The first Board of Finance meeting of the new administration discussed North Haven’s future challenges as the town continues to move forward in an uncertain economy.

Before addressing the trials ahead,  the board selected new officers. Richard Monico was voted in as board chairman, new member William Peiper was voted vice-chairman and Michael Hallahan was voted secretary. The meeting was also the first for new board member Dyann Vissicchio.

Board member and First Selectman Michael Freda projected a shortfall of $1.44 million for the 2009-10 fiscal year and a shortfall of $4.7 to $5.5 million for the 2010-11 fiscal year.

“We have a challenge on our hands,” Freda said. “We are committed to doing whatever it takes to balance the current budget and grapple with the $4.5 to $5.5 million shortfall for the next fiscal year.”

In predicting a $1.44 million shortfall for the 2009-10 fiscal year, Freda projected a revenue shortfall of $939,000 and a budget overage of $503,000.

The projected revenue shortfall, Freda said, was caused by a $500,000 over projected tax collection of the town’s back taxes as well as downward market rate influxes due to the poor economy. The back taxes still owed, Monico said, were largely represented by properties the town could not foreclose on because they have no chance of being collected on or are contaminated.

The projected budget overage represented many line items predicted to overspend their budgets, said Assistant Director of Finances Ed Swinkowski, including a $30,000 overage for legal fees, $166,000 for accrued benefits paid for sick time and vacation time for departed town employees, $20,000 for public works consultants, $81,000 for streets and roads overtime pay, $105,000 for winter maintenance supplies, $75,000 for road supplies, $15,000 for gas, $15,000 for town pool maintenance, $18,000 for the lease charge for the two town dump trucks, and $108,000 for school lighting.

The projected overage was reduced to $500,000 by projected under spending on other line items.

To help offset the shortfalls, Freda said the town would work with its liability and workman’s compensation insurance provider CIRMA to analyze North Haven’s claims history.

“We could see a rebate of $500,000 to $700,000 as the result of claims in our history that upon analysis are not as onerous as anticipated at that time,” Freda said.

Freda also said that he would be proactive in economic development, such as actively shopping the Rabina property at the former Pratt & Whitney site at 415 Washington Ave., to offset the shortfalls.

During the meeting’s public comment session, Sherman Katz asked the board whether it would take money from the fund balance or raise taxes in order to alleviate the shortfalls.

Freda responded that although he supports a higher fund balance, he would take from it should McGladrey and Pullen, an outside financial auditor service, state that is safe to do so without putting the town at risk.

North Haven’s fund balance is currently 7.7 percent.

Freda added that he would continue to look for soft savings in town that would save money without negatively affecting town services. He pointed to the town’s switch to a new and cheaper de-icing product for roads.

“I will be looking for this type of savings on a department by department basis,” Freda said. “I am in the process of doing that right now.”

Gerry Feinberg used to the public comment session to ask if the town would change its policy on pursuing foreclosures for properties with unpaid taxes.

Freda responded that in cases that appear to be caused by hardships, the town will continue to offer a payment plan of 18 percent a year at 1.5 percent per month. Property owners who simply refuse to pay, however, will be foreclosed on, according to Freda.

Freda added that the town would also not foreclose on any properties before Jan. 1 due to the holidays.