Old Lyme — Residents are looking at an overall spending reduction in the proposed 2021-22 budget that nevertheless results in a scant increase to the mill rate.

The $38.22 million spending plan, which includes general government, capital expenses and education, is down $590,224, or 1.52%, from the current year.

Budget documents show the tax rate is anticipated to rise by 0.1 mills, or 0.04%, to bring it to 23.30 mills.

Board of Finance Chairman J. David Kelsey in a Tuesday email explained there is a "slight" need to raise the mill rate because revenues are down by $200,000 and tax abatements further reduce revenue by $100,000.

"It is virtually immaterial, the increase," he wrote.

A homeowner with a house assessed at $243,000 would pay $5,662 based on the anticipated mill rate increase, or $24 more than in the current year.

Kelsey on Monday introduced the budget proposal at a pandemic-era public hearing at the Town Hall. About 10 people sat in socially distanced seats while the rest participated over the phone.

The proposed town operations section of the budget comes in at $10.75 million, an increase of $933,853, or 9.51%. But the hike is mitigated by a plan to lower the current $1.43 million capital outlay to $460,150 in the proposed budget, which represents a decrease of 67.91%.

Further alleviating the impact of the town operations increase is the town's responsibility to the Lyme-Old Lyme regional school district, which is slated to go down $550,327, or 2%. The total proposed Region 18 budget, which is funded by Lyme and Old Lyme, comes in at $34.87 million, an increase of 0.47%.

Kelsey emphasized that the document is not final until passed at a town meeting. "There's plenty of opportunity between now and the ultimate vote by the town on May 17 for revision, if required, and certainly for hearing folks out," he said.

The proposed budget was posted on the town's website the morning of the public hearing, according to the first selectman's office.

One of the biggest unknowns in what Kelsey described as "an odd year" is the amount of federal stimulus money the town will be receiving through the American Rescue Plan.

Figures released last month from the office of Rep. Joe Courtney, D-2nd District, show that the $1.9 trillion federal plan allocates $721,342 in baseline funding to Old Lyme. There is also an additional allocation that normally would go to county governments but will be assigned instead to individual municipalities here, based on a formula linked to population, as there is no county level of government in Connecticut.

Significant changes identified in Old Lyme's proposed budget include the removal of $345,850 in the capital budget for repairs to Grassy Hill Bridge, which originally were estimated at $692,000.

A promise for reimbursement from the state Department of Transportation was secured in 2018 under former Democratic First Selectwoman Bonnie Reemsynder's administration, according to state DOT documents.

Selectwoman Mary Jo Nosal, a Democrat, expressed surprise that the allocation had been scrapped. During the comment portion of the public hearing, she asked if the Board of Finance had taken a vote on the issue.

Kelsey said the board had not. When Nosal asked him why, he said only that the project "is not in the budget."

Kelsey on Tuesday told The Day in an email that the project cost was revised to $1.2 million after it went through the construction engineering process.

"The $692,000 remains approved, but the (Board of Finance) has NOT approved anything beyond that amount, because at this time we have no hard cost estimates NOR any written agreement of any additional reimbursement by the state or feds," he wrote.

He said the funds could be included in the 2022-23 budget or discussed at a town meeting for possible approval once the town has solid figures to work with.

The general government portion of the budget includes an extra $300,000 over the current year in capital project funds for road resurfacing based on a 10-year plan, bringing the total line item to $1 million. There's also $232,900 added to the Parks and Recreation Department's facility and equipment line for items including a playground at Hains Park and tennis and basketball courts at Cross Lane Park, according to Kelsey.

The annual budget meeting is scheduled for May 17 at 7:30 p.m.

e.regan@theday.com