Board of Finance - Minutes - 02/09/2022

Board of Finance Wednesday, February 9, 2022
Regular Meeting Minutes Waterford Town Hall
7:00 pm
Present: Chairman Glenn Patterson, Ronald Fedor, John Sheehan, Kevin Petchark; Robert
Tuneski, Baird Welch-Collins and Joe Filippetti
: moO
Elected: Jody Nazarchyk, Selectwoman, Abbas Danesh, Treasurer mS
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Absent: Robert J. Brule, First Selectman “
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RTM: Thomas Dembek, Sue Driscoll =
Staff: Christine Walters, Director of Human Resource, Jeffrey Robillard, IT Manas
Kimberly Allen, Finance Director, Maryellen McConnell, Secretary
1. Establishment of a quorum and call to order:
A quorum and a call to order was established at 7:00 pm, February 9, 2022
2. Public comment: No public comment.
3. Approval and acceptance of revised minutes of January 12, 2022.
Motion by John Sheehan and seconded by Baird Welch Collins to approve the
minutes of January 12, 2022.
Vote: 7-0-0 Motion: Passed
4. To consider and act on a request from Kimberly Allen, Director of Finance, for an
appropriation in the amount of $5,380 from Capital and Non-Recurring
designated line 20547-57846 Wi-Fi Town Wide Wiring.
Motion by John Sheehan and seconded by Robert Tuneski to amend the agenda
from Wi-Fi Town Wide Wiring to Fiber Upgrade.
Motion by John Sheehan and seconded by Robert Tuneski to approve the
appropriation in the amount of $5,380 from Capital and Non-Recurring.
Vote: 7-0-0 Motion: Passed

Board of Finance Regular Meeting Minutes — February 9, 2022
TM Page 2
5. To consider and act on a request from Christine Walters, Director of Human
Resources, for an FY22 Out of Series Transfer as follows:
Account | Description Approved | Current Account Account Revised
Budget Available | Increase Decrease Available
Amount | Budget Budget
Amount Amount
10145- | Administration 125,548 110,815.69 (67,546) 43,269.69
51110
10145- | Clerical and 60,639 4,016.05 29,694 33,710
51210 | Technical
10145- | Professional 54,000 0 37,852 37,852
52030 FeesTotal 67,546 (67,546)
Motion by John Sheehan and seconded Ronald Fedor to approve the Out of
Series Transfer for $67,546.
\ Vote: 7-0-0 Motion: Passed
: 6. Old Business: None
7. New Business:
a. Discussion of the FY2021 Audit Report with representatives from
CliftonLarsonAllen, LLP (CLA). Vanessa Rossitto from CliftonLarsonAllen, LLP
was on hand to give a presentation and answer questions from the Board of
Finance members.
b. Review of the Audit Report for FY 2021 by the Board of Finance. John
Sheehan reviewed selected items from an extensive list of questions and
comments he prepared. A copy of the list is attached to these minutes.
c. Review of the 2022 Grand List Report from the Town Assessor. Discussion
ensued on the Grand List, several questions were asked and Kimberly Allen
will be contacting the Assessor’s Office for responses.
d. Discussion of the current Board of Finance Policies. Chairman Patterson
stated that he would like to make a procedures manual for the Board of
Finance. This would help all new incoming members and answer questions
they may have.

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Board of Finance Regular Meeting Minutes — February 9, 2022
Page 3
e. Select the Board of Finance School Building Committee Representative for
the balance of the current term through 6/30/2022, and the next term
7/1/2022 — 6/30/2023.
Robert Tuneski was nominated for the position.
Motion by John Sheehan and seconded by Baird Welch-Collins to approve
the nomination.
Vote: 7-0-0 Motion: Passed
Monthly Reports — question from Kimberly Allen, Finance Director, can we
put the monthly reports on the Finance Department web page.
Motion by John Sheehan and seconded by Baird Welch-Collins to accept the
Finance Director’s request to post the monthly reports and send copies to
the RTM Moderator and to the RTM Majority and Minority Leaders.
Vote: 7-0-0 Motion: Passed
8. Liaison Reports: No reports.
9. Correspondence:
a.
Quarterly Treasurer’s Report: Quarterly Treasurers Report: Abbas Danesh,
Town Treasurer, noting he expects interest rates to rise over the rest of the
year and will adjust the town’s investments accordingly.
Letter from the Tax Collector: Discussion ensued regarding Department
Heads having to be at the last Board of Finance budget meeting. The Board
of Finance members concluded that there is no standing Board of Finance
requirement for Department Heads that attend that meeting. The Finance
Director noted that the First Selectman has addressed this issue with the
Department Heads.

Board of Finance Regular Meeting Minutes — February 9, 2022
Page 4
10. Adjournment:
Motion by Ronald Fedor and seconded by Baird Welch-Collins to adjourn the
Meeting of the Board of Finance at 8:22 p.m.
Vote: 7-0-0 Motion: Passed
Respectfully submitted,
With Wheels
John Sheehan, Clerk Maryellen McConnell, Secretary

