Hamden Council Flat-Funds Ed Board

Near the end of a five-hour meeting Saturday, the Hamden Legislative Council voted to flat-fund the town’s board of education in the next fiscal year, forcing it to cut about $2.8 million from its budget.

The council spent about 15 and a half hours making adjustments to Mayor Curt Leng’s proposed fiscal-year-2021 operating budget this week. Saturday morning, deliberations, which were held over the Zoom teleconferencing app, began at 9 a.m. and lasted until 3 p.m., with a 47-minute break for lunch.

Nothing the council votes on in deliberations is final until it passes its full amended budget, which it must do by June 5.

(Read about the previous week’s deliberations here, about the budget as proposed here, and about revenue projections in the proposed budget here.)

At the end of February, the BOE passed a budget that requested about $91.5 million from the town, up $2.1 million over last year’s $89.4 million. A majority of the increase came from mounting expenses the board is legally obligated to make, such as raises to unionized employees and climbing special education costs. The increases also included a few allocations that would begin to fund many of the equity-related initiatives and changes residents have called for.

Despite the charts and the pleas, however, the council voted to flat-fund the board’s budget, leaving it at the current fiscal year’s $89.4 million.

The board’s budget included an increase of $200,000 for curriculum rewrites in order to begin the process of crafting a more culturally inclusive curriculum. It included $270,000 for an academic summer camp that was supposed to help close the achievement gap. It included $125,000 to help smooth over the inequities between the town’s various Parent-Teacher Associations. It included $30,000 extra for professional development to help teachers teach an increasingly diverse student body.

Yet the additional $2.1 million the board asked the council for does not actually account for the real increase in expenses the board faces. Expense increases actually totaled $5.4 million in the board’s budget, which the board offset with grant funding and a reorganization to arrive at the $2.1 million increase the board requested.

Law requires the board to pay a majority of the $5.4 million in additional costs over the current fiscal year. Salary increases, most of which are set out in union contracts, total $2.55 million. Increases to the cost of tuition for outplacing special education students, which federal law requires towns to cover, total $1.55 million.

The board also faces a great deal of financial uncertainty because no one knows how the coronavirus will affect its expenses. Board members have said the pandemic will likely increase special education costs because of the hardships it poses for many students.

The council also voted to count $700,000 of grant revenue that is supposed to go to the board to cover education expenses as revenue for the town. The town did the same with $1.2 million of grant funding last year, but this year the board requested to end that practice and use all of its grant revenue for the educational purposes it is intended for. By counting board of education grant revenue as revenue for the town, the council increased the amount the board will have to cut from its budget because it had counted that funding as additional revenue on top of what it receives from the town.

A majority of that grant revenue comes from the Alliance Grant, which goes to Connecticut’s 33 lowest-performing districts. Hamden’s grant total is supposed to increase by $1.5 million this year to $5.8 million.

“It was not a good day for us,” said BOE Finance Committee Chair Walter Morton. ​“Some long discussions will be had with the finance committee and the board about how we go forward from here.”

Chief Operating Officer Tom Ariola warned the council that flat funding the board and keeping board revenue for the town would mean serious cuts that will come at the detriment of the services the board can provide.

“It’s going to be real cuts to real programs that address a lot of the issues that you guys brought up today,” he told the council, referring to the four hours of discussion about what council members want to see from the board that preceded any votes.

The board is slated to receive $900,000 in CARES Act funding, he said, which might be able to help offset the cuts the council made. But that funding can only be used to cover Covid-19-related expenses incurred before September. Many of those costs come on top of what it accounted for in its operating budget.

But while the board faces increasing costs, a financial crisis is looming over the council, forcing it to look wherever it can to reduce costs.

“What are we going to do when we run out of money?” asked councilwoman Valerie Horsley. If the council keeps giving increases, she said, how can it pay its bills?

The votes followed hours of discussion both about the details of the board’s budget, and about what council members want to see from the board of education in general. The conversation turned to one of the hot-button topics for the board this year: equity and efforts to create a more inclusive curriculum and recruit more minority teachers.

As the council prepared to slash the increases the board had asked for, Councilman Austin Cesare, a Republican, took a stand to defend the board’s request for an increase. ​“Being a teacher myself, those things are not free. They cost money,” he said, referring to the long list of what council members said they want to see from the board. You can ​“sit there for an hour lecturing the board about various things. But you have to fund those things, too.”

Cesare was one of just three council members, including Justin Farmer and Dominique Baez, who voted not to flat-fund the board.

Tax Collection Rate

Saturday’s five-hour meeting was just the rather hefty cherry on top of a week of long meetings. The council met for three and a half hours Tuesday, Wednesday, and Thursday evenings to hash out how to fund the town through a financial disaster.

