Finance Board To Discuss Two Options For Council Presentation

By John Voket

The Board of Finance is planning a special meeting next Tuesday, December 5, to finalize a capital plan presentation for the Legislative Council. According to finance board chairman John Kortze, that meeting with the council is scheduled for Wednesday, December 13.

The second of two joint meetings called for by the finance board will be to advise council members about planned municipal spending, specifically detailing two scenarios incorporating a new high school expansion project as the top expenditure.

“At the December 5 meeting, we want to come up with a consensus about what the [finance] board sees and feels about the biggest potential expenditure which is the high school,” Mr Kortze told The Bee Wednesday. “Then on December 13, we want to have a conversation with the council about the choices that can be made, and hopefully we’ll all be on the same page.”

Mr Kortze previously said that since the council is the voting body on municipal spending, it makes sense for the finance board in its advisory capacity to come out with a solid game plan so debt service on future capital spending will remain below a self-imposed ten percent cap.

“If it turns out we are not on the same page after meeting with the council, we’ll be prepared to show them the cause and effect of their decision from a financial standpoint,” Mr Kortze said.

Ultimately, he believes the finance board will likely present spending scenarios based on a high school buildout for two levels of future population projections. These projections have come to be referred to as “Bothwell’s high” and “Bothwell’s medium” numbers, referencing the state school population consultant Dr Bruce Bothwell.

Dr Bothwell has been consulting on Newtown student population projections for some time. The school district’s maximum design option accounts for his highest probable projection going out ten years, while more recently, the finance board has been considering a version building out for the medium projection.

Those projections are directly tied to tax dollars, municipal spending and debt service, potentially affecting the timing and viability of virtually every other town capital project going forward until at least 2013. Newtown’s financial planning consultant in conjunction with Newtown Finance Director Benjamin Spragg recently updated a chart detailing spending for debt service in relation to the ten percent cap.

That chart details a level of debt spending on bonds for all prioritized capital projects including a $47 million allocation for the maximum high school buildout. If that plan plays out with all projects being funded as proposed, the town’s debt cap would be exceeded by the 2009 fiscal year, Mr Kortze said.

Those overages would balloon between 2010 and 2013, exceeding the cap by between about $2.1 million and $750,000 for debt service above the ten percent guideline with no relief in sight until 2013, when that ratio dips slightly below the cap. Mr Kortze and other municipal sources have argued that the current projected scenario would only play out as projected if no other capital projects are proposed during that time.

He has countered, however, that necessary spending on the high school can happen with ample room for several other priority projects if the council agrees to support the midlevel student population projection, and the related buildout to accommodate it.

“You can look at it in very simple terms,” Mr Kortze said. “Right now you have $40 worth of projects requested and only $10 to spend this year. If the most important project is $8, you only have $2 left for whatever else you can afford. But if that priority project comes in at $6, you have twice as much to spend on the rest of the proposals.”

In real dollars, he is referring to a difference between the $47 million proposed for the maximum high school buildout, and an adjusted expenditure of $38 million if the council supports building for the medium population projection.

“Our primary goal is to try and accommodate as many capital projects as possible townwide while still keeping within the ten percent limit,” Mr Kortze said. “If we spend for the mid, we can say ‘do these other projects,’ but if we build to the high, we have $10 million less to spend on the rest of the capital proposals.”

Mr Kortze said in his opinion, it is easier to focus on the high school buildout by taking into consideration several evident factors.

“Growth is slowing statewide; based on Bothwell’s projections of lower grade populations, the high school student numbers have to come down. Housing starts have slowed and there are three to four times as many houses on the market now in Newtown than there were just a few years ago.

“We know it will pick up again eventually, but we don’t know when,” he continued. “We know we have to do something for the foreseeable future, so we make the best decision we can and do as many things as possible with the money we have.”

Mr Kortze said ultimately, he believes the taxpayers of Newtown are willing to be taxed based on their current needs, with an eye on the future.

“But I don’t think taxpayers expect to pay today for a project extending for an indefinite future,” he said.

Mr Kortze said next Tuesday’s meeting will also try to determine which other projects could be funded with the money left after the high school bonding.

“Either way, the list of possibilities will be extremely limited,” he said. “We’re going to have to cut or postpone a lot of the other priorities on the CIP. So it makes sense to start with the high school and then do as many other projects with whatever we have left over, that way we can at least ensure some of the priorities from the top of both the town’s and school’s lists can get done.”