2. Jennifer Wislocki, Board of Finance Thomas E. Marsh, First Selectman Pamela Christman, Chester Elementary School 10/20/20151

3.  A mil represents $1 of tax paid on $1,000 in property assessment. The current mil rate is 23.12 meaning that each property owner is taxed $23.12 on each $1,000 of assessed property.  For each mil assessed the Town collected approximately $423,000 in 07/08.  The Grand list grew about 1.75% in the last year. The value of a mil in the next fiscal year will be about $430,000. 10/20/20152

4.  Property taxes will make up about 85.4% of the revenue. Other revenue sources are:  State funds +/- 8.1% ◦ Education cost sharing 5.2% ◦ Grants, Casino, etc. 2.9%  Miscellaneous +/- 4.2% ◦ Permits, fees, ambulance fees  Surplus +/- 2.3% 10/20/20153

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6. If your property taxes pay about 85.4% of town expenses then for fiscal 08/09:  Approximately 6.68 mils pay for Town services  1.58 mils pays for General Government  Town hall services  Board and commission budgets  Library  Park & Recreation  1.36 mils pay for Public Works  road repair, plowing, mowing etc.  Building maintenance  Tree maintenance  1.29 mils pay for emergency services– fire, police, etc.  Ambulance expenses are about 143K but revenue generated is almost $130k.  Police protection costs about.7 mils 10/20/20155

7.  Town Services, cont’d. ◦ 1.0 mils pay for Public Health and Human Services ◦.85 mil pays for Town incurred bond debt ◦ 1.12mils pays for miscellaneous costs  Insurance  Legal & Engineering  benefits .95 mils pay for the Capital Budget  8.12 mils pay for the elementary school  8.12 mils pay for Region 4 10/20/20156

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9.  A full time police officer is being added. This position replaces a previous part time position.  A change in staffing in the Assessor’s office will reduce labor and benefit costs while allowing the office to be open through the lunch hour.  The Elementary School parking lot will be reconfigured and repaved to allow for better traffic flow.  Policy changes that have been implemented or are under review will smooth the budget process and allow for better planning. 10/20/20158

10.  Funding for road construction has been moved to the Capital budget. Road repair stays in the operating budget. ◦ This allows the town to provide level funding year to year smoothing out peaks and valleys that result from the significant variation in road construction costs year to year. ◦ Undesignated Fund Balance, or a “savings” level target will be developed to insure fiscally responsible government savings without over- taxing residents to meet the objective. 10/20/20159

11.  For next year the total proposed budget is up $531,266 or 4.62%. ◦ +$118,289 Town operating and Capital ◦ +$180,992 Elementary School ◦ +$232,055 Region 4  In addition we used $253,000 from surplus for this fiscal year so we are starting this year in a “hole” equal to that amount.  The result is we need $784,266 to balance. 10/20/201510

12.  Revenue is up $215,000  Chester has a substantial projected undesignated fund balance (savings) of about $1.3 million or 11.6% of the 08/09 proposed expense budget. Some of these funds can be used to offset expenses. ◦ 03/04 $700,000 used ◦ 04/05 $875,000 used ◦ 05/06 $650,000 used ◦ 06/07 $400,000 used ◦ 07/08 $253,000 used ◦ 08/09 $275,000 Proposed 10/20/201511

13. How Much More Will This Cost?  As the previous slide shows several years ago Chester was using significant “savings” to offset spending. This practice results in starting each subsequent year at a deficit. During the past several years the Boards of Selectmen and Finance have been moving toward “balanced” budgets while developing a policy that sets savings goals without overtaxing residents to reach those goals.  We debated long and hard this year over how much savings to apply. 10/20/201512

14.  During the past several years the Boards of Selectmen and Finance have been moving toward “balanced” budgets while developing a policy that sets savings goals without overtaxing residents to reach those goals.  We debated long and hard this year over how much savings to apply. 10/20/201513

15.  $192,000 is available in new revenue  $275,000 is being used from the projected surplus for FY 07/08. ◦ As previously noted, using fund balance this year means we start next year at a deficit. However, the Boards of Selectmen and Finance also want to keep growth in the mil rate to a minimum.  A.75 mil increase is suggested in order to provide approximately $317,500 in additional revenue. This represents a tax increase of about $155 on a home with a market value of $300,000. 10/20/201514

16.  Other taxes like Sales and Income Tax are calculated on a base that changes.  For example the sales tax rate of 6% has remained constant for years.  The state collected $3.1 billion in 03/04  Chester collected $1,063,000  The state collected $3.4 billion in 05/06  Chester collected $1,150,000  That is a $300,000,000 or 10% increase based on the same 6% rate  Chester’s increase $87,000 or 8.1% 10/20/201515

17. The state income tax rates have remained  constant since 2003.  The state collected $4.9 billion in 03/04  Chester residents paid $4.1 million (’03)  The state collected $6.1 billion in 05/06  Chester residents paid $5.4 million (’05)  That That’s a $1.2 billion (24.4% increase) on the same tax rate.  Chester’s increase was $1,300,000 (31.7%) 10/20/201516

18. NO!  Chester contributed about $1.4 million more to the state in 05/06 as compared to 03/04  State aid to Chester in 03/04 was approximately $1 million dollars  State aid to Chester in 07/08 was approximately $960,000 (a decrease of 4%)  08/09 state aid increases to $1,044,000. 10/20/201517

19. 10/20/201518

20.  Larger one time grants are NOT included in the figures. examples are:  STEAP grants  Federal Bridge Grants  Local Bridge Grants  USDA Grants  DEP open space grants  There are many other types of grants  These are awarded on a project by project basis. Some are good some not so good. As we found out with the Federal Bridge grant, often there are a lot of strings attached to the cash. In every case when applying for a grant we are in essence asking for some of OUR money back. 10/20/201519

21. CITYCT AID/TAX PD RETURN ON $  Hartford $1,900/$1,230 (1.54)  Greenwich $85/$11,000 (.007)  Essex $86/$2,970 (.03)  Killingworth $406/$2,033 (.20)  Haddam $288/$1,700 (.17)  Chester $217 /$1,650 (.13)  East Haddam $502/$1,368 (.36)  Deep River $395/$1,350 (.29) 10/20/201520

22.  The goal moving forward is to budget revenue and expenses to balance, and use surplus minimally.  The town will continue to have an appropriate undesignated fund balance (savings).  We must hold our State elected officials accountable. ◦ There is much discussion at the state level regarding “Regionalizing” to become more efficient. Ideas have included regional revenue sharing, and mandated regional services. This weakens local control and moves tax money further away from its source – your pocket! 10/20/201521

23.  If the next 9 years look like the past 9 years total Town spending (Town, School & Region 4 budgets) the budget for 2018 will be about $17,500,000.  If State contributions grow at 1% per year the total would be around $1,100,000. 10/20/201522

24.  If the grand list grows at 1.5% per year a mil would be worth about $485,000.  The mil rate to cover the needed revenue would be 33.8  A home with a value of $300,000 would have a property tax bill of $7,100.  Today that same home has a tax bill of $4,800. 10/20/201523

25. 10/20/201524