Date: Fri 22-Mar-1996

Publication: Bee

Author: KAAREN

Quick Words:

budget-hearing-council

Full Text:

Public Comment Sought On $50.3 Million Budget

B Y K AAREN V ALENTA

Newtown residents will have an opportunity to comment on the town's proposed

$50.3 million municipal/school budget for 1996-97 at public hearings next

week.

The hearings will be in the middle school auditorium at 8 pm next Tuesday,

March 26, and at 9 am on Saturday, March 30.

Last week the Legislative Council approved the proposed budget, which is the

first to top the $50 million mark in the town's history. It reflects an

overall 11.63 percent spending increase, mostly due to debt payments on

anticipated capital projects.

The council approved a $28,286,212 school budget, up 4.57 percent from the

current year but $250,000 less than the Board of Education had requested.

The town's proposed municipal budget of $22 million appears to be up more than

22 percent from the $18,044,497 in the current budget; that's mostly because

the council added the debt service costs for the proposed school projects

which haven't been voted upon by the town yet.

"We have a situation in which we know that capital projects may happen in

1996-97 and we have an opportunity to put them into our budget. This is a

financially prudent thing to do," said Joseph Mahoney, council president.

"In the past this hasn't happened," he said. "When capital projects were

approved at town meetings, the town has had to do short-term borrowing until

the next budget is approved."

The Operating Budget

The $22 million municipal budget proposed for 1996-97 includes an operating

budget of $14,173,898, up $839,975 this year. The operating budget includes

administration, public works, public safety, and a contingency account which

is used for unbudgeted expenditures such as additional snow removal during a

bad winter.

The budget increase includes $40,000 for a personnel director, $36,000 to

computerize town departments, and $130,000 for a fire truck tanker to haul

water to new housing areas where there aren't adequate sources of available

groundwater for fire fighting purposes. Municipal salaries also will increase

an average of three percent.

The town has a five-year road plan, which includes about $2 million a year in

road reconstruction projects. The council has begun to try to put this annual

expense into the operating budget rather than bonding it each year because

each $1 million of borrowed money costs the town $1.7 million when financed

over 20 years. This year the town put $1 million for road reconstruction into

the budget and bonded the other $1 million. For 1996-97, the council proposes

putting $1,350,000 into the budget, and bonding the remaining $650,000.

The school budget is up 4.57 percent primarily because of a projected 3.5

percent increase in student enrollment, plus salary increases, higher employee

benefit costs, increased transportation costs and general inflation.

Capital Reserve Fund

The town usually winds up with a surplus each year because it collects more in

taxes and other revenue than it spends. During the past decade this annual

audited surplus has ranged from $469,071 to nearly $2.3 million. Beginning two

years ago, the town decided to put some of this surplus into a reserve fund

for capital and nonrecurring projects, such as the one-time cost of connecting

public buildings to the town's new sewer system. The town put $900,000 of the

$1.5 million surplus into the reserve fund last year and put $600,000 back

into the budget to reduce taxes.

For the 1996-97 budget, the council wants to put $575,000 of the $2 million

audited surplus into the reserve fund to help pay for the cost of renovating

Town Hall South; the remaining $1,475,000 would be used to offset taxes next

year.

When the operating budget and the capital reserve fund are added together, the

proposed increase in the municipal budget for next year is 3.6 percent.

Debt Service

The remaining area of the municipal budget is debt service on both town and

school projects. This category would nearly double, topping $7 million, if

voters approve borrowing for the proposed high school and Hawley School

additions, a new roof for Head O'Meadow School and $650,000 in road

reconstruction. The debt service includes the already approved Booth Library

expansion but does not yet reflect the cost of the town's sewer project.

When debt service for the town and school projects is added to the municipal

budget, it totals $22,052,093, a 22.2 percent increase over the current

$18,044,497 budget.

The proposed school projects - $26.6 million for the high school, $3.9 million

for Hawley School and $630,000 for the Head O'Meadow roof - account for about

$3 million of the debt service. School officials have pointed out, however,

that the town will receive $1 million back from the state in school building

grant revenue, making the net cost to the town about $2 million. The high

school and Hawley School projects qualify for 40 percent state reimbursement

and the Head O'Meadow roof will be reimbursed 36.8 percent, if the projects

are done now.

A separate vote will be taken later on the proposed school projects. If they

are not approved, the debt service will be removed from the town budget.

The New Tax Rate

The tax rate, based on a total budget of $50,338,305, will be 25.6 mills.

To compute next year's taxes, property owners must know their new property

assessment, which was set in the town's recent property revaluation, and

multiply it by .0256.

Under the current tax rate of 32 mills, the owner of a house assessed at

$100,000 paid $3,200 in real estate property taxes this year. According to the

tax assessor, the average real property assessment increased by approximately

40 percent in the revaluation. Using this average, that house, now assessed at

$140,000, would have a tax bill of $3,584 next year ($140,000 x 25.6 mills), a

$384 increase.

Roughly 2.4 mills of the proposed 25.6 mill rate is due to the $3,492,623 in

additional debt service for the proposed capital projects. Without this

increase in the debt service, the tax bill for this $140,000 house would be

$3,248, a $48 increase.

Under the current budget, each mill of taxes equalled about $1 million in

spending. Since the revaluation, each mill equals about $1.45 million in

spending. If there had not been a revaluation, the proposed increase in the

debt service to pay for the new capital projects would have been nearly 3.5

mills.

During the budget deliberations, council members expressed support for the

capital projects and noted that the amount of debt service that must be paid

generally decreases each year over the life of a 20-year bond. The council

members also said this is the first time they can remember putting proposed

capital projects into the budget before they have been approved by the voters.

"The council has been attempting to get all of the capital projects

anticipated for the next year included at budget time so people can see what

the impact will be," said Melissa Pilchard, council vice chairman.

"There are people who vote for capital projects but who are not willing to

support the operating budget once the capital items are in the budget," she

said. "Perhaps they don't realize that voting for capital projects is a

commitment for 20 years, a commitment which shows up each year in the debt

service portion of the budget."

(Editor's note: Some numbers in this article are slightly different than those

which appeared in last week's Bee because adjustments were made in the total

budget after last week's meeting.)