Board of Ed Backs $450K Add to Medical Reserve

The Board of Education voted unanimously Tuesday night to add $450,000 to its medical reserve fund in exchange for the town bonding $450,000 for technology that is now in the school board's proposed 2011-12 budget.

"It seems to be something we should do. I think it would show some good faith here, but it is kind of unusual," said Supt. of Schools David G. Title.

The school board's 9-0 vote late Tuesday came in the wake of anger from town officials over the board's decision last spring to close a $3 million cut to its current budget by using $1.6 million from its medical reserve fund and its plan to use $1.9 million from the fund in the 2011-12 fiscal year.

Unlike the town, the Board of Education's medical reserve fund has a surplus, both on a cash and accrual basis, but the board's use of money from that fund came after a bond rating agency warned the town that the overall accrual deficit in the Internal Service Fund, which includes medical reserve funds for both town and Board of Education employees, as well as a fund for workers' compensation claims, was too low and inconsistent with the town's AAA bond rating.

Ken Lee, of Rhoda Avenue, the only member of the public to speak to the issue Tuesday night, said the entire discussion by town officials has been about the AAA bond rating and ensuring the town doesn't lose it. The town's AAA bond rating dates to the mid-1970s, and it enables the town to borrow money at the lowest possible interest rates.

Paul Fattibene, a school board member, suggested that the Board of Finance be allowed to "bond or fund" the $450,000 for computer switches, but Board of Education member Tim Kery disagreed, saying the word "bond" should be used to ensure town boards didn't fund the switches in the school board's operating budget.

" 'Bonds' ensures it's outside of our operating budget," Kery said. "I don't think we should deviate from what town boards want."

School board Chairman John Mitola agreed. "The representation made by the Board of Finance is that they were going to bond this, so I would leave the language the way it is," he said.

The school board also had a concern that the town could decide not to bond the $450,000 for computer switches, even though the school board agreed to put $450,000 in its medical reserve fund, but Pam Iacono, the board's vice chairman, said the Board of Selectmen earlier Tuesday evening pledged to support the $450,000 bonding request before other town boards.

Title said the $450,000 contribution into the medical reserve fund was for one year only, and the school board added language to the motion to indicate that.

The Board of Finance's vote is scheduled April 5.