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Berlin officials talk reserve issues


By Rachel Ravina, Staff Writer

(May 9, 2019) The Town of Berlin is focusing on rebuilding its depleted reserve funds following discussion at a work session last Monday evening.

As it stands, the reserves — or cash not earmarked for a specific use — would allow Berlin to operate for roughly four months should it find itself in extreme financial circumstances, said town Finance Director Natalie Saleh.

Whether that cushion is enough is a matter of opinion in the view of Councilman Dean Burrell, who acknowledged that some may think four months is substantial, while others could disagree.

“I don’t know how we got into this perception that the Town of Berlin is doing bad all of a sudden, that the Town of Berlin is going to go broke,” he said last Monday. “That the Town of Berlin is in these dire need of funds, because that’s not how I perceive it.”

Saleh said the reserve funds amounted to about $2.2 million, which Burrell said, in his opinion, is a good place to start.

“[It’s] a number that we can work with and grow from, but to say it that we are in these dire straits, that’s not the case at all,” Burrell said.

The town had a $8.392 million general fund balance in fiscal year 2016, according to budget reports. That balance has dwindled from roughly $7.1 million in fiscal year 2017 to $5.2 million in fiscal year 2018 to an estimated $3.7 million for fiscal year 2019.

Town Administrator Laura Allen said last Thursday that reserve funding was used for several capital projects, including the construction of the Berlin Police Department on Decatur Street in Berlin.

“Over time, the town has taken money from reserves for various capital projects, one of which was the police facility,” Allen said. “More recently, the town has taken money from reserves for operating expenses.”

In addition to capital projects, Allen said the reserve funding was also used for recurring expenditures, which require continuously withdrawing from a fund.

“Taking money out of reserves to pay for recurring expenses is really a slippery slope, because you’re just basically chewing up your savings and there’s no opportunity for it to be replenished,” she said.

Burrell said fixing the water and wastewater funds were top priorities.

“We have allowed those funds to pull this number (the general fund balance) down and it needs to stop, and the way it stops is increasing those fees, because those fees have been substandard for a few years now, and we’ve got to do that,” he said.

Additionally, Allen said she’s optimistic about Berlin’s future following the new policies discussed last Monday evening.

“Between that tax rate and the adjustment to the sewer fund, we should be in pretty good in shape,” Allen said.