Clarifying Wilton's 'Surplus'

There has been lots of on Wilton Patch, so we’re going to try and clarify the matter.

The town had a FY 2011 surplus of $5.7 million dollars, but after $1.2 million after carry-forwards (budgeted expenditure which will be carried into 2012), the surplus is $4.5 million.

So where did that all come from?

“An estimated $2.1 million surplus was used to reduce 2012 tax levies (the bills that went out in July),” said Board of Finance member Lynne Vanderslice.

That leaves the remaining surplus available to apply to the 2013 budget at $2.4 million.

The bulk of favorable revenue—about $600k—came from collection of back taxes, interests, liens, permits and conveyance fees.

“But they are not projected to be favorable again at this point, because we have raised the [2012] budgets for those items,” said Vanderslice.  “Are they going to be favorable again in 2012? Most likely no. People hear ‘favorability’ and think it’s going to happen again, but that’s not usually the case,” she said.

The ’s (BoE) major surplus was $2 million in health benefits that went unclaimed. That means the BoE budgeted an amount of money to be used for education workers’ health benefits. However, not as many workers expensed medical bills as budget for (employees didn’t go to the doctor as much as in 2010, for example) which left the BoE budget with some money left over.

Yet in FY 2012, there have been double the amount of health claims than that of 2011 for the first five months. This means that for the first five months of FY 2012, the BoE is $500k over budget.

“We were favorable in 2011, but we may have some problems in 2012. Part of that surplus may just reverse itself,” said Vanderslice.

Some of the over budgeting happened because the town thought the health care dollar value would rise (Wilton is self-insured  and doesn’t pay a third party to cover its medical expenses), so they increased the health care portion of the budget by 15-percent; however, health care cost remained the same as in 2010, said Vanderslice. 

The also came out with favorable revenue of approx $900k. Half of this was because much of the budgeted workman’s compensation and employee benefit money was not claimed. The other half “was [because of] savings across the board in each department,” she said.

“For 2012 we have simple reserves in place, but it’s too early to tell how much we’re going to need” because it won’t be until the end of FY 2012 that the numbers will be known for sure, said Vanderslice.

And for more information on this subject, see the post that Board of Finance member Andy Pforzheimer recently left on Wilton Patch:

“The $5MM number simply reflects the delta between what was appropriated for the FY and what was spent as of June 30 (the end of the FY). Some of it is expenses that were pushed into the next year for various reasons, some of it is unaudited bookkeeping, and some of it is genuinely unspent for various reasons (didn't hire someone for an open slot, had more building permit revenue than expected, etc.) The biggest single item is the money allocated for medical that wasn't claimed; there is no way to know how many people will get sick, in advance. Already in this FY, however, we have $500,000 *more* claims than budgeted for, so it's really best to think of the medical plan budget as a continuum, and not as something that really "ends" on June 30 and can treated as a surplus.

When we get the final reporting, what is genuinely surplus –maybe $2MM? Maybe $2.8MM? –gets allocated to the General Fund and helps to keep taxes lower next year. It's not unusual for us to have 2-3% of the $105MM budget unspent at year end, nor should it be. If it were 5-6 percent or if we overspent the budget, that would be a problem.”