The bottom-line headlines will trumpet how Hartford Public Schools will be receiving a budget-saving $10 million bailout.  State senators Ritter and McCrory will tell voters how they made it happen.  Hartford Mayor Arulampalam will take some credit.  Superintendent Torres-Rodriguez will add to her resume and profile bios that she successfully petitioned state and local political leaders for additional funding.  Board of Education member Rigueur will sleep next to copies of his “school officials” letter and his OpEd in the Hartford Courant.

However, except for the mayor, none of them can outweigh their past failures which brought them to the need for a budget bailout in the first place, and, the devil is in the details and may end up causing more agita than the HPS budget deficit it was designed to fix.

First, let’s look at the state’s portion of this bailout.  Oh, the word ‘bailout’ is appropriate when discussing folks who are floundering around like a fish with no water.

Connecticut Senator Matt Ritter stated in a press conference that the extra $5 million in state funding to Hartford schools “was done through recalculation of formulas dealing with tuition reimbursement,” formulas which are used in the states Education Cost Sharing (ECS) grants to school districts, the basis of state funding to school districts.

Tuition reimbursement has been one of the go-to budget busters for Superintendent Torres-Rodriguez, despite Hartford Public Schools collecting nearly twice the state average in tuition reimbursement from sending school districts.  But anyhoo, tuition payments cost HPS, according to Torres-Rodriguez, more than $100 million a year.  Thanks to the formula “recalculation” by Ritter and the boys (and girls), the state just saved them $5 million.  Thanks.

In a city of Hartford announcement on the bailout, Ritter was quoted as saying, “I searched for every state dollar that I could find for Hartford schools.”  This was less than a week after Ritter said upon learning that the state’s budget surplus savings program will take in $645 million more in tax revenue than expected, putting the surplus at  $1.2 billion for the year, “Folks, the state is in a very solid financial position.”  Apparently, Ritter’s search for “every state dollar” didn’t include looking in the budget surplus account which has over a billion dollars, instead, the legislature “recalculated” a school funding formula to come up with $5 million.  Thanks.

And, on April 23rd it was reported that the state legislature approved a 4.5% pay hike for “some” state employees, an increase of $154 million to the state’s budget.

As to the HPS bailout, “When the delegation was asked to deliver,” said Ritter, “we delivered.”

According to State Representative Doug McCrory, when the ECS is fully funded in 2026, tuition payments by school districts will be going away. “If parents make the choice to send their child to a school outside of their community, no longer will the school system have to pay for it,” he said. “The state will pick up the cost. It’s their responsibility and obligation.”

So, basically, the state just advanced some of the money that they will be paying in two years anyway, there was no big search for “every state dollar” as Ritter suggests.

Now, was this portion of the bailout, the “recalculation” of formulas or the advance of future payments, Hartford specific or are other school districts going to receive a “recalculation” benefit or advance?  Will other failing district superintendents and mispositioned board members also be knocking on the doors of their state senators and reps asking for spare change?  If so, Ritter’s “we delivered” message floats like a lead balloon.

The second portion of the bailout comes from the city to the tune of $1 million.  It’s not like Arulampalam signed a check for a million dollars, it is the city taking over school crossing guard costs from HPS.   HPS paid the guard’s wages, but the city controlled them.  This frees up $1 million on future HPS budgets, which has non-profits licking their chops.  Note to crossing guards, since Torres-Rodriguez isn’t signing your checks anymore, feel free to hold her up in traffic, it’ll be a 2022 Mercedes 350.

The crossing guard takeover underscores council member Hernandez’s thought that city could takeover HPS’ community schools program.  Hernandez shared this idea during Torres-Rodriguez’s budget presentation to the city council two weeks ago.  During a budget meeting last month, Torres-Rodriguez shared the information that she was seeking $2 million from the city in order to keep this program running, this after receiving a $2.1 million federal grant three months ago, which she used to hire three additional central office staff.  Perhaps this city takeover thing is the wave and need of the future.

The final $4.5 million portion of this bailout is the ‘robbing Peter to pay Paul’ portion and should be very concerning to a lot of folks.  News reports state that the $4.5 million is coming from the city, which is sorta true.

What’s happening is that the city is giving HPS a $4.5 million dollar loan from funds in the Other Post-Employment Benefits Trust Fund (OPEB).  How HPS-ish, a trust fund you cannot trust.  This fund covers retirement healthcare costs for retired city folks and non-certified (and some certified) staff employed by HPS.  So, technically, a covered staff member at HPS could be getting paid for the near future with money from their own retirement benefits account and newly hired covered staff will be benefiting from the retirement benefits paid into the fund by longer term employees!  And guess who’s on the city’s OPEB Committee which manages the trust?  Superintendent Torres-Rodriguez!

In 2021, the trust portion for BOE members was underfunded by 10%, or short $2.3 million.  The $24 million trust lost nearly $700,000 for the third quarter of 2023, but for the year, its investments have generated $1.1 million for the fund, and $2.3 million over the last 3 years.  Nearly twice what the fund has earned over the past three years will be used as a loan to HPS.  Did Torres-Rodriguez put up her Mercedes and her Volvo for collateral?  Will the OPEB Committee monitor HPS’ use of the funds (which technically would mean the superintendent will monitor her own spending)?  Did HPS get stuck with a hefty interest rate due to its poor credit history?

This is the sort of thing which harms a city’s credit rating.  Like an individual, a city must maintain a good credit rating in order to finance things like dog parks, bridges to nowhere, and non-affordable affordable housing projects.  The folks at Moody’s Investor Services who grade municipalities on their credit worthiness, upgraded Hartford last year from a Ba2, which is a non-investment grade, subprime, speculative and risky rating, to a Baa3, which is the lowest prime, investment grade rating, which means they are moderately risky and speculative.  In other words, they would still need a co-signer to finance a Kia.

The bottom line with robbing the OPEB trust fund to finance Torres-Rodriguez’s financial malfeasance is the question of its legality.  According to the Hartford city charter (Sec. 2-492(b)) “Any funds expended from the OPEB Trust Fund shall be utilized for the sole and exclusive purpose of providing OPEB benefits to retirees or their qualified dependents and, to the extent permitted, to paying the administrative costs thereof.” 

Also, city charter Sec. 2-497 states, “No part of the OPEB Trust Fund assets shall be subject, in any manner, to sale, transfer, alienation, pledge, assignment, attachment, or any other encumbrance, whether voluntary or involuntary, by operation of law or court order. Any attempt to sell, transfer, alienate, pledge, assign or otherwise encumber the assets of the OPEB Trust Fund shall be void and of no force and effect.”

The OPEB trust fund is for the “sole and exclusive” purpose of providing benefits to retirees and cannot be assigned, attached, or encumbered “in any manner.”  Doesn’t a loan to HPS go against both of these rules?  Or will the OPEB Committee call this an “investment” of trust funds, if so, what is their expected tangible net gain?  I’m floundering on this question like a fish with no water.

Finally, the purpose of this bailout was to retain staff at HPS.  I see problems brewing already while Torres-Rodriguez is home making out a shopping list.  According to an unnamed “spokesperson” for HPS (I wouldn’t want to be identified as the person delivering Torres-Rodriguez’s comments to the media either), these funds “have to be focused on responding to the needs of students…”  That’s a damn big umbrella!  Fixing broken urinals would be “responding to the needs of students!”

And to top off the whole charade, the “spokesperson” stated, there will "very likely still be a reduction in force.”  Like a fish with no water.