Cheshire Town Council Reviews FY2021 Budget via Video Conference Amid COVID-19 Pandemic
Town Council · Meeting of April 13, 2020
CT CHESHIRE — Cheshire Town Council opens remote FY2021 budget workshop with $117.6 million spending proposal clouded by pandemic uncertainty. Meeting via video teleconference on April 13, the council reviewed a proposed operating budget of $117,614,532 — a 2.97 percent overall increase — alongside a five-year capital improvement plan with a net borrowing figure of roughly $60.1 million. Finance Director Jim Jaskot warned that adopting updated mortality tables and reducing the pension rate of return assumption from 7.5 percent to 7 percent could push combined pension contributions from $3.9 million to as high as $5.4 million in fiscal 2021, depending on the amortization period chosen.
The town's self-funded medical trust fund has declined by $672,000 through eight months of the current year, and investment income has been revised sharply downward from a $900,000 budget to a $540,000 projection — itself questioned as the State Treasurer's Investment Fund was yielding just 0.89 percent at meeting time. General insurance costs have risen roughly 28 percent over two years, drawing pointed criticism from council members who demanded competitive quotes before deliberations close.
In the full story:
- The complete report — 1,034 words
Source: the Town Council meeting of April 13, 2020, reported from the official video recording and transcript.
CHESHIRE — April 13, 2020 — The Cheshire Town Council held its first remote budget workshop of the fiscal year 2021 cycle Monday evening, reviewing a proposed $117.6 million operating budget and a five-year capital improvement plan totaling more than $60 million net, as town officials wrestled openly with the financial uncertainties created by the COVID-19 pandemic.
The workshop, conducted via video teleconference and streamed on YouTube for public viewers, was the first in a series of budget sessions. Town Manager Sean walked council members through the proposed spending plan, which was formally presented on March 10 — just before the pandemic took hold — while Finance Director Jim Jaskot led detailed discussions on pension obligations, health insurance reserves, and investment income projections.
The Full Story
The proposed fiscal year 2021 operating budget stands at $117,614,532, representing a 2.97 percent overall increase over the current year. The general government side of the budget totals $33,978,497, a 3.86 percent increase, while the Board of Education budget comes in at $75,545,054, up 2.98 percent. Debt service is proposed to rise by $325,000, or 4.91 percent, and the town's capital non-recurring appropriation was reduced by $100,000 from the prior year's $1.1 million. No state teacher pension assessment is budgeted for fiscal 2021, eliminating the $284,000 placeholder carried last year.
The five-year capital improvement plan presented by the town manager carries a gross request of $74,639,000, reduced to a net borrowing figure of approximately $60,131,000 after accounting for $7.7 million in offsetting grants and available cash. The fiscal 2021 first-year capital appropriation request totals $12,110,000, an increase of $598,000 over the adopted fiscal 2020 capital budget. Major capital items include $10.3 million for road paving over five years, $3,065,000 for full-depth road reconstruction, a $5.6 million placeholder for the Bartlett Park South development project, $5.2 million for school roof replacements, and $2.4 million in code compliance and ADA projects at school buildings.
The pension discussion dominated much of the session. Jaskot presented scenarios showing that adopting updated 2010 mortality tables — which both the town's auditors and actuaries are pressing for — combined with reducing the rate of return assumption from the current 7.5 percent to 7 percent would push combined pension contributions from $3.9 million in fiscal 2020 to as high as $5.4 million in fiscal 2021, depending on the amortization period used. The town manager's recommended scenario uses a 7 percent rate of return, the new mortality tables, and a 25-year amortization period — the maximum allowed — which would result in a total contribution of $4.4 million, a $495,000 increase. A two-year phase-in option was also presented that would hold fiscal 2021 contributions to $4.293 million, a $346,000 increase, with the remainder addressed in fiscal 2022. Council members asked for additional modeling showing what fiscal 2022 would look like under both approaches before making a final decision.
"I personally am looking at this, trying to get as minimal impact to the taxpayers as possible. There may be projects that have to get pushed off on a temporary basis and moved down the lane." [No timestamp index supplied] — Budget Committee Chair David, chairing the budget committee
Health insurance reserves drew equal concern. Jaskot reported that the town's self-funded medical trust fund had declined by approximately $672,000 over the first eight months of the current fiscal year, with unfavorable claims variance of $437,000. The Board of Education's trust fund declined by roughly $1.4 million over the same period against $754,000 in unfavorable claims variance. Board of Education Chief Financial Officer Vince reported that the school district's monthly claims are running at $869,000 against a projection of $750,000, and that the district's trust fund balance has dropped from $3.7 million at the start of the year to approximately $2.5 million as of February 29. The district budgeted a $350,000 increase in its medical benefits line for fiscal 2021. Separately, the town expects approximately $150,000 in drug rebates from its new carrier, Cigna, that are not yet reflected in the budget figures.
Investment income projections also shifted sharply downward. Jaskot said that investment income budgeted at $900,000 in the current fiscal year has been revised to $540,000 for fiscal 2021, based on a 1.4 percent rate of return assumption — itself already potentially optimistic. As of the meeting date, the State Treasurer's Investment Fund was returning just 0.89 percent.
"I know this isn't revenue, but it kind of jogged my memory. I know we did a lot of refinances to low interest rates, but rates are even lower now." [No timestamp index supplied] — Mayor Orris
The council also reviewed administrative and finance department budgets, including a 6.37 percent increase in the information technology division, driven largely by a $33,000 initiative to move the town's accounting system to a cloud-hosted platform. The general insurance line drew pointed questions from council members, having risen from $406,000 in fiscal 2019 to a proposed $519,000 in fiscal 2021 — a roughly 28 percent increase over two years. Jaskot said new quotes are being sought and he hoped to return with a lower figure before budget deliberations conclude.
"I think the taxpayers deserve an answer as to why we're going up that significantly." [No timestamp index supplied] — Council Member Jim Jinks
General Services was deferred to a future session. No formal votes were taken at the workshop.
Why It Matters
The fiscal 2021 budget process is unfolding under conditions unlike any in recent memory. The budget was finalized before the COVID-19 pandemic accelerated, and town officials acknowledged Monday that multiple revenue lines — investment income, departmental fees, pool and library revenues — are now projected to come in substantially below budget in the current fiscal year, with uncertain implications for fiscal 2021. Pension costs, health insurance reserves, and insurance premiums are all rising simultaneously, compressing the general government budget. The council is scheduled to hold additional budget workshops the following two weeks, and the Board of Education is expected to appear before the council in late April. Any capital projects requiring referendum would go before voters in November.
Key Motions & Votes
- Action: Motion to adjourn Tally: Approved unanimously
Source
Cheshire's community access TV: Town Council meeting, April 13, 2020