New School Or Open Space?—

Capital Plans May Bump Against Town’s Debt Cap

By John Voket

If there is an X-factor in the equation for Newtown’s successful financial outlook, it may well involve either a high school building project or a plan for open space purchases. Board of Finance Chairman John Kortze believes pursuing both of these goals within the next five years could spell financial trouble for a community that has enjoyed enhanced credit ratings, which resulted in less costly bond service in recent years.

Mr Kortze spoke to The Bee about these and other concerns following an August 9 meeting, during which the board accepted both the Board of Education’s and the town’s latest projected Capital Improvement Plan (CIP). He was most concerned that if officials insist on pursuing an aggressive acquisition plan for open space, as well as a new high school, or even an add-on to the existing facility, the town will exceed its self -imposed debt service cap of ten percent.

“Right now we’re at about eight percent,” Mr Kortze said. “That doesn’t provide a lot of room before we exceed our cap.”

Mr Kortze said he would like to see the town continue with its commitment to acquire more open space, and said plans for a high school expansion or new school are still up in the air. He also credited the town with adhering to a published financial plan.

“That’s why the town has seen two consecutive upgrades in its bond rating — and we may see a third,” he noted. “These ratings have a direct and positive impact on our taxpayers, and they’re a very important part of our overall financial puzzle.”

Since its inception, the finance board has pushed for the town to put its future capital plans on paper. Mr Kortze said the practice of running the town in a more formalized and businesslike manner has provided a consistent stream of financial benefits.

“Newtown is a growing entity now — like an $80 million-a-year company — and we have to approach finances that way, with both accurate operating and capital budgets,” he said. “This is a major reason why and how you know if you’re [taking financial risks] too far. If we see it on paper, we know when we are pushing the envelope.”

Up to now, capital improvements and other aspects of the community’s financial management have adhered to guidelines recommended by the bond council, ratings agencies, and banks, Mr Kortze said. But by pushing the debt service cap to or beyond the ten percent self-imposed cap, the town may jeopardize future positive rating adjustments.

“You tend to make excuses why you bend the rules, but unless the town pays attention here we may reverse the positive trend we’ve seen,” he said. “We need to be sticking to the spending guidelines as they are set. In my opinion we don’t want to even run it up to ten percent.”

Mr Kortze believes a significant capital building project involving the high school could push the town beyond its ten percent cap.

Superintendent of Schools Evan Pitkoff said his department is going forward with plans to commission an architect to look at the existing site to make recommendations for the future.

“The last high school expansion was to accommodate a student population of 1,600, but projections are leading us to expect the current enrollment to increase beyond 1,600,” Dr Pitkoff said.

He said the architectural consultant will examine whether the existing school should be physically expanded, if new facilities should be built at the current high school site, or if the community needs a new or second high school at another location.

Dr Pitkoff said the current CIP does not include cost estimates for a high school expansion, because those numbers are not yet confirmed. However, both the superintendent and Mr Kortze agree that, based on a state education department formula for such projects, a new facility could cost the town as much as $25 million.

“The Board of Finance wanted to plug in a figure of $10 million [in the CIP],” Dr Pitkoff said, “but it could be up to $25 million.”

He said by early fall, the Board of Education should expect information on the existing site.

Town Departments’     Wish List

On the town side, Mr Kortze said he is still waiting to see the first selectman’s recommendations on the CIP proposals submitted by town departments. According to the first selectman’s office, the Board of Selectmen will be reviewing departmental proposals beginning with its August 16 meeting. After any adjustments are made to department proposals, the final CIP, excluding the Board of Education, will be presented to the finance board.

In a review of departmental proposals, some of the large ticket items include a renovation to the Dickinson Park Pond. According to documentation provided, the original projection of costs for this project have almost tripled, from $720,000 to $2 million.

The Newtown Hook and Ladder Company is hoping to replace a 25-year-old pumper truck, which actually serves as a supply truck for all town fire districts. Proposed cost: $440,000.

The Dodgingtown Fire district also hopes to replace a 20-year-old pumper, which serves as the primary responding vehicle for fire protection in the area, as well as a supplemental responder for the entire town. Projected cost: $400,000.

The Public Works Department is planning to replace a 1988 grader for $250,000. The old grader has a trade-in value of $15,000 according to documents.

A proposed capital road improvement budget includes major reconstruction of four town roads, work on two bridges, paving on nine roads, and a pond reclamation proposal. Total cost: $2 million.

The Department of Parks and Recreation is proposing an acrylic air-supported dome for the Treadwell Park Pool (projected for completion in the 2009-2010 fiscal year). Estimated cost for structure: $350,000.

On the subject of open space, First Selectman Herb Rosenthal has already expressed his desire to see a significant investment of up to $10 million for open space acquisition over the next five years. In a previous report, Mr Kortze stated he would like to see a precise explanation of where the money would be coming from, before the finance board began seriously formulating a plan for open space procurement.

During a previous Board of Finance meeting, a representative from the New Haven- based Trust for Public land testified that based on his group’s consultations with the town regarding open space conservation and acquisitions, the $10 million figure is both prudent and appropriate.

Following the most recent finance board meeting, Mr Kortze reiterated his concerns on the matter. When asked about which issues taxpayers might need to pay close attention to, Mr Kortze maintained: “Keep an eye on school improvements and open space [proposals].”