OLD LYME – Board of Finance Chairman Bennett J. Bernblum on Monday presented the proposed $45.39 million budget along with its potential implications on taxes in this and coming years.
The proposed $45.39 million 2025-26 budget – which includes town operations and capital expenses as well as the town’s share of the regional Lyme-Old Lyme school district – represents an increase of $3.28 million, or 7.8%, over current spending. It is heavily influenced by large-scale renovation projects affecting the schools and the Lymes’ Senior Center.
The public hearing on the budget lasted just over a half hour in front of roughly two dozen people in the Town Hall meeting room. Bernblum opened with the acknowledgement that it was not the kind of “sell out crowd” that drew more than 550 people to the Lyme-Old Lyme High School earlier this month to discuss for more than three hours a controversial proposal to allow apartments on the commercial strip of Halls Road.
Amid the apparent lack of controversy Monday night, Bernblum laid out the budget proposal he said would likely raise tax bills for the average property owner by around 4.7% based on the recent townwide property revaluation. But residents whose home values increased more than the average will see a heftier hike in their tax bills.
He said the projected tax rate, which won’t be set until immediately after the proposed budget is approved by voters, will be 16.2 mills.
A mill represents $1 in tax per $1,000 of assessed property value.
Bernblum has said the tax rate would be going up 6.8% if the finance board didn’t offset the increase by taking $800,000 out of the undesignated fund balance, or Rainy Day Fund.
The current tax rate is 24.4 mills. After taking the revaluation into account – and if spending did not change at all in the coming year – the tax rate would be 15.5 mills.
The town’s grand list of taxable property grew by 57.4% as a result of the revaluation, according to final assessor’s data that takes into account adjustments by the Board of Assessment Appeals. The board finished its final hearings earlier this month.
That means a house appraised at $400,000 with a valuation mirroring the average 57.4% increase to the grand list is now worth $629,600, according to Bernblum’s presentation. The tax bill for that homeowner based on the proposed budget would be $7,153 – an increase of $321, or 4.7%, over the current tax bill.
Illustrating the complexity of a revaluation year, Bernblum said a house valued at $600,000 that went up 65% in value due to the revaluation is now worth $990,000. The owner of such a home can expect a $11,247 tax bill if the proposed budget goes through. That’s an increase of $999, or 9.8%, over the current tax bill.
Old Lyme’s government operations expenses come in at $11.39 million, an increase of $835,260 million, or 7.9%, over the current budget. That includes debt service amounting to $702,350, which is up $271,168, or 62.9%, over current payments. The increase is driven largely by debt payments on the Lymes’ Senior Center renovation project.
The proposal includes an additional $107,000 increase in health insurance expenses over the current year.
The budget proposal, along with new language related to several town ordinances, will go to voters at a town meeting on May 19.
The Impact of Education
The proposed budget in Old Lyme includes education costs of $31.52 million, which is up $1.99 million, or 6.72%, from the town’s current share of the regional school district budget. The increase is driven by debt payments on a multi-building renovation project approved by voters at a cost of $57.5 million.
A referendum on the $39.7 million Region 18 budget proposal – which represents an increase of $2.7 million, or 7.39%, over the current spending plan for the district – is scheduled for May 6 in Lyme and Old Lyme.
The Region 18 Board of Education earlier this month voted unanimously to send the budget proposal to referendum.
Earlier objections to a decision to cut an elementary music teacher from the proposed budget were muted after the school board agreed to put the position back into the spending plan. The district will find savings elsewhere in the proposed budget to cover the cost, according to Superintendent of Schools Ian Neviaser.
Neviaser in a Tuesday email said the regional school board has opted not to use any of its $3.1 million undesignated fund balance to offset the spending increase despite calls to explore the option.
“The board has not chosen to make any changes to the current proposed budget and plans to go to referendum with what we believe is a fiscally responsible and reasonable request of a 2.69% increase in the operating budget coupled with a 4.7% increase in debt service, which is the main driver for the overall 7.39% increase,” he said.
School board Chairman Jason Kemp, who said he was speaking for himself rather than the full board, wrote in an email Tuesday that the undesignated fund is generally used for projects that might be too large for an annual budget, but too small to go to referendum and bonding.
“While nothing is planned at the moment, an example of such a project would be to replace the track which we are told can’t really be resurfaced again. It would be fiscally irresponsible to spend that down significantly to cover a year of debt service on the PK-8 school project,” he said.
