MINUTES -- SPECIAL MEETING
BOARD OF FINANCE
MAY 17, 2012
A SPECIAL MEETING of the Board of Finance was held in the City Hall Auditorium on Thursday, May 17, 2012.
Present were Mayor Ryan Bingham, Corporation Counsel Ernestine Weaver, Board of Finance members Bill Lamoin, Laurene Pesce, Brian Paganini, Thomas Scoville and Mark Bushka, Comptroller Alice Proulx, Police Chief Michael Maniago, Deputy Police Chief Christopher Smedick, Fire Chief John Field, Deputy Fire Chief Gary Brunoli, Superintendent of Schools Cheryl Kloczko, Board of Education Members Kenneth Traub, David Oliver, Daniel Thibault, Christopher Rovero, and Ellen Hoehne, and City Councilors Gerald Zordan and Elinor Carbone.
Mayor Bingham called the meeting to order at 5:00 p.m. He said his recommended total budget for the City is $50,165,613 and, based on conversations with City Council, he requested the Board of Finance make an additional cut of $353,072 to the Board of Education budget. With the presented revenues, this would result in a tax rate increase of 1.24 mills or a 33.74 mill rate. Mayor Bingham acknowledged that some members of the Board of Finance are looking for additional cuts, and suggested the Board include those within their motion when they vote to adopt the budget.
Mr. Scoville asked if it would be easier to request a general cut now and then meet to discuss where to make those specific cuts after the mill is set. Mayor Bingham said it would make this meeting run more efficiently but they need some direction on what the Board of Finance is looking for. He asked for a discussion beforehand so he might answer some questions on the impact this might have on services provided by the City. Mayor Bingham said at this point almost a million dollars has been cut, and any further cuts could have consequences. It will be too late to take them back after the mill rate is set, he said.
Mr. Scoville said he cannot support a tax increase that is more than 3%. He asked how much needed to be cut to achieve that threshold. Mayor Bingham replied, with Ms. Proulx's clarification, that it would be an additional cut of $266,353 from the City and an additional cut to the Board of Education of $353,072. He said the City Council recommended a total cut to the Board of Education of $735,647.
Mr. Lamoin agreed that it is important the budget be reduced further, because the increase to the individual is on top of everything else they are trying to cope with. The second reason that it needs to be reduced further, he said, is that we need to get our services costs and the types and amounts of services we provide in balance with our growth, or lack thereof. Mr. Lamoin said we need to rebalance so we can grow later but it's going to be a while.
Mayor Bingham said that is a great general statement but it doesn't account for state and federal mandates, public emergency responses, contractual obligations, and manpower obligations in certain departments.
Mrs. Pesce opposed even a 3% increase, because most people's wages are not going up by anywhere near that over the last several years. She said both the City and Board of Education have gone as far as they can, and additional cuts will result in the loss of staff. Mrs. Pesce said the City budgets very responsibly for long-term projects, but perhaps those could be brought back a little bit. However, she added that it would be foolhardy and shortsighted to not continue to fund those. There needs to be less people or the cost of those people needs to be less, she said.
Mayor Bingham said the Police and Firemen are still in contract negotiations, but all the AFSCME unions have agreed to a 0% wage increase, changed their health care model and have moved away from the traditional pension system. These are major shifts in municipal benefits, he said.
Mrs. Pesce said the problem is the revenue, because the stimulus money is gone.
Mr. Scoville said his concern is the burden on businesses, commercial property owners and the long-range effect that will have on our Grand List. He commended the Mayor for doing an excellent job in finding efficiencies, the progress made on retirement plans, and managing the City through this economic malaise that we're in. He added that we need to go a little further than the Mayor's recommendations.
Mayor Bingham said his hesitation is not on the City side, because that's his job. He doesn't have control over is the Board of Education and the impact on the services that they provide. He said he doesn't want to see Music and Sports and those needed programs cut from their budget.
Mayor Bingham said he doesn't disagree with the Board of Finance, and pointed out that we've had multiple zero increase budgets over the last five years. He said he is more interested in seeing the Board of Education system stabilized, and asked Mrs. Kloczko to address this.
