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Finance Members Look to Cash, Not Bond, for Turf Project

The Southington Board of Finance Tuesday approved a $920,000 cash purchase for the installation of synthetic turf at Southington High School.

Just one day after the Southington Town Council voted unanimously to approve bonding as an option to pay for the installation of synthetic turf at , the Board of Finance determined that was not the best way to pay for the project.

Finance members voted unanimously on Tuesday night to approve the one-time cash payment for the high school, using savings from the Self Insurance account and the town’s contingency fund to pay for $920,000 in costs associated with the project.

“Given all the other bonding that will be coming down the road in the near future, I feel it’s important that we do what we can to pay for this project now and avoid additional costs to the taxpayers,” Finance member Anthony Casale Jr. said Wednesday.

The cash option comes with a catch, however – finance members want to see the Board of Education contribute $40,000 to the overall cost of the project.

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The discussion began when finance members were asked to consider ways to pay for the project during a special meeting held in the community room at the Southington Police Department on Tuesday night. It was the final meeting of the 2011-12 fiscal year and Garry Brumback and Southington Finance Director Emilia Porthelina told members that there were savings realized in the Self Insurance account of $609,642.

To offset the costs, the finance board chose to move $310,358 from the remaining contingency fund and allocated the money to the turf installation on Fontana Field. The remaining money in the account, $74,310, will be returned to the town’s rainy day fund.

Finance member Wayne Stanforth said in using the contingency, the town would still maintain a 10.6 percent rainy day fund, well above the 9 percent required under the town’s fiscal plan.

Although bonding was approved for the project at $960,000, Casale and Feld said they wanted to see the remaining $40,000 come from the Board of Education’s field maintenance account.

Casale and Sandra Feld said that due to the timing of the project, which Brumback said Wednesday would begin in August and likely be completed at the end of October, they would like to see $40,000 from the field maintenance account reallocated to the project.

Feld said savings would be realized by the Board of Education, due in large part to zero maintenance costs after summer school.

The Southington Blue Knights football program, which had primarily used the field before, will need to relocate during most of the upcoming season, but the field itself will not be used and therefore would not need to be maintained. 

“I honestly believe the Board of Education will benefit from the field in more ways than we’ve considered and to ask them to use the $40,000 for this is not unrealistic,” Casale said.

The Board of Finance recommendation will now be forwarded to the Southington Town Council, who will have the task of making a final decision. Council members had approved bonding as an option Monday evening, but Council Chairman John Dobbins said that doesn’t mean the council will decide to bond the project in the end.

“It’s a formal process and that vote simply means we can bond the project if we wanted,” he said following Monday’s meeting. “It doesn’t mean we will bond the project. We still need to have a discussion regarding the best way to pay for it.”

In case you missed it…

Last week, the Planning and Zoning held a discussion in which they passed an 8-24 referral determining that the project met the town’s plan of development. The recommendation passed after a 5-2 vote along party lines. .  