He noted the proposed budget is less than the projected 10% increase for the coming year that had been presented to the towns prior to the referendum vote on that project. He cited lower than expected interest rates and grant funding that helped defray costs.
Rainy Days in Old Lyme
On the town side, the finance board on April 15 voted to use $800,000 from its own undesignated fund balance to soften the impact of the proposed budget increase on taxpayers.
Budget figures from Finance Director Anita Mancini show the allocation will bring the predicted $14.2 million Rainy Day Fund from 35.15% of the total operating budget at the end of this budget year to an estimated 29.6% in the coming budget year.
Bernblum said maintaining a healthy undesignated fund balance will help the town mitigate the effect of increasing budgets on taxpayers going forward.
“And that will still leave (a) surplus of a significant amount to hedge against future needs,” he said.
He emphasized that debt payments from the schools’ renovation project will continue to increase through the 2028-29 budget year.
“So debt service for Region 18 is going to continue to go up significantly, but not astronomically, over the next several years, and then finally it will begin to come down,” he said.
A philosophical schism between the two major parties on the finance board has pitted Democrats against Republicans. The decision to dip into the Rainy Day Fund for $800,000 represented a compromise among the three Democrats, who wanted to use more of the surplus to mitigate tax increases, and the three Republicans, who would have preferred to use less in order to save for the future.
Some finance board members at the time said the town could be facing costs in coming years related to a years-long effort to bring sewers to several beach communities under pressure from the state Department of Energy and Environmental Protection.
While town officials have long said the expense would be covered by property owners in the affected beach areas, Bernblum on Monday acknowledged there could be costs to residents at large.
State law specifies towns cannot assess property owners for any amount higher than the percent increase in the property value attributed to the sewers.
“It is possible that something could go wrong in the formula and that…the (Old Lyme Water Pollution Control Authority) won’t be able to bill the homeowners all of the costs necessary to recover 100%, in which case then the town could have some liability,” he said.
Shoemaker said costs related to connecting town-owned properties to the sewer system, including the Old Lyme Police Department on Shore Road and a planned bathroom facility at Sound View Beach, would also be covered by the town.
She said the town’s proposed capital plan includes $20,000 for initial engineering designs related to the Sound View bathrooms and contemplates spending an additional $20,000 on designs the following year.
Uncertain Expenses
Proposed capital costs come in at $2.49 million in the proposed budget. That’s up $456,792, or 22.5%, from the current budget.
The capital spending plan includes $443,500 to save for the purchase of three fire department apparatuses over the next several years. Also included in the budget is an additional $200,000 for road-paving projects, bringing the total line item to $1 million.
The plan earmarks $70,200 toward architectural designs sought by the Halls Road Improvements Committee (HRIC) for a plan to add a pedestrian bridge, sidewalks and other amenities, according to Bernblum.
But the Board of Selectmen last week agreed to put the work of the HRIC on hold in the wake of a groundswell of opposition to a separate proposal to amend the town’s zoning regulations and the subsequent resignation of HRIC Chairwoman Edie Twining.
“What is going to happen with Halls Road is in the hands of the Board of Selectmen primarily at this point,” Bernblum said. “So what they decide to do, or we decide to do, with respect to Halls Road at the moment has not been decided.”
Proposed capital expenses also include $80,000 to supplement $95,000 approved last year at a town meeting for the design and construction of a replacement gazebo at White Sands Beach.
First Selectwoman Martha Shoemaker said the town engineer’s original estimates were upended when it was discovered the town would have to follow state and federal flood zone requirements in updating the structure.
Subsequent estimates came in at $173,000 for the project, according to Feb. 24 Board of Selectmen meeting minutes.
Shoemaker attributed the steep increase to more stringent guidelines for installing the footings and holding the gazebo in place.
Shoemaker said the plan is to complete the engineering designs using last year’s allocation so the project can go out to bid.
Bernblum put it this way: “We’ll go out to bid when the designs are completed and cross our fingers that there’s enough money. And if not, we’re going to have to come back to you guys and beg for more.”
Bernblum said the finance board remains open to public feedback on the proposed budget through the May 19 town meeting.
“Historically, we haven’t gotten negative feedback in regards to it, but we certainly invite that,” he said.
Editor’s Notes: i) Bennett Bernblum is a financial supporter of LymeLine.com, but has no input to the editorial process, which remains completely independent.
ii) A reminder of Our Policy on Comments.
