This is a printer-friendly version of an article from Zip06.com.
05/10/2017 09:42 AMWith a plan to divert about $1.3 million toward paying down town debt should the proposed state Teachers' Pension Fund costs fail to impact Branford as anticipated, and about $1.11 million more built in for contingencies, Branford took another step toward approving a $111.8 million 2017-18 budget last night.
The final step takes place May 22 when the Board of Finance (BOF) reconvenes to set the new mill rate, currently proposed at 28.87 mills, which equals about a five percent annual property tax increase.
As First Selectman James B. Cosgrove reminded the RTM last night, the BOF still has some flexibility in determining the mill rate; so the budget – and the new tax rate – is not final until that vote.
"This body dealt with expenditures. We know that the Board of Finance dealt with the revenues," said Cosgrove. "I believe, when the Board of Finance budget hearings ended [in March], the Finance Director used the analogy that this is a relay race, and the baton was being passed to this body. Well, tonight, the baton is being passed to the Board of Finance; and they will then have the opportunity to review and possibly adjust the revenue end of the budget to ultimately mitigate some of this tax impact. I think it's important for the public to know that."
As it stands, cuts approved by the Representative Town Meeting (RTM) last night adjusted the proposed mill rate increase down by .05 percent from what the BOF had originally recommended in March. By a vote of 22 – 6, the RTM approved a $111,812,975 town budget; a savings of $162,941 from BOF-recommended figure of $112,424,671.
By town expenditure standards, the budget provides for necessary expenditures in operating costs and capital and lease costs. More than half of the proposed five percent tax increase will cover state cuts and costs.
Following the 22-6 RTM vote on May 9, Cosgrove thanked the representatives for passing what he termed a "very difficult budget."
"I know it was a very difficult budget to approve, because we all focus on the bottom line impact it's going to have to the tax payers," said Cosgrove. "I think it was recognized [that] it was a lean budget...this budget does maintain the level of service that we have been providing, continues to invest in our infrastructure and fully funds our future liabilities. What's driving this impact is the state; the change in the policies that are coming down from the state level. And we took a position to prepare ourselves for that impact that may ultimately come."
The most impactful, and as yet still unknown, state expense built into the budget by the BOF was a $2,747,784 line item in Teacher's Pensions. The money was added by the BOF to address a proposal by Gov. Dannel P. Malloy to have towns pay into the state Teachers' Pension Fund next year. On May 9, RTM Ways and Means Committee Chairman Peter Black (R, District 3), explained that, while the $2.7 million will remain in the budget, Town Finance Director James Finch has created an option for $1.3 million of that figure which could instead be put toward paying down debt principal for the town, should the $2.7 million bill not arrive once the state budget is finalized later this summer.
The move reduces the BOF recommended $2.7 million Teachers Retirement Board general operations expense in the budget by $1,370,000 and slides the $1.37 million over to debt payment principal for maturing notes in September, 2017. If, by then, the state does in fact charge the town the entire $2.7 million figure, rather than pay the notes, they would be rolled, allowing the town to pay the state bill, which Finch anticipates would be due in November or December 2017.
"So we won't have to go out and borrow, if we wind up with extra money," said Black of the option to the maturing notes in September. "What this does is just gives [Finch] the flexibility, over the summer, to make a decision; if we get an actual budget from the state by August. If we get the whole $2.7 million as a [state] bill; if that's what comes out, he won't pay the notes, he'll just roll them."
On May 9, Cosgrove told the RTM Branford's approach to the 2017-18 town budget is the "responsible thing, and the courageous thing," to do, in light of potential impacts from the state.
"Nobody in this room can say, with a degree of certainty, ultimately what is going to come out of the state; but we can say to our constituents that we're prepared for what will happen," said Cosgrove. "The Finance Director made a comment the other night that in his 20 years, this budget process has been the most challenging. Two budgets ago, we had a declining Grand List, for the first time probably in the history of this town. Last year, we did have reduced revenues coming in from the state. This year, by far, exceeds those challenges in the magnitude of those impacts -- but both on the revenue and expenditure side; due solely from changing state policy. We have to walk out of this room and be aware of that, and we have to make sure our constituents are aware of that; and that we are doing the responsible thing and the courageous thing in addressing this."