Hamden Signs Off On Wintergreen Sale Agreement

The sale of a Hamden school is one step closer to finalization, offering a potentially high-stakes opportunity to right past fiscal wrongs, according to town leadership.

That was the pitch Legislative Council members heard from Chief of Staff Sean Grace, Finance Director Curtis Eatman, and representatives of the town’s Board of Education Monday night before they voted to allow Mayor Lauren Garrett to sign a purchase and sale agreement that will hand the district-owned Wintergreen school building over to Area Cooperative Educational Services (ACES) for $16 million.

Now that the council has given Garrett the go-ahead to officially sign off on the price and terms of the Wintergreen transaction, a final majority vote by that same body to solidify the sale lies just a week away. The council will choose whether or not to complete the sale on June 15 following a public hearing on the matter.

Decisions from the town’s fiscal authority regarding how to allot funds from that sale also remain up in the air — and have time-sensitive implications concerning how the town chooses to manage itself moving forward. 

That’s because, as town administrators expressed Monday night, Hamden is ending the fiscal year with an anticipated $4 million deficit. Garrett pinpointed inaccurate projections of town expenses in the fiscal year ​‘22 budget as the reason.

For example, she said, Hamden’s agent of record for medical insurance recommended the town budget $49 million for health insurance costs last year. Instead, the town allotted $47 million. As more town employees have begun returning to doctor’s appointments as Covid-19 case numbers drop, Hamden has picked up an additional $3 million in medical claims. The same situation is true, albeit at much lower costs, for fringe concessions and retirement buyouts.

In total, Garrett said, the town will need to take roughly $4 million out of its fund balance to meet unplanned medical, retirement and overtime costs. 

Meanwhile, the town is simultaneously trying to follow through on a separate plan launched by the previous administration to reduce its long-term debt and improve its ratings among potential investors. Hamden is in the last leg of that deficit mitigation plan, which involves selling millions of dollars worth of old bonds to receive lower interest rates, then moving any money made from restructuring and refinancing those bonds into the town’s fund balance.

The town’s fund balance allows the town to pay for unanticipated emergency measures without borrowing more money — or to meet its outstanding financial obligations in the face of economic uncertainties. It also serves as a key indicator of the town’s financial position. 

The town promised investors that it would end the coming fiscal year with at least $6.6 million in its fund balance. That’s about how much the town currently has saved — but if the town takes out $4 million to pay this year’s deficits, it will need to replenish the fund balance or risk downgrading its ratings and facing higher interest rates when seeking bonding opportunities, according to Finance Director Curtis Eatman. 

So the town’s ability to cover the deficit while keeping its word to investors depends on the final sale of Wintergreen and the council’s reallocation of money to the appropriate places. 

Garrett also asked that the remaining money from the sale, around $12 million, be moved to a capital reserve fund which would be established by the council to support town — and Board ofEducation — capital improvement plans. She argued that creating such a fund would decrease Hamden’s dependence on borrowed money and deliver a pot of liquid cash the town could use to pursue any unanticipated capital costs. Garrett asserted that developing a capital reserve fund follows ​“best financial practices” and is supported by the town’s financial advisors and the Municipal Finance Advisory Commission.

While the town is figuring out how to use the Wintergreen sale to patch up budgetary holes and secure its slowly-improving status among investors, it is also working through a long-term plan that will keep students housed while losing a building that houses alternative and special education classrooms.

The BOE, which was flat-funded this budget season, requested that the council consider setting aside $400,000 to lease space inside Wintergreen for the continued housing of an alternative education program, the Hamden Collaborative Learning Center, which would otherwise be displaced due to the sale.

Wintergreen has served as one moving part in a years-old, ever-evolving plan to restructure Hamden’s public school facilities to save money, desegregate classrooms, and institute universal pre‑k.

Board of Education President Melissa Kaplan rehashed the story of how Hamden first put forward a program in 2019, known as​“3R,” that sought to institute sliding scale pre‑K for all Hamden families, racially balance the segregated school system, and consolidate the costs of school facilities by closing two of the town’s most diverse neighborhood schools. That plan would have in turn kicked an ACES magnet school out of Wintergreen and used that space as well as an expanded middle school to accommodate all students.