Mrs. Kloczko said they could handle the first $353,000 cut but going beyond that, the Board of Finance has to ask themselves whether to pay now or pay later. She said there will be 188 pages of new Education Reform mandates coming from the State, with no money attached to it. The most important thing about Public School is to educate the children. She said the Board is mandated to educate children to read, write, do mathematics, think critically, have technology skills, be able to do research, ask questions, work with others, problem solve, attack real world problems to come up with solutions, and work with outside industries to prepare them for the work force that's out there. Torrington is no where near that, she said.
Mrs. Kloczko said that by cutting this budget, it is a case of "pay now or pay later." We need to be able to provide and develop the educational program that these students need at the early childhood level to avoid the high school dropout rate that we have.
She added that the Board of Education has been a pleasure to work with because they have looked for budget cuts, but there should not be cuts to teaching basic education, reading, writing, math, and all the higher level thinking and technology skills. Mrs. Kloczko said a much wider education needs to be provided for these children and she is mandated by the State to get children reading by a specific level by 3rd grade. Children come into kindergarten unprepared, she said, and we're not even thinking or talking about all-day kindergarten because this town doesn't even have the physical space to do it.
Mrs. Kloczko said we have a long way to catch up, but if the Board of Finance continues to cut this budget, it will be a case of "pay now or pay later." She cautioned that we are in deep trouble and we will not be able to prepare our children for the future.
Mr. Bushka asked for some insight into where the $382,000 in cuts, and the potential additional cuts of up to $350,000, would come from.
Mrs. Kloczko said we currently have a surplus because it was a mild winter, we didn't need overtime and we've had savings in both utilities and the severance account. That could cover $342,000 in cuts, she said, but when you start looking at $390,000 in cuts, we're getting into our athletics.
Mr. Bushka asked if Mrs. Kloczko would consider cutting from their Capital budget. She replied that we have to have a safe environment for children to work in every day. The schools need upgrades and you have to have quality facilities for children.
Mr. Traub said with the Middle School chillers work, $85,000 savings in utility bills is anticipated per year for a $500,000 investment. If we continue to let our buildings age and not make any of these improvements, he said, this is going to compound on us, especially with rising energy costs. Mr. Traub said we also have a technology cliff that we're facing with the need to participate in online testing. He said that $200,000 of our Capital will be invested in our infrastructure to get us ready for this testing, and it will be a harsh reality that the City of Torrington will need to come up with between 2 ½ and 6 million dollars because the State says we have to.
As both a commercial and residential taxpayer, Mr. Traub said he understands the pain of taxes will be felt deeply, but at some point we do have to realize the cliff is coming. He said our buildings are falling apart, and $800,000 a year to maintain a million square feet is nothing. Mr. Traub noted that schools have been running with no circulator pumps in the heat systems and no exhaust fans in the kitchens. All we're doing is applying Band-Aids, he said.
Mr. Traub said that as Chairman, one of his commitments is to the Capital Accounts. He noted there were years when only $100,000 was set aside for Capital. You can't even fix a sidewalk for $100,000, he said, and we really can't continue to just let our infrastructure fall apart.
Mr. Bushka asked Mayor Bingham if $266,000 were to be cut from the City budget, where would he or the City Council recommend that come from.
Mayor Bingham said he preferred it not come from Public Safety, from infrastructure or from roads' budgets. He said he'd entertain potential cuts to the Vehicle Replacement line, but it’s a one-time savings that will need to be replaced. He noted that any cuts are going to have a fairly significant impact no matter where they are from.
Mr. Scoville wondered if the Vehicle Replacement Fund could be caught back up to a lower point and if we're too aggressive with this plan. Mayor Bingham agreed and said he hopes to find savings in fleet maintenance, and he noted that the Fire Department has some potential savings ideas already. He said he'd work to find the $266,000 in cuts and is ready for the challenge, but what he doesn't like to hear are the impacts on the Board of Education side.
