Mayor encouraging referendum to buy more time
NAUGATUCK — Borough officials are moving forward with a budget proposal that would increase the mill rate more than 4 mills.
After deliberating into the late night Monday, the Joint Boards of Mayor and Burgesses and Board of Finance approved a proposed $119.95 million budget for the 2016-17 fiscal year. The proposal is an increase of $4.68 million, or 4.06 percent, over the current budget.
The proposed school budget is flat at $61.68 million, while the proposal increases municipal spending $4.68 million, or 8.74 percent, to $58.26 million.
Under the proposed budget, the mill rate would increase 4.15 mills from 45.57 to 49.72.
The mill rate is the amount of taxes payable on the assessed value of a home. One mill equals $1 for every $1,000 of assessed value. Under a 49.72 mill rate, a home assessed at $150,000 will pay $7,458 in taxes, an increase of $622.
“You’ve been handed a very difficult draft budget,” Mayor N. Warren “Pete” Hess told the joint boards. “Obviously [the mill rate increase] is unacceptable to us.”
The budget will now go to a public hearing May 2 at 6:30 p.m. at Naugatuck High School.
One the major increases in the proposed budget comes in debt services. The borough will begin paying back bonds taken out for the $81 million Naugatuck High School renovation project and future upgrades at the wastewater treatment plant. Debt services is set to increase about $2.03 million.
Public safety is also a major driver of the increase.
The proposed fire department budget is $4.65 million, an increase of $745,043 or 19.06 percent.
The budget includes filling two of the four vacant firefighter positions.
“It’s not above and beyond. It is because we didn’t fund, over the years, replacements. So we are not bringing them back to the full force, but at least they will be a little bit better,” Board of Finance member Andrew Bottinick said.
The increase in the number of firefighters will ultimately decrease the department’s overtime budget, Board of Finance Chairwoman Diane Scinto said. However, with seven fire fighters planning on retiring this year and the new hires to replace them having to go through the fire academy, overtime is proposed to increase $338,817.
The proposed police department budget is $7.16 million, an increase of $623,341 or 9.53 percent.
The budget includes hiring one new officer and restoring the salary of an officer who is coming off of workers’ compensation, Controller Robert Butler said.
Due to retirements in the police department throughout the current fiscal year, the department’s employee retirement fund is projected to increase $166,507.
The borough is also dealing with projected losses in revenue, namely from the wastewater treatment plant.
“The biggest elephant in the room is our wastewater treatment plant issue,” Hess said. “The budget you have before you is assuming zero rent from Veolia [Water North America]. This is the worst-case scenario on the rent.”
Veolia runs the borough-owned plant. The plant’s incinerator was shut down last month because it was not in compliance with current Environmental Protection Agency standards.
The shutdown means that Veolia isn’t paying rent to the borough since it is not operating the plant. This year, the borough received $2.15 million in rent from Veolia.
Hess said the borough is currently in negotiations with Veolia, the state Department of Energy and Environmental Protection, and the EPA regarding the treatment plant. He said he is trying to resolve issues at the plant in hopes of saving Naugatuck money. The borough may be able to increase rent significantly in negotiations.
Hess encouraged residents to force a referendum on the budget to provide more time to resolve the matter with Veolia, and so the borough can have clearer revenue figures from the state before final adoption of the budget.
If a resolution is reached with Veolia, the rent paid to the borough would be revenue that would decrease the proposed mill rate.
“If we don’t adopt our budget for 60 to 90 days because of budget referendums it may actually work to our advantage,” Hess said. “So it would be unusual to root for a referendum, but in this particular case the longer we have to craft our numbers the more accurate we can be.”
While he’s hoping a referendum would push final budget adoption to a later date, Hess instructed the joint boards to craft the best budget possible with the available numbers.
“I think our charge is going to be to do the best we can with what we have here, keeping the worst-case scenario in play until we have more information,” Hess said.