Norwich — The City Council finalized a preliminary 2022-23 budget Monday night, using $1.2 million of the city’s second-year $14 million American Rescue Plan grant to wipe out any proposed property tax increase.

The council adopted changes to City Manager John Salomone’s proposed $139 million combined city and school budget Monday, adjusting revenues, cutting the proposed school budget by $430,000 and making other minor cuts. ARP funds will offset any remaining tax increase.

In addition to using $1.54 million in ARP funding to pay for nine city positions — including three police officers, a blight enforcement officer and a records clerk — another $1.24 million in ARP funds would be used to balance the budget, with $240,000 to offset any increase in the city paid fire department.

The changes would leave both the citywide tax rate at this year’s 42.35 mills and the paid fire district tax at 6.66 mills.

During discussion Monday night, aldermen stressed that their budget work is not done and more spending cuts and adjustments to the ARP spending plan could come. A second budget public hearing will be held at 7:30 p.m. Monday, and Mayor Peter Nystrom announced a third hearing at 6:30 p.m. May 16 prior to the council meeting that night.

In an explanatory report to the City Council released late last week, city Comptroller Josh Pothier wrote that a U.S. Treasury rule allows the city to use ARP funds to balance the budget.

During public comment Monday, several residents objected to using one-time ARP grant money to fund city positions or balance the budget. Pothier wrote that the city is banking on anticipated tax revenue from the cannabis industry and revenue from new development to replace the grant. Norwich is actively recruiting cannabis cultivators and a retail outlet.

Salomone’s initial budget cut the requested school budget by $1.1 million, from a requested 2.3% increase to 1.03%. Monday’s additional cut of $430,000 would bring the total school budget to $86.8 million.

School Business Administrator Robert Sirpenski said school officials are working on ways to absorb the cuts without affecting programs. School officials informed Salomone and Pothier that health care costs could be cut by $500,000 and unemployment and temporary help lines can be cut by $100,000 each.

Sirpenski said this year’s school budget is expected to end with a surplus that could be used to pay for some capital costs placed in next year’s budget.

“The remaining cut will have to be done by strategically shifting expenses and with grant funding,” Sirpenski said.

An ad hoc committee of City Council and school board members will meet at 6 p.m. Wednesday and again May 18 and 25 at Kelly Middle School.

Despite adding a third budget hearing in Council Chambers, Alderman Derell Wilson continued to object that the council has not tried to “meet residents where they are” to hear comments on the budget and ARP spending. Wilson said the council should hold a Saturday hearing or set up tables at community events to explain the budget and seek input.

Nystrom said it would be difficult to record hearings in remote locations, and the city would have to pay overtime to staff to work a Saturday hearing. Wilson said a small amount of ARP money could be used to pay for a Saturday public hearing.

c.bessette@theday.com