IPN Reps Examine Council,

BOF Roles In Capital, Budget Process

By John Voket

Following an initial discussion on possibly changing the role and positioning of the council in the town’s Capital Improvement Planning (CIP) process, incumbent Independent Party of Newtown council members Gary Davis and Po Murray took the opportunity to expand on their ideas about how to improve and streamline this annual multimillion-dollar plan.

Their follow-up emailed comments were made after a council meeting August 5, when Mr Davis proposed that the council position itself to provide greater influence at the earliest stage of the town’s capital improvement planning.

Following some spirited discussion among all council members in attendance, it was determined that the council, at any point in the capital planning process, could either call in any town representative initiating a capital request to ask questions, or attend and interact when appropriate, with the Board of Finance as that panel reviews proposals.

Currently, the CIP requests move from the Boards of Selectmen and Education, through the finance board, which hears about the proposals and costs, asks questions, confers on the prioritization of the projects and determines, based on existing debt commitments, if and which proposals are affordable taking into consideration a ten percent debt cap on overall borrowing for such projects.

Once that process is completed, the finance board passes on the vetted and prioritized CIP to the council, where it undergoes a so-called “political” review and approval by both the council’s finance subcommittee and the full panel. Even the council’s education subcommittee may weigh in on capital projects as they relate to the school district’s side of the CIP.

At this point in the process, the council can vote to change, add, readjust, or remove CIP items, although historically the council has approved the CIP based on the finance board’s recommendations.

“The council should be more engaged upfront instead of at the end,” Mr Davis said during the August 5 meeting. Mr Davis said by giving the council members an opportunity to ask questions, the group would be more attuned to the proposals the council is expected to endorse or reject as the final step before the debt service for those projects is factored into the annual budget proposal.

“We should have the ability to participate,” Mr Davis said, adding that perhaps the process might make more sense and be expedited if the council and finance boards received reports on capital proposals from the respective town and school department heads in a joint meeting as the first step in the CIP process.

‘Get It In Writing’

Mr Davis said by conducting a joint council and finance board presentation on the CIP, both panels would be proceeding from the same page. Additionally, he said having both groups in the same room at the CIP’s onset would provide an opportunity for the council to “define the most important priority between the Board of Education and the Board of Selectmen.”

As discussion at the August 5 meeting concluded, Vice Chairman Francis Pennarola said he received assurances from finance board Chairman John Kortze that council representatives could indeed attend and ask questions during the finance board’s part of the CIP review process.

Ms Murray’s reply: “Get it in writing.”

Following the meeting, both Mr Davis and Ms Murray responded to follow-up questions in writing about how they believe the council and the finance board interact in the CIP and overall budget process. Mr Davis explained that based on his understanding, the Legislative Council, per the Charter, is the fiscal authority in the community.

“I think the council can do a better job of engaging with the Board of Finance, the Board of Ed, and the Board of Selectmen on financial matters,” Mr Davis wrote. “I have advocated that the council have a more active role in these financial processes.”

By adopting such a change in the order of handling the CIP, Mr Davis believes it would provide an opportunity to better engage in discussing recommendations from finance board members during their reviews and in their capacity as the council’s financial advisor.

“I believe we need to evolve our CIP and budget processes for this to happen,” Mr Davis said. “The Legislative Council needs to challenge more often the assumptions underpinning the Board of Finance’s financial philosophies to ensure that our fiscal policies are flexible and able to meet the ongoing needs of our community.”

Ideas For Change

Ms Murray, who along with Mr Davis is seeking reelection to the council this November, agreed that the finance board “could do a better job.”

“I believe the BOF members are dedicated members of the town government who devote significant amount of time and I respect them for it,” Ms Murray said in her response. “If I have any issues with the BOF, it is related to how the town government has been structured and the processes the town has set up for the budget and CIP deliberations and also the lack of a long-term plan to determine the funding strategy.”

Ms Murray said she would like to see the finance board “work with the council and other town boards to improve the budget and the CIP processes so that the processes are more efficient, more accountable, more inclusive, and more transparent, so that the voters will have confidence that the town government is working together to make the best fiscal and socially responsible decisions for the town.”

To that end, Ms Murray said she would like to see the board of finance adopt the following practices:

*Provide oversight of the actual expenditures once the budgets and capital projects are approved.

*Assist in creating a process so that the BOF and the LC can receive regular updates on the BOS/BOE expenditures and capital projects (i.e., status of the dog pound project or road repair).

*Encourage and participate in the Fairfield Hills Master Plan review.

*Encourage and participate in a process to create an integrated strategic long-term plan so that the long-term plan would dictate the funding strategy to avoid Band-Aid approaches.

In illustrating the “Band-Aid” approach to long-term planning, Ms Murray cited the first high school expansion that cost taxpayers $28 million, and failed to accommodate a student population increase that necessitated a second expansion costing more than $40 million, plus the cost for 12 portable classrooms to temporarily reduce the interim space crunch.

‘Integrated Uniform Methodology’

In addition, Ms Murray said she would like to see the finance board assist the council and the finance director in creating an integrated uniform methodology to objectively determine the priority of a capital project. She pointed out that the Hawley School HVAC replacement has been delayed for years.

“Which objective measures would deem this project a priority or not? Which standards do we use to measure the priority of the leaky middle school roof versus demolishing dilapidated buildings [at] Fairfield Hills?” she asked.

She said the town needs to determine if it is more costly to continue with the current practice of using the ten percent debt cap, since delaying capital projects may significantly increase the future debt burden due to cost escalation as evidenced with the Hawley HVAC project.

During an earlier presentation to the council August 5, Mr Kortze referenced the ten percent debt cap as one of the major considerations by Moody’s Investors Service, the town’s bond rating agency, in maintaining Newtown’s favorable Aa2 rating.

In addition, Ms Murray recommended the town engage in a discussion to determine whether two bodies of government accountable for the budget and the CIP are needed.

“Some towns have the board of finance as the fiscal authority and no Legislative Council,” Ms Murray said. “Currently the Legislative Council is the fiscal authority, yet this body of government has abdicated much of its responsibilities to the Board of Finance.”

In the end, Mr Davis said taxpayers will always be best served by “vigorous debate to help create the best solutions and policies.”

Mr Davis said the same holds for elections.

“We need competitive elections to encourage constructive debate and discussion,” he said adding that  IPN is offering candidates for the Board of Finance, “so that there will be some competition for these positions in this election.”

“There are others in our community who could contribute to the financial thinking of the board if given the opportunity to do so, both by their political parties, and, ultimately, by the voters,” Mr Davis said. “It’s clear that the our local Republican and Democratic parties did not want to foster such competition in the election for Board of Finance, further indication that the two local town committees are very similar in their outlook and philosophy.”