Budget, BoA Vote and Mayor Veto + Charter explained

This will be an over-explanation on issues related to the budget.  I do this because too often I read comments or posts in the character of "well I heard..." or "so and so said that such and such...."  I provide links to the below factual information where helpful.

For those new to Shelton, we have a Board of Alderman (BoA) and Mayor form of government.  The BoA represent "Wards" or sections of the City (we are an incorporated municipality), but they serve the entire residents and businesses when establishing a budget and the mill-rate (tax-rate per $1000 assessed value, which is 70% of market value) of real-property (land, house, office building) as well as personal-property (automobile, business furnishings and equipment).

It is ultimately the BoA who would set the budget, a process called out in detail within the City's Charter.  The process begins with the Finance Director requesting each department within Shelton government to submit their appropriation request (it is due by Feb15)

The Mayor considers these requests, and with the Finance Directors assistance for estimates of revenue, debt obligations, etc; prepares a budget for the City.  This is submitted simultaneously to the BoA and the Board of Apportionment and Taxation, ceremoniously is a Joint Special Meeting of the two agencies.  You can see this presentation by the Mayor on the City's YouTube Channel here.

A common thread, both expressed by the Mayor in his budget presentation, and repeated by the President of the BoA, is that "inflation is at a 40yr high".  While certain costs have increased, inflation is measured by the Consumer Price Index, maintained by the Bureau of Labor Statistics. which rose for the 12 months ending April 2024 at 3.4%  In the last 40yrs (2024-1984), the highest annual inflation rate was 9.75% in 1988.  All this said, Shelton enjoys one of the lowest taxation levels in the area.  Note that I do not say "mill-rate" because different communities have different market values to their properties for a like-sized house, and the different mill-rates can create very different tax-costs to live within a specific community.  Again, Shelton does have a low mill-rate, but more appropriate to reference, a low taxation level - but any increases in taxes can not be scapegoated upon some national inflation is high story - because it doesn't reflect real figures.

Another common concern is regarding rising health-care costs.  No doubt this is impactful across the nation (and locally) with rising insurance premiums, rising deductibles causing more out-of-pocket expenditures, and rising medication costs.  The City is self-insured, combining both the administration side of activities (City Hall, P&Z, Public Works, etc) and the education side of activities (All education costs, including staff health insurance are encapsulated within a single amount line-item to the budget for the Board of Education).  While the costs for health-care related items rose in Fiscal Year ending 2023Jun30, the budget for the current Fiscal Year 2024Jun30 was not adjusted and thus both the Administrative and Education components far exceeded their budget, causing the City to tap into any surplus or carry-over balance in the City's accounts.  Not recognizing the reality of health care costs from 2023, and not adjusting the budget for 2024 to prepare for them, was a fiscal mistake.

The Budget Process has the Board of A&T and the Board of Alderman hold joint meetings to review the budget in detail.  You can see those meetings on the City's YouTube channel for 2024Apr4 (primarily the Board of Education's review), and then the 2024Apr9 meeting where the Library, and Police Dept was reviewed, and then aspects of borrowing and debt service.  It should be noted that the debt service for Shelton is vastly lower than many other municipalities. 

The Board of A&T then moves out of the process as the Board of Alderman then had a Public Hearing on the budget which was held at the Intermediate School on 2024May14 and can be seen in two videos; part A and part B to account for a recess-break during the meeting.

Finally the Board of Alderman pass a budget, which they did on 2024May23 and can be watched via this YouTube video on the City's channel.

How the budget is administered, as outlined in the above paragraphs, is defined by the City's Charter Chapter 7.  The Board of Alderman are required to hold at least one public hearing no later than May15, which they did as I outlined above on May14.

The Board of Alderman are required to adopt a budget not later than the second business day following May31 (for 2024 that would be TueJun4).  As outlined above, they did so on ThuMay23.

The Mayor does have the power to Veto the Board of Alderman approved budget.  The Mayor must exercise the Veto power within 3 business days following the presentation of the budget to him.  The Mayor's letter of 2024May29 informs the Board of Alderman that he "herby veto the action of the Board of Aldermen taken at its Special Meeting of May23rd 2024, item 1.  Adoption of the Budget for Fiscal Year 2024-2025".  The Mayor's letter is time-stamped received by the City Clerk on May29 at 11:08am.  

