Representative Town Meeting Budget and Special Meeting - DAY 2 (linked)

WATERFORD/EAST LYME
SHELLFISH COMMISSION
(WELSCO)

TOWN OF WATERFORD
15 Rope Ferry Road
Waterford, CT 06385
860-442-0553
SOCIAL SERVICES GRANT FUNDING REQUEST
ORGANIZATION NAME: idakorlavad - Ls ast Lyre. Shell teh La ttt) 3313)
REQUEST DATE (FISCAL YEAR): PIPZ-AOBY
REQUESTED AMOUNT: g /,00
BENEFIT STATEMENT (Describe how these funds will be used)
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Per Town of Waterford Budget Guidelines: please attach a certified audit report of all funds
appropriated during the last completed fiscal year to your funding request.
DECLARATION
|, the requester, understand that | am requesting public funds from the Town of Waterford,
declare that this request does not pose any potential conflict with the Town of Waterford
and | will provide any documentation requested by the Town of Waterford to authorize
funding this request or review the appropriateness of the request.
LEAs OT Pee Ze22-
& Signature Date
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Waterford-East Lyme Shellfish Commission
Date: Dec 5, 2022
To: Waterford Board of Selectman
From: Peter Harris, Chairman
RE: Budget request for year 2022-2023
The Waterford-East Lyme Shellfish Commission (WELSCO) oversees shellfishing in the Niantic River.
WELSCO has had a successful year continuing to provide recreational shellfishing of clams and oysters
within the Niantic River.
There are 3 areas in the Niantic River available for recreational shell fishing; Area A which is open year-
round and is located in the central part of the river, and Area B north and Area B south which are open
conditionally during the colder months and is located in the southern third of the river and a section
located south of Sandy and Horse Point. The open and closed status of each of these areas is overseen
by DA/BA and the Ledge Light Health District.
Recreational permits are sold by both the East Lyme and Waterford Town Halls as well as J & B
Bait and Tackle and Mackey’s Bait and Tackle. Permits are sold under a variety of conditions based on
duration, residency, and senior citizen status. Last year, WELSCO voted to increase the permit fees in a
few categories as well as set limits to oyster harvests. These fees had not increased in many years.
These fee increases will offset operational expenses that have increased due to inflation. Increasing the
permit fees will also help manage shellfish stock by preventing overfishing. As of Oct 29, 2022, there
were a total of 694 permits sold generating $9790 of revenue for WELSCO. This is similar to the
previous year. The revenue from permit sales helps to offset operating costs of WELSCO. WELSCO
is not-authorized to issue commercial shell fishing permits based on state statute. WELSCO uses a
private accounting firm to manage our financials which adds significant expense. The complexities of
managing WELSCO’s finances separate from town’s accounting requires an independent accountant.
This year, WELSCO had a financial review for 2021 performed by the private CPA firm Seward and
Monde. A financial review was permitted by the town as a financial audit would require more in-person
interactions which were limited due to the pandemic.
WELSCO entered into 2 agreements with the towns of Waterford and East Lyme in 2022 and the end of
2021. The first was a formal agreement for each entity to fund 1/3 of the Save-the-River-Save the Hills .
pump-out boat. This boat is critical to maintaining the no-discharge zone in the Niantic River and
maintaining water quality at a high standard. The second agreement was the signing of an MOU with
East Lyme and Waterford to each fund 1/3 of the coasts for workers comp insurance for the WELSCO
wardens. The WELSCO wardens perform water sampling activities for both towns (unrelated to
WELSCO) to maintain their respective shellfishing areas in accordance with DA/BA requirements.

