Town budgets can be dull stuff. Not in 2008, with residents, businesses and government all feeling the pain at the pump and the electrical switch. Montville’s new finance director, Terry Fafard, arrived in mid-April, just in time to get in on the final touches of the proposed budget.
On May 20, the Town Council approved the fiscal year 2008-9 budget of $56, 292,738, $20,015,497 for general government and $721,870 for capital improvements.
The lion’s share of the budget is for $35,555,371 for Montville’s public schools. This is a three percent increase over last year, compared to the 6.89 percent increase requested by school district superintendent Dave Erwin. The Montville Times went to press before the final budget meeting of the Montville School Board on Wednesday evening, May 28.
“This year it’s bare bones,” said Mayor Joe Jaskiewicz, who worked closely with Pam Bonanno, town treasurer, in putting together the budget in the months before Town Council selected Fafard for the finance director position.
The Town Council also voted to increase the mill rate from 21 to 22. This would increase property taxes on a residence assessed at $200,000, at 70 percent of fair market value, by $200 per year, according to Fafard. Taxes on a property assessed at $300,000 would go up $300 for the year.
For the first time in at least 12 years, there are efforts to advance petitions that call for a public referendum to reverse the Town Council’s votes. Montville’s town charter authorizes the Town Council to adopt the annual budget by resolution, with the provision that residents could seek to overrule the decision through a petition process to take the vote to a public referendum at a town meeting.
Town Council member Russ Beetham, Montville Independent Party, who cast the lone dissenting vote on the budget and mill rate increase, is seeking not to increase property taxes.
“I want the mill rate to be the same as last year and to take the money out of general fund surplus,” he said. “We’re not looking to cut a lot of people. The town right now has plenty of money in general funds surplus.”
On May 22, Town Clerk Lisa Terry issued a petition to Beetham to overrule the budget resolution. Terry did not issue a petition to overrule establishing the mill rate, based on legal opinion by Town of Montville legal counsel in 1994 that determined the petition process couldn’t be used to change the mill rate.
As of press time, Beetham was still seeking town legal council’s opinion if the mill rate could be overturned through petition.
“If the town attorney rules that we can overturn the mill rate, there will be two petitions circulated,” he said. “One to overrule on the budget, one to overrule on the mill rate.”
If he can’t achieve a mill rate reduction through the petition process, he said he wouldn’t pursue the effort to rehash the town budget.
“It would be a waste of time,” he said.
The town charter provides that petitioners would have 20 days to collect five percent of signatures of registered town voters. Beetham has until June 9 to collect 455 signatures, Terry said.
The town has about $4.1 million in its reserve, according to Fafard, at the low end of the range the Town Council set as appropriate reserves. It adopted the resolution in December 11, 2006 to maintain its surplus between 8.5 and 17 percent of the general fund budget.
“Nobody, state or federal, is mandating the amount or percent in the reserve,” Beetham said. “It’s only a recommendation. If you can afford it, it would be nice. But I don’t think this is the time to hold people’s money in the town’s bank when they are having troubles.”
If the town needed to, he said, it could sell the bonds with protective insurance and still get a triple A rating.
It’s not uncommon for Connecticut towns to dip into their reserve when it gets above that minimum level, Fafard said, noting that she has had experience with that practice in Haddam, where she worked in the finance department for 12 years. She has not looked into the merits of protective insurance if the fund balance were reduced below the minimum.
“If there was an emergency, if something came up, the town could use fund balance below that level,” she said. “If we would have to bond money, a lower balance could lower the town’s bond rating.”
The outstanding question remains if the town would need to bond money to settle the Rand-Whitney Containerboard Corp lawsuit. The town continues to pursue the appeal and is continuing to negotiate, Jaskiewicz said.
“I’m not so sure I would recommend taking funds from the surplus,” Jaskiewicz said. “The way things are going, I really feel the state grants we receive could be reduced. So we may need that surplus money to help us next year.”
No one is disputing that times are tough for everyone, taxpayers, businesses, government and schools. Jaskiewicz points out that capital expenditures by the town benefited from $250,000 received from the Tribal Council last May.
The capital improvement plan includes $300,000 for paving and draining and $180,000 to replace fire department equipment and to replace some cruisers for the police department. Town counselors voted to add $5,000 for maintenance and upkeep at the police department.
Jaskiewicz said he plans to take a cautious approach on capital spending.
“I’m going to see what happens with electricity, gas and oil,” he said. “If they really get out of hand, I may have to put a stop on anyone buying anything for awhile.”
One new item retained in the budget is the plan to hire a human resources staff position. Funding is earmarked for that new role for only half of the year, in recognition that the interview and selection process will take some time.
Fafard started the job on April 14. She previously worked to the town of Haddam for the past 18 and one-half years. Haddam is governed by a board of selectmen and board of finance. She is moving up from working on a town budget of about $28 million and a population of 7500 to Montville’s $56 million budget and population about twice the size.
Fafard recently earned her degree in business from Albertus Magnus in New Haven. She lives in East Haddam, with her husband, Alan, a facilities manager for GE, and their daughter, Megan, who recently graduated from the University of New Haven, where she studied interior design.