First Selectman’s Report

1. First Selectman’s Report 2008-2009 Fiscal Year Budget Jeremy J. Shingleton April 16, 2008

2. Table of Contents • Economic Environment: Page 3 • Financial Strategy: Page 7 • Operational Policy: Page 12 • Budget Overview: Page 13 • Key Deliverables: Page 18 • Appendix: Page 19

3. US Economy is Slowing

4. Unemployment is on the Rise Note: Q1 2008 – 232,000 jobs lost

5. Energy Costs Continue to Rise Note: May 2008 Futures for LS Crude Oil $112 bbl

6. Times are tough! Household expenses are growing faster than salaries Economic outlook poorest since August 1993 Small Business optimism at 28-year low National sales outlook lowest since October ’01 Nationwide foreclosures for March up 57% over 2007 Excessive taxes and poor economic outlook have a negative effect upon the local economy, particularly small businesses Tax burden has an immediate impact upon the residents, making it difficult to make ends-meet Taxpayers demand relief and they deserve it! Goal is to slow spending, while still improving level of service provided to the community Environmental Assessment

7. Operating Budget Strategy • Contractual obligations, utilities, insurance, and benefits represent a significant portion of budget • Aggressively reduce spending in all other areas, while improving service levels and making long-term investments in infrastructure Controllable Expenses

8. Managing Long-Term Debt

9. Mill Rate Stabilization Long-term Capital Planning + Operational Efficiency + Proactive Debt Management = Stable & Predictable Taxes!

10. Projected Impact 2008-2009

11. Impact of Bond Authorization

12. Overall Operations Policy • Improve productivity • Establish clear goals and processes, actively manage, and hold people accountable • Efficiently organize and allocate resources • Manage departments in a business context • Eliminate waste • Create operational efficiencies and innovation to reduce labor and materials costs • No new expenses without a business justification • End the entitlement mentality and adopt a merit-based salary program • Take advantage of low interest rates and competitive bidding by bonding major projects • Overall, Find Ways to Do More with Less!

13. Budget Overview • Reduced departmental expenses for most departments • Eliminated 4 positions • Full-time Development Compliance Officer (currently vacant) • Part-time Medical Advisor • Part-time Tax Collector Clerk • Proposed New Police Officer • Added 1 position • Highway Maintainer (starting January 2009) • Prioritized needs of all town departments • Controlled expenses through innovation and efficiency

14. Highway Department

15. Where Your Money is Spent

16. Changes in Budget

17. Sources of Revenue • Revenue largely dependent upon property taxes • Limited state funding • Actively seeking state and federal grant opportunities

18. Key Deliverables for 2008-2009 • Streamline operations of town government • Reduce long-term exposure to volatile energy rates • Develop a forward view of our organization, anticipating and responding to future problems • Improve quality of town roads, parks, schools, and municipal buildings • Enhance image of town, developing a cultural center around historic downtown and riverfront • Grow commercial tax base and bring skilled jobs to Cromwell

19. 2008-2009 Fiscal Year Budget Appendix

20. Annual Budget Process • Dept. Requests to First Selectman by February 1st • First Selectman Reviews and Makes Recommendations  • Board of Selectmen Workshops March 5th and 6th • Board of Selectmen Finish Work by March 14th • Selectmen Present to Board of Finance at Regular March 27th Meeting (per Charter)  • BOE Present to Board of Finance at Regular March 27th Meeting (per Charter) • Board of Finance-Set Hearing Dates at Meeting   • Public Hearing: April 16th • Board of Finance Workshops – April 23rd and 24th • Board of Finance Finish Work by April 28th (10 days after last hearing but no later than April 30 per Charter) • Town Meeting – May 6th • Referendum Vote – May 10th

21. GLOSSARY OF COMMONLY USED TERMS • Appropriation: to set aside money for a specific use. • Adjusted Budget: Budget as approved by Town Meeting/Referendum plus any additional appropriations made during the fiscal year. • Capital/Non-Recurring (CNR) Fund: This is a special fund set up for capital or non-recurring expenditures over $10,000. Per Town Charter, the appropriation for this fund is NOT included in the annual taxation. • Debt Service: Annual payments necessary to pay down debt obligations already incurred. • Fiscal Year: This is the 12-month period that is covered by the annual budget. In our case, Cromwell’s fiscal year runs from July 1st to June 30th. • Fund Balance: Unreserved governmental funds maintained to meet unanticipated needs or challenges, such as pre-funding reimbursement grants offered by the State or other agencies or to offset extraordinary expenditures associated with natural disasters. Credit rating agencies monitor the level of fund balance to evaluate a government’s creditworthiness. • General Fund: The fund established for the general operations of the Town. Other funds are established for specific purposes, such as various building and capital projects, or special revenue situations.

22. Organizational Chart