Shelton's Financial Future Not That Positive

I had the pleasure of reading this yesterday, originally writen by the democratic Mayoral candidate here in Shelton, Chris Jones. And as a parent, tax payer, and citizen in the city, with permission from Chris, I wanted to re-post this so all of our residents could really see the truth when it comes to Shelton's financial future.

Written by Chris Jones
Friday, 21 October 2011 09:30

Editor's Note: The following a guest column by Mayoral candidate Chris Jones.

After filing a Freedom of Information requests for the city of Shelton's Official Bond Statement and the Comprehensive Annual Financial Report, I have learned that the City's financial future isn't as positive as Mark Lauretti claims it to be.

The Lauretti Spin: Shelton's financial future is sound.

The truth: After reading the official bond statement section "Ratings " ( pg.2 ) I was taken back by what I read. In the first paragraph, it states, "The Bonds have been rated Aa2 by Moody's Investors Service and AA by Standard and Poor's Corp ("S&P"). The next line then states that both agencies have given Shelton a negative outlook.

In order for me to find the reasons why they gave Shelton such bad outlook, I had to contact the rating agencies via phone and e-mail.

I was mailed a copy of the rating and quite surprised when I started reading the opinion section. In the first paragraph it states that " Moody's has affirmed the Aa2 rating on the city's $93 million of outstanding long term debit and assigned a negative outlook."

The assignment negative outlook reflects their view that further weakening of the Workers' Compensation Fund will adversely impact the General Fund, reducing the city's financial flexibility to levels no longer consistent with the current rating category.

It continues to state that Shelton's General fund balance continues to weaken due to a growing illiquid receivable due from it's Workers' Compensation Fund, which maintains a NEGATIVE $4.9 million net asset position. The General Fund has been subsidizing the Workers' Compensation Fund and was owed $2.9 million at the end of fiscal 2010.

After reading the Official Statement I figured I better look into the Shelton's Annual Financial Report for more information about the Workers' Comp Fund. I found on page 37, the section that reflects what I was looking for. The Risk Management and Self-Insurance section provided me with the following info: The City of Shelton is exposed to various risks of loss, including torts, theft of, damage to, and destruction of assets; error and omissions; injuries to employees; employee health and natural disasters. The City generally obtains commercial insurance for these risks, but has chosen to retain the risks for workers' comp, including heart and hypertension, and physical damage of the City's vehicles.

At this rate, our bond rating is going to be lowered, which means that the City of Shelton taxpayers will be paying a lot more for borrowing. And Mark Lauretti loves to bond everything. My calculations are that our outstanding debit is $93 million and the Shelton High renovation and the new Perry Hill School aren't included in this total yet. When those two projects come on board, we will be up to about $135 million bonded, $25 million more than our $110 million annual budget.

As evident in the recent years Mark Lauretti's solution to the city's financial problems is to continue to borrow irresponsibly and to ignore the $4.9 million deficit for the Workmens' Comp Fund.

In the Jones administration, I will set aside money in the General Fund to pay for such things as new police cars, fire trucks and maintenance equipment so we will save YOU, the taxpayer unnecessary interest expense. I will also look into a commercial insurance carrier and prudently reduce the shortfall in the Workmans' Comp Fund. My administration will regain Shelton's high bond rating lost by Mark Lauretti!

Ladies and Gentlemen of Shelton, I have been doing my homework the last two years and will only provide you with factional information, that has been researched and studied from state & city documents. If you have any input or questions of me, please contact me at chris_jones85@hotmail.com