Following recent discussions with the First Selectman and other town officials, each of the three major rating agencies, Moody’s, S&P and Fitch, rated Ridgefield’s bonds as AAA for the 14th year in a row owing to our town’s, in Fitch’s words, “sound financial management”.
On April 9, the Board of Finance (BOF), whose principal duty is to oversee the town’s financial condition, completed approval of the capital and operating budgets to be submitted for voter approval in the annual town meeting on May 6 (for small capital projects) and in the budget referendum on May 14. If approved by voters, the tax rate (aka mill rate) will go up by just 1.95% next year. This results, in part, from returning the remaining $1.1 million of the CL&P refund to taxpayers and using an additional $650,000 of general fund balance.
The operating budget approved by the BOF is comprised of three main parts: town operations for $32.3 million; school operations for $82.9 million; and, debt service (principal and interest) of $13.2 million. The Town has done an excellent job holding the line against personnel headcount increases. Due to curriculum and other improvements, plus unfunded state mandates such as the new Common Core State Standards, the School District was unable to keep headcount flat this year. The school budget also contains $565,000 for increased security costs following the Newtown tragedy. However, the District made significant efficiency improvements including negotiating a new bus contract (saving $514,000) and switching health insurance carriers (saving $630,000 for the District along with Town savings of at least $285,000).
The BOF approved a capital budget of $3.6 million, the largest piece being $2.2 million for public works such as roads, as recommended by the Board of Selectmen (BOS). The total capital budget is in line with a target of $3.5 to $4 million per year used by the BOS. The Town continues to pay down more old debt than it issues new debt. Consequently, debt service is declining by 0.72% in the 2014 budget. According to Fitch rating agency, Ridgefield’s debt burden is about “average at $3,806 per capita but as a percentage of taxable market value is much lower [than average] at 1.2%”.
One way to determine if the cost of government is reasonable is to look at the rate of increase in taxes versus the increase in consumer prices. For the 5-year period ending with the 2014 budget year, the Town’s mill rate will have increased at a compound annual rate of 1.75%, while the general inflation rate (CPI) for the 5-year period ending December 2012 was 1.80% per year. We believe that the Town, once again this year, has sound, well thought out capital and operating budgets to put before the voters at the referendum on May 14. Please come out and vote YES on all the budget items.
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Mr. Sutherland is a member of the Ridgefield Board of Finance, and also a member of the Ridgefield Democratic Town Committee, which provides this column.