$10.9M At Center Of Dispute
Schools Say City Wrongly Took Control Of Reserve Fund
NEW BRITAIN — The leadership of the school system is accusing Mayor Erin Stewart’s administration’s of wrongly taking control of nearly $11 million in a reserve fund.
“You have taken monies belonging to the board of education and its employees/retirees without authorization to do so,” the school board’s attorney told Stewart in a letter.
But Stewart counters that the change is only an accounting matter, and that she’s merely moving the city back to an accounting system it had used until 2015.
“It’s a non-issue,” she said in an email Monday. “I am not sure what their concern is, I’d think they have bigger things to be worrying about like our student test scores.”
Disagreement over the self-insurance fund is just the latest sign of strained financial relations between the city and its school system.
New Britain, among the state’s poorest cities, hasn’t raised its share of the education budget in two years. City leaders argue that local taxpayers can’t afford more, and point out that the schools have been getting increases in state aid even when municipal funding was flat.
In the current dispute, Superintendent Nancy Sarra wants the city to return control of the $10.9 million reserve in the school system’s medical self-insurance fund. City government merged that money in the 2018-19 budget with its own self-insurance fund for municipal employees.
The schools’ self-insurance fund pays out medical claims from monies paid in by the school system and its employees. In recent years, educators had built the reserve of just under $11 million.
When Stewart announced in the spring that she wouldn’t increase the school budget from last year’s level, educators said they’d use some of that reserve to cover shortfalls so they could avoid layoffs.
Stewart’s administration maintains that the city and education self-insurance funds were handled as a single account until 2015, and that the new budget merely restores that system.
Sarra’s administrative team, however, says the city has begun paying less into its own fund, which is already in the red. Merging the funds will make the city’s finances appear healthier while depriving the school system of money it had built up over years, they say.
“Plainly, the city is not entitled to unilaterally take such monies,” reads a Sept. 13 letter to Stewart from school board attorney Joseph McQuade.
If the city won’t change its position, the school system will either sue or withhold the roughly $14 million it has expected to pay into the fund this year, McQuade wrote.