The Newtown Board of Finance (BOF) conducted a virtual meeting July 13 to discuss the Newtown Board of Education’s (BOE) non-lapsing account, its related school board policy, and procedures regarding the account as recommended by the finance board dating back to May 2014.

At the start of Monday’s meeting, it was announced that the call-in ID number that had been posted on the agenda was not valid.

BOF Chair Sandy Roussas said, “Let me just put this on the record right at the beginning that there was an error in the meeting ID number, there is a missing number... I’m not going to cancel the meeting — [we’ll] go ahead as noticed, but we just won’t be able to take any action on any item.”

In recent months, the non-lapsing account has been brought up in relation to anticipated and unanticipated expenses involving any fall 2020 school reopenings after the COVID-19 pandemic disrupted the last school year. Another more recent and related issue involving a lease payoff on school district security cameras has also been the subject of some discussion.

If the school board authorizes that payoff using unspent surplus funds from its 2020 budget, it will draw down on the balance the finance board will be asked to consider for transfer to the non-lapsing account.

For the better part of an hour Monday, officials discussed concerns over how administration of the fund and budget surpluses that may fortify it affect the finance board and school district’s budgeting process, approvals, and the authorization to release funds — along with interpretation of the non-lapsing fund policy.

2014 Meeting Minutes

Roussas said she had forwarded her members the finance board’s meeting minutes from the May 12, 2014 meeting so everyone had access to the same information.

According to those minutes, the BOE’s non-lapsing account was unanimously adopted that day “as presented, as a process, as allowed by the new state statute.”

The minutes detail the account description as, “Sec. 32 (NEW) (Effective July 1, 2010) “For the fiscal year ending June 30, 2011, and each fiscal year thereafter, notwithstanding any provision of the general statutes or any special act, municipal charter, home rule ordinance or other ordinance, the board of finance in each town having a board of finance, the board of selectman in each town having no board of finance or the authority making appropriations for the school district for each town may deposit into a non-lapsing account (in a special revenue fund) any unexpended funds from the prior fiscal year from the budgeted appropriation for education for the town, provided such amount does not exceed one percent of the total budgeted appropriation for education for such prior fiscal year.”

The recommended process recognizes that the BOE identifies funds to be allocated from surplus into the account, and that the deadline for the school board to make that allocation request is no later than August 31 of each year.

It also states that if such an allocation request is made before the annual deadline, the”BOF meets and acts on BOE requests and places funds into non-lapsing account designated for BOE future use. Funds remain in account until request is formally made by BOE. BOE submits request to BOF and identifies purpose for use of funds. Request should follow process identified and be consistent with a special appropriation request. BOE provides rationale and justification for request as well as any necessary financial impact statement. BOF meets and formally acts on requests as well as informing Legislative Council.”

Background On The Policy

As for the BOE Policy 3160 under discussion, it was adopted April 4, 2017 and was updated June 16, 2020.

That policy references adding funds to the non-lapsing educational account and states “Each year, before August 31st, the Newtown Public Schools Director of Business will recommend to the Board to deposit into a non-lapsing account any unexpended funds from the Board’s prior fiscal year general operating budget, provided such amount does not exceed the percentage of the total budgeted appropriation for education for such prior fiscal year as referenced in [state statute] 10-248a.

Policy 3160 continues, “Each year, before August 31st, the Board will forward a request to transfer unexpended funds from the previous year’s budgeted education appropriation to the non-lapsing education account. The transfer request will include each account number and the amount to be transferred. If known, the specific use for the funds will be communicated.”

For removing funds from the non-lapsing educational account, it details, “The Board [of Education] will vote to forward a request and explanation to the Board of Finance for use of funds from the Non-Lapsing Education Account. The Board may also request that an amount of funds be designated for a specified purpose and the Board may use all or some of the designated funds for the specified purpose. If funds are no longer needed for the specified purpose, the Board may remove the designation from any remaining funds, and inform the Board of Finance of the change.”

Member Discussion

At the July 13 BOF meeting, BOE Chair Michelle Embree Ku and Vice Chair Dan Delia, as well as Superintendent of Schools Dr Lorrie Rodrigue, were present to give input as both groups discussed the details of the non-lapsing account.

When Roussas asked what the purpose of the account was when it was initially created, Ku explained, “I do have the minutes from the January 13, 2014, meeting and I’ve pulled these up… it does indicate [John Kortze], who was the Board of Finance chair at that time, and First Selectman [Pat] Llodra noted that the Board of Education should have the same ability as the town to know of future challenges and save incrementally for it.”

As previously reported by The Newtown Bee, concerns expressed by Board of Finance members days before the end of the fiscal year prompted school district officials to delay prepaying three remaining annual lease installments on a security camera system by using $374,796 from an unusually large 2019-20 budget surplus. The Board of Education approved prepaying the lease at its June 2 meeting. At the time, the decision was explained as having an immediate and corresponding $124,932 impact on the 2020-21 fiscal year’s budget. The BOE felt the positive impact would presumably carry through the 2022 and 2023 budget cycles, as well. Finance board members later expressed concern regarding the state’s decision to reopen schools in the fall — and how related expenses could affect the 2020-21 budget.

The inability to come to a mutual understanding of the policy that ultimately binds both groups together for implementation led Roussas to bring up the idea to form a subcommittee with members of both boards.

The idea was supported by other members at the meeting, including BOF member Chris Gardner, who proposed continuing discussion of such a subcommittee at the next BOF meeting when it could be voted on.

Members of the BOE present expressed their desire to do whatever they can to reach a mutual understanding.

BOE member Delia concluded, “You know we all have the same purpose. We’re serving the greater good of the Town of Newtown and the children in Newtown. And I think it’s important that we make sure that we come to an agreement and work through this together. And I’m all for working together on this… I’m happy to participate and make sure that we’re all on the same page.”

For more information about upcoming Board of Finance meetings, visit newtown-ct.gov/board-finance.

Newtown Bee staff members Eliza Hallabeck and John Voket contributed to reporting.