The town has $123,000 in surplus at the closing of the 2008-2009 fiscal year, as a $500,000 shortfall in revenues was more than matched by a $623,000 shortfall in expenses. The extra $123,000 was added to the town’s fund balance, which currently stands at $10.1 million.

In order to close out the 2008-2009 fiscal year budget, the Board of Finance voted Aug. 19 to approve a transfer of $1.69 million from under-expenditures to cover all over-expenditures, which led to the $123,000 total surplus.

In reviewing the over-expenditures, board member Richard Monico, a Republican, aired concern that $180,207 was being transferred to cover extra expenses over the 2008-2009 fiscal year budget for legal fees. The legal budget required $167,744 extra for legal fees related to judgments and claims, as well as $12,462 extra for the collection of back taxes.

Looking over a list of town legal bills from the 2008-2009 fiscal year, Monico worried that North Haven employed an unusual amount of law firms. “There are 10 to 11 law firms working for the town,” he said. Monico also believed that several law firms were attending the same town meetings, resulting in multiple bills, while other firms were performing work he thought could be done “on retainer.”

Board member and First Selectman Janet McCarty said that the number of law firms was increased by insurance companies employed by North Haven and by specialty work. “Four were hired by insurance companies,” she said of the law firms. “Another was for labor experiences, another for constitutional law.”

McCarty added that the legal budget was also exceeded partially because of cases that began during the previous administration. “There were 47 cases transferred from the past administration to my own,” she said. “Some have been settled, some have not.”

“There are also payments for settlements – not just lawyers charged us $180,000,” McCarty added.

“There is no case that the town is pursuing because we want to spend the taxpayers’ money,” McCarty continued. “We are responding to what is happening legally. We are not spending more than we need to defend the town.”

Monico was also distressed that the town was charged by one law firm “to attend a seminar.” Monico later said that this firm was North Haven town attorney Parrett, Porto, Parese, and Colwell of Hamden.

When reached for comment, town attorney John Parese said that he had billed the town after attending a half day seminar on ethics, as part of his research on the matter. The mid-February seminar was held by the Connecticut Conference of Municipalities, Parese said, of which North Haven is a member. The seminar was free to members, the attorney added.

“It was at a time when the town’s ethics code was going under multiple revisions,” he said. “It was me getting a handle over the current issues and the law of ethics.”

Parese said that he attended the seminar after the draft of the code of ethics submitted by the town appointed proposal committee received “modest public comment.”

“I probably ended up saving some money for the town,” he said. “Instead of me having to do research – going through and reading all the literature and pouring through all the statutes – I saw two presenters. One was a state staff attorney from the board of ethics, and another was a private attorney who specialized in ethics.”

Parese said that he also learned how other towns resolve ethics issues, and that the seminar helped educate him for the large task of reshaping the code of ethics.

“It was the first time that the code of ethics was thoroughly reviewed and revised since it was put into place almost 40 years ago,” he said. “It was an important thing to know about.”

“It was a great opportunity to learn,” he added of the seminar.

Monico also worried that while most firms only billed the town “$150 per hour,” one firm charged North Haven “$300 an hour” for “what appears to be basic zoning work.” Monico later said that this firm was the Marcus Law Firm of North Branford.

When reached for comment, attorney Shelley Marcus of the Marcus Law Firm said that any $300 per hour bill from her office to North Haven was a mistake.

“The max amount I bill North Haven, as per agreement with the town, is $195 per hour,” Marcus said. “My normal hourly rate is $300 per hour – it is very possible that by mistake a bill went out with my usual billing rate. If that has happened, the town is due credit, which will happen immediately.”

Marcus added that North Haven utilizes her firm only when town council cannot legally perform their duties. “From time to time, my firm is called upon to represent the town when the town council has a conflict of interest or other issues,” she said.

Marcus believed that the erroneous $300 per hour bill originated from a case in which the North Haven Land Use Administrator had a question considering an upcoming planning and zoning meeting.

“Town counsel had a conflict of interest with this person who had the application, so we represented the town in the matter,” Marcus said.

The largest end-of-the-fiscal-year transfer was $445,079 to streets and roads. Board chairman Dean Volain, a Democrat, said that this was due to a winter which required extraordinary amounts of snow cleanup. “It was a rough winter,” the chairman said. “There were tons of plowing and tons of salt – it’s not complicated.”

Volain said that 87 line items came in under budget. A total of $84,958 was transferred from public libraries, $68,458 from treasurer finance, $55,243 from tax collector, $76,013 from community services, $72,201 from the personnel police expenses, and $170,705 from street lighting to cover shortfalls in other budget categories, such as legal expenses and streets and roads.

A portion of the savings from the 2008-2009 budget was also derived from spending less on electricity. “Electric was low,” Monico said. “I think we may have grabbed the wrong number somewhere.”

McCarty said that the $123,000 surplus had a lot to do with the hard work of the town’s department heads. Volain reiterated the first selectman. “We owe a lot to the department heads,” he said.

“We got through another year,” Volain added. “We held taxes down and we kept the fund balance where it should be. I’m happy with that.” The $10.1 million in the fund balance represents 7.7 percent of the annual town budget, within the acceptable range according to auditors.

Monico and several public speakers wondered if the $1.69 million transfer should be put to vote at a special town meeting. Volain responded that town meetings are only held to vote on additions to the budget. The chairman said that, according to the town attorney, since the transfer only moved around funds that already existed within the budget, no meeting was necessary.

Volain added that the transfers are simply an annual practice to balance the budget. “If you go back over the last 10 years, transfers occur every year,” he said. “There were years with millions of dollars in transfers. I don’t think that this is significant compared to previous years. This is not a large number.”

Speaker Debrah Ward-O’Brien, Chairman of the Republican Town Committee, worried that the fund balance would have been lower had the town not received a $4 million refund from the Connecticut Recourses Recovery Authority. The refund was negotiated by North Haven Town Hall.

Speaker Gary Amato, a member of the Democratic Town Committee, did not understand the concern demonstrated by Monico and several speakers. He stated that town had accumulated a surplus and that the fund balance would still be above “the 5 percent agreed upon in 2005” without the CRRA money. “The headline tomorrow should read ‘town fiscally sound’,” Amato said.

Monico also expressed concern that the projected tax collection rate was set too high at 98 percent for the 2009-2010 budget. He stated that the 98 percent was derived from the collection rates of previous years, and not “the first year of our new economy.”

Decreasing the expected collection rate would raise the town’s tax rate.

Volain concluded, “In difficult times, we should keep the tax rate low.”