The Orange Board of Finance will present its 2021-22 budget on April 21 at 7 p.m. at a hearing that is open to the public for comment. In order to allow enough room for social distancing, the hearing will take place in the High Plains Center gym.
As of press time, the board had not finalized its budget, with questions remaining in particular as to what the town can expect in income. Given the anticipated new debt payment for the Race Brook Country Club purchase, and an increase in employee benefits, the Board of Finance on March 15 was looking at a 3.7% budget increase. But the board was still working on reducing that number, said Finance Director John Cifarelli.
Cifarelli also had combed through the town department budgets and suggested certain cuts to the board, after consultation with First Selectman Jim Zeoli. Those suggestions included a number of smaller cuts — such as for furniture and “repair and maintenance” line items — but also removing larger positions which had been carried over from previous budgets, such as the salary for an unfilled position in the Public Works Department. It all added up to a total of $607,175 in savings that the finance board agreed to remove from the budget.
Country Club Purchase: One major budget driver for the town this year is the anticipated debt payment for the Race Brook Country Club purchase. The estimated cost used as a placeholder until the town has actual numbers is $563,000 for the ’22 fiscal year.
Finance Board member Joe Nuzzo pointed out that if the annual debt payment comes in at $522,000; and the town loses $125,000 in property tax revenue because the club is no longer in private hands, the total cost to the town for the next 20 years is $647,000. Even with the anticipated lease income from the club, which is not to start until the fall of 2022, the town will pay about $400,000 a year more than it takes in. “It is a unique opportunity,” Nuzzo agreed, saying that he supported the purchase. “But it’s not inexpensive,” he added.
Another budget driver on the town side is for employee benefits, which looks at an increase of $694,000.
Capital Fund: In order to reduce the burden on the taxpayers, the finance board can decide to move certain capital items out of the operating budget and allocate funding from the General Fund to pay for them. Currently the account balance in the capital fund is more than $2 million. Cifarelli suggested the town pay for police car replacements as well as a recording system for the police department from that pot. He said Orange School Supt. Vince Scarpetti also had identified some $300,000 in capital projects in the school budget. The town has already earmarked $200,000 to replace pipes at High Plains Community Center.
At this point Orange is flush with savings. It has a very healthy Fund Balance of $14.7 million, which constitutes about 20% of its $73.7 million budget. Even if the Fund Balance were to be reduced to $14.4 million at the end of this Fiscal Year, it would still constitute 19.62% of its budget.
The town can reasonably expect some extra cash flow into its General Fund. There is the 2020 Amity surplus, which to a large part has been paid back to the member towns, and from which Orange received over $1 million. The town decided to keep $300,000 of that available in its operating budget.
There are potential FEMA reimbursements for damage caused by Storm Isaias last summer. The town allocated $250,000 from Fund Balance for the storm cleanup. So far it is unclear when the federal money will be disbursed and how much.
The town as well as the school system can expect financial support from the most recent federal CARES Act, which aims to mitigate the impact of the pandemic. As of last week, the town had not received an official notice when or how much it can expect. A Hartford Courant listing quoted Orange as receiving $1.3 million and the school system $303,000; Amity would be receiving $536,000.
The money was allocated to the 169 municipalities based on population; the funds are meant to help the public sector with its response to the COVID-19 emergency; help provide premium pay to essential employees and provide funding for government services which were affected by loss of revenue during the pandemic.
“It’s certainly helpful in the year we’re in,” Finance Board Chairman Kevin Houlihan said.
Grand List: The next taxable Grand List — the listing of all taxable property, which includes real estate, motor vehicles and business personal property — as measured on October 1, 2020, overall increased slightly. The Grand List is one factor that determines what will be taxed, and is an integral part of the budget for the next year.
Real estate values increased by 0.007%, according to the figures supplied by the Assessor’s office. Motor vehicle values, on the other hand, increased by almost $6 million, or 4.2% compared to the 2019 Grand List. “The cumulative value of newly registered current-model year passenger cars was more than enough to offset the accrued depreciation from recurring vehicles,” wrote Assessor Mark Branchesi in his report.
Business personal property, however, dropped by $2.7 million, or 1.8% from October 1 2019 to 2020. “This is the first time since 2010 that this section of the Grand List decreased,” the assessor wrote, attributing the decrease to United Illuminating and its affiliates reallocating assets to various locations outside of Orange; and to “the chilling effect of COVID 19 on the local business community.”
Although the town has been able to attract several large businesses in recent years, the trend regarding UI and its parent company seems to be continuing, as the Southern Connecticut Gas building is up for sale. The offices are said to be moving into the UI building, while the vehicles will be moved to a West Haven site. The gas company is the third largest taxpayer in town, after UI and Fairfield Grand Reserve, which owns an apartment complex on Prindle Hill Road.
By Bettina Thiel – Orange Town News Correspondent