Questions and Comments on FY2021 Audit Report
State and Federal Special Report Letters
1.
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6.
-*Federal Single Audit Report Pending. Last Year’s comments noted. Total
Federal revenues = $1,716,656 in FY2020 up from $1,399,839 in FY2019 which
was down from $2,588,876 in FY2018 which was up from $1,476,481 in FY2017
which was down from $1,850,874 in FY2016 — down from $2,139, 308 i in
FY2015,
*The largest Federal award was the Special Education IDEA grants totaling
$586,337.
*No deficiencies were noted in the Federal Single Audit Report .
Total State revenues = $2,075,683 in FY2021 up from $1,848,603 down from
$2,446,421 in FY2020 down slightly from $2,489,647 in FY2018 which was
down from $4,830,177 in FY2017. Increase in FY2017 was in School
Construction Grants.
Grant that I just noticed after all the years doing this report — Which Department
uses the Medicaid Grant from the Department of Social Services. Page 4 of State
Single Audit. ($62, 310 in FY2021 and $52,714 in FY2020)
No Findings or Questioned Costs found in the State Single Audit Report
Comprehensive Financial Report .
1,
1e)
ws
Cover notes that, like the FY2019 and FY2020 Reports, the FY2021 Report i:isa
Comprehensive Annual Financial Report (CAFR) unlike the FY2018 report,
which like the FY2017 Audit Report was just the Annual Financial Report, not a
Comprehensive Annual Financial Report (CAFR). I prefer the CAFAR because
the additional statistical information is very useful.
Short summary of Waterford Government that preceded listing of Principal Town
Officials in prior CAFRS is after the listing of Principal Town Officials. It did
not appear in FY2018 Audit Report. It was also not in the FY2017 or FY2016
Audit reports. It had been in previous Audit reports.
Excellent summary of Economic Activity in Town on Pages Vi-Vii.
The paragraph on Long Term Financial Planning needs to be corrected to include
the fact that the RTM formed a Planning Committee that superseded the BOF
Committee in CY 2013 (October 7, 2013 RTM meeting). Also, the RTM
Committee established in 1998 went out of business after the release of the
Government Consulting Group Report in CY2001. That is why the BOF formed
its committee in FY2001. A similar comment was in the Review ‘of the FY2020
Report and the FY2019 report. Page viii
Unassigned Fund Balance discussion. Page viii
The Auditor’s report explained how they conducted the Audit of the Financial
Statements provided by the Town noting what they reviewed and what they did
not review. Key paragraph is the Opinion that the Financial Statements were”
in accordance with accounting principles generally accepted i in the United States
of America.” Pages 1-3.
In FY2021 the Town’s net position decreased by $688 thousand after restatement
or 0.4% and Business Activities decreased by $1.6 million or 3.1%. In FY2020
Page 1

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the Town’s net position decreased by 0.6% or $894 thousand and business
activities decreased by 2.9% or $1.6 million. In FY2019 the Town’s net position
decreased by 0.8% or $1.4 million and the business activities decreased by 2.2%
or $1.3 million. Town’s net assets as restated due to GASB 75 increased by 1.4%
in FY2018 compared to the increase in FY2017 of 1. 7% compared to the decrease
of 3.42% in FY16. Page 4
Expenses in FY2021 were $2.3 million more than the $121.6 million generated in
tax and other revenues for governmental programs. Expenses in FY2020 were
$894 thousand more than the $111.4 million generated in taxes and other revenue.
Expenses in FY2019 were $1.4 million more than the $102.6 million generated in
tax and other revenues compared to FY2018 expenses that were $2.1 million less
than the $106.9 million generated in tax and other revenues. In FY2017 expenses
were $2.7 million less than generated revenues compared to expenses $5.8 million
more than generated revenues in FY2016. Page 4
Resources available for appropriation in FY2021 were $1.7 million more than
anticipated. Resources available for appropriation in FY2020 were $1.5 million
more than anticipated compared to FY2019 resources available for appropriation
compared to $2.7 million more than anticipated compared to resources in FY2018
that were $823.4 thousand more than anticipated. Resources available for
appropriation were $1.2 million more than anticipated in FY2017. Page 4
Due to the managed spending by department heads and the impact of the COVID-
19 shut down of activities, there were $41.1 thousand transferred to the Capital
Improvement Fund in FY2021 and unused appropriations of $2.2 million were
returned to the fund balance at the end of FY2021. This compares to $1 million
of the unassigned balance transferred to the Capital Non-Recurring Expenditure
Fund and $1.8 million of unused appropriations were returned to fund balance in
FY2020 compared to the $963.0 thousand that were returned to fund balance at
the end of FY2019 compared to $792.6 thousand of unused appropriations which
were returned to the general fund balance in FY2018. This compares to $591.2
thousand of unused appropriations were returned to the general fund balance in
FY2017. Page 4
Good explanation of town financial activities and categories of Town funds is
found Page 5.
Note that Town Funds use the modified accrual accounting method so there is a
difference between governmental activities and governmental funds. This
difference is described in a reconciliation included with the fund statements. Page
5.
Town cannot use fiduciary net assets to finance operations. Page 5
Due to GASB 84 the FY2020 Unrestricted net position was restated at $18.9
million and the FY2021 Unrestricted Net Position is $9.002 million. As noted
above, the Town’s assets were restated in FY2018 Audit Report due to GASB 75.
In FY2020 the unrestricted net assets changed to ($19.13) million compared to the
FY2019 unrestricted net assets of ($13.040) million from the ($11.532) million in
FY2018 Based on that restatement, the Unrestricted net assets decreased from
($13.638) million in FY2017 to ($11.532) million in FY2018. In the FY2017
report Unrestricted net assets changed from (5.725) million at end of FY15 to
Paged

