to receipt of grant 
reimbursements of the same amount for prior year expenditures. 
 
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 $55.8 million at the end of the year, which includes a $6.1 million fund 
balance in the Internal Service Fund.     
 
Net position of the Utility Commission Fund at the end of the year amounted to $49.7 million.  Factors affecting the 
balance of this fund are included in the discussion of the Town’s business-type activities. 
 
In fiscal year 2022, net position of the Internal Service fund decreased by $163.6 thousand from fiscal year 2021.  
This is due to $12.1 million in contributions and other revenues (an increase of $240 thousand over fiscal year 
2021), reduced by expenses for claims and program administration of $12.3 million (an increase of $845.1 thousand 
over fiscal year 2021). 
 
General Fund Budgetary Highlights 
 
Revenues were higher than budgetary estimates by $1.1 million and expenditures were less than revised budgetary 
estimates by $1.0 million.  Overall revenues over expenditures on a budgetary basis were $350.6 thousand.  In the 
current year, revenues increased by $449.5 thousand or 0.5 % over the prior year and expenditures increased by 
$4.0 million or 4.2%.   
 
The major factors affecting this year’s annual operating results are as follows: 
 
 
Property tax revenue was over budgetary estimates by $158.4 thousand and over prior year revenue by $603.0 
thousand. 
 
State and Federal grant funding was over budgetary estimates by $312.5 thousand and over prior year revenue 
by $89.1 thousand. 
 
Assessment revenue is over budgetary estimates by $11.3 thousand and over the prior year by $4.7 thousand. 
 
License and permit revenue is over budgetary estimates by $366.8 thousand and under the prior year by 
$226.9 thousand.  Town clerk fees decreased by $31.8 thousand over fiscal year 2021.  The building 
department is down from FY21 by $256.9 thousand, conveyance tax revenue is down from FY21 by $24.0 

 
10 
 
thousand.  Planning & Zoning, had a decrease of $17.7 thousand over the prior year.   Miscellaneous fees and  
permits were down from FY21 by $13.3 thousand.  Lien fees paid by the Utility Commission to the Town 
Clerk were down by $2.3 thousand. Recreation and parks revenue is up from FY21 by $119.1 thousand. 
 
Fines, Penalties and Charges for Services are under budgetary estimates by $110.1 thousand and under the 
prior year revenue by $120.1 thousand.  The biggest change was a decrease for miscellaneous revenue of 
$68.0 thousand, followed by a decrease for tuition fees of $38.8 thousand.  There was a decrease of $41.0 
thousand in tipping fee revenue.  Bulky Waste fees were up by $2.5 thousand.  Recycling revenue decreased 
by $1.5 thousand.  False alarm fines were down up $0.5 thousand. Senior Services program revenue was up 
by $26.2 thousand. 
 
Other sources of revenue were over budgetary estimates by $196.5 thousand and over the prior year revenue 
by $78.5 thousand.   
 
Investment income is over budgetary estimates by $59.8 thousand and over prior year revenue by $93.5 
thousand. 
 
Other Financing Sources, which consists of the cancelation of prior year encumbrances and transfers in from 
the capital improvement fund, was over estimated revenue by $121.9 thousand and under the prior year by 
$72.2 thousand. 
 
Overall Expenditures came in $1.0 million under revised budgetary estimates.  The largest amounts of unused 
appropriations returned in the current fiscal year are as follows: 
 
 
The Police Department returned $184.9 thousand. 
 
The Public Works Department returned $142.9 thousand. 
 
The Emergency Management Department returned $84.6 thousand. 
 
The Fire Services Department returned $79.9 thousand. 
 
The Insurance budget returned $79.7 thousand. 
 
The Retirement Commission returned $76.3 thousand. 
 
The Building Department returned $48.8 thousand. 
 
The Board of Education returned $46.8 thousand. 
 
The Information Technology Department returned $44.3 thousand. 
 
The Planning & Zoning Department returned $43.9 thousand. 
 
The Senior Services Department returned $39.2 thousand. 
 
The Recreation and Parks Department returned $35.8 thousand. 
 
The Legal Department returned $33.3 thousand. 
 
The Library returned $27.2 thousand. 
 
The Finance Department returned $14.9 thousand. 
 
The Town’s General Fund balance of $23.8 million reported on Exhibit III differs from the General Fund’s 
budgetary balance of $23.5 million reported in the budgetary comparison in the required supplementary 
information.  This is principally because budgetary fund balance does not include $226.1thousand of outstanding 
encumbrances at year-end, which are reported as expenditures for budgetary purposes.  The balances for special 
revenue funds financed primarily from operating transfers from the General Fund are also rolled into that fund for 
reporting purposes.  For fiscal year 2022, those balances amounted to $59.3 thousand. 
 

 
11 
 
CAPITAL ASSET AND DEBT ADMINISTRATION 
 
Capital Assets 
 
At June 30, 2022, the Town had $280.7 million invested in a broad range of capital assets, including land, 
buildings, park facilities, vehicles and equipment, roads, bridges, and water and sewer lines - Table 4.  This amount 
represents a net decrease (including additions and deductions) of $6.1 million, or 2.1%, from last year. 
 
Governmental
Business-Type
Activities
Activities
Total
2022
2021
2022
2021
2022
2021
Land
$
9,008
        
$
8,982
         
$
128
           
$
128
            
$
9,136
        
$
9,110
         
Land improvements
1,919
        
1,995
         
1,919
        
1,995
         
Building and improvements
162,636
    
168,063
     
909
           
944
            
163,545
    
169,007
     
Machinery and equipment
2,592
        
2,519
         
634
           
592
            
3,226
        
3,111
         
Right-to-use lease 
  machinery and equipment
221
           
221
           
-