1 First, 1. First I Id dliketothanktheBoardofFinanceandallof thedepartmentheadsthatsatwiththeBoardof Financeandreviewedmyinitialrecommendations. IdalsoliketothankourFinanceDirector, ,PaulRizza.Mr. Rizza workedincrediblyhardonthisbudgetandhe deservestoberecognizedforthatwork.

2.Withthatsaid 2 said,Id I dliketopresentmybudgetbyfirstre cappingtheTownsfinancialpositionattheendofthe 20112012fiscalyear.

3.AsPage19oftheAnnualFinancialReportclearly 3 shows,theTownendedthe20112012FiscalYearwitha surplusof$237,043dollars. Thatmoney ywasaddedtotheTownsrainy yday yfund, , doublingtheTownsfundbalance. Attheendofthe20112012fiscalyear,theTownhada totalrunningsurplusof$437,843.00.

4.Youmaybeasking,How Howdoesthiscomparewith previousyears? Between2002and2007duringmyfirst10yearsinoffice, theTownbalanced10straightbudgetsandmaintaineda runningsurplusofnolessthan$4milliondollars dollars. Between2007and2011,theTownranthreestraight deficitswhich,atonepoint,causedtheTownsfund balancetodroptonegative$5.1milliondollars. However,Iamhappytoreportthatinthelast18months, Iandmyteamhavequicklyreversedthistrendand producedapositiverunningsurplus.Thegoalistoend thecurrentfiscalyearwithnolessthan$1milliondollars inoursurplusaccount. account

5.Youmaybeasking, 5 asking How Howdoesthiscomparewith neighboringTowns? Ourfundbalanceoverthelast4years,incomparisonto otherTowns, ,wasrathersmall.However, ,thankstobetter budgeting,wearebeginningtostabilizeandcatchupto ourneighbors. Incomparison,between2002and2007,ourfund balancewasonparand,insomecases,inexcessofour neighbors.

6.However, 6 However creditratingagencies, agencies likeMoody Moodys sand Standards&Poor,stronglyrecommendthattheTown haveasavingsaccountequalto5%ofitsoperating budget.Fivepercentofourproposedbudgetisabout $4.3milliondollars. $ Inthepastyear,wehavecommittedtoaplanof incrementalcontributionstothefundbalancetobring theTowninlinewiththerecommendedfigure.

7.InadditiontotheTown Towns sfundbalance,debtisanother keyeconomicmeasure.LikeyouandI,theTownhaslong termdebt. IampleasedtoreportthatthechangeintheTownslong termdebtpositionindicatesthatwecontinuetomove forwardontherighttrack. TheTownbeganthe20112012fiscalyearwithjustover $48milliondollarsinlongtermdebt.Inthelastbudget year,wepaidoffnearly$3.6millionofthatdebt,or7.4% percent,reducingourtotallongtermdebtto$44.5 milliondollars. Asyoucansee see,weve we vemaderemarkablefinancial progressinthe18shortmonthswevebeenhere.

8.NowthatI 8 Ive vegivenyouasummaryoftheprogresswe madeinthelast18months,Iwanttospeakbrieflyabout whatfactorsinfluenceamunicipalbudget.Putsimply, thebudgetiscomposedoftwoparts:expensesand revenues.

9.Now, 9 Now whiletherearemanydifferenttypesofexpenses, expenses severalareconstant.Theyareexpenseswhichregularly occur,mayberequiredbycontract,orareessentialto runningtheTown. Forexample,employeebenefits,insurance,anddebt servicearerequiredexpenses.Legalservicesare essentialtothedefenseoftheTown.Utilitieslikewater, sewer,heat,andelectricityareconstant.Andfinally, education,police,fire,andpublicworksservicesare essentialtoensurethedaytodaysafetyofour Community.

10.Ontheothersideofthebudget, 10 budget themainsourcesof incomefortheTownarefromtaxes,stateandfederal funding,andmiscellaneousfees(suchasfeesfor recordingdocumentsonthelandrecords).

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11.Informingthebudgetwearecurrentlyin, 11 in wepaid particularattentiontotheexpensesideofthebudget. However,certainexpensescontinuedtopresent challenges.Policeovertime,resultingfromashortageof manpower, p ,continuestobeachallenge. g Wehavetaken steps,includinghiringnewofficers,tosolvethisissue, butthesavingsfromthosestepsisstillmonthsaway. Additionally,expensesrelatedtoHurricaneIrene, Superstorm Sandy, andtherecentwinterstormareonly partiallyreimbursedtotheTown,requiringtheTownto absorbtheunreimbursableportions.

