Budgets Plan Cut

By Steve Bigham

The finance committee of the Legislative Council Wednesday voted to recommend that $2.3 million be trimmed from the proposed 2000-2001 municipal budget. In addition, it managed to come up with an additional $900,000 in revenue. The move – the brainchild of committee chairman John Kortze – would reduce the proposed tax rate increase from 4.4 mills to 2.92 mills.

The big question still to be answered is: will Newtown residents approve a tax rate increase of that size? Committee member Melissa Pilchard doesn’t think so. She was the lone dissenting vote at Wednesday’s meeting. Mr Kortze, Brian White, Tim Holian and Donald Studley all voted in favor of the plan.

Mrs Pilchard said a taxpayer with a house valued at $300,000 is looking at $450 increase in taxes if the proposed budget passes.

“It’s about an 11 percent increase. And that’s a lot for one year, especially when you consider this is not just one shot. You’re looking at a big increase next year, too,” she said.

Fortunately, Mrs Pilchard said, Newtown had a $2 million surplus to use this year. Without that next year, we’re really in trouble. Also, she said, the council is presuming that next year’s grand list will grow at the same pace it has over the past 3 or 4 years.

Aggressive Borrowing Plan

The biggest savings under Mr Kortze’s scenario hinges on an aggressive borrowing plan to pay for $45 million in major capital projects ($30 million in first year, $15 million in the second year). The scheme would essentially double the debt of the town. However, by spreading the town’s bond issue out over three years, the council would be able to reduce this year’s massive debt service from $9.3 million to $8 million. This provides a reduction of $1.27 million or 0.75 mills in this year’s budget, but creates an increase in debt service of 1.1 mills next year, 1 mill the year after and .4 mills in the third year.

“The actual borrowing would take place over two years, but would impact the mill rate for three years,” Finance Director Ben Spragg said. “The way it’s proposed is good because there are no spikes in the mill rate. It remains fairly level over the three years. It’s a combination of bonding and bond anticipation notes.”

According to Mr Kortze, this plan provides the kind of flexibility that Mr Spragg felt the town needed to get through the town’s current situation. That situation involves several large projects that must be done within the next two years. The lengthy list of debt service items includes the proposed 5/6 school, Fairfield Hills purchase, Edmond Town Hall maintenance, ball fields, municipal space needs, and Hawleyville sewers.

The finance committee also recommended that $350,000 be cut out of the Parks & Recreation’s proposed operating budget for the development of two ball fields at the Amaral property along Elm Drive. Members felt the $2 million included in debt service would yield enough ball fields to get by. The committee kept $200,000 in the operating budget for use in the development of the Oak View Road soccer/lacrosse field.

“The Parks & Recreation is not losing the ability to fund the development of the Amaral property. It’s just that the funding source will be different,” First Selectman Herb Rosenthal said.

However, some finance committee members indicated their doubt that the Amaral property should be used for fields, especially such expensive ones. The town purchased the land for $400,000 and was asking for another $550,000. The high cost is due to the large wetland areas that have been discovered there.

“They’re forcing something that shouldn’t be a field into a field,” noted member Donald Studley.

After a lengthy discussion, the finance committee agreed to reduce the Board of Education’s self-funded insurance by $250,000. The council made the same move last year, then gave back $90,000 in state funding to offset the loss.

The finance committee also came up with another $250,000 in savings when it reduced the $1 million for Fairfield Hills maintenance to $750,000. If the town does purchase the 186-acre campus, the timeframe will be such that it won’t take over the campus until July 1. The state, according to Mr Kortze, would likely still be footing the bill for the first three months of the fiscal year.

Another $172,000 in savings was found when the finance committee agreed to recommend that a $352,000 revaluation project be paid out over two years.

Additional Revenue

Mr Kortze’s plan recommends that $700,000 be taken out of the town’s capital and non-recurring reserve account to further offset taxes. Mrs Pilchard argued against this plan, saying it is never good practice to use this money because it only digs a hole for the town the following year. But, as Mr Kortze pointed out, the fund is set up – in part – to help reduce taxes.

Also, the committee recommended that $200,000 in Local Capital Improvement Plan (LOCIP) money be used to offset current capital items, such as roads, graders and a Hook & Ladder truck.

The finance committee also managed to trim the Board of Education’s capital improvement plan down to $500,000. That money is expected to be paid for in the operating budget.