This is the text of a Motion that BOE Member Bill Wellman made at tonight's BOE Meeting:
"During the current year, the school system operated on a budget of $55,552,177. That budget is recognized by school administrators as having been a “good budget.”
The Board of Education is responsible for proposing a budget for the New Milford School system each year. In doing so, they rely on information provided by the Superintendent of schools and her staff. This year the Board of Education originally requested a budget for the 2008-2009 school year of $59,115,622 or an increase over the 2007-2008 budget of $3,563,445.
Although mandated by its own strategic parameters to consider the ability of the town to finance its budget, the Superintendent presented no evidence to the Board with respect to the town’s ability to finance the education budget and the Board required none.
Subsequently, the Mayor proposed a budget to the Town Council that reduced the increase requested by the Board of Education by $1.75 million. The Town Council further reduced the increase by $1.1 million. The actions by the Mayor and the Town Council appear to have been motivated by their concerns about the ability of the Town to afford such an increase in the coming year.
During the Town Council’s deliberations, members of the Board of Education raised the issue of whether the Board was entitled to use of a substantial portion of a surplus available in the “Internal Service Fund”, a town fund dedicated to financing medical costs for town and school employees and retirees. The Town Attorney advised that those funds could not be turned over to the Board of Education; and the Town’s Chief Financial Officer, Ray Jankowski, pointed out that the Board of Education had been substantially underestimating the revenue the fund would receive from co-payments by the fund’s school beneficiaries resulting in higher taxes to the taxpayers of roughly $500,000 per year for, at least, the last two years.
The Superintendent reviewed the history of the fund from the school system’s perspective and confirmed Jankowski’s findings. The Superintendent further acknowledged that the Board of Education’s budget for the coming year, 2008-2009, included such an underestimate again.
The Superintendent’s report concluded that there was a need to restore the citizen’s trust and confidence in the process and suggested that there be better communication with the Chief Financial Officer’s office but did not suggest any way to deal with the error in the coming year’s budget.
It is important to note that underestimating the co-payments of fund participants has no benefit to our children, the educational system, plan participants, or any individual. The consequences are to increase the taxes paid by the taxpayers, and to create a surplus in the “Internal Service Fund”. It is, also, important to note that there is no allegation, nor any evidence, that these surplus monies were used in 2006 or 2007 as a slush fund or benefited any individual.
The taxpayers of the Town of New Milford, however, were harmed by having to pay higher taxes than necessary and the school system may have been harmed by not having these funds available for other educational purposes. Clearly, and at a minimum, the Board should take action to correct this year’s budget request.
As the budget is our responsibility, I believe the Board should inform the Mayor, the Town Council, the Board of Finance and through them the taxpayers of the Town that we regret the error and specify what we as a Board believe should be done with the funds so recovered - whether it be to reduce the budget request or to apply the funds to a specific use.
Since the Board of Education adopted its requested budget, other developments have impacted our budget request but you would never know it from the recent hearing at the Board of Finance In addition to myself, the Chairman of the Board of Education, the Superintendent of Schools, and other members of the Board of Education were present. Comments from members of the Board were limited to requests that budget monies be restored – no mention was made of the developments which make our original request excessive.
Since our original request was submitted, (1) the Superintendent has identified $280,000 in savings, (2) a majority of the Town Council has indicated that the Board could use $500,000 from the capital reserve fund for its capital needs instead of budgeting that amount; (3) health insurance premiums will be reduced by $680,000; and (4) around $500,000 will not be required for the internal service fund. In sum, we now need $1,960,000 less than we did at the time we submitted our budget request but everyone continues to act as though we need the entire budget restored. This is not the way to restore trust and confidence. If this Board is serious about restoring trust and confidence, we must be candid with the Town government and the taxpayers, and see to it that our actions match our words.
Above all we must recognize that our responsibility is not just to spend but to spend wisely and take the steps to do so. Until we do, we are not entitled to trust, confidence or credibility.
I move that the Board direct the Superintendent to inform the Mayor, the Town Council and the Board of Finance in writing of our error with respect to the internal service fund, apologize for it and inform them that we are reducing our budget request for the coming year by $1,960,000 – the amount of the savings we have already recognized."
The Motion failed 7-2; the two that voted for it were Wellman and Turk.
Town Treasurer Ray Jankowski attended the Meeting.