The Board of Finance held a regular meeting on Monday April 14, 2008 in the Meeting Room, 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, Joseph Kearney, Michael Portnoy, Harrison Waterbury. ABSENT: Martin Gersten.
ALSO PRESENT: Financial Director Ben Spragg, four members of public, one member of press.
VOTER PARTICIPATION.
Ruby Johnson, 16 Chestnut Hill Road, distributed “Explanation of Allocated Expenses reported by the Fairfield Hills Authority 3/19/08” (Attachment A to original minutes). She discussed Fairfield Hills. She said that there was nothing in the original bonding to authorize hiring an engineer. The ball field cost $692,000 and with the $900,000 in the CIP will cost over $1.3 million. The utility loop was estimated to cost $1 million and now the estimate is $6 million. She said that it was stated that an attorney said that the bonding money could not be used for the ball field lights, but that no attorney did say that. The Board of Finance should try to become more involved. We are competing with private individuals to develop property.
Bob Merola, 22 Ashford Lane, is opposed to the High School expansion as proposed. He said that there were 18 foreclosures in Newtown as of January. Ridgefield’s budget proposal increase is 3.5%. He distributed article “Reaction Is Mixed to Proposal for School Addition.” (Attachment B to original minutes) from the Washington Post. He noted that the article referred to an addition in Fairfax County with 35 classrooms for $10 million; Newtown’s proposal is for 25 classrooms for $34 million, which is five times as much money per classroom.
COMMUNICATIONS. Mr. Kortze reported on the last meeting of the Build Out Committee, comprised of himself, Mr. Waterbury, Mrs. Llodra from the Legislative Council and Mrs. Doyle formerly from the Legislative Council. Demographics were prepared by the Committee’s consultant for Newtown for the years 2000 through 2030. Mr. Kortze noted that the consultant said that enrollment projections and population projections are different. The statistics indicated that the elementary school that would have the most growth is Middle Gate; also that the High School growth projection is 31%. The fastest growing population segment would be seniors at 158%, the second fastest growing would be Grades 9-12 at 31%. The Build Out Committee will meet again within a month and Mr. Kortze will report again to the Board of
Finance.
FIRST SELECTMAN REPORT. Mr. Borst reported that we received formal notification from the State that Newtown will receive $300,000 for landscaping and lighting at Fairfield Hills. Mr. Kortze inquired about Phase II of the Sandy Hook Streetscape Project. Mr. Borst is not aware of the status of the project but Mr. Spragg said that the project is being done in phases with Phase II upcoming. Mr. Borst reported that the State has notified us that the property at 9 Glen Road contains hazardous material and that the owner must monitor his well as well as adjoining wells.
FINANCIAL DIRECTOR REPORT. Mr. Spragg will report under the budget discussion.
NEW BUSINESS.
Discussion of the impact of the Town of Newtown proposed FY 2008-2009 budget. Mr. Kortze reported that Board of Education Vice-Chairman Lisa Schwartz had requested that some elected officials put together the impact of the proposed budget and quantify it. He noted that the impact will be different for every household because of reval. He noted that all of the statements that he has seen regarding the impact have been very far from having any accuracy whatsoever.
The Board of Finance will discuss four levels of the impact on individuals: 1) the municipal increase; 2) debt service for the High School; 3) operational expenses for the High School; 4) reval.
The proposed mill rate of 23.2 times the assessed value of a house equals the tax for next year; subtract last year’s tax to compute the percentage of increase. Mr. Gaston noted that there would be one’s tax increase would be just under 3% for the High School expansion.
MUNICIPAL INCREASE
Mr. Kearney distributed “Calculation of Proposed Budget for Various Scenarios of Home Appraisals” without reval (Attachment C to original minutes). He also distributed “Calculation of Proposed Budget for Various Scenarios of Home Appraisals” with reval (Attachment D to original minutes). The percentage of High School expansion cost to the total budget would be 2.92% in both scenarios. The increase in taxes would be 5% without reval and 10.3% with reval.
The annual operating cost for the High School expansion is proposed by the Board of Education to be $779,000. This figure was used to calculate Column #7, “% of HS Expansion Cost to Total Budget.” Using the figure of $779,000 rather than $700,000 as Mr. Kearney listed on the worksheet that he distributed increases this percentage from 2.86% to 2.92%.
Mr. Spragg distributed “Financial Director Proposed Budget 6.% Increase” (Attachment E to original minutes). He explained that the tax increase would be 6.4% if the mill rate is 23.2. He said that tomorrow the assessments for all the homes in Newtown will be posted on the Financial Director’s section of the Town’s website. He advised that the column “2006 NEW GROSS” is from the current data base and the column “2007 NEW GROSS” is from the reval firm’s data base, so that both columns must be taken into consideration.
IMPACT OF THE HIGH SCHOOL
Mr. Spragg noted that he would need the amount of money that is in the school budget for the addition which he does not have in order to calculate the impact of the High School. Mr. Kortze noted that the total High School bonding will be $2.302 million in total plus $780,000 operational expenses as presented by the Board of Education which equals $3.082 million divided by $3.85 million equals eight-tenths (8/10) of a mill for the High School completed. Next year would be $1.157 million plus $780,000 equals $1.937 million divided by $3.875 million equals one-half (1/2) of a mill. This is eight-tenths (8/10) of a mill all in and one-half (1/2) of a mill next year. All in on the High School equals a 3% increase in taxes for the average home owner. Mr. Spragg said that of the $5.5 million that the budget is up, $1.156
million of the $5.5 million in the first year is for debt service or 21% of the increase; factor in the $770,000 and 25-30% of the increase is for the High School.
One-third of the additional money going into the budget is for the High School.
Of the 6.4% increase proposed in the budget, 2.1% is for the High School expansion and 1.5% is for operational costs for the High School in the first year, or 3.6%.
The impact of the High School for the first year will be: debt service $1.156 million plus $780,000 operational costs equals a one-half (1/2) mill increase. This is using the figure for operating expenses given by the Board of Education which may change based on growth. Expect to have efficiencies recognized down the line, such as with staffing and HVAC. The base cost that we identified is $780,000 but this may change based on Board of Education engineering projections and they estimate $735,000 for future years. We are assuming that we will bond at 4% but capital markets may change. Mr. Spragg said that we will have two separate bond issues over two years.
· Through the Town website, the public will be afforded the opportunity to learn exactly what their taxes are last year vs. this year.
· The total High School bonding equals eight-tenths (8/10) of a mill for the High School completed based on this year’s proposed budget. All in on the High School equals a 3% increase in taxes for the average home owner, or $30 for every $1,000 in taxes.
· Of the 6.4% increase proposed in the budget, 2.1% is for the High School expansion and 1.5% is for operational costs for the High School in the first year, or 3.6%.
· The proposed mill rate of 23.2 times the assessed value of a house equals the tax for next year; subtract last year’s tax to compute the percentage of increase.
· Of the 6.4% increase proposed in the budget, 2.1% is for the High School expansion and 1.5% is for operational costs for the High School in the first year, or 3.6%.
Mr. Gaston moved to accept the above. Second by Mr. Portnoy and unanimously accepted.
Mr. Kortze said that he personally will never make a value judgment on somebody’s personal money.
ADJOURNMENT Having no further business, the meeting was adjourned at 9:30 p.m.
Ann M. Mazur, Clerk
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