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12.Havingcarefullyreviewedtheprospectiverevenues 12 andexpenses,Iandmyteamcarefullyputtogethera budgetforthe20132014fiscalyearwhichIwouldnow liketosharewithyounow.

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13.Insummary, 13 summary mybudgetcallsforasmallincreasein expensesof.55%and$44.3million dollarsineducation funding.

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14.Specifically, 14 Specifically Iambudgetingapproximately$87 $87.1 1 milliondollarsinrevenueand$86.1milliondollarsin expenses.Whenweaddinthe$1milliondollar contributiontoourTownsavingsaccount(orfund balance), ),y youcanseeImp proposing p gatotalbudget g of $87.1milliondollars.

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15.Now, 15 Now myteamandIfocusedonafewkey considerationswhensettingtheincomeandexpense numbersyoujustsaw. Ontheexpense p side, ,theTownexperienced p amillion dollarincreaseinemployeemedicalexpensescausedby thenewObamacareregulations.Thisincreasewas unavoidable,andrequiredtheTowntogetcreativeabout absorbingtheincrease. Ontherevenueside,theeliminationofseveralgrants, includingthePequotandMohegangrants,andthe proposedrestructuringofotherStategrantsmade revenuecalculationsdifficulttopindown.

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16.Anotherkeyfactorthatwasconsideredinforming 16 thisbudgetwasthechangeinthevalueofthegrandlist thelistofalltaxablepropertyinTown.Asyoucansee, theTownexperiencedveryslightgrowthinthegrandlist tothetuneofabout$ $9milliondollars, ,whichwillleadto averyslightincreaseinrevenuefortheTowninthenext year.

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17.Thegoalinthisbudgetwastoreduceexpensesor, 17 or at worst,keepthemthesame. Asaresult,myproposedbudgetcallsforsavingsorno increasesto23ofthe48p primary ybudget g lineitems. Withafewnotableexceptions,includinghealthcare costs,theremaininglineitemsincludeverymodest increases.

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18.Specifically,departmentslikeCounselingand CommunityServices,Zoning,andBuildingMaintenance, willallseesavingsduetoreductionsintheirexpenses. Bypercentage,youcanseethatCounselingand CommunityServiceswillseethelargestsavings,atnearly 8% due toprivatizingthemanagementofthe 8%, departmentwhichhasbothsavedcostsandincreased revenue. SavingswillalsoberealizedintheZoningDepartment andwithBuildingMaintenance. TheLegalDepartmentseesnoincreasewhatsoever, whileinsuranceseesamodestincreaseof1.47%as opposedto4 4.7% 7%lastyear adifferenceof3.23%. 3 23%

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19.Aseducationisanissueofcriticalimportancetothe Town,Ialsowanttoexplainthefundingbeingproposed inthisbudgetforeducation. Inmyfirst10yearsinoffice,myTeamandIwerevery proactiveregardingfundingforeducation education. Infactbetweentheperiodof2000and2008,myTeam andIgaveanaverageincreasetotheBoardofEducation of$1.25millioneachschoolyear.In2004,thatincrease wasashighas$1.85milliondollars. Weunderstoodthattimesweregoodandthat enrollmentwasincreasing.Asaresult,wemadea commitmenttoinvestingheavilyinoureducational systemoverthatperiodoftime.

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20.However, 20 However asyoucanseefromtheBoardof Educationsenrollmentchart,thestudentpopulationhas beensteadilydecliningoverthepast4years.In2009,we hadapproximately3,520studentsinoursystem.Asof 2012, ,thatnumberhaddropped pp by yalmost400to3,159 , students.

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21.However, 21 However whilethestudentpopulationhasdeclined inrecentyears,theTownwillbecommittingthesame amountofmoneytoeducationasitdidlastyear.The resultisthattheTownwillbeallocatingapproximately $14,000 $ , per p studentintheupcoming p gbudget g afull $1,500moreperstudentthanwasbudgetedjust4years ago.Thisisalmost$300dollarsmoreperstudentthan lastyearalone.Asaresult,whilethetotalfundingfor educationisstayingthesame,wecontinuetoincrease thestudentfundingavailabletotheBoardofEducation.

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22.Now, 22 Now attheendoftheday, day thebottomlineisalways abouttaxes.Everyonewantstoknow,Whatwillthis budgetmeanfortaxes.

