OLD LYME — About 40 residents who attended the Annual Budget Meeting at the middle school Monday night unanimously approved a number of agenda items, including the town’s 2019-2020 budget as well as Open Space Acquisition funds for the purchase of 300 acres of McCulloch Farm.
Andrew Russell, chair of the Board of Finance, explained some of the highlights of the upcoming budget, which included total expenditures of $38.91 million, representing a 7.2% increase over the previous year. The 2019-2020 mill rate was increased from 21.91 to 22.41 per $1,000 of assessed property value, or 2.29%. The town’s grand list increased from 34.04 million to $34.91 million, a rise of 2.56%, according to town documents handed out at the meeting.
Using and maintaining the budget surplus
Russell said the Board of Finance elected to use $800,00 of surplus funds to balance the budget and keep the mill rate down. He pointed out that because of the town’s “conservative approach,” the unreserved or surplus fund has grown from about $5 million, or 15% of the budget as of June 30, 2012, to about $8.7 million, or 24% of the budget as of June 30, 2018. The coming year’s surplus is expected to come to $8.03 million.
Because Old Lyme is a shoreline community, and vulnerable to storms, the town auditor has consistently advised the town to maintain adequate offsetting financial resources on hand, Russell said. In addition, having money in surplus also allows the town to borrow at advantageous rates, he explained.
“[The auditor] said you may not get the money from FEMA, you may not get the money from anywhere, you need to be able to take care of yourself. So he said it’s a lot of money, but it’s in the right neighborhood to be in,” Russell clarified. “But what that does is for us when we need to borrow money or when Region 18 needs to borrow money, it gives us the best, lowest-possible interest rates we can get because we have money in the bank and we’re operating on a very conservative [model].”
On the positive side, the town’s local revenue this coming year, which partly comes from fees, reimbursements and fines, is expected to increase by $29,500, of which $27,000 will be in interest income — a substantial increase, according to Russell.
“Our town treasurer and our finance department have done a very good job, very conservatively — they’re very restricted as to where they can invest the money, but they’ve done a very good job with where our money sits and we are earning interest.”
Roads and bridges
The town will receive $427,400 from the Connecticut Department of Transportation for work on the Mile Creek Bridge, which the town will match, Russell said. The town will also receive $400,000 for the Sound View Path Improvement Project.
“That’s why our capital improvement budget is up about $700,000. Yes, we’re spending $1.7 million but we’re getting over $800,000 back from the state of Connecticut for work on those projects,” he said.
The town budgeted $630,000 for road improvements, an increase of $230,000 from the previous year, which Russell said was part of a long-term strategy.
“Our roads are getting older and we’ve been taking care of them but we need to put more money into them. The roads have been categorized as to when they need replacement and there’s a very good plan going out 20 years showing when the roads will be replaced,” he said.
Salaries and benefits
Unanticipated costs increased in a number of areas, including insurance for town employees, increased from $767,000 to $880,000, Russell said.
“When you hire new employees, you don’t know if they’re going to be a single person on your plan, two people, or a family. People who are on your plan may be a single person now and may have gotten married or had a child so the costs to the town could end up changing and you can’t anticipate that,” he said. “We do know what the rates are going to be but we don’t know exactly what the makeup of our employees that are going to be on the plan, so that’s a significant increase there.”
Health insurance increases for town workers resulted in a $74,000 shortfall in the 2018-19 budget, for which residents approved funding later in the meeting.
Contractual salary increases were another factor adding to the town’s unexpected expenditures, including an additional $37,500 for the Resident State Trooper salary.
“We were fortunate for the last budget season we had a resident trooper who was on the lower end of the pay scale. She left at the beginning of this calendar year and was replaced with an officer that has a much higher (salary) level, so the pay structure is very different. We have no control over who they hire to take over our town. We have some say but you don’t know who is going to apply and what their pay scale is going to be,” Russell said.
