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Board of Finance members went through the city’s revenue lines Tuesday night, working to set a new mill rate for Stamford taxpayers.
As they did, one thing became clear – Vice Chair Mary Lou Rinaldi is bullish on Stamford.
Rinaldi, confident of the city’s prospects for the 2022-23 fiscal year, suggested half a dozen hikes in revenue projections.
She proposed increasing the expected revenue from building-permit fees to $6.75 million, or $250,000 more.
“People are still doing new construction and renovation, so I think increasing this projection slightly is a good move,” Rinaldi said.
The board passed her proposal unanimously.
Rinaldi continued, suggesting a $50,000 increase in projected revenue from a source of fees related to construction – street opening permits.
“For the same reason,” she said.
Again, all yeses from the board.
Rinaldi proposed increasing the revenue projection for conveyance taxes the city charges on real estate transactions. It should be $1.75 million more, she said.
“It’s still a hot market, especially on the commercial side, and I expect the numbers will go up,” Rinaldi said.
Board Chair Richard Freedman concurred.
“It’s also because house prices are higher than they were,” Freedman said.
They got pushback from Director of Administration Sandy Dennies, who said the market can quickly change. Dennies advocated for a more conservative estimate.
“If we’re off on revenue, we will be off on the budget,” Dennis said. “Sales have been exceptional, but, as in prior years, we limited our projection.”
“That seems draconian,” board member David Mannis said.
Ultimately the entire board agreed with Rinaldi and voted for the higher revenue estimate.
Rinaldi had another proposal.
“I would like to increase the expected tax collection rate to 99 percent,” she said. “Last year the city ended up collecting 99.3 percent and I think they’ll be able to get close to that again.”
She got all yes votes again.
It set the stage for an innovative proposal from Freedman, who said he’d checked with the city attorney to ensure the board can do it. Freedman said his proposal was about the city’s plan to rebuild Westhill High School and Roxbury Elementary School.
The latest budget bill from Hartford increased the state reimbursement for the cost of the Westhill project, estimated at $258 million, from 20 percent to 80 percent. So the state would pay $206 million and the city would contribute $52 million.
The Roxbury project is expected to cost $86 million. If it’s approved, the state under the new regulation will reimburse Stamford 60 percent – a big increase over the previous 20 percent. It means the state would cover $51 million and Stamford would contribute $35 million.
So, for the two projects, Stamford will need $87 million.
Freedman said he’s learned that state law allows municipalities to set aside a portion of revenue raised by a new mill rate and reserve it for big-ticket builds.
“It will allow us to pay for capital projects out of cash rather than bond for them,” Freedman said. “It will save the city an enormous amount of interest expense over time and relieve a lot of the pressure on the capital budget.”
Stamford’s share for the Westhill and Roxbury projects “will be the largest capital contribution the city has ever made,” Freedman said. The total cost of a broader plan to renovate, expand or rebuild aging school buildings citywide is $500 million over 12 years.
Freedman’s proposal was to levy an additional tax to raise $20 million in 2022-23, and put it in a reserve fund dedicated to fixing or replacing school buildings.
Depending on the taxing district, the proposal would raise the mill rate – the amount of tax per $1,000 of assessed property value – between .86 percent and 1.4 percent.
So the average property tax increase would be just under 1 percent without the $20 million reserve, and just over 1 percent with the reserve.
The Board of Representatives must vote on the proposal before May 25, the deadline for setting the mill rate.
If city representatives OK the reserve proposal, a homeowner who would pay $10,000 in property taxes in the fiscal year that starts July 1 will pay $10,100 instead, finance board members said.
Freedman said the average property owner in Stamford pays just over $9,000 a year in taxes. The mill rate for motor vehicles will remain at 27.25, regardless of whether the reserve is approved.
Now is the time for Stamford to begin footing the bill for fixing the schools, Freedman said. He put the roughly 1 percent tax increase into context.
The mill rate increase last year was 2.3 percent, he said, and since 2013, “this board has approved mill rate increases that ranged from 2.6 percent to over 3 percent,” except for no increase in 2020 because of COVID-19.
Rinaldi liked Freedman’s proposal.
“It’s like buying a house outright with cash, rather than taking a mortgage for 20 or 30 years,” she said.
Board member Geoff Alswanger agreed.
“We would be putting a $20 million down payment on the building of two new schools,” Alswanger said.