Role of the Board of Finance

The Board of Finance (BOF) is the only major municipal governing body (Board of Selectmen (BOS), Board of Finance, and Representative Town Meeting (RTM) ) that is not a requirement of Connecticut General Statute (CGS) 7-193.  It is an optional body authorized by CGS 7-340 when voters of the municipality agree to form a BOF.  For example, the towns of Montville and Groton, and the cities of Norwich, New London, and Groton do not have a BOF. The voters of Waterford agreed to establish a BOF when they approved the initial Town Charter.  Currently the BOF is made up of seven individuals elected for four year terms (four elected in one election cycle and three elected in the next election cycle).  Although not a required board in municipal government, the CGS does give the BOF certain powers when it is constituted in a Town Charter.

Charter

The Charter gives the BOF the responsibility in accordance with state statutes to prepare the budget, lay on taxes, apportion taxes throughout the year, transfer unexpended balances, approve special appropriations, prescribe how town accounting records are kept, arrange for an annual audit, publish an annual report, and any other duties “bestowed” by state statutes.  The most recent change to the charter also gives the BOF the authority to hear appeals of financial decisions by the BOS of any department, board, or agency.  The charter gives the RTM the same authority over financial decisions made by the BOF.  Now, it is possible for a department, board or agency to be turned down by the BOS and the BOF but still get the desired funding from the final authority, the RTM.

Ordinances

The ordinances grant the BOF all “the powers and duties conferred or imposed by the general statutes of the state of Connecticut” and additional authority to audit any building project and the responsibility to ensure that building committees comply with the reporting requirements of the code of ordinances.  The Code also directs the BOF to provide copies of the annual report before the Annual Business Meeting of the RTM in December and publish the final report after that meeting.

A recent change to the code of ordinances gives the BOF review authority over the Fleet Management Plan.  The BOF may recommend changes to the plan submitted by the BOS to the RTM or it may return the plan to the BOS for further changes by recommending a zero balance fleet management transfer until changes are made in the Fleet Management Plan.

Statutes

State Statute permits the BOF to fill any vacancy between elections until the next election unless the Town Charter has other procedures.  Since the Waterford Charter refers to state statute, the Waterford BOF is able to fill such a vacancy.

Besides the powers noted in the town charter the statutes also require the BOF to publish in the newspaper of record, the recommended budget with the format specified by the State Office of Policy and Management five days before the Town meeting called to approve the budget for the upcoming year.  That is why there is a significant expenditure in the BOF budget for advertising and why you see the nearly full page of budget information the week before the May budget hearing by the RTM.  This same state statute limits the RTM appropriation to that approved by the BOF.

The statutes authorize the BOF to lay on a tax over no more than five years for a non-recurring expenditure whose total cost would “make the total tax so high as, in the judgment of the board, to be inconsistent with the public welfare…”; to transfer unexpended appropriations and to include in annual expenditure, a contingency amount up to three percent of the requested annual expenditure.  The statute further forbids any department from expending any funds that are not appropriated by the BOF.

The statutes authorize the legislative body (RTM) to establish the Capital and Non Recurring Expenditure fund only upon recommendation of the BOF and the appropriation of money to that fund only upon the recommendation of the BOF.

Statutes require the BOF to produce an annual report and account for any funds provided by the State as well as other information deemed appropriate by the BOF.

The BOF has sometimes been called the most powerful board in town government because it must approve all town expenditures.  However, that power is limited by state statute, the charter and the code of ordinances.  The final stop  for most town actions according to state statutes and the charter is the legislative body, the Representative Town Meeting.  I will discuss the RTM in my next column.