Simsbury, CT - March 14, 2006

The Regular Meeting of the Board of Finance was called to order at 6:05 P.M. in the Simsbury High School Auditorium. The following members were present: Chairman Paul Henault, Peter Askham, Candace Fitzpatrick, Nicholas Mason, and Kevin North. Member Anita Mielert was absent. Also present were BOE Business Manager, David Holden; School Superintendent, Dr. Diane Ullman; Board of Education Chairman, Richard Hogan; and other interested parties.

Ms. Fitzpatrick made a motion to approve the minutes of the February 28, 2006 Special Meeting and Mr. Askham seconded the motion. Mr. Mason requested that a sentence on page 2 be deleted. The motion to approve the minutes as amended passed 5-0.

Ms. Fitzpatrick made a motion to approve the minutes of the February 28, 2006 Regular Meeting and Mr. Askham seconded the motion. Ms. Fitzpatrick asked that the minutes be amended on page 7 to reflect the fact that she left the meeting at 7:35 PM. The motion to approve the minutes as amended passed 5-0.

Mr. Henault referred to the memorandum from Mr. Hogan dated 3/14/06 entitled “2006-07 Board of Education Budget” (Addendum I) and thanked the Board of Education for coming in with numbers that met the Board of Finance’s guidelines as discussed earlier in the year. Mr. Hogan noted that this was the first time that the BOE has met the guidelines as set by the BOF (as opposed to being given a cap) and that it represented a lot of work. He noted that the final budget of $54,980.263 adopted by the BOE represent a 5.6% increase over the 2005/06 budget.

Mr. Hogan reviewed the steps involved in their budget development process, which began in late September. He also stated that the priorities used in developing the final budget figure were to improve class size level, provide social/emotional and academic support to students and to provide adequate curriculum and professional development funding. He indicated that, since the fixed costs over which they have no control, such as labor contracts, insurances, operating costs associated with the square footage of the high school, special education mandates, retirement contributions, transportation and utility costs and equipment maintenance, are basically met by the 5.6%, a number of program reductions were necessary.

The proposed budget includes the addition of a new elementary assistance principal position to be divided between Tootin Hills School and Latimer Lane School, a part-time math consultant at each elementary school, some progress in class size, additional social work, psychological and tutoring services, additional curriculum development opportunities for teachers, professional development, website development, the addition of a computer.

In order to make those improvements, however, a number of reductions to programs and services had to be made, such as eliminating Elementary Resource Teacher positions, the reduction of one certified teaching position, reductions in requested textbook and equipment purchases and scheduled building improvements, as well as increases in Pay to Play and Simsbury High School parking fees and the reduction of a secretarial position.

Group (ERG) classifications that would impact Simsbury. Dr. Ullman stated that she attended the meeting of the State Board when this issue was discussed and, rather than re-arranging the ERG’s, she said they are probably leaning in favor of doing away with the ERG’s entirely within the next few years.

Mr. Hogan addressed the issue of the non-public school budget, which increased by 16.5%, 12% of which is due to changes in federal law. Mr. Hogan explained that this budget represents federal mandates imposed on local school districts by IDEA 2004, which states that the local school district must provide child find (identification of students with special needs) and certain special education services to students placed by their parents in private elementary and secondary schools in Simsbury. Such services in the past year (the first year of full implementation of IDEA 2004) have included consultation, disability evaluations, and service plans and involved a total of 455 staff hours. Mr. Hogan stated that the BOE has discussed sending a letter to the private schools requesting reimbursement as it seems unfair that the public school system must provide these services to private school students. Although it is doubtful the letter will be complied with, as Mr. Henault pointed out, it at least starts the dialogue.

Ms. Fitzpatrick asked if the State Board of Education has ever taken a position or sent any letters rejecting these impositions. Dr. Ullman responded that there has been heavy lobbying against these unfunded mandates, but they have been largely unsuccessful. Mr. North asked, if the State can sue the Federal Government, can the Town sue the State? Mr. Mason felt that response, if taken to its logical extension, would then mean a taxpayer could sue the Town.

Dr. Ullman noted that 10% of the student population is average for special education incidence, which could equate to a maximum of 140 such students and right now the BOE is handling about 20% of that, so this is a very modest estimation of what the potential cost could be. Dr. Ullman also noted that a great deal of effort has been put into restoring some of these services to students, particularly at the secondary level, and they now are actually having to dismantle what they were able to restore because of this mandate.

Mr. Askham asked about the student population projections and Mr. Holden said they expected about 3 additional based upon contract projections with Project Choice students added in and subtracting projected outplacements and adding in projected non-resident students that will be paying tuition.

Mr. Mason stated that he was concerned that developments such as the Powder Forest, West Street, and the proposed Meadowood project would skew the projections. Dr. Ullman responded that informal surveys of West Street residents indicated that, although some have sold their homes to people with children, they also represented people who were moving to be nearer to grandchildren and that many had sold their homes to people with no children. Dr.Ullman stated that future surveys will be taking into account these new developments and also the possibility of Meadowood and will do a more refined elementary projection.

