NAUGATUCK — The Joint Boards of Mayor and Burgesses and Board of Finance last week adopted a $127.1 million budget proposal for the 2020-21 fiscal year.
The proposal increases spending by $1.9 million, or 1.5 %, over the present budget.
The spending plan uses $5.35 million — $4.1 million from the fund balance and $1.25 million from an insurance reserve account for workers compensation and dental benefits — as revenue to cover a shortfall, balance the budget and keep the tax rate flat at 47.25 mills next fiscal year.
The joint boards deliberated among three options when it came to using money from the fund balance, or surplus. The other options would have used $3.7 million or $3.3 million but raised the tax rate by 0.25 mills and 0.5 mills, respectively. Officials voted, 13-7, to leave the tax rate flat.
The $4.1 million transfer from the fund balance drops the account to $7.4 million, or 7% of the total budget, according to finance board Chairman Dan Sheridan. Officials anticipate this fiscal year will finish with a surplus, which will help replenish the fund some.
Sheridan, who voted against the option to keep the tax rate flat, said officials who wanted to keep taxes level should have reduced spending further.
“In today’s uncertain times, I think that’s totally inappropriate. I think it’s irresponsible to run the fund balance so low,” Sheridan said. “It sets us up for a significant mill rate increase in 2021-22 budget. I think having no increase is totally inappropriate.”
Sheridan said the transfer limits the borough’s surplus available in case something unforeseen happens in the next two years.
A week after the finance board reduced spending by about $800,000, the joint boards further reduced the budget by $300,451 to get to the $127.1 million total.
The changes included a reduction of $100,000 from the Board of Education’s budget request. The proposed school budget stands at $63.9 million, which is an increase of $1.7 million from this fiscal year.
Officials are also looking into whether they can move $1 million in medical premium costs from the school budget to the municipal budget. This wouldn’t impact the overall budget, but it would allow borough officials to keep the school budget increase down to avoid increasing the minimum school spending requirement. State law requires municipalities to spend at least as much on education from one year to the next, with some exceptions.
Officials also deferred the $200,000 yearly mortgage payment for the purchase of parcels A and B — the former General DataComm building and the adjacent parking lot downtown — for a year. This reduced the borough’s debt service to $12.3 million, under the budget proposal.
Officials also made some adjustments in the proposed $1.8 million budget for capital requests. The joint boards took out a single axle dump truck and police car, and extended leases for public works vehicles from three to five years to free up $122,716. These funds were put toward street paving, bringing the amount earmarked for road work to $722,716, and restoring most of a previous $150,000 reduction for paving the finance board approved.
In lieu of an in-person hearing on the budget proposal, residents can submit comments and questions on the budget online at www.naugatuck-ct.gov. A submission form is available by clicking on the “Budget Information” link in the menu bar on the left side of the homepage. Officials are accepting comments through May 10.
The joint boards are scheduled to review the spending plan a final time and vote to adopt a budget May 13.