Shelton aldermen use surplus to cover budget overruns

Photo of Brian Gioiele
Exterior of Shelton City Hall, in Shelton, Conn. Jan. 11, 2021.

Exterior of Shelton City Hall, in Shelton, Conn. Jan. 11, 2021.

Ned Gerard / Hearst Connecticut Media

SHELTON — City officials dipped into the general fund surplus to cover $1.4 million in budget overages from the 2021-22 fiscal year.

The Board of Aldermen, at its meeting last week, approved use of the general fund surplus to cover the budget overages, which Mayor Mark Lauretti said were mainly due to unanticipated increases in health insurance costs.

The list of overages provided by the city’s Finance Department included areas from within the budget that could cover those additional costs.

“I felt it was appropriate to cover this in one lump sum,” Lauretti told the aldermen before they unanimously approved the use of the general fund surplus, which will stand at $5.2 million after the transfer.

Finance Director Paul Hiller said, even after use of the general fund surplus for these excess budget costs, “The city is in the strongest shape over the 10 years I’ve been here. Financially, the city is in healthy shape.”

Overall, there were more than 30 line items over budget for the 2021-22 fiscal year — the primary drivers being group health insurance ($675,716); police pension ($91,815); professional services ($50,000); and municipal gas ($47,297).

The city is self-insured, said Hiller, adding that the health insurance was tougher to track. He acknowledged that the city had more cases than expected that reached the $175,000 stop loss in claims.

Police pension cost jumps resulted from the recent settlement of the police contract. He said the retroactive costs from the settlement, along with pension payments related to private duty work, led to the budget overrun.

Hiller said under the present system, officers on private duty earn pension payment on that work.

The professional fee overruns were the result of legal fees, Hiller said, mainly from union negotiations, arbitration and mediations.

The Board of Education budget was also in the red by some $299,000. This, too, Lauretti said, was driven by unanticipated health insurance costs.

Lauretti said he chose to use the general fund surplus to cover these costs, but in the case of the Board of Education, he had another option to cover the overrun — student transportation.

Overall, the budget shows that two student transportation line items came in under budget — the daily student transportation line ($254,259) and athletic transportation ($44,801).

The city runs the Shelton Student Transportation Service, charging the Board of Education a flat fee of $3.15 million. The city is entering its fourth consecutive year handling student busing.