Finance Board May Reserve ‘Wiggle Room’

In Revised Bonding Cap

By John Voket

The town may have substantially greater borrowing power than previously anticipated for capital projects in the coming year, and about half of what was estimated for the 2011-2012 fiscal cycle, as a result of several factors, including the town’s latest bond rating upgrade.

Thursday evening, the Board of Finance was expected to consider a borrowing schedule for the next five years combining the town side and school district requests.

(That meeting occurred after The Bee went to press — see the update online Friday at newtownbee.com.)

Following the last finance board discussion, it was assumed that there would be about $4 million available for the next two years of capital projects, that could all be used in either year, or distributed in two variable amounts between the 2010 and 2011 fiscal cycles.

But in refining capital borrowing scenarios factoring less costly debt service and a five-year annual budget growth projection of 2.92 percent per year, Finance Director Robert Tait was able to increase the possible borrowing amount for 2010- 2011 to $5 million.

In this scenario, if the town decided to max out its borrowing capacity next year, it would still remain under its ten percent debt cap. That would also restrict borrowing in the 2011 fiscal year to just $1 million.

Prior to the meeting, finance board Chair John Kortze said that while the town may theoretically have as much as $2 million more in borrowing capacity, his board may decide that it is not prudent in the current global financial climate to exhaust it all.

“The lower rate does create more borrowing, but we asked for that wiggle room,” Mr Kortze said, adding, “I believe there are members of our board who think we should reserve spending all of it.”

Mr Kortze said the finance board may want to focus on as many different projects that can be completed on both the school and town sides without exhausting its credit limit. With that in mind, the finance chair emailed Superintendent Janet Robinson asking, for example, the cost to break out the boiler replacement at Hawley School, versus the cost for a full heating and air conditioning renovation.

“That would free up [funds] for some town-side projects,” Mr Kortze said. “Maybe if we could put the right boiler system in Hawley, and factor adding on a system buildout in the future, that would be the way to go.”

The finance board was expected to recommend its CIP options to the Legislative Council February 18, ahead of its budget deliberations, which commence with a public hearing February 25 at 7 pm. To accommodate an expected large turnout, the board has relocated that hearing from the Municipal Center to the Newtown High School lecture hall.