New Schools, Old Bills

Despite all the new schools in town without leaky roofs or antiquated heaters, the Board of Ed’s maintenance costs will remain unchanged this coming fiscal year. The number of people coming to work will change: The school district predicts 150 layoffs.

Those financial figures were discussed Tuesday evening in City Hall, where the Board of Aldermen’s Finance Committee heard testimony from education brass on the city’s portion of its budget for the coming fiscal year.

The Board of Ed has a total projected budget of $370 million for FY 2011 – 2012, down $5.5 million from the current fiscal year. According to the mayor’s proposed $475 million budget for the city, $173 million of the education budget will come from the city. That’s the same as last year.

Superintendent of Schools Reggie Mayo said that flat funding means 150 layoffs loom, unless the Board of Ed can find room in the budget.

One alderman, East Rock’s Justin Elicker, noted with surprise that the Board of Ed’s maintenance budget will also remain flat. He said he would have assumed that with new schools constructed in recent years, the cost of maintaining them would go down.

Not so, said Will Clark, chief operating officer for New Haven public schools. The school system has more square footage to maintain and needs to do ​“preventative maintenance.” In fact, an independent assessment found that the district should be spending millions more on maintenance than it is.

Tuesday’s meeting was the latest in a series leading up to a final vote on the mayor’s budget next month. Aldermen have been hearing from all city departments seeking to justify and protect their allotment of taxpayer dollars. The Finance Committee heard from the Board of Ed and several special services districts, and received a PowerPoint presentation from unions.

After the meeting, Alderman Jorge Perez said he appreciates the Board of Ed is ​“acknowledging and accepting” the difficult fiscal situation the city faces and agreeing to ​“do more with less.”

Elicker was more critical. ​“I have trouble understanding why new schools cost just as much money to maintain and repair,” he said. He spoke of how someone getting a new car then saves money on repairs.

Union PowerPoint Scores Few Points

Tuesday’s schools testimony was followed by a workshop with representatives of AFSCME Council 4, which represents many city employees.

Unions and the city administration have been locked in a pitched battle, about more than just school custodian jobs. The mayor has argued that ballooning pension and health care costs will cripple the city if unions don’t make concessions. Unions have accused the mayor of balancing the budget on the backs of municipal workers.

Tuesday’s presentation elaborated on that argument, with charts showing that the major cost driver in the budget is not pensions and health care, but debt service.

It was received without questions by aldermen. Sean Matteson, the mayor’s chief of staff, acknowledged later that debt service is currently a larger portion of city costs than pensions and health care costs. But those costs are set to rise, while debt service will go down, he said.

Elicker said the union presentation didn’t offer a lot of new information. ​“Everyone knows we have a lot of tax exempt property. Everyone knows we have huge debt service,” he said. He also said debt service costs will go down in the near future.

“That’s what was missing in AFSCME’s charts,” said Alderman Greg Dildine.

Live Blog

6:29 p.m.: The meeting is about to begin. A handful of aldermen are here. Reggie Mayo, superintendent of schools, is here, along with Will Clark, chief operating officer for the Board of Ed. The meeting’s agenda is here.

6:33: Chair Alderman Yusuf Shah calls the meeting to order by reading the agenda. Shah says the BOE will be taken first. Clark, Mayo and two others sit at the conference table, with six aldermen. Three other aldermen are in the gallery.

Mayo: We’re moving along very very well with school reform. Teacher evaluations are going forward; school climate surveys are out to parents. … This budget is a fine document. We have been transparent. This is the third year we will be flat-funded, which causes some concern. 42 positions were eliminated recently. We will have to lay off 150 more. That number could be substantially lowered as we work this budget. ​“As we find dollars, of course we will take some of the individuals off” the layoff list.

6:42: Alderman Jorge Perez: When I was looking at the city budget book, on page 213 and 214, one of the lists is pensions. For BOE it says $8,595,000. When I read the BOE book, it’s different. For me the numbers need to make sense. Maybe there’s another number I have to add.

Mayo: We’ll take a look.

Perez: Are we going to talk about bonding? I want to go over school construction.

6:44: Mayo: Clark will talk about capital projects.

Clark: We’ve made presentations in the past on need to maintain stewardship and maintenance of property. The general fund side of the budget has not changed. Many of the maintenance costs have not increased despite adding a million square feet. This year, the capital request is reduced by over a million dollars. Life safety risk, for example has been cut by 36 percent. This is maintenance on exits, public address systems, clocks. HVAC repair and replacement reduced by 42 percent. Not funding that could be problematic. We’ll have to keep a close eye on it. Energy performance enhancement spending reduced 80 percent. Spending on that has resulted in millions of dollars in savings over recent years. Asbestos and environmental management cut 80 percent. Rolling stock cut by 87 percent. That means no new vehicles. No new spending on cafeteria equipment. Overall its a 33 percent reduction from last year. We are doing more with less.

