Category Archives: Uncategorized

Governor Announces Municipal Aid Update

Today, the Governor gave his update on the Municipal Aid levels for each town. This is the State operating plan until a State Budget is passed. Here is a sampling for selected Towns:

Fairfield is reduced by $4 Million

Milford is reduced by $14 Million

Newtown is reduced by $7 Million

Stratford is reduced by $23 Million

West Hartford is reduced by $24 Million

Westport is reduced by $1 Million

Hartford is reduced by $55 Million

Greenwich is reduced by $500,000

Darien is reduced by $600,000

New Canaan is reduced by $500,000

Bridgeport is reduced by $31 Million

With the exception of Hartford and Bridgeport, the towns listed have been reduced to virtually zero in Municipal Aid.

In Fairfield’s case, we have been planning for a significant reduction in Aid if no State Budget was passed. We have taken actions since the start of the fiscal year on July 1st including a strategic hiring freeze and a hold on capital purchases.  I have also asked for a survey by our Department Managers of other towns’ procedures to share best practices and learn what we can do better.

The Governor’s update is disappointing, but not a surprise. We have taken the steps needed to minimize the impact on our residents and town services. I want to compliment our Department Managers for their help and creative approaches in handling the hiring freeze in each of their departments. This is not an easy adjustment to lose $4 million in revenue this far into the fiscal year.  By planning early and being proactive, we have worked together to minimize the impact on our residents.

When you look at the size of these reductions to towns across the State, you realize how important getting a State Budget passed is to everyone. Let’s work together to call on our State Assembly to pass a well-balanced state budget as soon as possible.

Thank you, Mike Tetreau

How Does Fairfield’s Mill Rate Compare With Other Towns?

August 16, 2017

Now that budgets and Mill Rates are set for the year, let’s take a look at how Fairfield stacks up against other Fairfield County towns. Fairfield has the 6th lowest Mill Rate in Fairfield County. We come in after the big four – Greenwich, Darien, New Canaan and Westport.  Shelton also has a Mill Rate just a little lower than ours.  I have listed a selection of towns in Fairfield County and their Mill Rates below.

Fairfield has one of the lowest Mill Rates in Fairfield County and the State.

Town
Mill Rate
Greenwich11.369
Darien16.16
New Canaan16.669
Westport16.86
Shelton22.21
Fairfield25.82
Ridgefield27.21
Wilton27.7685
Weston28.91
Redding29.62
Easton33.38
Trumbull33.39
Newtown33.87
Monroe35.76
Stratford39.97
Bridgeport54.37


For Greenwich, New Canaan, Darien and Westport, their common attribute is much higher property values (see below, data current as of 8/9/2017).

Town
Median Home Value (in millions)
Greenwich2.195
New Canaan1.325
Darien1.3
Westport1.285
Fairfield0.525

The higher Average Price of a home in these towns is what drives a higher Grand List Value per capita. This means more Grand List value per resident to pay for town services.  These towns are able to spend more on Town services per resident than Fairfield does, yet have a lower Mill Rate.  Their lower Mill Rate is driven by higher home values, not by spending less.

When you look at the last twenty years, these towns haven’t managed their expenses better than Fairfield. They are not more efficient in providing town services. In fact, their town expenses as a percentage of total budget have increased more than ours.  Those towns are experiencing the benefit of growing their Grand List values more than our town.

It is clear that Fairfield needs to focus on growing our Grand List–the list of all taxable property in Town including Residential property, Commercial property, Motor Vehicles and Personal property. This is the best possible way to minimize tax rate increases and maintain our quality of life.

We must set a goal of strategic growth that will meet our town’s needs today and in the future while maintaining our Town’s character and charm.

Thank you for taking the time to read this perspective,

Mike

Comparing Mill Rates and Growing Fairfield’s Grand List

July 21, 2017

I was asked by a resident to explain why Westport has a lower Mill Rate than Fairfield. What is Westport doing differently?

I have looked at Mill Rate comparisons for a number of towns. Fairfield has the 6th lowest in Fairfield County. Only a few towns have a lower one….Greenwich, Darien, New Canaan, Westport and Shelton.

Let’s take a look at Westport.  Twenty years ago, Westport and Fairfield had comparable Mill Rates. In the last two decades, Fairfield’s has stayed in the 25 Mill range.  Westport has dropped its Mill Rate to 16 in the same time period.

