Bd. of Finance Sets Mill Rate & Proposed FY’18 Budget with 1.58% Increase

After two nights of deliberations (March 29 and 30), the Board of Finance approved a 1.58% increase in the mill rate, and plans to bring to town voters the budgets as proposed by the Board of Education and the Board of Selectmen–save for a $25,000 cut to Trackside Teen Center‘s budget.

At public hearings over the last two consecutive Mondays, the BoF heard the proposed FY’18 budgets from both the school board–$80,569,905 (a flat, 0.0% increase)–and the selectmen–$33,233,876 (a 3.2% increase). They also listened to feedback on those budgets from the public and last night (Thursday, March 30) the BoF voted to set the town’s mill rate for 2017-2018 at 27.768504, an approximate 1.58% increase over last year’s mill rate.

Here’s how they voted over the two nights:

  • Appropriate $80.57 million for the BoE’s operating budget (0.0% increase)
  • Reduced Trackside’s line item budget–initially considering a $75,000 slash from a $150,000 total budget, but eventually settling on trimming just $25,000
  • Appropriate the BoS’s operating budget with the new Trackside line item budget, making it $32,034,470, and the BoS’s capital budget as proposed:  $1,174,406 (3% total increase)

What Went Into the Deliberations

Chairman Jeff Rutishauser gave some context for how the BoF approached this year’s task. Rather than starting with proposed budgets and figuring out a mill rate they thought the town would accept, they took a different, reverse approach, first targeting an ideal mill rate and working backwards to get optimal operating budgets from the schools and selectmen.

“The guidance we started with was 0.0% mill rate increase which led to around a 1.25% decrease in operating budgets from both selectmen and education. Recognizing that 0.0% is a big jump from where we were coming into the year, we knew that was a heavy lift and a stretch target, and we said so,” Rutishauser explained.

The budget proposals they got from both boards were higher than the minus-1.25% they asked for, to the tune of a 1.6% mill rate increase, or $1.87 million more than what was asked for in FY’17:

Rutishauser also pointed to a couple key events impacting that proposed $1.87 million budget increase:

  • disappearing state aid:  Wilton got $1.2 million in Education Cost Sharing (ECS) money in FY’17; this year that ECS grant was reduced to nothing
  • $300,000 increase in the town’s debt service
  • no substantial grand list increase to offset the residential tax burden

Board Members Weigh In

Before voting, each BoF member gave his thoughts.

John Kalamarides commended the Board of Education for their “hard work” to bring a flat 0.0% increase.

“The BoE is working hard to keep costs in line with the declining school population, while bringing the best in new education models and methods to our students. That the school system can maintain its excellence while keeping its budget flat is remarkable.”

He also said that the feedback and emails that the BoF has received “have overwhelmingly supported the current [education] budget zero-percent increase.”

Kalamarides couldn’t find any “waste, fraud or abuse” in the town’s budget, and opposed any prospective threatened cuts to town non-profits, especially for the Wilton Library and Trackside Teen Center. “If we’re cutting these organizations, we’re cutting the lifeblood out of what Wilton stands for.”

Peter Balderston also praised the Board of Education’s efforts this year to deliver budget savings in the face of yearly enrollment declines, but said he “continues to see opportunities for savings in the budget,” some of which have not been “realized or examined.” He called the gap between an 18% school budget increase since 2009 and a 7.5% enrollment decline over the same period “sort of startling,” especially when property taxes have increased 22.8% during that same 8-year period.

Balderston said school officials need to be “more aggressive in meeting the [financial] challenges.”

“If we’re going to ask the electorate of this town who have ponied up the monies that they have over the last eight years, that they are owed an appropriate response in how the school district is going to deal with this very long term decline in enrollment.”

In the selectmen’s budget, Balderston was “particularly concerned” about Trackside.

“It’s a facility launched in early 2000 with the promise it would be self-funding within a few years. This year alone the budgeted subsidy is $150,000. While it’s a wonderful place, I’ve been to events there, I’m challenged to find why we need a one-plus FTE on an operation like that. That’s something we should take a hard look at.”

