A Business Like No Other

Whenever we hear a political candidate say that local government should be run more like a business, we always wonder what kind of business the candidate has in mind. A business where shareholders are the only customers and each shareholder/customer has the legal right to attend every business meeting? A business where performance standards for its largest division and a large portion of its revenue stream is controlled by state and federal governments? A business where the customers get to vote on the price of the product?

There is no business like local government, but that does not mean that sound business principles governing accounting, finances, and capital planning are not essential to running a successful town. One fortuitous result of an otherwise confusing and contradictory charter revision vote in 2001 was the re-creation of Newtown’s Board of Finance. Because of the impressive level of financial expertise of its members, the board has quickly founds its place at the center of the town’s financial operations. It has worked effectively with the Board of Selectmen, the Legislative Council, and the town’s finance director to bring a measure of control and foresight to Newtown’s finances that has been recognized and rewarded by Wall Street with higher bond ratings and lower interest rates, promising millions of dollars in potential savings for local taxpayers in the coming decades.

Notwithstanding the good work that has been done in the last four years to bolster the town’s financial health, Newtown’s money managers still have an important goal to meet: better coordination of town and school finances.

With that goal in mind, the Board of Finance, First Selectman Herb Rosenthal, and Finance Director Ben Spragg have been pressing for closer consultations with the Board of Education, which is used to running its own financial shop. Last week, after an intervention of sorts, the school board seemed to get the message. The board heard explicit warnings that its failure to produce clear cost projections for two major expansion projects at the high school and middle school could cloud the town’s economic picture enough for Wall Street to downgrade Newtown’s financial rating and undermine the coordinated efforts of the Board of Finance, Legislative Council, and the Board of Selectmen to give the town sound financial footing for the future. Last week, school board chairman Elaine McClure promised to come up with the needed cost projections quickly.

We assume the promise will be kept, and we hope to see many more examples of school and town money managers working together, and not just at budget time. Keeping a town financially healthy is a complex task requiring expertise, vision, and up-to-the-minute information. It’s nobody’s private business. Our school and town leaders have to talk to each other, advise each other, and cooperate with each other year round — and they have to do it in plain sight of their shareholders/customers.