Council Sends CIP Back To BOF To Approve ‘Debt Vacation’
The Legislative Council took action Wednesday, January 9, that if approved by finance officials, would clear the way for Newtown to go on a so-called “debt vacation” during the 2024-25 fiscal cycle.
Nearly three hours in to a special meeting that evening, and with hopes of approving a five-year Capital Improvement Plan (CIP), the Legislative Council instead voted 7-5 to remove two $1 million school district bonding requests from the plan in its fifth year, which by Town Charter, requires sending the plan back to the Board of Finance for review and approval.
The move, if affirmed by the finance board, would create a scenario that year in which the town would seek no bonding for any municipal or school projects. Officials said that move is not only fiscally prudent, but would allow the town to more aggressively pay down existing debt service without any first-year borrowing expense for those two scheduled capital projects.
The projects and corresponding bonding allocations were identified by council member Ryan Knapp as “place holders” in the CIP — meaning project details and true costs are not yet defined. The CIP acts as a road map identifying virtually all planned and/or requested town and school capital projects over the coming five-year fiscal cycle.
While the formal CIP only identifies five years worth of planned projects and corresponding borrowing, grant, and or operating revenues to cover their costs, both the school board and municipal leaders have expanded the plan to include proposed projects as far out as ten years.
School board Chair Michelle Embree Ku and school board member Dan Delia, Superintendent of Schools Lorrie Rodrigue, and district Facilities Director Robert Gerbert, Jr, were on hand to respond to questions.
Dr Rodrigue noted that district officials had met the previous evening with the school boards Capital Planning Committee and made no changes to the 2020-21 requests. She said, however, that district leaders were already planning to meet later in the year to consider making some changes to future year requests. Among the changes she said would be discussed, were moving plans for a Head O’ Meadow (HOM) School boiler replacement from year four (2023) to year two (2021).
‘Rock Solid’ Boiler
Mr Gerbert told council members that the 42-year-old HOM boiler was just serviced and that one component was replaced.
“That was the only issue we had with that boiler,” the facilities director said.
“We think it’s rock solid,” Dr Rodrigue added.
Some subsequent discussion revolved around the schedule for planned HVAC projects — and how they were prioritized in conjunction with a nearly two-decade old-environmental study that examined air quality in the Hawley School and the Middle School.
Coincidentally, a decade ago, in 2010, the finance board also questioned school officials on how they were prioritizing planned HVAC projects when concerns were raised about air quality in the same two schools. In 2010, an air quality expert reported that several areas of the Middle School contained measurably worse levels of carbon dioxide than a previous round of testing in November 2001.
That information played a role in how district officials were prioritizing capital spending for HVAC improvement then. In 2010, school board members decided to prioritize the Middle School’s HVAC and air circulation renovations over a similar project at Hawley School.
The current CIP has $300,000 requested in 2020 for the Hawley ventilation and HVAC renovations planning, and requests 3,962,000 in 2021 to complete the project.
On another matter, Mr Knapp repeatedly questioned and later referred to the fact that school officials were asked in mid-2019 to involve the Town’s Sustainable Energy Commission in organizing capital projects involving energy conservation. Dr Rodrigue said Mr Gerbert — who was recently hired to replace retiring Facilities Director Gino Faiella — had just begun engaging with the energy panel and planned to work more closely with the commission on future projects.
Mr Knapp also questioned school officials about the planned moratorium on bonding in year five of the CIP. Ms Ku mentioned that she thought it would be more beneficial for the town and school district to not bond in subsequent years versus doing no bonding over a single year.
Dr Rodrigue said school officials would take that proposal into consideration when they re-examine the CIP and timing of future projects later this year, and told Mr Knapp that the bonding moratorium had not yet been discussed.
Later in the meeting, First Selectman Dan Rosenthal said he had mentioned his desire to not borrow in the 2025 fiscal cycle to Dr Rodrigue during the 2019 CIP process.
When it came time to make a final decision on the current CIP, Council Chair Paul Lundquist reminded his colleagues that any changes would require the plan go back to the finance board for final review and approval before the CIP could be finalized for the upcoming fiscal and bonding cycle.
That prompted Councilman Phil Carroll to propose removing the Year One request to bond $300,000 for the Hawley HVAC planning and design phase — instead proposing the district cover that cost from its reserve fund. Mr Knapp then moved an amendment to shift the expenditure from the bonding column on the CIP to a column reflecting the revenue would come from another source.
Upon further discussion, the amendment passed unanimously, but the proposal to make the district cover Hawley HVAC design and planning from its nonlapsing fund failed 8-4. Mr Ryan then introduced discussion about moving the Head O’ Meadow boiler project to year one and pushing proposed renovations at Hawley and Reed Schools out by one year.
He said the move would provide more time for district officials to perform new air quality studies, which could lead to reprioritizing work at the corresponding schools. After further deliberation, Mr Lundquist said the motion teetered on the edge of micromanaging district projects.
“I feel like there’s a lot to these [proposed] changes without rationale to it,” the council chairman said. A subsequent vote on Mr Knapp’s motion failed 8-4.
The final proposal that eventually brought the CIP business to an end for the evening came from Councilman Chris Smith, who noted that the CIP contained the two $1 million projects in year five. So he proposed dropping those projects from the official CIP to clear the plan of any bonding that year.
Mr Rosenthal previously characterized the proposal as a “debt vacation,” and was backed by Town Finance Director Robert Tait, who said the town should take one year off from borrowing every five years as a regular financial practice.
Mr Smith felt his proposal, if approved, would affirm the council’s support for the debt vacation proposal.
“I like the message it telegraphs about intent for a bond free year,” Mr Lundquist added. “This is the way to have an impact — doesn’t change the outcome.”
Mr Knapp agreed, saying the CIP “is a plan — and we shouldn’t put forth a doc that has funding in year five.”
That motion passed 7-5, and a final motion to return the CIP per Charter directive to the finance board passed 11-1, with Councilman Dan Honan opposed.
The Board of Finance will presumably take up the proposed CIP adjustment at its scheduled January 13 meeting.