Old Lyme finance board finalizes budget with small tax increase
Old Lyme — Despite having to account for costly capital improvements and a higher-than-expected share of the Lyme-Old Lyme education budget next year, the Board of Finance presented its approved budget to residents this week with only a slight tax increase compared to this year’s 21.91 mill rate.
The proposed $38.9 million budget, which includes general government, capital expenses and education, calls for an additional $2.6 million, or 7.2 percent, increase over this year’s budget and would boost the tax rate by just 0.5 mill to 22.41 mills.
The Board of Finance unanimously decided to appropriate $800,000 from the town’s $8 million reserve fund to help keep the tax rate increase low despite an increase in overall expenses. Those largely are driven by an additional $1.2 million the town is required to contribute into the Lyme-Old Lyme education budget next year due to higher-than-expected enrollment shifts, as well as an additional $1.8 million budgeted toward “necessary” capital projects next year, member David Kelsey said at Monday's budget hearing.
The capital projects include several bridge and road repairs — $454,800 for the Mile Creek Bridge and $100,000 for the Grassy Hill Bridge — as well $107,000 toward a roof repair at the Cross Lane firehouse.
Another $150,000 is planned for a Lower Mill Pond repair and $400,000 toward Sound View Beach Association sidewalk repairs, among other various expenses. Some of those costs, however, will be significantly offset by state grants, Kelsey said.
Besides capital spending, other factors impacting next year’s budget include an additional $113,000 in medical insurance costs — a 23.7 percent increase over this year’s spending — as well as an additional $44,000 to finance a townwide economic development study.
Kelsey said that, looking forward, the largest expense within the town’s capital budget will go toward repairing the town’s 60 miles of roads. He said the town carefully is planning how to go about that, while budgeting $630,000 toward road improvements next year — $230,000 more than what is typically financed.
“We are in a very unique position,” First Selectwoman Bonnie Reemsnyder said at Monday’s hearing. “We probably have one of the highest (reserve) fund balances in the state and yet, we still have money set aside for those very expensive expenditures such as firetrucks and roads.”
“A lot of other towns have realized they haven’t invested money in their roads, and they are facing, all of a sudden, the need to finance that,” she continued. “They will have to bond. And many are just trying to keep up with repairs alone.”
One resident at Monday’s budget hearing worried the board’s decision to tap into the town’s $8 million reserve fund was too aggressive. Reemsnyder responded saying that, had the board decided not to take from the reserve fund, the town would have had to either bond for its proposed projects or increase the tax rate significantly.
“We are lucky that we are in a situation where we can pay out of our surplus,” Reemsnyder said. “When you look at the increase in capital, it is huge. But because we have some grants and because we plan for this over the years, we are able to keep it even.”
“While I agree that it's aggressive, I think that this is the time we need be aggressive to keep (our tax increase) to just a half mill,” she said.
Kelsey added to that, saying the Board of Finance most likely would not take from the reserve fund the following year.
With a half-mill tax increase, a resident with a home assessed at $243,000 will pay an additional $122 in taxes next year, while a resident with a home assessed at $878,000 will pay an additional $439.
Offsetting some of the town’s upcoming expenses, Kelsey also highlighted that the town is expecting more than a $1.2 million increase between its local and intergovernmental revenues, with a $229,307 grant for road repairs and $237,221 in Education Cost Sharing Grants. Other state grants — amounting to over $800,000 — also will help offset bridge repair costs and Sound View improvements.
A town meeting to vote on the finalized budget is set for May 20.
Editor's Note: This version corrects the amount of extra taxes residents will pay.
Stories that may interest you
While Thursday and Friday were expected to be cold, if you've been hoping for warmer weather ahead, you are in luck.
Both cities are following similar paths to try to keep their minor league baseball teams intact past the 2020 season.
Victims of childhood sexual assault suffered another setback Thursday as they learned the Judiciary Committee has decided not to consider a bill that would have eliminated the statute of limitations that prevents older victims from filing lawsuits.