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(10.913) million at end of FY16 to (5.839) in FY2017. The negative value is a
result of the implementation of GASB 68 in FY15. Business type activities
(mostly the Utility Commission Enterprise Fund) decreased to $50.4 million in
GY2021 compared to $52.0 million in FY2020, compared to $53.6 million in
FY2019 compared to $54.817 million in FY18 compared to $56.670 million at
end of FY17 compared to $57.463 million at end of FY16. This compares to
$57.6 million in FY15. Page 6.
Total Revenues were $117.776 million and total expenses were $118. 432 million
in FY2021 compared to total revenues of $111.416 million and total expenses of
$112.215 million in FY2020 compared to Total Revenues of $102.563 million
and total expenses were $103.781 million in FY2019. This compares to Total
Revenues of $106.967 million and total expenses of $104. 634 million in FY18.
This compares to Total Revenues $104.939 million and total expenses $102.223
in FY17 compared to revenues of $101.315 million and Total Expenses $107.242
million in FY16 compared to. Total revenues $102. 886 million, Total Expenses
$102.315 million in FY15. Page7.
Government activities revenue sources — 79.1% from property taxes, 17.9% from
operating and capital grants and contributions, 2.8% from charges for services and
0.2% from investment and other general revenues in FY21 compared to 82.7%
from property taxes, 13.4% from operating and capital grants and contributions,
2.8% from charges for services and 1.1% from investment and other general
revenues in FY20. This compares to 88. 0% from property taxes, 7.2% from
operating and capital grants and contributions, 3.5% from charges for services and
1.3% from investment and other general revenues in FY2019. This compares to
82.2 % from property taxes, 14.0% from operating and capital grants and
contributions, 3.1% from charges for services and 0.7% from investment and
other general revenues in FY18. This compares to 81.9% from property taxes,
14.4% from operating and capital grants and contributions, 3.3% from charges for
services and 0.4% from investment and other general revenue in FY17 compared
_ to 85.2% from property taxes, 11.2 from operating and capital grants. 3.4% from
17.
18.
charges for services and 0.2% from investments in FY16. This compares to
80.5% from property taxes, 16.2% from operating and capital grants and _
contributions, 3.1% from charges for services and 0.2% from investment and _
other general revenues in FY2015. Investments have decreased by $949.3.
thousand in FY2021 after decreasing by $215.0 thousand in FY2020 after
increasing slightly in percentage share (up by $611. 0 Thousand i in FY2019 over
FY18. Page 7 & 8.
Note the factors affecting operations outlined on Pages 7&8.
Revenues from Sewer fees increased by $115 thousand in FY21 after decreasing
by $55 thousand in FY2020 after increasing by $111 thousand in FY19 compared
to a decrease of $265,000 (3.3%) in FY18 compared to $226,000 (1.4%) in FY17
compared to decrease of $70,000 (1.8%) in FY16. Capital contributions increased
by $16 thousand i in FY21 after decreasing by $43 thousand in FY2020 after a
$221 thousand (5.3%) decrease i in FY2019, compared to a $890 thousand
decrease (68.1%) in FY17 compared to the increase by $362,000 (38.3%) in
FY16. This was due to completion of work on Pump Station Grit Facility in
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" operating transfers from the General Fund are also rolled into the General Fund
FY18, Harvey Ave. Pump Station in FY17 and the Wastewater SCADA system
project.Ion FY16 Page 8
Town Combined Fund Balance was $35.6 million, an increase of $4.1 million
from the restated $31.5 million ($31.2 million originally) in FY2020, an increase
of $7.5 million from $23.7 million in FY2019, an increase of $1.7 million
compared to $22.0 million, an increase of $0.9 million in FY18 from $21.1
million an increase of $3.5 million in FY17 compared to $17.6, million, a
decrease of $2.7 million in FY16 compared to $20.4 million in FY15. The
General Fund showed a total increasé of $2.8 million in FY20 compared to an
increase of $2.5 million in FY2019 compared to an increase of $1.2 million in
FY18 compared to an increase of $1.7 million in FY17 compared to an increase
of $1.3 million in FY16. Page 9
The Internal Service Fund net assets increased by $426.5 thousand in FY21
compared to an increase of $1.3 million in FY20 compared to a decrease by
$352.5 thousand in FY19 compared to an increase by $255.3 thousand for FY18
adding to the $217.2 thousand in FY17 adding to the $788,900 increase in FY16.
Fortunately, in FY21 the contributions of $11.9 million offset the expenses for
claims and program administration of $11.5 million in FY21 compared to FY20
when the contributions of $11.4 million offset the expenses of $10.2 million. This
compared to FY19 when the contributions of $11.7 million offset the expenses of
$12.1 million. This compares to FY18 where the $11.2 million in contributions
was greater than the $11.0 million expenses in FY18 continuing the positive
trend. In FY17 the $11.0 million in contributions and other revenues was greater
than the $10.8 million in expenses for claims and administration. This continues
the positive trend. In FY16 the $10.9 million in contributions was greater than the
$10.1 million in expenses for claims and administration. Page 9.
FY21 revenues were $3.9 million over expenses cotnpared to FY20 revenues
which were $2.3 million over expenditures. This compares to FY19 when
revenues were $2.8 million over expenditures on a budgetary basis. This
compares to FY18 revenues that were $934.9 thousand over expenses compared
to FY17 when revenues were $1.8 million over expenses compared to FY16 when
revenues were $1.2 million over expenses. Page 10
As usual, a good presentation of major factors affecting the FY21 operating
budget. Page 10.
There were $641. 8 thousand of outstanding encumbrances at the end of FY21
compared to $522,100 of outstanding encumbrances at the end of FY20. This
compares to $186,800 of outstanding encumbrances at end of FY19. This
compares to $566,000 of outstanding encumbrances at the end of FY18. This
compares to $279,600 of outstanding encumbrances at the end of FY17. This
compares with $414,700 of outstanding encumbrances at the end of FY16.
Encumbrances are reported as expenditures for budgetary purposes. Page 10
Note that balances for special revenue funds that are funded primarily from
for reporting purposes. IN FY21 those balances amounted to $53.7 thousand. In
FY20 those balances amounted to $355,500. In FY19 those balances amounted to
Page4

