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SEE YOU IN COURT! - May 2017

May 1, 2017

As Chair of the Finance Committee of the Nutmeg Board of Education, new Board member Penny Pincher is deeply concerned about the budget next year. Given the uncertainties regarding state funding, Seymour Dollars, venerable Chairperson of the Nutmeg Board of Finance, made good on his threats, and he and the other members of the Board of Finance have recommended a “no-increase” budget to the voters to approve at the upcoming referendum. As a result, the Board of Education was forced to cut many items from its budget for next year, including new Chromebooks for Acorn Elementary School and new band uniforms.

By contrast, the Board has done well with its budget this year. For the first time in recent memory, special education expenses have been below budget for a number of reasons, including that two children in expensive out-of-district placements moved out of town. Indeed, the actual expenses for special education for the current year are predicted to be around $300,000 less than budgeted. Consequently, Penny sees an opportunity to mitigate the damage she expects to the school system next year.

She sent Ms. Superintendent an email with her idea – buy the Chromebooks and band uniforms now! By using the unspent funds now, she reasoned, the Board can achieve two of the goals it had when it submitted its original budget to the Board of Finance. By return email, Ms. Superintendent told Penny that she thought Penny had a great idea and that she would promptly make arrangements with the Business Office to purchase the Chromebooks and the band uniforms this year. Being politically astute, however, Ms. Superintendent included all the other Board members on the email, because she did not want any of the Board members to accuse her of not being transparent.

As one might expect, the other Board members were not all in support of Penny’s idea. Red Cent, in particular, was incensed by what he saw as an end run on the Board’s opportunity to return unspent funds to the Town at the end of the year. Red expressed his strong displeasure in a “Reply All” email, and he even copied Seymour Dollars on his response. Of course, then Seymour got involved, and he threatened the Board members that such expenditures were unauthorized because they were not presented to the Town for its approval last year for this year’s budget.

Penny and Ms. Superintendent didn’t want trouble, but they felt strongly that the students will suffer if the Board doesn’t at least replace the Chromebooks at Acorn. Accordingly, Penny responded to Red, Seymour and the other Board members that she and Ms. Superintendent will drop the idea of replacing the band uniforms, but that they will authorize the purchase of the Chromebooks as an “educational emergency.”

Seymour was not mollified, and in a responsive email, Seymour referred vaguely to “dire consequences” if Penny and Ms. Superintendent go ahead with their plan to deprive the Town of the surplus funds that it rightly deserves to receive.

Can the Nutmeg Board of Education go ahead with the plan hatched by Penny and Ms. Superintendent to expend the funds this year from the special education line item to buy Chromebooks?

* * *

The proposed action is permissible, but the way that Penny went about it was all wrong. Boards of education may make line item transfers of the funds appropriated for school purposes, but in doing so, they need to follow statutory procedures.

Each spring, boards of education in Connecticut must prepare and submit to the fiscal authority an itemized estimate of the funds needed for the coming year. Considering that estimate in light of the other needs of the municipality, the fiscal authority makes an appropriation to the board of education. The board of education must then keep expenditures within the limits of that appropriation (along with other funds received for school purposes), and the board of education may not borrow money. Rather, if additional funds are needed during the course of the year, the board of education must request a supplemental appropriation from the municipality.

That said, under state law the board of education has significant discretion to expend the funds appropriated to it. Conn. Gen. Stat. Section 10-222 provides that “the money appropriated by any municipality for the maintenance of public schools shall be expended by and in the discretion of the board of education” (emphasis added). Moreover, in exercising that discretion, boards of education may “transfer any unexpended or uncontracted-for portion of any appropriation for school purposes to any other item of such itemized estimate.” Id. However, the statute prescribes procedures for such transfers, which procedures both Penny and Ms. Superintendent ignored.

Specifically, the statue contemplates that the board of education itself will make such transfers unless “the urgent need for the transfer prevents the board from meeting in a timely fashion to consider such transfer,” in which case designated persons may make transfers up to the limits the board of education sets when it designates such person (e.g., the superintendent). Here, there is no urgent need for a line item transfer, and thus the question of transferring funds from the special education line item to buy the Chromebooks should have come back to the Board as a whole.

Even when such urgent circumstances are presented and a delegate must make a transfer, the statute imposes additional requirements: (1) the transfer must be announced at the next regular board meeting, and (2) the board of education provide a written explanation of the need for the transfer to the legislative body of the town.

In addressing these statutory requirements, boards of education should be careful to define “line item” broadly so that the duties associated with transfers are rarely triggered. In that regard, an amendment to the statute from 2013 is helpful. It provides that the “itemized estimate” that boards of education must submit to the town in the budget process “means an estimate in which broad budgetary categories including, but not limited to, salaries, fringe benefits, utilities, supplies and grounds maintenance are divided into one or more line items.” Given this statutory provision, it is appropriate for boards of education to define “line item” broadly for these purposes.

Finally, again we see the Nutmeg Board of Education violating the Freedom of Information Act. A “meeting” under the FOIA includes communications to and among a quorum “to discuss or act upon” matters under the agency’s jurisdiction. Here, as soon as Mr. Superintendent hit “Reply All,” she essentially invited the Board to conduct an illegal discussion of the budget over email in violation of the FOIA, which invitation the Board promptly accepted.

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