Minutes from the Regular Meeting of the Legislative Council held in the meeting room of the C. H. Booth Library, 25 Main Street, Newtown, Connecticut, on Wednesday, August 5, 2009. Vice-Chairman Fran Pennarola called the meeting to order at 7:30 pm.
Present: John Aurelia, Sr., Francis Pennarola, Gary Davis, Joseph Hemingway, Patricia Llodra, Po Murray, Daniel Amaral, Jan Brookes, Jeffery Capeci, and Paul Lundquist.
Absent: Joseph DiCandido and Chairman William Rodgers
Also Present: First Selectman Joe Borst, Deputy Planning and Land Use Director Rob Sibley, Chairman of the Board of Finance John Kortze and 3 members of the public and 2 members of the press.
PUBLIC PARTICIPATION: Lorraine Frampton, 6 Pebble Road, told Council members that she was at the Board of selectman’s meeting when they approved the $92,000 for the all the equipment in the room so that the meetings could be televised. She asked if there was any way to require as many meetings as possible to be there to be televised rather than those who just chose to and have it sit empty.
APPROVAL OF THE MINUTES: Minutes of the Regular Meeting July 7, 2009 - Mr. Capeci moved to accept the minutes of the meeting held July 7, 2009 as corrected. Mrs. Llodra seconded and the motion was unanimously approved.
Mr. Capeci noted the following corrections:
Page 3, New Business, paragraph 4, 3rd sentence, the word, “drudge,” should be “dredge material.”
Page 4, New Business, under HRC Operation, paragraph 4 the phrase, “fly ash is from materials created by generating coal,” should read “fly ash is from materials created by generating electricity from coal.”
Page 5, New Business, 10th paragraph, 3rd sentence, the word “railroad,” should be replaced by “Newtown Transload, LLC.”
Page 6, New Business, 1st paragraph, 2nd sentence, “U.S. Service of Transportation,” should read as stated “U.S. Service Transportation Board.”
COMMUNICATIONS:
Mr. Pennarola says he did speak to the Chairman who says he is busy working on a letter with regards to the railroad and says he has not completed it but will have it in time for the next meeting.
Mr. Pennarola also indicated that he received a copy of the email of the minutes of the Police Commission’s activity with regard to the Traffic Calming Guidelines and they have taken the position that since we really didn’t apparently have any comments on what was proposed that they were going to approve them as submitted to the LC and that was unanimously passed.
Says he just received it and we look at it and make sure the council’s role and prerogatives in the matter continue. They do have a role to come back to the council periodically. Certainly, if we are not a happy with how things are being implemented and handled we do have some input in the process..
Mr. Pennarola also stated that he had received a copy of the Moody’s Report from Finance Director Bob Tait and told the council that Mr. Kortze would be in to address it.
Mr. Davis informed commissioners that State Representative Chris Lyddy sent a letter to Chairman Rodgers in July. In the letter, he said Mr. Lyddy laid out process with states attorney regarding the permit submitted to the DEP.
He added that Mr. Lyddy made the suggestion that a public hearing be held outside of the permit process.
Mr. Davis suggested that the Council supports that idea.
COMMITTEES:
Ordinance Committee –
According to Mr. Pennarola, he submitted the Noise Ordinance to the Bee for publication on Friday. It was the version submitted to the DEP and essentially has their blessings. The DEP only required one change – that which provided a bit of controversy in the public hearing whether we can control animal sounds. He added that the DEP basically said, “no we can’t.”
Mr. Pennarola said they have deleted that and submitted it for publication.
In addition, Mr. Pennarola said he would circulate copies of the Zoning Enforcement Ordinance that the Land Use agencies in town requested to give the Zoning Enforcement and wetlands people another tool to bring people into compliance. He added that it’s something in between doing nothing and hauling people to court allowing for a citation and fine.
FIRST SELECTMAN’S REPORT:
Mr. Borst told commissioners that he gave a copy of the Moody’s Report to the council and noted that the Town has received an Aa2 rating which is very good.
The First Selectman also said that he had some information on the re-funding process. He told the Council that as of 4:10 pm the Newtown refunding has been finalized and the town had saved $801,671 by refinancing $13,860,000 in previously issued bonds from the following bond issues 2004, 2005, 2007 series A and 2007 series B. These savings are after $70,000 for legal counsel advisory fees, rating fees, and payment agencies fees. He added that the Town will save over $250,000 in the following years 2010, 2011 and 2012 and about $5,000 each fiscal year 2013 through 2020.
According to Mr. Borst, the town’s true interest cost (TIC) for this is issue was 2.3%. He noted that the town’s strong bond rating of AA2 helped the town capture this historically low rating.
Mr. Borst concluded by stating that “Mr. Tait did an excellent job with the rating review.’
UNFINISHED BUSINESS:
Discussion of CIP, budget, and other Legislative functions – Mr. Pennarola said he didn’t plan to discuss the CIP.
Discussion and possible action: Board of Finance resolution regarding reopening certain budget items per state authorization – Mr. Pennarola said he doesn’t plan on taking any action on that and said Mr. Tait indicated it was premature..
