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05/13/2020 08:45 AMCapping off the unique budget process put in place due to the coronavirus pandemic, the Board of Finance (BOF) voted May 7 to set the town’s mill rate to 32.31, a 0.28 mill or 0.87 percent increase, to pay for the $103,443,251 town and schools budget, an increase of $2,843,105 or 2.83 percent over current spending, which it approved April 27. On Thursday, May 14 at 7 p.m., the board will consider an appropriation and bonding of $1.7 million for upgrades to the heating, ventilation, and air conditioning system at Baldwin Middle School.
In March, before the widespread closures put in place by town and state governments and the subsequent budget reductions, the BOF had approved a budget that would have resulted in a 1.13 mill increase to send to voters via referendum. BOF Chair Michael Ayles noted that the mill rate increase adopted May 7 was the lowest for Guilford in the past 20 years.
Budget referendums were disallowed by an executive order signed by Connecticut Governor Ned Lamont on March 21, an order that also laid out the process by which the “budget-making authority” in towns would approve a final budget and set a mill rate themselves, soliciting public input where possible.
Since the shutdown, the BOF has held two virtual public hearings dedicated purely to soliciting input from the public, and also had three additional meetings that included opportunities for public comment. It also received almost 180 emailed comments from residents.
At the BOF’s previous meeting, during which it approved the actual budget, most discussion centered around the possibility of bringing the mill rate increase down to below one percent.
The BOF reduced the town’s requested budget increase by $100,000 and the schools’ by $200,000 when it approved the budget on April 27, and had previously pulled $50,000 from both the schools and the town increase requests before the pandemic.
To minimize the tax burden on residents, the mill rate was calculated under the assumption that $250,000 will be drawn either from an estimated surplus or from the undesignated fund balance. The town won’t know what that surplus is until after the end of the fiscal year in July, though both town Finance Director Maryjane Malvasi and the schools’ Business Manager Linda Trudeau said they felt comfortable with those numbers.
Ayles cautioned that money drawn from the undesignated fund balance must be replaced next year when there are likely to be many more uncertainties and potential hardships, including increased school expenses or reductions of funding sources from the state.
Both Ayles and First Selectman Matt Hoey said that it was their opinion that waiting for the possible surplus and only dipping into those unassigned funds when needed was the wiser course, rather than drawing from that money now knowing the town would need to find it in next year’s budget.
BOF member Jonathan Trotta motioned to have $500,000 from surplus or undesignated fund monies used to mitigate taxes, which would have resulted in a 0.61 mill rate increase. Others cautioned that those funds may need to kept in reserve during a time of great uncertainty.
Guilford Superintendent of Schools Dr. Paul Freeman said that new and unexpected costs were a “concern” for next year, and that there had been conversations about split sessions, simultaneous distance and in-person classes, limiting the number of students in school, and special education service increases when schools reopen in the fall.
“I just want to caution the [BOF]...I am more and more concerned about the scale of unanticipated expenses that we may face next year because of state mandates about how we come to school...and just can’t tell what those will be,” Freeman said.
Having a healthy undesignated fund balance to cover these kinds of expenses was something most BOF members, as well as Hoey, agreed would be very important over the next couple years.
“We just don’t know what the next year or the year after [are] going to look like,” said BOF member Jeff Beatty. “We may need the undesignated fund balance...where, if we looked back, we would say, ‘Those idiots didn’t put the money aside when they should have.’”
In the end, the compromise for the BOF was to tap $250,000 from the undesignated fund balance to reduce the mill rate, though the Ayles emphasized to the Courier that the anticipated surplus, as it is currently projected, would cover this money.
The BOF’s vote to set the mill rate passed 6-0, with Trotta abstaining.
“I don’t feel like I should be voting on the budget in place of constituents. I’m not comfortable with it,” Trotta said.
The Bonding Issue
The $2.6 million of bonding requested by the Board of Education in February was also discussed at the May 7 meeting.
One project, a $1.7 million of heating and air conditioning maintenance for Baldwin Middle School, was scheduled to be discussed at a virtual town meeting on Thursday, May 14 at 7 p.m. rather than simply being voted on by the BOF, based on advice by legal counsel.
In more usual circumstances, the bonding issue would likely have gone to referendum alongside the budget, rather than having two referenda held two weeks apart.
Debt service from this project would not be a part of the fiscal year 2020-’21 budget, according to Ayles.
The process, as discussed by the BOF, will involve adjourning that town meeting without a vote by residents, and subsequently having the BOF or BOS approve or disapprove it. To virtually attend that meeting, find login information at www.ci.guilford.ct.us/event/special-town-meeting.