Herbst's 2015-15 budget message
In accordance with Chapter IV, Section 1 of the Trumbull Town Charter, I present my sixth budget for fiscal year, 2015-2016.
In preparing this transmittal letter, I reviewed every other budget I have submitted to your board. In my transmittal letter of four years ago, I said:“[I]rrespective of our personal beliefs as to what is an appropriate budget for the Town . . . each of us must approach this process in a thoughtful and deliberate manner, placing the well-being of the town above personal or partisan considerations.” I still believe this to be true. It is based on this premise that the Board of Finance must confront these challenges in a collaborative manner and adopt a municipal budget that protects our Town, maintains our school system and most importantly considers the current economic conditions afflicting our residents.
TOWN BUDGET, GENERAL FUND BALANCE AND A HISTORY OF TAX RATE
This year, I am proposing an overall town budget of $160,347,023, with an increase in expenditures of 2.17%. Of this total expenditure increase, 1.42% is for the Board of Education, and .28% is dedicated to increased pension contributions. Debt service is down .06%. This means for all other town services, the Town will realize a modest .54% increase in expenditures. This .54% increase includes contractually guaranteed wage increases, which underscores how we have worked collectively to make government smaller and smarter under this proposed budget. If the budget proposed is adopted, Trumbull taxpayers will see a 2.19% mil rate increase. The budget that I present to you for fiscal year 2015-2016 not only makes meaningful investments in public education, but also maintains and improves vital services, public safety and our infrastructure. The overall Town employee headcount has been reduced by 3 full time positions in this budget over the previous fiscal year.
Over the last six years we have been able to make these investments and correct years of benign neglect while having one of the most stable and predictable tax rates in all of Fairfield County. If this budget is approved as presented, the average annual tax increase over the last six budgets will have been 2% per year, among one of the lowest two year averages in all of Fairfield County.
|Fiscal Year||Tax Increase|
In this budget, our General Fund balance remains at a healthy 10% of our annual operating budget. This hard work is exactly why Trumbull saw its credit rating upgraded last year by Standard and Poors. The Town’s total general fund balance is $15,234,809, representing 10% of the Town’s operating budget. The Town will also realize considerable savings on a refinance of existing debt, which will allow the Town to reduce our debt service obligations by $900,000 this year. This will help to bring our expenditure increase down, which in turn will positively impact the proposed mil rate that will be adopted later this year.
As the Board of Finance and Town Council consider a compensation plan for elected and non-union Town officials, you will note that for the First Selectman, Town Clerk and Town Treasurer, I have put zero dollars in the salary line item for these positions to take the politics out of this debate. Those funds have been placed in the contingency line item in this proposed budget. I am going to let your board, consisting of 3 Republicans and 3 Democrats make this collective decision concerning the appropriate wages for these three elected positions. It is important for the general public and taxpayers of Trumbull to know that any change will only take effect after the 2015 municipal elections.
TOWN PENSION FUNDS
For the first time ever, the annual required contribution (ARC) for both the Town and Police pensions are fully funded. It is significant to note that during my tenure the ARC has increased $2,668,000 in the annual operating budget for the Town pension fund and $1,657,000 for the police pension fund. Over the last six budget cycles, pension contributions have increased $33,495,000 million to meet the needs of present and future retirees. In 2009, the pension fund represented a clear and present danger to the fiscal health of the Town of Trumbull, with a town pension fund only funded at 27%. This increase in funding over the last six years should underscore the gravity of the situation when we took office in 2009. Six years later, we have set our pension systems on a path to prosperity, where continued commitment in the operating budget and a diversified investment strategy will lead to a pension system that is fully funded.
Town Treasurer John Ponzio has advised me that Town pension funds saw $1.4 million of investment earnings over the past year, with a positive cash flow of $1.3 million. Between the Town and Board of Education non-certified personnel, we have successfully negotiated nine labor agreements that now have a defined contribution plan for new employee hires, which long term will reduce the Town’s unfunded pension liability.
BOARD OF EDUCATION
The Board of Education has requested a budget increase of 2.94%. I have reduced this request by $573,734, representing a 2.34% increase. In developing my proposed budget for the school system, I examined the costs of our contractual obligations for the coming fiscal year, the projected increase in our healthcare costs, and all existing and proposed programs. When the Board of Education adopted their budget, Dr. Cialfi and central office administration indicated on record that a 2.79% increase would be palatable. I believe the Board of Education can realize additional significant savings through several efficiencies, among them by joining the public sector purchasing coalition, just as we did, in relation to our pharmacy coverage. The Board of Education budget I propose builds upon our excellent school system while according the Board of Education enough funds to reduce and even eliminate pay to participate fees for our students.