Update on Guidelines-Traffic Calming – discussed earlier
COMMUNICATIONS (continued):
Mr. Kortze arrived at this point and was given a chance to speak about the Moody’s Report.
Mr. Kortze passed out a copy of the Moody’s report, emphasized several areas he highlighted, and answered questions for the next half-hour.
Moody’s affirmed the Aa2 rating on $11 million General Obligation Refunding Bonds and the balance of 63.6 million in outstanding General Obligation Bonds.
“The rating,” Moody’s noted. “Also reflects the town’s well managed financial operations and currently moderate debt position.”
Mr. Kortze noted that the refunding was expected to generate $284,000 at 2.5%. This combined with other refunding could be sizeable.
He went on to note that Moody’s reported that the Town was in a “healthy financial position,” but noted that “revenue declines” were “expected to pressure reserve levels.”
Furthermore, Moody’s indicated that “the Town’s financial position would remain satisfactory with its conservative budgeting practices, ongoing fiscal monitoring, and declining use of reserves to balance the operating budget.”
At year-end, Moody’s reported that “the town’s Unreserved General Fund balance totaled $10.4 million or 10.2% of revenues down from an available reserve balance (combined Unreserved General Fund balance of Capitol Non-Recurring Fund balance) high of $12.8 million or 14.0% of revenues in 2006.
Assuming 3% revenue growth the town’s total General Fund balance would decline to a pro-forma $12.1 million or 11% of revenues, below the 14% median for similarly rated Connecticut Municipalities.”
Mr. Kortze emphasized the following phrase from the report, “Positively, in contrast with previous years, the fiscal budget passed on the first attempt.”
Additionally, the town’s fund balance appropriation was down from prior years with the goal of balancing the 2011 budget without use of fund balance to support the operating budget.
The adopted 2010 budget (1.66% reduction 2009 budget or $1.7 million reduction) “passed on its initial vote.”
Moody’s reports that “the reduction incorporates a .3% ($313,071 levy increase, a 1.2% ($149,158) intergovernmental aide reduction, as well as sizeable reductions to charges for service (-26% or $613,356) and interest income (-42% or $520,000).” And, “on the expenditure side, the town was able to mitigate general government salary growth through negotiations with its collective bargaining units, which resulted in 0% increases in fiscal 2010.”
Again, Mr. Kortze emphasized what he felt was an important sentence in the report. “As planned, the budget also includes a $2.0 million General Fund balance appropriation, a 24% reduction from the prior year.”
As of July, 2008, the town’s pension plan was 98% funded and the combined selectman and Board of education pension fund was over-funded at 107%
Mr. Kortze told the Council that it was important to note that Moody’s indicated Newtown’s sizeable tax base was expected to remain stable as growth slows which are healthy wealth indicators.
Reading from the report, he stressed the “however” by Moody’s, “Single family residential construction activity has slowed markedly, causing the value of residential building permits to decline to a 10-yeaar low of $5.7 million in fiscal 2008, from a peak of $49 million in fiscal 2003.”
“This is our revenue source,” Mr. Kortze told the Council.
He also noted that Moody’s indicated Newtown had a “manageable debt burden.”
The town’s overall debt position is moderate at 1.4% of equalized net grand list, and Mr. Kortze read. “Principal amortization (80% retired in 10 years) is slightly above the state median of 74%, in ten years.”
The town maintains a comprehensive five-year, $98 million capital improvement plan.
“Looking ahead,” Mr. Kortze said highlighting Moody’s conclusion. “Debt service is expected to peak at 10% of expenditures by fiscal year 2012, placing the town at the limit of its adopted debt service guidelines.
According to Mr. Kortze, Newtown had a good report and the only negative was the economy which the town has no control over.
He added that it would be “very, very hard” for the town to get AAA rating because the towns with an AAA rating are very different from Newtown. Newtown has no Interstate 95 or Route 1 and does not have the industrial base that the other towns have.
Ms. Murray asked for an update about the state’s attorney’s lawsuit against Moody’s.
According to Mr. Kortze, the lawsuit pertains to what level of parody we should subscribe to the rating agencies. In turn, he noted that the rating agencies, Moody’s and S&P, are talking about changing the ways they rate municipalities.
He added that the rating agencies have been “easier on corporations” and “municipalities ended up with the short end of the stick.”
Mr. Kortze told commissioners that Moody’s said it would be on a schedule to change how they rate municipalities, but they haven’t done that. However, he added that they have been better “of late” than they ever have been.
OLD BUSINESS (continued):
Discussion of CIP, budget and other Legislative Functions- Mr. Davis brought up the Legislative Council’s role during the budget process and stressed that the Council should be more engaged up front rather than at the end of the process.
He is concerned that the council can attend meetings, but not participate.
When the figures are submitted, Mr. Davis believes the council should be able to ask questions so that the Board of Selectman could do its work.
He indicated that there should be room for the Legislative Council to say this is number 1 between the 2 choices, and give the Board of Selectman the council’s feedback on it.