I reviewed expense growth over the same time period. Fairfield’s total expenses grew less than Westport’s.  In fact, our Expense per Capita is much lower than Westport’s and many surrounding towns.  This is a good measure of our efficiency in delivering town services.

What has changed and allowed Westport to lower their Mill Rate is the growth of its Grand List. Our Grand List was $4 Billion in 1998.  Westport’s totaled $3 Billion.  We exceeded Westport’s total by 33%.

Today, the totals are different.  Fairfield’s Grand List has grown to $10.8 Billion.  Westport’s Grand List has grown even more and now exceeds ours at $11.2 Billion.  This is what has allowed Westport to spend more and lower its Mill Rate.

This by no means is to suggest that we cannot make improvements and lower costs.  We are going out reviewing other towns to look for best practices.  We are committed to continuous improvement.

It does suggest that we need to look at ways to grow our Grand List.  It is the one common attribute of each of the towns that have a lower Mill Rate.

Thank you, Mike

Town Budget Update as of June 27, 2017

Even though our Town has voted on a budget, set a Mill Rate and is sending out tax bills, Fairfield’s budget is not final. We are waiting on the State to approve its budget. We currently have $5 million in State Aid in our budget. When the State budget is finalized, we are expecting to see a reduction in this funding and must then adjust our budget accordingly.

Since the RTM has voted on the budget and the Mill Rate has been set, the Town is limited in the adjustments we can make. The Board of Education budget is 65% of our overall budget and cannot be adjusted without agreement from the Board of Education.
Debt Service is 10% of our budget and has to be paid. We are committed to making our Pension Fund and OPEB Retirement Fund payments. This totals about 80% of our budget that cannot be adjusted at this point.

The remaining 20% of the Town budget is about $60 million and includes Police, Fire, Public Works, the Library, and Parks & Recreation as well as a number of smaller departments. Finding significant cuts or reductions in these departments presents a real problem and will most likely mean reductions in Town services.

In Fairfield, we are doing our best to prepare for the unknown. We have instituted a hiring freeze and put a hold on capital purchases as well as other measures. Our goal is to provide the maximum financial flexibility to deal with the expected cuts. We are doing our best to avoid significant cuts in Town services. However, everyone should be ready for some changes if the State makes dramatic cuts to our funding.

I will keep you updated as changes come down from the State.

Thank you,
Mike

The RTM Budget Vote Weakens Fairfield

The recent RTM budget vote by the Republican majority weakens our town. Our 5-year average tax increase is the lowest in twenty years. We have strengthened our town’s financial foundation and improved services. In fact for the prior two years (Fiscal 2016 and Fiscal 2017), the Board of Selectmen, the Board of Finance and the RTM agreed with my budget recommendations and made virtually no changes. This year is different.

The Budget voted on by the RTM Republicans is not sustainable and hurts our town. The State has proposed major reductions to Municipal Aid. The answer is not cutting essential maintenance that will cost more in the long run.

My final budget recommendation provided for full Education funding, essential infrastructure maintenance and full Library support. The Republicans on the Board of Selectmen did not support these recommendations. The Board of Finance in bi-partisan fashion agreed with my recommendations and restored this funding. I want to thank the BOF for their leadership. It takes real leaders to make the tough decisions. However, the RTM Republicans ignored the advice and wisdom of the BOF.

The RTM Republicans voted to cut this funding – leaving the town without essential maintenance or a well-funded Library. They voted to leave the town totally exposed to future State cuts in municipal aid. The RTM budget is not sustainable. It leads to a less well maintained Fairfield, a less safe Fairfield, and a less desirable Fairfield. These cuts literally lead to a future paved with pot holes. While these cuts saved the Median taxpayer $31 this year, they will cost each taxpayer much more in the long run. This budget gives us less value for our tax dollars.

It is not over yet. When the State finalizes their cuts to our town, we will see and feel the real price of this ill-advised budget vote.

New Budget Update from Hartford

Finally some good news! The Speaker of the House was quoted in the Hartford Courant as stating that the Teachers’ Pension Cost transfer to the towns will not happen. This definitely counts as good news. It also means that we do not have to account for that $9 million expense in our budget.  My recommendation is that we use the reduction to restore some cuts and reduce the mill rate increase.

