No One, Repeat, No One Happy With New Derby Budget

DERBY — The Derby Board of Apportionment and Taxation Thursday unanimously approved a $44.5 million budget that carries a tax rate increase of 2.5 mills.

A single-family house assessed at $130,000 will pay an additional $325 in taxes next year.

Higher assessed houses will pay more, lower assessed houses will pay less.

The budget flat-funds the Derby school district’s $18.6 million budget for the second year in a row. The school district had initially asked for an increase of about $550,000. It grew to about $970,000 when the district learned this week three new incoming students would need to enroll in special education programs.

School Superintendent Matthew Conway previously said flat-funding the school district would trigger layoffs.

After Thursday’s budget adoption Conway said school officials would be reviewing how to proceed. A discussion is expected to take place at the Derby school board’s July 2 meeting.

Derby’s budget was a mess this year.

An audit discovered a series of problems. Example — the city accidentally double counted school aid from the state, creating a budget deficit. Some Board of Education expenses recorded in the 2017 – 2018 budget were actually related to expenses from 2016 – 2017.

The audit, according to statements made by public officials Thursday, pointed out some problem areas that the city has known about for decades.

The budget problems and subsequent draining of the city’s savings will likely result in the city’s bond rating being downgraded.

The city has not explained who specifically was at fault for double-counting state aid, but has opted to take the blame collectively.

The 2.5 mill increase was a direct result of the budget mistakes — an indignation not lost on people who spoke during a public hearing just before the tax board voted.

A contingent of speakers said Derby Public Schools have been improving — and that flat-funding education because of budgeting mistakes was not fair. About 80 people attended the meeting, the most at a budget public hearing in years.

“A flat line is no good on an EKG, and it is no good on our school system,” said Walt Mayhew, a former tax board member. ​“It will kill the progress that’s been done.”

Derby needs a good school district to attract families willing to settle in Derby. Settled families will attract the commercial properties Derby so desperately needs to grow its grand list, speakers said.

“The situation that you’re faced with, where you are going to raise taxes to cover financial mismanagement — I do not envy you,” Mayhew said.

The entire public hearing is posted at the top of this story.

Other speakers called the budgeting problems ​“human error,” but still not something that the residents should be forced to pay for. Two speakers described the situation as ​“appalling.”

Several senior citizens spoke up, saying the tax-rate increase was terrible for people living on fixed incomes.

Anne Hayes said she was a new Derby resident, then walked the tax board through what she had learned during the public hearing — mainly that this budget is bad for everyone.

“I also see that payment for this mistake, made by adults, is once again being foisted on the young,” she said. ​“I see that payment mistakes made by adults are being fostered on those who have served long and well, and have retired in this town. I find it disturbing.”

Mayor Rich Dziekan spoke during the public hearing, saying the city found the problem and is working through it.

Earlier this week the city unveiled an 8‑point plan to get the city back on solid financial ground.

Part of the plan involves restructuring debt and using the savings to lessen the mill rate increase. Without that — residents could have been looking at a mill rate increase Thursday of 4 or 5 mills.

Click here to learn more about what the city is doing to get its budgeting house in order. The plan does not include layoffs or rescinding union raises.

The budget goes into effect July 1 and covers the fiscal year ending June 30.

In May, the city’s WPCA voted to raise sewer rates for the average house $30 to $37. That is in addition to the annual $257 capital fee residents are paying in connection to a 2014 sewer repair referendum voters approved.

The video below shows the tax board reviewing and then approving the budget. The school budget allocation is voted at the 27:06 mark, or click here.

Keep local reporting alive. Donate.ValleyIndy.org