Representative Town Meeting Regular Meeting Materials (linked)

David Campo
From: JOHN SHEEHAN <sheehanjw@sbcglobal.net>
Sent: Friday, May 22, 2020 1:43 PM
To: David Campo
Gc: Ronald Fedor; Maryellen McConnell; Kimberly Allen
Subject: Back up Material for Transfer to Undesignated Fund Balance CNR
Attachments: Fund Balance Est 043020.pdf; Fund Balance Policy November 2015.pdf
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Dave - Since there does not appear to be any backup for the BOF Request to Transfer $1 million
from the Unassigned Fund Balance of the General Fund to the Undesignated Fund Balance of the
Capital Non Recurring Expenditure (CNR) Fund | offer this material and, as an individual member of
the BOF, my reasoning for approving this request.
4. According to the latest Unassigned Fund Balance Status report as of April 30, 2020 the estimated
Ending Unassigned Fund Balance on June 30, 2020 is $17,452,102.
2. According to the BOF Fund Balance Policy, "The Town will maintain an unassigned fund balance
as of June 30th of each year between 10% and 13% of the subsequent fiscal year's budgeted
General Fund Revenue." This generally means that the unassigned fund balance should be between
10% and 13% of the approved budget for the coming fiscal year.
3. The approved budget for FY2021 is $95,978,230. Ten percent of that is $9,597,823 and thirteen
percent of that is $12,477,170.
4. Transferring $1 million from the unassigned fund balance to the Undesignated Balance of the CNR
would reduce that balance to $16,452,102. This is well above the thirteen percent higher range.
5. After restoring the $100,883 of the Undesignated Fund Balance to the Municipal Complex line, the
CNR Undesignated Fund Balance is $53,686.59. The recommended $1 million will provide
additional funds for any Capital Projects that may be proposed in FY2021. These funds have already
been provided by the taxpayers in the past and do not impact any FY2021 taxes. It may also save
future taxpayers if the projects are funded from the Undesignated Fund Balance rather than future tax
levies. ;
It is my hope that the Representative Town Meeting will agree with my analysis and approve the
transfer.
Bill Sheehan
J. W. "Bill" Sheehan |
19 Laurel Crest Drive
Waterford CT 06385

860-442-9053
sheehanjw@sbcglobal.net

FIFTEEN ROPE FERRY ROAD
WATERFORD, CT 06385-2886
To: Board of Finance Metubers
From: Town Accountant (he °
Date: May 13, 2020
Subject: Status of General Fund Unassigned Balance
Unassigned Fund Balance:
Unassigned balance 06/30/19 16,781,193
Projected revenues in excess of (less than)
budgeted through 04/30/20 670,909
Estimated Ending Unassigned Balance 17,452,102
PHONE: 860-442-0553
www. waterfordct.org

cae
TOWN OF WATERFORD
FUND BALANCE POLICY
OBJECTIVE
The Towa of Waterford feels it necessary fo maintain an adequate unrestricted fund balance in the General Fund to
provide for a sound financial base for current and future budgets as well as mitigating risks such as revenue
shortfalls or unexpected expenditures. An adequate level of unresiricted fund balance will also assist the Town in
mainisining its bond rating.
DISCUSSION
Waterford recognizes the new Fund Balance components below in accordance with Goverment Accounting
Standards Board (GASB) Pronouncement #54
« Non Spendable Fund Balance — Amounts that cannot be spent because they are either:
o Not ina spendable form such as long-term receivables, inventory, or prepaid expenses
co Legally or contractually required to be maintained intact, such as an endowment fand
* Restricted Fund Balance — Amounts that have legally enforceable constraints placed on their
. use by external patties or external laws and regulations.
¢ Committed Fund Balance -- Amounts that can only be used for specific purposes pursuant to
constraints imposed by formal action of the government's highest level of decision-making
authority RIM)
* Assigned Find Batance — Amounts intended to be used for specifie purposes, but are neither
restricted nor committed
¢ Unassigned Fund Balance Amounts that do not fall within any other classification.
POLICY
The Town will maintaln an unassigned find balance as of June 30" of each year between 10% and 13% of the
subsequent fiscal year's budgeted General Fund reyentie.
The use of General Fund Unassigned Pund balance in excess of the maximum level shall be limited to one-time,
non-recurring purposes. Examples include Capital Projects, transfer fo Capital Non-recurring fund,
emergency/stomm response, debt service mitigation, Jand acquisition, and other one-time, non-recurring uses
determined fo be in the best financial interest of the Town.
The General Fond Unassigned Fund Balance may be appropriated as authorized by the RTM, upon approval by the
Board of Finance.
General Fund Unassigned Fund Balance in excess of the maxinuun level will not hs allocated to ongoing operations
fo avoid a revenue gap in subsequent budget years.
For purposes of fund balance classification, expenditures are to be spent from restrleted fund balance first, followed
in order by committed fund balance, assigned fund balance and lastly, unassigned fund balance.
if Unassigned Fund Balance falis below the minimum level, the Board of Finance will propose a plan to restore it to
the minimum 10% level within three years.
EFFECTIVE DATE
Board of Finance approved this policy offective November 18, 2015.