School District Requesting Special Appropriation To Cover ‘Savings’ Shortfall

By John Voket

Some local officials are wary of a school district request for a special $113,436 appropriation the former superintendent called for in a memo that was provided to The Bee this week. The request was conveyed in a June 14 memo to Legislative Council members from Dr Evan Pitkoff, who departed the district for another post June 30.

The council is expected to review and rule on the request at its next meeting, July 11, according to Chairman Will Rodgers.

In the memo, Dr Pitkoff said the Board of Education’s medical insurance “savings” discussed at the final council budget deliberation prior to the town’s fourth budget referendum were overstated. Newtown faced a protracted budget season with three back-to-back budget proposals failing before a fourth proposal finally passed June 5.

“Applying the actual rates received from Anthem [the district’s health insurance carrier], along with the varying premium co-payments, FICA and Medicare offsets, direct employee payments and applicable plan participants, results in a reduction of $249,564,” Dr Pitkoff wrote. He said that amount is $113,436 less than the calculation the council used in making the recommended reduction to the school-side budget.

“Therefore, the Board [of Education] will need to adjust its budget by an additional $113,436 beyond the actual funds that were attributable to insurance savings unless an adjustment can be made by the council,” the memo states. Dr Pitkoff concluded the brief correspondence asking for “any consideration possible for relief of this additional unintended reduction to the school budget.”

Speaking on the matter earlier this week, Mr Rodgers said he thought any council action to accommodate such a special appropriation would set a bad precedent.

“Then what’s to stop every department in town from coming back after the budget is approved, and saying facts and circumstances have changed [since deliberations] and expect to get more than the taxpayers approved in the budget vote,” Mr Rodgers said. “The budget is almost always an approximation because, for instance, it is almost always approved before state aid [in the state budget] is factored in.”

He said the council cuts, and prior recommendations from the Board of Finance, were based on the best facts and circumstances available at the time.

First Selectman Herb Rosenthal was equally concerned about the request, suggesting it was made prematurely.

“They won’t really begin to have an idea about how much of a difference the savings will be until at least the end of September when they see in reality things like who is hired and who has retired,” Mr Rosenthal said. “And they really won’t have a true picture of any real shortfalls until the end of the next budget year.”

Mr Rosenthal said it would be more appropriate for the school district to bring up any perceived miscalculations, or renewed estimates of shortfalls in projected health plan savings during the 2008 budget deliberations.

He said the original finance board recommendation to the council on possible health plan savings, which was passed on to voters in the first referendum, amounted to $484,000. By statute however, the school district is not bound to factor the gross cuts made to its budget by outside boards in areas that are suggested.

Mr Rosenthal said that gross projected savings did not factor in employee contributions. But neither the projected town nor the school side savings can be achieved if premiums are reduced because that would also lessen employee contributions, he said.

The first selectman said by his calculations, going back to the original finance board cuts and factoring the final school district premiums, the school district comes out with $17,000 or $18,000 more than needed to cover the costs.

“The district is only giving us part of the picture,” Mr Rosenthal said, adding that the town is not getting enough additional revenue from the state or other sources to cover the additional $113,436 being requested by the district.

He suggested the school district look at its net surplus in the current budget and encumber the requested amount toward next year’s projected shortfall instead of requesting a special appropriation after the budget has already been approved by taxpayers.

“The reductions have been made,” Mr Rosenthal said. “The district should address this as the new year rolls along if and when any problem with this account develops.”