The Board of Finance held a regular meeting on July 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, Martin Gersten, Harrison Waterbury. ABSENT: Michael Portnoy.
ALSO PRESENT: First Selectman Joe Borst, Financial Director Robert Tait, Deputy Director of Land Use Rob Sibley.
VOTER PARTICIPATION. None noted.
COMMUNICATIONS. Mr. Kortze received a notice from the Town Clerk concerning the annual report which is due in October. Mr. Tait will prepare the report.
Mr. Kortze received correspondence from IPN member Bruce Walczak stating that Mr. Walczak feels that Mr. Gersten is not a properly seated member of the Board of Finance because his appointment to replace Mr. Torok who resigned was made on November 19 by the former Board of Selectmen but Mr. Gersten’s term was for the new session beginning December 1; therefore, he said that the new Board of Selectmen would have been the body to fill the vacancy. Mr. Kortze noted that Mr. Torok resigned after the election. Town Attorney Grogins’ opinion is that the appointment of Mr. Gersten is in compliance with Section 2-40(e) of the Town Charter. Mr. Kearney would like to know how much of Mr. Grogins’ retainer was expended for this matter. Mr. Borst will research and report this amount to the Board of
Finance.
Mr. Kortze noted that according to the Capital Improvement Plan (CIP) regulation, the Board of Education is to submit its CIP to the Board of Finance in June and the Board of Selectmen in August. A reminder will be sent to the Board of Education.
FIRST SELECTMAN REPORT. Mr. Borst reported that the bid opening for the High School expansion project will be on July 22 at 31 Pecks Lane.
He noted that a meeting concerning the CIP will be held with himself, Mr. Tait, Mr. Kortze and Dr. Robinson.
He noted that the Bridgeport Hall Town Hall project will go out to bid when State approval is received for the project; a radon system is still needed. He noted that because of IT concerns expressed at a meeting with O&G and Tai Soo Kim, electronics for the building will be delayed so that the IT Department can place wires, etc. The Council Room will be completely audio equipped so that people could watch proceedings on TV from their homes.
Mr. Kortze expressed concern that Doug Brennan’s report on Fairfield Hills expenses was not part of the public vetting and bidding process that town projects go through but that this is one individual’s presentation. He also noted that the Board of Selectmen did not ask for this report. He feels that this process was flawed from the start because it was not part of the public process.
MINUTES. Upon motion of Mr. Gersten, the minutes of the regular meeting of May 22, 2008 were unanimously accepted as presented.
FINANCIAL DIRECTOR REPORT. Mr. Tait distributed a new CIP spreadsheet to the Departments including the Board of Education. He said that the Departments were advised in the past not to change future years as listed in the CIP but he has advised them that they may make changes. He will prepare three year end schedules: Schedule A will be year end transfers, Schedule B will be year end re-appropriations which are unencumbered balances to be carried forward. The funds on Schedule B must be for specific items that were approved in the budget and must be approved by the Board of Finance and Legislative Council. Schedule C will be a valid list of purchase orders that are being carried forward. There will be no estimated purchase orders for June bills.
UNFINISHED BUSINESS. None noted.
NEW BUSINESS.
Presentation by Deputy Land Use Director concerning the financial impact of open space purchases. Mr. Sibley noted that in 2005 funds to purchase open space were approved in the amount of $10 million, $2 million for each of the next five years. He noted that in the last three years we contracted for 30 parcels and protected over 350 acres. We received $800,000 in matching grants and spent $8,146,712.09. He said that the average break point will be just under nine years. He recommends a $2 million annual bond or budget line item for open space and a $6 million bond request for three large parcels totaling over 330 acres. He said it is best to purchase when the market is soft.
Mr. Kortze feels that the number of children per unit is higher than 1.5 and is probably 1.89. He suggested that Mr. Sibley compare his per pupil expenditure with the State website though his figures are about the same. He would like to review Mr. Sibley’s open space metric. Mr. Kortze noted that on the former metric out of 100 points, only 10% was financial and that this item must carry a heavier weight in order for purchases to be approved. Mr. Kortze noted that the Board of Selectmen has the sole authority to purchase property. He said that this needs to change especially if open space is to be in the CIP each year or we will need to have a special appropriation each time this comes up. He said that the bonding cost vs. the town operating cost needs to be considered. He suggested that Mr. Sibley make his case
to the Board of Selectmen.
