BET hears preliminary FY25 closeout; board of education aid, contingency and $10 million state grant discussed

Finance staff presented a preliminary FY25 closeout and a multi‑part plan to use one‑time state funds to address school and capital priorities.

Jared (finance) said the FY25 closeout is preliminary and still subject to audit and encumbrance clears. He showed two scenarios: one that assumes the previously budgeted $8 million use of fund balance and one that treats no fund balance use; the latter would leave the city close to break‑even after year‑end adjustments. Staff noted a $3.3 million conveyance tax/developer revenue that was budgeted for FY25 did not close in time and will likely post in early FY26.

The board and staff discussed a $10 million state municipal aid allocation available for road maintenance, plowing and capital, and the administration described a proposal to direct roughly $3 million of next‑year state funds to help the Board of Education. As part of negotiations with the Board of Education, finance described an MOU that (a) gives the BOE an infusion of city funds to address immediate health‑care and staffing shortfalls and (b) requires the BOE to appropriate recurring amounts to the city’s internal service fund (which covers health insurance, automobile/property liability claims and workers’ compensation) to share costs long term. The city’s presentation said $2 million would cover the BOE’s current health‑care shortfall, $1 million would be carried into the next fiscal year for staffing and program restorations, and an additional portion of the one‑time $10 million state grant will be allocated mechanically (for example, DPW road costs traditionally covered by the operating budget could be covered by grant proceeds, freeing operating dollars to help BOE costs).

Jared reiterated that federal and certain state education grants remain uncertain and that the administration will perform internal audits to determine compliance risk before applying for or certifying grant claims. The board asked for additional written explanations on a large underrun in the Combined Dispatch capital project that left approximately $4–4.5 million available and on the composition and desired target balance for the internal service fund. BET and staff agreed to return to the board in August with final FY25 true‑ups and specific transfer items tied to the BOE MOU.

The board discussed contingency balances and staffing-related costs (including Social Security budget variances) and asked finance to provide a more detailed explanation of Social Security variances at a future meeting.

The BET did not take a new vote on FY25 closeout numbers at this session; the presentation was informational and the board requested follow‑up documents and formal votes on specific transfers in August.