EAST LYME, CT — The East Lyme Board of Finance voted 4-1 on Sept. 9 to allocate $46,000 in cannabis tax revenue for downtown streetscape improvements and unanimously approved a new process for developing the town's 2027-28 operating budget.
The board also approved $17,476 in state grants for early voting expenses and historic records preservation, while reviewing financial projections that showed a roughly $1 million surplus for the fiscal year that ended in June.
Public Works Director Joe Bragaw presented a proposal to replace missing trees and improve deteriorating tree wells throughout downtown.
Bragaw said many tree wells had fallen into disrepair, creating potential hazards, while others no longer contained trees.
The proposal includes planting new trees in existing wells and adding several trees to the street-facing property in front of the Night Jar dispensary.
Bragaw said the Zoning Department would not permit the removal of existing tree wells and would approve only projects that replace the trees.
The town's cannabis revenue fund contained approximately $60,500, according to the presentation.
Sandra Bullock moved to approve the $46,000 allocation, and Barry Sheckley seconded the motion.
The measure passed 4-1, with Kim Kalajainen opposed.
The board voted 6-0 to establish a process for developing a target spending figure for the fiscal 2027-28 operating budget.
Sheckley presented the proposal, which he said resulted from nearly a year of research and discussions with other board members.
Rather than establishing a budget, the process uses 12 assumptions to project future expenses and revenues.
Those assumptions include anticipated wage increases under collective bargaining agreements, employee benefits, pension costs, inflation, capital expenses, technology costs and state revenue.
The proposal also incorporates a 17 percent fund balance target and historical Board of Education spending trends.
Sheckley proposed a budget growth guideline based on inflation plus 2.75 percentage points.
He said his analysis found that historical budget increases averaged 2.75 percentage points above inflation.
The proposed guideline is intended to establish a consistent spending target for town departments as they develop their budgets.
Board members discussed staffing assumptions, inflation projections and the potential use of departmental performance measures.
Sheckley moved to use the process to develop a fiscal 2027-28 spending target for presentation at the board's October meeting.
The motion also called for the first selectman, Board of Selectmen and Board of Education to use the process when beginning their respective operating budgets.
Bullock seconded the motion, which passed unanimously, 6-0.
The vote did not establish a final budget or spending cap.
Finance Director Kevin Gervais reported that the town ended fiscal 2025-26 with approximately $96.5 million in revenue and $95.5 million in expenditures, producing a positive balance of about $1 million.
The town had budgeted approximately $96.6 million in both revenues and expenditures.
Gervais said roughly $550,000 of the surplus resulted from a budgeting error involving sewer bond payments that had been counted in both the general fund and sewer fund.
Other savings resulted from employee turnover and the previous year's spending freeze, including unspent funds in the police, fire and retirement benefits accounts.
Gervais said he expected to present a fully reconciled year-end report in October.
The town's fund balance stood at approximately 22 percent, he said.
Long-range projections suggested it could decline to about 15.5 percent by fiscal 2027, although Gervais said that estimate assumed the town would use the full $1 million budgeted from fund balance, which he did not expect would be necessary.
Tax collections through Aug. 31 reached 55.3 percent, compared with 53.95 percent at the same point last year.
Gervais identified firefighter overtime as a significant concern in the current fiscal year's budget.
The town budgeted $650,000 for overtime, equivalent to approximately $12,500 per week.
During the first eight weeks of the fiscal year, actual overtime averaged $16,390 per week, nearly $4,000 above the weekly budget.
Gervais attributed the higher expenses to military leave, injuries and staffing shortages.
He said First Selectman Dan Cunningham and the fire chief were monitoring the spending.
Gervais also reported that the town was working with legal counsel to establish a trust for other post-employment benefits, or OPEB, to address retiree health obligations.
Those obligations exceed $3 million and currently have no dedicated funding, he said.
Establishing the trust would require changes to the Pension Board ordinance, allowing the board to oversee the trust and the town's defined contribution retirement plan.
The board unanimously approved two state grant appropriations.
A $13,476 grant from the Connecticut Secretary of the State will offset expenses associated with early voting.
Kalajainen moved to approve the appropriation, and Sheckley seconded the motion. It passed 5-0.
The board also voted 6-0 to accept $4,000 from the Connecticut State Library to help digitize and preserve historical documents in the Town Clerk's Office.
Bullock introduced that motion, which Sheckley seconded.
Cunningham reported that the town had completed the first phase of its structural and environmental assessment of the former police station on Main Street.
The second phase was underway, he said.
Cunningham said the initial assessment identified unexpected issues requiring further investigation.
A public survey concerning potential future uses of the building had recently closed, and town employees were compiling the responses.
He said he hoped to have a summary of the engineering findings and public feedback within the next several months.
Cunningham also updated the board on the town's sewer capacity study.
He said the analysis required under the current sewer moratorium was nearing completion and was expected to be presented to the Board of Selectmen in mid-October.
The findings could help determine whether the moratorium should continue and how future development could proceed, Cunningham said.
He also discussed public concerns about Flock cameras, saying the Board of Selectmen was seeking legal guidance on the town's authority and responsibilities.
Cunningham distinguished Flock cameras from speed cameras, noting differences in how the systems retain data.
David Baer of the East Lyme Ambulance Association presented an overview of the nonprofit organization's operations and finances.
Baer said the association operates independently of the town as a nonprofit organization, with two ambulances and 45 emergency medical technicians.
Paramedic support is provided by Lawrence + Memorial Hospital.
He described financial challenges associated with emergency calls that do not result in patient transportation and therefore generate no transport revenue.
Baer also cited increasing call volumes, an aging population and additional transports originating from the prison.
Kalajainen requested additional information about response activity and advanced life support requests for a future meeting.
The board voted 6-0 to postpone discussion of revisions to its short-term investment policy until October.
It also approved the Aug. 12 meeting minutes, 4-0.
Cunningham reported that the town was interviewing candidates for a new information technology director and preparing for the next budget cycle.
The meeting adjourned at 6:36 p.m.
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