Discussion on plan for exploring Newtown’s bond rating. Mr. Kearney asked when would be the best time to request that Moody’s upgrade Newtown’s bond rating now that we have approved a charter change that will allow us to manage our fund balance. Mr. Tait said that now is a good time. He said that we need a complete set of audited financial reports to present to Moody’s. He said that we need a financial policy explaining what the Town feels is an adequate level for the undesignated fund balance which the Board of Finance has established. Mr. Kearney suggested that financial advisers come in and map out a coherent strategy. Mr. Tait also said that for three years in a row New Milford used their fund balance to balance their budget and their rating went down. Mr. Tait will create a new
financial policy.
Mr. Kortze asked that Mr. Tait prepare a list of items that the town should adopt or re-adopt that need to come before the Board of Finance to be placed on the next agenda.
Mr. Tait noted that the undesignated fund balance is for emergencies and a policy on the fund balance is separate from uses of the fund balance. He noted that Standard & Poors also gives ratings.
Mr. Gaston noted that Avon is rated AAA and he would like to know what they do. He said also that Avon and Norwalk use their fund balance though Moody’s says not to. Mr. Kearney noted that they may be over 10% in their fund balance.
Mr. Kortze noted that the ratings agencies do not rate municipalities the same as corporations. Mr. Kearney feels that we should get a continued positive because we corrected what Moody’s cited twice as an issue.
Update on Build Out Consultant. Mr. Kortze reported that final meeting of the Build Out Committee will be scheduled soon. He said that the data is helpful. He said that the Town was divided into districts for schools, fire and police. He said that Dr. Chung uses three demographics but does not do student enrollment projections. Also Dr. Chung uses ages rather than grades for projections. Mr. Kortze will present the Board of Finance with the final report.
Mr. Borst discussed Doug Brennan’s report on Fairfield Hills. He said that he did due diligence and asked Mr. Brennan to visit Bridgeport Hall with him, which they toured for hours. He said that Mr. Brennan is an engineer with an international reputation and that Mr. Borst was only looking out for the town. He received the report in January but held it up until the budget had passed. Mr. Kortze said that he has an issue with the fact that this is one individual’s non-publicly vetted process and that some are giving it more weight than it deserves. He said that we have a process in Town on how we go forward with projects. He has an issue with the gravity that some of Mr. Brennan’s recommendations have taken on.
ADJOURNMENT Having no further business, the meeting was adjourned at 9:30 p.m.
Ann M. Mazur, Clerk
The Board of Finance held a regular meeting on July 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, Martin Gersten, Harrison Waterbury. ABSENT: Michael Portnoy.
ALSO PRESENT: First Selectman Joe Borst, Financial Director Robert Tait, Deputy Director of Land Use Rob Sibley.
VOTER PARTICIPATION. None noted.
COMMUNICATIONS. Mr. Kortze received a notice from the Town Clerk concerning the annual report which is due in October. Mr. Tait will prepare the report.
Mr. Kortze received correspondence from IPN member Bruce Walczak stating that Mr. Walczak feels that Mr. Gersten is not a properly seated member of the Board of Finance because his appointment to replace Mr. Torok who resigned was made on November 19 by the former Board of Selectmen but Mr. Gersten’s term was for the new session beginning December 1; therefore, he said that the new Board of Selectmen would have been the body to fill the vacancy. Mr. Kortze noted that Mr. Torok resigned after the election. Town Attorney Grogins’ opinion is that the appointment of Mr. Gersten is in compliance with Section 2-40(e) of the Town Charter. Mr. Kearney would like to know how much of Mr. Grogins’ retainer was expended for this matter. Mr. Borst will research and report this amount to the Board of
Finance.
Mr. Kortze noted that according to the Capital Improvement Plan (CIP) regulation, the Board of Education is to submit its CIP to the Board of Finance in July and the Board of Selectmen in August. A reminder will be sent to the Board of Education.
FIRST SELECTMAN REPORT. Mr. Borst reported that the bid opening for the High School expansion project will be on July 22 at 31 Pecks Lane.
He noted that a meeting concerning the CIP will be held with himself, Mr. Tait, Mr. Kortze and Dr. Robinson.
He noted that the Bridgeport Hall Town Hall project will go out to bid when State approval is received for the project; a radon system is still needed. He noted that because of IT concerns expressed at a meeting with O&G and Tai Soo Kim, electronics for the building will be delayed so that the IT Department can place wires, etc. The Council Room will be completely audio equipped so that people could watch proceedings on TV from their homes.
Mr. Kortze expressed concern that Doug Brennan’s report on Fairfield Hills expenses was not part of the public vetting and bidding process that town projects go through but that this is one individual’s presentation. He also noted that the Board of Selectmen did not ask for this report. He feels that this process was flawed from the start because it was not part of the public process.
