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Simsbury selectmen back using year-end surplus to avoid $1 million tax increase
Summary
At a special April 23 meeting the Board of Selectmen agreed without objection to support using $1 million of a projected $3 million year-end surplus—rather than tapping $1 million in health-insurance reserves—to keep the proposed mill rate at 2.15% amid uncertainty over insurance claims and Lockton projections.
The Board of Selectmen on April 23 agreed without objection to recommend using part of a projected $3 million year-end surplus instead of drawing $1 million from the town's health-insurance reserves, a move intended to avoid increasing the mill rate from the advertised 2.15% toward about 3%. The decision came during a special meeting convened at 9:31 a.m.
Amy, a town finance staff member, told the board the Board of Finance had proposed three options after a recent public hearing: (1) keep the original plan and use $1 million from the health-insurance fund and assign $1 million from the general fund to amortize that use; (2) leave the health-insurance fund intact and use $1 million of expected year-end surplus to offset next year's operating budget; or (3) budget a $1 million tax increase now, which would raise the town's mill rate closer to 3%. Amy said Lockton, the town's insurance consultant, had projected roughly a 14% increase in health costs next year and that current reserve levels are around 18% of expected claims versus a typical target of 20%–25%.
Why it matters: Board members said the change would shield taxpayers from an immediate increase while still leaving the town able to respond if claims materialize. Selectman Diana said she was not inclined to increase taxes and urged keeping the advertised rate low. "I feel strongly that we keep our increase as low as possible," Diana said. Mike and other members also argued against reopening the budgets and favored option two as the least disruptive path for taxpayers.
How the plan would work: Under the agreed approach the town would use $1 million of the anticipated $3 million year-end surplus to cover next year's operating budget instead of drawing from the health-insurance fund. Amy explained the town could then use up to about $500,000 of the remaining surplus, if needed, to restore the health-insurance fund to the preferred 20%–25% reserve level. Board members noted that diverting some surplus could reduce the planned contribution to capital reserves by roughly $500,000 but said the town would still maintain a substantial capital balance.
Legal and procedural context: A town staff member reminded the board that section 12-144 of the Connecticut General Statutes directs municipalities to pay current-year expenses with current-year taxes, framing the use of year-end surplus as an appropriate response to a current-year spike in insurance costs. Amy said the Board of Finance had provisionally favored the tax-increase option until Lockton provides further information.
Record and next steps: Members asked staff to document the board's support for option two and to send a letter with Amy's help to the Board of Finance ahead of the next public hearing. The selectmen recorded their consensus "without objection." No formal roll-call motion to approve the budget change was taken at this meeting; the board agreed to present the documented position at the next scheduled public hearing. The meeting adjourned after a procedural vote.
