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Old Saybrook Projects Surplus

An unexpected spike in the town’s fee-based revenue has yielded a projected year-end surplus of nearly $700,000. Nearly $550,000 of that surplus is tied to fee-based revenue that was not anticipated during the town’s annual budget preparation process.

Town fiscal years run from July 1 to June 30, but bills for services performed during the fiscal year arrive in the two months after the year ends, so the town’s books on the prior fiscal year are rarely closed until at least the end of summer. That means the precise year-end numbers may not be known but the close-out estimates are usually pretty close to actual.

“The town had one of its best fiscal years in a generation,” said First Selectman Carl Fortuna, Jr. “A lot of the town’s fee revenues were larger than anticipated or budgeted.”

Fortuna said a major contributor to the town’s extra revenue last year were building fees paid by applicant Eastpointe for town reviews and approvals for the 186-unit Post & Main apartment development at 7 North Main Street. That project alone brought in more than $100,000 in fees to town coffers.

Overall the Building Department originally projected fee revenue of $250,000, but the actual amount appears to be $432,000.

“People are investing in their homes to renovate and add to them. And then there’s the North Main project,” explained Fortuna.

The Building Department wasn’t the only department to log higher than projected fee-based revenue.

At budget preparation time, the Parks & Recreation Department projected fee revenue totaling about $200,000; the actual number for the last fiscal year is about $266,000 in fees. Strong participation in Parks & Recreation programs, a successful mini-golf course season, and strong beach pass sales all contributed to the bump in the revenue.

The town clerk’s office also collects fees for recording land records, liens, documents, and providing other services. The original estimate was that fees charged by the Town Clerk’s office would bring in $350,000 in revenue; the actual is projected to be $466,000.

While the extra revenue from fees was the largest share of the town’s year-end surplus, some of the surplus also is tied to unspent funds returned to the general fund by town and school departments.

“The 2015-’16 budget was a one-percent increase in general government spending over the prior year and it still was underspent by about $100,000,” said Fortuna.

The unspent but budgeted funds from both the general government and the school district return to the town’s general fund.

“What this surplus helps us with is to bolster the general fund balance, our rainy-day fund. This balance has been increased over the past five years from around five percent of the total operating budget for the town and schools to today’s approximately 10 percent of the budget,” said Fortuna. “That 10 percent is important and a number that the credit rating agencies look for when you go to bond or refinance your municipal debt. And it’s in stark contrast to what’s going on in state government.”