The Board of Finance held a Regular Meeting on Monday, April 9, 2007 in the meeting room at Town Hall South, Main Street, Newtown, CT. Chairman John Kortze called the hearing to order at 7:35 p.m.
PRESENT: John Kortze, James Gaston (8:00), Michael Portnoy, Harrison Waterbury, John Torok (8:00), Joseph Kearney
ALSO PRESENT: Finance Director Ben Spragg, First Selectman Herbert C. Rosenthal (8:25), one member of press
Public Participation: None present
ACCEPTANCE OF MINUTES: Upon motion by Mr. Waterbury, the minutes of the 2/22/07 meeting were accepted as presented.
Upon motion by Mr. Waterbury, the minutes of the 2/27/07 meeting were unanimously accepted as presented.
Mr. Waterbury moved to accept the minutes of the 3/1/07 meeting. Mr. Kortze offered the following correction: On page 4, the last motion, ADD “and that the Board of Finance recommends that the Board of Education take into consideration the following reductions in the 2007-2008 Budget: a) a reduction of $174,000 in health insurance, b) $100,000 reduction in fuel oil estimates, c) a $175,000 reduction by eliminating the two new school buses, and d) a reduction of $132,000 by eliminating the two additional teachers at the Middle School. Motion seconded and minutes unanimously accepted as amended.
OLD BUSINESS
Build Out of Town and Seeking Consultant
Mr. Kortze advised that he and Mr. Waterbury met with Legislative Council members Pat Llodra and Stacy Doyle to discuss this issue. They have decided to come up with a series of questions for answers that will assist in planning for growth being consistent with the Plan of Conservation and Development, i.e. given the demographics and zoning, what would be the maximum build out of the town and what would be the timing for build out. Mr. Kortze sent a letter to the members of the Board of Selectmen, Board of Education and Planning & Zoning Commission requesting their input. Mr. Kortze will share that input once it is received.
Mr. Torok and Mr. Gaston arrived at this time.
FINANCE DIRECTOR’S REPORT: Mr. Spragg distributed numbers prepared by Mr. Bienkowski showing that the high school project could cost an additional $558,865 through loss of revenue from the State due to the new reimbursement rates. Newtown’s wealth ranking will be increasing from 36th in the state to 33rd. As wealth increases, the state gives less in school building grants. The additional $558,000 we would be losing in reimbursement would have to be borrowed at a rate of $39,000 per year for principal and interest. There has been some discussion among Board of Ed and some Council members about borrowing the entire $41 million for the high school expansion upfront. Mr. Spragg feels that the way we finance contracts has served the town well for many
years. He also feels that losing 1.43% in reimbursement is not worth changing the way we finance construction projects. Surrounding towns have financed projects upfront and have had problems, i.e. having to go back for additional funds. We have never had that problem. The Board of Ed wants to get the entire project financed in this fiscal year and will probably be coming in to see the Board of Finance to request $41 million and to hold a town meeting for approval next month. Mr. Portnoy does not believe that this project has yet been defined. How can we agree to give them this money when we really don’t know the scope of the project. Mr. Kearney agreed. Mr. Gaston does not want to lose $500,000 if we don’t have to but he understands the difficulty with putting money upfront and then having a $43 million project.
Mr. Kortze suggested requesting more information from the Board of Education. He feels the contingency is very large at this point and there are other questions he would like to ask. He does not like asking for more money in the budget that has not yet been approved by taxpayers. He will invite the Board of Education to attend a future meeting.
Transfer
Mr. Torok moved to transfer FROM Account 01570-5000 Contingency $50,000.00 TO Account 01100-4063 Legal Other $50,000.00. Motion seconded and unanimously carried.
The $60,000 budgeted in the litigation line item has been totally depleted due to a large lawsuit during this fiscal year.
Legal Matters
Mr. Gaston moved to enter executive session to discuss a legal matter and to invite the Finance Director and clerk to attend. Motion seconded and unanimously carried.
Meeting entered executive session at 8:18 p.m. First Selectman Rosenthal arrived during the executive session. Meeting returned to open session at 8:30 p.m.
FIRST SELECTMAN’S REPORT: First Selectman Rosenthal advised that the Town Attorney has issued an opinion that the First Selectman is the only one who can sign the contract for architectural fees for the high school addition. In the past, the Board of Ed has always been in charge of building schools. However, the State Statutes say that the School District builds the schools and Attorney Grogin’s opinion is that the town is the School District. The Board of Education is elected to manage the schools.
Having no further business, the meeting was adjourned at 8:40 p.m.
Jan Andras, Clerk
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