April 1, 2005

 

Honorable Mayor, Town Council and Citizens of Windsor,

I am pleased to submit the FY 2005-06 Financial Plan and Program of Services. This proposed plan includes recommendations that strive to balance a variety of goals, objectives and values, which at times often compete with one another. I assure you that these recommendations were deliberated with careful thought, especially in light of the revaluation impact last year.

One priority when crafting this financial plan was to maintain the integrity of core municipal services to insure that the citizens and businesses of Windsor continue to enjoy a relatively high quality of life. In addition, it addresses the need for Windsor to maintain our competitive edge so we can continue to attract and retain residents and businesses. Finally, this budget presents a multi-year outlook for service delivery and future fiscal choices. In the end, it is no less than a maintenance budget, and I caution the Town Council that a continuation of erosion in service levels as outlined in this document could jeopardize that high quality of life if extended into future years.

Based on fixed costs and contractual obligations, a 5.4% expenditure increase over the FY 2005 budget would be necessary if we were to propose a "maintenance" budget.

This scenario is illustrated below.

BOE	5.4%	$2.74 M
General Government	5.0%	$1.10 M
Debt Service	6.0%	$345,000
Sewer Services (MDC)	7.4%	$185,000
		$ 4.37M

Resources including grand list growth ($1.28 M) and other revenues ($480,000) total $1.76 million. When taken from the $4.37 million total expenditures needed to implement a "maintenance" budget, a gap of $2.61 million remains for FY 2006.

There were four primary options available to close the gap on the $2.61 million. Thoughtful combinations of these approaches have been taken in crafting this budget.

1. Reduce expenditures and service levels
2. Raise other revenues
3. Utilize the town’s cash reserve funds
4. Increase the mil rate.

The leadership of both general government and the Board of Education clearly understand this is not a "business as usual" year. The Board of Education budget reflects an increase of 2.98% or $1.5 million. To achieve this, their needed resources were reduced by approximately $1.2 million from the fixed cost amount of $2.74 million. Reductions of staff in the Board of Education budget include 5.2 teachers, 4.5 paraprofessionals, 2.0 administrators and others coupled with non-salary savings.

In working with the Town of Windsor Leadership Team, I have developed a budget that proposes an increase of approximately 2.95%, or $641,000 for general government. This is approximately $459,000 less than the projected fixed cost increase.

When increases in debt service and MDC assessments are factored in, the proposed budget results in an overall (ie: town and BOE) spending increase of $2.7 million, or 3.33% over the FY 2005 budget. To mitigate a tax increase for FY 2006, this budget includes the use of $283,800 in additional reserves. The proposed budget increases the mil rate to 29.13, an increase of 0.30 mils over last year’s mil rate of 28.83, resulting in an increase to property taxes by 1.0%.

The proposed FY 2006 General Fund Budget is summarized as follows:

	FY 2005 Budget	FY 2006 Budget	$ Change	% Change
Board of Education	50,839,400	52,356,447	1,517,047	2.98%
Town Operating Budget	21,725,620	22,366,820	641,200	2.95%
Sewer Service (MDC)	2,491,225	2,677,130	185,905	7.46%
Debt Service	5,584,948	5,927,450	342,502	6.13%
Capital Projects	0	0	0
Total	80,641,193	83,327,847	2,686,654	3.33%

In order to maintain current services, or achieve a greater level of service delivery, proposed expenditure levels would need to be increased. That is why this proposed financial plan is ultimately a policy and service delivery document comprised of an array of choices related to:

• Levels of service delivery
• Willingness and ability to pay
• Funding mechanisms
• Short term fiscal context
• Long term quality of life and fiscal impacts

While striving to balance this array of choices, a basic set of parameters were utilized as filters. They include but are not limited to:

• Attempt to maintain the integrity of core municipal services
• Apply a multi-year approach in terms of service delivery and fiscal management
• Address Town Council goals and objectives.

The ability to provide a range of public services so citizens and businesses may continue to enjoy a relatively high quality of life is in jeopardy of being eroded if service levels as outlined in this financial plan continue for a number of consecutive budget cycles.

To achieve a 2.9% expenditure increase in general government spending, a number of areas were reduced that will impact, but not completely destroy the integrity of core municipal services. Some of the reductions listed below are possible due to a "re-thinking" of service delivery, or delaying certain initiatives. Although these choices garner the financial relief to achieve our end goal, they are also decisions that may impact the completion of Town Council goals in a timely fashion.