Mr. Askham asked about the number of professional staff. Mr. Holden stated that they are projecting the number of certified staff will remain level. In one instance, they have added one assistant principal serving two elementary schools and eliminated two teacher resource positions and, in another, have added a half-time elementary math consultant, but have eliminated a whole series of math tutors.

Dr. Ullman stated that the budget did not allow them to take care of class size in Grades 4, 5 and 6. She is also very worried about the high school as it is very tightly staffed under this proposed budget and any unusual enrollments could cause problems; they may have to staff later at the expense of cutting something. Mr. Henault asked how difficult it would be to take teachers from the junior high and move them to the high school. Dr. Ullman replied that current staffing plans have the teams back intact so that a core group of teachers stays with a group of students, which is important for that age group. Taking anyone from the middle school would begin unraveling that team structure again, so they would most likely look to equipment or building maintenance funds if they had additional staffing needs.

Mr. Askham asked how many teachers were anticipated to retire and Mr. Holden said there are 11 with 9 confirmed at this time and the anticipated cost savings to be realized approximates $25,000. Dr. Ullman stated that approximately one-third of last year’s new hires were at the beginning of the salary structure. Mr. Hogan also noted that last year’s new hires had one of the highest percentage of teachers just out of college.

Mr. Askham asked the BOE to break out their insurance costs as to active and retired for purposes of OPEB budgeting. Mr. Holden noted that actual expenditures for retirees last year were $87,900, with $103,000 projected for next year and $110,000 for the following year. Mr. Henault pointed out that the actuarial calculations will be much higher than the actual costs.

Mr. Mason stated that he was bothered by the fact that the BOE budget just addressed fixed costs and there were no new improvements. He remained torn between the need for improvements and the need to manage tax escalation. He asked if the BOE had a sense as to how this situation would play out in future years. Mr. Hogan replied that there are a lot of things in the educational budget over which they have no control, such as the collective bargaining process, mandatory binding arbitration and unfunded special education mandates. These items will drive a need for budget increases that run higher than the rate of inflation. On the plus side, reductions in class sizes will allow them to provide more support services for students. But, as a town, Mr. Hogan felt that there is a need to look at commercial development as a long-term means of bringing in additional revenue as there will continue to be pressures on them to drive the tax budget up.

Mr. Holden noted that the projected decline in elementary student population of 300 over the next five years should provide some offset against potential increases. But he also noted that he does not see on the horizon any reduction in the area of medical/health in terms of inflation and clearly electricity deregulation is not reducing costs. Also, they are going to be mandated to use ultra-low sulfur and diesel fuel on buses. Although there are pressures that are being introduced for good reasons, they are not going to help keep budget increases down going forward.

Mr. Mason asked, if an additional $700,000 were to be offered, where would it be used and Dr. Ullman stated that it would go straight towards managing class size so that equipment funds or maintenance funds would not have to be tapped. Mr. Mason responded that he was concerned that the new renovations would not be kept up. Mr. Henault noted that the budget for maintenance, as a percent of the total budget, has remained pretty stable over the years.

Mr. Askham asked if the student population were to decrease by 3%, could they then expect to see a flat budget in the future. Mr. Hogan replied that so much depends on where the students would be eliminated. Mr. Askham stated that he assumes the 4% teacher contract is what drives the budget and, with a 5.6% budget, they should be comfortable. Mr. Hogan stated that the fixed costs resulted in the 5.6% and, therefore, cuts had to be made.

Ms. Fitzpatrick confirmed that the reduction of athletics expenses on page 10 of the budget book from $115,000 to $47,000 reflected the increase in Pay to Play fees. Mr. Holden noted that, with an additional $50 increase in fees, students would be paying for everything except the coaches. Dr. Ullman stated that they need to watch that the numbers of students trying out for teams is not declining due to inability to pay. Mr. Henault confirmed that there is a program in place to cover those in need who want to play but are not able to afford the fees.

Mr. Henault noted that the textbook expense is pretty constant and asked if the $342,000 was sufficient for their needs. Mr. Holden said it was and, like many of the supplies they purchase, they are in a purchasing consortium. Dr. Ullman noted that they will be undergoing their accreditation process next October and have serious curriculum development needs and that, every time a curriculum is revised, there is a textbook cost associated with it.

Mr. Henault thanked the Board of Education for doing an excellent job in following the Board of Finance’s guidelines. Mr. Hogan replied that they were very pleased that they were able to meet the guidelines and appreciated that guidelines were used in lieu of a cap.

Mr. Askham had two handouts for the Board. One was an article from Barron’s entitled “The Trillion-Dollar Pothole” that addresses the liabilities the states are facing relative to health costs for retirees. The second was a schedule that potentially showed that, under the Governor’s car tax proposal, the Town stood to receive more tax revenues from the State than it does right now and that the proposal just represents a new way to tax, which would disagree with the previous schedule that has been presented to the Board. He asked the Treasurer to redo his schedule to show that more money will be received from the State. Mr. Henault stated that a lot has to do with where the tax is going to come from and whether or not an individual is actually going to benefit or be hurt by the change.