To summarize the most current mix of actions:

• The BoA voted to approve a budget on ThuMay23
• The Mayor would have assumedly received official notice of the action on FriMay24, from the Clerk for the Board of Alderman.
• Three business days following official notice on FriMay24 would be the days of TueMay28, WedMay29, and ThuMay30 (being that Memorial Day was a Holiday).  The Mayor's Veto letter of WedMay29 is under the deadline called for in the Charter.

At this point, the ball is in the Board of Alderman's court.  The BoA has 7 days after the exercise of the veto (WedMay29 + 7 calendar days since the charter does not say 7 "business days" for this element to over-ride a veto, simply "7 days"), or WedJun5 to take action.  The BoA has set a Special Meeting Agenda for FriMay31 at 4pm, with a single line item "Override Mayor Lauretti's Veto of Board of Alderman's Adopted 2024-2025 Budget".

It should be noted that "Special" meetings can not have their agenda's adjusted.  The meeting is simply an item to override a veto, and can not enter into discussion for an alternative budget or proposal.  The BoA often have a prepared "motion" within their agenda, and it does indicate that they will be in fact over-riding the Mayor's veto.

The fact is that the BoA voted unanimously (7-0) to adopt a budget.  Note that there are 8 Alderman, but Alderman Bernie Simons was absent due to a medical issue.  Despite the Mayor's veto, there should be no change or flip-flopping on the budget they approved about 1 week ago, and it should still stand.  Technically, to override a veto requires a 3/4 affirmative vote.  The current charter does not recognize an absence, abstention or recusal to change the denominator of 8 Alderman, so thus 3/4 of 8, or at least 6 votes are required to override the Mayor's veto.  I believe this is what will occur.

However, if the BoA do not override the Mayor's veto, then the Finance Director will present to the Mayor the budget that was adopted by the Board of A&T.  At that point, things get a bit muddy because the Board of A&T did not approve a recommended budget as you can see in their Apr25 minutes on page 6 of 7

Going backwards without an A&T approved budget, the only budget to work with would be the Mayor's original recommended budget.

What it comes down to for FriMay31, is the BoA approving an override of the veto the Mayor placed upon their motion to adopt a budget on May23, with at least 6 Alderman voting to approve that override of the Mayor's veto.  If that fails, then the Mayor's originally proposed budget will become the budget.

The current mill rate (fiscal year 2023/2024) is 17.47, and last increased in 2019.

If the BoA budget and 19.18 mill rate becomes effective for fiscal year 2024/2025, it will be a 9.8% tax increase.  In my mind, not that terrible when spread out over 5yrs (2019-2024)

If the Mayor's originally proposed budget on Mar21 at it's 18.1 mill rate becomes effective, it will be a 3.6% tax increase.  In my view, that must create some hardships for someone since such an increase over 5yrs is not keeping up with inflation.

In my opinion, there is a bit of political theater with this veto action.  There are legitimate costs and budgetary needs accounted for by the Board of Alderman (all 8 members are Republican, as is the Mayor).  The BoA has more than doubled the tax increase from what the Mayor proposed, but in 2025 (a local official election year) the increase in taxes imposed in 2024 may be forgotten, but if the increases are recalled by voters, it was the Alderman who increased them so dramatically, not the Mayor.

Lurking deeper for 2024/2025 Fiscal year and beyond are some significant costs for the Sewer Treatment facility (the Water Pollution Control Authority recently approved their budget and 10% fee increase for users of the Sanitary Sewer System - which is separate from the City's operating budget).  There is some concern expressed by the Mayor regarding the Sewer Treatment facility capacity impacting the City's economic development (particularly impacting would be the build-out development of the "MAS" property on Constitution Blvd North.

Also in the news (and politically charged) to impact 2024/2025, is payment of fines in lawsuits against the Mayor and Police Chief not covered by insurance, and payment of backpay and pension costs to several police officers from many of the same lawsuits they won.

I thank-you to all the volunteers on the Board of A&T, and the Board of Alderman (both boards are elected) for the mountains of work accomplished during this budget process.