Herbst unveils his financial 2025 plan
First Selectman Timothy M. Herbst on Monday began the rollout of Trumbull 2025 with his financial plan for the town. Building upon the success of a stable tax rate, improved pension fund and upgraded credit rating, the first selectman outlined what he believes the town must do to achieve a AAA credit rating by 2025. The first selectman noted that the AAA credit rating is important because when the town borrows money for capital projects in the future, having a AAA means the town will pay less interest on the money it borrows, thus reducing the burden to Trumbull taxpayers. Having a AAA credit rating will mean millions of dollars in taxpayer savings over the life long term bonds.
“I am very proud that we have been able to keep the tax rate stable while at the same time full funding our annual pension contributions and dedicating more money to education, public safety and our infrastructure, stated First Selectman Herbst. “But now we need to build upon this success and go after the AAA credit rating. To do that, as part of my Trumbull 2025 plan I will propose the following measures be taken:
• Institute 5 year budget forecasting so decision makers at all levels of government know what fixed costs the town is anticipating over that same time period. Debt service, pension contributions and healthcare costs are in large measure, fixed costs that can be anticipated or predicted with a better degree of certainty. Doing this will allow decision makers to better scrutinize discretionary spending;
• Implement a municipal ordinance that requires that the town’s General Fund, more commonly referred to as the Rainy Day Fund, not fall below a 10% threshold. To go below the 10% threshold will require a two thirds affirmative vote of the Trumbull Town Council and four-out-of-six Board of Finance members voting in the affirmative. A healthy rainy day fund is examined by the rating agencies in assessing a community’s
• Implement a municipal ordinance requiring that the annual required contribution (ARC) for town pensions be fully funded. To go below fully funding the ARC will require a two thirds affirmative vote of the Trumbull Town Council and four-out-of-six Board of Finance members voting in the affirmative;
• Develop separate line items in the operating budget for fixed costs within town government and fixed costs within the Board of Education. Taxpayers have a right to see how much we are spending in debt service for school construction projects and pension contributions for BOE non-certified personnel. This will require the Town and the Board of Education to engage in long term financial planning collaboratively.
“The borrowing and spending controls we championed in 2011 as part of Charter Revision put the brakes on a lot of the reckless spending that occurred before we arrived in 2009,” stated First Selectman Herbst. “The results are pretty clear. These last six years, the average tax increase has been among the lowest six year average in Fairfield County. The pension fund has improved immeasurably and the bond rating agencies agree. This is why our credit rating has been upgraded. The significant Grand List growth we have realized has allowed us to stabilize the tax rate. I firmly believe that to build upon a stable tax rate and growing economy, we must do these things to achieve a AAA credit rating by 2025.”