$67,000. In FY18, those balances amounted to $74,900. In FY17 those balances
were $86,600 compared to $98,700 in FY16. Page 10
25. Capital assets decreased by $4.5 million in FY21. This compares to Capital assets
decreasing by $2 million in FY20. This compares to a decrease of $6.8 million in
FY19, This compares to a decrease of $7.0 million in FY18 on top of the $7.37
million decrease in FY17 on top of the $5.8 million decrease in FY 16. Much of
these decreases were influenced by depreciation Page 11.
26. Town debt at end of FY21 was $72.8 million, up from FY20 debt of $63 million
down from $69.5 million at the end of FY19, down from $74.5 million at end of
FY18 which was down from the $79.5 million in at end of FY17 compared to
$85.7 million at end of FY16. Page 12.
27. Town debt rating is “AA” from Standard and Poor’s in FY210. This is no change
from FY20, FY19 and FY15. There is no mention of “Aa2” (up from “AA3” in
FY11) from Moody’s Investors Service that was noted in the FY16 report. Page
12.
28. Note that the town debt limit in FY21 is $646.3 million up from $638.6 million in
FY20, up from $614.8 million in FY19, up from 603.2 million in FY18,
unchanged from FY17 but up from $572.3 million in FY16. [hope we never get
close to that figure. Page 12.
29. The unemployment rate in FY21 was 6.5%, down from the FY20 10.8% up sharply
from 3.7% in FY19. The FY19 rate was down from the FY18 rate of 4.0% down
from an FY17 rate of 4.7% in FY17 compared to 5.3% in FY16. This is lower than
the national 11.1% and higher than the State average of 10.1% in FY20. Page 12
30. The Unassigned Fund Balance increased by $4.0 million in FY21 compared to an
increase of $2.2 million in FY20 compared to.a $2.8 million increase in FY19
compared to an increase of $796.8 thousand in FY18 compared to an increase of
$2.2 million in FY17 compared to a $809,700 increase in FY16. For historical
information prior to change in fund definitions in FY11, the Unreserved Fund
Balance at end of FY2010 was $11.1 million, essentially the same as in FY2009
(report says it is a decrease from $12.08 in FY09) and close to the $11.4 million at
end of FY07 after an increase to $19.2 million iin FY08 due to Dominion
settlement. Page 12
31. Total Net Assets for FY21 are $208,405,121 compared to $210,444,390 in FY20
compared to net assets in FY19 of $212,884,881 compared to net assets for FY18
of $215,485,469 compared to net assets of $222,999,822 in FY17 compared to
$221,076,376 in FY16. Page 13.
32. Total Cash, cash equivalents, and investments at end of DY21 was $55,044,640 in
the Audit. The Treasurer’s report for 06/30/2021 showed a value of $54,913,022.
Page 13
33. Loss in the Business Type Activities (Utility Commission) in FY21 was
_ $1,622,655 compared to a loss of $1,688,931 in FY20 compared to a loss in FY19
of $1,451,560 compared to a loss of $2,085,971 in FY18 compared to a loss of
$800,704 in FY17, compared to FY16 loss of $137,199. These losses are mostly
due to depreciation of related capital equipment. Page 14.
34, Long Term Liabilities at end of FY21was $19,360,178. This is an increase from
the FY20 value of $14,540,697. This is an increase from the FY19 value of
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$13,688,114, a slight decrease from FY 18 total liabilities of $14,426,353
compared to $10,893,245 in FY17 compared to an FY16 value of $19,128,450.
Page 15.
Long Term Liabilities not reported in the funds at end of FY21 are $157,967,581
compared to a FY20 value of $158,417,896 compared to a FY19 value of
$134,731,866 compared to $124,511,806 in FY18 compared to $124,073,136 in
FY17, compared to FY16 liabilities of $125,581,192 compared to FY15 liabilities
of $123,607,087. This is the fourth time the long-term liabilities have been
detailed in this part of the audit due to the OPEB reporting requirements. Page 16.
Note that the Net Pension Liability is $33,780,610, Compensated absences is
$6,740,355, and Net OPEB liability is $16,693,761 in FY21. This compares to a
Net Pension Liability is $31,574,561, Compensated Absences is $7,239,502 and
Net OPEB Liability is $17,291,575 in FY20. This compares to a Net Pension
Liability of $29,879,877, Compensated absences liability of $7,258,446, and the
Net OPEB liability of $18,501,569 in FY19. This compares to Net pension
liability of $14,262,138; the compensated absences liability of $7,093,628 and
Net OPEB liability of $20,720,417 for FY18. Page 16
General Fund Balance at end of FY21 was $23,782,024 compared to $20,113,162
at the end of FY20 compared to $17,259,424 at end of FY19, compared to
$14,789.151 in FY18 compared to $13,594,126 in FY17, compared to FY16
Balance of $11,922,864 compared toa general fund balance at end of FY15 of
$10,574,012. Page 17
Capital and Nonrecurring Fund Balance at end of FY21 was $7,797,327
compared to $8,062,934 at end of FY20 compared to $4,491,330 at end of FY19,
compared to $5, 593,327 at end of FY18 compared to $6,473,966 in FY17,
compared to FY16 CNR balance of $7,307,393 compared to a CNR balance at
end of FY15 of $10,197. Page 17.
Note that there was still a deficit of $2,941,627 related to the Waterford High
School Building Project at the end of FY21, a reduction of $1 from $2,941,628 at
the end of FY20. This is down from the deficit of $2,941,645 at end of FY19. I
guess $17 of interest sort of pays off. Real question is what is current status?
Page 17
Note the explanations for the differences in amounts reported for government
activities on page 18. There is more detail in FY21, FY20 and FY19 audits
compared to previous audits before FY18. Some of this is a result of the
requirement to provide more detail regarding Pension and OPEB future liabilities.
Page 18
The change in net assets of government activities was (687,683) in FY21
compared to ($895,894) in FY20 compared to ($1,356,763) at end of FY19
compared to $2,137,645 at end of FY18 compared to $2,716,587 at end of FY17
compared to’ ($5,790 620) ¢ at end of FY16 compared to ($1, 005 513) in FY15.
Page 18.
Enterprise Fund showed an operating loss of $1,638, 665 i in FY21. compared a loss
of $1,688,931 in FY20 compared to an operating loss of $1,451,560 in FY19
compared a loss of $2,105,565 in FY18 compared to a loss of $1,217,918 in FY17
compared to a loss of $1,444,095 in FY16 compared to a loss of $1,378,805 in
Page 6

43.
44.
45.
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_the Pension fund and the OPEB fund. This was repeated in FY19 and FY20. I
FY15. The depreciation expense ($1,807,505) plays a significant role in this
paper loss. Page20_
Internal Service Fund for Health insurance showed an increase to $6,229,162 in
FY21 compared to an increase to $5,802,649 in FY20 compared to a reduction to
$4,542,016 in FY19 compared to its position of $4,894,509 in FY18, up from
$4,639,216 in FY17 up from $4,422,052 in FY16 up from $3,633,202 in FY15.
Page 20
Internal Service Fund Investment income of $5,069 in FY21 is down significantly
from $62,559 in FY20 is up from $43,199 in FY19 is up from $27,557 in FY18 is
up from $12,741 in FY17 is up from $3,548 in FY16 is up from the $2,017 earned
inFY15. Page 21.
Utility Commission Enterprise Fund ended FY21 with $4,027,700 cash balance
down from cash balance of $4,836,350 at end of FY20 compared to ending FY19
with $3,667,346 up from $3,138,882 cash balance in FY18, up from $2,990,568
in FY17, up from FY16 cash balance of $2,320,871 in cash, up from FY15 with
$2,266,877. Page 21..
Note that $9,062,017 is restricted for OPEB.Benefits and $639, 05 0 to Retirement
Benefits in FY21 compared to $6,109,331 restricted to OPEB Benefits and
$540,447 to Retirement Benefits in FY20 compared to $5,056,942 restricted for
OPEB and $535,281 for retirement in FY19, Page 22
Trust Funds information was combined in the FY18 report rather than separating
prefer keeping the reporting of the two funds separate even though both are
_ managed by the Retirement Commission. These funds are reported separately
48.
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50.
51.
52.
53.
54.
55.
later in the Audit Report. Page 22 & 23
The combined Trust funds ended FY21 with a balance of $9,701, 067 up from the
FY20 balance of $6,649,778 up from a FY19 balance of $5,592,253 up from a.
FY18 balance of $4,179,991 compared to a combined balance of $2,919,656 at
end of FY17. OPEB Trust Fund ended FY17 witha balance of $2,355,136 with
its only expense in FY17 an Administrative payment of $9,781. It made its first
appearance in the audit report in FY16 with a value of $1,160,000. Page 22 and
23.
The combined Retirement and OPEB Investment Income in FY21 was s $1, 977,974
up from FY20 Investment Income of $333,388 in FY20, compared to a FY19
Investment income of $297,336 up from $161,460 in FY18. The FY17
investment income was $48,277. Page 23
It is important to understand the accounting policies discussed on pages 24-35.
Note that revenues are recorded when earned and expenses are recorded when a
liability is incurred regardless of the timing of the related cash flows. Page 25
Generally, expenditures are recorded when a liability is incurred. However, debt
service expenditures as well as expenditures related capital leases, compensated
absences, claims and judgements are recorded when payment is due. Page 25
The Custodial Funds are new in FY21. Page 26 .
Note the rules on interfund activity described on Page 26
Note the depreciation table on page 27 & 28 for all physical property and
equipment.
Page 7

