Finance board advises negative budget growth
By a five-to-one vote, the Board of Finance set budget guidance at a 1.25% decrease over current budget levels for both the Board of Education and Board of Selectmen for fiscal year 2018 (FY18) during its Sept. 20 meeting. John Kalamarides was the lone dissenter as Chairman Jeff Rutishauser, Walter Kress, Peter Balderston, Richard Creeth, and Warren Serenbetz voted in favor.
The board used a model created by Rutishauser and Chief Financial Officer Anne Kelly-Lenz that started with mill rate changes and worked its way down to money for the operating budgets.
The model was designed "so that both operating budgets go down the same percentage,” Rutishauser said.
“We target what we want the town to afford and then see what the implications are for both departments,” he said.
Coming to a decision on budget guidance wasn’t easy, as the board had to take into account lawsuits that will impact this year’s budget season.
“A large lawsuit regarding how we evaluated some land that was in and around reservoirs was settled in the past couple weeks,” said Rutishauser.
“We've been working on it in executive session because it's been confidential, but the judge did make his determination to settle.”
About five years ago, Wilton’s appraiser put an approximate $16 million appraised land valuation on 10 parcels of land “near or adjacent to the two reservoirs in town owned by Norwalk,” Rutishauser told The Bulletin.
“The Second Taxing District of Norwalk, the landowner, filed a suit seeking a much lower appraised valuation more in line with a forest use,” he said.
The Norwalk taxing district countered with about $3 million, and the judge came back and awarded Norwalk with about $6.5 million — “twice what Norwalk asked for, but about $9.5 million less than our appraised value,” said Rutishauser.
Because of this, Rutishauser said at the finance board’s Sept. 20 meeting, “as we go into the grand list, it's $9.5 million less than we thought” — down to the $6.5 million level.
“As we get into the grand list for the coming year, it starts off effectively $9.5 million negative and then we take growth from there,” he said.
On Wednesday, Sept. 7, Superior Court Judge Thomas Moukawsher ruled that Connecticut’s education cost-sharing method is irrational and unconstitutional and ordered the state to re-examine its education system.
“An opinion was put out by the judge that sided with the plaintiffs and basically said the funding wasn't fair,” said Rutishauser.
“It's more than just money — it's teacher evaluations and class sizes and special education and a bunch of other things — but it does affect the funding formula.”
Rutishauser said he talked to state Rep. Gail Lavielle (R-143) over the weekend about the status of ECS. Lavielle said it was not the education decision that would suggest prudence, it was the deficiencies in the state budget.
“Given the precariousness of the state budget I would be very careful about relying on ECS funding,” Lavielle said.
Because it's such a target, Rutishauser said, Lavielle suggested the town take the educational cost-sharing off budget because “it's not going up; it's only going down and it's a question of how much.”
“Her advice to us was to look at that as something [we] probably want to take down,” said Rutishauser. “We all thought this, but that judge's opinion strengthened the cause for moving that off budget.”
On Thursday, Sept. 15, Attorney General George Jepsen announced that the state plans to appeal the ruling.
Finance board member John Kalamarides said he spoke to Jepsen, who told him that the lawsuit won’t affect Wilton “a great deal.”
“He said the plaintiffs in this are going to be very unhappy with the things in the suit and it didn’t really go their way,” said Kalamarides.
“He said a lot of the material that came down from the judge could be thrown out, they were going to sue again, and the case would be in the courts for another five years before anything happens.”
While the town can probably rely on receiving municipal grants “because they have a long-standing process not affected by the lawsuit,” said Rutishauser, the same cannot be said about municipal revenue-sharing (MRSA).
“Last year, we were told there would be room for revenue-sharing — we didn't believe it, so we put zero in the budget for it, and it came out being around $380,000,” said Rutishauser.
“The legislator who supported that is not running for election so without his support, there is a good chance of a collapse back down to nothing.”
The finance board first discussed starting out with a 1.5% to 2% increase for both operating budgets, but Rutishauser pointed out that “if you zero out all the school excess cost grant, plus MRSA, it’s actually 2.75% with a flat Board of Education and Board of Selectmen operating budget.”
“If you take out the $1 million-and-change from the government and take the increase in debt service at $750,000 and our $1.4 million less of excess fund balance,” he said, “you get 2.75% even before starting to talk about operating for the boards.”
“If there's ever been a year where we've said we need to hold the line at 0%, this is it,” said Rutishauser.
“This year, all these other non-operating expenses and costs are working against being at all easy on the operating side."
Rutishauser said he’s talked to First Selectman Lynne Vanderslice and Board of Education Chair Bruce Likly and “both understand how difficult this year is going to be.”
"They know that the numbers are big, what the town can and will and wants to accept,” he said, “and they realize that there's going to be some tough choices to be made.”