Recently, questions have been raised about the current Town administration’s handling of Bolton’s application to the State for reimbursement of eligible costs of the Bolton High School renovation project. This post is an attempt to give voters some information about this issue.
Unfortunately, what little has been put out by the Republican leadership has been misleading at best and has done little to increase our understanding of what went wrong, what the consequences have been, or what consequences the Town might still face.
In fact, we might not have known anything about this problem if a group of concerned citizens had not shown up at the March 7, 2017, Board of Selectmen (BOS) meeting to ask pointed questions of the First Selectman and the Town Administrator (read the minutes here).
When the BHS project was approved by referendum, the voters anticipated that the Town would be able to take advantage of State reimbursement funds available for school renovation. A State grant was sought and obtained to partially fund the project.
However, State funds are not paid up front—they are paid in the form of periodic progress payments to reimburse a percentage of eligible costs, with a “hold back” of 5% that is paid, if at all, after the Town makes a final submission of project costs and documentation and the State completes a final audit of the project.
Pending reimbursement by the State, the Town funded the project by borrowing some of the money and by taking some from the Town’s fund surplus or “rainy day fund.” (The administration has referred to this as the “Town borrowing from itself.”)
We should realize, however, that when money is taken from a surplus fund, the town loses interest income: Money that’s not there doesn’t generate interest, and the lowered fund balance could eventually effect our bond rating if the money is not replaced.