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John Moise June 27, 2012 at 04:35 PM
Jason, All the vendors will come in under 1 million they no the deal. No surprise here. The devil is in the details. They will get the job and then run up the cost afterward because it will have to be done. Everyone is blinded with the must have and not paying attention to the details.
John Leary June 27, 2012 at 04:50 PM
1) When the town borrows money (Bonding) it pays fees to initiate the bond and then pays interest to the bondholders. (Like a mortgage or loan). The bond initiation fees for the turf project ($25K) were included in the total cost estimate of $960K. So the decision to cash fund the project avoids the $25K initiation and the interest. The board voted 6/0 to cash fund. 2) The use of cash versus debt is a treasury operation. Decisions must be made to use the leverage ability that debt financing allows but caution is necessary to remain in an acceptable tolerance. Southington is well under its limit for debt load. Most expenses are cash funded each year. Debt is used for long term items such as buildings, fire trucks, infrastructure projects. Yes the use of debt costs money. There is always a cost to borrowing money. 3) The self insurance fund has within it a reserve balance that is in accordance with the policy. So excess reserve, while always nice to have is not necessary. The town maintains a master reserve (Rainy Day Fund) that is in excess of policy limits. Again reserves are fantastic and a true sign of health.
John Leary June 27, 2012 at 04:56 PM
The public needs to be aware that the infrastructure of Southington has been ignored for far too long. This includes the school buildings, Town Hall, Gura Building, the sewers, the bridges, and the roads and other paved surfaces. So while I am not a huge supporter of debt we need to get to an acceptable level of modernization of the infrastructure. The key will be our future commitment to maintain the infrastructure at an acceptable level.
Bill June 27, 2012 at 07:58 PM
personally i think it is ridiculous we dont get to vote on a budget in town and a town council gets to vote on the budget. ridiculous
John Moise June 27, 2012 at 09:21 PM
John that is an old song. If the town had $600,000 laying around then put it into roads or better yet lower my tax increase that I was not happy about when I opened up my tax bill. Can't wait to see the next rate by Moody's after the stunt of taking $300,000 from Rainy day fund for a non emergency. Good luck explaining that one. Did you consult Blum Shapiro before doing this? The BOF should rescind this plan ASAP.
Steve Kalkowski June 28, 2012 at 12:43 AM
I would like to make a comment regarding the Turf Field. I am speaking as a citizen of Southington and not as a member of the P&Z Commission. First off, I applaude Chairman Mike DeFeo an the entire Turf Committee for the great work they did in getting us to this point where we have an approved project, bids coming in shortly, a proposal of how to pay for it and a light at the end of the tunnel. I also give much credit to the Town Council and Board of Finance for having the courage to approve and fund this project across political parties. I would like to understand, however, why we are not requiring a certain level of private fundraising as was done in Cheshire. I get the fact that this would take several months, require lots of work from a dedicated team of citizens and delay the project. However, we have many fundraising success stories from our youth leagues in town. When I ran Southington North Baseball, we had very success fundraising efforts which were a big portion of the leagues revenue. The more recent Boards have really made many additional improvements to the facities as well Thanks to the generous donors. Ron Klein raised $100K+ for Southington South Little League to get lights on their Babe Ruth field. We know how to fund raise in this town. Why are we not doing that? At the end of the day, I fully trust and support the decision of the Board of Finance and Town Council, and if they determine we should pay cash for it, let's do it.
Arthur Cyr June 28, 2012 at 01:28 AM
In reply to John Moise. Be honest, stop the scare tactics. This isn't the 1990's or the year 2000, we actually have people who read the contracts and know the details this year. The project costs are available Thursday 10am. The only one that is blind is you. We cannot be the City of Progress is we continue the old ways of not fixing and replacing. You got a ZERO increase Town government budget this year. Try talking positive to your people for a change.
John Leary June 28, 2012 at 01:29 AM
No money was taken from the rainy day fund (Undesignated reserve fund balance) for turf or anything else. The rainy day fund remains untouched and we add to it each year. The funding for the Southington High School Football Field (Soon to be Southington Community Field) will come from a surplus in the "Self Insurance Fund" $610K and $310 from the 2011/2012 fiscal year contingency (Per BOF recommendation to Town Council on 6/26/2012). The contingency is an budgeted item that is not specifically defined at the time of budget approval. Its purpose is to fund unknown items across the town to avoid having to dip into the "rainy day fund". Now that 2011/12 fiscal year is almost over the BOF made a 6/0 decision to apply t$310 from contingency to the turf. I support the position that the "rainy day fund" should only be used for emergencies and one time opportunities. Turf is neither.
John Leary June 28, 2012 at 01:34 AM
A fund category will be established to gather and retain all of the revenue generated by the turf field. The intent is for this fund to grow and be used to cover future costs of the turf so it is not a direct burden on the tax base.
John Leary June 28, 2012 at 01:40 AM
