Town Treasurer insists Brookfield is entering a 'delicate' period

By Scott Benjamin

BROOKFIELD – The town with less than 20 square miles of land – bordered by two lakes - appears to be on the cusp of its biggest transformation since the decade of the 1960s when it grew more per capita than any of Connecticut’s 169 municipalities – going from 3,405 residents to 9,688 – a 184.5 percent increase.

Town Treasurer John Lucas says Brookfield is “currently in a delicate time” as it expands its economic base and embarks on a handful of expensive capital projects.

It is creating a downtown that hopefully will rival the vibrant central business districts in Darien and West Hartford.

A tract of land in a corporate park that was vacant less than 10 years ago and is very visible to the rest of the town will be housing by next summer a major manufacturer with 400 employees.

The corn field is being developed into a medical office complex.

Is Brookfield poised to eventually achieve a 15 percent fund balance which usually leads to the coveted AAA bond rating from each of the three rating agencies?

Lucas, a Democrat who is seeking a second, four-year term in the November 5, election said the 15 percent fund balance is “a reasonable goal.”

“However, I don’t think it’s going to happen in the next year,” he added in an interview.

He will face Republican Steve O’Reilly - who was the GOP candidate for first selectman in 2011, a former selectman and a former longtime member of the Board of Finance – in the municipal balloting.

According to figures provided by Town Controller Marcia Marien, the fund balance was at 6.9 percent in 2015, the year before Lucas took office. It was at 8.14 percent in 2016, 8.67 percent in 2017 and 10.12 percent in 2018.

Democratic First Selectman Steve Dunn, who is seeking a two-year term in the municipal election, said the fund balance is currently at 10.54 percent, which not long ago would have almost guaranteed an AA1 rating, the next to highest offered by the bond agencies.

When Republican David Scribner became treasurer in early 1996 he recommended increasing the fund balance annually to at least seven percent. That strategy apparently helped secure three bond rating upgrades by mid-1997, going to AA2, the third highest ranking available. It didn’t improve again until 2010 when the rating was raised to AA1.

Scribner served as treasurer until January 2016. He also was the state representative from the 107^th District from 1999 until early 2015.

Lucas said following the 2008 financial crisis that rating agencies have recommended higher fund balances to ensure that a municipality can overcome unexpected losses.

The town currently has an AAA rating from Standard & Poor’s and an AA2 from Moody’s Investor Services, which recently upgraded it from a negative outlook to stable.

Dunn said a higher rating, for example, can represent “hundreds of thousands” of dollars in borrowing costs on major projects.

Lucas said that a municipality can improve its fund balance by increasing the mill rate through higher taxes.

However, he added, “The more appropriate way is to increase your grand list.”

Brookfield appears primed to do that.

Brookfield Patch reported earlier this year that Dunn, who is seeking a third, two-year term in the municipal election, had said that the commercial portion of Brookfield’s grand list – the log of taxable property – could increase in the coming years from the current 16 percent to 20 percent.
Branson Ultrasonics is moving from Danbury and is building a 140,000-square-foot facility on the 75-acre Brookfield tract in the Berkshire Corporate Park, which may open as early as next spring. It would put Branson, along with Photronics on Secor Road, as the largest manufacturers in Brookfield.

The second section of the street scape in the 198-acre Town Center of Brookfield – near the Four Corners intersection – is about to be completed, which Dunn believes is another step in turning the area into a vibrant New England-style central business district similar to those in Darien and West Hartford.

The Town Center of Brookfield has been discussed since former Democratic First Selectman Ken Keller was in office from 1983 to 1987. It became a possibility after the 2.1-mile Route 7 bypass opened in November 2009, alleviating much of the traffic congestion near the Four Corners intersection on Federal Road.

A medical building is being built on the corn field on Junction Road, which had been envisioned more than a decade ago as the site for a new Costco, which subsequently expanded its long-term location on Federal Road.

