City Council members approved the 2011 preliminary budget during a special meeting Wednesday, Oct. 20 at City Hall.
The proposed budget reflects a mill levy rate of 8.12 which is 0.32 mills higher than the current rate of 7.8. The increase represents 32 cents per thousand valuation or $32 more per $100,000 in value. “This rate captures the state law allowable three percent annual increase,” said City Administrator Kent Hager.
“The 2011 budget continues our General Fund operations as they are today,” reported Hager. “We are very lucky that we can say that.”
The total proposed General Fund operational expenditure budget is $6,257,671 which is $89,605 or 1.45 percent above the 2010 budget. The total General Fund revenue is anticipated to increase $77,111 to $4,116,993 or 1.91 percent excluding property tax revenue. Hager reports that the increase can largely be attributed to an increase tax equivalent payment from New London Utilities.
There are not salary increases in the 2011 budget; however a 4.2 percent increase is expected in the health insurance premium.
Hager reported to council members that economic foresight since 2006, have decreased the city’s full time staff by four people. “These full time staff have been replaced by three part-time employees,” said Hager. “Once again, it is fair to say that we have thinned out our staff about as far as we can.”
“The city does not manufacture a product, rather we provide services and we provide services with people,” explained Hager. Of the total $6,257,671 General Fund expenditure for 2011, $4,819,376 is composed or salary and fringe benefit expense which represents 77 percent of the total General Fund budget.
Equalized value decreased
The City’s equalized value has decreased from $331,828,850 to $322,101,750 largely due to a continued depressed economy. “For the second year in a row, our equalized value has decreased,” reported Hager. “This makes budgeting very difficult as in the past, we have always experienced an increase in taxable value,” he said.
Hager thanked city staff members for their continued efforts to control costs while continuing the level of services residents expect.
“Treasurer Judy Radke deserves special recognition for her efforts to keep our community’s budget in line. We can be very thankful that we are in as good a financial shape as we are,” he said. “We need to continue to be very cautious.”
Alderman Tom O’Connell was the lone “no” vote against the proposed budget stating he felt that the full .32 cent mill increase was not necessary. Hager reiterated that of the 0.32 mill levy increase, 0.28 of that is just to bring the 2011 property tax revenue to the same amount as 2010 given the decrease of nearly $10,000,000 of taxable value in the City. “Given this, only 0.09 mills is the actual increase in taxes over the current year or $9 per $100,000 of value,” explained Hager.
Alderwoman Mary Tate was excused from the night’s meeting.
A final budget hearing will be scheduled for November.