Based on this new information I recommend:

  1. Restoring the earlier $2 million reduction to the BOE budget
  2. Restoring the $300,000 reduction to the Fairfield Public Library budget
  3. Restoring $1,000,000 to Public Works for Paving
  4. Restoring $750,000 to Public Works for Major Equipment Purchase
  5. Reducing the budget by approximately $360,000 in expense reductions – adjustments that will come up during the BOS/BOF meetings
  6. Reducing the Supplemental Contribution to Surplus by $600,000
  7. Using the balance to reduce the Mill Rate increase to 2.2 percent

In this economic climate and with the negative State cuts, this is a very solid accomplishment.

I will keep working to see what other adjustments we can make. There is still a lot more discussion to take place with the Board of Selectmen, the Board of Finance and the RTM. These are my recommendations that I will propose to the Board of Selectmen next week.

We still have a long way to go. We will not have final budget numbers from the State until June or later, and we still have to keep an eye on next year. The State is struggling this year. Next year doesn’t look to be any better.

We have to keep Fairfield on a solid financial foundation. We have worked hard to fund our reserves and fund our long term liabilities (pension costs). We have maintained our infrastructure and we funded our Senior Tax Relief.  We are in better shape than most towns to weather this financial storm caused by the State.

Thank you for your time,

Mike

Teachers’ Pension Costs – The Worst Part of the Governor’s Budget Proposal

The transfer of Teachers’ Pension costs from the State to the towns is the worst part of the Governor’s Budget proposal. This hurts every town and city especially seniors, low income property owners and small business owners. Let’s take a look at Fairfield.

This is a State program to pay for Teacher Pensions. It was developed by the State. It was promised by the State. It was designed by the State. As towns, we had no input.  We didn’t cause the problem. The State is solely responsible for the designing of a program that isn’t sustainable and then compounding the problem by not funding it.  The State doesn’t want to make any changes to the program. It just wants to pass the costs on to the towns. This is just plain wrong and fiscally irresponsible.

Let’s look at the facts. Let’s look at all the ways this is bad for the towns and the State.

First, the Teachers’ Pension Program is primarily funded by state income tax, a progressive tax system. Those taxpayers with the most income pay the largest share. By moving this expense to the towns, it would be funded by property tax or a regressive system. Every taxpayer pays at the same rate regardless of income.  This moves the expense to towns unfairly burdening our seniors, our lower income property owners and small businesses.  Connecticut towns already have the highest property taxes in the nation.  This cost alone will increase Fairfield taxes by 3% this year and more every year in the future. A program that makes our property taxes higher hurts everyone in the State. This is not a solution.

Second, this approach changes nothing! The Pension funding problem remains unchanged. The State is abdicating its responsibility to find a solution. This hurts our towns and cities alike. Although Fairfield may be viewed as a wealthy town, all of our residents are not wealthy. This approach unfairly burdens seniors, lower income property owners and small businesses hurting our local economy.

Third, this cost would become our fastest growing expense in the future. The current Pension plan assumes an 8% discount rate or expected rate of return on investments. This is one of the highest assumptions in the nation. The plan is also underfunded. The combination of these two conditions means this expense will grow faster than any other line item in our budget. This guarantees higher property taxes in the future for all towns.

Fourth, it was suggested by someone in the State Administration that the wealthier towns, such as Fairfield, need to have some “skin in the game” and that these towns have been receiving a “hidden subsidy” from the State. This comment is either incredibly naive or a complete misrepresentation. How can someone suggest that a town like Fairfield has no “skin in the game” when we contribute over $200 million through income tax alone to the State budget? Where does that person think the State gets its money? It is equally incredulous to suggest that Fairfield is getting a hidden subsidy when we give the State $200 million in income tax and our teachers’ pension costs are $27 million.  How does one call it a subsidy when it is our money the State is using?  Fairfield is subsidizing the State not the other way around. Simply put, this is 100% a State problem and the State needs to take responsibility to fix the problem.

If Fairfield doesn’t have to pay $9 million in Teachers’ Pension costs to the State, we can do the following: restore the proposed budget cuts to our schools, our library, and Public Works, and lower our projected mill rate increase. We have to come together to help fight this proposal. We need to demand a better solution from the State. We need to keep these dollars in Fairfield.

I am working with our State Delegation, joining with other Mayors and First Selectmen, supporting the efforts by CCM and personally meeting with Assembly leadership to stop this pension cost transfer. I am asking all Fairfield residents to join together in contacting our State Delegation and State Assembly leadership to demand a better solution for our town and all of Connecticut. The Governor has made his proposal. The final budget recommendation is now in the hands of the State Assembly.

