On January 9, the Board of Finance continued to discuss a policy dealing with fund balances held by outside agencies, noting that the policy should emphasize accountability and transparency.

The finance board has spent its last several meetings discussing the policy, aimed at ensuring outside agencies that make requests on the budget are treated equally in the budget review process in respect to any fund balance they are carrying. In the 2022-23 budget, the town made nominal contributions to seven outside agencies that serve the community. In addition, the Lake Lillinonah and Lake Zoar Authorities and the Edmond Town Hall Board of Managers received budget allocations.

Three other quasi-governmental agencies also received funds: $303,000 to Newtown Youth & Family Services; $143,000 to the Children’s Adventure Center; and $1,408,000 to the C.H. Booth Library. And another $1,132,000 was distributed to the town’s five fire companies; $270,000 to Newtown Ambulance; and approximately $10,000 to Newtown Underwater Search and Rescue.

At its January 9 meeting, BOF Vice-Chairman Chandravir Ahuja recommended putting language concerning accountability and transparency on the first page of the proposed policy, under the “Purpose” section that leads the document.

“We want to be more up front,” said Ahuja.

Ahuja also wanted language asking for each organization’s two most recent financial statements to be modified to three or four most recent statements.

“Two years only puts us back in the COVID years,” said Ahuja.

First Selectman Dan Rosenthal suggested that the lake authorities be removed from the policy, noting that their budgets are assessments to the town, not requests that the town can modify.

“We may think it’s too much but there’s nothing we can do,” said Rosenthal.

Ahuja said that the town should still ask for the financials, and Rosenthal noted that the lake authorities “are already giving them to us as is.”

BOF members explained the policy was not about creating a cap for the fund balance total, but rather a threshold for when a fund balance would need scrutiny from town boards such as the BOF and Legislative Council during respective budget reviews.

The balance can be over ten percent, they explained, but once over that amount the boards will want information on why the balance is so high and how the balance will be used. Fund balances under $50,000 do not need to be reported.

Rosenthal said that an accounting of a capital plan that a fund balance would be used for should “not be just earmarks,” but a full plan for the next several years.

“If something in the submitted plan has not been done a few years down the road, we want to ask why that is,” said Rosenthal. “We need to know if it’s their plan or if they’re just throwing things out there.”

Chairman John Madzula II said that the purpose of the policy is to not set things in stone but to set expectations for what the town is looking for from outside agencies.

Rosenthal said the purpose of the policy is to “level the playing field” so that it doesn’t seem to any one group that it was “their unlucky year to be put through the wringer.”

At an earlier BOF meeting, Ahuja said that the issue started last year with the library’s fund balance, when Councilman Ryan Knapp moved to cut an increase from the library’s proposed budget, keeping it at its 2021-22 level.

“We need to discuss what our policy should be so we are not picking on a single agency,” said Ahuja. “The framework should be applicable for one and all, not an ad hoc look at the fund balance if they are asking for more money.”

Associate Editor Jim Taylor can be reached at jim@thebee.com.