Reductions still sought on city and school budgets

Carbone recommends using fund balance

TORRINGTON — Board of Finance members joined Mayor Elinor Carbone on Zoom Tuesday to continue the search for ways to reduce the school and municipal budgets, and are likely to use a portion of the city’s reserve funds to balance it.

Since the municipal budget first was proposed at $57.81 million, Carbone has reduced that by $1.6 million. But that spending plan still would be an increase of 2.5 percent, which, along with the school budget, would increase the city’s tax rate from 46.17 mills to 46.99 mills.

The Board of Education’s proposed $78.30 million budget initially reflected an increase of nearly 5 percent over current spending. Members are still reviewing the spending proposal with the mayor, who said Tuesday that the increase is down to 2.5 percent.

The mayor is recommending applying $2.5 million from the fund balance to the combined budget. If reductions are made to either spending plan, less of the fund balance contribution would have to be used.

“Our recommendation is to use $2.5 million to offset spending plans for 2020-21,” Carbone said. “Using the $2.5 million would bring our fund balance to just over 10.35 percent.”

The city has a fund balance of $15.91 million. The vast majority of the fund balance has been built by end-of-year surpluses from city departments.

“At the end of the year, the fund balance receives a combination of year-end surpluses in various departments and surpluses in revenues,” the mayor said. “At the end of the year, if we didn’t spend those accounts down, then we formulate a budget and tell taxpayers how we’ve spent their money. This year, there were savings in line items because we had a mild winter.

“We leave those surpluses in the line items of the budget, and they flow into the fund balance,” Carbone said. “That’s how our fund balance went from $5 million in 2014 to $15 million in 2020.”

The fund balance addition isn’t always used in full, Carbone said. “Last year, you’ll recall that our

plan was to appropriate $2 million to offset the impact of spending plans, so the mill rate (would) have a more modest increase,” she said. “Based on this year’s budget performance, we won’t use any of that $2 million appropriation.”

The coronavirus pandemic is part of the concern for the schools budget, with unknown expenses looming for the 2020-21 school year, she said. “We met with the superintdendent, the board of ed chairman and the schools business manager, and we talked about the unknown,” the mayor said. “They don’t know what it’s going to cost to bring kids back to school next year; including the cost of personal

protective equipment, transportation costs; if the state requires a.m. and p.m. sessions ... there’s just a vast unknown at what those costs are going to be.”

The school district is tracking all COVID-19 expenses separately. School districts across the state are hoping for reimbursement of those specific pandemicrelated costs. But if there is no reimbursement, or it’s less than 100 percent, the costs would have to be budgeted into the regular school spending plan. “That will also impact our fund balance,” Carbone said. “So we can use the fund balance until reimbursement occurs.”

Finance board member Mark Bushka asked about the ongoing meals program, which has provided breakfast and lunch to families since schools were shut down in mid-March. That program

has totaled about $400,000, Carbone said.

“Is there any money left in the school lunch account?” he asked, wondering whether the school district already was being refunded for the extended meals program.

Carbone said that cost could be reimbursed as a COVID-19 expense. “I would think those expenses would be reimbursed by FEMA,” she said. “We will tell them.”

The mayor is meeting with the school board next week before the regular City Council meeting June 1. “We are trying to identify all COVID-19-related expenses,” she said. “It will make a difference.”

Finance board member Christopher Anderson pointed to the fund balance as “a last resort.”

“I just want to say that we

always pause before spending anything out of fund balance,” he said. “It should be a last resort, but given the projected surplus, (the fund balance) does help. I think we’re on the right track.”

Anderson worried about using the fund balance each year. “If we start showing a consistent pattern of needing the fund balance, are we aiming too high? Are we establishing a pattern?” he asked.

As it stands, using $2.5 million from fund balance, Carbone said the goal is to get the city and school budgets’ increases down to 2.5 percent. “So now we have to see what additional cuts are needed for a zero increase on the mill rate,” she said. “We have to button it down. It’s still a moving target.”

Carbone said that to date, city and school budgets still need to be reduced by about $750,000

each.

Finance board member Lance Boynton brought up wage concessions with the employee unions, which recently was suggested as a way to reduce spending. “Any progress on that?” he asked.

Carbone said she was meeting with unions to discuss it.

“It’s not looking very positive, to be honest,” she said. She pointed out that wages for public safety departments who have been working on the front lines during the pandemic, for example, made it difficult to consider cutting or reducing wages. “They’ve had to respond to calls in full PPE, and feel they’re at great risk,” she said. “There’s no way of knowing what they’re responding to, and they’re always at risk of bringing it (COVID-19) home to their families.”