Electricity surcharge overloading budget
STAMFORD — It’s electric ... and it’s costing the district money.
The Board of Education is asking the city to drain more than $200,000 from a reserve account to pay for rising electricity costs in the district. The board approved the motion at a meeting of its fiscal committee Tuesday night.
According to district Director of Finance Hugh Murphy, the increased amount comes from a capacity charge the company levies to pay for system upgrades. The charge, which is not part of the district’s fixed electric rate, is about one to two cents per kilowatt hours. Murphy said the rate is the highest it has been in the last 10 years.
At a meeting of the school board’s Fiscal Committee Tuesday night, board members questioned why the increased rate was not calculated into the budget for this year. Murphy said the rate went into effect at the start of the fiscal year in July after the budget had already been set. He said next year the rate will be different and is predicted to drop.
“It’s in every utility bill,” said Clarence Zachery, the district’s chief fiscal and operations support officer. “That’s how they upgrade their lines. It doesn’t creep up. The rate just goes into effect.”
Board Chair Andy George expressed concerns over draining the reserve, which Murphy estimated was set up five to six years ago and carries over year-to-year.
“My concern then is the energy reserve is completely depleted,” George said. “This was unanticipated to a certain extent. If this happened again, we would be faced with a shortfall in the operating budget. We just have to be careful and mindful of that.”
Murphy said even with the money from the reserves, there’s predicted to be a $392,000 shortfall in the electricity budget for the year.
“So we’re going to pretty much have to find another couple of hundred thousand in our budget,” remarked board member Jackie Heftman.
The electrical rate spike is only further draining an already strained budget. In the same meeting, the board approved a request for supplemental funding in the amount of $702,594 for mold remediation. The cost is going to direct vendor payments and custodial overtime for the remediation. All occurred prior to Oct. 29 when the city Mold Task Force resumed fiscal responsibility for the mold crisis.
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