The Board of Finance held a regular meeting on August 28, 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, Martin Gersten, Joseph Kearney, Michael Portnoy, Harrison Waterbury.
ALSO PRESENT: First Selectman Joseph Borst, Financial Director Robert Tait, Director of Land Use George Benson, Chairman of Planning & Zoning Lilla Dean, Board of Education member Kathy Fetchick, two members of public, one member of press.
VOTER PARTICIPATION. Ruby Johnson, 16 Chestnut Hill Road, said that the Charter change concerning managing the fund balance does not set any guidelines. She asked if the fund balance could be used for Fairfield Hills expenditures and capital improvement plan items.
COMMUNICATIONS. Mr. Kortze noted that the bids for the High School expansion came in $6 million over budget and questioned how the architect could be so wrong, in excess of 20% over budget. He noted that a meeting was held with representatives of the Board of Finance, Board of Selectmen, Board of Education, Legislative Council and Public Building and Site Commission to try to determine a time line to see if a referendum could be held in October for the additional $6 million. He asked why are we building something this size when we have to wait. He noted that the Board of Education will have to accommodate this $6 million somewhere else in their Capital Improvement Plan (CIP).
At the July 14 meeting, Mr. Kortze noted that he had 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. Town Attorney David Grogins determined that Mr. Gersten is a properly seated member. Mr. Kortze noted that Mr. Grogins bill to the Town related to this matter was for $600 Email correspondence between Mr. Kearney and Mr. Walczak are attached to the original minutes of tonight’s meeting as Attachment A. Mr. Kortze prefers handling such matters in a public forum, not by email.
MINUTES. Upon motion of Mr. Gersten, the minutes of the regular meeting of July 14, 2008 were unanimously accepted as presented.
FIRST SELECTMAN REPORT. Mr. Borst reported that one item discussed at the Board of Education’s special meeting today was the fact that a $635,000 cost for portables will be in the budget for 2009-2010 for one portable with nine classrooms.
Mr. Kortze asked Ms. Fetchick if the Board of Education had discussed the High School expansion schedule and will there be a delay. Ms. Fetchick said that the gym schedule will be the same. The classrooms at the back of the addition will be available in 2010 for this year’s seventh grade. The schedule is now out to 23 months with start planned in December 2008. If there is a redesign the schedule would be much further out. Re-engineering would take 6-8 months. Re-design could take ten months with a start a year late. We can submit two revisions to the State without effecting the time line. If the State determines that more than 10% of the project has changed it could determine that this is a revision. If there is a substantial change we would lose the architect’s fees. Mr. Borst said that the State
Board of Education has not yet taken this to the bonding committee of the State Legislature and that if we can get this through there would be minimal delay.
Mr. Kortze suggested that the Board of Finance email their questions to him. Mr. Gaston asked if there would be any ramifications with the State if we have another referendum. Ms.Fetchick said that the ED 049 can be revised twice and that the changes made do not affect the original application. Mr. Gersten asked if we can suggest that the Board of Education submit a Plan B. Mr. Kearney feels that we should look at options of a reduced scope of project, reducing the base not the alternates. Mr. Gaston feels that it is valid to ask if there is time to put together a Plan B before December. He noted that we were told all or nothing. Mr. Waterbury would like to see where the inflation really is; what is causing this to be so much higher than the architect’s drawings. Mr. Portnoy will email his questions to Mr.
Kortze. Mr. Kortze asked how can we expect the bidders to hold their prices for another year.
Mr. Kortze asked Mr. Borst to clearly articulate in the resolution for the referendum what the public is getting for their money, not what they may not get. He would prefer not to see the word “generally” in the resolution.
UNFINISHED BUSINESS. None noted.
NEW BUSINESS.
Presentation by Planning and Zoning concerning financial impact of Town of Newtown Incentive House Zone Study Grant Plan. Ms. Dean noted that the Board of Selectmen asked Planning & Zoning to request that the Board of Finance report that there is no financial impact to the Town in applying for this grant. Mr. Borst noted that the Board of Selectmen had approved applying for this grant on July 21, 2008. Ms. Dean said that the grant is for technical assistance to plan for affordable housing. She said that we would like to have the State recognize the three trailer parks as affordable housing. She noted that we also need financial advice for this. We would like to determine suitable areas for affordable housing rather than having a developer determine where the affordable housing will be. Mr.
Benson noted that many towns are applying for this grant. The State has mandated that municipalities have affordable housing and Mr. Benson said that applying for this grant will show the state that we are being pro-active in this regard. He said that there are no strings attached to this grant. Ms. Dean would like to look at the possibility of giving Town employees the right of first refusal for affordable housing. She said we would also like to court people who have done affordable housing in other areas.
