photo: Zoom recording of the city of Wilton, Nov. 15, 2022

Although the FY2024 the budget planning process doesn’t start in earnest until early 2023, the Finance Council (BOF) is already looking at potential mill rate and budget scenarios that could impact Wilton taxpayers.

The Council of Selectmen (BOS) and the Board of Education (BOE) – whose respective budgets represent the two key components of the city’s overall budget – both warned the BOF that larger-than-usual budget increases are a distinct possibility in the next budget planning cycle.

As a result, the BOF anticipates its work on behalf of Wilton taxpayers could be very challenging in the coming months. In addition to seeking to gain an early understanding of how the FY2024 budgets might take shape, the BOF is also reviewing its internal meeting procedures to ensure that upcoming budget deliberations go smoothly.

But first, some GOOD news

As reported to the BOS Hon November 7th, First Selectwoman Lynne Vanderslice informed the BOF of the favorable FY2022 budget results.

As for revenue, Vanderslice reported that its fiscal 2022 revenue was higher than expected by $923,000. Revenues were driven by higher-than-expected transportation charges ($692,000) and building permit fees ($234,000).

“This is good news for [FY]2022 but also good news for [FY]2023,” Vanderslice told the BOF.

This is because those higher revenues go to the Balance of the city’s excess fund, which can be used to minimize increases in rolling speed. Vanderslice estimated that $652,000 would be available to reduce FY2023 taxes and $271,000 to reduce FY2024 taxes.

The BOS FY2022 budget was also favorable in terms of operating costs, which fell below budget by $760,000. Those savings will be transferred to the Municipality Infrastructure improvement fund.

Key assumptions in the discussion of rolling rates

In a discussion led by the board member Matthew Raimondi, the BOF has reviewed the budget and production rate scenarios that could emerge in the next budget process. (The spreadsheet model used as a basis for the discussion is available on the city’s website.)

For the purposes of the discussion, the following annual growth assumptions were considered:

  • BOS budget growth of 2%: a larger annual increase than FY 2022 (1.7%) and FY 2023 (1.4%)
  • BOE budget growth of 3% – also a larger annual increase than FY 2023 (2.2%) but in line with budget increase in FY 2022 (3%)
  • Grand List growth of 1% for fiscal 2024 and 1.25% for fiscal 2025-2026, which Vanderslice says is higher than historical increases (averaging around 0.7% annually), and will ultimately reflect the expansion of ASML and commercial development projects such as 141 Danbury Rd.

While the BOS and BOE have yet to provide a clear indication of what their proposed FY’24 budget numbers might be, the estimates used in Raimondi’s Hardy model seem far-fetched given past budgets, recent budget developments and projected “headwinds” i.e. inflation.

Another key assumption: increased debt service

Debt service costs, which he had rejected by 2.2% from FY2022 to FY2023, should start to rise in FY2024. Vanderslice advised the BOF in July to expect this critical shift, but also stressed that Wilton’s overall debt level will still be in line with historical levels.

Out of approximately $9,025,000 in debt service costs for FY 2023, debt service is projected to increase to approximately $9.7 million in FY 2024; $10.8 million in fiscal 2025; and $11.50 in fiscal year 2026.

Resulting rolling rate

In the scenario presented at the November 15 meeting, the mill rate would increase by 4% in fiscal year 2024. This is in contrast to the rate increase of 1.3% in the approved budget for fiscal year 2023 and 1.5% in fiscal year 2022.

“I think we should discuss it,” Raimondi said. “A 4% rate hike sounds like a lot. We should make sure that we are all comfortable with what the assumptions are and what the expectations might be about [the BOF] enter into budget negotiations next year.

Rich Santosky asked Vanderslice about the Grand List, which grew by about $57 million and $62 million annually, respectively, in FY 2022 and FY 2023, compared to the model’s projection of $44 million for the year fiscal 2024.

“Aren’t we in a period of construction and growth that is unprecedented compared to two years ago?” she asked.

Vanderslice responded that a significant portion of Grand List’s recent growth is due to motor vehicles, which will not be valued equally in the future and will likely decline. Additionally, the commercial development now underway will not fully impact the Grand List until the works are complete.

Santosky also expressed a desire to fine-tune the mill rate scenario with more insight and accuracy into estimating the BOE budget and avoid the last-minute discussions that occurred in the previous school budget review process.

Stewart Konigsberg agreed.

“I think we should invite [Wilton Public Schools Superintendent] Kevin Smith we come back for our next discussion,” Koenigsberg said. “At that point, we will have some results from union negotiations and more direction, [including data on] change in the school population. It could be a useful exercise. They can give us a range of what they are thinking.

BOF chair Michael Kaelin he thanked Vanderslice for his guidance and Raimondi for putting together the mill speed projections.

“Although we don’t know where the [budget] will come to, we know that if there is a 3% increase in the BOE budget and a 2% increase in the BOS budget, we will have a 4% increase in the mill rate,” he said. “That will help us when we see their budget”.

Internal procedure

The BOF appears to be taking steps to keep its house in order as the FY2024 budget process approaches.

“Internal governance and internal regulation” were on the agenda of the November 15 meeting.

Kaelin expressed a desire for board members to come to explicit agreement on procedural issues such as “who can talk when and what they can talk about.”

“We are a six-member board. We should all have an equal vote and an equal say,” Kaelin said. “But as we saw last spring, there was fierce conflict, people talking to each other. This is what we cannot have. This is what that we must avoid”.

While Kaelin would prefer to conduct meetings with simple rules, she believes the board should recognize the authority to enforce rules of procedure agreed upon at meetings.

After some discussion as to whether the previous internal conflicts were “isolated incidents” or warranted the need for stricter rules, the board finally voted (with Sandy Arkell abstaining) to review Roberts’ rules for small councils and draft some proposed rules, to be discussed at the next meeting.

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