A newly seated group consisting of representatives from the Board of Finance, Board of Education, and Legislative Council met April 1 to further discuss creating a cross-board policy that would codify how surplus school district funds would be transferred into and distributed from a non-lapsing educational fund.

Part of the discussion centered around whether the group should even continue its current activities, as any recommendations it developed would likely involve the Board of Finance — which is currently on the agenda of the Charter Revision Commission (CRC) for possible elimination.

Discussion leading up to the CRC charge involving the Board of Finance poses an alternate appointed panel that would report to the council, which could become the community’s sole fiscal authority for final approval of all Charter-required financial decisions.

But it was decided that more immediate matters involving the non-lapsing account would still need to occur in the time between when the charter panel is expected to finish its work later this year, and when such a recommendation, if approved by voters, would take effect.

If the CRC were to recommend eliminating the finance board, and that recommendation proceeded to a public vote — likely this November — and was approved, the process leading to the changeover of Newtown’s fiscal authority would not be finalized until at least late 2022.

Whether it is short-lived or continues to exist past the charter review process, the work group also discussed whether the finance board is and would continue to be statutorily permitted to provide final authorization for releasing surplus budget funds into the school district’s non-lapsing account.

A standing legal opinion delivered late last year by the town attorney states that final authority for the transfer lies exclusively with the Legislative Council, and not with the Board of Finance. However, a 20-year-old charter change vested Newtown’s finance board with some fiscal authority as well — so that ultimate authority to approve financial transfers into the more recently authorized non-lapsing account remains in question.

The legal opinion states that if such a transfer is considered a special appropriation, the council possesses final authority.

As the work group continues its examination of details toward forming a recommendation, several participants on April 1 voiced a strong desire to see any final policies simplified and scripted in a way that would allow for flexibility.

Questions For Attorneys

Much of the remaining discussion that evening involved processing questions that would be forwarded to the town attorney and an attorney for the Board of Education (BOE). Both lawyers are scheduled to be part of a special meeting the work group is calling for May 3.

Among a number of queries, the work group is seeking interpretations of Section 10-248a of state statutes, and whether the attorneys believe the creation of a cross-board policy can restrict districts use of non-lapsing account funds, and/or whether it can compel finance board action.

The work group also wants the attorneys to advise its members on guidelines as it attempts to craft that policy.

Specifically the work group seeks to understand:

*The roles and responsibilities of the BOE and town fiscal authority relative to the non-lapsing account;

*The purpose of Newtown’s non-lapsing educational account under the umbrella of “educational use;”

*Why and how funds go into the non-lapsing account;

*When, why, and how funds come out of the account;

*The maximum amount of non-lapsing educational fund balance (if any); and

*Annual reporting regarding the non-lapsing educational fund.

Regarding structuring and establishing a joint agreement between multiple town bodies, in 2018 and early 2019, the school superintendent reported that some other school districts have a Memorandum of Understanding (MOU) between their BOE and town (Board of Finance/Board of Selectmen/ fiscal authority). The work group hopes to definitively learn the pros and cons of utilizing an MOU versus policy.

The work group also wants to learn if there are state statutes regarding establishing policy that crosses multiple town bodies, and if there are legal considerations of one policy approved by all bodies — or each body having and approving their own policy that has been reviewed and agreed to as consistent by the other bodies.

Additional questions revolve around the hybrid nature of Newtown’s finance board, and whether it has statutory wherewithal to hold the decision-making responsibility for the transfer of budget surplus funds into the non-lapsing account, and for school board authorizations for spending funds from that account.

Finally, the work group wants to know which financial transactions require an appropriation once a budget and any qualified bonding authorizations are approved each year by voters.

The work group’s next regular meeting prior to the special meeting bringing in the attorneys is scheduled for April 26.