Mr. Gaston moved to endorse the Town of Newtown Incentive House Zone Study Grant Project Plan dated August 6, 2008 revised August 8, 2008 with the understanding that there are no obligations or cost ramifications to the Town of Newtown with this study. Second by Mr. Kearney and unanimously carried.
FINANCIAL DIRECTOR REPORT.
Town of Newtown General Fund, Unreserved Fund Balance Policy.
Mr. Tait distributed a draft “Town of Newtown General Fund, Unreserved Fund Balance Policy” (Attachment B to original minutes). He noted that the Town has a Charter change that will allow us to manage our fund balance. His draft calls for an unreserved fund balance of not less than 8% and not more than 16%. He said that an unreserved fund balance gives us financial flexibility. Mr. Gaston noted that we have a Capital and Non-Recurring Account policy. Mr. Kortze noted that this policy has a guideline of 5%. After discussion, it was decided that the Unreserved Fund Balance guidelines will be not less than 5% and not more than 16%. Mr. Tait noted that there is interest provided in the budget with an undesignated fund balance.
Mr. Tait noted that the Capital and Non-Recurring Fund is for items under $350,000 that to not make it into the CIP. He also noted that there will be a separate account for Parks and Recreation Surcharges; also Open Space in Lieu of Fees will now be called Open Space Acquisition.
Mr. Tait will review whether the Capital and Non-Recurring Fund should have a guideline.
Mr. Tait will seek Town Attorney David Grogins’ opinion as to whether Mr. Tait can legally transfer the $5 million fund balance without other authorization.
Discussion and Possible Action: Fiscal Year End Transfers.
Mr. Tait distributed “Town of Newtown Schedule A – Fiscal Year End Budget Transfers at June 30, 2008.” (Attachment C to original minutes). Mr. Kearney moved to approve Town of Newtown Schedule A – Fiscal Year End Budget Transfers at June 30, 2008 as attached. Second by Mr. Waterbury and unanimously carried.
Discussion and Possible Action: Fiscal Year End Reappropriations. Mr. Tait distributed “Town of Newtown Schedule B – Fiscal Year End Reappropriations at June 30, 2008”. (Attachment D to original minutes). Mr. Tait explained that the schedule represents funds that were approved in the budget but were not committed. Mr. Gaston moved to approve Town of Newtown Schedule B – Fiscal Year End Reappropriations at June 30, 2008 as attached. Second by Mr. Gersten. YES 5 (Gaston, Kortze, Kearney, Waterbury, Gersten). NO 1 (Portnoy). Motion passed. Mr. Portnoy would like an explanation from the Board of Selectmen as to whether these items should be carried forward to the next year.
Mr. Gaston moved to reopen discussion of Fiscal Year End Reappropriations. Second by Mr. Waterbury and unanimously carried. Mr. Gaston moved to approve Town of Newtown Schedule B – Fiscal Year End Reappropriations at June 30, 2008 as attached. Second by Mr. Kearney. Mr. Portnoy would like the Board of Selectmen in coordination with the Finance Director to look at where we are going so far this year and if we have extra money should we consider not approving and carrying over but look unto placing the money in an unreserved fund and requesting that Departments move their schedules out. Mr. Tait noted that this is not the original list that was submitted to him but that after conferring with Department heads he has eliminated purchase orders. Mr. Gaston asked are we going to micromanage;
he feels that the Board of Selectmen should ask these questions during the next budget when reviewing the budget with Department heads. Mr. Gersten feels that we would be going in circles with the money. Mr. Borst noted that we would have to go out to bid again if this money goes back into the general fund.
Mr. Borst and Mr. Tait will review Schedule B – Fiscal Year End Reappropriations by the next meeting. Mr. Gaston moved to table until the next meeting. Second by Mr. Portnoy and unanimously carried.
Discussion and Possible Action: Fiscal Year End Encumbrances. Mr. Tait distributed “Town of Newtown Schedule C – Fiscal Year End Encumbrances at June 30, 2008”. (Attachment E to original minutes). Mr. Gersten moved to approve Town of Newtown Schedule – Fiscal Year End Encumbrances at June 30, 2008 as attached. Second by Mr. Gaston and unanimously carried.
Discussion and Possible Action: Board of Education Year End Transfers. This item will be tabled as the Board of Education was not present.
ADJOURNMENT Having no further business, the meeting was adjourned at 9:30 p.m.
Ann M. Mazur, Clerk
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