Chairman's View: Not to Eliminate Buildings, But to Eliminate Expense (Jan. 22, 2019)

Chairman’s View: ‘Not to eliminate buildings, but to eliminate expense’

JANUARY 22, 2019 BY JOHN ENGEL, CHAIRMAN, TOWN COUNCIL

In the fourth week of a federal government shutdown it’s a good time to reflect on the state of Connecticut and town government. There is cause for optimism.

Newly elected State Sen. Alex Bergstein announced the State is pursuing a policy of “shared risk.” I asked “Shared between whom?” because last year’s plan was to add a $4 million burden onto New Canaan.  The senator clarified she meant shared between the union workers and the State. If Gov. Ned Lamont agrees and the renegotiation and restructuring is finally underway, then this is great news.

Our grand list went down 7%: First Selectman Kevin Moynihan says he can bring in a town budget growing 0% to 1%. Is this because of a 1-year anomaly in the debt service? Does this assume only 5% rise in health care costs? Or, are we making the hard choices? It should be 0%. 

The Brick Barn: A relatively minor building in our portfolio, it has taken on outsized proportions for our citizens. We cannot ignore the fact that Town Council and two selectmen demanded to see alternatives to demolition. We owe it to the electorate to explain why we must spend $65,000 on demolition when the New Canaan Preservation Alliance says it is fully funded and ready to restore now at no cost to the town. The Board of Selectmen is at a stalemate until the first selectman convinces his fellow selectmen or they convince him. If a stalemate then the demo money is returned.

The Police Station: It feels reckless of us to talk about a new $16 million to $20 million police station between Saxe and the YMCA when there is only $7.8 million in our capital budget. And, that is the absolute worst location. Where is the money coming from? What other locations are being considered? Will this spending come at the expense of library or Waveny renovations? How far does $7.8 million get us?

Irwin House: First, it was to be a museum. Then, offices for nonprofits. Then Board of Finance members asked for demolition costs. The Town Council was understandably anxious to hear that we were talking about amendments to the deed with no explanation. Russ Kimes made an excellent case that it be repurposed as the school administration building, saving us $300,000 per year.

Vine Cottage: Make this charming building part of the historic district. Put out a Request for Proposals by May 1. There are businesses that will sign a long-term ground lease and fix it up. Any proposal that preserves Town Hall parking and which transfers restoration responsibility to the tenant should be considered.

Keep these buildings at no expense and with benefit to the public. The most important thing is not to eliminate buildings, but to eliminate expense.

Chairman's View: On Bags and Budgets (Feb. 4, 2019)

Chairman’s View: On bags and budgets

FEBRUARY 7, 2019 BY JOHN ENGEL, CHAIRMAN, TOWN COUNCIL

The Town Council is considering a proposed townwide ban of supermarket plastic bags. Letters are starting to pour in. Supporters of the ban cite the environmental impact. Opponents of a ban say we are chipping away at freedom and personal choice.

Greenwich, Stamford and Westport banned the bags; Darien will be next. Will New Canaan’s decision rest on the more successful write-in campaign? Fewer than 25 people have weighed in. We all want to get greener but do we need more laws? We want to hear your thoughts.

The Budget. The First Selectman declared victory this week, proposing the lowest budget increase in a decade, up 0.16%, with two highlights: One is the way we look at contingency, consolidating department contingencies into one account at the town level. The second is a hiring freeze. Both seem sensible. If passed the mill rate will increase from 16.96 to 18.32 this year. Unfortunately, next year our debt service is forecast to rise and I fear the mill rate may rise with it, making us less competitive with Darien and Westport.

Our Superintendent of Schools brought in a school budget, up 2.05%, and believes we are done because they met Board of Finance standards published in the fall. We are not. Board of Finance models were based on changing assumptions. The whisper number from the Board of Finance and Town Council is we need another $1.5 million (from a schools budget that only rose a modest $1.4 million). Sound impossible? It may be too hard to turn the ship in one year. We did not get to this point in one year and we may not solve it that quickly. 

Consider that over the past 13 years spending increased 42% while enrollment was flat. In the last seven years spending increased 24% while enrollment decreased 3%. 

Consider that Darien teaches 4,726 students with 767 teachers and administrators whereas New Canaan teaches 4,113 with 749. If we managed to Darien’s ratio of 6.16 we would have 81 fewer staff across our schools. 

This is not a criticism of our schools or a statement that their budget is “fat” It is not. It is simply recognition that to meet Board of Finance debt targets of debt service below 10% in a period of rising interest rates we will have to make long-term systemic changes. If zero growth is too much in one year then perhaps a 3-year plan growing 1% per year is something the Board of Education and Board of Finance can agree on together. Such a plan would bring the mill rate back to a level below 18, reassure a jittery housing market, provide less stress to our schools than year by year cuts, meet Board of Finance long-term debt guidance and would be consistent with “stable but slightly decreasing enrollment” projections from our demographer.

