School board again delays employee health fund vote
Published 6:50 am, Wednesday, October 12, 2011
The Board of Education, acting on a request Tuesday night by interim First Selectman Michael Tetreau, again postponed a vote on a memorandum of understanding that would establish the amount of money the school system and town government need to contribute to their employees' health insurance reserve fund.
"Simply, we need an agreement as to how we're going to get from point A to B," Tetreau said.
Tetreau cited a recent negative outlook from Moody's, a credit-rating agency that added the outlook to the town's AAA credit status, as one reason for the need for the memorandum.
As of Tuesday night, Tetreau, Chief Fiscal Officer Paul Hiller, Board of Finance Chairman Tom Flynn and Superintendent of Schools David Title had not hammered out a revised memorandum of understanding on the contributions to the fund. School board member Paul Fattibene, who is also a lawyer, pointed out at a board meeting last month that there was conflicting and ambiguous language in the original memorandum. As a result, a vote was postponed at that time.
School board member Catherine Albin said she wasn't comfortable with the working memorandum either, as its language, or lack of, allows for the agreement be rescinded by either party at any time.
Some board members felt a memorandum of understanding is not needed and that the superintendent could be directed how to proceed regarding insurance contributions.
However, Tetreau felt in order to keep the town's AAA credit rating intact, contributions for the coming years, on both the town and schools' side, should be clearly defined. Tetreau said the credit-ratings agencies look at the overall reserves, and that includes workers' compensation, which has risen, and they're concerned about how the town will address that.
For the last few years, both the town and the Board of Education have funded the actuarial recommended amounts to the reserve fund, but the school board has built a healthy surplus while the town has not.
Hiller said last month that the school board's surplus now is roughly $4.9 million, while the entire amount in the fund -- town and school contributions -- is $5.9 million. The figures are preliminary, as some claims through June 30 have not yet been processed. Also, an ongoing audit will not wrap up until Thanksgiving time, he said.
The board's contribution this year, according to the 2011-12 budget, will be $16.4 million. The town expects to contribute $14.9 million, according to Hiller. Tetreau said a memorandum of understanding is preferable so it is clear how much should be directed to the employee health insurance fund.
Board Chairman John Mitola said last month that the intent of the memorandum is to have the Board of Education and the town contributing an equal share, which isn't happening now.
"We're contributing more," he said. The motion to postpone a vote on the memorandum of understanding passed Tuesday by a 7-0 vote with one abstention.