Joint boards approve BOE bailout

NAUGATUCK — At a special meeting of the joint boards of Mayor and Burgesses and Finance on Tuesday, a wide, 16-3 majority approved an almost $1 million bailout, though not without reservation.

As conditions of the bailout, the school board will keep borough Controller Wayne McAllister as its business manager through next fiscal year and to switch its insurance broker from USI Insurance Services to CBC Kane Partners.

The school board last Thursday approved concession packages presented by labor unions, which total $592,126. The total sum the school board will request from the borough will not exceed $955,906.

Finance Board member Dan Sheridan (left) and Second Deputy Mayor Mike Ciacciarella voted against bailing out the Board of Education, but the fund transfer passed, 16-3.

Finance Board member Dan Sheridan (left) and Second Deputy Mayor Mike Ciacciarella voted against bailing out the Board of Education, but the fund transfer passed, 16-3.

Finance Board Chairman Ray Lennon, Jr. said there would not be a transfer of funds for the time being, nor would other borough department heads be asked to make cuts. The borough will wait until the end of the fiscal year, June 30, when officials can “sweep together what’s left of [other borough] accounts and gather monies to make up the deficit, in the same manner as last summer for the previous budget.”

“Ultimately, if it’s not there we’d have to be faced with transferring money from our Fund Balance,” Lennon said. “Those would really be our only two choices for making up the budget.”

A designated amount, $950,000, of the approximately $7.5 million Fund Balance, which secures municipal bonds, was budgeted as a revenue item this fiscal year to insulate the borough from the possibility that property tax revenue might not materialize as budgeted, due to the recession. Mayor Bob Mezzo said Tuesday night that property tax collection was on pace, so that designated amount might be free on June 30.

But no one wants to touch the Fund Balance because it would likely affect the borough’s bond rating. Lennon said drawing from that account would be an absolute “last resort.”

So the real impact of the Board of Education’s deficit will not be known fully until June, when borough officials will see how much money can be scraped from other departmental accounts.

Regardless, borough savings would have otherwise been funneled into contingency and the Fund Balance, which at 7.5 percent of the total municipal budget, is already less than the recommended 10 percent.

And borough officials are more concerned about next year’s budget, which will likely include a deficit even greater than this year’s.

Mezzo said Tuesday that solving that problem will involve “reductions in force”—layoffs, early retirements, natural retirements, building consolidation and reconfiguration, and program cuts.

“There’s no doubt that on Sept. 1, or Aug. 30, whatever the first day of school in 2010 will be, there will be less people working in those buildings,” he said. “And that’s the reality of it. There’s not much that can be done about that.”

Officials were glad to have avoided layoffs during the school year, as those cuts would have had impacted the quality of education and would have saved only $15,000 per teacher at this point.

Some, including Burgess Pat Scully and Finance Board member Dan Sheridan, wanted an assurance that Superintendant of Schools Dr. John Tindall-Gibson’s contract would not be renewed until the school system’s financial situation improved. Burgess Bob Neth spoke to the education board’s autonomy concerns, saying it was entirely up to BOE members whether they have enough faith in Tindall-Gibson’s management to renew his contract. No stipulation concerning his employment was inserted into the final motion, which Mezzo drafted and Burgess Anthony Campbell read.

The motion as voted upon read, “Motion that the joint boards of Finance and Mayor and Burgesses acknowledge and assume the Board of Education deficit in an amount not to exceed $955,906 for the 2009-2010 fiscal year, subject to the immediate action and finalization of the following conditions: (1) The bargaining units provide financial assistance in an amount equivalent to those stated at the special meeting of the Board of Education held on Thursday, Jan. 21, 2010. (2) The Board of Education ensure that Wayne McAllister remain in the capacity of temporary business manager through June 30, 2011 and be provided access to all information necessary to perform said position, consistent with action taken at the special meeting of the Board of Education held on Jan. 21, 2010. (3) The Board of Education affirmatively effectuate the change of the Board of Education’s health insurance agent of record to CBC Kane Partners, effective upon arrival of this motion, in accordance with action taken at the special meeting of the Board of Education held on Jan 21, 2010. (4) The Board of Education, in conjunction with the business office, take all responsible actions necessary to reduce the overall spending deficit for the 2009-2010 fiscal year.”

The motion passed, 16-3. Burgesses Scully and Mindy Fragoso expressed their regret and reluctance to support the measure. Finance Board members Sheridan, Matt Katra, and Second Deputy Mayor Mike Ciacciarella voted against the motion.