The Darien Board of Finance met with the Board of Education Tuesday night to discuss the district's side of the budget.

The BOE recommended its $71.8 million budget to the BOF in late February after trimming $910,000 from Superintendent Donald Fiftal's proposed budget. The finance board would like to see more cuts, according to BOF Chairman Murry Stegelmann.

"When we take your numbers, your capital and operating, and the Board of Selectmen's capital and operating, and put them together, we're staring at a 5.0 percent mill rate increase for the year. And that's a number which we find unacceptable, and we're hoping you can help us get to a more reasonable number overall by addressing your fraction of the budget," Stegelmann said at the beginning of Tuesday night's two-hour meeting.

The school district is currently running a deficit, Board Chairwoman Kimberly Westcott told Stegelmann. Westcott's board provided the finance board with several handouts throughout the course of the meeting, one of which stated:

"We have been reporting a projected deficit since we were informed that the Connecticut State Department of Education would not be reimbursing the special education Excess Cost Grant at 100 percent. In our most recent (March 1, 2010) budget projections, we showed a negative balance projected at $306,344 with four months to go."

According to data from the BOE, the district received 84 percent reimbursement for that excess cost grant; had the district been reimbursed at 100 percent, it would have received an additional $487,000 in state funds. In addition to a lack of state funding, the deficit has also been affected by legal fees, according to the district's director of finance, Richard Huot.

"In the last three months, we've been averaging between $40,000 and $60,000 in legal fees," he said.

The district is "actively engaged in four cases," has spent about $400,000 in legal fees to date this year, and had only budgeted for $230,000, Westcott said.

The two boards also discussed the increasing cost of health insurance in the district. According to Westcott three vendors participated in a re-bidding of health insurance; the district's current provider, Anthem, came in with the highest bid at a 37 percent increase. Aetna was second highest and CIGNA was the lowest, with a 25 percent increase bid.

The current budget recommends about $9 million to be spent on health insurance this year; up $1.7 million from last year.

"One thing I might mention on health insurance for 2009-2010, which we assume is because of the economy, is that we've had a migration of spouses onto our plan," Westcott said. "We've had 65 additions to our plan, which increased both our cost and can affect experience."

The finance board questioned the BOE about revenue, including the $100 student activity fee at Darien High School, which the BOE projects will bring in about $120,000 in revenue. One member of the BOF asked whether it would be possible to raise that fee to $125 to increase funds coming in, but Westcott said her board was against that.

"The higher it is, the harder it is to back out in the future," Westcott said. Ideally, she hopes to remove the activity fee after a couple years, she said.

The finance board requested that the BOE answer some questions about costs in the upcoming budget and submit answers by Monday, April 5, so the finance board can further look into the BOE's budget at its meeting on Tuesday, April 6. Among those questions the BOE needs to examine is the possibility of using natural gas in some of the elementary schools and the financial effect this may have.