Annual Budget 2020-2021
Total Page:16
File Type:pdf, Size:1020Kb
Town of West Hartford, Connecticut ANNUAL BUDGET 2020-2021 Adopted by the Town Council Annual Budget Fiscal Year July 1, 2020 - June 30, 2021 Adopted by the Town Council West Hartford Connecticut Town of West Hartford – Office of the Town Manager 50 South Main Street, Room 310, West Hartford, CT 06107 P: (860) 561-7440 F: (860) 561-7438 www.westhartfordct.gov June 22, 2020 Town Council Re: Fiscal Year 2020/21 Budget I am pleased to present the fiscal year 2021 Adopted Budget totaling $300,246,758, representing an increase of $3,753,192 or 1.27% from the fiscal year 2020 Adopted Budget. The municipal services portion of the Adopted Budget totals $112,854,278, representing an increase of $2,494,704 or 2.26% over the current year Adopted Budget. The Superintendent of Schools’ Adopted Budget totals $170,073,528, an increase of $1,272,839 or .75% over the current year. The capital financing portion of the budget for both municipal and education services totals $17,318,952, a decrease of $14,351 or .08% from fiscal year 2020. Summary of General Fund Expenditures FY 2020 Adopted Town Council Adopted Increase/Decrease Percent Change Total Town Services $ 110,359,574 $ 112,854,278 $ 2,494,704 2.26% Board of Education $ 168,800,689 $ 170,073,528 $ 1,272,839 0.75% Capital Financing $ 17,333,303 $ 17,318,952 $ (14,351) -0.08% Total Expenditures $ 296,493,566 $ 300,246,758 $ 3,753,192 1.27% The Town will need to increase property tax revenue by $2,432,814 or .94% to finance the fiscal year 2021 Adopted Budget. Of this amount, $2,175,115 will be generated as a result of Grand List growth. With respect to the tax rate, the Town Council has adopted a uniform mill rate of 41.80 mills to finance the Adopted Budget. This represents a 0% increase for real and personal property, and motor vehicles. Taxes for the average homeowner with two vehicles should be consistent with FY 2020. Budget Policy Objectives This budget process was extraordinary as the impact of the COVID pandemic forced the Town and School District to re-evaluate the overall needs of the residents in conjunction with the overall ability to finance those needs in the face of significant unemployment, a plummeting economy, and the ongoing battle to maintain the spread of the deadly virus. Decisions that in normal times would not be considered, were discussed and implemented in the name of public safety and health, including the closing all Town buildings to the public, requiring non-essential staff to stay home, and cancelling all activities where individuals would congregate such as sports, camps, outdoor pools and public events. The state, through executive orders issued by the Governor, suspended or amended certain rules and requirements in order to allow local governments to operate in this new reality. As examples, distance learning and virtual meetings became the norm and working remotely became a necessity. Town of West Hartford – Office of the Town Manager 50 South Main Street, Room 310, West Hartford, CT 06107 P: (860) 561-7440 F: (860) 561-7438 www.westhartfordct.gov In order to adopt a budget that minimized the fiscal impact on both residential and commercial communities, management proposed and the Town Council ultimately approved significant budget adjustments including hiring freezes, anticipated union concessions, reductions in non-critical services (including laying off a sizable amount of the Town’s part time workforce), and putting on hold (pending further review and evaluation) all Town and Education activities that required public contact. In an effort to mitigate the potential property tax increase, the Adopted Budget includes the use of $1.5M of undesignated fund balance. Additionally, in accordance with the Pension Board’s long term goals, the Town further reduced the discount rate from 7.125% to 6.99% to better project asset growth rates. The increase in the Fund’s long term liability as a result of this decrease in the discount rate was primarily offset by adjusting the plan’s amortization growth rate to better reflect consistency with other communities. The Town also continues to fund Other Post-Employment Benefits (OPEB) in accordance with actuarial recommendations. Revenue Outlook The 2019 Grand List increased by $52,036,239 or 0.82%, for a net taxable Grand List of $6,368,328,344. This represents measured growth during a non-revaluation year and is a testament to West Hartford’s continued ability to attract residential and commercial investment. The real estate portion of the Grand List increased by $31,168,568 or 0.55%. Personal Property increased by $5,866,459 or 2.9% and the Motor Vehicle list increased by $15,001,212 or 3.5%. The Adopted Budget maintains the current year’s property tax collection rate of 99.1%. The Governor’s Biennial Budget has fluctuations in a variety of categories over the current year revised