Mrs. Brookes agreed with Mr. Davis noted that according to the charter provides there are no guidelines in the CIP process, and but it comes to the council last. However, it was probably the intent of those who wrote the charter that the CIP process mirror the budget process.
Mrs. Llodra indicated she was not a fan of going in that direction, but said she feels the Legislative Council isn’t well informed.
She suggests that there be a common language to measure requests against and says there needs to be a revision regulation to conform to practice.
Mr. Capeci added that the Board of Finance does put the priorities from both sides (Town and Board of Education) into the mix but believes the council should discuss with the Board of finance whether or not there needs to be a joint meeting.
Ms. Murray stated that she has a problem with the CIP because the Board of Selectmen and the Board of Education make decisions on priority in a vacuum, as an integrated long-term plan for Newtown has not been established to truly identify an integrated priority list. The CIP should be used as a funding tool once the long-term plan has been established.
Mr. Hemmingway noted that the council needs to get the information sooner and believes the boards still need to be involved separately. In addition, he said he disagreed that the council members don’t have the opportunity to ask questions and says that they can ask anytime they want.
Ms. Murray stated that from experience, one could ask all the questions however one may not receive the answers.
Mrs. Llodra said that council members can all agree that they have discomfort with the process being used.
Mr. Lundquist agreed that there is a process that can be worked through, but asks how much interference could be caused by that process.
NEW BUSINESS:
Discussion and possible action: Financial Impact Statement – The Financial Impact Statement was tabled.
Transfers:
Mr. Capeci made the motion to transfer from account 01310-1007 Traffic Guard the amount of $950.00 and from account 01310-1004 Civilian Personnel the amount $2,000 to account 01310-1003 Sworn Personnel a total of $2,950 to cover wage increases not in budget. Mr. Aurelia seconded and the motion was unanimously carried.
Mr. Capeci moved to transfer from account 01320-1001 Marshall Fees the amount of $967.00 to account 01320-1005 Secretarial Fees a total of $967.00 to cover secretary wage increase not in budget. Mrs. Brookes seconded and the motion was unanimously approved.
Ms Murray made the motion to table the Public Works transfers pending more information. Transfer from account 01500-4061 Contractual Drainage the amount of $37,500.00 to account 01500-2016 Equipment Fuel a total of $37,500.00 for underestimated fuel price; and Transfer from account 01500-1003 Payroll the amount of $3500.00 to account 01500-2018 Street Electric a total of $3500.00 and from account 01500-4060 Winter Contractual the amount of $1532.00 to account 01500-1003 Winter Overtime the total of $1532.00 both for underestimated budgets. Mrs. Llodra seconded and after a brief discussion the motion was unanimously carried.
Mr. Capeci moved to transfer from account 01550-1008 Part-Time Staff Salary the amount of $2,000.00 to account 01550-1003 Park Maintainer Overtime a total of $2,000.00. Mrs. Llodra seconded and the motion was unanimously approved.
Re-Appropriations:
Mr. Pennarola clarified that re-appropriation means the money was appropriated for 2008/2009 and it wasn’t spent, so we’re now we’re asked re-appropriate the money so it can be spent.
Mr. Capeci moved to re-appropriate for public works $55,800.00 from Building – Capital account 01650-5080 for sun room at senior center - to bid out soon; $147,900.00 from Capital Road account 01500-5081 for drainage job on Hi-Barlow/ Eden Hill Road – to bid out shortly; and $34,800.00 from Capital Road account 01500-5081 for work on Towns End Road still in progress. Mr. Aurelia seconded and the motion was unanimously carried.
Mr. Capeci moved re-appropriate for technology $100,521.00 from Selectman Other – Nonrecurring account 01105-2013 for hardware and software at new municipal building and $26,000.00 from Selectman Other – Nonrecurring account 01105-2013 for permit and work order management system. Mr. Hemingway seconded and the motion was unanimously approved.
PUBLIC PARTICIPATION:
Lorraine Frampton asked if the board of legislative council gets all of the information ahead of time.
Members of the Council said. No.
Mr. Pennarola said “No, not all the exclamatory information.”
ANNOUNCEMENTS: none
EXECUTIVE SESSION:
At 9:16 pm Mr. Aurelia made the motion to go into executive session to discuss land issues and invited Mr. Sibley to attend. Mr. Capeci seconded and the motion was unanimously carried.
Mr. Pennarola reopened the regular meeting at 9:45 pm.
Ms. Murray made the motion to accept the donation of the Lisy Property #09-01 a total of 3.25 acres located at 3, 4, 5 and 6 Herb Trail. Mrs. Llodra seconded and the motion was unanimously approved.
Ms. Murray moved to authorize the town to purchase the Darby-Chisel-Brockway Property #09-03 a total of 7.98 acres located on Wilderness West Road for $50,000 plus closing costs. Mrs. Llodra seconded and the motion was unanimously carried.
Having no further business, Mrs. Llodra made the motion to adjourn the meeting at 9:49pm. Mr. Davis seconded and the motion was unanimously approved.
Ted Swigart, Clerk
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