2011Year In Review—

Council, Selectmen, Finance Dug In On

Budget, Debt, And Policies

By John Voket

Newtown’s leading elected bodies — the Board of Selectmen, the Legislative Council, and the Board of Finance — all worked collaboratively in 2011, crafting a pair of budget proposals; initiating or amending various town ordinances; as well as improving financial policies that in part helped protect Newtown’s municipal bond rating.

The first few days of the year saw the council’s Finance Committee, under the leadership of Ben Spragg, take up the issue of reducing the town’s debt cap on capital borrowing after learning that Newtown had the ability to bond as much as $30 million for capital projects in the final year of the proposed Capital Improvement Plan (CIP).

To accomplish reducing the debt cap, which is a mandated limit on borrowing that should not exceed ten percent of the overall projected budget in each fiscal year, Mr Spragg suggested rolling back borrowing in year five from approximately $30 million to $20 million. By reducing borrowing costs by one-third, the corresponding debt service would roll back to nine percent.

On February 9, the Legislative Council received the recommendation from its Finance Committee to take advantage of a one-year dip in debt service during year five of the CIP, to permanently lower the town’s borrowing cap from ten to nine percent.

A concerted effort by the finance board and first selectman to reduce borrowing to nine percent gained added traction March 24 when finance officials began exploring even further borrowing reductions as soon as 2016, and after selectmen and the council began taking a hard look at Mrs Llodra’s proposal to step down borrowing between year five and year ten of the CIP.

Finance Chairman John Kortze said his board voted to recommend the step-down from ten to nine percent take place in year five, however, and went a step further by asking the council to support “aggressively” cutting debt service to perhaps as low as eight percent.

By mid-November, Town Finance Director Robert Tait was in the process of preparing a borrowing scenario that would ratchet the borrowing cap down to nine percent beginning in what would become year four of the newly proposed CIP. Mr Kortze said it would be an optimum year to lower the debt cap because it represents the first borrowing opportunity following the retirement of a large chunk of bonding.

Charter Revision

In February, the council voted 11-1 to accept the recommendations of the latest Charter Revision Commission, and then voted unanimously to send those recommendations to a public vote only to see the measures fail because the minimum number of Yes votes required by state law was not registered.

To achieve the revision, 15 percent of the town’s registered voters — or about 2,400 individuals — were required to approve the commission’s proposal of modifying budget ballots to request that each voter: (a) approve the budget, or (b) reject the budget because it is too high, or (c) reject the budget because it is too low.

Despite being challenged by Vice Chairman Mary Ann Jacob and members of the charter commission who attended on one of his points of opposition, Councilman Kevin Fitzgerald remained steadfast in his decision to oppose the recommendations.

Mr Fitzgerald said he believed the proposed budget questions did not go far enough to clarify the intent of voters who cast No votes, and he was also not supporting the proposed revisions because the charter panel recommended against splitting or bifurcating the budget between the town and school sides.

New Ordinances

A proposed “ordinance to protect children” was introduced in February and adopted in early July permitting local police to approach and potentially remove registered sex offenders from public gathering places where they might pose a threat, particularly to children, including town-owned trails and other areas of open space.

The ordinance, as proposed, identified a number of “Child Safety Zones,” specifically any park, school, playground, recreation center, bathing beach, swimming or wading pool, gymnasium, sports field, or sports facility under the town’s operation or otherwise sanctioned for use or leased by the town or any of its departments or agencies.

Violators will face a $250 fine — the maximum allowed by statute.

During a February 9 meeting, Ordinance Committee Chair Mary Ann Jacob said she planned to review a proposal to amend the Fairfield Hills Ordinance to prohibit the Fairfield Hills Authority from entering into “negative lease” situations. That matter also came before the full council in July, with Council Chairman Jeff Capeci noting that the Board of Selectmen always has the ability to bring negative lease proposals forward.

But he said the amendment as proposed by the Ordinance Committee would specifically direct any proposal related to land or buildings at Fairfield Hills be vetted through a multistage review by the Boards of Selectmen and Finance, the council, and then face approval at a public town meeting, or possibly in a referendum if payback to the lessee was enough to trigger such an action by charter.

On September 21, the Legislative Council’s Ordinance Committee heard a presentation from Newtown Borough Warden and Finance Board Vice Chair James Gaston detailing how the town might go about enacting an ordinance to curtail blight. He said such an ordinance would be added to the town’s arsenal of tools to enhance quality of life and minimize attractive nuisances and the public health threats that are commonly associated with blighted properties.

Mr Gaston, who went on to win a seat on the Board of Selectmen, said he compiled an inch-thick stack of paperwork for them to read and consider as committee members move forward discussing the possibility of adding such an ordinance. And as the year ended, the blight ordinance proposal was awaiting discussion and possible action at the committee level.

