Berlin audit generally positive, but pension woes linger

Published on Thursday, 18 January 2018 22:24
Written by Charles Paullin


BERLIN - An auditor’s report shows the town on generally sound footing financially, but with a few areas of concern.

A representative of the auditing firm gave town officials her analysis at a recent special joint meeting of the Board of Finance and Town Council at the Berlin-Peck Memorial Library.

The town is getting healthier fiscally, said Katherine M. Patnaude of PKF O’Connor Davies - “$460,000 healthier and that’s good.”

That $460,000 surplus represents money from sources such as state aid, grants and taxes minus all expenditures, Finance Director Kevin Delaney said. It also means the town’s ability to cover future liabilities is now stronger, Delaney added.

One area of concern was the town’s pension liability, Patnaude said, with an estimated $9.1 million needed for employees on the town’s old pension plan that is no longer offered.

The town had the plan funded at $268,669 for the 2016-17 fiscal year, short nearly $8.9 million. It did move nearly $1.5 million into the plan for the current fiscal year, but $1.3 million was paid out to two employees, leaving the current balance at just over $400,000.

The 14 active employees on the plan are able to retire anytime and receive a lump sum or extended payments. Two former employees are still eligible to receive benefits, and 21 retirees receive monthly checks totaling $205,000 a year. Four active police officers are eligible for over $1 million in pension benefits.

“That should be something that should keep you up a little bit at night,” said Patnaude.

“It does,” responded Mayor Mark Kaczynski.

Following the audit meeting, the Board of Finance discussed adding $1.6 million every year for the next five years to adequately fund the plan.

In comparison to other Hartford County towns’ similar plans, excluding Hartford, Berlin’s pension plan funding level was the lowest.

One strength of the town’s finances was the $11 million of unassigned fund balance - cash reserves available for any use, anytime - that the town has.

Patnaude said a higher fund balance is good in case the underfunded pension plan needs immediate funds, the state decides to add to the town’s expenses or funds are needed for capital projects.

Having too much in reserve can make it appear as if a municipality is taxing its residents too much, though, but she said, “You’ve got to have some (fund balance) to be responsible.”

In comparison to 28 other municipalities in the county, excluding Hartford, Berlin was “about the same as everyone else,” said Patnaude of the portion of the unassigned fund balance the town uses.

Other positive she cited were the $2.6 million in last year’s budget the town didn’t spend; the town’s 99 percent tax collection rate, higher than the county and state averages; and fiscal management practices that set an example for other towns.

Other areas of concern were other post-employment benefits, potential teacher retirement funding needs, insurance coverage liabilities and $90 million in long-term debt, which is larger than the town’s $85.2 million current operating budget.

Charles Paullin can be reached at 860-801-5074 or

Posted in New Britain Herald, Berlin on Thursday, 18 January 2018 22:24. Updated: Thursday, 18 January 2018 22:27.