PROSPECT — A projected surplus in Region 16’s 2018-19 budget never came to fruition, and now Beacon Falls officials may have to go back to the voters for approval to allocate funds to make up the difference.
Historically, the Region 16 Board of Education has included projected budget surpluses as revenue for Beacon Falls and Prospect, which make up the region, when building a budget for a new fiscal year. The projected surpluses are used to offset the towns’ education expenses.
The 2019-20 school budget included a projected $300,000 surplus from the 2018-19 budget. The projected surplus divided up to about $114,000 for Beacon Falls and roughly $186,000 for Prospect, based on the ratio of students from both towns.
Last August, after the school budget and both town budgets were approved, the school board voted to transfer up to $407,314, which is 1% of the 2018-19 school budget, of unspent funds from the budget to its capital non-recurring account for capital projects. An audit of the 2018-19 school budget showed the region ended the fiscal year with a $243,000 surplus — not the projected $300,000 — and this money was transferred to the capital non-recurring account, leaving nothing left to return to the towns.
School board Chairman Priscilla Cretella said, during the board’s Feb. 12 meeting, the norm over her 30-plus years on the board has been to try and carry over an anticipated surplus from one budget to the next to help the towns. But, she feels, if the board needs the money for the students than it should be spent.
“The problem is both towns have gotten used to that (anticipated revenue),” she said.
On June 18, after all the budgets were approved, school officials sent letters to Prospect Mayor Robert Chatfield and then-Beacon Falls First Selectman Christopher Bielik outlining the towns’ education payment schedules. The letters also stated that the projected $300,000 surplus didn’t exist anymore because officials anticipated transferring the money for capital projects.
The matter didn’t come to the forefront until Beacon Falls officials realized in November that the town’s payment schedule was $114,000 more than the town budgeted. Officials described this delay as a failure in communication.
The lack of a surplus has had different ramifications in Beacon Falls and Prospect.
In Beacon Falls, the town is short roughly $114,000 for its education payments. Beacon Falls Finance Manager Natasha Nau said the town used the net education cost from the school budget that was passed in May, which factored in the projected surplus as revenue, when building the town budget.
Beacon Falls First Selectman Gerard Smith said town officials also used figures from the state for the town’s Education Cost Sharing grant, rather than using the projected figure included in the school budget.
This nullified what school officials thought was an additional $97,560 in ECS funding the town received in January, according to town officials, since the town had already budgeted it.
Chatfield said he didn’t factor in the projected surplus into Prospect’s budget as revenue this fiscal year. He used to, he said, but hasn’t done it the last few years after the surplus came up short one year.
Chatfield said he’s used surplus funds the town receives from the region to pay for capital items. This year, Prospect received about $200,000 more in ECS funding than it budgeted, which reduced the town’s education payments. At its Feb. 4 meeting, the Prospect Town Council approved transferring the money from the general fund to its capital non-recurring account to put toward school expenses for the 2020-21 fiscal year.
In Beacon Falls, though, the town would have to scramble to come up with the $114,000 unless the school board rescinds its vote to transfer the surplus funds or makes up the difference, Smith said.
If Beacon Falls has to appropriate additional funds, voters in town have to approve it. Any town expenditure over $20,000 has to go to a town meeting for a vote.
Since the issue came to light, officials from the town and region have had discussions on how to deal with it.
“We’re definitely trying to work together,” Nau said.
During the school board meeting, board member Ben Catanzaro of Beacon Falls, who was elected in November, said there’s concern about what would happen if the town has to make up the difference and voters reject the appropriation.
“At the end of the day money has to go from point A to point B,” he said.
Superintendent of Schools Michael Yamin said expenses and revenues are fluid. He said the region is happy to work with Beacon Falls on the issue. He added the school board worked with the towns to cover the loss of ECS funds when the state cut the grant a couple of years ago.
“It’s been a two-way street since I’ve been here,” he said.
Yamin said the region’s budget is still a moving target. He said officials anticipate having surplus funds in the budget that could reduce the towns’ education payments later in the fiscal year. He said officials will have a better idea of where the budget stands by April 1.
Smith said if school officials plan to adjust the towns’ payments, town officials need to know because they have to figure out how to come up with the money.
Moving forward, school officials feel it would be better to not include projected surpluses in the school budget so that figure isn’t counted on by town officials.
“Revenue streams move constantly and it’s just one more moving target to become a problem if that money doesn’t exist, as it didn’t this year,” said Tony DiLeone, the region’s director of finance and business operations.