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Newtown Twp. nixes plan to hire financial consultant

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In a move that caught most of the stakeholders by surprise, the Newtown Township Board of Supervisors passed on a resolution to contract with an outside financial firm to advise the township on its fiscal matters going forward.

Last year, the township received a $40,000 matching funds grant from the Pennsylvania Department of Community and Economic Development (DCED). The hope was that the grant, awarded through the Strategic Management Planning Program, would help the township identify areas where it could save money and also determine new avenues for economic development.

The supervisors recently approved a 2020 budget that calls for expenditures that outweigh revenues by more than $1 million.

In September, the township began a search for a firm that would help the township close these types of financial shortfalls and come up with a five-year plan for improving its fiscal status.

Econsult Solutions Inc. (ESI) was selected among a group of companies who were sent requests for proposals (RFP). The company lists the cities of Chester and Coatesville along with the borough of Colwyn (Delaware County) among its current clients.

ESI Director Dan Connelly attended the Jan. 22 session hoping to add Newtown to that list.

But it was not to be.

When Vice Chair Dennis Fisher – who also acts as a liaison to the township’s finance committee – called for a motion to approve the agreement with Econsult, the move was met with silence from the remaining three members of the panel.

No second. No vote. No contract.

“It was unexpected,” said Fisher of what transpired in the final minutes of the meeting. When asked, Board Chairman Phil Calabro said he would have no comment on the matter.

Finance committee director Jack Brod wasn’t holding back, however.

“The township is continuing a trend of deficit spending that is not only unsustainable, it’s going to become impossible at the end of this year,” said Brod, after the meeting. “We were hoping to get this plan done in time for (2021) budget discussions.”

Secretary-Treasurer John Mack said the township sent out RFPs to several companies who came recommended by the DCED. Econsult was the only company that responded, he said.

Mack said he was not comfortable moving forward with a plan in which only one company submitted a bid for the contract.

“The township usually has competitive bids for these types of contracts,” said Mack.

He said the township may renew efforts to get competitive bids at some point in the near future.

Newtown is projecting a year-end fund balance of $1.3 million, a little more than half of what was left over in 2019. While the board raised taxes in 2018, it has held the current millage rate steady at 4.50 the last two years.

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