56. Note discussion of Deferred Outflows/Inflows related to OPEB funds on Page 28.
57. Fund balance terms explained on pages 29-30. (GASB 54 implementation)
58. In budget discussion on page 31, the appeals process time lines are in the Town
Charter, not Town Ordinances. This error was also in the FY20, FY19 and FY18
reports.
59. During FY21 supplemental budgetary appropriations of $41,100 were made
compared to FY20 supplemental budgetary appropriations of $1 million. This
compares to supplemental budgetary appropriations of $800, 000 in FY19. Page
32
60. Note the difference between GAAP and budgetary basis of accounting on Page
32.
61. Funds with Deficit balances — Historic Preservation Enhancement Grant —I
assume that the dollars are in the General Fund. High School Building Project —
$2,941,627 in FY21 down a dollar from $2,941,628 in FY20 compared to
$2,941,645 deficit in FY19 (down from $2,941,672 deficit in FY18). I assume
this is the amount in dispute with the State regarding allowed expenditures for the
High School Project. Nuclear Safety Emergency Preparedness - $84,798. Again,
I assume those dollars are in the General Fund. Page 32. In FY19 and FY18
report the High School Building Project owed the General Fund $2,942,807 (Page
37). Page 32
62. Custodial Credit Risk Presentation different in F Y21, FY20, FY19 and FY18
different from the FY17 discussion. IN FY21 the bank balance had increased to
$28,781,931. IN FY20 the discussion was limited to a bank balance of ~
$9,684,969. Discussion was limited to bank balance of $3,682,002 in FY19 and
$1,258,200 in FY18 while bank balance if FY17 was $16.969,000. Respective
- Credit Risks reported are $23,178,450 in FY21, $7,671,969 in FY20, 2,859,979 in
FY19, $633,815 in FY18 and $13,500,000 in FY17. Page 33
63. Be sure to review the Various Risk explanations. Pages 33-35
64. Net Receivables in FY21 were $4,420,989 compared to $3,772,763 in FY20,
compared to $3,669,623 in FY19 compared to $5,347,557 in FY18. Page 36
65. Note the decrease in net capital assets on page 37 due to depreciation. Page 37
66. Note the Depreciation expense of $9,053,694 in FY21 compared to $9,366,645 in
_FY20 compared to $9,627,541 in FY19 compared to $9,718,411 in FY18
compared to $9, 668,916 in FY17 compared to $9,676,204 in -PY16 conipared to
$9,334,424 in FY15. Page 37 & Page 38
- - 67. Construction Commitments remaining. at end of FY21 are $1, 002, 753 compared
~ to $6,689,464 in FY20, compared to $13,379,955 in FY19, compared to
_ $1,726,988 in FY18 compared to remaining FY17.commitment of $1,716,627
.. compared with FY16 Commitment of $1,390,796 compared to the FY15
commitment of $1,168,918. The new Public Works Building on Hartford Road i is
responsible for the large number. Page 38 -
68. Note the composition of the interfund balances at the end of FY21 totaling
$9,846,013 in FY21 compared to a balance of $9,107,963 in FY20, compared to a
balance of $7,352,253 in FY19. Page 38
69. Note the Post-Employment Benefits (OPEB) liability j in FY21 of $16,693,761
down from $17,291,575 in FY20 compared to the FY19 liability of $18,501,569
PageO

