Board Looks

To Financial Future

By John Voket

In the first of two expected sessions, the Board of Finance was scheduled to discuss the next five years of capital planning Thursday, October 28. The meeting occurred after The Bee went to press, and updates from the meeting will be available October 29 at newtownbee.com.

Before the meeting, finance board chairman John Kortze said this year, perhaps more than any, his board will have to look to future capital planning based on population projections and expected trends that were validated by an expert analyst during a joint finance/council meeting last month.

“I’ll know more after [Thursday’s] meeting, but the biggest issue I think is what does the town do in the face of these changing demographics,” Mr Kortze said.

The finance chairman cited declining school enrollment projections that have been telegraphed by Dr Hyung Chung in his most recent study of the town, and said that his board will take a lead from the First Selectman Pat Llodra and her board regarding their ideas on future space needs.

“A discussion of future town space needs is much larger than the schools, which are also town-owned buildings,” Mr Kortze said. “So I am waiting to hear the first selectman’s perspective on it.”

The proposed five-year Capital Improvement Plan (CIP) currently highlights nearly $65 million in prioritized municipal and school projects through 2016. As proposed, those 47 projects would require $51.4 million in bonding, $7.5 million from the general fund and the balance from grants and other sources.

While the CIP is by name and function, a plan, officials have in the past indicated that any single or combination of capital projects — particularly those in years two through five — are subject to cost fluctuations that could eventually result in spending millions less, or more.

The all important “year one” in the CIP, containing projects that are imminent and expected, includes $3.3 million in requested funding and $1.8 million in anticipated bonding. Among the projects earmarked for the 2011-2012 cycle are:

*$430,000 bridge repair on Poverty Hollow Road;

*$500,000 for the first of three installment payments to underwrite a new Hook & Ladder headquarters;

*$200,000 toward the next phase of the Sandy Hook Streetscape;

*$350,000 to continue Fairfield Hills utility infrastructure work;

*$350,000 toward the design phase of a Hawley School heating and air conditioning system overhaul;

* $1.5 million for capital road projects that will be covered from the general fund, not bonding.

The three top-ranked projects are the bridge and road projects and the Hawley HVAC design phase. The Fairfield Hills infrastructure proposal is ranked last in next year’s cycle.

In addition to the nebulous future of Newtown’s population growth, the finance board will also have to consider possible future needs in the face of uncertain and, some say, a likely continuing downtrend in the overall economy.

In that eventuality, it could bring a windfall in terms of savings on capital projects because ostensibly, labor and materials costs could drop — and in the case of open space acquisitions, substantially increase the amount of land accessible for the $3.5 million requested in years three through five.

But at the same time, the town and taxpayers’ ability or willingness to authorize debt service on these types of initiatives may be further compromised by the economy. A third and final aspect of the equation will be the finance board’s ability to balance the former points against the reality that is the town’s ten percent cap on borrowing.

While in recent years, the finance board has entertained discussion on eventually lowering that cap to nine, or even eight percent, perhaps the current economic realities will be enough to move the board to formally propose such a reduction.

Looking ahead at years two through five in the proposed CIP, bridge and road projects, with similar earmarked expenditures from the general fund, remain top priorities, with bridges on Brushy Hill, Meadow Brook, and Jacklin Road slated for imminent replacement or renovation.

Phase 1 of the proposed Hawley HVAC work is the top school bonding priority in the 2012-2013 CIP cycle, projected to cost $3 million. A $100,000 request for the Newtown High School auditorium upgrade is also earmarked in year 2.

The Sandy Hook Streetscape migrates to the number two priority spot in 2013 for $200,000, and on the school side, there is another $2.2 million requested to complete the Hawley HVAC project, $1.3 million for the high school auditorium, and $630,000 for the design phase of a middle school improvement project.

Year four elevates requested funding for improving and extending walking trails at Fairfield Hills to the second top ranking position at $250,000; and funds to complete the Hawley HVAC project are requested in the amount of $1.6 million.

That CIP cycle in years 2014-2015 also begins earmarking for a proposed Parks & Rec Community Center, which could be another area of contention if down-trending school populations begin opening up existing space in one or more school facilities. Design for the proposed new community center, which no longer includes a senior center component, is projected at $700,000 in year four — with the single largest requested project across the entire CIP, a whopping $15 million, requested in year five.

Mr Kortze told The Bee ahead of the October 28 finance meeting that he does not expect his board to rule on any CIP revisions or decisions until their next regular meeting in November.