The city of Shelton ended the 2012-13 fiscal year with a budget surplus of almost $7.5 million, according to a recent audit.
The city had been budgeted to spend $115.5 million during the year but actually spent only $109.4 million, a difference of $6.2 million.
The other $1.3 million that made up the surplus was due to higher revenues than anticipated. The city had revenues of $112.5 million compared to the projected $111.2 million.
Most of the increased revenue was due to higher than expected property tax income.
“Twenty-two balanced budgets, and 22 budget surpluses,” Mayor Mark Lauretti said in reaction to the audit. “It’s totally consistent with what we’ve been doing in Shelton.”
Lauretti has now been in office for 22 years, and was re-elected to his 12th two-year term last November.
He noted the surplus occurred at a time when property taxes have been going down slightly in Shelton.
Fiscal year 2012-13 went from July 1, 2012, to June 30, 2013. The annual audit was conducted by Levitsky & Berney PC of Woodbridge.
Factor in credit rating
Lauretti said credit rating agencies like municipalities to have healthy annual surpluses, and it’s a factor in how a town’s financial standing is determined when the bond rating — which sets the cost of borrowing money — is set.
He said he’s not necessarily a big fan of such large surpluses, but noted that most of the amount is used as a down payment on the following fiscal year’s budget or put into a rainy day fund for the future.
Shelton now has about $12 million in its rainy day fund, also known as the “undesignated fund balance.”
‘Guesstimate,’ dealing with unexpected
Lauretti said putting together a budget is a “guesstimate” because of all the uncertainties. “No one has a crystal ball,” he said.
A budget, he said, “must allow you to deal with incidents that occur which are out of the ordinary — like a blizzard that cost us $600,000.”
That was a reference to the huge snowstorm in early February 2013 that dropped two to three feet of snow in Shelton, requiring the use of many outside contractors to plow the city’s streets.
Critics have claimed it’s underspending
Various parts of city government spent less than allocated to create the surplus. This includes $1.9 million less for public works, $1.6 million less for general government, $1.3 million less for public safety, and $822,000 less for cultural and recreation programs.
The Board of Education came close to spending its $63.7-million budget, leaving a small surplus of $82,000.
Lauretti has been criticized by opponents at times for purposely underspending the budget, leaving positions unfilled and infrastructure in need to run up the surplus.
He dismissed the criticism. “To me, everything is based on need,” Lauretti said. “Sometimes we find ways to do things without spending money. We live within our means.”
He emphasized that the city is spending funds on many projects, such as road improvements, school security upgrades, new school buses, and open space purchases.