Tag Archives: Westport CT town budget

Budget Deliberations Begin

Budget season is here!

The Board of Finance begins its public examination soon.

First Selectman Jim Marpe presents his proposed town budget on Tuesday, March 9 and — if needed — Wednesday, March 10. He’s requesting $77,103,992 — a 2.21% increase over the current $75,439,392.

An additional $6,127,959 includes requests for the Westport Library ($5,090,148), Westport Weston Health District ($590,811), Westport Transit District ($342,000) and Earthplace ($105,000).

Superintendent of Schools Thomas Scarice and Board of Education chair Candice Savin present their budgets on Thursday, March 11. They ask for $128,013,115 — up 4.98% over 2020-21’s $121,936.488. The bulk of the Board of Ed budget is salaries (64%) and benefits (16%).

Click here to see the entire proposed budgets.

All meetings are held via Zoom, starting at 7:30 p.m. They will be livestreamed on westportct.gov, and shown on Optimum channel 79 and Frontier channel 6020.

Emails to Board of Finance members can be sent to BOF@westportct.gov. Comments to be read during the public comment period may be emailed to BOFcomments@westportct.gov. Full names and addresses are needed.

To comment in real time during the meeting, send an email by noon that day to mmace@westportct.gov. Include your name, address and the agenda item (click here) to which your comments will relate. Participation details will be emailed to you.

Bart Shuldman: Town Leaders’ Hard Work Controls Costs

Wherever they were last week, Westporters appreciated hearing that our mill rate will actually fall in the coming fiscal year.

Bart Shuldman was in China. On his flight home, he reflected on the news:

Westport taxpayers received good news regarding the mill rate for fiscal year 2016-2017. The Board of Finance approved a 6.8% decrease from the previous year, based on the growth of the Grand List and the good work by Jim Marpe, Avi Kaner and the Board of Finance at controlling costs for the coming year.

In addition, Westport taxpayers will also pay less property tax on their cars. We should all thank Jim, Avi and the Board of Finance for their diligent work, as Westport is not like any other town in Connecticut. Many, if not all surrounding towns are experiencing either small or large mill rate increases.

Westport's 1st and 2nd selectmen: Jim Marpe (left) and Avi Kaner.

Westport’s 1st and 2nd selectmen: Jim Marpe (left) and Avi Kaner.

Westporters also learned additional good news: The town will continue to pay down debt, and also continue to pay the Actuarial Required Contribution for the town employee pension plan. I do not think most people know how important this piece of the news is to all of us.

Some background: Many years ago the town implemented 2 major employee benefit programs, a defined pension plan and something called OPEB (Other Post Employee Benefits). In addition, past town leaders borrowed a lot of money and accumulated a large amount of debt.

In 2011, after a very deep recession, Westport’s debt stood at over $156 million. Our pension liability was over $186 million, and the OPEB liability was more than $84 million.

Making matters worse, for years before 2011 Westport was not funding the Actuarial Required Contribution necessary to meet the pension obligations promised to town employees. Then the stock market went through the 2009 recession, causing pension assets to decline. Westport taxpayers were on the hook for hundreds of millions of dollars.

This is NOT a photo of Westport's pension fund.

This is NOT a photo of Westport’s pension fund.

Fast forward to today. With the good work of Jim, Avi and the Board of Finance, the town is in much better financial shape.  While the pension obligation has grown to over $270 million, the pension is 85% funded.

As noted above, Westport is now paying the total Actuarial Required Contribution and also making up for past underpayments. Meanwhile, the town’s debt is down to $115 million.

What might surprise many residents is that debt service, employee pension and OPEB obligations are an enormous percentage of the budget. Principal and interest cost on the town’s debt is over $14 million. Pensions cost the town over $16 million, and it appears OPEB costs over $10 million each year. Therefore, almost 20% of the town’s budget goes to decisions made many years ago, and does not fund current town needs and potential projects.

Westport residents should thank our current town leaders for doing what is needed to control costs and manage the town’s obligations.

The $3 Million Elephant — Or $8 Million. Or $30 Million

Last Sunday, retired businessman and 35-year resident Jim Goodrich offered some thoughts here on the town budget — including the pension liability.

His “06880” piece elicited strong reactions — including several explanations of the pension fund.  Today, Jim addresses those responses.

You’re never too old to learn.

By going to the recent Board of Finance meeting, thinking about that meeting, then posting observations that generated considerable feedback, I’ve picked up a bit more understanding about my town.  I find it useful.  Maybe you will too.

I called the pension fund “elephant in the room” a $3 million problem.  Is it really an $8 million problem — or $30 million?

The answer is:  It’s all 3 problems.  Here’s — in rounded numbers — is why.

The $30 million refers to an unfunded shortfall in the town’s obligation to the pension fund for municipal employees.  (Teachers are not included; they’re covered at the state level.)

The $8 million refers to the annual amount the town must pay for the next 30 years, in order to fulfill its pension obligations.

Now it gets really interesting.

The $3 million represents a reduction to the $8 million annual payment the actuaries say the town should pay into the pension fund.  Why would Westport pay only $5 million of the $8 million into the fund, creating a larger long-term obligation?

This is not where our pension fund is. We hope.

The answer is pretty straightforward.  By underpaying the pension fund, town and Board of Ed budgets can be more fully funded without having to raise taxes as much, or at all.  Of course, the amount of the underpayment must be paid someday — just not now.

There are all kinds of discussions knowledgeable people can have on this point — and much of the subtext at the recent Board of Finance meeting dealt with this issue.  What seems to be going on is “fiscal responsibility” versus “competent resource management” in balancing important community needs and the taxpayer’s ability to pay.  The BOF is the place these discussions should take place.

Currently, town and school officials are finalizing details to show what a total of $2.6 million cut in funding will mean to educational programs, as well as vital services.  The public does not yet know the exact cuts to be made — but they are expected to be serious.

What does “serious” mean?  It could easily be headcount cuts to police, fire and teaching personnel, plus public works and all other town departments.  What may get hit are all the “S”s – safety, security and schools — as well as Westport’s large “Q” (quality of life).

So pay attention.  We may know within a few days what the cuts will bring.  By Wednesday the BOF will have voted — and then it’s a done deal.

For a moment, consider what would happen if the BOF went in another direction and simply reinstated the $2.6 million to the town and school budgets.  Would the world come to an end?

No.  But taxes would go up by an average of about $260 for each Westport household.  There are 2 people in my household.  That’s $130 for each of us for the year.  It’s $2.50 a week — 36 cents a day.  For safety, security, excellent schools and quality of life — I don’t know about you, but it seems like a bargain to me.

(What do you think?  To contact the Board of Finance, click here.)