Charter Revision Draft Dissolves Finance Board

By John Voket

Without fanfare or much discussion, the Newtown Charter Revision Commission reviewed and passed its final draft recommendation to the town’s constitutional document this week. The most significant of the changes both in literal scope and potential impact involves the dissolution of the town’s Board of Finance.

Among the charter revisions is the proposal renaming the Board of Finance to the Finance Advisory Board. In enacting such a modification, the town, via charter stipulations and an enabling ordinance, would have complete control over the powers and responsibilities of this group of elected financial professionals.

Currently, as a Board of Finance, its elected members enjoy certain rights and protections afforded under state statutes, much like the Board of Education, although in much more limited scope. One key difference, according to finance board chairman John Kortze, would be the removal of his board’s statutory right to review all financial records of any town department, including the school district.

“It’s critical at this juncture, when Newtown has grown into a $100 million financial enterprise, that the Board of Finance be not only involved in financial matters in an advisory capacity, but that it be empowered to protect the financial interests of every taxpayer under the state statutes,” Mr Kortze said. “By changing the name and [dissolving] the Board of Finance, the taxpayers and the town will lose the maximum potential to exercise checks and balances to ensure its financial security.

“It seems like just the opposite of what many people are asking for, and what you would expect to occur,” Mr Kortze added.

Now that a final charter revision draft has been passed, the Legislative Council must approve or reject the revised charter no later than October 25. The next regularly scheduled meeting of the council is October 3.

Within 30 days after council approval, and no later than November 24, the revised charter must be published in full at least once in a newspaper having a general circulation in the community. Concurrently, by that date, the council must, by vote of its entire membership, determine when the revised charter shall be submitted to electors.

That date shall not be more than 15 months after the date of the council’s final approval.

Council Chairman Rodgers told The Bee that Mr Cramer asked the revised charter be voted upon at either the 2008 budget referendum or the 2008 general election in November. Mr Rodgers said he was inclined to recommend the full charter revision go to voters in May 2008.

Prior to this week’s meeting, Mr Cramer said he was particularly interested in learning whether or not the finance board name change recommendation might remove statutory protections and immunities enjoyed under state laws by elected Board of Finance members.

Revision Created Conflict

Mr Cramer maintained throughout the current charter revision process that a conflict occurred in the previous charter revision, which technically empowered two boards of finance, one by title that is vested with full-time oversight and advisory responsibilities, and the second — the council’s finance subcommittee — that refines or validates the advisory board’s input before recommending or rejecting budget actions, as well as other significant appropriations legally authorized by the full council.

This apparent conflict between advisory and policymaking powers between these two elected boards has been an issue Mr Cramer sought to repair in the current revision process. He said his concern was among the driving factors behind supporting what first seemed to be an innocuous fix of an unintended outcome of the last charter revision vote during the last revision.

At that time, an 11th-hour petition forced a breakout question on the ballot, which passed, creating the current Board of Finance with all statutory powers and privileges. In the same referendum, a large package of other charter revisions, including the removal of financial policymaking powers from the council’s finance subcommittee, failed, leaving the town with two financial committees.

During the ensuing months, language was crafted to accommodate both entities in the charter, each having specific powers and duties, but neither having sole oversight and legislative control of the community’s financial business.

More recently the proposal to dissolve the finance board was criticized by its vice chairman, James O. Gaston, who argued that the name change would also likely expose its volunteer members to civil and possible financial risks. Mr Gaston said a Finance Advisory Board is a hybrid entity that exists exclusively in Newtown, and does not come under state immunity protections.

Mr Cramer told The Bee that he would not support a revision that risked exposing any town volunteers civilly or financially in the course of their duties. But after learning in the past few days from Town Attorney David Grogins that any members of a locally controlled finance advisory committee, whether appointed or elected, enjoy both hold-harmless protections and individual financial protections under the town’s insurance carrier, he decided to back the revision.

Mr Cramer’s and his fellow charter commissioners’ decision comes despite Mr Grogins’ written legal recommendation to keep the Board of Finance intact and as is.

In that decision, he wrote: “The Board of Finance in Newtown is a hybrid board in that some of the normal functions as a board of finance are vested in the Legislative Council and some in the Board of Finance. This situation is the result of the vote of the electors of the Town of Newtown and the last Charter Revision Commission,” he continued.

“The present Board of Finance has advisory as well as actual functions under the existing charter. While there is no statutory requirement as to the nature of the Board of Finance (assuming a charter town rather than a statutory town), I believe it would be a misnomer to call it a ‘Finance Advisory Board’ and I recommend against this change,” Mr Grogins concluded.

Text of Revision

The proposed revision to the Charter Section 2-130, if approved, would read: “The Town shall have a Finance Advisory Board consisting of six (6) members who shall be elected for terms of two (2) years. The provisions of minority representation as set forth under Section 9-167a, of the General Statutes as amended, shall apply to the Finance Advisory Board and each political party may nominate and elect as many members of the Finance Advisory Board as shall be permitted by the minority representation provisions of said Section 9-167a, any Special Act to the contrary notwithstanding.”

The Finance Advisory Board shall have the powers granted and the duties imposed by this Charter. The proposed revision removes existing language that reads: “…with the powers granted and the duties imposed by the General Statutes on boards of finance except to the extent that the latter may be inconsistent with or in conflict with any of the provisions of this Charter.”

Mr Kortze believes some or all the charter commissioners, while working toward enhanced checks and balances in town government, failed to recognize how this proposal limits the town’s only statutorily vested board from performing the ultimate checks to protect the taxpayers dollars.

“I respect the work of the charter commission overall, but the Board of Finance in its current role provides a series of checks and balances that serve the taxpayer extremely well, and any change to that would detract from our ability to perform that critical function,” Mr Kortze said.

He then referred to recent rapidly accelerated bond rating upgrades the town has enjoyed, saving taxpayers millions, along with special notations in each of the last five bond rating reviews from Moody’s Investment Service, specifically citing the quality of oversight and management on the part of Newtown’s current Board of Finance.

“That and the fact that we have a finance director who every year for a decade has been recognized nationally for having the best municipal financial reporting,” Mr Kortze said. “What do you think it will do to Newtown’s bond ratings once Moody’s gets wind of this change?”