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A Bridge Over Muddied Waters



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A discussion by the Board of Finance (BOF) revolving around the nonlapsing educational fund has caused some confusion, following on the heels of that board expressing concern to the Board of Education (BOE) regarding the school board’s June decision to prepay a lease for security cameras. An unexpectedly large year end surplus, due to school closures the previous months, provided the BOE the opportunity to prepay the lease and free up funds as far forward as the 2023 school year. There is no prepayment penalty, but neither is there a prepayment benefit.

Those who are elected to oversee immense amounts of taxpayer money are granted a vote of confidence. The BOE has the authority to go forward with payments from its year end surplus, such as the prepayment of the lease; the BOF, which serves in an advisory position to the BOE on preferred financial practices and reviews transfers and appropriations for the various town boards, has more control over funds after they are moved to the nonlapsing educational account. (While a modified state statute gives school boards discretion on spending funds from nonlapsing accounts, a Newtown BOE policy still gives the local BOF final say on how those funds are spent.)

The BOF, however, indicated enough apprehension that the BOE decision to use surplus funds now — rather than bump that boon to the nonlapsing account — could compromise unpredictable costs of schools reopening, that the BOE agreed to hold off on the prepayment. Then, following discussion at the July 13 BOF meeting, attended by school board members, the BOE at their July 21 meeting rescinded the June 2 approved action. That means money in the BOE end-of-year surplus could move to the nonlapsing account, with payment from it then overseen by the BOF. The reality of expenses accruing as schools attempt to reopen in the fall was not one dismissed by the BOE in its consideration of year-end spending and determination of use of funds.

Surplus funds and transfer to nonlapsing accounts are two converging rivers that muddy the waters of understanding what goes where, and who determines the use. Surplus funds are a windfall; the nonlapsing account was adopted in 2014 as a sort of savings account for unspent educational funds, with BOF oversight.

It is confusing, but important to understand. The two boards, which met together on July 13, are unclear enough on the nonlapsing account process that they even agreed a subcommittee made up of both boards’ members might better understand it.

Bridging trust between the two boards for the benefit of Newtown’s taxpayers and schools is commendable. When even experienced board members disagree on the content, it portends future wheel spinning. How the recent BOF and BOE meetings played out reflects a tug-of-war over surplus and nonlapsing account funds, and who should have the final say on spending.

Clarification will allow boards, in keeping with state and local rulings, to respect each other’s decisions, which voters have determined they are qualified to make, with confidence.

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1 comment
  1. dennis brestovansky says:

    I agree with the points raised here for ordinary times; however, the magnitude of the surplus funds this year is extraordinarily large. Projected start of year surplus is now a seven figure number, approaching 2% of the annual school budget. Is there a point at which the surplus becomes so large that taxpayers should be allowed to vote on what is done with it? At present, we vote on the school budget, which is tied to a specific operating plan. What goes into that plan is debated in a public forum and single digit percentage changes are considered substantial and important to taxpayers. If we underspend that plan by a similar significant amount, should it really be a given that the money can be spent on items not in the specific voted upon operating plan without taxpayer input? For nominal amounts, I agree with BOE discretion, but when the amounts grow as large as they have this year, I’m not so sure that’s the right approach. It starts to render the vote on the budget and operating plan less meaningful.

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