CHESHIRE – The 2022-23 school year is well underway, but at the Board of Education there are still concerns about the cost of provision to pupils, teachers and staff.
One item noted by district chief operating officer Vincent Masciana in his financial report at a school board meeting earlier this month was energy costs. The district’s current electricity contract with Constellation Energy, in place since 2018, is due to expire in December. The district had a favorable rate of about 8 cents per kilowatt hour, but any new contracts are “likely to be double that.”
“The market hasn’t been favorable” to finding a new vendor with a similar foreclosure rate, Masciana said at the Sept. 15 school board meeting, but he’s confident the district can find another option. This may include, for example, returning to Eversource.
For now, “we’re not giving up on trying to find a better rate than market rates right now,” he said. These current prices are reaching up to 16 cents per kilowatt hour, but the hope is to settle somewhere in the 12 to 14 cent zone. At those prices, the district would look to lock in for a year or two at most, Masciana said.
The result of locking in at the higher rate would be an increase of approximately $100,000 in the budget. This negative impact could be offset by cutting spending elsewhere in the budget, Masciana said.
“It’s not going to blow the budget, but we never like to see such big variances,” he added.
Board member Tim White asked if part of the district’s electricity budget was being offset by the town’s solar power generation facility near the dog park on Waterbury Road – a project White has helped launch in 2014 as a graduate student at Yale’s School of Forestry & Environmental. Studies.
Masciana responded that the district sees no direct benefit from the solar farm.
“It’s not factored into any of the schools’ operating budgets,” Masciana said. But as state mandates for green energy, including the bus fleet, take effect over the next decade, planning for the transition from fossil fuels has already begun.
Higher fuel oil and diesel fuel costs are also a reality. To account for the effects of inflation, the district put a cap on non-salary expenses.
“It’s 40% of the approved budget, and we’re going to leave that in place probably until December just to be on the safe side,” Masciana told board members. “We will continue to evaluate it as the year progresses.
“The purpose of the cap is just to make sure that if something really goes over budget, we have enough cushion,” he added.
A second area of budgetary concern relates to medical benefits. These claims, as explained in Masciana’s budget report, amounted to $1.1 million for July and $1.4 million for August, including an additional week, against a budget of $1 million per month. Masciana said he was “not particularly concerned about the trend yet, but we’ll have to keep monitoring it and we’ll see how the year unfolds.”
Board member Faith Ham expressed concern about cost overruns, asking, “When are we going to start going to providers, hospitals and asking for cost data? Because there’s something going on here that we can’t control.
“The rates that are paid to a provider for a given procedure, whether a doctor’s visit or a surgical procedure, are negotiated in advance, in our case by Cigna,” replied Masciana. “What drives up our costs are claims that exceed the $25,000 threshold and fall short of the $175,000 stop-loss cap.”