6:49: Alderman Justin Elicker: It’s very helpful to see each school individually. Are you making principals accountable for reductions in energy use or office supply use now that you have the budget broken down in this way?

Mayo: They’ve always been responsible for that. We give principals an equipment budget and two other budgets.

Elicker: You didn’t know previously about energy use though?

Clark: We did know that. …

Elicker: I would think maintenance costs would go down with new schools.

Clark: General repairs are less costly, but maintenance is still needed regularly. All of those costs remain and are higher because of more square footage and sophisticated machinery. We need to plan preventive maintenance. Independent study said we should put in $41 million into maintenance. We’re putting in $3 million.

6:56: Perez: In the budget, I’d like to know why there are changes to bonding expenses. Why is the city being asked to spend another almost $18 million more? It’s on pages 4 – 18 through 4 – 22.

[He’s talking about this.]

Clark: First, a history lesson on school construction. It starts with coming together around an idea to repair schools. It’s done in stages, with some aldermanic leadership. Information is transposed transparently throughout the process. Every dollar gets approved, vetted and discussed by various public committees. Eventually, at the end, there are some adjustments as projections become realities. State has funded 78 percent overall, with the city paying 22 percent. ​“Ineligible” is a bit of misnomer. … Every year the number the state pays is not the same. … We start by putting expenses in as eligible. It doesn’t make sense to exclude things before the state does. … There is a back-end adjustment. We are still $9 million under all the budgets you approved. ​“The system is not only working, it’s working to your advantage.” … Davis, for example, was paid for mostly with state dollars. … So that’s the history. Things have been publicly vetted.

Clark: So I’ll go through the list quickly. Hillhouse, the fieldhouse: That was originally approved as reimbursable by a former commissioner. Two commissioners and audits later, they changed their mind, essentially. We continued to fight that and save $12 million of the initial audit. We’ve been fighting the remaining $8 million but ​“there comes a time when it is what it is.”

Perez: So the $8 million is due strictly to square footage issues.

Clark: Yes. … Celentano: There was a great desire to maintain that building [477 Prospect St.]. It cost too much to incorporate it into the school, so the state found in ineligible. … Beecher: We renovated. The state found would it have cost less to knock it down and rebuild. We fought the edit. Now we’re ​“throwing in the towel.”

Perez: On Beecher, did the rules change? Did we know from the beginning?

Clark: We knew that renovation ran the risk of shifting costs to the city. We decided to go with that plan. New Haven had made the decision to try to preserve what it could.

7:12: Perez: We get accused of being rubber stamps, that we don’t do our homework and pay attention. I want to show the public that we do do our homework. If we’re putting in more expensive windows when we could use cheaper, that’s different than losing a case to renovate rather than rebuild.

Clark shares more details on how other costs were deemed ineligible.

7:18: Perez: Can we get copies of the state audits? Also, there are some things you don’t know about. Others, you do. I’d like you to come to us sooner than later for approval when there is something known to be an expense.

Clark: Context is required when reading the audits. If you want to come over, we can walk through it and see the context of it. … The original budget request is essentially a projection. Over the years, with all those projections, we’re under by about $9 million. … We’re fighting over every dollar, in order to get this reimbursement.

7:24: Mayo: We’d like to thank you for your support over the years.

No further questions.

Chapel West Special Services District is next. Aldermen have no questions for Brian McGrath. [I was out in the hallway asking Will Clark a couple questions.]

7:29: Whalley Avenue Special Services District is up. Sheila Masterson, executive director, sits and hands out the WASSD annual report. The big news is Stop & Shop. The other big news was the sidewalks. We’re thrilled with the sidewalks, done in consultation with police department. We’ve also installed ​“light the night” at that critical block, the corner of Winthrop and Whalley, where Whalley Pizza is. We’ve increased the budget request to $92,000. We’ve gone to a straight mil rate.

7:32: Town Green Special Services District. Two representatives sit, Rena Leddy and Richter Elser. They distribute packets. Request that Board of Aldermen approve a levy. Leddy says: This past year we planted 218 planters, redesigned planters in Pitkin Plaza, worked on the Union Avenue embankment and State Street landscaping. This winter we removed 50,000 square feet of snow at a cost of $13,000. We also created a partnership with Columbus House to have an outreach worker. We pick up 314,000 pounds of trash per year. … The mil rate for our member contributions is being reduced this year.

7:42: Now Grand Avenue Special Services District. Bill Placke, the district’s treasurer, takes a seat. Placke: We’ve been around since 2009. Our objective is cleanliness, beautification, and safety. Our budget is $40,000. We recently increased the mil rate to 1.25. Our administrative expenses are only $3,000.

