Town Contends With $212,483 Woodstock Academy Bill

WOODSTOCK — When Woodstock town officials were notified in November 2018 that Woodstock Academy would present them with a $212,483 bill for roof repairs and underground storage tank removals, it set in motion a flurry of meetings and discussions about how the town would pay for it.

There were several issues that the Boards of Education, Selectmen, and Finance had to grapple with.

It was a big bill for a private institution that the town doesn’t own.

If the cost was considered tuition, that would mean an increase in the education budget which would raise the minimum budget requirement. Basically, the MBR requires towns to maintain an education budget at its most recent amount. If $212,483 was considered tuition, it would increase the education budget for years to come.

Some board members and residents think that treating the $212,483 as a capital expense circumvents Woodstock’s ordinance known as prop 46. The ordinance requires that the budget not exceed increases to the town’s revenue (grand list increases, fees collected, and state and federal money received). The town already voted in the budget for 2019-20 and it maxed out the prop 46 guidelines.

“I believe if we spend this money, prop 46 is useless,” said BOF member Roy Bradrick, Jr. “We’ll be able to call an expense anything we choose.”

The town’s auditor and counsel weighed in on the subject and both agreed that the bill could be treated as a capital expense. Auditors said it fit the qualifications for permissible capital expenditures.

“The only leap is that the money is going to a private institution,” Attorney Richard Roberts said.

Towns are authorized to pay private entities that provide a public service and Woodstock Academy has been the town’s high school for more than 100 years. The state supreme court decided that as a matter of law, Roberts said.

“In light of that, I felt is was a permissible capital expense,” he said.

The Woodstock Academy bill will be an expense spread out over two years, however. This was another sticking point for residents. Roberts said that almost every capital expenditure is one that will recur at some point.

“It’s a one-time expense that’s being charged over the course of two years,” he said.

Regardless of who owns the asset, the time charged for the cost of capital work isn’t the determining factor in whether it’s considered a capital or operating expense, Roberts said.

First Selectman Mike Alberts said there was money in the General Fund Balance to cover the WA bill. Auditors suggest towns have 15 percent of their budget in a general fund balance and Treasurer Karen Fitzpatrick said she estimated the fund would be above 15 percent by the time books closed on the year.

“We don‘t own the academy,” Fitzpatrick said, "but it is an asset for 431 Woodstock students and the $6.7 million education budget. We’re putting this money into our children.”

BOF member David Fortin said the bottom line is that WA submitted a bill that Woodstock has to pay.

“This will have the least impact on the community,” he said. “This isn’t a way to circumvent prop 46. There is nothing in prop 46 that mentions this type of issue. I’d ask us to put aside our frustration with WA and figure out how to pay the bill. That’s what we’re here for tonight.”

The issue will head to referendum because it’s more than $100,000. Residents must vote on any expenditure over $100,000.

Should the vote fail to pass, the $212,483 will come out of the BOE budget, according to BOF Chair Michael Dougherty.

“It’s either a capital expense, or considered tuition,” Dougherty said. “If it’s considered tuition, that comes from the BOE budget, which has already been approved at the maximum of what prop 46 allowed.”

BOF Alternate David Richardson said this won’t be the last time Woodstock residents will have to deal with WA bills for capital improvements. Alberts said it was his understanding WA was in the process of completing a comprehensive review of its capital expenses, that the trustees hadn’t put enough money away for capital improvements over the years.

“Head of School Christopher Sanford admitted they had fallen short,” Alberts said.

Denise Coffey can be reached at dcoffey@courant.com.