compared to the FY18 liability of $20,720,417 compared to the restated value in
FY17 of $21,640,691 in FY17. FY17 Audit Report stated an OPEB liability of
$13,841,300 down from the FY16 value of $15,274,000 up from the FY15 value
of $13,574,800 and the Compensated absences of $6,740,355 in FY21 down from
$7,239,502 in FY20 up from $7,258,446 in FY19 up from $7,093,628 in FY18
_ compared to $7,301,177 in FY17 down from $7,811,225 in FY16 compared to
$8,247,881 in FY15,. Enterprise fund compensated absences are $315,651 in
FY21 down from $345,395 in FY20 compared to $406,178 in FY19 compared to
$358,456 in FY18 compared to $383,488 in FY17 up from $348,931 in FY16 up
slightly from $348,518 in FY15. Page 40
70. Note the Town’s long-term liability of $135,325,515 in FY21 up from
$134,964,002 in FY20, up from $130,232,756 in FY19 up from $122,470,628 in
FY18 compared to the restated FY17 value of $131,872,563. FY17 audit reported
a long-term liability of $124,073,136 in FY17 down from $125,581,192 in FY16
up.from $123,607,087 in FY15. Page 40
71. The Due within one year is $7,372,193 in FY21 up from $6,521 348 in FY20
down from $6,534,786 in FY19 up from $6,415,023 in FY18 compared to
$5,841,000 in FY17 up from $5,101,327 in FY 16 up from $4,950,806 in FY15.
Page 40
72. Note the bond payment schedule. Final payment of bonds will be in 2041, up |
from 2035 in FY20 up from reported 2034 in FY19 (It was 2037 in FY17, 2036 in
FY16 and 2035 in FY15). The recent bonding for the Municipal Complex and
bond refinancing that happened in December 2019 and December 2020 moved
the final payment year to FY2041. Page 41.
73. Total statutory debt limit of seven times annual receipts from taxation is
$648,806,802 in FY21 up from $638,609,762 in FY20 compared to $614,810,721
in FY19 The actual debt at end of FY21 was $72,815,000 up from $63,030,000 in
FY20 compared to FY19 when it was $69,465,000. It was not listed in FY18
report. The actual debt in FY18 is $74,485,000. In FY17 the Total statutory debt
limit was $603,192,000 but current debt was $87,841,000. Page 41and 42.
74, Note that the Unassigned Fund Balance of the General Fund at end of FY21 was
$22,981,081 but the total Unassigned Balance was reduced.to $19,948,347 by
negative balances in other funds (mostly from the High School Building Project
Fund deficit) in FY21. Page 43 Ol
75. Tax Abatement discussion on page 44 first appeared in the FY18 audit report.
76. Description of Employee Retirement Systems and Pension Plans is much
expanded from previous audit reports prior to FY17. Pages 44-66 (compared to
Page 42-49 in FY14 audit report)
77. Membership in the town retirement plan on July 1, 2019 (date of last actuarial
valuation) is 10, down from the FY19 and FY18 figure of 13 (Based on July 1,
2017 actuarial valuation. This is down from 17 for FY17. This is down from 19
in a previous actuarial valuation in FY15) Page 45.
78. Note the annual required contribution to the town plan of $59,870 (with
contributions of $82,000 made by the Town in FY21 compared to $81,131 (with
contributions of $89,953 made by the Town) for the year that ended on June 30,
2020 compared to $82,000 for year that ended on June 30, 2019 compared to
Page9

79.
$81,493 for year that ended June 30, 2018 compared to $84,000 as of June 30,
2017 compared with $83,367 as of June 30, 2016 which was the same amount as
June 30, 2015. Page 46
Although the pension liability as of June 30, 2021 was $931,582 compared to the
June 30, 2020 of $969,081 compared to the June 30, 2019 liability of $1,013,766
compared to $1,066,831 as of June 30, 2018, compared to the liability as of June
30, 2017 is $1,052,775 down from June 30, 2016 is $1,126,510 (down from June
30, 2015 liability of $1,213,597 down from $1,293,910 at end of FY14), the
actual amount in plan is $639,050 (68.59% of pension liability) at end of FY21
80.
81.
82.
83.
84.
85.
86.
87.
88.
compared to $540,447 (55.77% of pension liability) at end of FY21 up from
$535,281(52.80% of pension liability) at end of FY19 compared to $543,569 at
end of FY18 (50.95% of pension liability) compared to $564,556 at end of FY17
(53.63% of liability), down from $575,470 (51.08% of total liability) at end of
FY16 compared to $639,471 (52.69% of total liability) at end of FY15. Page 47
The net pension liability is very sensitive to the discount rate. See table of page
48,
Pension trust furid had a net position at end of FY21 of $639,050 up from FY20
net position of $540,447 up from FY19 net position of $535,281 down from
$543,569 at end of FY18 and $564,520 at end of FY17. Page 49
The MERS is fully explained on Pages 50-53
Town reported liability share in the MERS is $33,488,078 at end of FY21 up from
$31,145,927 at end of FY20 up from $29,401,392 at end of FY19 up from
$13,738,876 in FY18 down from $16,236,237 in FY17, up from $11,738,474
(6%) in FY16, up from $8,954,659 (17.38%) in FY15. The recognized pension
expense was $9,020,067 at end of FY21 down from $9,233,462 at end of FY20 up
from $4,931,098 at end of FY19 up ftom $3,358,779 in FY18, down from ©
$3,747,799 in FY17 up from $2,256,480 in FY 16 compared to $1,698,885 for
FY15. Page 51
The town has recorded $417,901 as long term liability to MERS at end of FY21
down from $835,265 as long-term liability to MERS at end of FY20 down from
$1,252,629 as long-term liability to MERS at end of FY19 down from $1,678,977
as long term liability to MERS at June 30, 2018; down from $2,110,496 as long
term liability to MERS at June 30, 2017 down from the FY2016 value of
$2,542,012. The FY21 amount paid was the same as the FY20 amount paid of
$417,364. The FY19 amount paid was $426,348. The FY18 amount paid was
$431,519 compared to the FY17 amount paid of $431,516. Page 52
Actuarial Assumptions noted on pages 52-53 greatly impact the Net Pension
Liability, especially the discount rate. Page 53
The Teachers’ retirement system is fully explained on Pages 54-57
The aggregated Pension information combines data from the PERS plan, The
State Teachers Plan and the MERS plan to show the total pension liability for the
Town. This table was new in the FY19 audit but the FY19 audit did not include
the State Teachers Plan. Page 57
Employee contribution to the MERF is 3. 25% if covered by Social Security and
5% if not covered by Social Security (Page 51) while the Teacher’s Contribution
Page 1 0