7:50: Time for the workshop with AFSCME. A digital projector is being set up. Three men and three women take a seat at the table.

Mathew Brockman: I’m a representaive with Council 4 AFSCME. As you know we have a lot at stake here.

At the table:
Vanetta Lloyd president of daycare workers
Cherlyn Poindexter, management workers
Mark Murphy AFSCME international
Tom Delusha, treasurer of custodians union
Tonia Gonzagez, paraprofessionals

Brockman: Last time we were here, we showed you the report stating that privatization of custodian services would push workers into poverty. Tonight we’ll put the budget choices into context. Essentially this city’s structural issues result from nontaxable property, Yale, and too much capital expenditures, school construction. These weren’t caused by union employees, nor will they be solved by putting workers on unemployment.

Murphy begins a PowerPoint slideshow.

7:57: Murphy: Chart 1 shows that debt burden exceeds pensions. Debt service for bond debt has increase in last six years by 1.8 percent. Pension obligations have gone up also, but pension obligations are half what debt service is. But we don’t see the mayor talking about debt service as a crushing force on the budget. Debt obligations will increase. Decisions were made to add to the debt. I’m not qualified to say if it was warranted, but it is an important driver of costs.

Chart 2: New Haven’s debt burden exceeds that of all but one peer city: Bridgeport.

Chart 3: ​“Schools Dominate Debt.” It’s a pie chart showing schools account for 65 percent of city debt.

Chart 4: ​“City’s Fiscal Condition is Not Distressed” Murphy: The city’s underlying financial situation is sound. We are not at a crisis point. The undesignated fund balance has grown to about 3.5 percent of the total budget, despite the recession.

Chart 5: New Haven’s fund balance is comparable to its peers.

Chart 6: ​“Nearly Half of Real Property Is Exempt” 45 percent of the city’s grand list is non-taxable. That’s grown from 25 percent in 1950. Murphy: You’re at the mercy of state policy makers. … ​“You can’t have a sustainable future with so much or your property locked up and out of reach.”

Chart 7: ​“City Personnel Levels Declining” Murphy: You can see that city employees are already doing more with less. The number of staff has dropped from 2,097 in 2002 to 1,605 in 2012. The proposed budget has an additional 65 positions cut, plus more cuts mentioned earlier by the Board of Ed.

Chart 8: ​“Overgenerous Benefits” It says an assistant custodian get $38,620, a top rank police officer gets $62,501. Murphy: These are not extravagant wages or benefits. A retired custodian gets an annual pension of only $27,000 and no social security. ​“This is it. This is the only guaranteed income they have.” Employee pays 6 percent of salary towards pension. City pays 7 percent. To meet the pension needs of the future, a contribution of nearly 20 percent would be required. That’s the unfunded liability. … The police officer will get $50,000 a year pension after 30 years on the job, no social security. The unfunded liability is 24.72 percent. Unfunded liabilities are a serious issue and they actually increase if more people are laid off. But the problem is solvable long term. Council 4 has offered to pay 3 percent more towards pensions.

Chart 9: ​“High-Deductible Health Plan Problems” This chart seeks to refute a proposal to switch to high deductible plans. Murphy: It would have a deductible of 2,000 per person, $4,000 per family, plus out of network costs of $20,000. Those costs are simply unaffordable. …This is a major flaw. The sickest employees bear the greatest burden. It does nothing to reduce costs. … These plans don’t work because health insurance is not exactly an efficient marketplace. … There are better options: prescription drug pooling, the city can negotiate better with health insurance carriers, there may be potential in the long term with the Sustinet plan.

Chart 10: ​“Layoffs, Privatization Will Cause Long-Term Harm” Murphy: Laying off custodians will increase the pull on public assistance. Most people will lose their homes. Whether or not workers live in New Haven, they live in the region, and spend money here.

Chart 11: ​“Sensible Solutions” Murphy: Cut borrowing. Reexamine the capital program. Examine hiring and management ratios. ​“There may be situations where you’re a little top heavy with management positions.” … ​“The city can and should receive greater payments from non profits like Yale.” … Increase enrollment in the National School Lunch program. Make the extra effort to get applications back from parents, to get more money from federal government. … Examine FRAC revenue strategies on fees, for example.

8:26: The committee has no questions. … On to the public hearing.

Aldermen hear a presentation on the February monthly financial report. Fire and police overtime are still over budget. Another report will come out on Thursday.

Perez: I’d like to see some information about capital budgets in these reports.

Elicker asks about sale of parking garage. The bid came in significantly less than expected.

Alderman Carl Goldfield asks about overtime being over-budget.

8:42: No public testimony. Public portion is closed. Meeting is adjourned.