Finance board sets budget guidance
The Board of Finance issued preliminary fiscal year 2019 (FY19) budget increase guidance of 1.5% for the Board of Selectmen and 1% for the Board of Education during its Oct. 17 meeting.
Board of Finance Chair Jeff Rutishauser presented an “upside-down mill rate model,” which he said the board found “useful” last year.
As discussed at the board’s previous meeting, Rutishauser’s model included a 1% mill rate increase “as a start point,” and assumed 27 basis points [in grand list growth] as a non-revaluation year,” said Rutishauser.
“I put in 27 basis points in grand list growth because that’s what last year’s was and we have no better indication that it’s going to be a whole lot different — and this is independent of revaluation of existing properties,” he said.
“This year, it’s going to be two pieces — addition to the grand list of 2017 assumed, and the revaluation of what the grand list is, which doesn’t bring us any economic value per se.”
Although it’s too early to determine changes in other revenues, Rutishauser said, “one that is pretty obvious … is the municipal grant monies coming from the state government in municipal aid.”
“Last year, it was $1.09 million in the budget, and this year — at least to start with this model — we dropped it to $500,000, for a drop of almost $600,000,” said Rutishauser.
“It could be as low as zero, it could be as high as last year, but the indication is that it’s going to be reduced.”
The model has debt service set at $10.8 million for the coming year — down about $900,000 from the previous year, said Rutishauser.
“That comes from the fact that we didn’t issue as many bonds as rolled off from 20 years ago, so there’s a relief in that for the first time in many years,” he said.
“If you look at how we have an increment of money from last year from this model, it’s a benefit of $900,000 of debt service, $1.5 million of additional off the grand list — assuming a 1% mill rate increase, offset by around $600,000 of reduced municipal aid.”
Board member Richard Creeth said it’s important that people understand that any guidance given by the finance board now is based “purely” on current information and assumptions.
“We’re trying to give some visibility to manage expectations,” he said.
“If we come out with some guidance and the general fund balance is $1 million less than we had hoped, that has to revise our guidance. It’s really important to understand that.”
If the excess fund balance, debt service or municipal aid numbers “change significantly,” Creeth said, “that’s going to have a big impact on our guidance.”
“We’ve all been concerned that this pension fund payment may come to roost,” said Creeth, “and if it does, I would assume that we’re going to have to scrape by on charter authority money, which is going to directly impact that number.”
Rutishauser said the $4 million in excess fund balance in his mill rate model could go up or down, and the board will “probably revisit” the number if there are “major changes in the excess fund balance [and/or] surprises from Hartford.”
Rutishauser also noted that the model “does not assume that [teachers’ pension contributions are] coming our way in FY19.”
“Right now, this assumes zero [teachers’ pension contribution] and it can’t get better than that — it can only get worse,” he said.
If the town is expected to contribute to the pension fund, Rutishauser said, the mill rate model could be off by “a substantial margin.” If it doesn’t have to contribute, he said, “it becomes a positive variance.”
Rutishauser said although Gov. Dannel Malloy’s proposal to have municipalities contribute to teachers’ pensions “hasn’t gotten much traction, it doesn’t hurt to take it as a potential reserve.”
Finance board member Walter Kress noted that the governor’s fourth balanced budget proposal, released Monday, Oct. 16, includes “having Wilton pay $900,000 and change in teachers’ pensions.”
“That is something I’m very adamantly opposed to,” he said.
Board of Education
The initial proposal was to set 1.5% budget guidance for both the Board of Selectmen and the Board of Education, but Creeth and fellow board member Walter Kress disagreed with that idea.
“I think about these two bodies being very distinct,” said Kress.
Six months ago, Kress said, the finance board asked the Board of Education to show savings from the District Management Council study it ordered in 2015, but “they still haven’t done it.”
Until that is shared with the finance board, Kress said, he “can’t get beyond where we were last year in providing them with no increase.”
“I think the Board of Selectmen has done a pretty good job of providing guidance,” he said, “but I’m not comfortable with what we’re getting, or have been getting in the past, [from the Board of Education].”
Kress said he believes bringing the education board “down to zero” would be “a great goal.”
Creeth agreed that the Board of Education and Board of Selectmen should be considered “independently,” and said a budget guidance of less than 1% would be “very desirable” for the Board of Education.
In the end, the finance board agreed on a year-over-year budget increase guidance of 1% for the Board of Education, with the request that it strive to come in less than that.
The Board of Education will hold a community conversation about the 2018-19 education budget Thursday, Sept. 9, from 6:30 to 7:30 p.m., in Wilton High School's Library Learning Commons.
Community members will have the opportunity to meet in small groups with education board members and administrators to share their thoughts and ideas about current budget priorities and recommendations.
The next Board of Finance meeting is scheduled for Tuesday, Nov. 21, at 7:30 p.m. in Room B of town hall.