is 7% as of January 1, 2018 (An increase from 6% effective on July 1, 1992)
. (Page 55).
89. Legislation passed in June 2019 has increased the employee contribution to
MERF to 2.75% if covered by Social Security and 5.5% if not covered by Social
Security for FY20. The Act envisions an increase up to 5.25% if covered by
Social Security and 8% if not covered by Social Security in FY24. (This change is
not reflected in the FY21 audit).
90. Note membership in the OPEB retirement plan of 492 as of July 1, 2020 down
from 514 as of July 1, 2018 down from 528 as of July 1, 2016 (down from 804 as
of July 1, 2014 which was up from 733 as of July 1, 2012 and Up from 713 as of
July 1, 2010). Page 58
- 91. OPEB Liability Presentation in FY21, FY20, FY19 and FY18 audit is very
different from presentation in previous audit reports due to GASB 75. Pages 57-
66
92. The Net OPEB liability that is recognized as of June 30, 2021 is $16,693, 161
down from June 30, 2020 liability of $17,291,575, down from the June 30, 2019
liability of $18,501,569 down from liability as of June 30, 2018 of $20,720,417
compared to July 1, 2017 net liability of $21,632,696 (GASB 75). Page 58
93. Note that because the total OPEB liability is $25,755,778 the Plan fiduciary net
position percentage of total OPEB liability is only 35.18% in FY21, up from
26.11% in FY20, which is up from 21.47% in FY19 which is up from 14.93% in
FY18. Page 58
94. For a defined benefit plan it is considered “fully funded” if the funding status is
100% which means there is enough money to cover any liabilities. If the fund is
80% funded it is considered “Healthy”. In reality, the average funding status is
69.9%. Sourced from “THE NEST” “What is a Fully Funded Retirement Plan”.
95. The Discount rate used to measure OPEB liability in FY21 is 6.5%, down from
the FY20 rate of 6.75%, the same as FY19 based on the July 1, 2018 study. Page
59
96. Like the Retirement Plan Liability, the OPEB liability of very sensitive to the
discount rate. Page 59
97. The Town recognized OPEB expense for FY21 was $750,150 down from the
_ FY20 recognized OPEB expense of $1,018,898 down from the FY19 Town
. recognized OPEB expense of $1,310,541 down slightly from the FY18 Town
recognized OPEB expense of $1,539,938. Page 60
98. OPEB Trust Fund position at end of FY21 was $9,062,017, up from the FY20 end
_ of year position of $6,109,331 up from FY19 EOY position of $5,056,972 up
from the FY18 end of year position of $3,636,422 compared to end of FY17
position of $2,355,136. Page 61-62
99. Teacher’s OPEB explained although the Town makes no contributions to this
fund Pages 62-66
100. Note that if Town was required to fund OPEB for teachers the net OPEB
liability would be $15,736,711 in FY21 up from $15,128,952 in FY20. Page 64
101. Not to panic anyone but that would give the Town a total OPEB liability
of $41,492,489 at end of FY21, up from $32,420,527 at end of FY2020.
102. Note discussion on Risk Management on Pages 66-67
Page 1 1

103. Health Claim additional liability as of June 30, 2021 was $605,346, down
from the June 30, 2020 of $639,399, down from the June 30, 2019 additional
liability of $976,696 up from June 30, 2018 liability of $872,476 compared to
‘June 30, 2017 liability of $814,809 compared to June 30, 2016 Liability of
$764,096 compared to Health Claim Liability on June 30, 2015 of $783,939
compared to the Health Claim liability June 30, 2014 of $807,131. Due to change
to a fully-indemnified 1 insurance policy there were no liabilities as of June 30,
2013. Page 66-67
104. Stop Loss is discussed on Page 66. This is important in funding Health
Care Plans. Page 66
105. Miner Lane Landfill liability not claimed in FY21, FY20, FY19 or FY18.
The Liability is listed as $247,000 in FY21, down from $271,000 in FY20, down
from $295,000 in FY19 down from $309,000 for FY18 on Page 40. Town
claimed liability for closed land fill on Miner Lane for FY17 was $368,000
compared to FY16 liability of $391,000 compared to $414,000 in FY15. Page 67
106. Note that Dominion is 34.3% of Town property tax revenue in FY21, up
slightly from 34.1% of Town property tax revenue in FY20 up from 33.7% of
Town property tax revenues in FY19, down slightly from 34.9% of property tax
revenues in FY 18 compared to 34.5% in FY17 compared to 33% of tax revenue
in FY16 down slightly from 34% of tax revenue in FY15, same as in FY14, up
from 30% of tax revenues in FY13, FY12, FY11 and FY10 compared to 29% n
FY09. Page 67
107. The GASB 84 restatement for FY20 is discussed on Page 68. The School
Activity Fund is a Special Revenue Fund, the Student Scholarship Fund is
reported as a Custodial Fund and Performance Bonds are reported i in the General
Fund. Page 68
108. © COVID-19 Impact in FY20 was discussed on page 67of the FY20 Audit.
It is not discussed in the FY21 audit.
109. Note the difference in budgetary revenues compared to GAAP revenues.
Page 70.
110. Police Department returned $114,830 in 1 FY21 compared to $40,321 in
FY20. Page 73
111... Publi¢ Works returned $116,241 in FY21 compared to returning $331,282
in FY20 compare to $149,384 in FY19 compared to $270,273 in FY18 compared
to $149,076 in FY17 compared to $142, 177 in FY16 compared to $130,552 in
FY15, Page 73
112: Senior Citizens returned $115,634 in FY21 compared to retumning $58, 128
in FY20. Page 74
113. Recreation and Parks returned $187,442 in FY21 compared to returning
$80,965 in FY20. Page 74
114. Board of Education returned $1,123,093 at end of FY21 compared to
returning $332,426 in FY20 compared to returning $50,099 in FY19. Page 74
115. The total returned funds for the Town and Board of Education at the end
of FY21 was $2,197,183 compared to a total returned of $,780,026 at the end of
FY20. Comment — The large returns at the end of FY21 and FY20 are a
Page L 2

combination of good management by the Department Heads and the uncertainty
of programs and projects in the COVID years. Page 74
116. | Comparing expenditure total on Pages 74 with revenue total on page 70
Revenue was $7,558,246 greater than expenses in FY21 compared to $2,229,889
greater than expenses in FY20 compared to Revenue $2,470,273 greater than
‘Expenses in FY19 compared to FY18 when Revenues were $934,924 greater than
expenses compared to revenue $1,818,440 greater than expenses in FY17
compared to $1,348,852 greater than expenses in FY16 compared to revenue
being $2,410,135 less than expenses in FY15. Pages 74, 70
117. Town finished year FY21 with $2,197,183 unexpended budget balance
compared to FY20 with $1,780,026 unexpended balance compared to a FY19
$962,997 unexpended balance compared to FY18 with $792,563 unexpended
balance compared with $591,164 unexpended balance in FY17 compared to FY16
with $599,291 unexpended balance compared to FY15 with $252,144
unexpended balance... Page 74.
118. The major difference between the budgetary and GAAP basis is that
encumbrances are recognized as a charge against a budget appropriation in the
year in which the purchase order is issued so that encumbrances outstanding at
- year end are recorded in budgetary reports as expenditures of the current year
while in GAAP basis encumbrances are recorded as assigned fund balance. Page
74
119. Pension liability for Pension Trust Fund is $931,582 in GY21 compared to
$969,081 in FY20 compared to $1,013,766 in FY19 compared to $1,066,831 in
FY18 compared to $1,052,775 in FY17 compared to $1,126,510 in FY16
compared to $1,213,597 in FY15 but the net pension liability is $292,532 or
68.60% in FY21 compared to $428,634 or 55.77% in FY20 compared to
$478,485 or 52.80% in FY19 compared to $523,262 or 50.95% in FY18
compared to $488,219 or 53.63% for FY17 compared to $551,040 or 51.08% in
FY16 compared to $574,126 or 52.69% in FY15. Page 75 |
120. Regarding MERS, the Town’s proportion of the net pension liability is
3.01% in FY21 compared to 3.02% in FY20 compared to 3.07% in FY19
compared to 5.54% in FY18 compared to 6.09% in FY17 compared to 4.88% in
FY16 and 5.21% in FY15. This is a restatement of the 17.38% for FY16 and
FY15 in the FY16 report. The fiduciary net position is 71.18% in FY21
compared to 72.69% in FY20 compared to 73.60% in FY19 compared to 91.68%
in FY18 compared to 88.29% for FY17 compared to 92. 72% in FY 16 of total
pension liability. The percentage is up slightly from the 90.48% for FY15. Page
73
121. Town contributions to the MERS was 16.70% of the covered payroll in
FY21 compared to 15.55% of the covered payroll in FY20 compared to. 13.26%
of the covered payroll in FY19, compared to 13.21% in FY18, 14.91% in FY17
. and 13.51% in FY16. Page 79
122. Although the town pays nothing to finance the Teacher’s Retirement
System, the System fiduciary net position is only 49.24% in F Y21 compared to
52.00% in FY20 down from 57.69% in FY19 up from 55.93% in FY18 up from
Page 1 3

