 |
Ready or not, the new year has arrived! Once again, I wish you all a happy, healthy, and safe year. With this year come a lot of changes and challenges, including new leaders at the national level, an economy that continues to impact all, and increased requests for services provided to those in need. And, as with every new year, the beginning of budget season!
The challenges faced in this year’s budget are many. While two years ago many of you had increases in your tax bills due to your property being re-evaluated at a higher rate, the tax rate has remained the same for the past two years – no increase, and Town fees-for-service have not increased in most departments for many years. At the same time, costs have increased just as they have in your home. So, how were taxes not increased although spending did?
Just like in many of your homes, the Town has income (taxes, fees, grants, and state aid money), expenses, undesignated fund balance (savings), and bonds (loans). As loans are paid off, funds utilized for monthly payments are freed for savings or to pay additional expenses. In the Town’s case, as bonds were paid over the last two years, the funds used to pay the annual bill were then used to cover increased operating expenses. Additionally, funds were used from undesignated fund balance in 2007-08 and $600,000 is budgeted to be used in 2008-09. That’s the income side of the equation.
On the expense side, we scrutinized each department’s line item budget for the past five years and then cut (and in a few cases added) so that this year’s budget reflected actual expenditures for those years. Working closely with department heads, each department’s budget was carefully reviewed to differentiate between “need” and “want.” The “wants” were put on hold although each of them would have resulted in increased service of some type to residents. Department heads were then asked for additional decreases. And finally, all capital items (equipment replacement) were removed from the budget by the Board of Finance during final deliberations before presentation to the public.
What does this mean going forward into this year’s budget? Like all municipalities, we are going to have a tough time this year. On the income side, we cannot continue to take funds from undesignated fund balance – depleting our savings account could negatively impact our bond rating, resulting in higher interest rates when we next borrow money. Other reasons for not depleting the undesignated fund balance account include (1) sound financial management; and, (2) in case of emergency. We do not have any significant bonds being paid off this year nor do we anticipate a significant growth in the grand list. At the same time, given the state of the State’s finances, we are faced with a very real possibility of decreased funding from the State – whether that be in aid to Towns, State
funded grants, or educational funds. And with the current economic challenges, although we continue conversations with developers, we do not envision any major growth in that area in the immediate future. We continue to search and apply for all grants that fit applicable needs.
On the expense side, like yours, the Town’s expenses continue to increase. Our CFO, Maggie Cosgrove, is incredible at locking in good oil prices – she did not disappoint again this year. We’ve also joined an electricity consortium which locks in our electric rates for five years at a good price. Both the Town and the schools are working diligently to decrease utility expenses wherever possible – ranging from fixing Town Hall’s heating/cooling system to putting software on computers allowing them to “sleep” at night while still getting needed upgrades. Candace Maynard, an Eastern CT State University student, will be interning in the First Selectman’s office for this semester and working closely with Greg Plunkett, Facilities Director, to implement suggestions made last
year by the Energy & Fuel Conservation Committee, as well as to research and propose additional energy saving means and/or policies. The draft “Purchasing Policy” to be used by the Boards of Selectmen, Education, and Finance are done and, once approved, will help to consolidate purchases. We have consolidated copier services and are working on phones. Office supply purchases are being done through the State contract. And, we continue to look for ways to consolidate, share, and decrease expenses.
For many years in the past and completely last year, capital items and maintenance have been cut to decrease the budget. However, as outlined above, there is no longer any capital to cut and little maintenance funds. This is an issue that will require addressing in the near future as buildings are getting older and the fleet has aged in many cases beyond the vehicle’s life span, i.e. a 40-year old grader, 26-year-old fire truck, etc.
So, here’s the history in brief. In upcoming columns, we’ll be talking about other items that impact the budget. My goal is provide you with the best information possible so together we can address the needs of the Town. If you have questions or comments, please let me know or join us at next week’s coffee at 7:00 a.m. at Family Pizza. Parks & Recreation Director, Jason Cohen, will join us.
In conclusion for this week, please don’t forget that tax bills are due on January 1st. Supplemental Motor Vehicle taxes and the second half of Real Estate tax bills must be paid in full on or before February 2, 2009 to avoid interest charges. As you know, you will NOT receive a second real estate bill as they were sent with July’s bill – consolidation of the two bills was one of the cost cutting measures put into place this year. If you need a copy of your bill, please contact the Tax Office immediately at 537-7209.
Previous Selectman Notes can be viewed at
| |
