Big budget decisions coming next week

With rising insurance costs, a struggling pension fund and $15.7 million in reserves, the $174.8 million budget for the town and schools will be at a crossroads next week when the Board of Finance decides what to do: cut some more or leave it as is.

The latter, while possible, seems unlikely.

"We're very well aware that we're still in a very uncertain economic climate, and if anything, I find peoples' confidence about the future seems to be less than what it was a year ago," said Helen Garten, chairman of the Board of Finance. "Having two years of a recession has made people very uneasy."

In the 2010--11 budget, which was submitted to the board in February, the school budget of $111.1 million represents a 1.78 percent increase from 2009--10. The town portion of the budget -- $63.7 million -- represents a 7.74 percent increase.

"Each of us are trying to understand the ramifications of any requested increase on the mill [tax] rate," said Avi Kaner, a member of the Board of Finance.

When the board deals with the town portion of the budget on Tuesday at 7:30 p.m. in Town Hall, it will have the ability to ask for reductions in each individual department, such as police, fire and the library, if a majority vote in the seven-member board is attained.

When the school portion is discussed on Wednesday at 7:30 p.m., the board can only ask for a certain reduction but not target it to a specific category.

Elliott Landon, superintendent of schools, hopes that it doesn't get to that point.

"Our hopes are that the Board of Finance realizes how tediously the Board of Education worked and what it took to bring this budget in at the lowest possible cost without destroying any of the programs that have made the Westport schools so excellent," he said.

Landon noted that the recent teacher contract, which offers modest increases that have been unlike any contract in the past, is just one of the ways that savings were achieved this year.

"If the Board of Finance is reasonable, it will allow our budget to be approved without further reductions," he said.

There was a steep drop in revenues last year and both the town and the schools were asked to cut $1.4 million from their 2009--10 budgets, which prompted a student-organized rally at the steps of Town Hall.

The estimates in revenues were kept conservative in 2009--10 projections.

"This year and last year, what sets us apart from [other budget years] is our extreme concerns about revenues, which in the past we could almost assume that revenues such as conveyances taxes, building permits and the like ... would stay constant," said Garten.

Kaner sees a couple problems with the town portion of the budget.

"The town health insurance costs for the town are going up by 17 percent and there's no value added to that by Westport taxpayers," he said. "It's still unclear as to why the health insurance is increasing by a greater rate than the school health insurance."

The other problem he sees is with the funding of the pension. About $3 million less than what town actuaries have suggested is being put in to fund pensions for retired employees.

"This is an extremely dangerous strategy because it puts us into a deeper hole next year," Kaner said.

At the town's disposal is $15.7 million in reserves, officially known as "unreserved, undesignated fund balance in the general fund" and colloquially called "the rainy day fund."

"We don't want to be over-reserved because that means you're overtaxing, but at the same time we have to keep the reserves," said Garten. "A lot of it is for unknown contingencies that might come up. Say for, example, storm damage, but also to make sure we have enough cash on hand to meet our operating expenses as the year goes on."

Last year, about $2.2 million was taken out of reserves, which was actually less than the $2.9 million taken out in 2008--09. The amount taken out recently has not been unusual and it's typically done to smooth out the tax increase set each year, according to John Kondub, director of the town's finance department.

"For the past few years, we've been dipping into the ... `rainy day fund' and no one can argue that this past year wasn't certainly a rainy day and it was appropriate to dip into reserves, but you can't keep doing that," said Kaner.

At times last year, the talks between the Democrats, who hold the majority, and Republicans would become barbed. Board members rarely crossed party lines, and most votes went 4-3 as members of the same party always stuck together.

This year, Kaner, a Republican, expects the two parties to work together more.

"The past couple of years the Board of Finance had been extremely partisan and as a result had difficulty in reaching the right answers," he said. "This year, it's been different. Members of the Board of Finance are working extremely well together and the bickering of the past seems to have disappeared."