State Aid projection. Under the Governor’s estimates, the Education Cost Sharing grant will increase by $423,671. The Youth Services Grant, which had been a general fund revenue and was appropriated to Bridge Family Services, is now going directly to Bridge Family Services. Some adjustments have been made to revenue accounts as a result of limited programs and services proposed for recreation, senior centers, the Elmwood Community Center, and outdoor pools. Additionally, due to declining interest rates, investment income is also projected to decline. In order to maintain the current FY 2020 mill rate of 41.80 mills for FY 2021, the Adopted Budget relies in part upon the use of $1.5 million in undesignated fund balance. Expenditures The Town of West Hartford’s General Fund budget is comprised of three major components: municipal services, the West Hartford Public Schools, and capital financing. 1) Municipal services - The municipal services portion of the Adopted Budget totals $112,854,278, representing an increase of $2,494,704 or 2.26% over the current year. The significant cost drivers leading to this increase include: Fully funding the Actuarially Determined Employer Contribution (ADEC) for the Pension Fund; Fully funding active and retiree health insurance; Town of West Hartford – Office of the Town Manager 50 South Main Street, Room 310, West Hartford, CT 06107 P: (860) 561-7440 F: (860) 561-7438 www.westhartfordct.gov Reducing the uninsured reserve level by $500,000 to $1million which better reflects a reasonable reserve level; Transferring one additional Police Officer (total of two) position and benefits to the Parking Fund; Reducing the projection for non-union unsettled labor contracts by $675,000, which will be achieved either through contract negotiations or layoffs; Increasing the ad valorem tax for wastewater service provided by the Metropolitan District Commission (MDC) by $793,200 (6.9%); Reducing part time labor in Leisure and Social Services and Library to reflect the projected diminished programming available for summer camps, outdoor pools, Senior Centers and the Elmwood Community Center; all related to the COVID pandemic; Reducing part time labor in Public Works for Grounds Maintenance. Reducing other various accounts, including utilities, related to projected limited facilities usage as a result of the COVID pandemic. While no program has been eliminated in its entirety, some of the budget amendments will diminish certain service levels. 2) West Hartford Public Schools budget – the final budget adopted by the Board of Education totals $170,073,528, an increase of $1,272,839 or 0.75% over the current year. Significant drivers include the following: An increase of $3,300,000 for salaries, in accordance with collective bargaining agreements; A reduction of $1,970,000 in benefit costs as the cost of retiree health benefits will be funded by the BOE Retiree Health Reserve in fiscal year 2020-21; A net decrease of $57,000 for all other expenses, resulting from the planned use of $1,500,000 of current year surplus, which is to be transferred to a non-lapsing account and used to offset higher special education tuition, transportation, and professional services costs. 3) Capital financing – The capital financing portion of the budget for both municipal and education services totals $17,318,952, a decrease of $14,351 or 0.08% over the current year plan. Some notable projects for the first two years of the Capital Improvement Plan (CIP) include the Fern Street Bridge replacement ($4,200,000), School Security Improvements ($3,700,000), Animal Shelter ($750,000), Police Shooting Range ($750,000), Recycling Center Modernization ($1,370,000), and Storm Water Management Projects ($3,508,000). Fund Balance As stated earlier, one of management’s objectives is to continue the Town’s efforts to increase its undesignated fund balance in the General Fund. While West Hartford has long enjoyed a AAA/Aaa bond rating from the credit rating agencies, the Town was put on a negative outlook in fiscal year 2017 by Moody’s Investor Services due in part to the uncertainty regarding State aid and a low undesignated fund balance ratio as compared to peer Connecticut AAA rated municipalities. Town of West Hartford – Office of the Town Manager 50 South Main Street, Room 310, West Hartford, CT 06107 P: (860) 561-7440 F: (860) 561-7438 www.westhartfordct.gov Moody’s has since removed the negative outlook and reaffirmed the Town’s stable outlook as a result of the Town’s strong financial position and its commitment to achieve a 9% undesignated fund balance by the end of fiscal year 2019. While the Town’s bond or credit rating is important as it is a significant factor in determining the interest rate that the local government will pay on bonds that it issues, the Town has decided to utilize $1.5 Million of undesignated Fund Balance to stabilize the tax increase for FY 2021.