‘We’re in the hole’
Danbury dips into savings amid calls for school funding
DANBURY — The city’s finances appear to be at an inflection point.
“I think we’re in good position, but that doesn't mean we’re going to remain in good position if we don't remain disciplined,” David St. Hilaire, Danbury’s finance director, told the City Council on Tuesday. “I remain cautious. I think we’re doing well given the circumstances, and I think we’re doing as well as anyone can expect.”
The mayor plans to dip into $6.75 million of reserve funds to cover the proposed $267 million city and school budget, which would keep the tax rate flat for the third consecutive year, even as some call for more education spending. Overall spending would increase by $5 million.
The city has built up its “rainy day fund,” and with the coronavirus pandemic hurting the city’s revenue and taxpayers’ pockets, it’s time to use that money, St. Hilaire said.
“It’s raining,” he said. But members of the public, school board and some on City Council are demanding the city increase the proposed education budget.
After the school board wrote a letter to the community describing the district’s challenges and requesting $4 million more in education funding, public comments in support of the schools flooded into City Council for its virtual budget public hearing Thursday.
This included an appeals from parents, school staff and a ninthgrader, who argued “education is the pillar of our community.
“I may only be 15 and not of voting age, but that doesn’t mean my issues and concerns can be shoved under a rug,” Danbury High School student William Sweeney wrote in an email which was read to the council over Zoom.
“All I ask is that you give the students and teachers of Danbury the tools needed to learn and inspire,” Sweeney wrote.
The mayor’s about $146 million education plan includes $137 million in city funds, an increase of
$1.25 million from this fiscal year. The schools would also use $5.1 million in federal grants and a
$3.5 million district surplus from a prior year.
But city officials, including leaders on City Council, have said they want to avoid a tax rate increase when businesses and community members are struggling financially during the coronavirus pandemic.
“We’re not going to burden taxpayers right now,” St. Hilaire said Tuesday during an ad hoc council meeting on the education budget. “We know they've been dealing with all the difficulties of COVID, unemployment, businesses have been closed. Now is not the time to resolve all of our problems.”
But for some parents, the pandemic is a reason to increase school funding.
“Our students are suffering, and they’re suffering this year more than ever,” wrote Meagan Guidotti, an educator with three children.
Parents said they wanted to see their children back in school full-time, something the district is working toward with help from federal coronavirus relief funds.
‘In the hole’
In total, the district expects to receive $41.2 million in federal grants, with $4.6 million of that already spent this fiscal year. The rest of the grants will be stretched out until fiscal year 2024-25, with about a third of that offsetting some operational needs.
School administrators project a $31 million hole once the federal funding is exhausted if the city and state don’t commit to a steady increase in funding over time.
The city expects $32 million in federal grants, which St. Hilaire said came at the perfect time.
“That’s going a long way, but we have to be very smart on how we manage that and that will determine whether we’re going to be able to weather the storm or not,” he said.
Some of those federal funds are expected to offset the revenue losses in the ambulance, water and sewer funds.
Overall water and sewer usage increased because residents were home more often during the pandemic. But commercial usage declined, and these properties are charged a higher rate, so revenues fell, St. Hilaire said.
Revenue to the ambulance fund took a bigger hit because fewer people were transported to the hospital during COVID, he said.
Other municipal entities, such as the Danbury Parking Authority, Tarrywile Park Authority and the Danbury Historical Society and Museum, faced falling revenue, too, he said.
Meanwhile, COVID-19 drove up the cost of materials, St. Hilaire said. Increased pension and health insurance costs are among the driver’s in the city’s budget.
With interest rates low, the city plans to refund its debt in the coming month. The goal is to use three-quarters of a million dollars in savings toward this year and a half million dollars in the coming years, St. Hilaire said.
Danbury has saved $6.6 million since 2010 by refinancing its debt, Mayor Joe Cavo said.
“Those work very well,” he said at a meeting Monday.
The city is working on a plan to avoid dipping into its reserve funds again, St. Hilaire said.
“We’re in the hole,” he said. “You go too much in hole, it’s going to be very difficult to get out of whole without a lot of pain. I mean, there's going to be pain as it is, but you have to be able to manage your way out of it.”