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A Wednesday night virtual meeting offers a look at how the six elected officials who sit on the Board of Finance watch the taxpayers’ money.
The citizen volunteers demonstrated their seriousness about their roles as financial watchdogs.
To prepare for the meeting, they went through Mayor Caroline Simmons’ proposed 561-page, $329 million city operating budget; the 120-page, $91 million capital budget; and Superintendent Tamu Lucero’s 208-page, $315 million schools budget.
Finance board members perused the budget books for questions they’d like answered before a series of meetings that begin next week, when department heads will come before them to make their cases for why they should get the funding they’ve requested.
The Board of Finance is an especially important body in Stamford, where 92 percent of the money needed to run things comes from city taxpayers. In Stamford, the state and federal governments together contribute only 3.6 percent to budget expenses.
Off the bat, member Dennis Mahoney had questions about the Board of Education budget. He wanted to know the status of Stamford’s share of the Education Cost Sharing grant, an important source of school funding that the state distributes to municipalities each year.
Democrats in Hartford have a proposal to increase the grants, but Gov. Ned Lamont’s position on it is unclear.
The extra state money “certainly would go a long way toward helping us with the fiscal cliff,” Mahoney said of a looming $8.8 million deficit Stamford schools face next year, when COVID-19 relief money used to fund 120 jobs runs out.
Mahoney wanted to know whether the city would get the extra money before May 17, when the finance board must set the mill rate for the 2023-24 tax bills. If so, tax bills could be lower, he said. If the money should arrive after the tax rate is set, “what happens to it?” Mahoney wanted to know.
It would become surplus that the board would allocate in the 2024-25 fiscal year, replied Richard Freedman, Board of Finance chairman. Stamford is set to receive about $8 million in Education Cost Sharing grant money from the state, Freedman said, with the possibility of another $8 million.
“That money would come into the city, not the Board of Education. Once we set the Board of Education budget, they can’t spend it,” Freedman said. “So it might not affect the Board of Education budget this year, but it clearly affects the mill rate because it’s a source of revenue, which means we could offset the tax levy. So I think we just wait as long as we possibly can to set the mill rate.”
Every $6 million in the budget accounts for 1 percent in taxes, Freedman said, so the extra $8 million would be 1.3 percent.
“It’s a big number. It’s certainly bigger than anything we’re going to be discussing over the next month,” Freedman said. “It sure would be nice to know if we’re getting it before we set the mill rate.”
Elda Sinani, the city’s Office of Policy & Management director, said she will see what she can find out from her counterparts in the state OPM.
Mahoney had another question about the school budget. It stems from messaging put out by district administrators, he said.
“Every time I read an article or see an update from the Board of Education, it’s ‘We have to keep the pressure on the Board of Finance and Board of Representatives to not cut our budget because they will be cutting significant programs,’” Mahoney said. “I read that and hear that and I even dream about it, I’ve heard it so many times.
“So I’d like to see what, specifically, the Board of Education requested since 2021, the first year of the pandemic, when we held them flat, and what they got,” Mahoney said. “With all the supplemental COVID funding, haven’t they generally gotten what they asked for? I want to understand that before they come in.”
He asked Sinani and her staff for an answer by Monday evening, when school officials are set to present their budget during a finance board meeting (accessible here).
Mahoney had another question, this time about the Board of Education’s capital budget. It was about a “kitty,” as he put it, established by his board and the Board of Representatives last year.
To help pay for an ambitious 20-year, $1.5 billion program to renovate or replace the city’s aging schools, the two boards acted to create a construction fund by increasing last year’s property tax 1 percent. The fund contains $20 million.
“Is there anything besides that in the fund?” Mahoney asked.
School officials “promised” finance board members they would add $18 million to $20 million of the COVID relief money to the construction fund, Mahoney said.
“I know some went for short-term capital needs, but to me it seemed like it all disappeared into some cloud,” Mahoney said.
Tony Romano of the city’s Office of Policy & Management said he knows there is $20 million in the fund but, as for COVID relief money, “I don’t know.”
Freedman said it’s a matter for Monday’s meeting with school officials.
“Let’s ask them when they come,” Freedman said.
Finance board member Laura Burwick spotted a few things about the city side of the budget that raised questions for her.
One was about Scofield Manor, a residential care facility for the elderly and disabled run by the Stamford housing authority.
The budget allocation “went from $230,000 one year to $323,000 the following year and now the mayor is asking for $466,000,” Burwick said. “There’s also a $60,000 bond. I’d like to know what’s going on there.”
Freedman said the head of the housing authority, Vincent Tufo, will appear before the board to explain.
“It’s worth a separate discussion,” Freedman said.
Burwick raised another issue, this one taken from national headlines. It concerned banking industry turmoil following the collapse of Silicon Valley Bank of California and Signature Bank of New York.
“What bank are we keeping our deposits in? I want to make sure we don’t get caught with large amounts in a bank that may not be as credit-worthy as it should be,” Burwick said.
Sinani said she thinks the city keeps its deposits with Bank of America but she would double-check.
Freedman raised his concern about an $8.3 million projected increase in employee health insurance costs, even as the city has been switching employees from its self-insured plan to a less expensive State Partnership Medical Plan.
It looks like the health insurance fund, set at $4 million, will be short, Freedman said.
“We need to confirm that’s right because I don’t know how we are off by that much,” Freedman told Sinani.
The city needs a balance in that fund because it must cover the costs of its self-insured plan directly.
“The biggest things are always hidden in the budget book,” Freedman said. “This one is definitely hidden deep inside the book.”
Diligence is critical to the job of fiscal watchdog. Board of Finance Vice Chair Mary Lou Rinaldi, a longtime member, said, “Whether the mill rate is going to change or not change, the operating budget should be as lean and efficient as possible … I am going to go through the budget line by line and see where we can make some cuts.”