What Changed in North Haven's Town Budget to Pass the Referendum?

On Tuesday, North Haven voters approved the revised budget for the fiscal year 2024-25 by a margin of 347 votes, with 978 "yes" votes and 631 "no" votes. This successful vote comes after a previous budget proposal failed by just 79 votes in May. Here’s a breakdown of the key changes and reductions that were made to ensure the revised budget passed.

DTC Members Lisa Leamon and Brandi Mandato turned out to vote in the referendum

Background

The initial budget proposal in May amounted to $130,355,151, reflecting a 7.3% increase over the current budget and incorporating a 2.65 mill rate increase. This would have raised the town’s mill rate from 32.65 to 35.30 and raised the average families monthly taxes by about $40. After failing to pass, officials revised the budget to address concerns.

Key Reductions and Changes

The revised budget of $128.6 million, which passed the referendum, carries a 1.99 mill increase instead of the original 2.65 mill increase. Here’s how the adjustments were made:

1. Additional Funds from Surplus

• $250,000 was taken from the fund balance (surplus) to be used in the operating budget. This decision, while necessary, puts the town in a challenging position with rating agencies who have been advocating for an increase in the fund balance over the past few years.

1. Updated Revenue Expectations

• $100,000 in projected revenue from short-term investments was added to the budget.

1. Reductions on the Town Side
   

• $40,000 reduction for police cruisers (reduced from 3 to 2 cruisers).

• $30,000 reduction in sirens due to the reduction in the number of cruisers.

• $300,000 reduction in fire engine leases (2 engines).

• $13,000 reduction for updates and maintenance of Peter's Rock Park.

• $70,000 reduction in Jet Vac lease. <-- what is this? It sounds awesome.

• $92,000 reduction in Police staffing line (per the Chief, this will not impact planned staff).

• $75,000 reduction in tipping fees (sanitation).

• $85,000 reduction in equipment rentals for streets and roads.

• $118,000 reduction in CBRA payments. These cuts total over $890,000 in reductions on the town side of the budget.

1. Board of Education Budget Adjustments
   

• A major reduction of $950,000 was made in the Board of Education budget. The Board of Finance put forth a plan to cover this reduction from the Board of Education’s Insurance Reserves. However, it is crucial to note that insurance reserves are not the same as surplus funds. Reserves are specifically set aside to cover future claims and district obligations, while surpluses reflect financial strength and the ability to handle unexpected events. The difference between reserves and surpluses is significant:
  

• Function: Reserves are for future claims, while surpluses indicate financial health.

• Financial: Reserves are considered liabilities because it is expected that they are utilized while surpluses are assets.

• In addition, the Board of Finance doesn't have the authority to tell the Board of Education what to cut from. I, as one of nine members of the Board of Education, would certainly cut reserves prior to cutting staff or other services.  A Board of Education meeting will need to be held to finalize where this cut will ultimately come from.

Financial Impact on Homeowners

With the revised budget, the town’s mill rate will increase from 32.65 to 34.64. For an average home valued at $300,000 with a net assessment of $210,000, this translates to a yearly tax increase of $418, or a monthly tax increase of $35 (down from around $40 in the budget proposed in May).

First Selectman Michael Freda’s full overview can be found here.