Mill rate deliberations start at 26.98

UPDATE: April 2 — Following the its April 1 mill rate meeting, the Board of Finance settled on a 26.8302 mill rate for fiscal year 2016 — a 1.196% increase over the current 26.5132 rate.

After looking at a wide range of factors, the Board of Finance came up with a “starting point” fiscal year 2016 mill rate of 26.9773 — a 1.75% increase over the current 26.5132 rate — and presented it during last week’s budget public hearings.
The finance board held its first mill rate meeting on Tuesday, March 31.
On Wednesday, April 1, Board of Finance Chair Warren Serenbetz told The Bulletin that at the second mill rate meeting later that evening, the actual rate would be set and would go to voters at the Annual Town Meeting on Tuesday, May 5. The adjourned vote is Saturday, May 9. (The meeting and vote are in May, not April, as erroneously reported last week.)
“The 26.9773 is the starting point,” Serenbetz told The Bulletin on Monday, March 30. “We may or may not end up with the same number by the time we are finished [with the mill rate meetings].” The mill rate is the property tax rate per $1,000 of assessed value, or 70% of market value. There was a 2.0328% mill rate increase last year.
At the school budget public hearing on Monday, March 23, Serenbetz said the mill rate increase is driven by:

  • The Board of Selectmen’s request for a 2.06% budget increase.

  • The Board of Education’s request for a 1.98% budget increase.

  • A 16.63%, or $1.5 million, debt service increase.

Serenbetz said the debt service increase “has been offset by the prior year surplus available to reduce the mill rate.” He said the town is using 23.3% more of the surplus than it did last year.
Serenbetz said required operating funds are currently budgeted to increase $3.9 million, which he said is “offset by the use of just shy of $1 million from the fund balance.”
Under the town charter, Serenbetz said, the board “must consider several factors when developing the mill rate,” including “the view of the voters, financial resources, whether the Board of Education and the Board of Selectmen can find savings in their respective budgets, the appropriateness of revenues, debt service and general fund balance amounts.”
Serenbetz said the town’s resources and financial condition are assessed by “looking at revenues of sustainability, the debt burden and budgeted versus actual expenses in prior years.”

Revenues of sustainability

Serenbetz said the board looks at revenues of sustainability based on grand list growth, “which is still less than 1% for fiscal year ’16.”
He said this growth is “consistent with the last four years, although a little bit higher than in the last several years."
At 99.3%, the tax collection rate remains consistent year over year.
“We will see a small decrease in state grants and funding due to a decline in the Board of Education grants and fees,” said Serenbetz, “and other income will see a small increase over prior years.”
Serenbetz said the factors impacting future sustainability are:

  • The real estate market, “which has improved but is still well below pre-recession value and price levels.”

  • Wilton’s employment data, which “now shows that unemployment is at 4.6%.”

  • Connecticut’s state budget.

“We look at the state budget and the uncertainty there in the state’s fiscal health,” he said, “because that will impact possible grant cuts in future years.”

Other factors

The board also looks at the debt burden, the general fund balance and pension fund levels when assessing town resources and financial conditions.
“The impact of projected buying needs will lead to significant increased debts through 2020,” said Serenbetz.
“We recently went to market for $20.27 million. Based on our Moody’s Aaa rating, we’re able to secure an interest rate of just over 2.75%.”
Serenbetz said one of the key factors in getting a Aaa rating — meaning the town’s obligations have been judged to be of the highest quality and subject to the lowest level of credit risk — is for the town to maintain the undesignated fund balance at a minimum of 10%.
Serenbetz said the town may also have an opportunity to refinance some existing debt at lower rates.
The town’s unfunded pension liability is currently $8.2 million, he said.
“The Board of Finance maintains the policy of overfunding the actuarial required contributions as long as the plan is underfunded,” he said.
“In general, I would say the trustees are also making very good decisions about what the assumptions are that go into the actuarial funded amounts.”

Budgeted vs. actual

According to Serenbetz, over the five-year period 2010 through 2014, the average actual increase for both the Board of Education and Board of Selectmen was under 2.5%.
“In addition,” Serenbetz said, “their actual spending has been favorable to budgets over that five-year time frame.”

Annual town meeting

The Annual Town Meeting to discuss the budget will take place on Tuesday, May 5, at 7:30 at Middlebrook School, 131 School Road.
Voting will follow the meeting. Residents may also take part in the adjourned vote on Saturday, May 9, from 8 to 6 at the Clune Center, 395 Danbury Road.