Other expenses, like $115,000 in technology upgrades were planned for, and necessary, Russell said.
“Our town hall is in dire need of technology upgrades. We started the project this year and we’re completing it next year,” he said.
Town Hall employees were dependent on more than one operating system, and bringing the entire organization onto the same operating platform will result in multiple efficiencies, Russell said.
“It’s going to allow us to offer more services to our residents online in the long run as well as for contractors who will be able to do some of their work without coming in to town hall to apply for permits and things like that. A top technology upgrade will allow us to do that as well as backing our systems up and having a great deal safer backup as well as security.”
Contributing to road improvement will be the acquisition of a $40,000 “hotbox” trailer that will allow the Public Works Department to heat asphalt to make patches, a more economical approach than hiring an outside contractor to do the job, Russell said.
The town also allocated $81,000 for Public Works truck washing station, which Russell said was required for environmental protection.
“Basically our trucks go on the road, get salt all over them, you have to have a proper way to wash them down and have that runoff disposed off properly. It just can’t run across the parking to wherever it goes, it has to go into tanks and be treated — it’s an environmental thing, it’s something that we have no choice, it has to be done,” he said.
He said the town looked into sharing East Lyme’s truck washing station on Four Mile River Road, but the trucks would have accumulated salt driving back to Old Lyme that needed to be washed off, cancelling out any benefit. “We tried,” Russell said.
Because the town’s sanitation program will change at the end of June, the tipping fees will increase by $64,000 to $274,000. Recycling costs, which went up in March, will increase by $5,000 to $41,800. Russell encouraged townspeople to recycle more because recycling costs were cheaper than the garbage disposal costs.
A greater share of education spending
The town’s share of the education budget increased from $26.34 million to $27.56 million, or 4.6%, which about $700,000 more than anticipated.
“That’s because it’s based on the student populations between Lyme and Old Lyme and a few too many people moved into Old Lyme versus how many moved into Lyme, so our share or percentage of that Region 18 budget went up,” he said.
Upcoming financial considerations for Old Lyme were $1,250,000 for repayment of the library project, a portion of the total $1.75 million voters approved in July 2018. The remaining $500,000 will come from surplus in the 2019-2020 budget.
Russell also listed potential expenditures of $150,000 for the Lower Mill Pond dam and matching funds of $300,000 for repair of the Grassy Hill Road bridge. He said other unknowns in the next few years were potential Halls Road improvements, a sewer or pump station project, replacement of the town’s trash and recycling cans, options for model of the police department, and an increased need for road maintenance.
A unanimous vote, and McCulloch purchase
The audience had no questions on the budget and approved it unanimously.
In another unanimous vote, residents approved $600,000 in Open Space Acquisition funds for the purchase of 300 acres of McCulloch Farm, which will connect the Ames Open Space and the Lay Preserve, stitching together over 700 acres for public use and recreation.
At the meeting, Amanda Blair, co-chair of the Open Space Commission, commended property owner David McCulloch, who sat in the audience.
“Dave, you have touched the lives of so many and now you have given us in Old Lyme the most wonderful gift of all — your portion of the McCulloch Farm,” Blair concluded, as the audience stood for an extended standing ovation.
Afterwards, residents approved appropriations for $16,000 for emergency repairs to Grassy Hill Road Bridge and $26,000 for increased sanitation tipping fees in the 2019-2020 budget cycle.
The meeting ended with the announcement of Robert Doyen as the 2018 Citizen of the Year. Doyen, a 25-year member of the Harbor Management Commission and a longtime fire department volunteer, who received kudos for his years of service to the town.
When reached by phone Tuesday, Board of Finance Vice Chair Bennett Bernblum had no further comment on the 2019-2020 budget.
NOTE: David Kelsey, co-founder and primary funder of CT Examiner, is a member of the Board of Finance. He was not contacted as part of writing this story.
Note: This story was corrected to reflect that the town would not be required to provide matching funds for the Sound View Path Improvement Project.