Finance Team Finds Room In CIP

To Fast Track Middle School Roof

By John Voket

In a joint meeting with the school board November 5, Board of Finance members and Newtown Finance Director Robert Tait illustrated a scenario where delayed bonding for the approved high school renovation, or funding of other future school district capital projects, could actually help save taxpayers money, and complete prioritized school facility improvements sooner.

But the idea, at least in concept, was informally rejected by some Board of Education members who wanted to reserve as much potential future funding as possible toward the high school project, in the event the board decided to come back again to taxpayers asking for more than the $38.8 million already approved for the project.

A recent request for $6.045 million was defeated in a referendum, and finance board Chairman John Kortze strongly suggested during the meeting that his colleagues would not support going back to taxpayers again for more money.

Reiterating that the high school project is still the finance board’s “number one priority,” Mr Kortze continued promoting the potential for taxpayer savings if a delay in bonding for the high school created a funding gap large enough to accommodate replacing the Newtown Middle School roof.

“We’re talking about pushing up projects in the CIP [Capital Improvement Plan] to achieve those projects within a shorter time and within the debt cap scope,” Mr Kortze said, referring to the town’s self-imposed ten percent debt cap on borrowing for capital projects, that is a preferential standard viewed as favorable by municipal bond rating agencies.

Mr Tait said after the meeting that while he used the scenario of plugging a $4 million middle school roof replacement estimate into a gap because of expected delays in the high school project, it is ultimately the school board’s decision whether or not to follow through on that idea, suggest alternate funding of projects on its own, or leave the future borrowing scenario as is.

He did, however, state that any projects that can be pushed closer in the projected time line for funding would generate taxpayer benefits.

“This will save the taxpayers money because of the inflation the Board of Education is putting on the projects,” Mr Tait said.

During a recent district CIP presentation to the finance board, district Business Manager Ron Bienkowski announced that beginning with projects in the current fiscal cycle, he is factoring an eight percent multiplier per year to account for inflation. He reiterated that information this week, and stated that except for projects that have already received firm bids or current cost estimates, all future capital costs are fluid numbers.

In regard to the high school project already on the table, school board Chair Elaine McClure warned that her board should perhaps reserve committing additional capital funds to other projects if rebidding or rescoping the high school renovation fails to achieve a financial flat line or any added savings.

“What happens if rebids come in $2 or $4 million over, and people want to vote on it again?” Ms McClure asked. “Will we still be able to keep [within] the debt cap.”

Mr Kortze replied, “You can poll the Board of Finance but we’ve approved $38.8 million and that’s all we’re going to approve.”

Finance board member Michael Portnoy carried the sentiment several steps further.

“My position is we have $38.8 million approved. I’m not sure it would be wise to go back [to voters] because it might fail again,” Mr Portnoy said. “Then what? Come back for $5 million, and then $4 million, and then $3 million? It’s not a good idea.”

Finance board Vice Chair James Gaston said while he might consider special circumstances, he felt rebidding the project would provide savings in light of rapidly declining commodities costs in the international marketplace.

“I think this could be a $40 million project, or $39 or even $38 million,” Mr Gaston said.

Following the meeting, Mr Tait suggested that if the school board was to consider utilizing these temporary gaps in the bonding cycle to plug in lower cost capital projects, it would be best to use the next highest priority items that fit the dollar amount available.

“The further out you go in the CIP timeline, the more unreliable the projected costs become,” the town finance director said. “You never really know until you’re ready to go to bond what the real number will be, but the good news is we have some room to adjust.”

Following the finance board’s discussion the school board went on to conduct other regular business (see separate story).