NAUGATUCK — It’s official: the Board of Education managed to close its books for the 2009-10 fiscal year without a bailout from the borough. In fact, according to information released this week by Chairwoman Kathleen Donovan, the school system closed out the budget year June 30 with a surplus of more than $2,000.
In January, the joint Boards of Mayor and Burgesses and Finance said they would supplement the struggling school board’s budget with as much as $956,000 from the borough’s rainy-day fund, which also secures its municipal bonds.
The school board’s deficit projections decreased each time they were announced after that — in July, as the numbers were being compiled, the board projected it would need no more than a quarter-million dollars, or about 26 percent of its original projection, to close out its books.
But the borough never had to make good on its controversial promise of a bailout worth almost $1 million. Donovan said in a press release the change in the school board’s fortunes is due to a surplus of more than $100,000 in accounts funding employees’ health insurance benefits.
Wayne McAllister, borough controller and acting Board of Ed. business manager — who was assigned the school board post as a stipulation of the bailout — tells a slightly different story. He said the school board’s self-funded insurance program had never been the problem afflicting the 2009-10 budget, which the board did not adopt until January.
“The health insurance was budgeted properly in 2009-10,” he said. “It was budgeted improperly in 2008-09. It was overall sound fiscal management practices throughout the [2009-10] budget, including furlough days, and not spending all the appropriation in the supply accounts and such, that did it.”
Among said management practices were austerity measures such as a spending freeze on discretionary supply accounts and an imposed limit on the overtime non-certified staff members could work.
“I commend my colleagues on the BoE for working through a very difficult and tense time, recognizing that changes were needed in the BoE business office and putting a halt to any discretionary spending or hiring,” Mayor Robert Mezzo wrote on his webpage. “While there has been much criticism directed at the [school board], of which I am a member, the reality is that difficult decisions were ultimately made and sound fiscal management was restored. … resolving the systemic issues in the business office in this economy was no small task.”
In addition to management directives targeting discretionary spending and hiring, the Naugatuck Teacher’s League in January approved a mid-year concessions package worth more than $500,000. Teachers, administrators and Superintendent of School Dr. John Tindall-Gibson gave back unpaid furlough days, and the union representing secretaries, custodians, paraprofessionals, maintenance employees, and cafeteria workers agreed to take a pay freeze for the third time in a decade.
“It was a collaborative effort,” McAllister said.
Funding the future
The school board in June finished writing its 2010-11 budget, which hinged upon a change of insurance carriers, a redistricting including the consolidation of Hillside and City Hill Middle Schools, and a 15-percent staff reduction including 14 layoffs.
McAllister acknowledged that when it comes time to write the 2011-12 budget, things could get hairy.
“From indications, the economy will continue to run up against the same challenges we’ve had in the last year,” he noted. “Revenues will be flat, if not lower. Expenses, contractual expenses, right now are significant in terms of labor.”
The 2.5 percent raise borough teachers were promised for 2011-12 in their current contract will add $600,000 to the board’s expenses that year, and administrators have said supplies and textbooks accounts, which were cut deeply this year to keep the current budget in line with a small funding increase from the borough, will soon need to be restored to previous levels.
But, McAllister said, some of the measures taken to rein in expenses this year will carry over into next year’s spending plan.
“We have an early retirement plan at the board. That will be a sustainable cost reduction measure,” he said. “We had those layoffs. We’re down over 50 full-time positions. That alleviates some of the budgetary pressures for next year.”