Although clam stock in the Niantic River appears to be sustainable, WELSCO’s attempt to purchase
clam seed or adult clams to ensure our stock is maintained have been unsuccessful. While clam seed
stock is scarce, WELSCO spent $4000 to purchase 20,000 oysters, which will add a second species of
interest to the shell fishing public, and to attempt to increase the population of this environmentally
beneficial shellfish species to the Niantic River. As done last year, the oysters were sourced from the
Niantic Bay Shellfish Farm. As in 2021, WELSCO has made a decision this year to not purchase
scallop stock as our previous efforts have not been successful and the factors related to stocking success
of this shellfish species are poorly understood and expensive. WELSCO also decided not to hold a
scallop season this year as the native population appears to be quite low.
WELSCO owns the Shellfish Warden boat which is used to collect water and meat samples, as required
by the DA/BA, to allow for recreational shell fishing activities. WELSCO wardens collect samples not
only for WELSCO but also for the Waterford Shellfish and East Lyme Harbor Management/Shellfish
commissions. The Warden boat is one of the few municipal boats in the water year-round and has been
used in the past by other departments in emergencies. Although WELSCO bills for warden’s hours
from the other shellfish commissions, WELSCO pays for all other expenses for the warden boat
including fuel, insurance, maintenance and repairs.
A point of concern for WELSCO in 2022 continues to be the condition of the Waterford town dock.
Although the main dock is sound, the finger pier where the warden boat is docked is in disrepair and a
potential safety hazard. Discussions regarding repairs are ongoing with town officials.
WELSCO will continue to carefully manage our clam stock through a combination of restocking efforts,
_ management of native stock, and helping to mitigate man-made influences that negatively impact
shellfish sustainability. Improving water quality is an important component of this and WELSCO also
believes enhancing oyster populations in the Niantic River will improve water quality.
Due to the continued popularity of recreational shellfishing in the Niantic River and our prudent
management of our finances, WELSCO will be requesting $1 as part of the Waterford Social Services
Grant for the next fiscal year. Based on the past few years permit sales and expenses, we believe this
proposal will allow WELSCO to reduce its financial burden to the town while being able to pay for our
operating expenses without any reduction in services. As we can’t predict future permit sales or
expenses, we will carefully monitor our finances and may request funding next year as needed.
Funding from the town for the pump-out boat program and the workers compensation insurance will
remain as per the signed MOUs.

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“Certified Public Accountants os a oe
Financial Statements’ -.
June 30, (2022 and 2021 _
vee Waterford East. ¢ Lyme Shellfish Commission’ oe

1D AND MONDE
countants’ Conclusion
sed on our reviews, we are not aware of any material modifications that should be made to
: accompanying financial statements in order for them to be in accordance with the modified
3h basis of accounting as described in Note 1.
rth Haven, Connecticut
gust 15, 2022

D AND MONDE
WATERFORD-EAST LYME SHELLFISH COMMISSION
’ STATEMENTS of FINANCIAL POSITION
(Modified Cash Basis)
June 30, 2022 and 2021
(See Independent Accountants' Review Report)
2022 2021
ASSETS —
rrents Assets: :
Cash and cash equivalents $ 3,472 $ 7,320
Money market account 32,550 39,128
Short-term investments 52,587 45,398
Total current assets 88,609 91,846
yperty and Equipment: -
Equipment, at cost 29,898 29,898
Less, accumulated depreciation 25,875 23,793
Total property and equipment, net 4,023 6,105
Totals | | $ 92,632 $ 97,951
4 LIABILITIES and NET ASSETS
rrent Liabilities:
Accrued payroll taxes $ 29 $ 33
it Assets:
Without donor restrictions:
Available for operations 88,580 91,813
Property and equipment 4,023 6,105
Total net assets without donor
restrictions 92,603 97,918
Total liabilities and net assets $ 92,632 $ 97,951
See notes to financial statements.