Here are the key people to contact:

Thank you for your help and support, Mike.

 

Update on Fight Against State Budget Cuts to Fairfield

I wanted to let everyone know the actions I have taken since the Governor announced his proposal to cut $4.6 Million in State Aid to Fairfield. This cut includes the reduction in Education Cost Sharing (ECS) funding and the reduction in Revenue Sharing from the State Sales Tax.

 

I have taken a very proactive approach. I have been working with Connecticut Conference of Municipalities (CCM)  – the lobbying group for towns and cities. I have been on television as a panelist on News 12′s Focus on Connecticut. CCM asked that I represent the towns throughout Fairfield County. I have been interviewed by numerous news media. I have reached out to our State Delegation. I have spoken to numerous other State Representatives and State Senators. I have reached out to other First Selectmen and Mayors. I have met with the Speaker of the House, Brendan Sharkey.  I have also requested a meeting with our State Minority Leaders to present our case and hear their perspective. I have spoken before the Sherman School PTA and have been asked to present to others. 

 

The budget proposals are currently in the hands of the General Assembly for their response and proposals. Everyone I have contacted has made it clear that there is no support for the Governor’s proposal. It will not go any further. Once the Assembly has made their recommendation and position clear, I will be reaching out to the Governor to garner his support for Fairfield and similar towns. 

 

I have been in continuous conversations with our town elected officials who serve on the Board of Education, the Board of Finance and the Representative Town Meeting (RTM). I have had conversations with my colleagues on the Board of Selectmen. 

 

I have continuously pointed out the poor process and the poor planning that led us to this situation.  I have made clear the negative impact on our town by these proposals and these last minute devastating cuts. I have also spoken out about the lack of fairness in the cuts and approach to our town.

 

I have recommended to the RTM that we delay our town vote on the budget until we have answers from the State on exactly what cuts are coming.  Everything from the State until now has been in the form of proposals but nothing is final. I have been following up with our Town Attorney to determine our options for delaying our vote and with our CFO to confirm our options and flexibility on getting out tax bills.

 

As a Town, our expenses are set. The appropriation or spending has been approved by the Board of Selectmen and the Board of Finance. Our budget recommendations are now before the Fairfield RTM. The RTM can lower or cut these appropriations but cannot raise or increase them.  

 

The budget I proposed at the beginning of March included a decrease from last year on the Townside and once combined with the BOE came in at just a 1% increase. One of the lowest in the last twenty years. The town tax increases over the last five years have been the lowest total increase as far back as I can find. Our tax and expense per capita are one of the lowest in Fairfield County. 

 

I hope this helps you have a better understanding of all that has been going on.  

 

General Electric and the Town of Fairfield

Let me first say that on behalf of the Town, I am in active communication with both GE and the Governor’s office and have been ever since GE’s announcement that it is considering leaving the State.

Here is what I have accomplished so far:

  1. I have been able to keep the communication flowing between GE and the State while the evaluation is proceeding. There was a lot of emotion initially. GE specifically asked that we keep the emotion and rhetoric to a minimum.
  2. I made certain Hartford understands all the ways that GE makes valuable contributions to both Fairfield and our region.
  3. I encouraged the Governor to reduce the impact on GE by making changes to the budget in the follow up “implementer bill.” These changes helped but I am not convinced they went far enough.
  4. I encouraged the State to make an as aggressive and competitive proposal as possible to convince GE to stay.
  5. I encouraged GE to listen to the State’s proposal.

The tax situation created by the recently approved State budget can only be solved by the State.  Both Democrats and Republicans at the State level share the blame for not addressing these financial issues over the past twenty years.  There is a responsibility on behalf of both parties to stop playing politics and to take seriously addressing the current tax situation.  Whether GE leaves or stays, Connecticut still has major competitive issues and our State leaders need to combine their efforts to resolve these issues.

Unfortunately, there is a very real chance that GE will leave Connecticut or at least relocate enough of their staff to change their headquarters to another state.  Both the State tax situation and recent decisions at the Federal level are affecting GE’s future planning.  Nevertheless, on behalf of the Town, I will continue to facilitate communication between the parties and work earnestly to keep GE, an incredibly valuable corporate citizen, here in Fairfield.

Mike