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Business Office Funds Transfer Proposal Gets Chilly Reception

Administrators, members of Board of Education Finance Committee not supportive of idea of transferring New London Public Schools funds to municipal budget

A proposal to move the funds to operate the business office from the school budget to the municipal budget got a skeptical reaction at the Board of Education Finance Committee meeting on Thursday.

President Bill Morse and Vice President Elizabeth Garcia Gonzalez both voted to recommend that the full board not approve the transfer in the 2013 fiscal year. Board member Barbara Major, the committee’s third member, was absent due to an illness.

The full board will vote on the matter at tonight’s meeting.

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Transfer proposal

The board for the 2013 fiscal year, a six percent increase which would bring the school budget to $42,999,270. During discussions over the budget, board member Margaret Curtin tried unsuccessfully to include a recommendation of consolidation of school and city financial departments as part of the budget proposal.

Mayor Daryl Finizio recommended that the City Council’s Finance Committee to bring the school budget of $41,011,927. He said he considered potential savings from consolidation of financial departments in the proposal.

The council’s to the budget, anticipating that the publicly funded portion will remain at $39,817,405 while the increase will be covered by extra Education Cost Sharing revenue anticipated under .

Councilors also invited the board to consider transferring the business office budget to the municipal budget to free up additional funds in the school budget. The Board of Education must return an answer on this offer by April 30, when the Finance Committee will finish its budget deliberations and the City Council will vote on appropriations ordinances.

Board reactions

Morse said he considers that such a transfer will take oversight of the district’s finances away from the Board of Education and put it under the City Council and mayor. He said he was willing to have discussions on the possibility of consolidation, but that he was unwilling to proceed with what he sees as an irreversible structural change without a more detailed plan of action.

“I think it’s reckless, and I also think we’re being forced into a corner to react,” said Morse. “And I think it’s unfair.”

Gonzalez said she understood that the board would still have control of school funds, but also wanted more information on the proposal.

“I want more clarity before voting,” she said. “I also want to know if other schools have done this and if it worked well.”

The proposal met with more support from Secretary Jason Catala, who said he thinks the consolidation is something the district is going to have to do. Catala said consolidation proposals have often been floated and there has been little progress made on them.

“There’s no way of sugarcoating that this has been in place for almost 10 years now,” Catala said of the proposal.

Administrative concerns

In a memo presented to board members, Fischer says some school districts that have tried financial consolidation have done so piecemeal, with East Hampton’s Board of Education retaining management of its payroll. He said cost savings are difficult to track, and that the benefits of consolidation have more to do with improving efficiency and cooperation than cost savings.

“I fully understand we have concerns to save money, but in point of fact there hasn’t been a system that has been show to save money by doing this,” said Fischer.

Board member Delanna Muse asked if the transfer could result in job savings. Based on estimates of school administrators, the district anticipates that full staffing would be preserved with a six percent budget increase, while the district would lose 58.8 positions if flat funded and 26 positions if the budget is increased by three percent.

Fischer said the business office’s budget is $539,761, but that a transfer of the budget would result in an estimated net savings of only $183,521. He said that this is equivalent to about two teaching positions, since a teacher’s salary and benefits amounts to about $90,000.

Maria Whalen, the district’s director of business and finance, said the office handles not only finances but several human resources tasks. She said these include benefits, insurance, unemployment, and workers’ compensation.

“I honestly don’t feel that the city and some of the board members know what goes through our office,” she said.

Tim Wheeler, the district’s chief information officer, said an upgraded fiber-optic connection between the district and city would have to be installed in the event of consolidation at a cost of about $50,000. Wheeler said he hasn’t been consulted by the city on the matter and estimated that establishing a common software for accounting could also cost between $500,00 and $1.5 million.

“We’re throwing outnumbers without having the knowledge,” he said.

Attorney Peter Janus said in a memo to Fischer and Morse that any consolidation proposal would seem to fall under the Consolidated Administrative Services Oversight Board, which was established in 2011 to make recommendations to the City Council and Board of Education “for administrative services that may be consolidated and create service level agreements.”

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Barbara Crocker April 26, 2012 at 01:46 PM
It seems to me that Mr. Wheeler is the one "throwing out numbers"... Having worked in accounting at non profits for the past 16 years, I wonder what kind of accounting software would cost between $500K and $1.5M. Really?
Thomas Cornick April 26, 2012 at 03:41 PM
It is a good thing that the taxpayer is a bottomless well of revenue and can support redundancy and empire building with little impact upon his own finances. I seriously doubt that the amount of data transfer requires much beyond the capabilities of DSL service on a regular copper phone line. Like children, ask for a pony if you want a puppy.

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