FAIRFIELD — In his State of the Town Address on Monday, First Selectman Bill Gerber warned that years of relatively flat local taxes may be coming to end, as the town faces higher borrowing costs, sluggish growth of property values, and a costly new teachers contract.
Between steady increases to the town grand list and federal coronavirus money, Fairfield’s mill rate has remained fairly flat over the last few years, with annual increases staying below 1 percent since 2021. But the newly elected town leader told Representative Town Meeting members that he inherited several fiscal challenges which could end that streak.
“At a high level, we face some challenging cliffs in the fiscal 2024-25 budget that are left from prior years,” Gerber said.
Taxable property values in Fairfield have increased in recent years, much of which can be attributed to residential real estate development — from 2020 to 2022, taxable residential values jumped by $90.6 million.
The 2023 grand list has not yet been released, but Gerber told the RTM that the latest property assessment showed an increase of just 0.25 percent over last year’s $10.8 billion gross assessment. There were 204 property sales valued at over $1 million in 2022, compared to 194 in 2023.
“We will not realize the valuation benefits seen in recent years,” he said
At the same time, Gerber said, Fairfield will likely see a spike in project costs. During the pandemic, the state distributed federal funds to municipalities through the American Rescue Plan Act. Fairfield received a total of $24.8 million, and allocated the money toward various projects and department requests — about $3.3 million to reduce flooding by the Rooster River watershed, $3 million for sidewalk and paving repairs, and $1 million to remediate environmental contamination from the fill pile, to name a few.
Gerber said the town was able to borrow significantly less, lowering costs by about $2 million last year. But without new ARPA funds, he said, borrowing will likely increase in the 2024-25 budget.
“ARPA funds have been allocated and borrowing rates are now significantly higher. Our borrowing amounts will have to return to normal levels, and will cost more than in the recent past,” he explained.
According to S&P Dow Jones Indices, the current municipal bond index in Connecticut is nearing the highest level it’s been in the last 10 years, which could increase costs for local financing projects.
A competitive contract
Along with the grand list and federal funds, Gerber said the $221.5 million school budget approved by the school board last week would significantly impact the overall operating budget.
The Fairfield Public Schools budget calls for a 5.2 percent increase over last year, and was largely driven by a new teacher’s union contract.
During a Jan. 9 presentation, Superintendent Michael Testani said it was imperative that the district increase teacher salaries, as Fairfield was losing staff to surrounding districts with higher pay. Following negotiations with the union, the district settled on a more than $4 million contract increase, boosting teacher compensation by an average of 4.6 percent. Staff salaries accounted for about 3.8 percent of the total school budget increase.
On Monday, Gerber reiterated the importance of renegotiating the teachers contract, but warned of consequences for the entire town.
“What does that mean? Well, the Board of Ed is about 60 percent of the total Fairfield budget. So, that is a large increase,” he said.
Gerber said his administration is still seeking ways to offset the fiscal challenges, but told the RTM he’s unwilling to compromise the level of services that residents deserve.
To avoid fiscal cliffs in the future, Gerber said Fairfield officials need to create long-term plans and improve efficiencies throughout town, including updating outdated processes that slow employees down.
“I ran for office to solve problems and get things done. I hope to engage all elected and appointed officials and all residents in finding solutions, because I truly do believe that we are better when we work together,” he said.
Gerber, a Democrat, beat former First Selectwoman Brenda Kupchick, a Republican, in the race for the executive seat by a slim margin in November.
On Tuesday, former First Selectwoman Brenda Kupchick — who still serves as a Board of Selectmen member — said she took issue with a lack of notification about Gerber’s address, but looked forward to reviewing the new budget.
“I find it odd the first selectman gave a State of the Town Address last night and residents weren’t notified and no one has reported on it. I was able to watch some of it on Fair TV,” she said. “I want to thank Mr. Gerber for his acknowledgment of the good work my administration did keeping taxes low. It wasn’t easy but we proved it’s possible. I look forward to the release of Mr. Gerber’s budget.”
Gerber will likely release his annual operating budget in February or March.
Watch the entire 2023 State of the Town Address on FairTV.