Town Council Roy Abramowitz Q&A
Q: The Town Council was recently taken by surprise regarding the arbitration award from the Lakeview Avenue Bridge litigation. As a Town Council member, what would you do individually to prevent something like that from happening again?
A: As a Certified Public Accountant, my financial, auditing, budgeting and forensic background gives me the experience to ensure that financial decisions are not made with incomplete and, at times, inaccurate information. Checklist(s) must be incorporated into the process to ensure fiscal accuracy and responsibility. It is evident that internal control and "checks and balances" are lacking in the town's budgetary process. I would not allow kiting transfers amongst funds to pay current expenditures, such as legal fees and arbitration awards from a nonrecurring capital fund. I would propose installing a "checklist reporting system" that would outline the procedural steps at each level of review and require a sign-off by the First Selectman's Office, Selectmen's Office, BOF and Town Council. The CFO or treasurer would review the checklist and either sign off, request reconsideration or recommend additional procedures. One step would be generation and review, by each level of responsibility, of a monthly year-to-date "budgeted" to "actual" comparative analysis of revenue and expenses. Any material discrepancy, such as excessive legal fees, would be reviewed and signed off each month. I would require the town treasurer actually sign large disbursements. I would require project specific contracts be utilized, not boilerplate templates.
Q: A few months ago, when dealing with road paving and sidewalks, Town Council had a discussion regarding bonding versus budgeting. When do you feel it is appropriate to borrow money and when is it appropriate to place it in the budget?
A: By definition, "municipal bonds" are utilized to finance public capital projects (infrastructure) such as construction of schools, highways, sewers and energy delivery, not repairs and maintenance. New Canaan would only utilize general obligation bonds, which are guaranteed by the full faith and taxing power of the town. Revenue bonds would not be appropriate. Once the parameters of a "capital project," such as road replacement but not road maintenance, or a capital renovation but not repair or maintenance, are established analysis must also be made of the burden (cash drain) on the town's balance sheet and the effect on the "mill rate" (per capita town tax rate).
More InformationFact box
Since New Canaan's bonds are not backed by a sinking fund, fulfilling the obligation must not present a problem on the town's balance sheet, cash position and tax rate. The town cannot be put into the position of perpetual debt (refunding). Now consideration must be given to lowering Connecticut's debt rating since the rating of all municipalities within the state will be affected. In my opinion, considering the current debt burden of the town, no additional debentures should be issued until our burden is decreased and the economy, inclusive of real estate values, rebound.