Town of Southington Town Council Town Manager JOHN N. BARRY, Chairman JOHN WEICHSEL ANTHONY E. D'A1'1GELO, Vice Chairman (860) 276-6200 JOHN E. CARMODY NICHOL<\s DEPAOLA FAX (860) 628-4727 CHRlSlDPHERJ. PALMIERl EDWARD S. POCOCK, III MICHAEL A. RlCCIO ARTHUR H. SECONDO DAVlDZONI

February 24, 2009

Honorable Board of Finance

Gentlemen:

I hereby transmit to you the proposed Town Manager's budget for 2009-2010. I want to publicly commend the Department Heads for their work on the budget. I had set a 2-1/2% maximum increase as a goal. Almost all have cooperated and met that challenge. Most of the increases are in areas with which individual department heads are not involved.

Certain assumptions have been made in the development of the budget. Hopefully, these assumptions will prove to be valid. The proposed 2.9% increase, I believe, is the lowest I have ever submitted. The General Government budget is summarized below.

Summary of 2009/2010 Budget Town Manager Request & Comparison to 2008/2009

Summary: 2009/2010 2008/2009

T.Manager Adopted %

Proposed Budget $ Change Change General Gov't - Operating $37,234,236 $36,217,286 $1,016,950 2.8% Debt Service - G.G. $3,031,321 $3,063,941 ($32,620) -1.1% Debt Service - Education $3,320,681 $3,102,153 $218,528 7.0% Education - Capital $128,000 $100,000 $28,000 28.0%

Total General Gov't

Expenditure Request $43,714,238 $42,483,380 $1,230,858 2.9%

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Taxes Reguired to Fund Town Manager's 2009/2010 Reguested Budget:

General Gov't Expenditure Request $43,714,238 $42,483,380

Less: General Gov't. Estimated Revenues ($5,442,158) ($6,032,951)

Subtotal $38,272,080 $36,450,429

Less: 36% of estimated back taxes pro-rates and suppl MV taxes ($495,000) ($594,000)

Less: 36% Fund Balance utilized ($162,000) ($207,000)

Current taxes needed, before uncollected estimate $37,615,080 $35,649,429

Plus: uncollected estimate $865,147 $819,937

Current taxes required for General Government $38,480,227 $36,469,366

Taxable Net Grand List $3,964,931,495 $3,919,715,079

General Gov't. Mill Rate $9.71 $9.30

EXPENDITURES:

The most significant changes on the expenditure side are as follows:

Insurance. For the first time our workers compensation claims have shown a large increase. This has caused a $82,000 increase.

Fire. This department is up $180,000. The union in this department is the only group that has another year left on its contract. Regrettably, that rate is 4-1/4%. Also the overtime in this department is a continuing problem.

Hydrant Rental. The Water Department has increased this cost by 20% resulting in a $78,000 increase.

Rental of Office Space. It is the administration's plan to move the three departments out of the Gura Building and demolish it. Some have other ideas. As presented, the one-time cost of relocation would be $223,000 and the yearly rental is estimated at $140,000.

Snow & Ice. This account is increased $137,O@0 to reflect the reality of this activity. Among other things, the department is using magnesium chloride to a large extent instead of salt and sand. While the snow budget is thus increased, the sweeping budget is reduced.

Environmental Problems. This account is increased by $130,000. There has been a demand that we pay $14 million for a "natural resource damage" in the vicinity of Old Turnpike. To protect against this extraordinary claim we will need considerable extra work by our environmental attorneys.

Community Services. This department has moved out of the cramped quarters of the Town Hall to the old Milldale fire house. $59,000 is the additional cost to take care of a substantial building.

Capital Budget. This item is up $243,000. Individual review will show that several items are necessary to finish up projects. Even in these difficult times it is necessary to have an active capital program.

Heart & Hypertension. This uncontrollable account went up $50,000.

Municipal Retirement. The Town's contribution to retirement system increases $92,000. This program administered by the State of Connecticut is well beyond the Town's ability to affect.

Interest. The required interest payment is up $311,000. The Town has been quite active in recent years in the use of bonds. This again is a fixed cost that cannot be changed.

Contingency is up $100,000 to $900,000. A town of our size and complexity should have a contingency of $1 million. Experience has shown that a larger figure is needed.

There are bright spots on the expenditure side. Steve Wlodkowski had requested the purchase of a tractor and the bins for the bulky waste transfer station. Approval by the Board of Finance and Town Council results in a $] 90,000 annual saving.

REVENUES:

As one might expect, the recessionary economy has caused a reduction in many revenue areas. Interest income is down $250,000; Town Clerk fees are expected to drop $350,000. The big question is, will the State grants remain as we have been informed? The State appears to be in significant financial difficulties and thus we might receive some bad news down the line. If that occurs, the figures shown will not hold.

Wh ile I am not involved with the Board of Education, the combined effect is shown elsewhere in the budget.

itted,

Town Manager JW:pb

cc: Town Council