2011-12 Budget Process

In February, the finance board launched into an overview of the proposed 2011-12 town budget with First Selectman Pat Llodra and then-Board of Education Chairman William Hart.

Touting a “significant increase in the degree of collaboration” among town and school staff, Mrs Llodra said the efforts of all involved would contribute to the success of the best-case proposal. “The costs of the town will be best managed together,” she added.

In early March, the finance board moved a town request for $37,922,648 and a school district request for $68,703,427 on to the final phase of deliberation by the Legislative Council before voters had their say in a referendum set for the final Tuesday in April.

The council made a $497,590 reduction to the school district’s requested increase to account for health insurance savings, a slight increase in fuel costs, and a $70,000 increase for a district organizational study.

On the town side, the council cut about $274,000 to similarly adjusted health coverage, added $5,000 for other increased benefit costs, provided $5,000 to the Labor Day Parade Committee, added $50,572 for equipment fuel, $37,830 in borrowing interest, and $4,500 to a regional human services agency.

That first-round proposed budget, however, failed by 266 votes at referendum.

Following the failed first-round referendum, the council voted 10-2 to reduce the amount of a second-round budget proposal by one percent, which shaved $1,066,259 from the revised spending plan. The resolution also represented a new tactic for the council, by sending the proposal back to the Boards of Selectmen and Education to achieve reductions collaboratively, instead of the council deliberating and making the reductions.

On May 3, the council agreed to send a $105.6 million second round budget request to a second try referendum. That plan was apparently also good enough for taxpayers, who passed the second-round budget proposal May 17 by 168 votes.

GOP

Dominates Elections

In the November local elections, the GOP dominated Legislative Council races, with the top vote-getting Democrats winning minority seats in Districts 2 and 3. A recount in District 1 between Democrat Paul Lundquist and Independent Kevin Fitzgerald determined that Mr Lundquist was the victor by eight votes.

The remaining council seat winners in District 1 were Republicans Robert Merola, George Ferguson, and newcomer Joe Girgasky. In District 2, the GOP frontrunners were Mary Ann Jacob, Kathryn Fetchick, and Dan Wiedemann, with Democrat Daniel Honan winning the final open seat.

In District 3, Republican newcomers Phil Carrol and Mitch Bolinsky along with incumbent Jeff Capeci won seats. Democratic incumbent Daniel Amaral also won reelection.

Republican First Selectman Pat Llodra decisively captured a second term, posting 4,330 votes to Independent Party of Newtown challenger and Selectman William Furrier’s 692 votes. Mrs Llodra’s running mate, incumbent Selectman Will Rodgers, and Democrat James Gaston, Sr, won the remaining seats on the Board of Selectmen with 2,695 and 1,599 votes, respectively.

IPN candidate Po Murray, who sought a selectman’s seat, received 823 votes.

Mrs Llodra helped carry fellow Republicans into almost every other open seat that the GOP could fill. The IPN, however, won its first seat on the Board of Finance with Carol Bosco Walsh outpolling incumbent Democrats Michael Portnoy and Martin Gersten as well as IPN newcomer Rudy Magnan.

Democrat James Gaston, Jr, won a seat on the Board of Finance, joining Republican newcomer Richard Oparowski, along with incumbent Republicans Harrison Waterbury, John Kortze, and Joseph Kearney.

Enhancing Financial Policies

During an interview in early January, Mrs Llodra outlined a number of initiatives she hoped to accomplish in the new year in concert with Finance Director Robert Tait, her board, the council and the Board of Finance. Among them was a change to Newtown’s fund balance policy, which obligated the town to maintaining no less than five percent of the total annual budget in undesignated reserves.

At the same time, Mrs Llodra said she hoped to reduce reliance on fund balance to offset taxation by $1 million in the next fiscal year, “thus ridding ourselves of the practice of using our savings account for operational expenses.” The first selectman also planned to continue utilizing Newtown’s capital nonrecurring fund to help plan and save for future expenses — reducing the need to borrow money.

Just a few weeks later, Newtown completed another successful bond offering, although the meeting local officials had with two rating agencies generated what was perceived as a written warning to local officials that continued use of the municipal fund balance to offset tax increases could result in a future rating downgrade.

Mr Tait said that the town’s commitment to wean itself from the practice, while eventually reinvesting in the fund, bodes well for a rating increase to the coveted AAA status, possibly in the next three to five years. He said ideally, the median level of a fund balance cushion should represent about nine percent of the overall budget, but the first selectman said Newtown should aim to reserve 11 percent if possible.

Mr Tait also affirmed that Newtown is planning to begin fortifying the fund beginning in the 2012 fiscal year. And at year’s end an updated fund balance policy was on deck before the finance board, and a plan to begin funding the balance to an eventual eight percent from the current seven percent, was scheduled to be part of the discussion during the upcoming 2012-13 budget process.