TOWN SIDE RE-ORGANIZATIONS
In this budget, you will note that I have proposed several reorganizations intended to improve services to our residents, enhance efficiencies and reduce the overall burden to the Trumbull taxpayer. The most significant reorganizations are in the Finance Department, Labor Relations Department, Health Department and Parks and Recreation Department.
PUBLIC WORKS AND FINANCE DEPARTMENT:
Public Works Director John Marsilio has been instrumental in negotiating a new municipal solid waste agreement that will save Trumbull taxpayers 1.3 million over the next ten years. Finance Director Maria Pires has recommended a series of reorganizations in her department representing a savings of $26,000 to Trumbull taxpayers.
LABOR RELATIONS DEPARTMENT:
Last year, at my request, our Director of Labor Relations, James Haselkamp, developed a plan to transition pension administration from the Finance Department to the Labor Relations Department. Since the town never had a human resources department headed by a qualified professional, the rationale was to have all employment and post-employment responsibilities flow through one department. In addition to handling the hiring and testing of all Town employees, this department will now handle contract negotiations, grievances, healthcare coverage, as well as benefit and pension administration. This reorganization is close to completion. Mr. Haselkamp has also successfully transitioned the Town to a new healthcare consultant and new pharmacy benefits administrator. He has also developed a plan to reduce our stop loss coverage. All of these proactive measures represent $202,000 of savings that Mr. Haselkamp has identified and implemented in less than one year.
In the Labor Relations Department, you will note that I have added administrative support for recruit, risk and benefit administration. Given the pension overpayments that occurred in years past, I believe it is critical to have the necessary support in place to guarantee that these situations do not occur in the future.
As you recall, late last year, the Trumbull Town Council voted to withdraw from the Trumbull-Monroe Health District (TMHD). Currently, Trumbull’s contribution to TMHD is $315,380. Trumbull’s newly constituted Health Department will represent a total cost of $297,991, representing a savings of $17,389.00 to Trumbull taxpayers.
PARKS AND RECREATION DEPARTMENT
I would now like to discuss the reorganization affecting our parks system and recreational programming. In 2011, Trumbull voters approved a Charter Revision that consolidated the Parks Commission and Recreation Commission into one governing body. While the policy and governing functions were consolidated, the department has yet to be consolidated. Currently, the Parks Superintendent supervises the Recreation Director, yet the Recreation Director makes more in salary than her supervisor. Both employees are in two different unions. Delegation of duties are not clearly defined and delineated. This budget consolidates these functions and creates a Parks and Recreation Department. Existing full time employees will remain in their current positions. Part time and vacant full time positions have been restructured and reconstituted. Other services will be outsourced through an RFP process. The department will be led by a Director of Parks and Recreation, representing an overall savings of $41,350 through this consolidation.
GROWTH IN TRUMBULL’S COMMERCIAL GRAND LIST
At my request, Trumbull Tax Assessor Mark DeVestern has prepared an analysis of how much the Grand List has grown over the last six years, specifically to illustrate the growth in the commercial tax base that in turn has provided a modicum of relief for our residential taxpayers. In 2009, the commercial Grand List was $655,593,000, representing 14.2% of the total Grand List. Today, the commercial Grand List is $853,345,700, representing 21.3% of the total Grand List. My administration anticipates significant Grand List growth over the next year as the 5520 Park Avenue medical development is completed, among many other commercial, retail and professional uses that are under construction. This will have a very positive impact on Trumbull’s mil rate next year.
While we must govern the Town in a fiscally prudent manner and consider the financial implications this budget will have on our taxpayers, we must also maintain Trumbull’s strong position as a community of choice in the State of Connecticut. We should all be proud of our recent ranking by Family Circle Magazine as the 7th best Town in the nation to raise a family and we should all be proud that Family Circle Magazine gave our Town a 9 out of 10 in assessing our public school system. Recently, Coldwell Banker ranked Trumbull as the Number 1 booming community in Connecticut. Just a few months ago we were ranked as the 4th safest community in Connecticut. Our challenge is striking an appropriate balance to maintain our competitive edge while recognizing that fiscal prudence is essential during these challenging economic times.
There is no question in my mind that the Town of Trumbull is better off now than it was six years ago. Our financial position is stronger, our school system is better and we are all proud to say we live in Trumbull. Working together, I believe we will meet the challenges that lie ahead and lead our Town forward in a responsible manner. My administration welcomes the opportunity to work with our Board of Finance and Town Council as you consider this proposed budget.
Very truly yours,
Timothy M. Herbst