Town Manager's Budget Message

March 21, 2008
Mayor Andrew Adil
Members of the Wethersfield Town Council
Citizens and Taxpayers of Wethersfield

The proposed 2008-2009 budget certainly presented many challenges to the staff and me as we put together the following 5.53% tax increase document. We know that the national economy is in horrendous shape and that our citizens have to spend more and more money on their daily living. I aimed for a prudent budget that would allow us to keep our present services with no additional programming added, as well as allow us to continue meeting our capital needs. We have made much progress in the last few years in replacing our old and outdated fleet and repairing our buildings and roads. I do not wish to see us go backwards. This budget will allow us keep from falling behind in the progress of previous years, but does not make any major inroads into the substantial list of projects we should be undertaking to move our Town forward.

All new position and additional hour requests have been taken out of the budget. As I have done in previous years, I have attached this list to the end of this message, with my recommended priorities for these positions, so that if there are additional funds, you can place them into the budget for next year. When prioritizing, I tried to look at meeting the needs of the entire Town and what position would affect the greatest number of citizens in a positive manner. I also looked at having Town Departments become more efficient and what would translate into better communications with the public.

The 5.53% tax increase consists of a 2.41% increase in the Town budget and a 7.90% increase in the Board of Education budget. This would be an increase of 2.03 in the mill rate, from 32.94 to 34.97. The average homeowner with an assessed home value of $156,188 would have to pay an additional $316.65 in taxes.

Below you will find a summary of the revenues and expenditures, and an outline of the impact the proposed budget will have on our community.

REVENUE STREAMS:

As you are aware, the Grand List rose .6341%, which will produce $413,578 in additional revenue for next year. With high increases in utilities, health care, Metropolitan District Commission (MDC) costs and other items, this amount had been spent many times over in fixed costs. State funding to municipalities will not rise from last year. Our local revenues for next year are projected to go down $603,254 due to a large drop in investment income, collection of back taxes, transfer station fees, Town Clerk recording fees and State transportation grants. Because of this, we were in a deficit position putting together a budget before we even looked at the expenditure side.

It is imperative that we work with our State legislators to allow local option taxes, such as a hotel/motel tax and/or a sales tax, so that municipalities can derive revenues from sources other than the property tax. Several bills during the current legislative session address this issue and the Council of Small Towns (COST) will be forming a committee of local leaders to submit a list of possible revenue sources to the legislators.

Our staff, under the leadership of RaeAnn Palmer is reviewing our user fees, but I feel that we have probably raised fees to the point where further increases would lead citizens to opt out of fee-based services and therefore would not raise additional revenue. There will be very small increases in our proposal to you for user fees but minimal new revenue will be produced.

I have still included an estimate for the continuance of the conveyance tax, which our legislators say will survive for next year, but do not count on it for future years.

FUND BALANCE USAGE:

One of the goals of the Town's Strategic Plan is to maintain an 8% fund balance, which is measured by the undesignated fund balance as a percentage of the estimated revenues. We project the fund balance will be around 8% at the end of this fiscal year. I am recommending that you use $700,000 of the fund balance to reduce the budget impact on the mill rate, and to use the one time payment from CRRA of $581,000 to offset next year's fund balance. The money from CRRA is really the taxpayers' money, and I feel it should go back to them by offsetting the amount they have to pay in taxes next year - a rebate of sorts. The only problem with this is that it could bring us below the 8% target for fund balance. A fund balance below 8% may affect our bond ratings and we are selling bonds this year. Also, because the CRRA funds are a one time payment, next year there will be a $581,000 revenue gap in the budget which we will have to make up some other way.

EXPENDITURES:

All of the huge increases that affect us as individuals in our daily lives also affect the Town's budget. We have projected the following increases for our budget for fixed costs:

These increases have an enormous impact on the 2008-2009 budget.

Because of this and because I was trying to keep the tax increase to a minimal amount, there were many cuts that I would not normally recommend to you. Below you will find some of the items cut or reduced.

Needless to say, all of these decisions were extremely hard and if it were not for the horrendously tight fiscal times, I would not recommend most of them to you.

SOLUTIONS:

The State did award our Town some of the Service Sharing grant funds, so we hope to reduce costs in some areas for future years, as the grants are implemented. The Governor has recommended that this program be funded again next year, and it is imperative that we continue to work with our neighboring communities to consolidate services and cut costs by working cooperatively with one another.

As I mentioned earlier, we must work with our State Legislators to allow Towns the local option to raise revenues in unique ways, other than by the property tax. Again, this could include a hotel/motel tax, sales tax, or a minimal vehicle registration tax that could assist us with paving our local roads.

I continue to work with our unions to have our employees pay more health insurance co-pays, reduce benefits for retirees, and control wage increases. I have just begun negotiations with the middle management union and the AFSCME group representing the secretaries, dispatchers and other employees. I will be reviewing this budget scenario with them so they understand the ramifications of our budget for next year and the next few years. I will also be asking all employees' assistance in making suggestions for reductions to our budget. I welcome their thoughts.

As I did last year, I will be holding budget forums for residents. As I schedule these, I will let you know. Please feel free to attend. Last year's forums went very well and were very informative to me as well as to the residents. If any citizen wishes to host a Budget Forum with 15-20 residents in attendance, please contact me.

The staff and I look forward to meeting with you and reviewing the budget requests. We are here to assist. As you proceed with the budget process, please keep in mind that a mill is worth $2,003,873, so therefore, for every $200,387 you add or delete, the mill rate will go up or down 1/10 of a mill.

The Department Heads did an excellent job in preparing their budget proposals. Most kept their budgets in line with last year's the best they could given the huge increases in fixed costs. I thank them so much and also want to applaud the efforts of Lisa Hancock, Finance Director, and Rae Ann Palmer, Assistant to the Town Manager, who put in a lot of time and effort to work with me on this budget. I would also like to thank Gale DiLuzio, Executive Secretary, and Paul Dudley, Data Services Manager, for their assistance and hard work in preparing the final budget book.

I highly encourage taxpayers to attend our Public Hearing on April 21, 2008 at 7:00 pm at the Silas Deane Middle School Auditorium so we can hear from you on how you wish your dollars to be spent in Wethersfield. I also encourage people to call me (721-2801) or contact me with letters or e-mails (bonnie.therrien@wethersfieldct.com), so I can pass their comments along to you, the Town Council. The Town Council must adopt the budget no later than May 15, 2008.

Sincerely,

Bonnie L. Therrien
Town Manager

Positions