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Politics & Government

The Greening of New Canaan: Town Budget $2.5M Ahead of Projections

Conveyance taxes, building permits and careful planning get most of the credit, according to CFO Conrad.

During the fiscal year which ended June 30, 2010 New Canaan collected approximately 66 percent more in conveyance tax and building permit fees than anticipated, according to New Canaan Chief Financial Officer Gary Conrad. Overall, the budget was $2.5 million ahead of projected revenues.

The conveyance fee is a tax paid by a home owner when a home is sold. The amount represents a percentage of the selling price. One-half to 1 percent of the purchase price is paid to the state and one-quarter percent to the town.

Conrad told Patch on Monday those enviable collection figures are the result of conservative long-range planning. When these budget projections were being developed, "We were at the worst point of the recession, and so we went very conservative with it." he said.

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Conrad explained that while the budget forecast $350,000 in conveyance tax and building permit fees, the actually amount collected was $1.018 million. 

The projections for the years prior paint a picture of the economic downturn. In the year ending June 2009 revenues from the conveyance tax and building permits were projected to be $1.4 million. In fact, only $855,000 was collected. 

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The years prior to that reflect a rosier economic climate.  June 2008 saw a collection of $1.542 million and June 2007 $1.722 million. 2004 through 2006 saw revenues far outpace projections. In 2006 $1.865 million was collected against a budget prediction of $800,000. 2005 was even brighter with a collection of $2.018 million far outpacing a projected $750,000. Similarly, in 2004 a budget of $750,000 was dwarfed when $1.978 million was collected.

Conrad said that projections on all taxes, lien fees and interest are always budgeted at several percentage points less than true expectations. "We always forecast below what we should collect," he said, "And the difference is a favorable buffer . . . it's our safety net."

Regarding overall tax collection, he said that while revenues were higher than projected, some of that money would have been captured in years going forward. He suggested that some may choose to pay their taxes sooner rather than later.  "With interest rates so low, it's cheaper to pay your taxes (on time) with a credit card, than pay the 18 percent interest mandated by the state," he said.

On the expense side of the ledger, he reported that town employees have done a good job of tightening their belts wherever possible. Both capital expenditures and operating expenses were cut throughout the town.  A hiring freeze was also put in place.

The Mill Pond dredging project was a highlight of the budget year.  He stated that the work went very smoothly and the project actually came in $175,000 under the projected cost. 

So, Patch wanted to know, should we expect to see budget increases going forward? As Conrad expressed it, New Canaan has done a good job of living within its means. He said, "The first thing that will come across is why not keep it lean?"

 

 

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