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Finance Board Approves American Rescue Plan Funds For Hawley HVAC



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The Board of Finance at its October 12 meeting seconded using $2.5 million from American Rescue Plan (ARP) funds released to Newtown for the Hawley School HVAC project, approving it unanimously following a similar action by the Board of Selectmen.

Leading up to that previous vote, First Selectman Dan Rosenthal said there are many things that could be funded through the ARP money, and that requests have been coming from various departments. However, the only item that needs to be decided immediately is whether to use part of the funds for the Hawley HVAC project.

“The decision tonight is on Hawley — it fits exactly in the parameters of the [ARP] funding,” said Rosenthal

The town has until December 21, 2024, to allocate money from the disbursement and another year after that to spend it.

The appropriation for Hawley School was authorized in the capital improvement plan (2021-22 to 2025-26). The town will issue $8 million in bonds to borrow the amount, minus the $2.5 million in ARP money if the Legislative Council and the voters also approve it.

“I think it’s important to pay attention to where the funds are going,” said BOF Chairman Keith Alexander. “I’m going to vote to do this because I think this is an appropriate use, so I think it works out. The timing’s a little short but I understand that.”

Voters will be asked to approve or reject the appropriation on Election Day, Tuesday, November 2.

“The idea behind our thinking was that using the ARP funds to reduce bonding makes sense,” Rosenthal said. “It gives the public some idea what goes on the credit card and what doesn’t.”

Rosenthal said that utilizing $2.5 million from ARP instead of bonding would save the town roughly $125,000 in principle per year, and about $200,000 per year with interest.

“I’m happy this benefits all taxpayers,” said board member Chris Gardner. “It does people of favor, it takes a big chunk of money and uses it to reduce bonding.”

Rosenthal stated that if the Hawley School HVAC project does not pass at referendum in November, the ARP funds can be used elsewhere.

“If it doesn’t [pass at referendum], we still have the $7.5 million [in ARP funds] to spend and the decision changes,” said Rosenthal.

According to the US Department of the Treasury, ARP funds can be used by the town for the following:

*Support public health expenditures, by, for example, funding COVID-19 mitigation efforts, medical expenses, behavioral health care, and certain public health and safety staff.

*Address negative economic impacts caused by the public health emergency, including economic harms to workers, households, small businesses, impacted industries, and the public sector.

*Replace lost public sector revenue, using this funding to provide government services to the extent of the reduction in revenue experienced due to the pandemic.

*Provide premium pay for essential workers, offering additional support to those who have and will bear the greatest health risks because of their service in critical infrastructure sectors.

*Invest in water, sewer, and broadband infrastructure, making necessary investments to improve access to clean drinking water, support vital wastewater and storm water infrastructure, and to expand access to broadband internet.

“Within these overall categories, recipients have broad flexibility to decide how best to use this funding to meet the needs of their communities,” states the treasury website.

Rosenthal noted that the ARP requires anything that funds are used for not be a “recurring item” — so for instance a new position with a salary would not be an approved use of the money. Any recurring items would have to be funded by the town’s normal operating budget in future years. Additionally, ARP funding cannot be applied directly to the budget as revenue to directly reduce the mill rate.

Finance Director Robert Tait said that the ARP disbursed $1.56 billion to counties and towns, and $3.93 billion to residents across the country. Of the town’s $7.6 million share of the money, it received half, or $3.8 million, this year and the other half be available for spending next year.

Rosenthal said at an August BOS meeting that even though the town does not have to do formal appropriations to spend ARP money, he felt it was better to follow the prescribed process in the Newtown Charter as funds are allocated. Rosenthal’s thinking was it creates a paper trail should the federal government question how Newtown applied the funds, as well as showing taxpayers how those funds were used.

Some other things the town could use the money for besides the Hawley project are new WiFi routers at the community center and municipal center, which selectmen indicated were working poorly; a new roof for the municipal center; and vehicle cameras for the police department.

Rosenthal said he felt it was best to keep items under consideration for ARP funds to items that have been considered for past budgets.

Rosenthal said that up to one third of the disbursement, or $2.4 million, can be used as part of the Revenue Loss Calculation, which can be used in any way the town sees fit. The $2.5 million for the Hawley School HVAC does not need to be used as part of the Revenue Loss Calculation, as it falls “squarely within the things allowed by the grant.”

“I think most towns are using the revenue loss part of it,” said Rosenthal.

Reporter Jim Taylor can be reached at jim@thebee.com.

From left, Board of Education Chair Michelle Embree Ku, Director of Facilities Robert Gerbert, and school district Director of Business and Finance Tanja Vadas listen as Board of Finance members discuss the district's Capital Improvement Plan (CIP) during an October 12 meeting. The finance board a short time later unanmimously recommended using American Rescue Plan funds to help underwrite the Hawley School HVAC renovation, which is currently part of the district's pending CIP.
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