In a now annual exercise introduced by finance officials several years ago, the Legislative Council hosted the Boards of Finance, Selectmen, and Education for a budget preview session November 19.

While First Selectman Pat Llodra and Finance Director Robert Tait both vowed to seek a zero tax increase budget, the school superintendent’s presentation focused as much on issues that could affect future budgets as he did on the 2014-15 spending cycle.

The meeting commenced with Mr Tait reporting that current year medical claims were down about ten percent, which he characterized as “very good news.” The downward claims trending bodes well for budgetmakers on both the town and school sides, so far minimizing the likelihood of a spike in town employee health plan costs.

Superintendent Joseph V. Erardi, Jr, hailed the immediate news on the health claims issue, while telegraphing concern for what he believes is a looming $1.2 million annual increase in district health plan costs that could hit as soon as the 2016 fiscal cycle.

The cause of that massive hit, which also has the potential of increasing town side costs by another several hundred thousand dollars, is referred to as the “Cadillac Tax,” because it applies a premium to all health plans offering substantially greater benefits to participants.

These high-end health plan premiums are usually paid for by employers, typically featuring low or no deductibles and little cost sharing for employees.

Reviewing potential town side liabilities and revenue sources in the coming year, Mr Tait indicated the town employee pension was performing well and he does not anticipate an increase in pension contributions in 2015.

The finance director said he hopes to log the same amount of state aid next year, although Governor Dannel P. Malloy plans to make cuts in the coming days to close a state budget shortfall in the current year.

The first selectman said while she plans to bring a zero tax increase proposal to voters, she is still expecting to budget a quarter-million dollars next year and in subsequent years to fortify a capital roads account that had been shrinking or stagnant.

Mrs Llodra told the gathering she wants to continue the annual infusion of $250,000 until that capital roads budget is back to its optimal $2 million per year. A second priority would be to hire an information technology specialist to boost the town’s skeleton staff in the IT department.

Dedicated To Police

The first selectman said that position would only be added if funding is available from grand list revenues. If the excess revenue develops, Mrs Llodra said that individual would be dedicated to supporting the local police department.

“Right now they are struggling to keep up to a level of effectiveness and efficiency,” the first selectman said of the police services IT section.

Councilman Paul Lundquist asked if Mr Tait thought the town could achieve a one percent increase in grand list growth, which would produce nearly $1 million in excess revenues. The grand list is a ledger of all taxable property in town.

Mr Tait replied that the town has been averaging a 0.6 percent increase in grand list growth annually, and he is hoping for at least that in 2015. That level of growth would produce about $600,000 in added revenue.

Councilman Dan Amaral questioned whether funding a townwide purchasing agent would be a better payroll investment if added revenues developed. Mrs Llodra responded reminding officials that discussion about creating a purchasing position for the town and schools has been on the table for about five years.

Unfortunately, she said, long-term savings that might be achieved by adding a purchasing official are not typically realized until several years after such an agent is hired.

“I have to feel confident enough in a revenue stream [to compensate the cost] to carry the position for one or two years,” in anticipation of the payoff to justify the hiring, Mrs Llodra said.

School District Forecast

Dr Erardi began his presentation indicating that he expects to present a budget proposal to school board members the day before the December holiday break, and circulated a planning schedule that provided a February 13 delivery date to the Board of Finance.

The superintendent circulated a package of information to officials that included anticipated contract obligations. Those estimated increases amounted to $961,884 according to district Business Manager Ron Bienkowski — a 1.35 percent increase.

Dr Erardi said that figure would overlay a budget proposing no increase in the district workforce in 2015, and later saying that he is expecting to actually reduce the district workforce corresponding to an anticipated enrollment drop.

The superintendent said he expects to achieve any workforce reduction as a result of attrition and retirements, versus through layoffs.

Turning to the district’s most recent enrollment study, Dr Erardi recognized the significance of projected enrollment declines over the next decade, while cautioning the need to wait for results of an ongoing facilities study and a space needs assessment he hopes to have in hand by late winter.

Dr Erardi closed his presentation saying he was looking forward to working with all the officials gathered around the table, pledging to build relationships with other town boards rooted in trust and honesty, and responding to questions with data and rationale to support his positions and proposals.

Moving to questions, a concern about cost and capacity of school facilities was posed by Board of Finance Chairman John Kortze.

The superintendent said he recently walked every school facility, nothing that while there is no space for enrollment growth at the elementary level, if trends hold true as predicted, the high school which was recently expanded to accommodate 2,200 students, will see a 50 percent drop in capacity to about 1,100 in the coming years.

No Closing Recommended

Dr Erardi told officials despite similar albeit smaller projected student enrollment declines at the intermediate and middle school levels, “I’m not in a position to make a recommendation to close a school.” He said the community should wait until the space and facilities studies are complete, and possibly until the new Sandy Hook School is occupied before trying to assess and possibly tackle a school closure.

He vowed, at least, that no action to that end would occur in the 2015 school year, saying such a move would necessitate a town wide redistricting. Dr Erardi added that closing a school could create added long-term challenges if a rebound in student counts occurred as predicted by enrollment consultants.

Finance board Vice Chair Joe Kearney said as enrollment continues to plummet, he “would rather lay off a school than lay off people.”

Council Chair Mary Ann Jacob said district officials “need to be honest with the community,” saying that once the new Sandy Hook  School opens in 2016, a town wide redistricting “will be inevitable.”

Before ending the budget session, Mrs Llodra returned to the issue of the potential liability of the “Cadillac tax” hit on local taxpayers. She suggested that officials may need to examine creative ways to mitigate that expense, possibly creating wage increases that would offset sending town and school employees to the state insurance exchange to purchase their own coverage.

Mrs Llodra said that is one way to eliminate the requirement to provide coverage, and to potentially eliminate the nearly $2 million penalty that would be based on current town provided health insurance coverage.