This story was updated at 7:26 p.m.
NORWALK, Conn. The reserve ran dry, according to one Norwalk Board of Education member. Another member says Schools Superintendent Susan Marks hired teachers without authorization from the board and did not adequately oversee the transitions in a series of new chief operating officers.
The reasons for a $4 million shortfall in the board's 2011-2012 operating budget werer expected to be examined Wednesday night in a special meeting of the board's Finance Committee, which was cancelled. But board members and officials are trying to explain what has happened.
Democratic Board Member Mike Barbis said the fault doesn't just lie with the school's central office. "The city was complicit, too," he said.
Like others, Barbis said the majority of the $4 million is attributable to health insurance costs. "We used to self-insure," he said. "When you self-insure you have reserves. If the claims are less than you put aside you end up having some extra money. There was a bunch of this extra money lying around."
The situation changed when GASB , the Government Accounting Standards Board, instituted new regulations for the liability of pension and health care costs for retirees. Historically speaking, municipalities did not need to account for retirees, Barbis said. "All these municipalities have been guaranteeing people's pensions and benefits and all this stuff since the 50s," Barbis said. "Twenty or 30 years ago it didn't matter, today it's a big number. We are now required to put that money aside."
"They had been meeting these liabilities by drawing on this reserve and last summer that reserve ran dry," Barbis said. He added that was just as former Chief Operating Officer Craig Drezek, who started the job in early 2011, realized he had a health issue.
Drezek, who replaced COO Dan Cook, resigned in June after being given an ultimatum from his doctor, Barbis said. He was replaced by interim COO Ray Senese, who was replaced by Elio Longo late last year.
The quick succession of COOs is part of the reason there is a problem, he said. "There has been an ongoing computational mistake," said Republican Board Member Steven Colarossi, chairman of the board's Finance Committee. "...In my opinion the superintendent did not exercise sufficient oversight from all of these transitions."
Colarossi has other issues with Marks. "Unfortunately, the superintendent over the summer had the authority to hire teachers," he said. "She hired at least 10 to fill positions that we had already eliminated. So we have deficit spending we don't know about, and each has insurance costs."
The figures on that have not been calculated, but Colarossi said a new teacher costs $80,000 on average, the sum of the average salary and the average expense for benefits.
"We don't keep a tally sheet," Colarossi said. "We just assume that everyone who gets hired there's an appropriate budget authorization. We were told there were a number of teachers hired which exceeded the number of positions that we had budgeted for."
Marks did not return a request for comment.
Republican Mayor Richard Moccia, an ex-officio member of the board, also said the teachers who were hired are part of the problem. "It was my understanding that they were reducing the number of positions and it does not appear that was done," he said in an e-mail. "We have been put in a difficult position as to how we handle the shortfall. Will it involve using the rainy day fund? How will it affect the proposed budget for FY 2012/13? I will be having meetings with BOE and the administration to discuss the matter."
While campaigning for re-election last fall, Moccia asked voters to give him credit for improvements in the schools, such as increases in test scores. Asked if he should be held accountable for a budget discrepancy that occurred on his watch, he replied by e-mail, "The finances of the Board of Ed by state law are under their control and neither I nor the Board of Estimate has authority over their expenditures or their management once they receive the funds."
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