The equivalent of 9 full-time employees are not funded in this proposed budget. They are:

• 1 - Public Works Maintainer
• 4 - Public Works Seasonal Employees
• 1 - Economic Development Specialist
• 1 - Library Specialist
• 2.5 - Police Officers
• 1 - Part-time Parent Educator/Home Visitor
• 2 - Part-time Clerical Aides
• 1 – Part-time Mechanic Helper

Non-staff resources proposed for reduction in this budget include:

• Professional development, travel and training
• Capital Outlay
• Contractual Services
• Recruitment
• Grants and Contributions

With the implementation of those funding decisions, this budget will attempt to maintain the integrity of core municipal services in areas such as:

• Proactive police patrol districts
• Maintenance of public spaces
• Snow and ice control
• Volunteer Fire and Rescue services
• Public health and welfare
• Services for at-risk populations including teenagers
• Access to recreation, cultural and leisure activities

With every choice, there is a consequence. Spending reductions may not be as evident in some cases as it is in others. The following are examples of the impact residents may notice with regards to direct service delivery levels from town forces.

• Delays in responding to non-emergency repairs and maintenance of roads, sidewalks and parks
• Reduced hours at Veterans Pool
• No enhancements to town-wide small business retention efforts
• Reallocation of school resource officers from elementary schools
• Limited support for neighborhood watch programs
• Potential delays in responding to non-emergency police calls
• Reduce contributions to non-profit community organizations/events.

Fiscal Year 2006 Revenues

Grand list growth has produced $1,286,552 in new revenue for FY 2006. Windsor, like all Connecticut municipalities is dependent upon property taxes to finance local government services. Property taxes as a percentage of total revenues are 80.5%.

Other than property taxes, the town expects building permit revenue to remain at $615,000. While conveyance fees are expected to come in at approximately $225,000 over budget in FY 2005, this item is budgeted less in FY 2006 due to the scheduled sunsetting of the higher conveyance tax rate ($2.50/$1,000 versus $1.10/$1,000). Additional pressure on the General Assembly may persuade them to keep the rate the same, but it is premature to assume at this time.

State aid is scheduled to increase by approximately $430,000 in the Governor’s proposed budget. Interest revenue is projected to increase by $280,000 due to an increase in interest rates. Other revenues are projected to remain relatively the same. It is noted that the transfer from the Landfill Enterprise Fund is $100,000 less than FY05 due to the need to plan for the eventual closure of the landfill in FY 2008, which will result in the majority of the annual transfer being eliminated.

FY 2005 Update

The approved General Fund budget for fiscal year FY 2005 is $80,641,193. Projected revenues are expected to exceed the budgeted amount by approximately $990,000 and expenditures are projected to be $451,000 below budget. Much of the revenue surplus can be attributed to the increased conveyance tax re-approved last year by the General Assembly; higher interest earnings; sale of excess property and higher state aid. Expenditures this fiscal year should be below budgeted amounts due primarily to cost containment efforts instituted in September. These efforts include a hiring freeze, reductions in travel and training, suspending the Volunteer Support Program and reductions in materials and supplies as well as lower than expected charges in General Services. However, Board of Education expenses will be over budget due to the mandatory expense of special education tuition to other towns for special needs students. The town shows very good discipline over expenditure areas it controls, but it has became clear that the town is vulnerable to increasing cost pressures for items such as employee and retiree health insurance which has risen by 18% and sewer assessments by the Metropolitan District Commission.

Synopsis

From a fiscal management perspective, this proposed budget attempts to balance expenditure increases, view service delivery in a multi-year perspective, reduce non-fixed cost expense categories and balance the use of cash reserves and potential tax increase.

It takes into consideration factors that impact Windsor today, and will continue to impact our community in years to come. Factors such as aging infrastructure, older housing stock, shifting demographics and for some, stagnating household incomes.

In conclusion, I would like to stress that targeting programs and services to be reduced or eliminated is a balancing act that no one on this staff took lightly. We understand the fiscal and political environment and this proposed financial plan offers a balanced approach to meet today’s realities and look ahead to the years to come.

As I stated in the opening paragraph of this document, all recommendations for this proposed financial plan were deliberated with careful thought. I am proud of the many town employees who have devoted their time to insure that this budget balances the maintenance of core municipal services, maintains the town’s competitive edge, and provides a multi-year outlook for future fiscal choices. I would like to thank the Board of Education Administration, members of the town’s Leadership Team, Budget Review Team and the Finance Department for their efforts.

Respectfully Submitted,

 

Peter P. Souza

Town Manager