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A comprehensive report on the economic environment, financial strategy, operational policy, and budget overview for the 2008-2009 fiscal year budget.
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First Selectman’s Report 2008-2009 Fiscal Year Budget Jeremy J. Shingleton April 16, 2008
Table of Contents • Economic Environment: Page 3 • Financial Strategy: Page 7 • Operational Policy: Page 12 • Budget Overview: Page 13 • Key Deliverables: Page 18 • Appendix: Page 19
Unemployment is on the Rise Note: Q1 2008 – 232,000 jobs lost
Energy Costs Continue to Rise Note: May 2008 Futures for LS Crude Oil $112 bbl
Times are tough! Household expenses are growing faster than salaries Economic outlook poorest since August 1993 Small Business optimism at 28-year low National sales outlook lowest since October ’01 Nationwide foreclosures for March up 57% over 2007 Excessive taxes and poor economic outlook have a negative effect upon the local economy, particularly small businesses Tax burden has an immediate impact upon the residents, making it difficult to make ends-meet Taxpayers demand relief and they deserve it! Goal is to slow spending, while still improving level of service provided to the community Environmental Assessment
Operating Budget Strategy • Contractual obligations, utilities, insurance, and benefits represent a significant portion of budget • Aggressively reduce spending in all other areas, while improving service levels and making long-term investments in infrastructure Controllable Expenses
Mill Rate Stabilization Long-term Capital Planning + Operational Efficiency + Proactive Debt Management = Stable & Predictable Taxes!
Overall Operations Policy • Improve productivity • Establish clear goals and processes, actively manage, and hold people accountable • Efficiently organize and allocate resources • Manage departments in a business context • Eliminate waste • Create operational efficiencies and innovation to reduce labor and materials costs • No new expenses without a business justification • End the entitlement mentality and adopt a merit-based salary program • Take advantage of low interest rates and competitive bidding by bonding major projects • Overall, Find Ways to Do More with Less!
Budget Overview • Reduced departmental expenses for most departments • Eliminated 4 positions • Full-time Development Compliance Officer (currently vacant) • Part-time Medical Advisor • Part-time Tax Collector Clerk • Proposed New Police Officer • Added 1 position • Highway Maintainer (starting January 2009) • Prioritized needs of all town departments • Controlled expenses through innovation and efficiency
Sources of Revenue • Revenue largely dependent upon property taxes • Limited state funding • Actively seeking state and federal grant opportunities
Key Deliverables for 2008-2009 • Streamline operations of town government • Reduce long-term exposure to volatile energy rates • Develop a forward view of our organization, anticipating and responding to future problems • Improve quality of town roads, parks, schools, and municipal buildings • Enhance image of town, developing a cultural center around historic downtown and riverfront • Grow commercial tax base and bring skilled jobs to Cromwell
2008-2009 Fiscal Year Budget Appendix
Annual Budget Process • Dept. Requests to First Selectman by February 1st • First Selectman Reviews and Makes Recommendations • Board of Selectmen Workshops March 5th and 6th • Board of Selectmen Finish Work by March 14th • Selectmen Present to Board of Finance at Regular March 27th Meeting (per Charter) • BOE Present to Board of Finance at Regular March 27th Meeting (per Charter) • Board of Finance-Set Hearing Dates at Meeting • Public Hearing: April 16th • Board of Finance Workshops – April 23rd and 24th • Board of Finance Finish Work by April 28th (10 days after last hearing but no later than April 30 per Charter) • Town Meeting – May 6th • Referendum Vote – May 10th
GLOSSARY OF COMMONLY USED TERMS • Appropriation: to set aside money for a specific use. • Adjusted Budget: Budget as approved by Town Meeting/Referendum plus any additional appropriations made during the fiscal year. • Capital/Non-Recurring (CNR) Fund: This is a special fund set up for capital or non-recurring expenditures over $10,000. Per Town Charter, the appropriation for this fund is NOT included in the annual taxation. • Debt Service: Annual payments necessary to pay down debt obligations already incurred. • Fiscal Year: This is the 12-month period that is covered by the annual budget. In our case, Cromwell’s fiscal year runs from July 1st to June 30th. • Fund Balance: Unreserved governmental funds maintained to meet unanticipated needs or challenges, such as pre-funding reimbursement grants offered by the State or other agencies or to offset extraordinary expenditures associated with natural disasters. Credit rating agencies monitor the level of fund balance to evaluate a government’s creditworthiness. • General Fund: The fund established for the general operations of the Town. Other funds are established for specific purposes, such as various building and capital projects, or special revenue situations.