Town Auditor: "Lots of Improvement" but Pension Fund Still a Dark Spot

The annual audit of the town's finances came back as "clean," but overshadowing everything is still the town's Pension Fund, which contains a fraction of what should be in it.

Auditor Scott Bassett with the New Haven firm McGladrey LLP recently gave the Legislative Council the annual report on the town's finances

There are "no material weaknesses," he said, noting that the town had made "significant progress" over the past several years in handling its finances.

A bright spot was the General Fund, which ended the year with a $1.2 million balance, an increase of $637,000 over last year, Bassett said.

The town has three things going for it, he said: expenses were held tight, the town earned a premium on its bond sale last year and taxes were collected at a very high rate.

And the town's self-insurance fund saw $1.5 million in revenue over expenditures, Bassett said.

But the pension fund contains only $58 million when it should total more than $400 million, he said, casting a dark shadow on the rest of the town's fiscal picture.

Overall the pension was funded at 25.1 percent, he said, but the town contribution was only 13.7 percent of the recommended contribution.

As he stated last year, the pension fund is still the town's top problem, Bassett said, but the town is taking steps to address it, including investigating the possibility of bonding in the area of $125 million to shore up the balance. While it wouldn't bring the fund to an optimal balance, it would improve the health of the fund, he said.

"These reports are always a learning session for me," Councilwoman Kath Schoemaker said, asking what are the appropriate ways to increase the fund balance. "I thought I heard getting a payout bond was not the appropriate way," she said, referring to the bond premium the town earned when it sold bonds last August.

"Revenues need to exceed expenditures," Bassett said.