Hearing Set Feb. 28—

Public Comment Sought $103 Million Budget

By John Voket

The next phase of budget deliberations are beginning. The Board of Finance was set to review, possibly amend and accept a town side proposal on Thursday, after The Bee went to press this week.

The February 22 finance board meeting is the first of three budget deliberation sessions, but happens to have fallen on the night of the board’s regularly scheduled gathering. Next Tuesday, February 27, the finance board is scheduled to review and deliberate the school district budget that was approved by the Board of Education.

A public hearing on the full $103 million budget proposal is set for Wednesday, February 28, with the final finance board deliberation, which typically incorporates passing the full proposal to the Legislative Council, is scheduled for March 1. The February 27 school budget and March 1 deliberations will be held at 7:30 pm in the high school lecture hall. The February 28 public hearing will be at 7:30 pm in the high school auditorium.

According to finance board Chairman John Kortze, it was a challenge to find appropriate open dates, considering both this week’s school vacation and travel commitments of at least two other board members.

“There was no way we were going to schedule a session on the board of ed budget during school vacation this week,” Mr Kortze said Wednesday. “And we have to accommodate both [finance board members] Joe [Kearny] and Mike [Portnoy] because they are going to be away on different trips in the coming two weeks.”

Finding The Money

Prior to the February 22 meeting, First Selectman Herb Rosenthal said he was hopeful the finance board would affirm the proposal selectmen sent forward incorporating a $750,000 proposed allocation to the town’s capital nonrecurring account. He was also contrite about an error that caused the municipal side bottom line to increase nearly $450,000 after the final selectmen’s proposal was reported.

“Unfortunately in the last few minutes of the fourth selectmen’s budget deliberation, there was a miscalculation because we entered the Fairfield Hills Authority budget proposal at $49,850 instead of the actual $498,500,” Mr Rosenthal said. He said the adjustment to the final number will likely mean additional cuts by the finance board to get to the originally proposed number.

That original proposal of $38,111,069 became elevated to $38,559,719 after the adjustment for the error. The first selectman admitted the likely place to go to achieve the adjustment would be the capital nonrecurring expenditure, but said the capital road improvement budget may also have a little room to accommodate some or all of the adjustment.

Mr Kortze said upon reviewing both the school and town-side budget proposals, he observed that “both sides are high.”

“While I’m going into Thursday’s meeting with questions on the town-side [of the budget], I tend to listen to the presentation and the other members’ questions because most of my the answers tend to get explained before I ask,” Mr Kortze said.

Echoing Mr Rosenthal’s observations about the capital nonrecurring proposal, Mr Kortze said he may not support the infusion of a quarter-million dollars into this so-called “rainy day fund.”

“The surplus is all going into the nonrecurring account,” he said. “I’m anxious to see how it compares to previous years. In my opinion, if you put it in, and you have to raise taxes to make up the difference, we might have to end up using those funds [elsewhere].”

Addressing the Board of Education’s proposal, which tops $60.3 million, Mr Kortze said he was surprised to see new teachers budgeted when principals “are telling the board of ed they don’t need new teachers.”

While Superintendent Evan Pitkoff and school board Chair Elaine McClure have both heralded the district increase as the lowest proposal in a decade, Mr Kortze still questioned the figures compared to the student population increase this year.

“Why is the increase comparable to other recent years when this year enrollment is substantially lower?” the finance chairman asked.

Both Mr Kortze and Mr Rosenthal also pointed out the annual surpluses the school board has yielded at the end of each recent fiscal cycle as evidence that there might be some additional room for adjustment. The officials also noted the bids for diesel fuel bulk purchases, which are due in the coming week or two, are likely to be measurably lower since the cost of that fuel has dropped marketwide since the town’s last purchasing cycle.

Debt Service Cost

Finance Director Benjamin Spragg joined the first selectman and finance chairman saying the increase in debt service cost is a primary driver in the overall budget increase. Mr Spragg said taxpayers should remember that while debt service for both the school and municipal projects is accounted for in the selectmen’s budget, debt costs for this year’s school district projects are $5,252,479 compared to the town-side debt service cost of $4,054,804.

A document provided by the finance department details the breakdown in debt service for a bond issue planned for December 2007. The Improvement Bond Issue includes $2,750,000 for the design phase of the high school expansion which has a principal debt service payment of $137,500 and annual interest payments of $61,875.

The debt service for the design phase of the Parks and Recreation Department community and senior center facility is $600,000 with $31,500 in principal and $13,500 in annual payments. A $2 million fund for open space acquisition has a $100,000 principal and $45,000 annual payments, and a bond incorporating $6,020,000 for playing fields, mothballing buildings, demolition and the new municipal office renovations at Fairfield Hills has a $301,000 principal payment and $135,3450 annual installments.

Mr Spragg said all improvement bonds are issued for 20 years, but the town has a history of paying down and refinancing bond issues when possible, which could lower the overall impact. The town will also seek an improvement to its bond rating from Moody’s Investment service when Newtown goes out for the next round of bonds in December.

A bump up in the bond rating could mean a savings of millions over the life of new and recent bond issues that can be, in effect, refinanced based on a more favorable rating if it is achieved.

As of June 30, 2006, Newtown was carrying about a dozen bond or borrowing issues totaling $72 million, including about $10 million for sewer upgrades, Mr Spragg said. The oldest issue going back to 1991 has the highest borrowing rate of 6.3 percent, and the lowest interest rate is borrowing at 2.1 percent for a water line issue.

The lowest interest bond issue to date was a 2004 issue that has a 3.47 percent rate. Mr Spagg said that high rate issue will be paid off in four years, meaning it will not qualify for refinancing, even if the December visit to Moody’s provides a ratings upgrade.

Mr Kortze warned taxpayers that numerous sizable projects in the Capital Improvement Plan over the next five years will have the greatest tax impact. But he also noted after several issues are paid off through 2011, the overall debt load as it is projected today, will lighten somewhat.

“It’s the cost of doing business when you are building schools and making municipal improvements,” he said.

(Details of the proposed school and town budgets appear this week on page C10.)