With the philosophy of it’s never too early to start discussing next year’s budget, Wilton’s three main Boards–Selectmen, Finance and Education–met Monday evening, Nov. 2, to have their first discussion looking ahead to FY-2022. First Selectwoman Lynne Vanderslice and CFO Anne Kelly-Lenz put together a presentation that set the stage for what they think will be a higher than expected increase in the mill rate of 4.8% for the next fiscal year–and one that will likely concern residents.
First the Good News
Vanderslice began by bringing the three Boards’ members up to date about the current fiscal year, explaining that FY’21 is forecasted to end the year slightly favorable, at $1.2 million in excess revenue. Here’s why:
- Despite BOF fears that the COVID lockdown would cause too many residents to defer paying taxes this past July, the tax collection rate is actually at 99.2%.
- In addition, the state came through with the first of three payments of the Educational Cost Sharing Grant–something the BOE didn’t budget for out of fear that the state wouldn’t actually pay it. Kelly-Lenz said that if the first installment was paid to the town, the other two payments will undoubtedly follow later next year. It appears Wilton will receive approximately $450,000, according to Kelly-Lenz.
- Conveyance fees on property sales are up “quite a bit,” with the surprisingly strong residential real estate market that Wilton has been experiencing.
- The town also collected a little extra in back taxes, liens and interest.
- Debt service is “fairly flat.” Originally there was an expectation that Wilton would be bonding some of the cost of renovating Police Headquarters in the upcoming year, but the pandemic has delayed that, and new needs may change the project (e.g. fewer shared spaces).
- Vanderslice and Kelly-Lenz included in their approach of forecasting FY’22 was a large reserve, similar to what was done in FY’21, so that if either the BOE or BOS have budget shortfalls, or have to spend more because of COVID, they can come to the BOF for help.
The Board of Selectmen will be favorable by about $450,000. Vanderslice said the most significant reason is that town employees moved from a self-insured plan to the state health plan for medical benefits–a $600,000 savings for the town, half of which had been budgeted. It also helps the town in FY’22, because after taking only half of the favorability, some of that favorability will float through, according to Vanderslice.
However, because the FY’21 budget reduced the town’s grant to the Wilton Library, Vanderslice is hoping to use some of that savings to return some money to the library. In addition, some of those savings will also be used to pay for road paving–something that’s typically funded by bonding, but because there was no Town Meeting last May due to COVID, residents didn’t vote on any bonding projects, including paving.
Then, The Bad News
Despite the savings, there are several elements that will push the mill rate higher in FY’22.
For the town:
- There is less excess fund money available to reduce the mill rate–60% less. For FY’21 there was over $7 million available in excess funds–which was unusually high due to savings from FY’20. Typically excess funds are used to offset some of the cost of operating expenses to help keep the tax rate in check. Last year’s $7 million meant the town could actually decrease the mill rate for FY’21. This year, those same excess funds just aren’t there to help FY’22.
- Even though the BOS has found savings in FY’21, they’ve reallocated them (Library and paving); as a result, those savings aren’t being returned to the fund balance.
- Things that were cut from the BOS’s FY’21 budget because of COVID closures will likely be added back in for FY’22 (e.g. hiring Merwin Meadows summer lifeguards and opening the Senior Center). In addition, the BOS anticipates restoring the library grant to its full amount.
- There will be little Grand List growth–projected to be at just 0.2%.
For the schools:
- The BOE used savings from FY’20 to pre-purchase some items for FY’21. Those expenses will have to be restored for the FY’22 budget.
- The Board of Education is forecasted to request up to $810,000 of additional funding from the BOF before the end of this year for COVID-related expenses they can’t cover in the current BOE budget (mainly due to increased cleaning and sanitizing required by the Health Department, including new custodial hires, as well as new teachers at Middlebrook to accommodate schedule changes from the hybrid learning model and at Cider Mill in order to keep class sizes small to socially distance properly).