52.26% in FY17 down from 59.50% of the total pension liability in FY16
compared to 61.51% of the total pension liability in FY15. Page 80.
123. Note that Net OPEB liability is 52.39% of covered payroll of $31,862,190
in FY21 compared to 55.64% of covered payroll of $31,077,578 in FY20
compared to 61.08% of covered payroll of $30,290,037 in FY19 compared to
68.09% of covered payroll of $30,429,413 in FY18 compared t¢ to 73.05% of
covered payroll of $29,615,001 for FY17. Page 81
124. Note that for FY21 the Actuarially Determined Contribution was
$2,139,712 but the actual contribution was $1,445,778 leaving a deficiency of
$693,934. In FY20 the Actuarially determined contribution was $2,127,089 but
the actual contribution was $1,614,570 leaving a deficiency of $512,519
compared to FY19 when the Actuarially determined contribution was $2,482,200
but the actual contribution was $1,871,349 leaving a deficiency of $610,855
compared to FY18 where the Actuarially determined contribution was $2,474,700
but the actual contribution was only $1,906,707, leaving a deficiency of $567,993
compare to the FY17 actual contribution of $3,811, 946 which was a contribution
Excess of $1,204,946. Page 82
125. Investment return of 26.18% in FY21 is a significant increase from the
5.44% in FY20 is down from the 6.44% investment return in FY19 was better
than the 4.13% in FY18 was better than the 2.069% rate of return in FY17. Page
83
126. Note information of Teacher’s Retirement System OPEB share for Town
that is paid by the State on Page 84 (Same as on page 64)
127. Unlike previous audit reports prior to FY18, there is no General Fund
Balance Sheet that generally appeared before the Schedule of Expenditures and
Encumbrances on page 85. The balance sheet is actually on Page 15. This
appears to be a difference in audit methods between auditors. Note the balance
sheet General Fund total of $36,717,537 in FY21 up from $29,316,688 in FY20
up from $26,602,213 in FY19 is up from $26,124,036 in FY18 up from
$22,084,471 in FY17 which is a decrease from $26,083,818 in FY16 which is an
increase from the $22,097,428 balance in FY15. Page 15
128. Note the Unexpended balance of $1,123,093 in FY21 compared to
$332,426 in FY20 compared to $50,099 in FY19 compared to $114,988 in FY18
compared to $57,659 in FY17 compared to $44,165 for FY16 compared to the
unexpended balance of $26,084 for FY15: Page85
129. . Uncollected taxes for FY2021 are $423,052 (Grand List of 2019)
Uncollected taxes for FY2020 were $525,600 (Grand List of 2018). Uncollected
taxes for FY2019 were $527,459 (Grand list of 2017). Uncollected taxes for
FY2018 were $611,084 (Grand List of 2016). Uncollected taxes for FY2017
~ were $606,243 (Grand list of 2015). Uncollected taxes for FY2016 were
$629,715 (Grand list of 2014). Uncollected taxes for FY2015 (Grand list of
2013) were $613. Total uncollected taxes at end of FY21 were $1,063,782 down
from FY20 total of $1,207,391, up slightly from FY19 total of $1,180,222 which
were down from FY 18 total uncollected taxes of $1,587,257 down from FY17
uncollected taxes of $1,665,965 down from FY16 when total was $1,787,537, up
from FY15 when the total was $1,563,749. It is gratifying to note the success in
Page 1 4.

collecting the back taxes. There does not appear to be any impact of COVID-19
on the collection of Taxes in Waterford. Page 86
130. Utility Commission has about $25,838 of uncollected assessments in
FY21, down from the $31,662 of uncollected assessments in FY20, down from
$54,548 of uncollected assessments in FY19 down from $71,652 of uncollected
assessments at end of FY2018 compared to $94,429 of uncollected assessments at
end of FY2017 compared to $133,589 of uncollected assessments at end of FY16
compared to $13,421 at end of FY15. Pages 87-88. Sewer assessments seem to
be most delinquent. It is obvious that the collection efforts of the Utility
Commission, assisted by the Town Attorney, have been successful.
131. The unnumbered pages between pages 88 and 89 explain all of the Special
. Revenue Funds. These funds account for grants received by the town. Most of
the grants were for Board of Education, Youth & Family Services, Senior
Services, Planning, and Police.
132. . Under the Capital Project Funds it would be clearer if the Fleet
Management Fund Funding Source included an annual input from the Capital
Improvement Fund. Same comment as in FY2020 review.
133. Water Fund had a balance of $632,093 in FY21 up from $622,193 in
FY20 up from $617,287 i in FY19 up from $604,153 in FY18 up from $578,846 in
FY17 up from $554,977 in FY16, an increase from $544,450 at end of FY15.
Page 93.
134, The following grants had no expenditures in FY21 — Y