A workgroup consisting of representatives from the Board of Finance, Board of Education, and Legislative Council charged with considering ways to appropriately administer the Board of Educations non-lapsing account heard from two attorneys during a May 3 virtual meeting.

The attorneys — David Grogins, representing the municipality, and Matt Ritter, representing the school board — were invited to appear and spend some time responding to a raft of questions submitted in advance.

The questions in part revolved around whether Newtown’s hybrid Board of Finance or its Legislative Council was legally empowered to authorize or appropriate surplus school district budget funds for transfer into the non-lapsing account — after which there would be no restrictions on expenditures as long as funds are used for qualified educational purposes.

From nearly the onset of the roughly one-hour meeting, both attorneys agreed that despite the finance board providing appropriation directives in the past, the final word on how much if any school surplus would accrue to the non-lapsing account each year is in the hands of Newtown’s Legislative Council.

But to understand why, Grogins related how the current iteration of the Board of Finance was created with only advisory — and not appropriating — authority.

Reminding the workgroup members, “I lived through it,” Grogins explained that a 2001 Charter Revision Commission recommended the creation of a Board of Finance that had full statutory powers to affect appropriations. However, upon recommending that to the council that seated the commission, the recommendation was rejected.

At the time, Grogins said, the charter panel’s leadership felt so strongly about shifting appropriations powers to a newly seated finance board, that it successfully petitioned the proposal to go on the ballot for Newtown residents approval or rejection.

This is where the story gets somewhat confusing.

Instead of scripting one ballot question that would seat and empower the finance board with appropriating authority, those concepts were split between two ballot questions. Once all the ballots were counted, the voters had authorized a Board of Finance to be created — but did not pass the separate measure giving them appropriating wherewithal.

As a result, it was determined that a new finance board would be seated and vested with only advisory capacity. This is the finance board architecture that exists today.

A ‘Hybrid’ BOF

Now for the next “however.”

The much more recent statute that empowers school boards to maintain a non-lapsing account funded by any annual surplus funds — not to exceed two percent of the approved district budget — gives appropriating authority to a community’s Board of Finance, or the appropriate panel vested with appropriating authority.

By charter, Newtown finance board is deemed advisory only — a “hybrid” by Grogins’ definition — even though it would otherwise be the group empowered to authorize surplus appropriations into the school board’s non-lapsing fund.

To further complicate matters, and without any intent to violate state law, Newtown’s finance board previously did vote on making appropriations to the non-lapsing fund.

On a related matter, the attorneys were asked whether they thought it would be legal and appropriate to create a compromise by which the finance board would act in that capacity, making official non-lapsing appropriations versus simply advising on them.

Grogins firmly stated that such a compromise “flies in the face of [Connecticut’s] home rule statute,” and could subject the town to litigation. In closing, Grogins told the workgroup that the current situation could be changed through a charter revision, and noted that such a charter review panel was currently seated and had the authority to take up the issue.

Ritter agreed, saying in his view, the council was the only Newtown body authorized to make appropriations to the school board’s non-lapsing account. He said, however, that in Newtown’s case it was more important to understand how the account and appropriations operate in practice, versus having a firm grasp on legal parameters surrounding the issue.

The school district’s attorney said that the process that transpires annually between the school board and council in and of itself contains checks and balances that ensure both parties work appropriately and cooperatively.

Briefly reviewing some historical points, Ritter said that before the state legislature created and permitted the use of non-lapsing funds to accrue money from school district surpluses, districts holding pending surpluses often spent them down in the final weeks or days before the end of each fiscal cycle as opposed to returning the funds to the municipality.

In creating the opportunity to develop and fortify a non-lapsing fund, Ritter said, lawmakers in 2010 came up with the compromise providing appropriations to that fund would be capped at two percent, and authorized by the appropriate town body empowered to do so.

Once the funds are appropriated, the school board can spend the funds in any way as long as it falls under the broad definition of educational use.

Ritter further illustrated that in a year where such an appropriation was granted and spent “on the worst thing, and the townspeople went crazy,” future appropriations might be minimized or curtailed completely by the appropriating authority.

Policy Versus MOU

That led to a discussion of another point outlined by the workgroup — whether all groups involved in the process could craft a policy or memorandum of understanding (MOU) that outlined specific purposes for incoming funds, for example: capital projects, equipment, or in Newtown’s case, a special education contingency fund.

“Or you can change your charter, or lobby to have the statute changed,” Ritter said, adding if the various elected bodies involved failed to get along, such a policy or MOU “isn’t going to work.”

Grogins said he was not adverse to the concept of crafting some type of agreement, and reiterated that while the council may have the authority to appropriate non-lapsing funds, the finance board was still vested with advisory capacity on if or how much should be transferred into that fund each year.

Ritter reiterated that if the school board proposes an appropriation for education purposes and uses it for something the council does not agree is for education purposes, “the next year — no money.”

“The Board of Education [members] may shoot themselves in the foot if they don’t collaborate every year,” he added, saying several state municipalities have MOUs. Ritter noted, however, “An MOU is only as good as the parties want to make it work; but a good policy could stick for a long time. Policies are codified — an MOU does not [codify an agreement]. At any time, the legislative council can assert its statutory authority.”

Some additional discussion transpired over whether certain portions of the fund could be earmarked for specific purposes as part of the process leading up to the appropriation. Ritter said he saw no detriment to earmarking part of the non-lapsing account for specific educational uses, while Grogins simply asserted that putting too many rules or restrictions in place “creates a problem.”

Ritter agreed, saying that if too much pressure is put on the school board to specify how funds would be earmarked in advance, the board might simply go to the town and bond for the funds versus using money accrued in the non-lapsing account.

“You want to give them flexibility so they can spend it,” Ritter said.

The non-lapsing workgroup is scheduled to meet next on May 26, according to Chair Ned Simpson, at which time the group will discuss the purpose of the account.

Associate Editor John Voket can be reached at john@thebee.com.