New Fairfield — New Fairfield’s Board of Finance (“BOF” or “Board”) met for its regular monthly meeting on Wednesday, March 15.

Medical costs were chief among the evening’s discussion topics.  Tom Kowalchik, Senior Vice President, USI, the BOF’s medical insurance consultant, attended the meeting to answer questions regarding higher-than-expected medical costs this fiscal year resulting in a budget shortfall and projections for next year’s medical costs.  Mr. Kowalchik jumped right in discussing medical claims for the period July 2022 through January 2023.  As of January, 311 employees are enrolled in the medical plan, and 329 are enrolled in the dental plan; and, through month-end, medical claims totaled $711,737.  Comparing what was paid out versus the amount budgeted, there is more than an $850,00 0 deficit.  Mr. Kowalchik noted that claims totaling more than $50,000, each, account for 54% of all claims and are attributed to 19 active and 2 inactive employees.    

Discussion between Mr. Kowalchik and Board members continued, with no real answers or solutions, while members acknowledged that the BOF relies on Kowalchik for projections on what the Town’s medical costs will be, and last year’s projections fell short.  Regardless, the BOF intentionally under-budgeted for medical costs this current fiscal year.  While less than actual costs, last year’s projection was $6,999,044 and the BOF budgeted about $1.3 mil. less than that.   Kowalchik pointed out that true savings comes on fixed costs, such as when stop loss and administration go down, or when the union pays 20% rather than 19%.  As is now known by everyone, the cost of paying medical claims is rising.  “There definitely has to be discussion around this, the claims need to be funded because they ar e running higher than expected,” Kowalchik said.  He briefly touched upon self-funding versus being fully insured and is awaiting numbers for the latter from Anthem to provide a comparison.  One thing is clear – the cost of claims is higher than expected and there is a shortfall that needs rectifying.

BOF member Cheryl Reedy pointed out that several contracts are up for negotiation this year and suggested to the Board of Selectmen and Board of Education that they work to increase employee contributions.  “Every little bit helps.  You know that we’re all in this together and everybody’s got to share the pain just a little bit and I don’t expect our employees to bear the entire burden of the 24% increase.  But, if their percentage contribution goes up a half of percent or something like that, it certainly helps.  So, I’ll just put that on the table for those who are in charge of negotiations to consider.” 

First Selectman Patricia Del Monaco presented the Long-Term Capital plans for/of the Board of Selectmen (“BOS”).  BOF member Kim Hanson questioned Del Monaco on the BOS’s planned reductions in the town’s capital and non-recurring fund – particularly the fire department equipment reserve.  “This won’t come as any surprise.  Again, we’re seeing cap and non (capital recurring funds) getting cut in order to maintain operating expenses.  I’ve been asking to cut operating expenses for 6 to 8 years and it is always cap and non that gets cut and that’s why we keep getting in a deeper and deeper in a hole,” he espoused.  “Frankly, we are blessed to have a volunteer department and they save us a tremendous amount of money by being a volunteer fire department.   It really hurts me to see these cuts,” Hanson said.

Del Monaco explained that the BOS is funding capital with the bonding, in the same category as the rest of the capital, but as debt increases other capital spending must go down.  “We’re having a hard time absorbing the peak of this bonding as it is; we can’t add more capital to that, that we are going to ask the taxpayers for – so yes, we have to cut our capital,” Del Monaco said.  She went on to explain that the cap and non-recurring fund has nothing to do with operating expenses, which are used to run the Town’s everyday functions and providing services to the public.  “The two are separate.  Just because the capital needs to be cut, or just because we’re bonding and doing large capital projects doesn’t mean the town doesn’t have to continue to provide the services we provide,” she said.  Del Monaco noted that as debt falls off, capital spending can be increased again.  “The medical and the debt are really what is driving this (budget) increase.”  Del Monaco said she thinks the BOS made good decisions with what they’ve done.  Mr. Hanson took issue with Del Monaco’s response that operating expenses cannot be cut.   

Following questions by Ms. Reedy, Town Finance Director Olga Melnikov noted that long-term capital projects are presented as part of the budget, and if the budget is approved by referendum, those projects listed are considered approved as part of the budget process.   “The Board of Selectmen cannot reappropriate funds,” she said.  Ms. Del Monaco reminded the Board, any project decided upon by the BOS outside the budget cycle still must be brought to a Town Meeting for voter approval.  “It is never something, by any means, that the Board of Selectmen can do on their own,” Del Monaco said.  Ms. Reedy thanked the First Selectman for this clarification.  BOF member Thora Perkins asked Del Monaco to note the amount of non-appropriated monies currently sitting in the capital and non-recurring funds.  Ms. Del Monaco estimated it at approximately $86,000; however, she said, “I would caution, it is important for us to have (not appropriated) in case we have an immediate emergency with a drainage system, or a piece of equipment fails, or heaven-forbid one of the town vehicles is involved in an accident.  That is a reserve fund that we try to build upon a little bit every year.”

During the first round of public comment, residents spoke against cuts to the proposed Board of Education (“BOE”) budget, including Jeff Giuliano – longtime resident and New Fairfield teacher.  Speaking eloquently, Mr. Giuliano said, “I’ll let you know the kids are great.  They come to school with the same excitement they always have.  They ask questions; they have experiences.  They want to work with their friends, they problem solve; they make their teachers and their parents happy and proud.  But there’s a difference after the pandemic.  They come in with much more emotional and social needs than ever before.  We, as the educators in this town, along with the administration and paraprofessionals, work hard every day to give them the experience they need to grow and recover from any gaps that the pandemic may have created.  They desperately need us to maintain for them the programs and classes that have made them so successful.”  In his opinion the just over 4.5% increase in the BOE’s operational budget is in keeping with natural wage increases and inflation, including the high cost for electricity and heating.  He also noted that with the increase in teacher’s salaries came an additional twenty minutes of instructional time to their workday, every day – at least at the primary school level, certainly an increase in services provided.

Parent Eileen Hacaj opined that the BOF has not engaged in serious discussion or consideration to changing how the medical fund and debt service costs are handled., noting that those two drivers account for 8.5 of the overall 13.15% increase in the proposed budget(s).  Echoing Mr. Giuliano’s sentiments, Katie Williams implored the BOF to find other ways to lessen the impact the budget increases have on the taxpayers rather than cutting the BOE budget.  “Our teachers have been doing heroic work through the pandemic and especially after, facing a lot of challenges with social and emotional issues with our kids above and beyond – trying to get them back on track emotionally.  They will not be able to do that if we start with cuts because it (those cuts) will cut teachers and programs.”  Stephanie Marlowe also thanked Mr. Giuliano for speaking and providing insight as an educator.  “I personally feel like we could even offer the school more social emotional support than they’ve already been given – a budget cut would prevent us from being able to do that.”

The BOE is expected at the next weekly BOF meeting to discuss its proposed budget.

New Fairfield’s Board of Finance next regular meeting is scheduled for Wednesday, March 29, 2023 at 7:30 p.m.

By Michelle L. Santoro