MERIDEN — The City Council’s Finance Committee approved a plan Tuesday night to put about half of the $3.4 million in unbudgeted tax revenue received from Eversource Energy towards expenses in next year’s budget, effectively lowering next year’s mill rate. The plan presented by City Manager Tim Coon and Finance Director Michael Lupkas calls for the city to “prepay” for expenses in next year’s budget, putting $1.2 million toward health insurance costs and $400,000 toward post-employment benefits costs. The city will also use $104,000 to purchase two new police cruisers this year.
Coon is expected to release his 2019-20 budget proposal Monday, and while it’s unclear what changes, if any, he will propose to the tax rate, Lupkas said the prepayments will cut the mill rate by about .5 mill. As a result, the average homeowner will pay about $60 less on their real estate tax bills next fiscal year.
The plan, Coon said, effectively gives a portion of the Eversource money “back to the taxpayers.” The city received the $3.43 million payment from Eversource after discovering the utility’s personal property was significantly under-assessed in previous years.
Of the remaining $1.7 million, $1 million would be used for expenses in this year’s budget, including $800,000 for health insurance costs and $200,000 for post-employment benefits. The remaining $700,000 would be used to replenish the city’s rainy day fund.
The Finance Committee voted 3-1 to approve the plan, with Committee Vice Chairman Walter Shamock not present. The full City Council is expected to vote on the recommendation Monday.
Republican Dan Brunet, the lone dissenting vote, said he couldn’t make a judgment on Coon’s plan without first seeing his full budget proposal. Brunet said, for example, if Coon’s budget calls for a tax increase, he may want to use a larger portion of the $3.4 million to offset the increase.
Committee Chairman Brian Daniels said he doesn’t think the approved plan “ties the hands” of the City Council when making revisions to Coon’s budget.
“By allowing these prepayments to go in, it allows the city manager to propose a budget that is over half a mill lower than it would be,” Daniels said.
The council has the option to use any of the $732,000 that would currently go to replenishing the city’s rainy day fund for other uses, including prepayments for next year, Lupkas said.
Coon and Lupkas want to spend $800,000 on health insurance costs in this year’s budget because the city’s health fund is projected to finish the year with a $1.8 million deficit after finishing last fiscal year with a $1.9 million deficit.
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