Ledyard - A couple dozen residents, including many town officials and town councilors, gathered in Ledyard High School auditorium Monday evening for a public hearing on the proposed $50.1 million budget for 2013-14.

As it heads to referendum in May, the general government operating budget stands at $20,442,567 - a 4.2 percent increase - and the Board of Education budget stands at $29.7 million - an increase of less than 1 percent. The overall budget represents a 2 percent increase.

Finance Committee Chairman and town Councilor Mike France said the budget contains four primary areas of increase. Raises account for about $245,000, health insurance increases about $540,000 and the capital improvement plan and management information system upgrades about $40,000.

Meanwhile, the town could lose about $150,000 of the $14 million in state aid it now receives.

Though the projected increase of about three-tenths of a mill - bringing the tax rate up to 28.22 in Ledyard - represents the town's first increase in four years, France said it's a small increase that was made smaller by avoiding unnecessary budget increases.

The only change the Town Council's finance committee made to Mayor John Rodolico's budget proposal earlier this month was to maintain the $400,000 annual funding for road maintenance, though Rodolico had proposed an additional $200,000 - another way of minimizing the tax rate increase, France said.

France also highlighted what he called areas of "improved efficiency" in town. The hiring of a human resources director, shared by the town and the Board of Education, has reduced outside legal expenses, he said. And France said the old Gales Ferry School is no longer a financial liability to the town. Marketed as a small business incubator, the building's tenants have generated enough revenue to the town to pay for utilities and building maintenance.

Superintendent Mike Graner said that of the three major school budget components, salary and benefits account for a 1.7 percent increase; instructional materials a little more than a 2 percent increase; and operational costs went down about 7 percent.

Another resident asked about the Ledyard Middle School renovation project as it relates to the tax rate - a $45 million undertaking that was slated to go to referendum with the budget in May. Last week, Graner asked the Town Council to rescind its resolution appropriating the money while the Board of Education looks for ways to decrease the cost to comply with state grant requirements.

Also brought up was the second major building project that will still remain on the ballot - a $6.3 million new police station.

France said the proposed 0.3 mill increase, assuming revenues come in as anticipated, does not include the cost of capital projects. Any tax rate increase to cover the bonds for the building projects will go into effect when the bonds are issued, which will be tied to the construction timeline. France said he didn't have an estimate for what the impact would be, but said it would be minimal.

A town meeting on the proposed new police station will be held May 7, with another on the budget held May 20. The referendum is scheduled for May 21.

a.isaacs@theday.com