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Amity Votes Not to Return $1.5 Million Surplus to Towns

Amity Votes Not to Return $1.5 Million Surplus to Towns

Major Implications for Town Revenue & Actual Budget Need

Author Note: The goal of balancing Town needs with taxpayer affordability is a challenging one.  In my view, one of the requirements of being a member of the Orange Board of Finance (OBOF) is to inform the public. In fact, I consider this an obligation of this elected position. What we are talking about is the spending of millions of dollars of hard-earned money of the people who reside in the Town. 

Being a member of the OBOF requires not only monthly review of the budget expenditures but analyses of a significant volume of data. The job also requires a questioning perspective of funding requests, with a keen awareness of the difference between “wants” and “needs.”  This method not only applies to the Town budget but also to the budgets of both Amity and Orange schools, which take up a major portion of our resources. 

Over the years, one way to achieve that balance of needs and affordability is to communicate a message of “Doing More with Less,” to set a culture by which we strive to operate.  In my view, this approach is consistent both with the Town’s heritage and with what we all do in our personal lives.

In this article, I will summarize and share recent events and learnings at Amity focusing on 3 major items: (1) Share the amount of the Amity FY 21-22 Surplus; (2) Examine the current FY 22-23 Amity budget in light of the Surplus; and (3) Summarize recent events & decisions related to the Amity FY 21-22 surplus and identify immediate implications.

 

1. Amity FY 21-22 Surplus AMOUNT

At recent Amity Finance Committee (AFC) meetings, I was able to confirm that the surplus for FY 21-22 was $1,536,324.

 

 

2. eXamining the new FY 22-23 Amity BUDGET

It is always a best practice to base future year budget increases on the actual amount spent in the prior year. Moffett, long-time OBOF member, put it this way: “Budgeting should be based on ACTUALS because – as seen by the Amity surpluses – the prior year’s budget is inflated to begin with.”

Now we have the Actual surplus data for FY 21-22, $1,536,324.  In addition, at the September meeting, the Amity Administration confirmed their needed increases totaled $1,651,598 across 8 major expense categories for the current FY 22-23.

 

 

As visualized in the accompanying graphic, a sizable amount (93%) of Amity’s budget need for FY 22-23 can come directly from the surplus embedded in the FY 21-22 budget. That amount of $1,536,324 is already there in FY 22-23 budget to begin with.

 

This fact means NEARLY ALL of the Increase spending for needed services to educate Amity students – for which a budget is prepared – would be covered by the funds in the budget that were surplus in FY 21-22. Therefore, only $115,274 of additional funding is required to satisfy ALL of Amity’s actual increased needs for FY 22-23. This increase would be a modest 0.22% increase from FY 21-22.

Of note, this Actual Need of 0.22% for Amity’s Budget increase is far lower than all FY 22-23 budgets proposed, discussed, and voted on this year.  In fact, the bi-partisan Orange BOF unanimously voted for to support a 0.41% Increase for Amity that turns out to be reasonably accurate, if anything a little overstated.

 

3. Recent Events & Decisions related to the FY 21-22 Amity Surplus

In August, Amity Finance Committee voted unanimously (with 2 abstentions) to use $516,982 of FY 21-22 surplus funds (1% of the budget) to support the Amity capital reserve fund. However, the Amity BOE rejected this unanimous vote of the AFC and voted to use $929,175 of FY 21-22 surplus funds (~ 1.8% of the budget) to support the capital reserve fund.

Also, Superintendent Byers announced that she made a recent request to lawyers about regional school systems and budget surpluses. These attorneys had indicated—citing an obscure CT State statute – that Amity “shall” not return surplus money to the taxpayers of Member Towns that funded the Amity budget.

Matt Giglietti, Vice Chairman of the AFC and Chairman of the Board of Finance in Woodbridge then contacted four attorneys who chuckled at the word “shall” because the word “shall” is not binding. Consequently, this finding led him to conducted an Internet search on the words “Shall” and Must” and the major distinctions between the two words: “Shall” is so corrupted by misuse that it has no firm meaning while “must” denotes a requirement or obligation.

Mr. Giglietti stated further that in particular one of the attorneys said “he would have no problem defending Amity if they decided to continue the precedent and return money to the towns.”

Then based on the State statute and the recommendation of Superintendent, Amity BOE decided to RETAIN ALL funds from the FY 21-22 surplus, and not return ANY MONEY to the Members Towns of Bethany, Orange, and Woodbridge.

So, in what may be a major surprise to many taxpayers, Amity Leadership has decided to return NO Surplus Money from FY 21-22 to the Towns.  This decision is all the more challenging to understand after years & years of Amity championing its “no big deal” approach to surpluses since “we give the money back to the Towns.”

 

 

Further, many taxpayers may recall a document dated Sunday May 8, 2022, five days after the first referendum failed with 64% voting against.  This 2-page unsigned document on Amity letterhead was widely posted on social media & reiterated a casual attitude about budget surpluses, stating three times in bulleted paragraphs “the monies in the budget that were not spent were returned to the towns.”  And then concluded – in a one sentence bolded paragraph – “The District, over the last 5 years, has returned 80% of the unspent funds to the Towns.”

Finally, there are two immediate implications from these recent events:

Implication #1 CARRY-OVER Funds.  The $1,536,324 surplus in the Amity FY 21-22 budget results in a $607,149 “carry-over” of money (surplus of $1,536,324 less $929,175 allocated to the capital reserve fund that the ABOE voted for, over-ruling the AFC vote as noted earlier).

Implication #2 ORANGE REVENUE SHORTFAL of $700,000:   For the current FY 22-23, Orange budgeted $700,000 in revenue from an anticipated large Amity surplus and receiving 50% share of that surplus to support the Town FY-22-23 operating budget.  An Amity surplus of $1,536,324 occurred as estimated; but now Amity Leadership decided not to return any of surplus funds to the Towns. Therefore, Orange now has a “$700,000 shortfall” in its current FY 22-23 budget.

By Jim Leahy, Vice-Chairman OBOF

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