Ridgefield Finance Board Starts 2028 Budget Planning, Advances Capital Spending Guidelines

Board members present were Chairman Mike Rettger and members David Ulmer, Joseph Shapiro, Andrew Okrongly and Greg Kabasakalian.

Early 2028 projections point to another challenging budget

Rettger presented an initial model for fiscal 2028 based on several preliminary assumptions, stressing that the figures were intended as a starting point rather than a forecast.

The model assumed operating budget growth of about 3.2 percent, an interest rate of 3.5 percent and annual grand list growth of 0.75 percent. Under the existing five-year capital plans, debt service would rise and then settle at roughly 6 percent of the overall budget, before accounting for possible major projects such as a public safety building, school improvements, a high school auditorium and other initiatives.

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Rettger said the exercise was meant to begin a discussion that will continue through September and October ahead of a tri-board meeting in November.

“We got September and October to figure out what we want to do for November,” Shapiro said. “This was really to give us an opportunity ... to look at the numbers.”

Okrongly said the board should use the next two months to determine which assumptions will become clearer before the tri-board meeting and what message the finance board ultimately wants to deliver.

Board debates whether last year's budget message worked

The discussion exposed some disagreement over the effectiveness of the Board of Finance's approach during the previous budget cycle.

Kabasakalian questioned whether another detailed presentation to the Board of Education and Board of Selectpersons would make a difference, noting that the finance board ultimately cut the school board's proposed operating budget last spring.

“I thought the presentation last year fell on deaf ears because look where we wound up,” Kabasakalian said.

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Okrongly said last year was the first time the finance board had delivered such an explicit early message and suggested it was too soon to conclude the approach had failed.

Rettger said the board must decide next month whether it wants to give the other boards a similar spending message this fall — and, if it does, whether members are prepared to stand by it during budget deliberations.

“To me that's the fundamental thing we need to decide next month,” Rettger said. “Do we want to say something like that and we want to mean it? Or if not, what else?”

Members also discussed whether inflation, particularly the Consumer Price Index, remains the best benchmark for evaluating annual budget growth.

Okrongly said CPI had drawn challenges during the previous budget cycle and suggested the board consider other measures. Shapiro said presenting several reasonable long-term indicators could give the public and other town boards more context rather than relying on a single measure.

Town's 2026 results remain close to projections

Town Controller Kevin Redmond said Ridgefield's preliminary fiscal 2026 results remained favorable, although bills were still being processed.

The preliminary figures showed about $1.6 million in net favorability before additional expenses. Rettger said that after accounting for an approximately $239,000 school-related amount, the figure was closer to $1.42 million — near the roughly $1.45 million projected during budget deliberations. Redmond cautioned that additional town expenses were still coming in.

Redmond also said the town should consider increasing its legal-services budget based on recent actual expenses.

“I think that's an area, a line item that we really can justify, especially when you look at three years of actuals,” Redmond said.

Tax collections finish above budget

Tax Collector Jane Berendsen-Hill reported that collections finished the previous fiscal year about $150,000 above budget, net of refunds.

Current-year taxes reached 100.12 percent of the budgeted amount, while supplemental motor vehicle collections reached 98.58 percent, she said.

Berendsen-Hill said July initially appeared light because July 31 fell on a Friday, when the tax office was closed, but collections through August had made up the difference.

She said she planned to examine delinquent accounts after completing year-end work. The town has already sent three years of delinquent motor vehicle and personal property accounts to a collection agency.

Cadence lease could factor into school space discussion

The board also briefly discussed lease revenue from Cadence Academy, after Shapiro noted that the Board of Education's Strategic Planning Committee has discussed potentially using that space for school purposes.

Shapiro said the finance board should understand both the revenue Ridgefield receives from the lease and the town's contractual obligations before any decision is made about the space.

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“What pops my mind is like, what is the revenue that we wouldn't be getting?” Shapiro said, adding that the lease's duration could eventually factor into Board of Education discussions.

Redmond said he could research the lease terms. Okrongly agreed it would be worthwhile to do so given the possibility that the issue could eventually reach the finance board or Board of Selectpersons.

New capital guidelines move forward

The board spent a substantial portion of the meeting reviewing proposed capital budget guidelines designed to establish clearer standards for what belongs in the capital budget and when projects should be submitted.

Rettger said a previous proposal had been divided into two documents: procedural capital budget guidelines and a separate policy governing debt levels.

