Town of North Branford

1. Town of North Branford Town Manager’s Proposed Budget Fiscal Year 2009-2010

2. Budget Process • The budget process should be viewed as a priority-setting one where scarce resources are allocated. This year, the resources are more limited than normal. • The budget document offers a proposed set of priorities and service levels to the Town Council. • The budget reflects past commitments of the community and a methodology to maintain core services, programs, and facilities.

3. Budget Challenges • National, State and Regional Economic Trends have a significant impact on local resources. • Demands for Town services increase concurrently with economic pressures and downturns. • State revenue streams are less predictable and are of critical importance to balancing local priorities.

4. Budget Challenges The budget attempts to balanceincome with demands for service. Revenues: Property Taxes State Support User Fees Expenditures: Town Government Debt Service Board of Education

5. Budgetary Constraints – Current Fiscal Year • Current Budget Limits on departmental discretionary spending imposed in December. • Limits on travel/training • Fuel budgets adjusted • Non-emergency Overtime Eliminated • Part-time hiring moratorium • Strict Adherence to Purchasing Guidelines • Discretionary Spending Eliminated • Savings from this year will be targeted to reduce taxes next fiscal year.

6. GENERAL GOVERNMENT EXPENDITURES

7. Proposed funding levels allow for a status quo budget to: Face required mandates; No new staff; No new services; Increased utility costs Health Insurance increases of 10%. Expenditure Summary:General Government • General Government operating budget proposed to be funded at $11,803,303 – a ZERO increase. • Department requests were cut $325,641 by the Town Manager.

8. Adjustments to Departmental Budgets • Discretionary Spending Eliminated • Fuel Costs reduced via regional purchasing • Position Control Measures Initiated • Special Revenue Funds Utilized • New Equipment and Projects postponed • Travel/Conferences Restricted • P-T Positions Reduced/Eliminated

9. Creativity and Regionalism In developing the budget for FY 2010,every effort was made to explore new and creative ways of meeting the demands for service. Thank you to all the Department Heads and the Superintendent of Schools for cooperation and teamwork in addressing these critical issues.

10. Creativity (continued) Examples: • Regional Dispatch Center (4 towns possible) • Food Commodity Joint Purchasing w/ Schools • Regional Purchasing Cooperative • Volunteers for staffing shortfalls • Shared I.T. services with Town/Education • Continued Cooperative Facility Maintenance • Inter-town mutual assistance agreements expanded

11. Expenditure Summary:General Government The above breakdown of expenses includes contractual obligations and increases in non-discretionary spending. Capital outlay is for departmental operating equipment.

12. EXPENDITURES FOR CAPITAL IMPROVEMENTS

13. Capital expenditures allow for future needs to be addressed as identified in the Capital Improvement Program. Capital Expenditure Needs: Road program Public Works Sander Building Phase II Police HQ Garage and Addition Emergency Communications Improvements Equipment replacement Swajchuk Park Phase II Technology Improvements Fire Equipment Replacement Expenditure Summary:Capital Improvements

14. Expenditure Summary:Capital Improvements • Proposed Capital Improvement Budget: • Funded Projects – Revaluation for October 1, 2010 Grand List Total Estimated Cost: $ 300,000 Funding Sources: Fund Balance Transfer - $76,000 CRRA Settlement - $224,000

15. Debt Service – Town Commitments Increases in the Debt Service Expenditures for the FY 2010 Budget are due to the following commitments of the Town: • North Branford Intermediate School (NBIS) • Smith and Atwater Library Projects • Open Space Purchases • Reeds Gap Road Bridge Reconstruction • STW/TVES Sewer Connection

16. Debt Service Expenditures • Expenses will increase by $919,502 (or 24.48% from the previous year) for the upcoming Fiscal Year. • Of the total proposed increase in expenditures for the upcoming Fiscal Year, the increase in Debt Service represents 54% of that total.

17. Expenditure Summary:Debt Service • Debt Service payments are budgeted expenditures to repay debt issued for major improvements such as buildings. • Debt Service is proposed to increase slightly. The savings from the FY03-04 refinancing of debt has ended.

18. Debt Service

19. Proposed Expenditure Budget Summary

20. Expenditure Summary

21. REVENUES TO FINANCE THE PROPOSED BUDGET

22. Financing the Budget:Changes in the Grand List The property tax remains the Town’s main source of revenue accounting for 73.4% of all revenues. Grand List growth is a combination of slight increases in real property values and similar declines in the value of motor vehicles.

23. The Grand List October 1, 2007 October 1, 2008 Increase/Decrease Real Estate $1,146,462,830 $1,153,960,160 $7,497,330 0.6% Motor Veh. $ 103,641,100 $ 100,374,490 $3,266,610 (3.3%) Pers. Prop. $ 34,374,085 $ 38,900,412 $4,526,327 11.6% Total $ 1,284,478,015 $1,293,235,063 $8,757,047 .7%

24. Financing the Budget:State Aid State aid has been used to limit property tax increases. Cuts in the State budget pass the tax burden to local taxpayers. Successive State budgets have limited aid to cities and towns, resulting in a tax shift from the tax base of the State to that of local government.

25. Interest Income is a reflection of the national trends and is expected to continue declining over the next several months. Fees and Charges – increases should be limited to avoid passing on additional costs to taxpayers. Real Estate Conveyance Tax Income is expected to decline with activity in the housing market falling. Building and Land Use/ Development Fees should be limited to avoid deterrents to economic development opportunities. Financing the Budget:Other Revenues

26. Financing the Budget:Use of Fund Balance • Fund Balance has been used to provide a degree of tax relief. • Maintenance of an Undesignated Fund Balance of 10 to 15% is pursuant to Town Policy and is recommended by the Town’s Auditor and Bond Rating Agencies. (Proposed Budget = 9.51 %) • The Fund Balance will be a key factor in determining the Interest Rates of the Municipal Bonds to be sold over the next few years. • Additional use of the Undesignated Fund Balance beyond what is proposed is NOT RECOMMENDED.

27. Revenue Summary

28. PROPOSED TAX RATE

29. Proposed Tax Rate • Slightly Decreased State Revenues • Marginal growth of the Grand List • Declining local revenue sources • Increase in Debt Service Expense • Increase in the cost of education services The Proposed Budget requires a tax rate of 26.34 mills – an increase of 1.39 mills or 5.5%. The major reasons behind the increase are:

30. Proposed Tax Rate Pro-Rata Mill Rate Distribution

31. Budget Impact (on average) While the Council will be pressured to reduce taxes, it will take large cuts to reduce the tax rate. In this scenario, $636,889 in cuts changes the tax increase from 3.88% to 2.43%.

32. Value of A Mill • One Mill = $1, 273,778 • Every $12,738 in cuts reduces the mill rate 0.01 mills.

33. Is this the Perfect Budget? The answer is NO But given the economic uncertainties, it’s a prettygood start. maybe with a little luck… and some hard work…

34. TOWN OF NORTH BRANFORD BOARD OF EDUCATION PROPOSED BUDGET OVERVIEW Deborah Prunier, Chair Board of Education