Finishing off some loose ends on the 2013-2014 as it made its way from my desk to the final RTM approval:
The original budget increase that I proposed was 4.83 percent higher than the current year. Negative health insurance experience accounted for a huge portion of that increase. The budget then goes on a tour to the Town bodies and makes a total of 5 stops along the way. At each stop it was reduced. However, the impact of those reductions varied depending on the information available at the time the cut was made. Let’s go step by step.
First stop: BOE. The BOE cut $342,417 the details of which are in the Board of Education Proposed Operating Budget 2013-2014, posted on our website, on page 13. Cuts included raising fees for custodial fees, having food service cover its additional pension obligations (ultimately will show up in lunch prices), removing the extended day kindergarten option (transportation savings), reducing school allocations and reducing spending on technology capital for new computer monitors. That brought the budget down to 4.63 percent.
Second stop: First Selectman. He needs to include a figure for the BOE budget in his recommended budget that is ultimately approved by the full Board of Selectmen. By the time he had to recommend a budget, our health insurance experience had improved to the point where he could reduce our budget by $1.1 million and not impact our operations, and that’s what happened.
Third Stop: Board of Selectmen. By the time this Board voted, our health insurance experience had improved another $1.3 million; the first round of savings from our bidding of the health insurance showed a savings of $343,000; and pension recalculations by the Town’s consultants meant that we could reduce our pension costs by $145,000. This allowed the total cut at the selectmen’s level (First Selectman plus Board of Selectmen) to be approximately $2.8 million with no impact on operations.
Side note 1: health insurance fluctuates from month to month. The Selectmen took the full value of the experience. Had the experience reversed itself over the next couple of months as the budget worked its way through the Town bodies, there could have been a huge problem — certainly no one was going to increase our budget to account for it. This could have put the Board of Education in a position of knowingly underfunding its health insurance account or absorbing a reduction in programs/personnel that was never intended. And if no action is taken, then the deficit shows up in the following year’s budget, as the BOE would need to increase its account to cover the shortfall. That’s why some advocated not taking the full value of the health insurance experience as a cushion against weaker experience down the road.
Side note 2: As I’ve said before, the Town boards cannot dictate where the BOE takes its cuts. How much the BOE should fund its health insurance, however, has been a cooperative effort between us and the town bodies. Technically, the town bodies do not need to give the BOE “permission” to change its health insurance account, but we have tried to work cooperatively for the fiscal health of the entire town, which is why various Boards may signal that it is OK to take a reduction from that account.
Stop 4: Board of Finance. It cut $1,250,000 but it also knew that our change of health insurance carriers was going to be worth approximately $500,000, so the impact to programs from this action was $750,000. There was a proposal to cut $2,000,000 at the BOF level but it did not pass.
Stop 5: RTM. Health insurance claims for March improved again. The RTM knew that its $500,000 cut would be funded partly by the March experience in the amount of $250,000. Impact to programs: $250,000.
So after this tour, while the BOE had to adjust its budget by a total of $4,637,488 to reach 1.51 percent, the impact to programs was $1,000,000. The rest was taken from health insurance and pensions. The central office decision to bid out the health insurance carrier saved $843,000. Had we not gone out to bid — a process we started in July of 2012 — the BOE would have needed to reduce its programs by $1,843,000. The $1,000,000 was difficult enough to swallow.
The real “leanness” of this budget proposal showed itself when the health insurance started reversing its course and trending back to normal and the savings associated with a carrier change began to be known. An operating budget increase of 2.1 percent would have meant no changes to any operational areas for next year. The entire reduction would have been taken by favorable trends in health insurance, changing health insurance carriers and pension.
At approximately 11:30 pm last night budget season ended. The Board of Education made two adjustments to my recommended list of cuts but otherwise the list of cuts posted on our website from the May 7 meeting will now be enacted starting July 1, 2013. These cuts were necessary to reduce the Board’s operating budget to the 1.51 percent increase passed by the RTM.
For the record, the Board restored the middle school Gifted and Talented program to its current service level; it had been scheduled to be improved for next year under the original budget proposal that I presented in January. The other change to the program is the children will be tested for gifted once — third grade — as funding to test a second time at the elementary level and once in the middle grades was eliminated in last night’s adjustments. The total cost of this restoration was $83,000.
