Budget Moves To Council

With 2.34 Percent Tax Hike

By John Voket

The Board of Finance moved a nearly $108 million budget proposal to the Legislative Council March 14. If the finance board’s spending plan passed on to voters unchanged, it would require endorsement of a 2.34 percent tax increase.

Adjustments to the town and school sides of the budget were made to reflect reductions in health care costs in the town’s self-funded program. Additional reductions to the school district budget were taken to account for modest savings in diesel fuel, and additional savings expected in a new transportation contract.

This year’s request marks the first time in recent memory that a budget proposal is showing more revenue than spending. This move would bring Newtown into immediate compliance with its own recently drafted policy of maintaining no less than an eight percent unassigned general fund balance.

As a result, the council will be considering a budget proposal with $107,406,525 in expenditures, but requiring $107,806,525 in revenue. That $400,000 difference would be applied to the fund balance, bringing it up to 8.0 percent on July 1 2012 — one full year ahead of plan.

Finance Board Chairman John Kortze introduced the proposal explaining that the move would not have any effect on services funded by the budget proposal on either the town side or for the school district.

The move was embraced by Vice Chairman Joe Kearney as well, who acknowledged that bringing Newtown’s fund balance up to eight percent may or may not have any immediate effect on the bond rating or the historically low borrowing rates Newtown is already getting on its bond initiatives and refunding.

“But the advantage is the perception,” Mr Kearney said, adding that officials can now return to the rating agencies ahead of the next municipal bond offering, having responded a year ahead of schedule to the single financial shortcoming those rating agencies have been noting during several past reviews.

First Selectman Pat Llodra also weighed in with her full support.

“The [bond rating] agencies keep flagging us,” Mrs Llodra said of the disparity between the level of Newtown’s fund balance and that of most other similarly rated municipalities. She also reminded the finance board that while reaching the eight percent level in the next fiscal year is a laudable achievement, that percentage is a minimum threshold and that the median goal she hopes to see would be ten percent.

Monitor ‘Qualitative’ Effect

Following brief remarks by resident Kinga Walsh, who asked the board to hold the line on school reductions, and to consider the “qualitative” effect of further cuts to the district’s request, Finance Board member Carol Walsh got the questioning started. Ms Walsh asked school board Chair Debbie Leidlein to explain why staffing increases are continuing while overall student population is declining.

Ms Leidlein first pointed to the area of therapists and other specialists tied to the special education system, being driven by what she described as a 200 percent increase in students diagnosed with autism or related conditions, all requiring state mandated support.

Ms Leidlein said that during her time on the school board, the group has worked to respond to students who are unable to get into core classes like social studies and history, because they fill up to capacity so quickly.

“We will need more teachers to address those core classes and the increased credits that will be required [by the state in coming years],” Ms Leidlein said. She also stated that as student population numbers at the high school begin to plateau and recede, there is a long-term plan to “rebuild [staffing] from the ground up.”

“We’re looking at making a better foundation at the elementary school level,” Ms Leidlein said. She also said a “self-study” the district would mount ahead of a reaccreditation procedure would help the district better identify where there are shortcomings in the overall curriculum, so the board could act to “fill those holes.”

The school board chair added that the district is also responding to community needs in this year’s budget request, by unanimously endorsing a full-day kindergarten program to begin in September.

“We will continue to look at staffing with a critical eye, keeping in mind the taxpayers,” she said.

Mr Kearney said, nonetheless, he would like to see the 2012-13 budget reflect the beginning of reducing staff to correspond with the reduction of students.

“I would like to see reductions happen on an incremental basis,” Mr Kearney said. “In a few years, the pressure [to reduce staff] will be building, and cuts will not be in slices, they will be giant.”

Generating A Cushion

Finance Director Robert Tait reported that anticipated savings in the town’s self-funded health care plan would likely generate a significant amount of a 25 percent cushion required between next year’s projected health care claims and the point where a supplemental stop loss program would kick in.

Mr Kortze then turned his attention to the school transportation contract, requesting whether Superintendent Janet Robinson had spoken with the incoming bus vendor All-Star about additional savings anticipated from reconfiguring the current bus routes and tier system.

Dr Robinson referred the question to district Business Manager Ron Bienkowski, saying she had no firm idea about potential savings because the rerouting was not complete.

Mr Kortze referred to a page of the bid sheet that All-Star submitted, which indicated the potential for ultimately reducing the number of buses requested by four or more, by readministering the routing.

Mr Bienkowski said he was comfortable reducing the equivalent of two bus runs, which would amount to about $113,000 in additional savings.

“There is a potential for more, but we haven’t figured it out yet,” Mr Bienkowski. The business manager also noted anticipated savings of at least $40,000 in electricity costs in the coming year, beyond what was accounted for in the proposal.

The finance board then quickly moved through motions to adjust the budget request to account for town side savings in borrowing costs, increasing a diesel fuel cost line, a payroll line and related benefits for a new Parks & Recreation management position, which replaces jobs held formerly by two employees at an overall higher cost.

On the district side, conversely, savings were approved for diesel fuel and proportional amounts in the self-funded health costs. Mr Kortze then suggested making a $700,000 reduction to account for removing four buses in the transportation line versus two. The panel subsequently approved the school district’s bottom line at $69,355,794 — a 2.04 percent increase over the current year.

After all adjustments were made, the finance board approved a town-side request of $27,980,942, representing a 0.43 percent increase over the current year.

Mr Kearney unsuccessfully introduced an amendment to reduce the district by $843,338, which would have held the same increase as the current year. But other board members argued that the $143,338 difference would not be enough to inspire individuals voting No on the budget to change their vote to Yes.

Finance board member Harrison Waterbury argued that the school board already came to the table with a $1.3 million reduction to the superintendent’s bottom line request, noting the overall reduction with Mr Kortze’s proposal would be more than $2 million.

Mr Waterbury said after the meeting that he appreciated the school board making the level of reductions they did, and not leaving it up to the finance board or council to do the work.

“This year they came forward with a $1.5 million reduction,” Mr Waterbury said. “They realized the superintendent’s recommended budget was too high.”