Representative Town Meeting Budget and Special Meeting - DAY 1 (linked)

Cheryl R. Larder
26 Wiemes Court
Waterford, CT 06385
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Robert Brule; Fist Selectman.
Town. of Waterford
15 Rope Ferry Road
Waterford, CT 06385
Re: Town Surplus
Dear Rob:
the letter we discussed regarding my inquiry as to why it has been suggested
Following is
signed. Fund Balance (“surplus”) to pay down Town
that the use of a portion of the Town’s Unas:
debtis a bad idea, or not recommended.
The Town’s appropriating: boards (Board or Selectman, Finance and. RTM) have passed
multiple uses of surplus as additional appropriations over the last two (2) years, $1.8 million for
roads in fiscal year 2021-2022 and more than $3 million so far in fiscal year 2022-2023. Despite
this, the surplus remains at a level significantly over (almost double) the amount recommended in
the Board of Finance’s Fund Balance Policy.
have commented on more than one occasion (certainly to. the annoyance of some) that |
believe we, as elected officials, have a responsibility to return some of this surplus to the taxpayers
(who have contributed to it) inreal time, ina way that can be immediately felt/appreciated by the
taxpayer.
are preparing budgets eighteen (18).months into the
ts returned, to the general fund at the end of each
high surplus. No one advocates a “use or
the general fund at end of the fiscal year is
As-we discussed, because departments
future, there continue to be significant amoun
fiscal year, which in turn contributes to the continuing
lose” policy and.the return of unused appropriations to
undoubtedly appreciated.
atorium on capital projects in the coming year-due to the
J understand your suggested mor
fact that the Town has many approved and funded capital projects that have not been completed
and still will take the next several months or longer to complete. I agree, why tax residents for
capital project that cannot be completed in the near term.

I am less convinced: that the plan to fund certain capital projects: over the next five years
from surplus will address the continuing high level of surplus or provide a benefit that. taxpayers
will feel in-an appreciable way in the near term. Looking at the Town Accountant's report of the:
Status of the General Fund Unassigned Balance dated March 8, 2023, the Town applied additional
appropriations through February 28, 2023 in the amount of $3,125,236 but had projected revenues
in excess-of budgeted. of $3,137,574. Effectively an additional surplus of $12,338. (not including
any funds that:may be returned by departments :at the end of the:fiscal year, of which there-are sure
to-be some), :
Tunderstand there is strong:opposition to-the use of surplus to fund the Town budget being
approved for the next fiscal year, due to the possibility of it creating a potentially false baseline
budget: and inflate the tax increase in subsequent years. I have suggested in conversation with
other individuals that if we targeted a specific surplus to be applied to budget over a series of years,
perhaps that would allay the fear of a drastic.inflation of taxes in the subsequent year but there:
seetns to be‘no room for agreement on this approach.
So, why not pay down debt principal? “A paydown of debt principal would have a
continuing, benefit year after year. Why do. we continue to pay debt, and charge taxpayers
additionally to pay on debt, when we have their money already to pay: it. down?
I will appreciate your obtaining. an opinion of whomever-you or Town. counsel deem
appropriate, of why it would not be beneficial to‘pay down the Town’s debt with surplus. I think
an hour or two of counsel’s time, including bond counsel if necessary, would be appropriate if this
ean lead-to any tax relief for our constituents,
Thank you in advance,
Le
ery] R. Larder
First District RTM.