Chairman’s View represents the views of the Town Council chairman and not necessarily those of any other Town Council member.

Chairman's View: Council Faces Cost of Debt, Capital Projects and Lower Property Values (Oct 4, 2018)

Chairman’s View: Council faces cost of debt, capital projects and lower property values

OCTOBER 4, 2018 BY NEW CANAAN ADVERTISER

A guest column from New Canaan Town Council Chairman John Engel.

New Canaan has the highest per-capita debt in Connecticut at $5,800, double that of Darien because we are a larger town with many more miles of roads and dozens more buildings. Therefore the Board of Finance has presented to the Town Council their recommendation that we reduce our debt service as a percentage of expenses over the next five years from 12% to 10%.

Capital Plan

The Town Council, Board of Education and Board of Finance agreed last year to work on common budget guidance in the fall. Those meetings are still needed. There is a disconnect between current Board of Finance guidance to reduce Town debt service to 10% levels and the new public-private initiatives we read about each week. Your town government needs to have an honest conversation about priorities and scrub the five-year capital plan.

State and local

High net worth taxpayers are continuing to leave Connecticut. The election will have an impact on our budget thinking. We need to vote for a change in our taxes that will have an impact on our budget planning. The latest poll shows Lamont leads Stefanowski by 6 points with a margin of error of 4 points. 40% of Connecticut voters are independent. Stefanowski has gained 6% with unaffiliated this month, but he trails among women by 22%. This race is too close to call.

Congressional elections, transportation  

New Canaan tax base is largely dependent on Wall Street, and it benefited from recent deregulation of the financial sector, federal stimulation and the bull market. But, the latest polls predict a Republican Senate and a Democratic House in Washington. We should anticipate gridlock from a balanced Congress at a time when what New Canaan needs is federal attention on our infrastructure. New Canaan needs multiple good commuting options, particularly faster and more trains. Town leaders are working on the affordable expansion of Talmadge Hill to make more parking available for commuters. This should shorten the waiting lists. I am surprised at how few people are taking advantage of newly available “Boxcar” parking in the St. Aloysius lot. Parking habits are equally slow to change.

2019 Revaluation

The property tax change is a concern for budget planning. In January we will learn that many tax bills will rise between 10% and 20%. Why? The Grand List is predicted to shrink 8% reflecting a reset at the top end of our market and subsequent compression as top tier prices fell and put price pressure throughout the system on lower-priced homes. Those homes will make up the deficit. 

Therefore, the Board of Finance and Town Council must re-evaluate our Tax Relief for Seniors program and its means-testing in light of the coming property tax volatility. We want to retain our seniors as we explore new senior housing options. It’s a small line item but deserves a fresh look.

"New Canaan Made Plain" (my column for the New Canaan Advertiser)

This column is making good on a promise of transparency. As your bow-tie wearing Town Council Chairman, rarely accused of being shy, it’s my charge to let people know what is going on in New Canaan.

Bankwell is quitting the residential mortgage business. Based on Bankwell’s tremendous history and visibility here in New Canaan (sponsoring just about every non-profit event in town) this is a shock. It reflects how competitive the residential mortgage business has become. It’s a funny time to leave the business, just as rates are about to tick up and the business could become more profitable.

The Town Council confirmed Board of Finance nominees: Colleen Baldwin returns; Todd Lavieri is new. When the BOF issued their guidance last month setting a cap of 2% on all budgets and the First Selectman reaffirmed that guidance we set the expectation for a tough budget season.

Town Council announced subcommittees last night. We had huge interest in the Infrastructure and Utilities Subcommittee where we will review potential cell tower sites on town properties (note new cell tower P&Z regulations are in draft for private properties), the roll out of gas service and the newly released Buildings Committee recommendations. Penny Young and Cristina Ross chair our subcommittee with Sven Englund, Joe Palladino, Tom Butterworth and Liz Donovan. New Canaan signaled low appetite for school and park sites. Private cell sites may now emerge.

The Town Council is beginning a new tradition: start each meeting with the Pledge of Allegiance led by local Boy Scouts, Girl Scouts and Cub Scouts. Good for the scouts, doubly good for the adults. We will stand.

People keep asking me what is happening in our real estate market and how will it affect our budget. As of December 1 the number of single-family home sales is up 36%. The median sale price is exactly $1.5 million. Sales below $1.5mm are up 41% while sales above $1.5mm are up 32%. The bottom half took off early this year, sales under $1mm were up 147% in October. Now, we see strength at the higher end as confidence moves up-market. Four sales this year over $5 million with another 2 sales pending is a good sign for the New Canaan market.

All 4 performances of the NEAD Nutcracker sold out last (snowy) weekend, 3000 tickets, the first ever with a live orchestra. Bravo. There’s one (charity) show this Saturday.

www.ncadvertiser.com