Some Budget Excess Still Hangs Over The Council’s Tightened Belt

By Steve Bigham

One week after being handed a proposed $72.4 million budget, reflecting an eight percent increase in spending, the Legislative Council is now trying to come to terms with how the town is going to afford it. At the moment, the council is looking at what will likely be a tax rate increase of 2.4 mills, but that figure could still go up or down, depending on how things play out in the coming weeks.

To date, the budget on the table does not include $700,000 in capital improvement requests from the Board of Education (including NHS athletic field expansion and improvements, and the purchase of modular classrooms at Sandy Hook). Last week, the school board cut an additional $200,000 out of its budget proposal following a request from the council’s finance committee, which had actually asked for a $400,000 reduction.

Earlier this year, the finance committee established a 7.5 percent guideline for increases in the 2000-2001 budgets for both the Board of Selectmen and Board of Education. The finance committee was trying to avoid large increases in operating expenses given that the town was already anticipating $1.1 million in debt service payments in the budget for the construction of a 5/6 school and the purchase of Fairfield Hills.

The town did get a bit of good news last week when Finance Director Ben Spragg announced he had reworked the town’s borrowing figures, based on lower interest rates, and found that he could reduce debt service projections by $341,000. As it now stands, the extra savings drops the projected tax rate increase from 2.6 to 2.4 mills. It may, school supporters hope, help allow the school board to retain the $200,000 in budget requests that are currently above the 7.5 percent guideline.

But there are no guarantees.

“I would like to try to bring the budget within those guidelines. I’m not willing to accept exceeding them,” noted Council Chairman Pierre Rochman, who went out of his way to say he does not speak for the entire council.

John Kortze, who chairs the council’s finance committee, said he also stands behind the 7.5 percent guideline his committee set.

“The finance committee recommended that the Board of Education get its school – with the debt service absorbed in the selectmen’s budget – and everything else that they need stays within the 7.5 percent guideline. As it stands right now, they are asking for 8.5 percent,” Mr Kortze said.

Still twisting in the wind is the $700,000 worth of school board capital items. Superintendent of Schools John R. Reed, Board of Education Chairman Elaine McClure, and other school supporters are expected to lobby for that money when they go before the council next week. Should that money end up being bonded over 20 years, it would cost the town an additional $70,000 this year.

Board of Education members this week said they did not feel it would be “prudent” to cut other things in the operating budget in order to fit in the capital items. Dr Reed agrees.

“To go into our budget to find $600,000 [for athletic field improvements], the things you would have to cut out would be of such significant value that you would be robbing Peter to pay Paul,” he said.

“The board is not allowed to have a savings account or surplus account that accumulates over time,” he noted, adding that the school board needs the help and cooperation of the council to handle these kinds of expenses. “We all understand it’s a difficult year.”

 

‘Slippery’ Figures?

This week, Mr Rochman expressed displeasure over the fact that a $1.2 million expense for a new communications system was being funded outside the selectmen’s operating budget as part of the town’s capital borrowing. He called some of the selectmen’s budget figures “slippery” and said the budget is not “what it appears to be.”

“It’s improper to present a budget that has some big items taken out,” Mr Rochman said. “If you put that $1.2 million for communications into the operating budget, then the selectmen’s budget would also exceed 7.5 percent.”

Mr Rochman said he simply planned to bring this fact up at the council’s meeting Wednesday night.

“When we’re talking about percentages, we need to consider that $1.2 million has been taken out of it. In all fairness, the increase in the [selectmen’s] budget is substantially more than 3.8 percent. The budget is going up more than the numbers indicate. And I want the voters to know that,” he said.

First Selectmen Herb Rosenthal this week said Mr Rochman’s assertions are a low blow.

“We have never put one-time expenditures of that magnitude in the budget,” he said Wednesday. “I felt it was more prudent and honest to bring this to everybody’s attention now. We don’t have hard figures on how much it is so I did not want to give a broad figure. The selectmen could have gone for a special appropriation sometime between now and the end of the next fiscal year, but [the finance committee] did not object to this when I brought it to their attention.”

As for the communications systems bringing the selectmen’s budget over the 7.5 percent threshold, Mr Rosenthal said the claim was nonsense.

“We would have never requested it in that fashion. We never would request something of that magnitude in one year,” he said.

Mr Kortze said the finance committee had not yet taken a position on the issue of borrowing for the new communications system. But he suggested that this may not be the year for extra capital borrowing requests on top of the 5/6 school and Fairfield Hills. He took note of the school board’s $700,000 borrowing request.

“In a year with $43 million to be borrowed, I think it is certainly well within the council’s right to say ‘that’s it on capital projects this year.’ I am not refuting the need, but I think you’ve got to draw the line. Some things have to wait,” Mr Kortze said.

As for the $341,000 in debt service savings accounted for by Finance Director Ben Spragg, Mr Kortze believes the town should “bank it.”

“I would rather sit on it right now,” he said.

The question on everyone’s mind is, will the taxpayers approve a budget that bumps the mill rate up by some 2.5 mills?

“I think the public will go for it if and only if the selectmen, Legislative Council, and Board of Education are in full agreement that it is important to pass this budget,” Mr Rochman said. “If there is dissention, then it will be a toss-up. If there is solid agreement, then I think there is a good chance.”

In order to gain the approval of the public, Mr Kortze believes everyone must stay within the 7.5 percent guideline. “I think if everybody holds to that rule, I think given what we’re getting, it makes it more palatable,” he said. “If that were to happen, that would mean the Board of Education and Herb will have to make some choices.”