Town Ends Fiscal Year in the Black, Finance Seeks Reserve Fund Policy

After accounting for final transfers and appropriations of expenses and revenue, Southington is set to finish the 2011-12 fiscal year with a surplus of roughly $300,000.

The surplus isn’t enough to satisfy members of the Board of Finance, however, as they expressed concerns that the money being transferred into the town’s reserve fund was slightly less than desired and the lack of a policy or line item has left the amount to be designated to the reserves each year up to chance.

“In the two, almost three years that I’ve been doing this, in order to maintain our designated reserves, we always have had to cross our fingers and hope and pray for surplus,” said Chairman John Leary. “It’s that surplus allow us to remain where we are at, but we need to do more to engineer the process so we know we will have the ratio we want.”

The town currently operates with a designated reserve, or rainy day fund, that sits at just over $12 million.

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The fund has largely been built in recent years using surpluses from the town’s annual budget, but none of these surpluses were specifically budgeted for the rainy day fund, Leary said.

With finance members approving a zero-base budget for the first time as part of the 2012-13 budget, board member Wayne Stanforth said now is the time to move in creating a policy.

Stanforth and Leary each said they’d like to see a special line item in the annual designated to reserves. This line item would specifically be used to bolster the town’s rainy day fund and help strengthen the town’s reserve policies at the same time.

Garry Brumback said he would be in favor in the change to a full policy, rather than using the surplus.

“Right off the bat, we are (currently) challenged on the town side to make sure we didn’t use that contingency,” Brumback said. “That in essence is hanging over us the entire year, to make sure we don’t use all that has been budgeted.”

If the town is going to do this, however, finance members said Wednesday that they would like to see the Board of Education be involved in the process and provide a line item in their annual budget as well. Brumback said he would sit with School Superintendent Joseph V. Erardi Jr. and his staff to discuss the possibility.

“I believe this should be a partnership and if the Board of Education is going to be 65 percent of the budget, they should be budgeting 65 percent of the line item for the reserve,” Leary said.

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