A more than $1 million surplus has been confirmed by town auditors for the last fiscal year.
The town and schools show a surplus of $1,155,390 for the $133-million 2014-15 budget, consisting of two basic parts:
• $81,843 in taxes, fees and other income collected above the budget’s revenue projection.
• $1,073,547 that was allocated but not spent by various town departments — including $342,070 returned by the schools.
“That’s good,” said Finance Board Chairman Dave Ulmer.
“More money coming in, and less money going out,” agreed board member Marty Heiser.
The finance board discussed the surplus Tuesday, Dec. 15, when a draft audit report was presented by Vanessa Rossito of BlumShapiro, the town’s auditing firm.
The finance board looked at the surplus as an addition to the town’s roughly $13-million fund balance — a kind of ongoing surplus that the town carries from year to year, something like a savings account or rainy day fund.
At the end of the fiscal year on June 30, the town showed an “unassigned” fund balance of $13,270,579, according to the audit — nearly 10% of the total budget.
The finance board has a policy guideline that says it will try to keep the fund balance at 8%-9% of the annual budget. So with the fund balance above that, the finance board will be in a position to use some of it to hold down taxes in next year’s budget.
In its annual budget-making, the finance board is usually looking for ways to keep the level of taxes down. If there’s a healthy fund balance, the board can dip in and designate a portion of it to be used as non-tax revenue in the coming year. This “use of fund balance” can balance the budget without either raising taxes more or making bigger cuts to the budget’s proposed spending.
So most years, the finance board does budget for the use of some fund baIance as revenue. If in the course of the year other revenues come in higher than projected — back tax collections go well, or fees from real estate transactions collected by the town clerk’s office are unexpectedly strong — the town may not have to use some or all of the fund balance designed as non-tax revenue in the budget. That amount is then returned to the fund balance at the end of the fiscal year.
That was the case in the last fiscal year, 2014-15, when the amount from fund balance budgeted for use as revenue was $900,000.
First Selectman Rudy Marconi said the auditors’ report shows the town’s fiscal strength.
“I think the general overview is that the 2015 fiscal year was a good year for the town of Ridgefield,” he said. “We did not need to use any money out of the fund balance (savings account) and we were yet still able to deliver the services, which is something we try and do every year.”
In theory that $900,000 not used from fund balance could be thought of as adding to 2014-15’s $1.1 million surplus — pushing it to $2 million.
“We did not have to use the $900K earmarked as revenues from the General Fund.
So the net surplus was about $2 million,” finance board chairman Dave Ulmer explained in an email.
The roughly $13-million “unassigned” fund balance is considered the most meaningful fund balance number, as it represents money the town has no plans to spend.
The 2014-15 Comprehensive Annual Finance Report also showed a larger “total fund balance” figure of $16,499,503 at the end June, but that number includes $3,228,924 that had been assigned for spending and was sitting there waiting to be spent. That falls in two categories. Board of Education “encumbrances” — money committed to be spent, but payments haven’t gone out — account for $1,378,924.
And there’s $1,850,000 out of the fund balance that the finance board has set aside for use as non-tax revenue, if needed, in the current fiscal year’s 2015-16 budget. The finance board won’t know until the end of the fiscal year in June whether that money will have to be used.
If the budget unfolds as planned, that money will be used. If revenues again come in higher than projected, or spending is lower than budgeted, some of that money may not be used and will be considered part of the next year’s “unassigned fund balance” or multi-year savings.
Last spring at the time of the budget vote, Ridgefield’s fund balance was 8.6% of its annual budget, placing it ninth among 11 nearby towns — which ranged from Fairfield’s 7.2% to Weston’s 15.4%.
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