Among the proposed changes is a limit on how much of the capital budget could consist of assets with relatively short useful lives. Rettger said the proposal would generally limit assets with useful lives of less than eight years to 25 percent of the capital budget, leaving room for technology and similar purchases while better matching asset life to the period over which Ridgefield borrows money.

The guidelines also address projects approved in one fiscal year but not undertaken until years later.

Redmond said recent reviews of old capital accounts had uncovered projects that remained unspent well after approval.

“If you set that expectation that you get approved for this capital, that means you need it,” Redmond said. “That means you should be pursuing it immediately.”

Board considers ending long-term borrowing for smaller purchases

One of the more significant concepts discussed was moving smaller capital purchases into the operating budget rather than borrowing for them over 20 years.

Rettger said recent capital budgets typically contain eight to 12 items below $25,000 and another eight to 10 between $25,000 and $50,000. He estimated that about $704,000 of last year's capital budget could have fallen into such a category.

Moving $700,000 from long-term borrowing into the operating budget could eventually save about $200,000 in interest, he said.

The tradeoff would be a near-term increase in operating expenses before the savings from reduced debt service fully materialized.

Okrongly supported the concept but said the town would need a transparent accounting structure so taxpayers and board members could still see which departments were responsible for the expenditures.

Redmond said the town's financial system could accommodate that approach through a separate cost center or group of accounts in the operating budget.

Grant assumptions would face more scrutiny

The draft guidelines would also require closer scrutiny when departments assume grants or other outside funding will offset the town's cost of a capital project.

Rettger said the goal is to distinguish between funding that is essentially secured and money that remains speculative.

He cited Ridgebury Road as an example of a project for which grant funding had already been approved, contrasting it with a hypothetical project competing for limited grant money without a commitment.

The board could still approve a project with uncertain grant funding, Rettger said, but might choose not to count the anticipated grant when determining how much money voters are being asked to authorize.

“This one ... I'm going to put in the bucket of discipline,” Rettger said. “It's a set of questions we should ask that we maybe haven't asked as rigorously in the past.”

Shapiro supported greater scrutiny, saying it should extend throughout the capital approval process.

“I think a higher level of scrutiny by the Board of Finance just means a higher level of scrutiny at every level in the process,” Shapiro said.

The board ultimately voted unanimously to move forward with a revised version of the capital budget guidelines and post the draft on the town website for public comment.

Debt policy remains unresolved

The board did not take similar action on the proposed debt policy.

Rettger said the policy is intended in part to address a weakness cited by credit rating agencies while helping Ridgefield maintain its AAA rating. He said recent ratings reports have praised the town's financial practices but identified the lack of a formal debt policy and long-term financial planning models as areas for improvement.

Rettger and Okrongly had compared five years of Connecticut municipal data to determine whether debt ratios differed meaningfully among communities with different credit ratings. They found little distinction among municipalities carrying ratings in the A categories, Rettger said.

“We need to decide if these are the right ratios and then find a way [to] come up with a rationale for picking a number,” Rettger said.

Shapiro said the research did not leave him confident that the proposed limits would clearly strengthen Ridgefield's position with rating agencies while retaining sufficient flexibility.

“It didn't leave me with a good feeling as to where to go next on this,” he said.

Okrongly raised another concern: A debt-to-grand-list limit could fluctuate substantially if property values fell, even without any change in the town's outstanding debt.

He also said the proposed policy was too vague about when the board would formally determine that a proposed capital budget exceeded its debt limits and require a supermajority exception.

“I think it's just too vague about how the overriding process would work,” Okrongly said.

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Rettger said the purpose of the policy is “to constrain us from borrowing too much” when additional debt would become economically unaffordable for the town.

Shapiro said the proposed limits should also be tested against large projects already under discussion, citing possible costs of $55 million for a public safety building, $50 million for school infrastructure and $19.9 million for a high school auditorium.

The board agreed the proposed standards need to be tested against both Ridgefield's historical borrowing and potential future projects before a policy is finalized.

What's next

The capital budget guidelines will be posted for public comment, with the Board of Education and Board of Selectpersons also expected to have an opportunity to respond. Rettger said the board would need to determine whether the guidelines should apply during the coming budget cycle or take effect a year later.

Meanwhile, the finance board plans to return to its preliminary 2028 budget outlook in September and October as it prepares for the November tri-board meeting.

The board approved its June 16 minutes as amended by a 4-1 vote, with Okrongly abstaining because he had not attended that meeting.

The meeting adjourned at 9:30 p.m.