Unlike many other municipalities, Brookfield has a 10-year capital plan, which forecasts future capital expenses, according to Lucas, a graduate of the Finance major in the Nathan Ancell School of Business at Western Connecticut State University, who worked for 16 years in support of the trade desk at MBIA in Westchester County, the world’s largest municipal bond insurer.

Since 2017 he has been doing investment accounting and financial reporting for W.R. Berkley in Greenwich – a Fortune 500 company that has $8 billion in revenue.

However, Brookfield’s capital plan includes some expensive items.

“One of the variables is the fund balance,” said Lucas. “Can we do all these things and also increase our fund balance?”

He noted that the town’s debt service will decline “substantially” in 2026 as some current projects are completely paid off.

In March, at referendum voters approved a new $78.1 million new Huckleberry Hill Elementary School on Candlewood Lake Road, near the current school. That price tag could be slashed to $63.3 million for municipal taxpayers if state reimbursement funding is approved by the state Bond Commission.

Dunn said in a September interview that he is confident that in December the state Department of Administrative Services will approve the project and send it to the 10-member state Bond Commission for reimbursement funding.

The students that have been going to Center Elementary School (CES) on Route 133 – the oldest school in Connecticut and the only one made of wood – will attend the new HHES and CES will be renovated into another public use. A committee is studying its future uses and will likely distribute a report in 2021. Municipal officials have said the library on Whisconier Road may be relocated there and the Parks & Recreation Department may want to utilize the gymnasium for its programs.

Additionally, the Police Department has been seeking for at least two years to expand its headquarters on Silvermine Road, which was built in 1988.

However, sometimes 10-year plans are interrupted.

For example, Dunn has said that he was told on his first day in office in December 2015 that the town faced a $3.3 million budget gap due to bond notes that had not been bundled together for long-term borrowing.

In a March 2016 column in The News-Times of Danbury – just two months after he took office - Lucas encouraged residents to support a $1.8 million appropriation at referendum to partly reconcile the shortfall.

He partly attributed the oversight to frequent changes in the municipal Finance Department and the Board of Selectmen.

Lucas said that there were “well-intentioned people involved, but I think the level of recordkeeping wasn’t as solid as it should have been.”

Brookfield Patch has reported that Dunn has said the town was able to rebound from the crisis through a hiring freeze and other cost-cutting measures.

Under Dunn’s immediate predecessor, one-term Republican First Selectman Bill Tinsley, the Board of Education reported a $1.2 million deficit.

Tinsley told Brookfield Patch in July 2015 that “half of my time in office has been spent” addressing that shortfall.

Former Board of Education Business Manager Art Colley faced criminal charges and Superintendent of Schools Anthony Bivona was dismissed from his position as a result of the mishandling of the funds.

Plus, Dunn has said that state assistance to Brookfield has declined during each of the four years that he has been in office.

Lucas acknowledged that the state will likely continue to seek to have municipalities pay for a portion of the teachers’ pensions, which have been fully-funded by the state since 1939

However he said he doubts that the state will seek to have municipalities pay for “100 percent” of the teachers’ pension costs.

Lucas said he supports Dunn’s efforts to gradually put more funds for road repaving in the operating budget instead of seeking so much in bond appropriations.

Dunn said the town has been spending about $1.5 million a year on road repairs and he has been able to put about $100,000 more per year in the operations budget to reduce bond obligations. The first selectman said he expected to reduce the boding to $450,000 during the fiscal year that will start new July.

Lucas said, “It should be 100 percent in the operating budget. When you don’t put it in the operating budget, it just takes away from your borrowing capacity.”

Brookfield Patch has reported that Dunn believes Brookfield needs to balance its commercial growth with maintaining its rural character. There is a contrast between driving on scenic Whisconier Road near Happy Landings Farm and the traffic congestion on Saturday morning at 11 o’clock near the McDonald’s restaurant on Federal Road.

On another topic, Lucas said the pension obligations for the municipal employees are 98 percent funded.

“That’s where we need to be,” he said. Brookfield Patch has reported that Dunn has said anything above 80 percent is considered “stellar.”

