STONINGTON FINANCE BOARD SETS UP FUND TO INSURE AGAINST AID CUTS

Stonington — The Board of Finance began its deliberations on the proposed 2017-18 budget Wednesday night by agreeing to self insure itself against expected cuts in state aid by using $850,000 from the town’s $14 million undesignated fund surplus.

Under the town policy to preserve its high bond rating, which it needs to lower debt payments on projects such as the upcoming elementary school renovation project, the town must keep two months of operating expenses on hand or $10 million. That gives the town some extra money to insure itself against the uncertainty of state aid.

“We’re in an unusual position in the State of Connecticut. We’ve been fiscally responsible and can insure ourselves against state aid cuts,” finance board member Timothy O’Brien said.

Board Chairman Bryan Bentz told members that he had spoken to state Sen. Heather Somers, R-Groton, on Wednesday and she told him that the worst-case scenario the town faces with proposed state aid cuts and new contributions to teacher pension would produce a $3.4 million revenue deficit. But he said Somers predicted the teacher pension contribution of $1.7 million would not occur and other education aid would not be decreased as much as thought. This would leave the town with an $850,000 shortfall. The $850,000 taken from the surplus fund would ensure against a cut of more than $850,000.

Board members also discussed what an acceptable budget increase would be, with members suggesting a 2.5 percent increase. Town employees are receiving raises of 2.6 percent.

Board members spent most of the meeting trying to clarify revenue estimates in the budget. The board, which faces the likelihood of making big cuts to avoid a large tax increase for residents, is scheduled to resume deliberations at 7:15 p.m. Thursday.