Fairfield's cumulative surplus fund increased more than $2 million at the end of the 2009-10 fiscal year, thanks mostly to savings by municipal departments, according to partial audit details released Monday by First Selectman Kenneth Flatto and Fiscal Officer Paul Hiller.

The complete annual audit on the town's finances will be presented to the Board of Finance at its Jan. 4 meeting.

"We're really pleased," Flatto said. "These last two years financially have been two of the most challenging."

The undesignated fund balance in Fairfield's budget totaled $12.286 million as of last June 30, compared to $10.263 million the previous fiscal year. There is another $1.076 million unspent, but that has been encumbered for expenses not yet paid, mostly on the Board of Education side of the fiscal ledger.

"We achieved one of the best surpluses, and one of the highest surpluses to my knowledge in the Fairfield County area," the first selectman said, "and possibly in the state."

Hiller, however, said the town has been "under scrutiny" by some of the rating agencies in regard to its surplus balance, which is now about 4.8 percent of its overall budget when the $1.076 million in encumbered funds is not included. With the encumbered funds, the balance is $13.362 million, or about 5 percent of the budget total. Hiller said the town's goal is to have between 5 to 8 percent of its budget as its surplus fund balance.

"It's roughly a 20 percent increase" from the last fiscal year, he said, "probably the largest increase, as a percentage, in this town."

Revenues grew slightly and accounted for about $600,000 of the increase, according to Flatto and Hiller, with the bulk coming from savings in the operating budget.

For example, Flatto said, four positions were left unfilled in the Department of Public Works, while at the libraries, hours were cut. "There's no one thing you can point to," Hiller said. "It was a little bit here, a little bit there. We didn't expand services and we cut back in a few areas."

By and large, both officials said, the town was still able to provide almost the same level of services before the cuts were imposed.

"I would say about one-third of the expense savings was for position vacancies," Flatto said, adding that a $250,000 reimbursement from FEMA for the damage caused by March storms also helped to offset expenses. "It was a lot of small things that department managers did to try and make sure they didn't go over budget."

Also, for the last two years, the Board of Finance did not use any of the surplus fund to help finance the annual budget as a way to offset the amount needed to be raised by taxes.