MINUTES. Upon motion of Mr. Gersten, the minutes of the regular meeting of May 22, 2008 were unanimously accepted as presented.
FINANCIAL DIRECTOR REPORT. Mr. Tait distributed a new CIP spreadsheet to the Departments including the Board of Education. He said that the Departments were advised in the past not to change future years as listed in the CIP but he has advised them that they may make changes. He will prepare three year end schedules: Schedule A will be year end transfers, Schedule B will be year end re-appropriations which are unencumbered balances to be carried forward. The funds on Schedule B must be for specific items that were approved in the budget and must be approved by the Board of Finance and Legislative Council. Schedule C will be a valid list of purchase orders that are being carried forward. There will be no estimated purchase orders for June bills.
UNFINISHED BUSINESS. None noted.
NEW BUSINESS.
Presentation by Deputy Land Use Director concerning the financial impact of open space purchases. Mr. Sibley noted that in 2005 funds to purchase open space were approved in the amount of $10 million, $2 million for each of the next five years. He noted that in the last three years we contracted for 30 parcels and protected over 350 acres. We received $800,000 in matching grants and spent $8,146,712.09. He said that the average break point will be just under nine years. He recommends a $2 million annual bond or budget line item for open space and a $6 million bond request for three large parcels totaling over 330 acres. He said it is best to purchase when the market is soft.
Mr. Kortze feels that the number of children per unit is higher than 1.5 and is probably 1.89. He suggested that Mr. Sibley compare his per pupil expenditure with the State website though his figures are about the same. He would like to review Mr. Sibley’s open space metric. Mr. Kortze noted that on the former metric out of 100 points, only 10% was financial and that this item must carry a heavier weight in order for purchases to be approved. Mr. Kortze noted that the Board of Selectmen has the sole authority to purchase property. He said that this needs to change especially if open space is to be in the CIP each year or we will need to have a special appropriation each time this comes up. He said that the bonding cost vs. the town operating cost needs to be considered. He suggested that Mr. Sibley make his case
to the Board of Selectmen.
Discussion on plan for exploring Newtown’s bond rating. Mr. Kearney asked when would be the best time to request that Moody’s upgrade Newtown’s bond rating now that we have approved a charter change that will allow us to manage our fund balance. Mr. Tait said that now is a good time. He said that we need a complete set of audited financial reports to present to Moody’s. He said that we need a financial policy explaining what the Town feels is an adequate level for the undesignated fund balance which the Board of Finance has established. Mr. Kearney suggested that financial advisers come in and map out a coherent strategy. Mr. Tait also said that for three years in a row New Milford used their fund balance to balance their budget and their rating went down. Mr. Tait will create a new
financial policy.
Mr. Kortze asked that Mr. Tait prepare a list of items that the town should adopt or re-adopt that need to come before the Board of Finance to be placed on the next agenda.
Mr. Tait noted that the undesignated fund balance is for emergencies and a policy on the fund balance is separate from uses of the fund balance. He noted that Standard & Poors also gives ratings.
Mr. Gaston noted that Avon is rated AAA and he would like to know what they do. He said also that Avon and Norwalk use their fund balance though Moody’s says not to. Mr. Kearney noted that they may be over 10% in their fund balance.
Mr. Kortze noted that the ratings agencies do not rate municipalities the same as corporations. Mr. Kearney feels that we should get a continued positive because we corrected what Moody’s cited twice as an issue.
Update on Build Out Consultant. Mr. Kortze reported that final meeting of the Build Out Committee will be scheduled soon. He said that the data is helpful. He said that the Town was divided into districts for schools, fire and police. He said that Dr. Chung uses three demographics but does not do student enrollment projections. Also Dr. Chung uses ages rather than grades for projections. Mr. Kortze will present the Board of Finance with the final report.
Mr. Borst discussed Doug Brennan’s report on Fairfield Hills. He said that he did due diligence and asked Mr. Brennan to visit Bridgeport Hall with him, which they toured for hours. He said that Mr. Brennan is an engineer with an international reputation and that Mr. Borst was only looking out for the town. He received the report in January but held it up until the budget had passed. Mr. Kortze said that he has an issue with the fact that this is one individual’s non-publicly vetted process and that some are giving it more weight than it deserves. He said that we have a process in Town on how we go forward with projects. He has an issue with the gravity that some of Mr. Brennan’s recommendations have taken on.
ADJOURNMENT Having no further business, the meeting was adjourned at 9:30 p.m.
Ann M. Mazur, Clerk
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