Walter Kress was moved by the many letters from the community, “…largely in support of the budgets as they stand today. These are not form letters, these are people who put some thought to these letters. They’re much more in-depth this year.”

He also spoke with several realtors, who told him that sacrificing the school budget is not at all optimal.

“I heard loud and clear from each and every one that having a school budget that goes below 0.0% actually could backfire and do damage to the community. The towns around us are all having a higher rate of growth for the school budgets themselves. The appearance could be that we’re not investing adequately in our schools. That’s one reason why I support where we are today at a 0.0% increase,” Kress said, noting, however, there is room for continuous improvement in instituting better financial oversight, controls and measurement–and he’d like to see the BoE start thinking now about coming in with another 0.0% increase next year (FY’19) as well.

Kress spoke firmly about not making further cuts to the education budget:

“A negative number, a small negative number especially, might have the perception that we’re not supportive of or that we are starting to cut our budget. It’s a perception issue–this is optics. What gets printed in the paper, what gets circulated, what gets researched by people considering coming to this community, we would be the only community out there with a negative [school budget number] attached to it. There’s a larger contingency of homebuyers who might say it’s an alarm. And if I’m a realtor in a different community, selling against Wilton, that just gives me another arrow in my quiver to throw out there.”

Richard Creeth also supported both budgets, although he suggested the BoE use “stronger financial analytics,” and think more like a business.

“I know the BoE isn’t a business, but if the board thinks of itself as a business delivering a product, and there’s a cost to that, unfortunately in today’s economic climate that’s kind of the way everyone has to think about things, whether you’re in education or government or whatever.”

What he didn’t like was the idea of cutting the budgets of the non-profits, speaking directly to first selectman Lynne Vanderslice:  “I don’t support that. You already went to the Library once, they already came back with something. It’s an important institution in town.” Nor did he want to cut Trackside’s budget or the town’s 45th police officer (school resource officer), adding that the BoF had heard support from the public for keeping that position.

Warren Serenbetz echoed his fellow BoF members in commending the school board, saying, “Good job but there’s more room to go.” He also eyed Trackside. “We’ve been waiting a long time for Trackside to ante up stand-alone support. We can ask for a 5-year plan to do it, but I think we can move that faster by making cuts in that area.” He hoped to keep the mill rate increase closer to zero.

Rutishauser was particularly critical of Trackside, as someone who was on the BoF members 15 years ago when the teen center was founded. “Fifteen years later we’re at the point where it hasn’t changed. That was supposed to be transitional to self-sustaining. I would support a reduction in that, not waiting a year. We have 15 months to get some significant fundraising going. After 15 years it’s about time to prod them off of the government subsidy.”

He did not want to cut the Library, calling it the second most positive amenity in town after the schools. “I think it’s terrific that they raise as much as they do to support the budget is exemplary. They raise a lot of money to support the town.”

Like the others, Rutishauser commended the Board of Education for achieving a 0.0% budget increase. “To push it any further is probably too much.” But he said officials should push for savings through better management, and try to get next year’s actual numbers down.

Trackside Budget Debate

Balderston made a motion to cut Trackside’s $150,000 budget by half. “To begin to wean the organization into being more of a private supported organization, is an appropriate thing, given that it was originally constructed with the understanding that it would be completely a privately-supported organization.”

That motion was seconded by Serenbetz, who said it should be a “specific instruction” to the BoS to cut the Trackside line item.

Creeth argued that if the town covers three-quarters of the Library’s operating costs, what would justify cutting Trackside’s operating costs by half? He also noted that Wilton’s Youth Services budget is lower than that of surrounding towns, and that Trackside is the only youth services facility in town.

Serenbetz countered that Trackside isn’t exclusively reserved for Wilton’s youth. “The issue with Trackside is it’s making a lot of its money not supporting the youth because they can’t make money doing that. And we’re continuing to support an organization that can’t make money doing what they’re supposed to do.”

Vanderslice told the BoF members that the original 2002 agreement between the town and Trackside specifies that the annual decision to fund the teen center is discretionary. Moreover, that agreement specified that funding was intended to only support labor costs. Cutting funding in half this year, she said, would be “cutting them off at the knees.”