The second change was the restoration of the special education swimming program in the amount of $26,000.
The total cost of these changes was $109,000. To make room for these additions back to the budget, the Board reduced technology capital spending by $106,000 and BOE conferences by $3,000.
All other changes proposed by individual Board members to the recommended cut list did not, for a variety of reasons, receive the 5-vote majority necessary to pass. FAIRTV broadcast the entire program so you can check out the details at your leisure.
I am not pleased to recommend budget reductions. I am not interested in reducing the quality of the school system; on the contrary, my goal is to improve the school system. But when your budget is an increase of 1.51 percent — that dollar amount does not even cover the increases in our health insurance and pension accounts — it’s a virtual impossibility. To the Board’s credit, it did stay away from the tempting target of cutting maintenance because it knows what the longer-term consequences of that action would be.
My recommended budget was cut at four different levels from the moment I presented it to the public on January 15, 2013. The Board of Education cut the budget from 4.83 percent to 4.63 percent before sending it on to the Town. The First Selectman cut it at his level. The Board of Selectmen cut it at its level. The Board of Finance cut it. The RTM cut it.
I can’t be more blunt: if you don’t like the cuts, re-read the above paragraph. By the time the damage is done and it gets back to us to survey the wreckage, it’s too late.
Think about this: had our budget been passed at a 2.1 percent increase, no cuts to any programs or services would have been necessary. All of the other reductions were handled by favorable health insurance claims experience or — at my urging — the $843,000 we saved by bidding our health insurance carriers. The actual cut to services was $1,000,000. Add that figure to the 1.51 percent and you get about 2.1 percent. Yes, a 2.1 percent budget to the BOE meant no program or service reductions. Period.
None of these changes decimates the school system in my opinion, but it’s the second time in my three years here that I have had to go through this. Despite the fact that we answered every inquiry from every town official about expenses in our budget — and get kudos for being able to explain everything — in the end, it didn’t matter. The Town wanted the tax increase at a certain level.
The Board of Education budget is an easy target for Town bodies. It’s the largest line item in the Town budget. The Town bodies do not need to identify where the cuts will happen, so they can claim innocence when the Board of Education is left to do the dirty work of making the real cuts. On the Town budget, the Town bodies have to identify specific cuts. On the Board of Education side, they can’t. On the one hand, that keeps the Town bodies from specifying line item cuts that is really the province of the BOE, but on the other hand it makes it a bit easier to cut because they don’t have to bear responsibility for the cuts that are enacted. The Board of Education gets to do that.
The Board members and I agonized over these reductions. It’s done. We’re moving on. Maybe next year will be different.
No, this doesn’t refer to the opening practice of the NCAA basketball season — it refers to the ending time of the RTM meeting last night. Actually, the meeting ended later than midnight, but the discussion of the budget finished at midnight. The RTM tried to shoehorn in 3 appeals of Board of Finance budget cuts prior to its 8:00 pm start, convening a Special Meeting at 7:00 pm for this purpose. The appeal on the Pequot Library alone lasted until 9:00 pm, with a standing room only crowd at the McKinley gymnasium and many of the rest of us in the hallway. The regular meeting convened around 10:15 pm and the town budget discussion began around 10:45 pm.
I commend the dozen or so hearty members of the public who waited until nearly 11:30 to engage in the “public comment” section of the evening.
RTM members were supposed to disclose which budget cuts they intended to put forth to a vote on May 6. Several members angered other members by stating that they intended to make cuts but would not disclose them until May 6. The moderator tried to get them to bring them forward sooner and then agreed to allow public comment on May 6 since some cuts would not be announced until that very evening. That leaves open the possibility of a very long budget night (or two) on May 6 (and possibly May 7), because ordinarily there is no public comment on the night the RTM votes on the town budget.
One member proposed a $1 million cut to the Board of Education budget. The Republican Majority Leader almost immediately afterwards spoke for his caucus and distanced himself from that proposal but did not propose any alternative proposal. Nothing prevents RTM members from making proposals to cut any part of the budget on the floor on May 6.
It was a long night and, in the end, nothing got accomplished. The next two weeks will find the RTM members testing the waters to see what is politically feasible to cut and what is not. It’s not too late for voices to be heard. The May 6 meeting begins at 8:00 pm. Please check with the Town for the location.