SEWARD AND MONDE
WATERFORD-EAST LYME SHELLFISH COMMISSION
STATEMENT of ACTIVITIES
(Modified Cash Basis)
Years ended June 30, 2022 and 2021
(See Independent Accountants’ Review Report)
Changes in Net Assets Without Donor Restrictions:
aan
2022 2021
Support and revenue:
Town of Waterford $ 2,500 $ 1,250
Town of East Lyme 3,500 1,250
Waterford Shellfish Commission . 513 1,068
East Lyme Shellfish Commission 325 119
Permit sales ; 20,612 18,737
Interest income ili 118
Total support and revenue 27,561 22,542
Operating expenses:
Boat & fuel oil 324 462
Travel & mileage © 510 334
Boat supplies - 909 °
Program funding 2,500 4,000
Repair & maintenance 1,680 524
Wages 4,557 6,406
Payroll taxes 381 715
Payroll processing 1,012 755
Depreciation 2,082 3,154
Shellfish propogation 4,000 3,425
Total operating expenses 17,046 20,684
General and administrative expenses:
Legal and accounting 8,500 3,325
Advertising 351 1,234
Insurance 5,764 4,202
Utilities 579 662
Education 125 -
Office supplies - ’ 110
Postage & delivery - 55
Printing 511 667
Interest expense - 10
Miscellaneous’ - 199
Total general and administrative expenses 15,830 10,464
Total expenses , 32,876 31,148
Change in net assets without donor restrictions ( 5,315) ( 8,606)
Net assets, beginning , 97,918 106,524
Net assets, ending ; ; § 92,603 $§ 97,918
See notes to financial statements.
or

SEWARD AND MONDE
WATERFORD-EAST LYME SHELLFISH COMMISSION
NOTES to FINANCIAL STATEMENTS
June 30, 2022 and 2021
1 - Summary of Sianificant Accounting Policies
Nature of Activities
The Waterford-East Lyme Shellfish Commission (the “Commission”) is an autonomous
joint agency of the Towns of Waterford and East Lyme established under State Statue.
This agency was formed to provide management services for shellfishing activities. The
Commission is funded through Town allocation and the sale of shellfish permits.
Basis of Accounting
' The accompanying financial statements are prepared on the modified cash basis of
accounting. That basis differs from U.S. generally accepted accounting .principles
primarily because the Commission recognizes revenues when received rather than when
earned; expenses and purchase of assets are recognized when cash is disbursed rather
than when. the obligation is incurred. Modifications to the cash basis of accounting
include recording: investments at fair value, recording deprecation and accrued payroll
taxes,
Financial Statement Presentation
Net assets, revenues, gains, and losses are classified based on the existence or absence
of donor or grantor imposed restrictions. Accordingly, net assets and changes therein
are classified and reported as follows: _
Net assets without donor restrictions - Net assets that are available for use in
general operations and not subject to donor restrictions. Net assets without
donor restrictions may be designated for specific purposes by action of the Board
of Trustees. ,
Net assets with donor restrictions - Net assets subject to donor imposed
restrictions. Some donor-imposed restrictions are temporary in nature, such as
those that will be met by the passage of.time or other events specified by the
donor. Other donor-imposed restrictions are perpetual in nature, where the
donor stipulates that resources be maintained in perpetuity. The Commission did
not have any net assets with donor restrictions as of June 30, 2022 and 2021.

SEWARD AND MONDE
Contributions
Contributions received are recorded as support without donor restrictions or with donor
restrictions depending on the existence and/or nature of any donor restrictions.
Support that is restricted by the donor is reported as an increase in net assets without
donor restrictions if the restriction expires (that is, when a stipulated time restriction
ends or purpose restriction is accomplished) in the reporting period in which the support
is recognized. All other donor—restricted support is reported as an increase in net assets
with donor restrictions, depending on the nature of the restriction. When a restriction
expires, net assets with donor restrictions are reclassified to net assets without donor
restrictions and reported in the statement of activities as net assets released from
restrictions,
Contributions are considered conditional when the underlying agreement includes a
performance barrier and a right of return to the promised assets exists. Conditional
contributions are not recognized in the financial statements until the performance barrier
and a right of return have been overcome,
Grants and Contracts ~
Grants and contracts are generally considered to be exchange transactions rather than
contributions. Revenue from cost reimbursement grants and contracts is recognized to
the extent of the costs incurred. Revenue from performance based grants and contracts
is recognized to the extent of the performance achieved. Grant and contract receipts in
excess of revenue recognized are presented as deferred revenue if the grant extends
beyond the Commission’s fiscal year and as due to the grantor if the grant was
completed within the fiscal year.
Advertising costs
Advertising costs are expensed when incurred.
Cash and Cash-Equivalents
Cash and cash equivalents include all liquid investments available for current use with an
initial maturity of three months or less. There were no cash equivalents as of June 30,
2022 and 2021.
Short Term Investments
The Commission holds investments in certificates of deposit accounts that have a
maturity period greater than 90 days, but will mature in less than one year. These are
classified as short-term investments in the statement of financial position-modified cash
basis. These investments are reported at their current fair values and any appreciation
is recorded in the statement of activities-modified cash basis as interest income.

