By Andreas Yilma, Staff Writer
NAUGATUCK — After hours of discussion and some final tweaking, the Joint Boards of Mayor and Burgesses and Board of Finance May 13 adopted a $127.1 million budget for the 2020-21 fiscal year.
The budget increases spending by about $1.9 million, or 1.5 %, over this fiscal year.
Following the joint boards meeting, the Board of Mayor and Burgesses voted, 7-3, to set the tax rate at 47.75 mills, an increase of 0.5 mills, for the 2020-21 fiscal year. Deputy Mayor Laurie Taf Jackson and burgesses Jack DeOliveira and Robert Neth voted no on the motion to set the tax rate.
The tax rate is the amount of taxes payable on the assessed value of property. One mill equals $1 for every $1,000 of assessed value. Under a 47.75 tax rate, the property taxes on a home assessed at $100,000 are $4,775.
In a typical year, residents could petition to send the budget to a referendum. The state has suspended in-person budget votes and referendums due to the COVID-19 pandemic.
The joint boards approved a budget proposal late last month that kept the tax rate flat. In a divided decision last week, the joint boards opted to use about $850,000 less from the fund balance, or surplus, than planned to balance the budget, which led to the tax rate increase.
The budget approved last week uses $4.59 million — about $3.3 million from the fund balance and $1.25 million from an insurance reserve account for workers compensation and dental benefits — as revenue to balance the budget.
“I think it’s a difficult budget. It was clear last night (May 13) to the joint boards that the services being provided were essential,” Board of Finance Chairman Daniel Sheridan said in a subsequent interview. “They entertained not to cut any significant costs. We had to raise the mill rate to offset the costs.”
Sheridan said increasing the tax rate by half a mill helps keep the fund balance at a more reasonable level. He added that officials need to stop using surplus money in the future because it’s a depleting resource. Officials used $1 million from the fund balance in this year’s budget.
In an interview the day after the meeting, Mayor N. Warren “Pete” Hess said he believes the economic impact from the coronavirus is going to play out over the next two years. He said the borough is also dealing with rising health care costs of $1.6 million next fiscal year and $1.5 million in the 2021-22 fiscal year, on top of other increasing expenses.
Hess called the 0.5 mill increase and the use the fund balance a compromise to address the issues while not completely raiding surplus funds.
“The mill rate is too high,” Hess said. “We’re doing everything in our power to reduce it.”
Hess said economic development is key, and the only way the borough is going to make significant economic growth is to develop large-scale projects like the proposed intermodal transportation hub dubbed the “Port of Naugatuck” on the former Uniroyal site and a transit-oriented development project planned for the Naugatuck Event Center site and adjacent vacant lot.
In a May 12 news release, the Naugatuck Republican Town Committee urged the joint boards to implement a pay freeze for employees as well as a freeze on new hires to limit the budget’s impact on taxpayers.
Hess said salary raises in the budget are governed by collective bargaining agreements and it’s not solely up to board members whether they are paid.
The joint boards approved a $63 million budget for the Board of Education after moving $900,000 of insurance costs from the school budget to the municipal budget.
Shifting the funds didn’t impact the overall budget. It freed up money for other items in the school budget, while allowing borough officials to limit the increase to avoid setting a higher minimum school spending requirement.
The school board’s budget this fiscal year is $62.2 million. The school board initially requested $64.4 million from the borough for next fiscal year.
The joint boards last week also made changes to the capital budget before settling on $1.9 million for capital projects.
Officials removed $50,000 to repair a freight elevator in the Naugatuck Event Center and $30,000 for exterior renovations at the Naugatuck Fire Department. The joint boards also reduced the amount earmarked for paving roads by about $62,000 to $660,000.
The joint boards added $250,000 into the capital budget to put toward developing the “Port of Naugatuck” project.
In an effort to reduce costs, DeOliveira, Taf Jackson, Neth and fellow burgesses W. Francis Dambowsky, Carl Herb and Charles Marenghi gave back all or some of the stipends — about $9,000 combined — they get for serving on the board. Burgesses get an annual stipend of $3,366, and Taf Jackson receives an additional $1,000 for being deputy mayor.
Overall, Sheridan described the budget as a compromise.
“I think we ended up with a reasonable compromise in a very difficult budget that meets the needs of keeping Naugatuck fiscally strong,” he said.