The state government has been plagued by a system that CT Mirror budget reporter Keith Phaneuf has said was structurally under-funded every year from 1939 through 2010.

The state Commission on Fiscal Stability and Economic Competitiveness reported last year that the pensions for the state employees were only 29 percent funded.

Lucas said Michael Matson, the owner of Matson Financial Advisors in Danbury and chairman of the seven-member municipal Retirement Benefits Committee, has provided valuable insight into how to best manage the system.

Lucas said the town is already moving toward a defined contributions plan instead of the more expensive defined benefits plan, which is hardly used in the private sector. He said following the most recent contract negotiations the municipal employees are in a hybrid plan.

Lucas said after many years of using Wells Fargo for the municipal pension fund, the town began utilizing Mass Mutual at the beginning of the year largely because “it made the most sense with the changes that we made with more of a hybrid plan.”

Lucas said that as of mid-September he had canvassed 100 homes and the most frequently asked question was affordable housing.

Dunn has said that there has been an application for a 29-unit housing complex on Stony Hill Road, which he said will be rejected because it doesn’t fit the character of the neighborhood.

The town has a state-approved moratorium on affordable housing in areas outside of Federal Road into 2021.

Donald Klepper-Smith, the economist for Liberty Bank and the chairman of former Gov. M. Jodi Rell’s (R-Brookfield) economic team, told Brookfield Patch in July that on average 428 people are leaving Connecticut each week on net.

That’s not the case in Brookfield, where, according to Wikipedia, the population has increased from 16,452 in 2010 to 17,550 in 2017.

Lucas said few voters appear to be familiar with what the town treasurer does.

Brookfield hired a full-time controller in 1975 and the town treasurer’s position took on a different character. It is a part-time job with an annual $12,828 stipend. The position is the fifth-highest paying elected position in municipal government.

The first selectman is the highest paid official with a $90.691 salary, which will be elevated to $100,346 in January, after the new term commences.

Lucas said the increase was made largely to make the pay similar to that in other suburban municipalities in Connecticut.

The town clerk earns $76,496 annually and the two registrars of voters are each paid $13,830.

Regarding the formal duties, the treasurer, along with the first selectman signs checks, as the treasurer is the agent on how the funds are dispersed.

Lucas is a member of the Retirement Benefits Committee and is in regular contact with the town controller and with the municipal bond counsel, attorney Laurie Hall, who is based in Hartford, and the town’s fiscal consultant, Hilltop Advisors, based in Rocky Hill.

Lucas said the bond counsel and financial advisor were able to provide important “legacy information” that helped address the $3.3 million bond funding gap.

Dunn said Hall and Hilltop Advisors are doing good work, but that the town is currently seeking requests for proposals, a procedure it should do all services periodically to determine “possible costs, services and what is available in the market.

Lucas said, “It is the prudent thing to do every four to five years.”

Dunn has praised Lucas for regularly attending meetings of the Board of Selectmen, the Board of Finance and special town meetings.

“I feel that I’ve raised the bar regardless of who is treasurer for the next four years,” Lucas said.

He added, “I’ve created this role in which I go to the meetings and feel I have an obligation to make my input on a regular basis and hear what the other town officials think.”

The treasurer also usually is on the committee that interviews candidates when a new town controller is hired.

Since taking office less than four years ago, Brookfield has had three municipal controllers.

Lucas said the turnover has created some obstacles, but that he credits the late Bill Leverence, who was hired under former Democratic First Selectman Bill Davidson and was the controller when Lucas took office for streamlining procedures, including taking money from multiple bank accounts and putting it all in Union Savings Bank. He added the Leverence also had taken steps to identify the $3.3 million funding gap.

He said he has been impressed with Marien, who has extensive experience in finance, including auditing.

Lucas said usually when there is an opening for a town controller there is a small pool of standout candidates since the ones with extensive municipal experience “ are few and far between. There are rules and regulations that often don’t exist in the private sector, so it can be a challenge for people who only have experience in that area.”