Chairman's View: Cap Town Spending for Three Years (Mar. 28, 2019)

Chairman’s View: Cap town spending for three years

MARCH 28, 2019 BY JOHN ENGEL, CHAIRMAN, TOWN COUNCIL

Town income is dependent on real estate values and the taxes they generate. Our revenues currently grow at 1% per year.

I propose that we cap spending at 1.50% per year for three years, beginning now. We must limit our spending growth more closely to our revenue growth. The town budget is growing 1.43% while the school budget grew 1.85% ($1.4 million). My proposal means cutting $340,000 from a $91 million Board of Education budget. This is not a criticism of the school budget or their priorities. It is simply the recognition that 2.8% average annual growth we’ve seen for the last 10 years is unsustainable.

The reputation of top-performing schools causes school-age families to move in. The No. 1 reason people move out is affordability. That is particularly true of our empty-nesters and seniors whose taxes developed the school system that we all currently enjoy. It’s the responsibility of the Town Council to make sure we maintain that balance between excellent schools and long-term affordability. We cannot ignore the effects SALT deductibility, revaluation, and pressures from Hartford have had on property values. We must cut spending growth in all budgeted areas to a level New Canaan can sustain.

New Canaan currently plans capital spending of $17 million, $18 million and $18 million in the next three years while retiring only $11.5 million to $12.4 million of debt per year. Those figures don’t meet the needs of our Police Department or library, but they do include a $500,000 fire rescue truck, $210,000 ambulance, $550,000 school planetarium, $6 million Waveny restoration, $200,000 Irwin House restoration, $250,000 Nature Center restoration and $3.2 million in the selectmen’s budget to buy land for new parking lots. We must get serious about re-prioritizing our capital needs within the $13 million cap. Doing so will result in debt service savings of $282,529, $426,047 and $842,239 in the next three years and is necessary if we are to decrease debt service toward the 10% guideline set by the Board of Finance in the fall of 2018. If we don’t limit new capital spending below $13 million, then we will never reach the 10% target.

Two years ago, New Canaan and Darien both claimed mill rates in the 16s. This year, Darien has a mill rate of 16.08 while New Canaan’s will grow from 16.96 to 18.11 and possibly exceed 19 in two years. We need the mill rate to return to levels near that of Darien and Westport, our closest rivals. I am confident that with proper planning we can do this while maintaining school excellence and the current level of services. And, as a Realtor, I am confident that real estate prices will recover and when they do we will be able ease the caps.

John Engel is chairman of the Town Council. The views expressed in this column are those of the chairman, not necessarily the entire council.

Chairman's View: Revaluation (Dec. 20, 2018)

Chairman’s View: Revaluation

DECEMBER 20, 2018 BY JOHN ENGEL. CHAIRMAN, TOWN COUNCIL

New Canaan’s real estate grand list fell by $570 million (7.15%) compared to 2017.In the recent revaluation:

• 4,861 parcels saw average decreases of 11%.
• 2,308 saw average increases of 13%.
• For homes worth more than $3 million, the average decrease was 14%.
• For $2 million to $3 million homes, the average decrease was 10%.
• For $1 million to $2 million homes, the average decrease was 7%.

Homes less than $1 million saw an average increase of 1%. Multifamily homes decreased 4%. Commercial properties increased an average of 13%. Condominiums increased 9%. 

We will not know what the new mill rate is and the new taxes are until the MuniVal consultation period is complete (this week and first week of January), then the Board of Assessment appeals process is complete (February) and then the (town and school) budget process ends with the Town Council vote April 4, 2019. 

If your revaluation is factually wrong then schedule a meeting this week for early January with MuniVal, the revaluation company and correct the facts (203-292-5500 or newcanaanreval@munival.com). If unsuccessful, then you must appeal in person to the Board of Assessment Appeals with facts about your house and comparable sales that occurred between Oct 1, 2017 and Oct 1, 2018. Appointments are given February 1 to 20 and the appeals take place in March. Sales that fall outside of that 1-year window are considered but carry less weight. 

After the 2013 revaluation the Board of Assessment Appeals increased two assessments and reduced 187 of the 285 appeals filed. Some homeowners appeal alone, others take a Realtor or an attorney. Some attorneys charge by the hour. Others work on contingency, taking a percentage of a successful appeal. If an appeal process is unsuccessful, the recourse is a lawsuit. Five years ago, 13 homeowners filed lawsuits against the town. Two were subsequently withdrawn. It takes three or four years to resolve a lawsuit.

Assuming health care rises 5%, town salaries rise 2.8%, school salaries 2.2% and $2.5 million comes from the general fund I expect expenses to increase 1.47% with “level services” and 1.86% if we follow Board of Finance guidance. Therefore, the mill rate announced in May will be between 18.61 and 18.69. That’s up 10% from 16.96.  A homeowner’s revaluation would have to decrease 9% in order to see a drop in taxes. To calculate your 2019 taxes multiply .01862 by your new valuation. (The spreadsheet is posted at johnengel.com).

Darien is revaluing now. Their assessor predicted most revaluations within 3% or 4% of their previous valuation. He expects the Darien mill rate to remain close to their current 16.08 rate. Wilton, now at 28.19, will send out revaluation letters in early January. Ridgefield’s grand list rose one half of one percent in their February 2018 revaluation, a 28.78 mill rate. Westport’s mill rate has been flat at 16.86 for 2 years and they won’t revalue until 2020. New Canaan experienced a 3% drop in the 2013 (reval) grand list but gained 1% in most years since (up $84 million, $85 million, $81 million, then $51 million in 2017).

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.