“They’re not prepared for it. Let’s give these people the opportunity. They’re coming back with something of substance. I’d hate to see that cut off,” she said, explaining that the Trackside board is actively working on becoming financially independent with a 5-year plan.

“I’ve had conversations about the plan they’re putting together. They have a group working on a financial plan, and  another group working on some organizational changes. One original idea was a student board, and that’s gone on the wayside.  They’re right in adding it back–if you want to get students enthusiastic and a sense of ownership, they ought to be part of running it,” Vanderslice said, adding that they are also developing fundraising initiatives.

She has also encouraged Trackside’s board to develop more programming as well as build more of a facility rental profit center. “They need steady daytime revenue,” as well as regular Saturday night events for teens, something she hopes will develop by having a teen board involved.

Kress suggested step decreases:  cutting the budget by $25,000 this year, and more each successive year. “Three years to self-sustainability. That’s a pretty long time and a little more palatable.”

Vanderslice also noted that the Trackside board–especially two new members, Middlebrook teacher John Priest and Bankwell’s Ann Mitrone–are taking her warnings very seriously. “They don’t want to lose Trackside.”

That said, she was realistic and not opposed to pushing the Trackside board with a smaller budget reduction.

“They need to raise their fundraising, and it’s a three-alarm fire that they need to raise their fundraising. I’m okay with requiring them to raise more money than they’re planning to next year. They’ve heard what I’ve said to them, they’ve heard what the BoS said to them but there’s nothing wrong with an extra push,”

Noting that she has done her fair share of raising a lot of money in Wilton, and cutting Trackside’s budget might actually help the teen center’s board drum up more financial support.

“It’s easier for them to raise money when their budget’s been cut. They’re not going to be happy with me saying that, but when you have some clear cut goal that you need to achieve to make sure that things continue to operate, people will step forward. If the community really wants this facility, then they will step forward,” Vanderslice said, noting that fundraising would have to start at some point, either in 2018 or 2019. “I’m not opposed to them starting in 2018.” She also said that the selectmen would work with them to help.

After Balderston withdrew his original motion and introduced a new one to reduce Trackside’s line item budget by $25,000, the BoF voted in favor 5-1, with Kalamarides the only member who opposed the cut.

Board of Education Budget Debate

Wilton schools superintendent Dr. Kevin Smith asked to speak to some of the concerns and thoughts the BoF members had expressed. He made a strident pitch for the board to support the school budget as proposed. He also made the case that administrators and board of education members were working hard to meet the requests of the finance board members but that reality was a bit different from expectation.

“With regard to a five-year model, you’ve been frustrated with our relatively slow progress in putting that together, and I accept that. Organizationally, today, we’re not built to do that work. We’ve come a long way, and we have a workable model. Given the original assumptions, the projections the way they are today, is a potential for a 3.0% budget increase next year and 3.0% the following year. I cringe, Jeff you said last year, ‘You think this year’s bad, wait until next year.’ This year I heard Lynne say, ‘You think this year’s bad, wait until next year.’ That reality isn’t lost on me, it’s not lost on anyone in the school system.

“The reality is this:  we have seemingly ever-increasing labor cost increases and other contractual cost increases–trying to manage those is a challenge, fully aware of the enrollment decline. Redoing the demographic study makes sense. Having an organization come in and do a system-wide feasibility study makes sense there. Because we do have to actively address the changes that are coming.

“Since I’ve been here we’ve worked really hard to produce budgets that advance our educational objectives, but also are really respectful to the current financial climate.

“So I would encourage you to adopt our budget as it is. We made some serious choices when we put [this] budget together.”

Where he hit a snag with the BoF was in discussing the DMC report. Smith told them that the report…

“…has not captured fairly the way that our related service providers’ time is used. There’s an assumption that if we just set the expectation that our psychologists, our counselors, our speech and language providers shift their schedules so they’re spending 75% of their time with kids, then we’ll have all this excess time. In fact, the day we read that report, we set that expectation. The reality today is not every provider can reach that expectation because of the demands of PPT meetings, staffing meetings, just trying to manage providing a high level service and meeting the needs of the kids in front of them.