Bill - Some municipalities do use a "budget by referendum" method, where voters vote yes or no on a proposed budget. However it has its problems as people vote no because they want more spending and some people vote no because they want less spending. Then the budget makers are left confused by the results of the vote. In a town our size, I feel it is not practical. Rather we have an independently elected Board of Finance which is charged with sorting out the finances and making recommendations to Town Council who has the ultimate authority. In this model people have a focused role on finance. We can discuss the role more if there is interest among the readers.
John Leary June 28, 2012 at 01:54 AM
Southington is interesting, as many folks have opinions and advice on how the town should be run. This is wonderful. However very few attend town meetings. On Tuesday 6/26/2012 the Board of Finance held 4 public hearings for spending appropriations 1) $675K for Mt Vernon Road, 2) $670K for Highway Dept roof, 3) $250K Aircraft Road and 4) $11Million for road and bridge improvements over 2 years. Only 1 person voiced an opinion. The entire BOF welcomes email, letters and phone calls to discuss finance issues with citizens. Please reach out to us with your opinions. (John Leary, Chairman - Southington Board of Finance 860.621.5960 or JLeary@Southington.org)
John Leary June 28, 2012 at 02:01 AM
E. Taylor - From the perspective of the vendors everything is cash funded. In the case of bonding the town sells bonds to investors (Municipal Bonds) and gets cash in return. Then vendors are paid from cash. We do not finance projects through vendors in the same manner people get a car loan and pay over time. The town will pay interest to the bond holders over time. Then the town will draw up detailed specifications of projects and vendors will place sealed bids. The winner will be chosen as a qualified bidder offering the lowest price for the specifically defined goods and services defined in the RFP (Request for Proposal) document.
Arthur Cyr June 28, 2012 at 02:56 AM
Actually Mr. Leary..... your Board of Finance IS INDEED getting a CASH discount, because you decided to pay cash instead of bonding, so the $25,000 in bonding costs that WERE INCLUDED in the $880,000 and $960,000 (with contingency) actually get reduced to $855,000 and $935,000 respectfully. :>)
Lucy June 28, 2012 at 02:56 AM
I have lived in two nearby communities that adopt the budget by referendum. One of these communities has a mandated all day referendum, the other requires a referendum on a budget if a certain percentage of qualified voters sign a petition requesting a referendum. The voting process is not at all complicated. Voters vote to accept the budget, reject it because it is too high or reject it if it is too low. The votes are tallied and the total sum of the no votes versus the yes votes decides if the budget is accepted or rejected. If the town fails to adopt a budget by the end of the fiscal year, the town operates under the previously approved budget.
Arthur Cyr June 28, 2012 at 03:05 AM
Many of us understand the process - we just don't believe it is correct. Out of the 10,000 voters who "might" go vote out of the 25,000 total voters..... how many will actually read more than the newspaper briefs or headlines about the budget?? VERY FEW. WE elect a Town Council and Board of Finance that spend hundreds of hours preparing and explaining our town budget. And they are very knowledgeable about it. And some towns waste $5,000 to $15,000 every year for repeated votes only to finally get one that barely changes by a few hundred dollars.
John Moise June 28, 2012 at 11:33 AM
Steve I agree with your comments. it is a shame there was not any money coming into this from the private sector like other drowns have done. Then again that is exactly what the arts people are trying to do with the Gura building and I guess the Town Council has problems with that as well. There is no consistency in the decisions being made and that is really too bad.
John Moise June 28, 2012 at 11:34 AM
John spin how you may when people open their tax bills this =money could have offset and minimized the increase.
Full Name June 28, 2012 at 02:08 PM
Speaking of "old song" don't you fit that bill Mr. Moise? You run your mouth about the same things time and time again, but keep going and maybe you can blow another election or 2 for the democrats. Citizens are tired of the same old song and dance of you penny pinching EVERY project that the town comes up with meanwhile our roads and infastructure get worse and worse. If the last election wasn't a wake up call to you I don't know what will be. The citizens overwhemmingly voted to renovate the middle schools and put a majority of republicans in office.
Tony Casale June 28, 2012 at 08:47 PM
Look, the Town Council gave us a mandate...We are getting turf....hey BOF tell us how to pay for it....bonding?....budget reductions? cash payment? donations (yeah right)....so we proposed budget reductions in the current and next fiscal year, didnt fly, the majority had passed the budget and our proposalwould have cut it, so we have excess funding in self insurance, ok and monies harvested from the 11/12 budget ok, the taxpayer saves $25,000 in bond initiation costs and what ever the interest on the bond would be.... thats what we were looking for, not to cost the TAXPAYER any more. In reality this meeting should have taken place AFTER the bids were open, because now that I knowthe numbers I would have insisted on recommending a town wide referendum on thisin November, the numbers are too close, and the TC can insist on a referendum even if it is below the $1 million dollar threshold. I will suggest that they do so, every taxpayer and citizen in town should have a say in this, oh by the way, get your tax bills this week....
Diann Thomson June 28, 2012 at 09:21 PM
