Reed Moves To Encumber School Funds

By Steve Bigham

Superintendent of Schools John R. Reed this week called for an encumbrance of $200,000 in Board of Education funds to cover imminent shortfalls in special education tuition and self-funded medical insurance.

Dr Reed made the announcement at Tuesday’s meeting of the school board.

Board of Education Chairperson Elaine McClure said she was disappointed with the news.

“It’s a shame. We’re basically telling people not to spend,” she said. “The town needs to realize that our budget is just so close that we’re ending up with a freeze or encumbrance.”

According to School Business Director Ron Bienkowski, the need to encumber funds was brought about after four additional special education students moved into the district this year. These students had not been budgeted for, he said, resulting in what may be a $100,000 deficit. The school system currently outplaces 33 special education students this year.

Newtown’s self-funded medical insurance has been an Achilles heel in recent years and the school system is once again experiencing high medical claims.

“Last year we pretty much used up our reserve fund balance. We started this year with only $66,000 and claims are high once again this year,” Mr Bienkowski explained.

Dr Reed was meeting with school administrators this week to determine where the encumbrances would take place.

An encumbrance, according to Mr Bienkowski, is a move to reserve funds for a specific purpose, while a freeze prevents the spending of future funds.

The Legislative Council voted to add $98,000 to the Board of Education’s budget this past September. The money was earmarked for its all-but-depleted self-funded medical insurance fund. In adding the money, the council set a precedent for adding money to the budget after it had already been approved by the taxpayers. The fund transfer was made possible by the receipt of $300,000 more in state aid than had been anticipated when the town budget was approved this past spring.