By Kevin McNabola
Orange Board of Finance
Kevin McNabola
This past week the Orange Board of Finance had the opportunity to review the recent audit report for the fiscal year ending June 30, 2022.
The audit report presented by Seward and Monde showed favorable results, with town revenues beating expectations and the budget by $1.7 million, largely driven by increases in property tax collections ($300,000) and intergovernmental revenues, including unbudgeted state grants of $500,000 and investment income, which ended with $200,000 in the black. Building permits and conveyance fees also came in higher year over year, and finally the Amity surplus accounted for $724,709 (42 percent) of the total $1.7 million surplus.
Expenditures were lower than budgeted by $756,871, primarily due to underruns within salary accounts within Public Safety, Public Works and Parks & Recreation. The undesignated fund balance for the year came in at $16,578,585, or 21.8 percent of total general fund expenditures of $76,114,029.
The net grand list for Oct. 1, 2021 was $2,133,286,440 – an increase of 5.44 percent compared to the 2020 grand list. Overall, residential property comprises approximately 62 percent of the grand list while commercial, industrial and business property account for 31 percent.
The current 2022-23 budget year had an increase of $2,253,661, or 2.96 percent, and continues to run favorable on expenditures – although the expectation is for lower revenues this year based on lower conveyance and building permit fees, which are largely driven by downturns within the economy. We can expect to see much tighter results for the fiscal year ending June 30.
The BOF had the first budget presentation for the new fiscal budget beginning July 1, 2023 and ending June 30, 2024 from the Amity Regional School District. Amity is projecting a budget increase of $1,565,101 or 2.93 percent, for the coming year based on the total proposed budget of $54,914,906. Key drivers of the increase are within contractual salaries $980,494 of which $650,830 is designated for contractual salary increases; $329,664 for new staff, accounting for 3.4 new full-time positions. Benefits also are another key driver, with increases of $637,498 within medical health insurance, which is expecting to see an 11.9 percent increase.
Although Amity also has increases within utilities and transportation of $108,508, there are some offsetting decreases, as special education transportation and tuition are expected to decrease by $596,597, as well as $67,774 within Amity’s debt service account.
Based on enrollment, Orange’s share of the Amity budget will decrease for 2023-24, while Bethany and Woodbridge will see an increase. From October 2021 to October 2022, Orange’s student population dropped from 1,091 to 1,017.
What does this mean for Orange? Essentially, it means that Orange will only see a $21,240 budgetary impact – a mere 0.08 percent increase.
The BOF will be meeting with all departments over the coming weeks to finalize the town’s operating budget and will have to factor in the current economy, fiscal realities and budgetary pressures that lie ahead in 2023 and 2024 with a possible recession on the horizon. The BOF will also have to factor in the loss of $700,000 in tax revenue from Amity High School that had been budgeted in the previous year. On the expense side of the budget, we can expect to see increases within contractual salaries and increases within pension obligations due to 2022 losses across the board within public sector pension asset portfolios.
Kevin McNabola is the chief financial officer for the City of Meriden and a member of the Orange Board of Finance.