a
SEWARD AND MONDE
Property and Equipment
It is the Commission’s policy to capitalize, at cost, all expenditures which materially
increase values or extend useful life exceeding $500, with a useful life greater than
three years. Donations of property and equipment are recorded as contributions at their
estimated fair value. .Such donations would be reported as without conor restrictions
unless the donor has restricted the donated asset for a specific purpose. Assets donated
with explicit restrictions regarding their use, and contributions of cash that must be used
to acquire property and equipment are reported as contributions with donor restrictions.
Expenditures in the nature of normal repairs and maintenance are charged to expense
as incurred.
_ Estimated useful life of assets are as follows:
Boat 5 years
Equipment 5-7 years
Income Tax Status
The Commission is a town agency, which is exempt from federal and state income
taxes.
Estimates
The preparation of financial statements on a modified cash basis requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities, and the reported revenues
and expenses. Accordingly, actual results could differ from those estimates.
Subsequent Events
The Commission has evaluated subsequent events for the period after June 30, 2022
through August 15, 2022, the date the financial statements were available to be issued.
2 - LIQUIDITY AND AVAILABILITY OF FINANCIAL ASSETS
The following reflects the Commission’s financial assets as of June 30, 2022 and 2021 available
for general expenditure, that is, without donor or other restrictions limiting their use, within one
year of the statement of financial position date:
2022 2021
Cash and cash equivalents $ 3,472 $ 7,320
Money market 32,550 39,128
Short-term investments 52,587 | 45,398
Financial assets available to meet the cash needs
for general expenditures within one year $ 88,609 $ 91,846

SEWARD AND MONDE
3 - PROPERTY AND EQUIPMENT
Details of property and equipment at June 30 2022 and 2021 are as follows:
2022 2021
Boat $ 25,104 $ 25,104
Equipment 4,794 4,794
29,898 29,898
Less, Accumulated depreciation 25,875 23,/93
Net . en) $ 6,105
Depreciation expense for the years ended June 30, 2022 and 2021 were $2,082 and $3,154,
respectively.
4 - CONCENTRATION OF CREDIT RISK
The Commission maintains cash in bank accounts which, at times, may exceed insured limits. .
The Commission has not experienced any losses in such accounts. The Commission believes it
is not exposed to any significant credit risk on cash.
A significant portion of the Commission’s support and revenue comes from the Towns of
Waterford and East Lyme as well as permit fees sold at local shops. Government funding and
sale of permits may be subject to reduction or termination in future years. Any reduction in
town funding and sales of permit fees could have a. negative impact on the Commission's
program services.
5 - RISK AND UNCERTAINTIES
In December 2019, an outbreak of a novel strain of coronavirus (COVID-19) originated in
Wuhan, China and has since spread to other countries, including the U.S. On March 11, 2020,
the World Health Organization characterized COVID-19 as a pandemic. In addition, multiple
jurisdictions in the U.S, have declared a state of emergency. It is anticipated that these impacts
will continue for some time. Future potential impacts to the Commission may include decreased
revenues and increased operating costs. The future effects of these issues are unknown.