Bethel finds fortune in CL & P error
The extra cash means that if the proposed $58.7 million municipal and school budget is approved by voters, the tax-rate or mill-rate increase will be 1.4 percent, rather than the 3.6 percent rise previously expected.
"We got the mill rate as low as we could," said First Selectman Bob Burke about the budget that selectmen presented to the finance board. "With this extra money coming in, we're very happy."
The money comes from Northeast Utilities -- parent company of Connecticut Light Power -- which informed the town this week about an error the company made in reporting the assessed value of its personal property -- its equipment -- last year.
"Immediately upon finding out, they contacted us," said Burke about Northeast Utilities.
Northeast Utilities last year built a major high-voltage power line in Bethel that included miles of new underground and overhead wires, as well as a new transition station and a major upgrade of its Plumtrees Substation. All of that increased its personal property.
When the utility company last year reported the assessed value of its personal property in Bethel, the figure was almost $57 million -- more than four times what it was in 2005. CL P became the largest taxpayer in Bethel, outweighing Duracell, which usually tops the list.
But even that high number was not enough. After looking at the figures again, the utility realized the correct number was $91.7 million -- nearly a $35 million difference -- and notified Bethel.
That $35 million translates to additional tax revenue of $963,092.
"It was an accounting glitch on how the assessed values were arrived at," said Northeast Utilities spokesman Frank Poirot about the original figure.
Personal property values are higher after new equipment is activated. When the original figure was submitted to Bethel, it was based on inactive equipment.
But while recently researching the power line project, accountants realized the new line was activated by the Oct. 1, 2006, deadline to submit property values to Bethel and other Connecticut towns.
Besides Bethel, Poirot said Redding, Wilton and Norwalk also were affected by NU's increase in personal property values.
"We knew it was a critical time of the year for all the towns," Poirot said about NU alerting the towns quickly about the new numbers so the increased revenue could be available for budget deliberations.
A tax-rate increase of 1.4 percent would bring the mill rate from 27.75 to 28.15.
A homeowner whose house is assessed at $200,000 presently pays $5,550 in real estate taxes. If the proposed $58.7 million municipal and school budget is approved, that same homeowner would pay $5,630 in the fiscal year that begins July 1 -- an $80 difference.
The annual Town Meeting on the budget will be Monday night, when residents discuss the proposed budget and set the date for a machine vote. That date must be at least seven days -- but no more than 14 days -- from the Town Meeting.
"Come out and understand what makes up the spending increase," said finance board chairman Kevin Cleary, who encouraged residents to attend the Town Meeting. "It's a good budget. People should come out and support it."
Part of the budget increase this year is due to a $500,000 rise in pension costs.
Ironically -- since NU is the source of the added tax revenue -- another reason for the spending increase is the big rise is utility costs.
"(The price of) utilities has grown 79 percent in the last three years," said Cleary.
The spending increase between the current school and municipal budget and the proposed budget for 2007-08 is 6.3 percent.
Of the $58.7 million in the proposed budget, $35.8 million is on the school side -- a 4.3 percent spending increase -- and $22.9 million is on the municipal side -- an 11.3 percent spending increase.
Among the initiatives on the school side of the budget are an expansion of summer school for incoming kindergartners and new textbooks.
On the town side, initiatives include an additional police officer and building maintenance employee, and salary increases for the first selectman, town clerk and registrars of voters.
Contact Marietta Homayonpour
at email@example.com or
at (203) 731-3336.