On Wednesday, February 19, the Board of Finance (BOF) will get its first official look at the School district's budget, but in the lead-up to that meeting, the BOF is looking for information from the BOE to help inform its decision. The board members discussed their questions and concerns at the February 12 BOF meeting.
BOF Chair Steve Geryk said he had asked the BOE for a breakdown of their full-time equivalents in FY '23-'24 and the number of full-time equivalents approved for FY '24-'25, along with the actual number of full-time employees. He has also asked for a breakdown of the increased costs that led to having a surplus at the end of last year to being nearly half a million over budget this year. "There might be a good explanation, but I haven't seen it," he said and he would like the BOF to have a complete understanding of the situation before it comes time to vote on the budget.
Interim Superintendent Dr. Laura Norbut has said the deficit is primarily due to increased special education costs, fuel, and electricity. Apparently, the utilities were under budgeted, and next year's proposed budget is correcting that issue. Additionally, the district has been told it will likely receive a lower excess cost reimbursement than anticipated. While it is supposed to receive over 90% and typically receives (and budgets for) slightly more than 70%, this year, the district has been told it may only get 64%.
The schools' budget freeze and a projected deficit of nearly half a million dollars have the BOF worried. The town's new Director of Finance, Yana Abramovich, said the deficit could be "getting to the point where it could be irreversible." So, the question is, what happens if that deficit is not cleared up?
If the Board of Education (BOE) officially projects a deficit, it must request additional appropriations, likely requiring a town meeting. Still, the question on everyone's minds, and BOF member Tony Pellgrino's lips, is, "What if we deny them the funds?" The answer isn't really clear.
State statute 7-348 says:
“No officer of such town shall expend or enter into any contract by which the town shall become liable for any sum which, with any contract then in force, shall exceed the appropriation for the department, except in cases of necessity connected with the repair of highways, bridges, sidewalks and water and sewer systems and the care of the town poor, and then not more than one thousand dollars.”
Additionally, Connecticut General Statute 10-222 says:
"If any occasion arises whereby additional funds are needed by such board, the chairman of such board shall notify the board of finance, board of selectmen or appropriating authority, as the case may be, and shall submit a request for additional funds in the same manner as is provided for departments, boards or agencies of the municipality and no additional funds shall be expended unless such supplemental appropriation shall be granted and no supplemental expenditures shall be made in excess of those granted through the appropriating authority."
Finally, State statute Section 7-349 says:
"Any officer who, in violation of any provision of this chapter, expends or causes to be expended any money of such town, except for the purpose of paying judgments rendered against such town, shall be liable in a civil action in the name of such town, and the amount so drawn from the treasury of such town shall be liquidated damages in such action against any such officer.”
Some believe this last statute means the BOE or Superintendent could be liable for overages, especially if additional appropriations are not approved. But this issue was addressed in Shipman & Goodman's blog post, and it doesn't seem like officials have anything to be worried about:
"Should you ever be sued for actions you take in the scope of your employment, you will certainly invoke the protections of Conn. Gen. Stat. § 10-235, the indemnity statute. That statute provides that board of education members, board employees and (in some circumstances) even volunteers are indemnified and held harmless against personal liability for actions they take in the scope of their responsibilities, and that protection includes the related legal fees."
So, the question remains. What happens if the BOE asks for additional funds but doesn't get them?
Dr. Norbut has also expressed some hope that the district will be able to make up for the deficit, but it's not clear how given it is already under a budget freeze and the deficit nearly doubled since the freeze was enacted. Still, once all of the reimbursements are in and the schools track down every dollar they are owed, they have managed to find surprising surpluses in the past.
First Selectman Bill Morrison said at the BOF meeting that it would soon be time to "peel the Band-Aid off." In other words, the town has to be prepared for a worst-case scenario in which it would have to dip into the General Fund to provide an additional appropriation. The town's auditor was also at the BOF meeting and presented earlier in the evening, saying that the total balance for the General Fund had increased by $1.2 million, bringing the unassigned balance up to $4.5 or 9.9% of the operating budget. Though that is good news, the town's policy is to have 10-14% unassigned, so it's still falling short of its goal. It could, technically, absorb the hit, but will set the progress back.
Stay tuned for Wednesday's meeting to learn where this will all land.