The Town Budget – So How Does That Work Again?

February and March are the key months for the development of the town budget.  The development and approval of the budget is a structured process defined in the Town Charter. The process extends over more than four months and involves three major town boards – the Board of Selectpersons, the Board of Education, and the Board of Finance. The planning activity culminates at the end of March, when the budget for the coming fiscal year is finalized for presentation to town voters.

Building the Budgets

The budget comes to the Board of Finance (BOF) for review in several parts, each via different development paths:

Town Operating Budget This budget is developed by the Board of Selectpersons (BOS) in a series of meetings in January and February, with input from all town departments, and comes directly to the BOF after approval by the BOS. The town side is also responsible for presenting a debt service budget, which covers the annual costs of interest and repayment of principal on the town’s outstanding borrowings.

Schools Operating Budget This budget is developed by the Board of Education (BOE), starting with detailed planning workshops involving Ridgefield Public School staff, BOE members and the public. The BOE holds public hearings on the Superintendent’s proposed budget in February, and then meets for further review and debate before adopting a BOE endorsed budget, usually later in February. Before coming to the BOF, the BOE adopted budget is first reviewed by the Board of Selectpersons, which is authorized to make its own non-binding recommendation for this budget (in the aggregate) before sending it along for BOF review.

Annual Capital Budget The annual capital budget encompasses spending for large equipment and major infrastructure projects that typically have an expected useful life of 10 years or more.  The capital budget includes items ranging from new trucks for the highway or fire department to road and sidewalk projects to various building repairs.  In recent years, IT equipment has become a major component of this budget as well.

The BOE submits its capital requests to the BS, which reviews them along with the capital requests from town departments. The combined capital budget request is sent along for review to the BOF after approval by the BOS. 

Board of Finance Role

Once the proposed budgets are developed, they are made available for public review and are the focus of a public hearing in late March. The BOF then holds a series of meetings to review the proposals, ask questions of the BOS and BOE, and conduct its own deliberations. In addition to reviewing proposed spending, the BOF is responsible for deciding other key assumptions that affect the calculation of the overall tax levy.  These include the expected collection rate for tax bills, the amounts of expected non-tax revenues (such as Parks and Rec revenues, building permit fees, real estate conveyance taxes, and investment income), and the amount of any current-year surplus that will be carried forward into the following year’s revenue calculation. This last decision is especially important, as it affects both the resulting tax mill rate as well as the expected amount of the ”Rainy Day” fund balance maintained by the town.

The BOF goal in the budget process, as defined by the Town Charter, is the “prudent management” of the town’s fiscal situation in light of “the overall financial condition of the Town.” The BOF is directed to take the perspective of “municipal government as a whole” rather than acting from “the viewpoint of any particular Town agency.” The Town Charter also constrains what actions the BOF can take with respect to the proposed budgets. For example, the BOF can reduce the amount of an operating budget request but may not increase it from what was requested. Also, if the BOF decides to make a reduction in an operating budget, it can only change the aggregate amount and cannot direct the cuts to any specific line items within the budget. In the capital budget, the BOF can add items as well as eliminate items, but any additions must then also be approved by the Board of Selectpersons.

The Annual Town Meeting and Annual Budget Referendum

This is where you – the voter – get to participate directly in the budget process!

Upon approval by the Board of Finance, the three budgets are then scheduled for discussion at the Annual Town Meeting, which will be held this year on Monday, May 6.  The BOS and BOE budgets are reviewed in some detail, and participants have the opportunity to ask questions on the details. As the result of town Charter changes adopted in 2023, the two budgets are not subject to amendment at the meeting, but after the discussion are sent along to referendum. For the capital budget, attendees can propose elimination of any capital item but may not make additions, again subject to meeting vote. The Town Meeting votes on individual items in the Capital budget of under $100,000, and also votes to bundle the remaining capital items into specific ballot questions for the referendum.

After the Town Meeting, the budgets are submitted to the voters of the town in the annual budget referendum, being held this year on Tuesday, May 14, from 6 a.m. to 8 p.m. Upon completion of the voting, the results are presented for ratification by the Town Meeting. The Board of Finance then completes the last step of the process, which is to calculate the “mill rate” that will be used for property tax bills for the coming budget year.

We encourage you to get involved in and understand the town budget, as this is an important component of the town’s governance process. 

In April, following completion of this year’s budget deliberation, we will provide a follow up article providing details on this year’s proposed budgets.

Note that the opinions presented in this article are those of the authors, and are not intended to represent those of the other members of the Board of Finance.

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