Finance Board Reviews Priorities For Capital Improvements

By Jan Howard

The Board of Finance continues to review the ranking of proposed projects in the five-year Capital Improvement Plan (CIP) covering the years 2004/05 through 2008/09.

At the meeting October 28, the board members discussed changes in the previous ranking of capital projects, moving some to a higher or lower position of priority for review and discussion at its next meeting.

Discussion also centered on whether the town is considering proposed future expenditures that would put it over its policy of keeping debt service to ten percent or less of expenditures.

Chairman John Kortze noted his concern that beyond the year 2004/05 the town might “be at a spot with little wiggle room” in regard to the policy to maintain a favorable appraisal of how finances are handled.

“My big concern, when I look at the charts, is that we teeter on reversing the trend,” he said. “I am not in favor of this materializing.” He said if bonding were to go over ten percent and there was a major issue that needed to be addressed, “it would become a major problem.”

He said he was concerned because of the budget failures in three of the last four years. “To proceed on this path might not be prudent,” he said, noting, “There are a lot of municipalities that are in the position of borrowing to pay for deficits.”

Mr Kortze said he was concerned about the larger bonding items projected over the next five years. “We have critical decisions to make,” he noted, “that could reverse the good things we have done.”

He said the board should focus on “maintaining the status we’ve been able to achieve.”

Finance Director Ben Spragg recently presented the board with charts that show the town’s existing debt service plus proposed annual debt service based on ten percent of expenditures growing at six percent a year and at three percent per year.

“I thought that we visited this issue,” Jim Gaston said. “This is a growing town, and there are growing needs for the town. We were comfortable with the ten percent.”

Mr Kortze said that none of the proposals on the CIP demand immediate attention. “I don’t see anything that justifies going over the guidelines.” He said the current ten percent or eight percent, which was suggested by Mike Portnoy, at three or six percent growth can be debated.

“Each scenario would put us to a point I would not be comfortable at,” Mr Kortze said.

Mr Gaston said if a project is on the CIP there is no guarantee it will go forward. However, he noted if the proposed high school project became $22 million instead of $17, “if that happens, it could be an exigent circumstance.” In regard to the school, he said he would like to know other options, such as an addition to the existing high school.

Mr Spragg said the ten percent is a guideline. “The bell goes off when Moody’s sees more than ten percent.” He was referring to Moody’s Investor Services, which ranks the creditworthiness of a town and its ability to pay back loans.

First Selectman Herb Rosenthal said the town pays its debt down quickly. “We pay regular principle payments so the debt service falls off quickly,” he said. “Ben, the Legislature Council, and the Board of Finance have taken a conservative stand. We haven’t played the games that some towns play. It comes back to bite you.”

In response to Kelley Urso’s question about the omission of open space acquisition from the plan, Mr Rosenthal explained that in the last budget season, $250,000 earmarked for open space had been omitted.

“It’s not because we don’t want to buy open space,” Mr Rosenthal said. He explained that the Board of Finance and Legislative Council are considering a larger authorization for land acquisition through a bonding package.

Mr Rosenthal said a funding proposal for open space could be put back into the CIP if no other acquisition program is approved.

Among items discussed for the 2004/05 fiscal year were possible higher priority standings for the Head O’ Meadow heating and ventilating system and funding for the state mandated revaluation, and a lower priority for the heating and ventilating system at Hawley School. Also discussed was $2 million proposed for roads, which would be funded through the general fund.

Mr Rosenthal said the funding is necessary to maintain the roads and keep the road system healthy.

Among funding proposals for the fiscal year 2005/06 is a proposal for renovations at Dickinson Pond, which Mr Rosenthal said is heavily used by residents.

“The pond is in dire straits,” Mr Rosenthal said.

In other business, the Board of Finance discussed a residential tax deferment program that, if enacted, would offer senior citizens another option for tax relief.

Mr Gaston said tax deferments are not as understood as well as other tax relief programs, and if such a program were enacted, it would be important to have a complete package of information so people could understand it.

He termed the deferment plan “an important piece of tax relief that provides cash flow savings to seniors to be able to stay on their property and defer taxes to a later date.

“I’d like to see the program put together,” he said.

The board is to discuss and finalize the tax relief proposal at its next meeting. It would then be sent to the Ordinance Committee of the Legislative Council for its input before final approval by the Board of Finance.