Mrs. Pesce suggested our local legislators come in and meet with the Board of Education, Board of Finance and City Council, if those legislators are voting for things that make this town responsible for more and more mandates that the State doesn't pay for. As hard as it is, she said, Torrington isn't poor enough, or big enough, and is not a priority school district.
Mr. Scoville said the trend for the past two years is for even more unfunded mandates. Mayor Bingham said we have State advocates through the CT Conference of Municipalities that constantly fight for us. He said the mandates are all well intentioned, but no thought is given to property taxpayers. Mayor Bingham said we're not in a position to change that right now. We need to meet mandates and that costs us money.
Mr. Scoville recalled years when the Board of Education budget would be the only thing cut at Board of Finance meetings. He said he appreciates the Mayor's direction to look at cuts proportionately. Mr. Scoville said his feeling is that we have to look at a million dollars in cuts and decide what comes from the City side and what comes from the Education side.
Mrs. Pesce asked Ms. Proulx what the increase in the mill rate would be if there was a 3% increase to the total budget. Ms. Proulx said it would be .97 mills, or a mill rate of 33.47.
Mr. Paganini asked what the impact on our bonding process would be if the Vehicle Replacement Fund were lowered, in light of efforts being made to remove our negative outlook. Mayor Bingham said taking money from the undesignated fund balance would have a greater impact on not being able to remove the negative outlook than if we touched the designated fund balances and designated capital accounts. He said that it bodes well for Torrington that we have done an extremely good job of being frugal and saving money in Capital Funds so that we don't have to bond projects. Mayor Bingham said this shows good disciplined fiscal practice and he noted that the Board of Education has started a rolling Capital Fund this year. We speak to the rating agency at the end of May, he said. Mayor Bingham said
he doesn't think it would have a huge impact and we can stand on our own but if we were talking about cutting the undesignated fund balance or putting a portion towards next year, that would probably be a bad sign for them.
Mrs. Pesce said we're at a 33.74 mill rate with what had been presented to us to this point. She asked if we go to a 3% increase in the budget vs. a 3.8%, what the mill rate will be. Ms. Proulx replied that with the additional reductions, currently you're at a 2.81% increase in expenses. She added that fund transfers, although less than last year, add to the burden of $450,000 that we had to make up for from the health insurance fund. Ms. Proulx said net of revenue, you're at a 4.62% increase. To get to the 3% increase in the mill, she said you would have to reduce the expenditure side by another $619,245. Mayor Bingham asked what the gross spending increase is. Ms. Proulx replied that there is a 2.81% increase. Right now the City is at 1.82%, she said, and Education is at
3.5%, just looking at expenditures. These are just the approved cuts, not including the additional cuts, she said.
ADOPT CITY BUDGET
On a motion by Mr. Scoville, seconded by Mr. Lamoin, the Board voted unanimously, by roll call vote, to adopt the 2012 - 2013 City Budget of $49,899,260.
ADOPT BOARD OF EDUCATION BUDGET
Mayor Bingham asked the Board if they want to make a motion inclusive of Capital and Operational. Mr. Scoville said he would like it to be all-inclusive as it would be difficult enough for the Board of Education. Any leeway we can give them would be prudent, he said.
ADOPT BOARD OF EDUCATION BUDGET Continued
Mr. Lamoin made a motion, seconded by Mr. Paganini, to adopt the 2012 - 2013 Board of Education Budget of $66,444,310 inclusive of Capital and Operational. Mr. Lamoin, Mrs. Pesce, Mr. Scoville and Mr. Paganini voted in favor, and Mr. Bushka voted against. The motion was passed 4/1.
SET MILL RATE
On a motion by Mrs. Pesce, seconded by Mr. Scoville, the Board voted unanimously, by roll call vote, to set the 2012-2013 mill rate at 33.47.
ADJOURNMENT
On a motion by Mr. Scoville, seconded by Mr. Lamoin, the Board voted unanimously to adjourn at 5:47 p.m.
ATTEST: JOSEPH L. QUARTIERO, CMC
CITY CLERK
Respectfully Submitted,
Carol L. Anderson, CCTC
Asst. City Clerk
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