Shelton finances in a 'sound position,' city officials say

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 finances are in a “favorable position,” with a replenished fund balance and stronger-than-anticipated early tax collection results, according to city Finance Director Paul Hiller.

Overall, the general fund — a point of concern last year when it sank to $84,068 — stands at $2,188,800. Hiller said the number has increased after a favorable fiscal year, when each department came in under budget, including the Board of Education, which returned $501,000 to the city’s general fund.

“We’re in a sound position,” Hiller said. “I know there was a point where the rating agencies had concerns about the low, or negative, balances that the city was carrying ... but the city has really turned a corner. I’m comfortable with where we are.”

“We’ve always been stable ... nothing has changed,” Mayor Mark Lauretti said in discussing the recently released city audit, completed by Prospect-based Clermont and Associates LLC, at the Board of Aldermen meeting on Jan. 7.

In putting the 2020-21 budget together, Lauretti set aside $1.6 million of the general fund just in case the city received lower-than-anticipated tax revenues resulting from the pandemic’s impact on the economy.

But Hiller said June collections actually came in at a higher percentage than the same time the previous year. Hiller would not comment on the January collections, with more than two weeks left for people to submit payment, but his belief is that that $1.6 million will never need to be removed from the fund.

“It’s a tribute to the Shelton taxpayers,” Hiller said.

Virtually all city departments underspent their budgets in 2019-20, according to Hiller, primarily because of shutdowns associated with the onset of the pandemic last March.

In 2019-20, the city also enjoyed $847,000 in savings from school transportation costs, Hiller said, but that number does not factor in depreciation on buses that the city has owned for some seven years.

The city-run Shelton Student Transportation Service handles the district’s student transportation as part of a court-negotiated settlement. The deal calls for the Board of Education to pay the city $3.15 million annually to be its bus operator.

According to the agreement, if transportation costs are more than $3.15 million, the city covers the extra amount. Conversely, if costs are less than $3.15 million, the extra money stays with the city.

Hiller said the school district also saved money on the deal in fuel costs, with buses not running after all schools closed in mid-March through the end of the school year.

“The city operating the buses has worked out very nicely for us,” Hiller said.

During the pandemic, Hiller said most municipalities have had to continue paying bus operators for full service, whether schools are open or not. Shelton, however, has avoided that cost by acting as the school district’s bus operator.

Lauretti said he expects more funds to come the city’s way as the Board of Education has initiated paperwork to obtain reimbursements from the state for school capital projects. The reimbursements, which will come from projects completed at Shelton High, Sunnyside and Elizabeth Shelton schools over the past few years, could total some $4 million.

While the projects were done at school buildings, the city covered the costs, said school Finance Director Rick Belden, so all reimbursements are paid to the city.