NEW BRITAIN - Mayor Erin Stewart issued a memo to Schools Superintendent Nancy Sarra and Board of Education President Nicholas Mercier on Wednesday afternoon in response to a presentation at the school board’s meeting on Tuesday.
Kevin Kane, the chief financial officer for the school district, presented the Board of Education with a summary of the impact of Stewart’s budget proposal on the district.
The mayor’s budget proposal flat-funds the Board of Education at this year’s amount. Kane warned that without a budget increase, the school district may face layoffs.
In the memo, the mayor wrote: “… the Board of Education budget is at the highest number it has ever been because of my administration. As a prior member of the Board of Education, I am keenly aware of the needs of our schools and students. The City has a proven track record of funding the Board of Education. In fact, the BOE received an additional $2.5 million in the current year budget, which goes annually toward the MBR [minimum budget requirement] - we were told this money was needed just to ‘maintain the status quo.’
“It is my responsibility to ensure that the citizens of the City of New Britain continue to receive essential services and that our students have the best education possible.”
Stewart told The Herald she was disappointed that Kane gave a presentation to the Board of Education without asking her or city officials to outline the budget proposal to the board.
“I never give a presentation to the City Council about the Board of Education’s budget proposal,” she told The Herald. “We ask them to bring it to us. If the Board of Education wanted us to give a presentation on what my budget proposal entails, I would absolutely 100 percent go over there and present ourselves.”
Stewart was not at the Board of Education meeting on Tuesday, but she received the PowerPoint presentation the following day.
Stewart said the numbers provided in Kane’s report don’t show the financial reality of what the city faces.
“It all has to do with context,” Stewart said. “What you don’t see in bottom-line numbers are all of the administrative changes that happen to get there.”
Stewart said that Kane’s presentation did not explain that there were mandatory increases to employee benefits, increases to police and fire department contributions and medical and health benefits for personnel, which cover school district employees.
The budget increases in Stewart’s proposed 2017-18 budget come from a few different areas and include: a $3.4 million increase to employee medical insurance; a $1.3 million increase in pension contributions and about an $800,000 increase to the police department’s budget.
City Director of Finance Lori Granato said Kane should not have included debt service as a separate line item in his presentation, because the Board of Education cannot bond and incur debt; the city does it for them.
“Within that debt service number is all education expense,” Stewart said.
Sarra said she understands the decisions the mayor needs to make around budget season, because she has to make similar choices when crafting her budget.
“I think as a city we all understand that we have to make hard decisions. I’ve got to make those hard decisions for the Board of Education, and our mayor needs to make them for every department in the city,” Sarra said. “I know the mayor and I are united in understanding that one of the challenges is the inequity of funding at the state level.”
However, Sarra said, the school district does face financial concerns.
“Our presentation to the board on Tuesday evening was painting a picture of our reality within the city,” Sarra said.
Despite the difficult financial decisions facing both the city and the school board, both the mayor and the superintendent pledged to work together for the betterment of all citizens.
“We are united in our efforts to improve education and overall services in our city,” Sarra said. “We are both lifelong New Britain residents and we are committed to ensuring that there is equity within the city and to fight at the state and federal level for additional funds.”
The Common Council will not adopt a budget until June. Sarra will discuss her budget request with the council’s Consolidated Subcommittee on Thursday, May 18.
Skyler Frazer can be reached at 860-801-5087 or by email at email@example.com.
Full text of the Mayor’s memo:
TO: SUPERINTENDENT NANCY SARRA
CC: BOARD OF EDUCATION PRESIDENT NICK MERCIER
DT: MAY 10, 2017
RE: BUDGET CALCULATIONS
I was surprised to read the New Britain Herald article this morning regarding the incomplete report that was given to you from Board of Education Finance Director Kevin Kane at last night’s meeting.
After careful review of the skewed PowerPoint slides that were presented to you and the information that was given in the article, I would like to clarify a few points.
Let me first begin by stating that the Board of Education budget is at the highest number it has ever been because of my administration. As a prior member of the Board of Education, I am keenly aware of the needs of our schools and students.
