Town Officials: Reserves should cover $1 million education budget shortfall

Print More

Democrats criticized Republican leadership for a more than $1 million shortfall in the 2018-19 Board of Education budget, calling it a “prime example of management weakness that suggests a need for more accountability,” according to a press release by the Democratic Town Committee’s executive board.

“In all cases, the hard-earned money of the taxpayers of Monroe needs to be shown the respect it deserves,” said Patricia Paniccia, the DTC chairwoman.

But town and education officials say higher than expected special education costs and bad years of claims in the school board’s self-insured medical insurance plan were beyond their control.

Further, Board of Finance Chairman Michael Manjos expressed confidence that reserve accounts can cover the difference.

“I’m fascinated the Democrats threw this out,” said Manjos, who is a Republican.

Manjos said Board of Finance, Board of Education and Town Council members knew there was going to be a problem during the last budget process and all voted unanimously on how to handle it, as well as approving the current budget, which was passed by voters on the first referendum.

In response to criticism of Republican leaders, who hold the majority on town boards and commissions, not knowing about the problem sooner, Manjos said central office should have known about the shortfall in October when student enrollment was finalized, but the Board of Finance was not informed until the spring.

During the budget process, Manjos said finance board members kept asking Gabriella DiBlasi, the school district’s finance director at the time, for more data on health care and special education.

“They never had it,” Manjos said.

DiBlasi resigned on June 30 and Frank Connolly, who was hired as the interim finance director, has been working with the Board of Education and Board of Finance to resolve the problem.

“We work well together,” Manjos said. “I have a very good relationship with the Board of Education and Superintendent Jack Zamary and I talk weekly.”

“In terms of the special education costs, knowing earlier is what should have occurred,” Zamary said Wednesday. “We put a number of controls in place, so we can monitor the costs month-to-month.”

As of July 22, Zamary said special education was a total of $763,000 over budget, adding $597,000 worth of grants and contingency funds were applied to it.

“The balance of the overage in special education was covered through a budget freeze,” he said.

Board of Education Chairwoman Donna Lane, a Republican, said the issues of escalating health insurance costs and increases special education expenses are not unique to Monroe.

“The Board recognizes clearly the importance of staying in line with its budget requirements,” Lane said.

Health insurance costs linger

First Selectman Ken Kellogg, a Republican, said the school district switched to the State Partnership Plan 2.0 when their self-insured plan proved too expensive, but while it is less costly, Kellogg said there is still a runout of claims on the self-insured plan.

Manjos said a million dollars is a fair estimate for the 2018-19 budget deficit, but the town will not have the exact figure until numbers are closed out at end of September.

A self-insured health care plan can save money when claims are low, but Zamary said the Board of Education ran into four bad years of health claims, drying up their plan’s reserves.

The superintendent said a meeting was held last summer with the first selectman and representatives from the Board of Finance, Board of Education, Town Council, central office, unions and the school district’s insurance broker to resolve the problem.

“We had all the liability,” he said of the self-insured plan. “We can’t control people being sick. Now we’re in a much larger pool. The risk is shifted from the municipality to the state.”

While the cost of the state plan can rise from year-to-year, Manjos said costs are fixed once a budget is adopted.

Lane said, “it is important to know that the board took proactive steps a year ago to reduce the growing costs of insurance by working with all employee unions to change insurance plans for the current fiscal year. While the budgetary shortfall from the previous insurance plan is significant, that shortfall would have been substantially larger if the board had not taken these steps.”

A 10-248 account

Manjos said the town has been taking Board of Education budget surpluses at the end of fiscal years and putting the money in a 10-248A account, because state law does not allow a school district to carry a surplus over from year-to-year within its own budget.

Manjos said he believes the 10-248A account should cover whatever remaining shortfall there is, adding there is an extra layer of accountability because it takes approvals of both the Board of Finance and the Town Council to use the funds.

He said savings and transfers within the education budget can also help and, if that is still not enough money, the Town Council and Board of Finance could vote to use money from the town’s undesignated fund balance.

Manjos said the town fund balance is healthy, accounting for about 16 percent of the town’s operating budget.

A regional center

When an individual education program (IEP) determines a special education student’s specific needs include an outplacement to receive the required services, the home school district pays for it.

“By law, we have to pay for that if it the student’s needs surpass what the district has,” Zamary said.

Though only a small percentage of students require outplacements, Zamary said the costs are significant.

The superintendent said he has been working with 10 other school districts in the state to open a regional special education center to save money through shared costs.

“We’re closing in on a site,” he said. “We’re hopeful that, a year from now, the center will be up and running. The goal is to fulfill every child’s needs as efficiently as we can.”

Leave a Reply

Your email address will not be published. Required fields are marked *