MINUTES
SPECIAL MEETING OF THE
BOARD OF FINANCE
MAY 17, 2006
A SPECIAL MEETING of the Board of Finance was held in the Council Chambers on Wednesday, May 17, 2006.
Those in attendance included Mayor Ryan J. Bingham, members of the Board of Finance Daniel Farley, Bruce Cornish, Mark Bushka, and James Zeller, Corp. Counsel Ernestine Yuille Weaver, and Comptroller Alice Proulx. Board of Finance members James Nichol and Joseph Nader were absent.
Mayor Bingham called the meeting to order at 1:00 p.m.
Mr. Farley reported receiving the one-time charges necessary for the NEASC accreditation, from Nancy Haynes, the Board of Education’s Business Manager. They consisted of the following:
1. $100,000.00 for high school textbooks,
2. $50,000.00 for consultants for the NEASC Visiting Team,
3. $75,000.00 appropriated for rest room renovations.
Mr. Cornish stated that, while the textbooks are related to NEASC, they are related more to an ongoing program with the change in schedule, which will provide more classes and require more textbooks.
The consultants are clearly related to NEASC.
The cost to repair the restrooms is included in the capital plan and not part of the operating budget.
Mr. Zeller noted that the budget committee had at one time talked about capping the Board of Education budget at 7%.
Mr. Cornish said he discouraged the Board of Education from concentrating too much on a percentage increase. Two years ago the Board of Education presented the city with a 4% budget. This budget may have been a management plan to achieve a budget goal as opposed to a budget based upon the realities of the district. Unfortunately, it didn’t work out very well and the students didn’t get what they should have received in the education plan. It was better for the Board of Education to come in with a reasonable budget that would perform the education program and that they be prepared to back it up.
Mr. Zeller noted that residents of Torrington absorbed a significant tax increase after the last revaluation.
Mr. Cornish indicated that the significant increase in taxes due to the revaluation occurred several years ago and that last year’s budget was balanced without the need to raise taxes due to small growth in the grand list, some one-time revenues, and surpluses from the prior year.
Mr. Zeller asked if Mr. Cornish saw any subsidies coming in on the city side. He pointed out that the Board of Education’s budget was ever increasing above and beyond the increase on the city side. He asked if efficiencies were occurring more on the city side as opposed to the education side?
Mr. Cornish stated that many of the expenses on the school district side are forced on them after the budget process has already been established. Many of the spending decisions are based on the number of facilities and how the children are aligned in town. The district has to meet the teaching needs according to how the population is divided within the city. The city has to ability to put off items for future years, whereas the school district has no control over some of their items.
Mr. Zeller asked Mr. Cornish if he believed the new Superintendent and principal at the High School will be able to do more with less, based upon their experience.
Mr. Cornish stated that the new administration has momentum and support and they have already made progress in teacher negotiations. It was now a question of whether they could achieve the goals they have set up for themselves. It was his belief that efficiencies would come about because they have stepped forward with a strong forward approach on how they are going to do business and meet the needs of the children in town.
Mr. Bushka noted that the school budget included $352,000.00 for K through 5 math, and asked if they would have a similar number next year for English and the following year for Language Arts. Also, what was the life expectancy of the new Math Program? How many years did they expect those books to last?
Mr. Cornish stated that this was a valid question and he would follow up on it to make sure they have the answer before they vote on the school budget. He noted that the life cycle of the curriculum was an important question because they have already indicated that they will be coming in with another round. The $352,000.00 could be considered a one-time cost to perform the math program, but because it will be followed in successive years with other curriculum and book changes to bring everything up to date, it’s an item that will continue to appear in their budgets for several years to come.
Mr. Farley inquired about the number of employees on either side of the budget.
Mayor Bingham indicated that the Board of Education has almost twice as many employees as the city.
Mr. Farley then stated that having more employees would explain a large part of why the Board of Education’s budget continues to increase every year.
Comptroller Alice Proulx noted that $1,293,224.00 was budgeted for the Board of Education’s contractual obligations.
Mr. Farley said he personally liked what the Board of Education was planning on doing; however, he was concerned over the amount of their budget.
Mayor Bingham stated that any cut could put the accreditation at the high school in further jeopardy and it would undoubtedly cost more to rectify the situation in the long run.
Mr. Zeller asked where Torrington fell in spending on a per pupil basis, as well as within the spectrum of municipalities in the State of Connecticut.
Mr. Cornish would make sure those numbers were available for their joint meeting with the City Council. However, the numbers they receive may be outdated and not very helpful with their deliberations. This board should consider the Council’s opinions, not only on the city budget, but the educational budget as well, since they carry the burden of the Board of Finance’s decisions during election time.
Mr. Cornish stated that the long term effect of not immediately responding to the accreditation concerns may be more detrimental than a 7% increase in the budget. He hoped to get some commentary from the Council in regard to the accreditation process. It’s more than an education budget, it’s economic development, public safety, and all the issues that the city has to deal with that are the outcomes of education in Torrington.
Mayor Bingham agreed that a good educational system was necessary to draw more businesses to Torrington.
Ms. Proulx stated that the increase in the Board of Education’s budget is $870,280.00 over last year’s budget. However, she hadn’t received the increased dollar amount for special education costs. The city expected to receive $453,973.00 in one-time revenues from the state.
Mr. Cornish said he hoped the Board of Education would reconsider their request for permission to use current year increased revenues from the state to offset deficiencies in their current budget. He further noted that their budget had not yet been totally spent down.
Mr. Zeller asked if they should consider using some of the funds in the Undesignated Fund Balance to cover some of the one-time expenses that could possibly be labeled as emergencies. He inquired whether we should contact Moody’s to see how our bond rating would be impacted for a one-time use of some of those funds. He questioned how long they should let the Undesignated Fund Balance increase. He suggested that perhaps the Board of Finance and the City Council could review this matter in the near future to help define the Undesignated Fund Balance and what types of situations would be defined as emergencies.
Mr. Zeller also pointed out that the city is guaranteed 100% of its tax collection, which should be considered in this matter.
Mr. Bushka stated that some towns use a percentage of their budget for their Undesignated Fund Balance. It’s really up to the Board of Finance to decide what they feel comfortable in having in the fund for emergencies.
Ms. Proulx stated that the Undesignated Fund has been growing each year. When the surplus is calculated, she tries to be as close as possible to not having an over or an under. She tries to use only the amount of surplus they feel won’t have a negative impact on the fund balance. It’s always been her goal not to impact negatively on the fund balance to try to grow it by a little each and every year. When she discussed the fund balance with Moody’s about guidelines and/or criteria for the fund, the only comment they furnished was that it wasn’t a percentage, but they like to see a trend in the positive direction.
Mr. Zeller thought if the fund was stripped by 3 or 4% of the interest, it would go a long way in paying for consultants, purchasing books, or renovating bath rooms at the high school. This was a good way to use the funds and not ask the taxpayers to kick in.
Mr. Cornish noted that the interest becomes part of the current year revenue. While he’s been on the board, the city has used current year surpluses to offset the next budget rather than dipping into the principal of the Undesignated Fund Balance. He pointed out that the Board of Finance did make a decision several years ago to take $2 million from the Undesignated Fund Balance to settle a Board of Education issue that had been carried forward year to year that created a negative audit finding.
Ms. Proulx thought the surplus might be the same as last year’s.
On a motion by Mr. Cornish, seconded by Mr. Bushka, the board voted unanimously to adjourn at 1:53 p.m.
ATTEST: JOLINE LeBLANC
ASST. CITY CLERK
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