The City has a proven track record of funding the Board of Education. In fact, the BOE received an additional $2.5 million in the current year budget, which goes annually toward the MBR - we were told this money was needed just to ‘maintain the status quo’. It is my responsibility to ensure that the citizens of the City of New Britain continue to receive essential services and that our students have the best education possible.
Additionally, the State of Connecticut has yet to produce a final budget and I am anticipating that the City will have to pick up a portion of the Teachers Retirement allocation.
Since FY 14, almost $100 million has been financed by the City-against our bond cap-for school-related projects. That includes $53 million for renovations at Smalley Elementary School under my administration.
What the presentation did not identify were mandatory increases to employee benefits, increases to police and fire department retirement contributions, MERF increases (as the state required percentage went up), as well as all other medical and health benefits.
The General Government increases over the FY 17 current budget are a result of the following:
The primary increases are in Employee Medical Insurance with $3,418,533; the Pension Contributions with $1,336,205; and the Police Department with $833,928.
The increase in Employee Medical Insurance is primarily due the past two years of actual claims being significantly higher than budgeted. As such, the City is budgeting to fund the full annual expected cost of the medical self-insurance fund. The total increase in the General Fund’s contribution to the Medical Self Insurance Fund is $2,939,078 over the FY 17 budget.
As for pension contributions, the July 1, 2014 Actuarial Valuation on the Fire and Police Pension Fund is what determines the yearly City contribution on behalf of these plans. This valuation is done every two years with the City. The Fire Pension contribution increased by $570,502 over last year’s budget and the Police Pension contribution increased by $68,490. Other key factors are the MERF employer rate as the State has increased the MERF employer rate from 10.91% to 12.15% for City Employees and from 14.98% to 16.93% for Police and Fire Employees. The total increase paired with salary increases since all the City union contracts are currently settled is $715,214 higher than the FY 17 current budget.
The increase in the Police Department overall budget is primarily due to the fourth and final year of the COPS Hiring Grant. The Grant subsidized the salary and a portion of the benefits for 7 patrol officers for 3 years. FY 18 represents the fourth year where the City has to fund 7 patrol officers for 1 year. The increase in full time salaries in patrol is $616,789 over the FY 17 current budget.
Again this is the City side breakdown for the FY 18 Mayor’s proposed budget vs. the FY 17 current budget. This does not include prior year, fixed-cost increases.
As you know, the Board of Education does not have to pay any of the aforementioned fixed costs, but the employees are covered under the benefit plans.
For the first time in many years, we have developed a very unique relationship between City Hall and the Board of Education, one that I believe we should all take great pride in. I am disappointed that we were not consulted to ensure that the numbers provided to you represented a real picture of the budget as a whole.
I have said time and time again that if we had all the money in the world, more than the 52% of our annually collected tax revenue would go to our education system. Unfortunately, that is not our reality.
However, we have been a fierce advocate at the state for equality in the Education Cost Sharing formula. Just this morning, we participated in budget workshops with the Senate. The proposal that will be put forth includes many increases and benefits to education in the City of New Britain. They include:
An increase in reimbursement for special education costs, resulting in an amount of $22,769,396 for FY18-an increase of $3,806,436
An additional $109,907 in ECS in FY18; an additional $329,720 in FY19; and an additional $219,813 annually until FY28
Complete reform of the Education Cost Sharing grant formula benefitting Alliance Districts like ours
I anticipate you will support these proposals when released.
While we are hopeful these proposals will pass, the current climate at the state Capitol in Hartford indicates we may be facing additional serious cuts. What type of deficit mitigation plan have you put together in preparation for this? Are you prepared?
I thank you for taking the time to read this memorandum so that we can continue the improved communications we have had in recent years. If the BOE finance director took a few moments to contact us for clarification, this issue could have been prevented. The work that we do day in and day out is for the betterment of our students and community; it is my hope that these clarifications bring us to a closer understanding of how City and Board of Education funding is allocated.