Board of Education members managed to reduce their spending increase for 2012-13 to zero as was approved by the Board of Finance at budget time, while adding in $200,000 for technology upgrades.
Supt. of Schools James Agostine had proposed meeting the $923,075 spending decrease by reducing the medical reserve fund by $542,000, saving $50,000 in unemployment compensation due to no layoffs and using $531,075 from an enterprise fund that was carried forward.
Several board members had serious concerns over cutting the medical reserve, but after lengthy debate, Mark Antinozzi made a motion to approve the budget revisions Monday.
"Even though we're not happy with some of the decisions that were made, we have a good program in place," he said. "I think we should vote on this tonight and get it over with. I think we have to bite the bullet and hope for the best. Trust our consultants. We have a viable education system."
Joseph "Jay" Fiorello of Ovation Benefits, a consultant to the Board of Education, told members reducing the medical reserve from about $2.7 million to $2.2 million would be "perfectly fine," accounting for 24-25 percent of the $9.1 million budget for claims. And Agostine strongly recommended that the board support the reduction.
"There is no other 'good elsewhere' to take these funds from," Agostine said, adding the only other alternative would be to take money away from the operating budget.
The board passed the budget adjustments by a vote of 6 to 3, with Jeff Guttman, Chairman Darrell Trump, Dr. Alan Vaglivelo, Kelly Plunkett, Mark Antinozzi and George King in favor and Secretary Mark Hughes, Donna Lane and Lee Crouch against.
No 'Backstop' Guarantee
When Board of Finance Chairman Mark Reed and Vice Chairman Mike Manjos proposed reducing the school board's medical reserve as one way to get its spending increase down to zero, they spoke of the town serving as a backstop — pumping money back in if claims ever make the reserve too low.
However, neither the Board of Education nor the Board of Finance approved a policy to that effect.
"Where is it in writing that the Board of Finance is going to backstop this?" Lane asked. "That if we reduce it by $542,000 and something catastrophic happens, they'll give us the money."
Agostine said, "I have to go on their word. It's been televised. It's in public meeting minutes."
Lane pointed out that the "backstop" proposal came from two finance board members without approval from the rest of their board. She said she does not want a repeat of 2009, when the school board reduced its medical reserve only to end up with a $460,000 shortfall.
Trump said the Board of Education will work on drafting its own policy for its medical reserve before seeking input from the Board of Finance.
Hughes said, "If we make the reduction now, Donna's right, there's no backstop. Where do we get the money?"
Trump said, "Our consultant told us $2.2 million is fine."
Hughes then wondered if the board has been in this self-funded health care program long enough to feel comfortable with the reserve at that level.
Guttman asked Fiorello what his other clients' reserves look like. Fiorello said they're "all over the place". However, he added that most strive to have a reserve somewhere in the 18-22 percent range.
"Most are south of that," Fiorello said. "With recent budget issues they went as thin as possible."
Hughes expressed his frustration that school board members had to adjust to a budget minus $923,000 that the Board of Finance cut from their request — a budget they never agreed to.
Plunkett agreed with Hughes sentiments, but said, "I'm with you Mr. Agostine. I don't want to see where these other cuts will come."
When the public spoke, Ernie LaFollette, chairman of the Monroe Citizen Audit Committee, noted how using the enterprise funds enabled the Board of Education to avoid cuts to its operating budget, while actually spending $200,000 on its computer replacement program — an expenditure that was not included before.
"You really have increased your budget to me by using the enterprise funds, money that wasn't in the budget," he said. "But it was not paid for by taxes, so the public shouldn't have a problem."