“Whether to Set Budget and/or Mill Rates Targets” was the main agenda item at the Sept. 13 meeting of the Board of Finance (BOF).
The discussion was in response to a request from First Selectwoman Lynne Vanderslice for budget guidance for the 2024 fiscal year.
At the very start of the discussion, BOF Chair Michael Kaelin expressed his doubt as to whether the board members would be able to reach a meaningful consensus on such guidance.
“The biggest obstacle I perceive to [the BOF] setting budget and mill rate targets is that we probably don’t agree, amongst ourselves, what they should be,” Kaelin stated, alluding to the divisions among board members during last year’s budget approval process.
After watching the BOF meeting, Vanderslice now concedes that she isn’t likely to get the budget guidance she was hoping for.
BOF Members Weigh In
At the Sept. 13 meeting, Kaelin invited the board members to express their own thoughts on the subject of setting budget targets. Though edited for brevity, their essential comments are included below. [Editor’s note: Most of the comments referred to the larger BOE budget, though they often referred to the BOS budget as well.]
BOF Vice Chair Stewart Koenigsberg: “We don’t know what we don’t know,” Koenigsberg began, citing examples such as emerging information on COVID-related learning loss among students and year-to-year enrollment changes.
“As a fiscal conservative, I’d normally say, try to keep [budget changes] as close to the [student] population change, given where the expected compensation changes are within the [union] contract, and go from there in terms of staffing and costs given that’s the overwhelming majority of the [budget],” Koenigsberg continued. “But there might be other cost factors that we should take into consideration, and we should be knowledgeable about what those are. I think it might be helpful for us to hear from the [BOE] directly. But again, I always advocate for taxpayers and try to keep it as lean as possible.”
Sandy Arkell: “I think all of us try to be fiscally conservative on behalf of the town,” Arkell said. “To Stewart’s point though, we need more information.”
“Just inherently, we’re going to have a huge headwind in terms of their baseline spending [from] last year. I expect that their outside services, energy costs, etc., are going to have that economic pressure that we’re seeing across the board. I’m actually in favor of at least some kind of target, but I think we need the BOE to indicate to us where they think they see things heading. It would be good to see some analysis on where they think those headwinds are going to be, and if they had to keep [the budget] say, flat — or at a lower targeted percentage increase, let’s say 2% — I think there’s going to potentially be some cut somewhere. That’s the kind of information I’d like to see because it’s really hard to make a decision or even set targets without understanding what the sacrifice [would be] or what benefits would be lost.”
Matthew Raimondi: “I’ve been thinking a lot about this one. [The BOF] didn’t provide guidance before my tenure on the board. I’m sure there are a lot of reasons not to do that [but] I can definitely see why [the BOS and BOE] want guidance. It provides more certainty into the budget they put together and what the range of outcomes can be. I think it’s also good fiscal practice as well, just given the way our elected government works. On the other hand, it’s hard to figure out what exactly that number is because as a board, we have several factors to take into account. There’s the BOE, there’s the BOS, there’s debt service… and what the taxpayers want to do as well.”
“I think we should provide guidance because I think given these kind[s] of headwinds — we know for a fact what that debt is — I think it would just be helpful setting what the guardrails are. We can probably figure out a number that is, you know, plus or minus some sort of guidance, understanding that it has to be palatable to the Town [residents] as well. So in summary, I would be in favor of providing guidance.”
Later expanding his comments about the rising debt service, Raimondi said, “There is some upper boundary of what we think the taxpayers will accept. I don’t know what that amount is. Relative to years prior, the debt service is a headwind in our face. I’m not suggesting budget cuts or budget increases —it’s just something that needs to get factored into our analysis in a way that we didn’t have to previously.”
Richard Santosky: “I don’t think we have enough information to understand what the costs are, what the impact of inflation has been. I think we need to better understand what the income of the Town is this year… We need to understand both sides — the cost side and the revenue side, to understand where we’re going with this,” Santosky said.
“I think it’s premature to say we’re going to set a mill rate anytime in the near future, until we hear [more information about] the student population and what the impact of inflation has been on our school[s] and the Town.”
“I’m not saying it’s going to happen, but if the Grand List were to increase by 10%, we could effectively have an increase in expenditure and still bring the mill rate down. I’m not suggesting that it’s going to go up by 10%, but I don’t think we know what is going to happen.”
Board member Chris Stroup was not in attendance.
Kaelin’s Goal: No Reduction in Services
Kaelin then offered more of his views.
“I just don’t want to see a reduction in services. So in terms of the data that I’m looking for from the BOS and the BOE, I want to find out how much the fixed costs are increasing — the essential services that we’re all in agreement that we can’t do without.”
“My view about the school budget [is] it’s all about the teachers. I don’t want to see a change in class size. I don’t want to see a reduction in teachers unless it’s justified by the enrollment reductions.”
“The teachers are the essential service and everything should be built around them,” Kaelin continued. “So I want to know from the BOE, how much are our personnel costs for teachers going to be going up? It’s fixed in the contract. They can tell us what that is… but where I do want to have a discussion with the BOE, and where I think we have to look more closely, are items that [are] discretionary.”
“Any expenditure that the BOE wants to make, that’s not directly related to the people in the classroom, then they’re going to have to justify that to me with some kind of objective criteria,” Kaelin said.
“There’s a lot of new people in town and there’s a much better feeling around town that this is a great place to live and we’re going in the right direction. We’ve got a lot of nice young families that have moved in here and there’s a positive feeling about the town. So we should just keep that going and do whatever we can to continue to make people feel like this is a great place to live and it’s a great place to invest in your home.”
Vanderslice’s Take
At the Tuesday, Sept. 20 BOS meeting, Vanderslice told the selectmen she had watched the BOF meeting.
“I do not believe we will receive guidance,” Vanderslice concluded.
“We’re looking for top side guidance, and they’re trying to go further down, for greater understanding of things,” Vanderslice explained. “They have a bunch of questions they want to ask.”
“We’re going to have a Tri-board meeting [the BOS, BOF and Board of Education] in October,” Vanderslice said. “Hopefully whatever [the BOF is] looking for in terms of questions we get them ahead of time so we can address them.”
After alluding to “a number of things” she had observed about the comments made by BOF members — including pointing out an incorrect mention that there would be a revaluation process this year — Vanderslice said, “I don’t think they’re ready” to offer specific guidance.
“At the end of the day, the guidance has been, plus or minus, a 1.5% [increase] for the last X number of years. We know debt service is going up. We were looking for some guidance from them that they’re going to move off that 1.5%… but I think we should just assume that they’re going to have to go up from the 1.5%, that they might end up at 2.5%, they might even end up at 3% as the mill rate increase because of inflation and just knowing the numbers,” she concluded.
“I think that’s where we should work from,” Vanderslice told the selectmen. “We can work backwards, and where would that put us as we’re thinking about the budget, at least right now.”