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04/22/2020 08:15 AMRegion 4 Superintendent of Schools Brian White presented the Deep River Board of Education (BOE) proposed fiscal year 2020–’21 (FY 21) budget to the Deep River Board of Finance (BOF) on April 14.
Before presenting the BOE’s proposed $5,470,471 budget for FY 21, an increase of 3.92 percent over the current fiscal year, White described the BOE’s approach to the budget’s development as “zero-based budgeting.”
“One of the things we talked a lot about throughout the budgeting workshop process in Deep River was this notion of zero-based budgeting and really starting with the assumption, that for each line in the budget, you start with zero. You identify the needs of the building and you build the budget accordingly,” said White.
Budget Process
The presentation of Deep River’s elementary school budget for FY 21 to the Deep River BOF is one step in the overall town budgeting process. This year, due to Governor Ned Lamont’s Executive Order 7I, the town budget will not be approved by voters at an annual town meeting on the third Monday in May, as per town ordinance.
“The executive order directs that the Board of Selectman will authorize the Board of Finance to adopt a budget and to set a mill rate…and no one is happy with this process, but it’s the executive order’s law and we don’t have a choice,” said First Selectman Angus McDonald in an April 15 interview with the Courier.
The BOF will have a budget workshop on April 28, when the town budget will be sent to a public hearing on April 30, according to McDonald.
The town is planning to develop a system to respond to questions and receive comments on the FY 21 town budget, whether through the town web site or by email.
Deep River BOE Budget
At the April 14 BOF meeting, White discussed key areas of the BOE budget before going through it in more detail. He pointed to the budget’s most significant driver, an 18 percent increase in the cost of health insurance, while explaining a new $240,000 line item as a contribution to a self-insurance reserve fund.
Upon learning that the self-insurance fund was operating at a very low level, the board included the contribution, splitting the cost “across all of the groups that the plan covers. We felt it was necessary to ensure the health of the fund next year,” said White.
Another new line item includes the salaries of cafeteria workers in an effort to be transparent about the true costs of the food service program.
This change was made after learning that the “subsidy coupled with the revenue the program generates through lunch sales was inadequate to cover the costs. As a result, all of the towns in their own way had to often cover a deficit at the end of the operating year to pay for the full cost of the cafeteria,” said White.
The last new line item is for a loan to cover the costs of an energy project completed at the elementary school last summer.
White also discussed enrollment projections and how they correlate with employee salaries and benefits.
With 235 students enrolled this year and 233 projected for next year, “it’s a difference of two students,” said White. “[It’s] not a significant enough change to see a positive change in staffing. With that said, after looking carefully at staffing levels across the entire school, we do have a reduction in this year’s budget of 0.5 staffing position in the area of special education.”
After detailing the budget by object code, White was asked questions by various BOF members. The topic of these questions varied, ranging from the accuracy of the data used for cost savings on gas and electricity, to the costs associated with a visitor software that safeguards students from sexual predators.
Back to the Caf
White was asked repeatedly to explain new line items to cover cafeteria worker salaries.
“Why all of a sudden are we incurring such gigantic, incremental costs in the cafeteria?” BOF Chair George Eckenroth asked.
“It’s a matter of how you look at it,” said White. “I don’t know if it’s all of a sudden. I think what you have in front of you is the true cost of your cafeteria, at least as it pertains to your salaries.”
Eckenroth asked BOE Chair Paula Weglarz to explain how the food services program and salaries were funded in the past.
“It would usually be a transfer of small amounts of money from here and there,” said Weglarz. “There was no transparency in terms of salaries or anything like that. It was always a little shuffle if a certain line item had a little extra, it would be shuffled over.”
Eckenroth expressed frustration that “it’s additive on top of what you already have is what gets me confused. Transparency is correct, but are you reducing other lines that it came from before? I should be net. It was always paid for in the past, why isn’t it netting out this year?” he asked.
White said it may have varied by year depending on the revenue generated through lunch sales.
“The fact remains that it varied by year to year in the amount of money that would have been required to make the cafeteria whole at the end of the year and source from which it was transferred to the best of my knowledge…there was never a go-to source,” said White. “There is not a bunch of extra money in this budget if that is what you’re striving at. That goes back to the notion of a zero-based budget.”
Future Costs
White was also asked whether the BOE had looked at ways to minimize increases due to the precarious financial situation with which many are currently faced as a result of the COVID-19 pandemic. White discussed meeting the contractual obligations the school system is still bound to including salaries and transportation costs, despite closing the schools and moving to distance learning.
It would be too early to predict any kind of surplus for the end of the year, according to White.
After further discussion, First Selectman Angus McDonald brought up the state’s minimum budget requirement (MBR), as it relates to increased costs associated with health insurance and funding errors in programming.
MBR prohibits towns from budgeting less for education than it did the previous year, unless it meets specific exceptions.
“Three years from now, when we’re not going to have to fund insurance concerns, when we try to pull that $75,000 out of our elementary school budget, we get whacked from MBR,” said McDonald.
White expanded on the need to replenish the self-insurance fund based on the recommendation of an independent insurance consultant based on industry standards. He reported that the recommended amount per plan participant was based on the seven independent entities under the insurance fund at the time. The figure used for each plan participant’s contribution will change with the anticipated departure of Essex municipal employees, according to White.
McDonald reported that Deep River is also considering changing its municipal health insurance coverage.
“In terms of how it affects the overall picture for us on the Board of Ed side, we employ 300 employees, so even though there are seven entities, the lion’s share is BOE employees,” said White. “The entities of both Deep River and Essex on the municipal side, although significant, are relatively small compared to the overall size of the BOE employee pool. While it does change our size, I don’t know that you’re going to have a critical mass leaving that group after the departure of the municipal employees of Essex and Deep River.”
White also gave an overview of the proposed $21,163,741 Region 4 FY 21 budget, which represents a 2.87 percent increase from last year.
Discussion continued specific to costs associated with the Region 4 budget, with several members of both the BOF and BOE expressing concerns related to the changed financial circumstances and budget process due to COVID-19.
“I’ve tried to encourage people, ‘Go out and express your opinion, send your comments to the board,’ and I’m hoping you are receiving them, but again, how can we make this more palatable?” BOF member Lori Guerette asked.