Old Lyme ― This year’s budget process is set to culminate Monday with a vote on a $40.97 million spending plan that officials say will not increase taxes.

The annual town budget meeting at 7:30 p.m. in the Town Hall will also include questions about whether the town clerk and tax collector should be appointed rather than elected.

The proposed budget, which includes general government, education and capital spending, is up $1.1 million over the current budget — an increase of 2.75%.

General government spending accounts for $11.2 million, an increase of $370,688. The town’s share of the education budget comes in at $28.2 million, up $727,820. The $1.2 million capital spending proposal is holding steady at just $167 less than the current budget.

Board of Finance Chairman David Kelsey said the tax rate will be unchanged at 23.5 mills. That means a resident paying $5,710 in property taxes on a house assessed at $243,000 will pay the same amount in the coming year.

The tax rate is staying the same despite the proposed budget increase because the finance board in April voted to use $600,000 from the town’s undesignated fund balance, or rainy day fund. That’s more than half a million dollars taxpayers won’t have to cover through their assessments.

Residents would be looking at a 1.6% increase to the tax rate if officials left the reserves intact.

Kelsey said the rainy day fund is currently around $10.8 million. Using $600,000 would put it at about 25% of the town’s total operating budget.

The industry standard for a healthy undesignated fund balance is around 15% of the total operating budget. Kelsey said Old Lyme officials like more of a cushion because the area is vulnerable to storms and flooding that could potentially wipe out valuable sources of tax revenue.

“If we have a weather event, god forbid, we could be in a situation where we have a significant delay or a reduction in the collection of taxes,” he said.

On the other hand, he said the finance board recognizes that’s a lot of money to keep in reserve.

“So if we can dip in and try to mitigate an increase in taxes, we’ve done that in the past and we’re proposing that again this year,” he said.

The budget also benefits this year from a 32% spike in local revenue, which Kelsey attributed to a $270,000 increase in interest on investments and an additional $130,000 brought in by the building department.

He said single-family home construction and renovations, due in part to residents who moved to the shoreline town amid the pandemic, drove the increase in building department receipts.

The budget includes $57,473 to hire a human relations professional and $85,320 for expenses related to information technology, including a part-time IT position.

Appointed or elected?

The town meeting will also include votes on proposed ordinances to change the town clerk and tax collector from elected to appointed positions.

First Selectman Tim Griswold said the proposal mirrors moves in other towns to give the Board of Selectmen power to appoint certain positions in a climate where municipal job requirements are getting more and more complex.

He said the current framework means anyone who lives in town can potentially get the job “regardless of credentials.”

The proposed ordinance specifies the tax collector would be appointed to a six-year term on the third Tuesday after this year’s municipal election. The town clerk would be appointed to a six-year term in January 2026 with the expiration of current Town Clerk Vicki Urbowicz’s term.

The language specifies it is “preferred but not required” that candidates live in town.

Registered voters and eligible taxpayers will also be asked to accept 1.88 acres of land as open space on Buttonball Road where an 8-lot subdivision was approved late last year.

e.regan@theday.com