good observation Tony - this Town Council had no problem letting this turf field through the budget, however, an organization comes to them with a project that will cost the town NOTHING! In the end they will have a building renovated and only asked for 18 months to get funding from available funding for the arts - the organization needs to present a 10 year financial plan??? Maybe the Republicans should stop worrying about November elections - Cheryl Loundsbury's in particular - and start thinking about the big picture! They do NOT get it!! people are not as dumb as they think...the budget for the turf came in just under $1 million? The Town Council was only given an ESTIMATE from the turf committee and now the actual costs are coming in: Seven companies submitted proposals for building an artificial turf field at Southington High School with costs coming in between $918,270 and $1,245,950. Three companies presented plans costing more than the $960,000 planned for the project.
Lucy June 28, 2012 at 09:39 PM
For the record, I was not advocating for or against a budget referendum, I merely expressed my opinion that the process is not complicated. I hope the next charter revision commission is an open process which enables all interested voters to apply and be interviewed for consideration to be on the commission rather than a repeat of the last two appointed commissions. Perhaps raising the referendum limits was a mistake, perhaps it was not, regardless, a popular project with unpopular funding is moving forward. The entire council and board of finance has voted in favor of the project, no turning back now...
Diann Thomson June 28, 2012 at 09:43 PM
On another note - I read a story in the Record Journal that stated: Kaestle Boos Associates estimated in 2008 that $1.6 million to $1.8 million would be needed for renovation. “Aside from the building’s inherent inefficiencies, its physical condition is poor and expensive to rehabilitate to current building code, fire code, and accessibility standards,” the report to the town said. WHAT A JOKE!!! Mr. Dobbins is using a report from a company that had its Bond pulled because they were shady and didn't finish the work (Hatton and Thalburg Elementary Schools) that they were hired to renovate! What credibility does Kaestle Boos Associates have? NONE!! And wasn't our Town Engineer and old Town Manager the ones that said the old police station was falling apart only to find out when they tore it down that NOTHING was wrong with it?
Jason Vallee (Editor) June 28, 2012 at 09:53 PM
Diann, we have included the report that was referenced, in it's entirety, in a follow up post along with the complete 26-page plan that the SCCA presented to the Southington Town Council on Monday night. Use the following URL to read both: http://southington.patch.com/articles/arts-center-business-plan-shows-sustainability-scca-says#pdf-10462872
Arthur Cyr June 28, 2012 at 10:45 PM
To Diann Thomson - You are incorrect regarding the old police station (Holcomb School) having nothing wrong with it. Before Walgreen's could be built they drove dozens of 100 foot long pilings into the ground so they could stabilize the site. Please, the Gura Building is NOT listed on the National Register of Historic Buildings and is structurally deficient. You supporters need to be honest with people.
Diann Thomson June 28, 2012 at 11:58 PM
We never said it was listed in the National Register of Historic Building. Again...we tell you things but you do NOT listen! You don't have to support our group Art, but please don't question our honesty! The building is a historical contributing property around the Town Green - you can check that our through Laura Mancuso, who is the coordinator for the State Historic Preservation Office in Hartford or Brad Schide, CT Circuit Rider for CT Trust for Historic Preservation - we have a copy of the study of historical contributing properties around the Town Green. That is what we have always said and that is the information we presented to the Town Council!
Lucy June 29, 2012 at 01:29 AM
The Gura Building has it's challenges, that is for darn sure, but I wish the SCCA the best of luck in its pursuit of its goals. Were it not for Artspace in Cheshire, I would not have met wonderful friends from nearby communities.
Arthur Cyr June 29, 2012 at 03:59 AM
"""We never said it was listed in the National Register of Historic Building."" WRONG!! YOU may have never said it, but kindly go to the VIDEO of the 6-19-12 P&Z meeting and follow it all the way to the end - where P&Z Vice Chair Paul Chaplinsky LIED when he said "The Gura Building is listed on the National Register of Historic Buildings..... (pause) (And where I stood up in the audience!)... as a contributing factor." He absolutely mislead and deceived some people who sat there and voted in favor of the project as well as residents who have watched the video. Just like when you posted earlier today that three of the bidders on the TURF field came in higher that the $960,000 target price. Another half truth. Lets put the whole truth out there - FOUR came in UNDER the target price.
RayJay June 29, 2012 at 10:13 AM
To Art Cyr, why aren't YOU on any of the town boards? You are at every meeting and have something to say about every meeting, article, and decision that takes place here in Southington. By the way, do you have a job?
Arthur Cyr June 29, 2012 at 12:36 PM
Yes, I have a "job". It is to go to as many Town meetings as possible every month and watch and ask questions and add input. FYI, having someone attend several committee meetings, then P&Z and Board of Finance and Town Council is how you realize "somebody" *was* telling two or three completely different stories depending on the day and audience. Were you at Town Council Monday? What real important question got asked at the Middle School Building Committee meeting Tuesday at 4:30? What went on at the Finance Board meeting Tuesday evening? Tell me it has NO effect and then look back at why the Water Department CANCELLED a $3 million bank loan last year. Some things can not get accomplished from within.
Phoebe June 30, 2012 at 02:45 PM
Not to mention that, during Cheshire's turf project, the yearly band competition needed to be moved. Southington's Music of the Knight is the biggest fundraiser of the year for the band backers. Last year's Music of the Knight was cancelled due to the blizzard. It was a terrible blow to both the students and the band backers' budget. How can Music of the Knight be held in 2012 is the field is out of commission?

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