On Wednesday, it set out to tackle the revenues in the budget in order to reduce them to more realistic projections that reflect the effects of the pandemic. The goal of the meeting, said Council President Mick McGarry, was to set all revenue projections at realistic amounts to figure out how much the council must make in corresponding cuts to balance the budget.

“We are aware that we are in a hole, but we are not sure how deep the hole is,” said McGarry at the outset of Wednesday’s meeting. ​“We will try to give some sort of approximation to that.”

But the council did not get very far. It ended the evening having adjusted only one major line, a few minor ones, and with a few larger ones tabled.

It spent much of the evening debating the tax collection rate, which is necessary to calculate the amount of revenue taxes will produce.

In normal years, Hamden has a collection rate of around 99 percent. This year, with thousands of residents laid off and many more facing significant financial hardships, some residents may not be able to pay their taxes, lowering the town’s collection rate and, consequently, its revenue.

Finance Director Curtis Eatman came to the council with a recommended range of 93 – 97 percent. If he had to set the number himself, he said, he would set it at 95 percent. That collection rate would mean a $7 million decrease in expected revenues for the town, and it would mean finding $7 million to cut from expense lines.

During the 2008 financial crisis, Hamden’s collection rate did not dip below 98 percent. In 2009, it was 98.7 percent, and dipped to 98.4 percent for the following two years before beginning to increase again.

Conditions were different then, though. The town’s tax rate has since increased by about 66 percent, meaning it now poses a much more significant burden for taxpayers. 

While some council members, like Brad Macdowall, said 95 percent was too high, most said they thought that estimate would prove too low, citing Hamden’s history of strong collection rates.

The council ultimately voted to set the collection rate at 97 percent. That will mean cutting about $3.7 million out of the budget elsewhere.

Cuts Continue

The BOE was not the only department to sit on the chopping block this week. The council also cut from every other department that came before it, though it did not realize anything close to the cuts it did from the board of ed.

At the beginning of the week, McGarry presented to the council his big-picture plan for approaching the budget. First, the council will pass an ​“austerity budget.”

Next, it will spend until November assessing how expenses and revenues actually shake out. Finally, starting in November, it will enter the ​“recovery” phase. If there’s a big hole in the budget in November, he said, that could mean a supplemental tax increase, or some other way of finding funds.

The week began with the fire department. Fire Chief Gary Merwede presented a table outlining the cuts he was willing to make to his department. They totaled just under $42,000. The council went further, cutting an additional $25,000, most of it from the department’s training line.

The council also honed in on two vacant firefighter positions. Merwede told the council that his department has just enough staff to meet the minimum manning requirements laid out in the fire union’s contract. Cutting those two positions, he said, would just mean using more overtime. The council voted to table a motion to cut those positions until it can get more information.

The library department was not so lucky with its one vacant position. The council voted to cut a $30,000 part-time librarian position that is currently unfilled, despite Library Director Melissa Canham-Clyde’s plea to keep it at least partially funded.

The council also slashed the library’s account for buying materials by $55,000, eliminated funding for Sunday hours, and cut a number of other lines.

The council made relatively small cuts to the various lines in the Planning and Zoning Department’s budget, following the guidance of Town Planner Dan Kops. It also began to discuss eliminating the assistant town planner position, which Kops said would leave the department significantly understaffed, limiting the department’s ability to function.

No other position in the department can be eliminated. The assistant town planner is a member of the supervisor’s union, which does not have a no layoff clause in its contract. The other members of the department, aside from the town planner, are protected by such a clause. The town charter requires the town to have a town planner. The council will come back to whether or not to cut the assistant town planner position at another meeting.

While the council slashed expenses throughout the budget, it also slashed revenue lines in every department. It reduced an expected voluntary gift from Quinnipiac University to $500,000 from the mayor’s proposal of $1 million. Some council members said even $500,000 was unrealistic, since the university’s contributions had totaled $100,000, $346,000, and $612,000 in the last three years. The university has had to cut its faculty and staff salaries because of the pandemic, and will not be in a position to give the town money, some said. Others argued that including the line would pressure the university to contribute more to the town than it has in the past. They cited the fact that just days before, the New Haven Board of Alders Finance Committee voted to up its expected gift from Yale in an attempt to get more money from the university.

The council also reduced a few revenue lines in the fire department, library, and arts departments, and tabled revenue lines in planning and zoning until it can get more information. Every time it decreases a revenue line, it must find a corresponding amount to cut from expense lines.

The council will meet again Tuesday for the first of the week’s four budget deliberation meetings.