So by now you probably know that the Board of Finance reduced our budget request by $1,250,000 and our 2013-2014 budget now stands at 1.85 percent higher than the current year. Last night we had a meeting of the full RTM (about 35 members out of 50 attended) at which Mr. Dwyer and I presented our (updated) Power Point presentation about the budget and answered questions for approximately two hours. (The new presentation is on the website under Budget.)
Some parents gutted it out until the end when public comment was allowed and spoke in favor of not cutting the budget further. (The RTM cannot restore money, just cut more or maintain the BOF level, unless the Board of Education files an appeal. An appeal requires a 2/3rds majority of the RTM to sustain.)
The next public session on our budget is April 22 at which time the RTM will discuss (and take public comment) on all aspects of the budget. It is possible for some additional Q & A but the idea of last night’s meeting was to get all of the members’ questions answered so they can discuss the budget on April 22. The meeting is at 8:00 pm at Kings Highway. No vote on the budget will be taken. At this meeting RTM members are supposed to declare any intentions to reduce anyone’s budget. On the Town side, this could be as specific as line item reductions but for the Board of Education budget it is for the entire budget (the BOE determines the line items in May). However, members can still put motions on the floor at the final vote which is Monday, May 6.
The school district took the initiative last July and put the insurance carrier out to bid. The results of that bidding have allowed the Town to reduce its budget by $400,000 and the Board of Education to reduce its budget by a minimum of $343,000. These figures are already built into the budget prior to the Board of Finance cut. Right now, we are estimating an additional $500,000 savings from changing our medical and dental insurance carriers (our insurance consultant is still crunching the numbers). This leaves a $750,000 gap right now. Further cuts would cause deterioration of the school system.
Put another way, virtually all of the 1.85 percent increase is going to health insurance and pensions. All other lines in the budget — salary increases, transportation, tuition, contracted services, textbooks, etc — essentially have to net to zero to meet the budget as it currently exists. (Note: salary increases are not zero.) A further reduction from the RTM, without some more health insurance relief, would cause further issues for us and would lead to additional service and program reductions that no one wants to see occur to our highly regarded school system.
We are about to have a few whirlwind days on the budget front, then take a pause.
Last Friday the First Selectman and Board of Finance Chairman announced that they had reduced the tax increase from an estimated 6.3 percent to an estimated 4.8 percent. While I do not know precisely what adjustments were made to the school district budget, I was told that the BOE’s improved health insurance experience over the past three months allowed the Town to reduce the BOE budget and not impact services or programs. In addition, we have some savings from bidding out the health insurance carrier — an initiative we here at the BOE Central office started in July — that are also factored into the equation.
There were other adjustments made on the Town side that I am not involved in. My guess is that at tomorrow’s Board of Selectman special meeting (4:30 pm, Town Hall), we will get some details. This meeting was not on the original schedule of meetings. No action is anticipated. I expect to hear some discussion among the three selectmen about the total budget, not just BOE, and perhaps pick up some clues as to what the final thinking may be.
Tomorrow night, in the second meeting of our budget doubleheader, the same topic is on the Board of Finance agenda. These are billed as “public executive sessions,” which may seem like an oxymoron. (Executive sessions are generally done in private.) In Fairfield, this means the Board will be discussing a matter in public, but that no public input or participation is to be expected. So we will get a chance to hear the thoughts of the Board of Finance members on the budget, at least those who wish to disclose their thoughts. No action is anticipated.
The action happens next Monday and Tuesday. At 2:00 pm on Monday, April 1, the Board of Selectmen will vote on the budget. The agenda has been posted, and this is the only agenda item. I do not expect there to be public participation.
Then, the next day, Tuesday, at 7:00 pm, the Board of Finance takes its vote on the budget.
Then, a brief respite.
Then, next Monday night, April 8, at 7:00 pm at the McKinley cafeteria, the RTM will hear a presentation on the BOE budget followed by questions from RTM members. This session takes the place of the committee meetings. I do not know if public comment will be heard at this time. I will do the same presentation to the RTM that I did at the BOS/BOF meeting (posted on the website), then take questions. All RTM members are invited to attend. (Other departments are being heard on other nights.)
We continue to update the district website with additional information. You can get a link to any items we have provided to any Board by clicking on the budget link on the home page.