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23.Amajorgoalformyteamwastoreducetaxesinthe 23 lastbudget.Improudtosayweachievedthatgoalfor nearly70%ofthehomesinTown.Unfortunately,the changeinrealpropertyvaluescausedbythestate mandatedrevaluationmadeitachallenge g toimplement p auniformtaxreduction.However,6,801homessawtax reductionsbetween1%andashighas39%. Again,thatsover6,800homeswhichsawataxreduction inthelastbudget.

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24.Forexample, 24 example manyofyoumayrecallthehomeI highlightedinlastyearsbudgetaddress.Itwasahome whichisreflectiveoftheaveragehomeinEastHaven a 2bedroom,1bathroomcape.Itshowedthatthetaxesin 2011hadswelledto$ $3,814 , dollars.However, ,becauseof therevaluation,undermytaxplan,thishomeownerpaid just$3,183dollarsin2012. Thehomeownersawa$631dollartaxcut.Thistaxcut, asapercentage,representsa16.5%taxcut.

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25.Now, 25 Now asyoumayremember, remember Ipulledtherecordfor thehomeofanotherpersonlastyear.Thispersonpaid $6,088dollarsintaxesin2011.Undermybudget,this personpaid$5,410dollars in2012. The$678dollarsavingsrepresentsan11%taxdecrease.

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26.Thisyear, 26 year Ipulledtherecordofanotherhomelocated intheMomauguin areaofTown.Thishome,whichsawa taxdecrease,isonHollandRoad.Thispersonpaid $4,917dollarsintaxesin2011.Undermybudget,this personpaid p p $ $4,159 , in2012. The$756dollarsavingsrepresentsa15%taxdecrease. Onceagain,duetotherevaluationinstitutedpriortomy takingoffice,implementingauniversaltaxdecreasewas impossible.However,injustoneyear,6,800familiesin Townsawadecreaseintheirrealestatetaxes withno decreaseinservices.

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27.Asaresult,thebudgetthatIamturningovertoyou, theTownCouncil,callsfornoincreaseintaxes.Rather,it callsfortheTowntoallowthe6,800homeswhichsaw theirtaxesdroptocontinuetokeepthosesavings. WehavemanyindividualsinTownonfixedincomes. incomes For manyyears,EastHavenhadoneofthehigher unemploymentratesintheregion.MyteamandIare sensitivetothefactthatweneedtocontinuetomakeit affordabletoliveinEastHavenandraiseafamilyhere. Weunderstandweneedtodomore,withless.Asyou cansee,weareuptothatchallenge. Thisbudgetrepresentsarealisticbudget,whichwill continuetomakeEastHavenaffordableforourresidents. residents

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28.Asapointofcomparison, 28 comparison Iwanttonotethatmy commitmenttonotaxincreaseistheexceptiontothe rulethisyeararoundtheState.Infact,manyTownsare lookingatsignificantincreasesintheirtaxesinthe upcoming p gy year.SeveraloftheseTownsarevery yclose neighborsofours.

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29.TheNewHavenRegisterreportsthatMilfordmaybe 29 lookingatclosetoa1milltaxincrease.

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30.NewHaven, 30 Haven justnextdoortous, us willbelookingata significanttaxincrease.Finally,TheRegisterhasreported thatothershorelineTownslikeGuilfordandNorth Branfordarealsoexpectingincreasesintheirtaxrates.

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31.However, 31 However asreportedbytheRegister, Register EastHavenis buckingthistrend.Thankstosoundfiscalmanagement, myrecommendationandplanistokeeptaxesexactly wheretheyare.

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32.Inclosing,IdliketosaythatIamveryproudofthisbudgetandwhatitprovidesforourTown. Inthepastyear,ourTownasexperiencedseveraluniquechallengeswhichhaverequiredusto maketoughfinancialdecisions. Sincetakingoffice,wevefacednaturaldisasters includingSuperstorm Sandy.Wevefacedlegal challengesregardingourpolicedepartment.However,ateachturn,weveworkeddiligentlyand cautiouslytorespondtothesechallengesinresponsibleways.Wecontinuetobeefficient and wewill illcontinue ti to t do d more,with ithless. l Thisbudgetrepresentsacommitmenttosoundfiscalmanagement.Itrepresentstheefficient stewardshipofresources.Itisapromisethatyourhardearnedtaxdollarswillbespentwisely.Itis anotherimportantsteptowardputtingEastHavenbackontracktowardbeingtheshiningstarof theshoreline. IthankyouforyourtimetonightandIlookforwardtoseeingthehardworkthattheTownCouncil putsintoreviewingthisbudget.Goodnight,andGodbless.

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