- Even before students returned in August, the Board of Education froze the budget due to overwhelming unanticipated expenditures.
- Mechanicals like HVAC needed to keep air flowing is running at mass capacity, which may impact their life span.
- There were unexpected BOE furniture expenditures to add standalone desks needed for social distancing; however, these are one-time expenses, and if the pandemic continues the school won’t need to repeat them next year.
- Despite a hot housing market that brought new families to Wilton, Enrollment decreased, primarily because a large number of families withdrew either to homeschool their children or to move their kids to private schools.
Vanderslice reminded the other boards that there are some unknown factors that will impact the budget-setting process.
For the Town:
- How long the COVID pandemic continues
- If there will be a vaccine and how long will it take to get a sizeable share of the community vaccinated
- State budget deficits
- What residents’ financial situations will be in January and if any will look to defer tax payments then
- What will happen with local businesses and Wilton property values
- Whether the town will receive any money through FEMA and the CARES Act (nothing was included in the projection Vanderslice and Kelly-Lenz put together)
For the Schools:
- The Board of Education is also facing a major unknown as a result of the COVID pandemic: how long will the need for any type of remote learning continue?
- If the pandemic ends, families will likely return to the public school district; if enrollment will increase, that drives a need for possible staffing increases
- The district is assessing academic progress and impact from the pandemic-related schedule changes. Any learning gaps will need to be addressed. “We don’t quite know yet to what extent we have slowed down our curriculum and to what extent we are going to somehow make up the gaps next year. It’s not a question unique to Wilton, but it’s something that could have a lot of impact in terms of how we try to figure out how to do that,” BOE Chair Deborah Low explained.
- Social-emotional needs have increased this year, both due to pandemic stressors as well as unforeseen tragic events. What extra supports will be needed long-term is “a question mark.”
- The COVID environment has magnified some needs for students with special needs. Compensatory services and education may be necessary, all of which have staffing and service hours implications.
- Like the town, the school district has deferred some big projects and teacher training; do those get made up next year?
What that Means for the Mill Rate
Vanderslice said that she and Kelly-Lenz calculated a likely 3.56% increase for the BOS, and a 3% increase for the BOE, coming in at a total 4.8% projected mill rate increase for FY’22.
Looking at FY’21, which had a 3.7% mill rate decrease, Vanderslice tried to put the almost 5% mill rate increase in perspective, noting it was an average increase under 1% over the two years. Nonetheless, “that may or may not sit well with folks because everybody, I think, enjoyed their tax decrease.”
Jeffrey Rutishauser, the BOF chair, complimented the BOE and superintendent for their “extraordinary effort” in planning and dealing with the challenges to keep the schools open and functioning during the COVID pandemic, something echoed by other BOF members.
He acknowledged that the $810,000 need from the BOE would come from the current reserve, which is at $2.9 million. That would leave about $2 million in the reserve for a fund balance adjustment.
Rutishauser anticipates next year “is going to be another COVID year,” with all that it implies economically.
“I don’t think we’re out of the woods on this anytime soon from what I can tell. So I think that people in town are still going to be having some economic distress levels like they are this year, I don’t think that’s ending anytime soon either. So we have to be sensitive to the overall economic conditions in town as well,” he said.
Finance board member Stuart Koenigsberg was not optimistic either. “I think if anything, it will not only continue, it may even get worse in terms of difficulty on determining where we are next year, particularly with the turnover in homes, trying to determine new students coming in and who’s coming back,” he said, adding that people he’s spoken with who have taken their children out of the district don’t intend to bring them back.
“But much greater impact is going to be the efficacy of the vaccination, how long that’s going to take. I would be cautious about that having much of an impact as we look at the beginning of next year, I think it’ll be very difficult to get that vaccine rolled out. I think people are way too optimistic about where things are going.
Vanderslice will attend the BOF meeting on Tuesday, Nov. 10 as the members further discuss putting together guidance for the other two boards heading into budget-setting season. Low also said she and Smith would be available to attend as well.