“I think it’s unfair to suggest we’ve left money on the table. That’s not accurate, we’ve taken that report seriously and we’re absolutely working toward it.

“DMC was comparing us to like-districts nationally; what they didn’t capture fairly were like-districts locally. We just pulled the numbers of psychologists and there are variances across the DRG, but we are in line, we’re not seeing many excess service providers, comparatively speaking.

“You need to know from me as the CEO of the district as well as of the administrative team, to look at all of these functions seriously, both continuing to provide high level of service but also trying to achieve efficiencies.

“The summary comment is, I hear everything, these are not new conversations, within the Board of Education we take them seriously.”

The BoF members suggested that there be better communication about where the DMC study isn’t accurate about the district and regular updates on what process the district is making in meeting the DMC recommendations.

“We’ve asked about it for a year and a half and there’s been relative silence about it. To basically say, ‘We’re doing the best we can,’ is probably not good enough. This needs to be priority,” Rutishauser said.

To which Smith responded, “I don’t know that it’s as easy to measure as it’s being assumed. The work is complex. I’ll go back and see what we might be able to develop.”

Kress stressed a familiar theme:  better communication. “Communication can be better between the boards and, in all fairness, to the community of taxpayers. benchmarking some of these things you are making progress on and showcase where you’ve made progress, I think that’s a good thing.

Potential Complications from the State

Complicating everything is the threat of the state’s unfunded teacher pension, and the Governor’s plan to potentially pass the cost to the towns. The number Wilton would face under that plan–$4 million.

Thursday morning, March 30, a new possibility emerged, with the speaker of the house in Hartford suggesting a new concept–breaking down the $4 million over five years; as such Wilton would be potentially looking at ponying up $800,000 this year.

“That is more likely. There’s no probability but we have to think about how to handle that if it hits us,” Rutishauser warned his fellow BoF members.

Wilton’s state representative, Gail Lavielle, told Rutishauser that as of now, nothing is set in stone. As such, he raised the possibility of waiting to set the mill rate until April 17, the last possible moment that board would be required to set it.

Serenbetz argued against waiting.

“We have a Charter Authority. We have a fund balance, which is why we keep a 10% balance, so we can take care of emergencies like this. I don’t think we should be reactive to every breakfast talk that somebody gives.”

The BoF members debated whether or not the town should consider dipping into that emergency fund or keeping it to protect the town’s AAA bond rating–as well as the unpredictability over what the state might wind up doing.

“If we have enough resources we’re all aware of it if it does come down the road, we have ways to cover what may come our way,” Rutishauser said.

They ultimately decided to move forward with setting the proposed FY’18 mill rate now.

Other Resolutions

The BoF members passed several resolutions that enabled them to set the mill rate:

  • Set the estimated tax collection rate at 99.4% against the grand list of $4.313 billion
  • Accept estimated tax revenues at $4,745,854
  • Appropriate debt service level at $11,767,516 (to pay off outstanding bonds)
  • Provide tax relief:   $1.1 million for elderly and disabled residents, $20,750 for the Wilton Volunteer Ambulance Corps (WVAC), and $20,750 for the Georgetown Fire District
  • Approve ending fund balance of $12,680,452.
  • Appropriate $1,255,490 to the charter authority, including $313,873 under the jurisdiction of the Board of Selectmen and $941,617 under the jurisdiction of the Board of Finance.
  • Set the June 30, 2018 estimated general fund balance at $12,680,452, which is 10% of the FY18 total operating funds required.
  • Set the June 30, 2017 estimated general fund balance at $16,795,603, leaving $4,115,151 to be used to finance the FY18 budget.
  • Recommend a general fund total operating budget of $126,804,522.

Wilton voters will consider the budget at the Annual Town Meeting on Tuesday, May 2, 7:30 p.m. at the Clune Center, with voting set to begin at the meeting’s conclusion. The adjourned vote will continue on Saturday, May 6 at the Clune Center, from 9 a.m.-6 p.m..

 

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