Money for settlement among transfers

NAUGATUCK — The Joint Boards of Finance and Mayor and Burgesses on Monday night approved over $900,000 in budget transfers, including moving funds to pay off a settlement with the state Department of Transportation.

As part of a series of transfers, officials moved $101,235 from the wastewater treatment plant’s collection system certificate of participation account to the settlement legal claims account to pay the settlement.

More than a decade ago the state received about a $450,000 grant to offset the cost of renovating the former Naugatuck train station on Water Street for the Naugatuck Historical Society museum. The federal government conducted an audit in 2017 that found the DOT was supposed to pay back about $200,000 of that grant, and it never did, officials previously said. The federal government sent the DOT a bill, which the state passed along to Naugatuck last summer.

The borough initially tried to fight the DOT on paying the money but ultimately decided to settle rather than try to take the matter to court. In order to file a lawsuit against the DOT, the borough would have had to get permission from the state first then argue its case in court.

“So we have a 50-50 chance of even being able to sue them, and then a 50-50 chance of winning. So the borough board felt it was not worth the effort and legal fees,” Mayor N. Warren “Pete” Hess said.

Hess said the $101,235 transferred was earmarked for bond payments on upgrades made to the incinerator at the wastewater treatment plant. The borough didn’t immediately begin making payments this fiscal year on the bond and had the money available to pay off the settlement, he said.

The joint boards also transferred $170,000 into the bond redemption account and $188,000 into the interest on bonds account from the treatment plant’s collection system certificate of participation account.

Controller Allyson Bruce said the money is being used to make payments on the bond for the incinerator upgrades. Although the money was always slated for that use, during a recent audit the borough was told it should have the money under a debt services bonding account rather than in the wastewater treatment plant’s account, she said.

The joint boards also transferred $215,000 from accounts payable and $233,188 from the lease payments account into the Munis project reserve account.

Hess said Munis is an upgraded and standardized accounting software that the state is recommending all municipalities begin using. The move requires computer upgrades, he said.

Bruce said officials don’t expect to use the money this fiscal year and it will be kept in a reserve account for when the project begins.