The Fairfield Board of Education opened discussion Tuesday on the Fiscal Year 2013-2014 budget proposed by Superintendent Dr. David Title. The proposed plan carries a 4.86 percent -- or $7.2 million -- increase over the current year's budget.
Prior to the board's discussion, board member Tim Kery provided a model that showed how the combined district and town budgets may impact taxes throughout the next 40 years. Assuming a budget increase of 4.5 percent year, Kery calculated that a 241 percent increase in taxes in 20 years and a 582 percent increase in taxes in 40 years.
'There's Going to Be a Cost That Will Be Hard for People to Afford'
He provided an alternate model in which the budget increased each year at 2 percent by 2 percent, which would result in a 149 percent increase after 20 years and a 221 percent increase in 40 years.
"It's a big struggle for me. I see value of everything we do for education, and then I look across the street and see my 90 year-old neighbor, who struggles to stay in his home," Kery said.
"The stark reality is, if we continue to do this [increase] every year, there's going to be a cost that will be hard for people to afford."
Vice Chair Pamela Iacono agreed.
"The message I'm hearing all around is we can't sustain this growth," she said. "As a board, we're going to have to make a decision on what [programs] we're going to offer and how we're going to offer it."
$5.4 Million Increase to Health Insurance Account
This year's driving force behind the increase had little to do with programming -- health insurance costs account for 75 percent of the $7.2 million.
"My concern is fixed costs that we have no control over," member Paul Fattibene said, referring to the health insurance account and other fixed costs, like salaries.
The proposed hike to the health insurance account is $5,431,206, bumping the total from $16,622,722 to $22,053,978, or by 33 percent -- the single largest increase in the Fiscal Year 14 budget.
There are many factors contributing to this figure, according to Title's explanation in the budget book. The components include the beginning fund balance, other sources of revenue, projected expenses, and a sufficient ending balance to cover incurred but not reported claims, known as IBNR.
Higher-than-expected claims, federal mandates, and an increase cost of services also added to the decision to contribute $5.4 million to the fund, Title said last week when he presented the budget.
The superintendent explained Tuesday that this bump is expected to be a one-year spike to properly fund the account and increases thereafter should be incremental.
Kery said that the board does not have "the knowledge or information to make an informed decision" on the proposed contribution to the fund or the budget in its entirety. The most recent information the school board has on the town and district's internal service fund is updated through June 30, 2012, which was well before the budget was presented.
A status of the fund through November or even December 2012 should be made available to the board prior to their vote on the budget on Tuesday, Jan. 29, Kery said, so that members can be sure the health insurance account isn't over- or underfunded.
Other Driving Factors to Budget Increase
The board also discussed salaries -- which have increased by 0.83 percent due to contractual raises for teachers and administrators -- the food service pension fund, and sources of income.
The budget for the district's pension/retirement account was bumped by $571,167 for Fiscal Year 2013-2014, with $50,000 of that increase allocated to the pension costs for the school lunch program. The school lunch program is self-sustaining and funds its base costs through the meals sold in the districts, but it could not absorb the projected pension increase for its employees, Title said.
Sources of Revenue for District, Town
Projected income for the district in Fiscal Year 2013-2014 is $6,722,608 and will come in the form of state and federal aid, summer school tuition, food service reimbursement, musical instrument rentals, reimbursement from the Fairfield Education, out-of-town tuition for special education students, preschool tuition, parking fees, and custodial fees.
Board members discussed some options for increasing revenues. John Convertito raised the idea of the organizations running daycare and afterschool programs in the schools paying a custodial fee to cover the differential costs the district incurs.
"I don't want to charge them astronomical amounts, I just want to cover our differential costs," Convertito said.
Title mentioned that the district in conjunction with the town may impose a new building rental fee structure come the start of the new fiscal year. Building fee revenue goes to the town but a plan may be in the works to offer a discounted fee to organizations that pay up front. According to Title, it takes some time to collect fees from groups after they rent space in the schools, because they often raise the money for the rental fee as part of their fundraiser or event.
The board will meet again to discuss the budget on Thursday at 7:30 p.m. in the Board of Education Conference Room (501 Kings Highway East, second floor). The budget is scheduled to be adopted on Tuesday, Jan. 29