The Board of Finance held a regular meeting on Thursday, August 25, 2005 in the meeting room at Town Hall South, 3 Main Street, Newtown, CT. Chairman John Kortze called the meeting to order at 7:30 p.m.
PRESENT: John Kortze, James Gaston, Harrison Waterbury, Michael Portnoy, Joseph Kearney, Peter Giarratano.
ALSO PRESENT: First Selectman Herbert Rosenthal, Finance Director Ben Spragg, Schools Superintendent Dr. Evan Pitkoff, Schools Director of Business Ron Bienkowski, Schools Director of Grounds and Maintenance Dom Posca, Board of Education Chairman Elaine McClure (8:20) and member David Nanavaty, Hawley School Principal JoAnn Peters, Consulting Engineers Service (CES) representative Brian Wetzel.
VOTER PARTICIPATION: None present.
COMMUNICATIONS: A letter was received from the Newtown Parent Connection thanking the Town of Newtown for its donation of $2,500. A letter was received from Regional Hospice thanking the Town of Newtown for its $500 grant.
FINANCE DIRECTOR REPORT: Mr. Spragg had no report.
ACCEPTANCE OF MINUTES: Upon motion by Mr. Gaston, the minutes of the 7/28/05 meeting were unanimously carried.
FIRST SELECTMAN REPORT: Mr. Rosenthal noted that he is forwarding thank you letters from agencies to the Board of Finance and Legislative Council.
OLD BUSINESS: None noted.
NEW BUSINESS:
Capital Improvement Plan – Board of Education. Dr. Pitkoff asked if items such as the $260,000 for high school auditorium repairs and $520,000 for the high school athletic fields have to be funded out of the school budget or out of the CIP. Mr. Spragg said that whether these are to be funded out of the school budget or school grants but still must be in the CIP. Mr. Kortze said that items that are ¼ of 1% of the budget will be absorbed by your budget. Mr. Rosenthal said that some items are paid for our of the operating budget and some are bonded. He said that the Board of Finance determined that roads will be funded out of our budget rather than by bonding.
Dr. Pitkoff said that it is an issue that funding must be in place before the State will review the plans for a project but the Town does not authorize an amount until after the bids are in. How can we get these in sync? Mr. Rosenthal said that he has asked CCM to ask the State Department of Education to allow the School Facilities Unit to review plans so we can go out to bid. He has not received any support from education sites in other communities nor has he received a letter of support from Mr. Bienkowski as he had requested. Mr. Rosenthal agreed that the process seems backwards. Dr. Pitkoff said that the process presents a procedure and time line problem. Dr. Pitkoff said that the high school auditorium project may have to be moved out of this year because of the present process.
Mr. Gaston said there may be no way we can do the HVAC and high school in 2008 and keep under 10%. Mr. Kortze suggests that the Board of Education discuss what their number one priority will be and come back to the Board of Finance with suggestions. Mr. Kearney asked if the borrowing rate goes down or if we get a higher rating will that affect us. Mr. Rosenthal said that the bond agency focused on the fact that there is no affirmative language in the Charter about how to manage our surplus. Mr. Kearney said we should consider a Charter revision to allow for more borrowing. Mr. Spragg said that the surplus goes into next year’s budget and that the rating agency said that we do not manage this. Dr. Pitkoff asked if it would help if he split the construction of the high school addition and the construction and
renovation work into two projects. Mr. Kortze feels that this would not stop us from exceeding 10%. Mr. Spragg said that splitting the projects would be helpful.
Mr. Kortze said that the Board of Finance will review the Board of Education CIP and put together a town-wide CIP.
HVAC – Board of Education. Mr. Kortze is concerned with procedures and accountability. He said that the Board of Education approved a number that was $1.3 million more than was approved by the public for debt service. Dr. Pitkoff said that we did not have control over what the price would be and that we have estimates that the bids have to validate. Mr. Posca said that plywood increased in price by 30% last week. Mr. Wetzel explained that the budget was put together 2-3 years ago and the scope of work has increased. Seven air handling units were needed rather than six as predicted. The 1921 section had no ceilings and ceilings were put in and lights replaced. He said that a renovation job like this is extremely difficult to conceptualize. He said we cannot predict the bidding environment. Mr. Giarratano
said we spent a considerable amount to develop the bid. Mr. Wetzel said that defining the scope of work is a big part. Dr. Pitkoff said that the Climate Control Committee reduced HVAC costs by 50%.
Mr. Rosenthal asked if the Board of Education modifies its figures in the CIP each year. Mr. Bienkowski said that these numbers have gone up in the CIP.
Mr. Bienkowski said that the taxpayers approved the debt service but not the project and that the taxpayers now have to approve the project.
Year End Transfers and Monthly Summary – Board of Education.
Mr. Bienkowski summarized the year end report. There was a balance of $9,006 in unexpended funds. There was a $3,366 shortage in school generated fees. $6,500 was encumbered for building projects. $32,000 was transferred from building and site improvements to other liabilities. Staff development was cut back $12,000. $243,000 was transferred from professional services to legal advice. Professional education services was cut back $13,000. Water bills were a few thousand dollars more than expected. Transportation provided some additional money. Printing jobs were deferred. Special education costs were over by $15,000. Electricity was $22,900 more than anticipated for the High School, Middle School and Reed School. Natural gas was $16,000 over. Fuel account money was transferred to various energy accounts.
Mr. Bienkowski asked that if additional revenue comes in from the State can it help with the Hawley project. He stated that additional funds from the state will be received in the amount of $1.485 for debt service over the life of the outstanding bond issue. Mr. Spragg said that this money would have to be appropriated and could be a funding source. It would be unanticipated revenue. Mr. Bienkowski also said that the Middle Gate water line is $250,000 under budget.
Mr. Spragg suggested that we go on the open market and buy Newtown bonds.
There being no further business, the meeting adjourned at 9:25 p.m.
Ann M. Mazur, Clerk Pro Tem
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