Officials revise borough budget

From left, Naugatuck burgesses Robert Burns, Patrick Scully, Laurie Taf Jackson and Rocky Vitale look over a revised 2016-17 budget Monday at the Board of Education office. Borough officials approved a proposed $120.7 million budget. –LUKE MARSHALL

From left, Naugatuck burgesses Robert Burns, Patrick Scully, Laurie Taf Jackson and Rocky Vitale look over a revised 2016-17 budget Monday at the Board of Education office. Borough officials approved a proposed $120.7 million budget. –LUKE MARSHALL

NAUGATUCK — Less than a week after voters rejected the proposed municipal and school budgets at a referendum, borough officials approved a revised budget that increases spending over the previous proposal, but reduces the impact on the mill rate.

On Monday, the Joint Boards of Mayor and Burgesses and Finance approved a $120.7 million budget for 2016-17 to send to a public hearing. The hearing is Thursday at 6:30 p.m. at Naugatuck High School.

The proposed $120.7 million budget is an increase of $5.46 million, or 4.73 percent, over the 2015-16 budget. The proposed budget increases the mill rate 1.99 mills, or about 4.3 percent, from 45.57 to 47.56.

One mill equals $1 for every $1,000 of assessed value. Under a 47.56 mill rate, a home assessed at $150,000 will pay $7,134 in taxes, an increase of $298.

The proposed municipal budget is $59 million, which is an increase of $5.46 million, or 10.19 percent over the 2015-16 budget.

The proposed Board of Education budget remained $61.6 million, which is flat from the previous year.

Since Naugatuck is one of 30 Alliance Districts in the state, school spending cannot be cut from the previous year’s budget, even though voters rejected the school budget.

The same isn’t true for municipal spending. However, the municipal budget approved Monday is higher than the $58.2 million one rejected at a referendum July 12.

The previous total proposed operating was $119.98 million budget and would have increased the mill rate 4.17 mills. The revised budget is an increase of $776,207 over the budget the voters rejected. However, the mill rate increase fell by 2.18 mills.

The driving force behind the latest spending increase and the decrease in the mill rate increase is the borough’s settlement with Veolia North America, which runs the borough’s wastewater treatment plant.

The first budget proposal did not include revenue from the rent Veolia pays to the borough. At the time, Veolia had shut down the incinerator at the plant over concerns with meeting federal mandates to reduce pollutants and stopped paying rent.

The borough and Veolia reached an agreement after the first proposed budget was adopted and Veolia started to pay rent again. The revenue, which wasn’t included in the first budget, was added in to reduce the mill rate increase.

The agreement stipulated that the borough is responsible for the cost to chemically treat wastewater in order to keep the emissions within the mandated levels and make upgrades to the incinerator. The cost to treat the water is $285,000, which is an expense not accounted for in the first budget proposal.

Debt services, which is a driving force in the overall increase due to the borough starting to pay off the $81 million Naugatuck High School renovation project, is increasing $385,646 over the previously proposed budget. The latest increase is due primary to upgrading the incinerator at the plant.

The borough is also facing cuts in state funding that weren’t known when the first budget proposal was adopted.

Mayor N. Warren “Pete” Hess said the borough will receive $750,000 less in revenue from the state than it had originally budgeted.

The borough will receive $26,000 from the state’s new sales tax sharing program, which is $175,000 less than what the borough had budgeted. The borough will also receive $2,990 for payment in lieu of taxes for state land. This is nearly $81,000 less that it received last year and $1,000 less than the state had originally promised, according to Hess.

The Board of Education was also impacted by state cuts. The first budget proposal estimated $408,000 in transportation funds from the state. These funds were completely cut, according to officials.

Hess said the reduction in the mill rate increase would have been greater if the state funding hadn’t been cut.

Hess said the proposed budget, while increasing spending, takes care of problems that have been plaguing the borough for a long time.

“What the budget does is resolve many problems from the past, including but not limited to bonding projects, problems at the wastewater treatment plant, settlement of the Naugatuck Ambulance litigation, and other matters from prior years,” Hess said.

The joint boards will meet July 25 at 6:30 p.m. at the Board of Education office to adopt a budget, which could be forced to another referendum through petitions.