Comprehensive Financial Report on Greenwich, Connecticut

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Greenwich, CT
A Comprehensive Annual Financial Report, CAFR, is a presentation, in the prescribed manner, of all the financial statements of a municipality (city or town), state, or any other government reporting entity in the USA. This report, prepared at the end of a fiscal year, is divided into three main sections thus; Introduction, Financial, and Statistical sections. The introductory section includes, but is not limited to the Letter of transmittal, and a highlight of the financial statements. The Financial section presents the reporting entity’s financial statements, their supplementary information, and schedules to the financial statements, whereas the Statistical section contains the demographics (number of employees, population, etc.), and financial ratios, among other vital information. From its latest CAFR, for the year ended 30 June 2020, we shall evaluate the Town of Greenwich’s Statement of Net Position, and General Fund’s Balance Sheet, and Statement of Revenues, Expenditures, and Changes in Fund Balances, to discuss its economic condition, comparison to budget, revenue sources, debt capacity, and pension obligation. We shall further review White Plains’ CAFR and make comparisons with Greenwich’s CAFR.
PROFILE OF THE TOWN
The town of Greenwich is located in the state of Connecticut, USA. Settled in 1640, the town is governed by its charter in addition to the State of Connecticut laws. With a population estimate of 62,840 according to the latest census (2019), the town covers an area of 50.6 square miles. The town’s financial affairs are administered by the Board of Estimates and Taxation, BET, whose membership is twelve (12). The Town of Greenwich, herein referred to as the Town, is responsible for the general administration of the town of Greenwich, provision of health services, education and library services, zoning and planning of the town, provision, and maintenance of recreational facilities, public libraries, and building and maintenance of public infrastructure (Greenwich, Connecticut ii). The Town’s government activities are financed by federal and state funds, taxes charged on property, and service charges.
Economic conditions. Out of its total revenue, property taxes accounted for 76.7%. The tax base is mainly residential property. The property taxes did not contract even during the period of the COVID-19 pandemic economic downturn. The Town has noted that these taxes are not mostly affected by volatile economic conditions, and whereas other sources of revenue like sales and income taxes contract during downturns, property taxes are not affected. Economic conditions influence most of the revenue from taxes (Granof et al. 104). Subsequently, they have an impressive collection rate of above 99% on these taxes. This revenue type is said to experience slow growth in stable economic times but also remains resilient during economic hardships, unlike the other revenue sources that contract during such times. This can be confirmed by the fact that after the expiry of the Executive Order on tax deferment issued by the State, the rate of collections was similar in comparison to the previous year. However, there are uncertainties regarding the delinquencies in the future especially given the prevailing Covid-19 pandemic.
The town has the highest assessed values of taxable property in the state. For the year ended June 30, 2019, the unemployment rate was 3.3%, compared to 7.8% for the year ended June 30, 2020. This signifies that the township is in a better economic condition compared to the rest statewide unemployment rate of 3.7%, and 10.1%, for 2019 and 2020, respectively. The Town has a stable higher per capita income (at $98,467 for the current year 2020), compared to other communities within the State. It has high property values as evidenced by the Grand List, a list of the Town’s property values, and against which property taxes are billed, which has remained the highest in the State at $33.1 billion as of October 1, 2018, which was an improvement of $201 million of the previous list. The Nathaniel Witherell Nursing Home improved its revenues to $17.1 million and has earned a slot in the Government Fund. The Town, through the BET, has a long-term plan on capital projects. The project estimates of the plan are projections by departments, included in the budget for 2019-2020. This fifteen-year capital projects plan has a cost estimation of $1.58 billion for 2019-2020, whereas the projected cost for 2020-2021 is $1.66 billion.
Comparison to Budget. The BET, through its budgeting committee and in collaboration with the Representative Town Meeting, RTM, is in charge of the approval of budget appropriation requests received from the various agencies of the Town, as the Town’s financial planning and control are premised on the annual budget, which is effective from July 1. The BET budget committee has a leeway to approve interim appropriation budgets of up to $5,000, whereas heads of departments can make requests for inter-departmental transfers of appropriations of amounts up to $5,000. The State’s budget constraints have not directly affected the Town’s budget, since the Town mainly relies on taxes to run its affairs. Items on the revenue side of the budgeted General Fund account that had positive variances (increased in the actual amounts) are; Taxes and special assessments ($1.8 million), use of money and property ($1.2 million), intergovernmental revenues ($4.1 million), and other revenues ($551,381). Those that had a negative variance (decreased in the actual amounts) are; licenses and permits ($434,963), fines, forfeitures and penalties ($442,108), and current service charges ($918,186).
All of the expenditure items had a positive variance (the actual amounts were less than the budgeted amounts) of a total of $17.3 million. The actual amounts for Use of unrestricted fund balance and transfers in, as items under the other financing sources, were $15.278 million and $3.372 million, respectively. The budgeted amounts were $15.278 and $9.125 million respectively. The budgeted and actual amounts remained the same for premium on bonds and transfers out. Overall, the budgetary account had a net increase balance of $2.333 million. The Sewer Improvement Fund had a negative variance of $23,823 on its actual revenues against the budgeted, signifying a lower revenue amount realized. Its actual expenditures against the budget had a positive variance of $7.34 million, meaning the actual amounts spent were lower than the budgeted. Its other financing sources had a negative variance of $ 7.264 million, mainly due to the failure to issue the bond of $7.25 million. The overall net change in its balance was $ 52,700. The Nathaniel Witherell Revolving Fund had a negative net change in its balance of $ 3.8 million.
Revenue Sources. The Town draws almost all of its revenues from taxes and other levies & charges (own-source) and does not rely so much on State Aid, partly because of the little amounts it was receiving from the State. For this reason, it has adjusted its budget accordingly to accommodate the deficit occasioned by the State Aid trimming. It has several revenue sources from which it draws its funds, and despite the impacts of the Covid-19 pandemic, like a spike in the rate of unemployment, the Town registered surpluses in its budget. A bigger size of the revenue is...