That plan was so controversial that years after introducing 3R, the town ditched it and worked to strike a tentative deal to sell Wintergreen to ACES instead, with the intention to use the $16 million they’d get in return to keep all of the town’s community elementary schools open. In turn, they would relocate the alternative and special education classrooms housed in Wintergreen, expand the middle school, and still open space in elementary facilities to open up more pre-schooling opportunities for families.

“We realized we didn’t get it right,” Kaplan summarized. 

Now the BOE is also hoping that $400,000 from the Wintergreen sale can be used to lease space for Hamden’s alternative education students inside Wintergreen next year, asserting that they would otherwise be displaced by the loss of the school where they’re currently housed.

To summarize: The town is banking on the Wintergreen sale to fill its fund balance and keep its words to investors; pay for fiscal mismanagement by prior administrations; and move forward with the newest version of its 3R project, supporting the school district in moving forward with overdue capital projects after the council flat-funded it this past budget season.

But that series of interdependent outcomes rests on the council deciding to complete the sell of the school and follow Garrett’s guidance concerning fund allocations — all before June 30. If the council does not vote on where to place the money, it will all go directly to the fund balance. But the council may vote otherwise, potentially moving in a different direction from Garrett’s suggestion.

Monday saw mixed responses by council members on all fronts in response to the administration’s proposal.

Three council members abstained from voting. Three voted no on the school sale itself.

Councilwoman Betty Wetmore voted against the purchase and sale agreement. She asked whether the town could negotiate a higher price for the sale and criticized terms of the contract.

“I feel we’re selling a huge asset — and I know we have to sell assets in our town to pay down our debt, but I don’t know why we’re leaving all the furniture, the whiteboards… that’s worth a fortune right there. And now that you’re leasing it for almost a year, I mean how much is that costing us?” Wetmore asked.

“This is by far the largest offer the town has ever received,” Grace responded.

Newly elected BOE member David Asberry urged the council to disregard the ​“past,” including criticisms of Hamden’s back and forth over which school facilities to sell and for how much, and to focus on finding ways to prevent unnecessary movements of students from school to school.

“Stop thinking about five years, seven years ago — let’s just starting thinking about what we can do better,” he said.

Other council members, including Justin Farmer, disagreed with Asberry’s stance.

“People in Hamden move here generationally,” he said. ​“I want the opportunity for my kids and my kids’ kids to live here generationally. We need a plan and a vision we know will carry through.”

Farmer said that while he generally supported the prospect of taking in $16 million, he needed to have further conversation with board members about exactly what the future of 3R entails before voting in either direction.

“I will not be supporting this,” he asserted. ​“In terms of the 15th, I don’t know what my vote will be. But I have much discussion to have with the members of the board and with the superintendent. My expectation is for people to answer their phones so we can figure things out.”

When it came down to voting on whether or not to reallocate money from the fund balance towards paying for structural deficits, the finance committee voted in favor of all four action items (paying for medical fees, town wide savings, accrued benefits, and starting a capital reserve fund) — though not all of of those financial reallocations were unanimously supported. For example, paying the town’s medical obligations was supported by everyone with the exception of Betty Wetmore, who abstained from voting. Meanwhile, only one committee member voted in favor of creating a capital reserve fund while the remaining three abstained. Still, that was enough for all of Garrett’s suggestions to pass committee.

As council members debated how to hold all elected officials accountable and connected when it comes to making and reflecting on both past and decisions concerning everything from student well-being to taxpayers’ pockets, school teacher and new council member Katie Kiely pushed for the town to work more collaboratively with the Board of Education moving forward.

“To the new Board of Education coming in, our work going forward has to be done both as a town and a Board of Education partnership really working together,” she said.

In the meantime, she added, decisions have to be made to avoid further disorienting families and students by relocating them between facilities or threatening to close their schools.

“We need to make sure this doesn’t negatively impact students if we can help it,” she said. ​“And we can. By using the money from Wintergreen” to keep alternative education students in their home until more thoughtful plans are successfully put into place.