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HomeMy WebLinkAbout2006-02-15 Finance Committee Minutes Joint Meeting of Finance Committee, Board of Selectmen, School Committee and Library Board of Trustees February 15, 2006 The meeting convened at 7:35 p.m. in the Parker Middle School Multi-Purpose Room, 45 Temple Street, Reading, Massachusetts. Present were Finance Committee Chairman Chuck Robinson, Vice Chairman Andrew Grimes, Members David Greenfield, Paul Bolger, Michele Williams, Hal Torman and George Hines. Selectman Chairman Camille Anthony, Secretary Joseph Duffy, Selectmen James Bonazoli and Ben Tafoya. School Committee Chairman Rob Spadafora, Members Lisa Gibbs, Elaine Webb, Carl McFadden, John Carpenter and Pete Dahl. Also present were Board of Library Trustees Chairman Vicki Yablonsky, Town Manager Peter Hechenbleikner, Assistant Town Manager Bob LeLacheur, Superintendent of Schools Pat Schettini, Assistant Superintendent John Doherty, Schools Director of Human Resources and Finance Mary DeLai, Town Accountant Gail LaPointe, Public Works Director Ted McIntire, Library Director Ruth Urell, Police Chief James Cormier, Fire Chief Greg Burns, Paula Schena and the following list of interested parties: David Morgan. Discussion/Action Items FY 2007 Budget - Finance Committee Chairman Chuck Robinson indicated that he would like to discuss the reserve policy. The budget policy is to start at level service, then look at additional services or cuts. He indicated that there is a need to review the process in the future. The goals are to maintain services, maintain 5% reserves and balance additional services, and save for the future. Town Accountant Gail LaPointe reviewed the revenue changes. Rob Spadafora noted that we received $600,000 last year from Home Depot and thought it was supposed to be $1 million this year. The Town Manager noted that it wasn’t $600,000 last year because it wasn’t fully developed. He also noted that with Home Depot and Jordan’s combined, we might have received $600,000, and that their new growth was spread out over two years. Ms. LaPointe reviewed the local receipts. She noted that we are looking at an increase in interest earnings, and the Governor’s budget has an increase of approximately 10% in State Aid. She also noted that we are expecting $1,392,090 from the SBA. Other funds that are available are from the sale of cemetery lots, Reading Ice Arena Authority, RMLD Earnings Distribution, Overlay Surplus, Certified Free Cash and the sale of real estate funds. She noted that we need to keep the reserves at 5% of operating budget or $3,209,495. Deleted: We have $2,500,00 and have built in $500,000 to bring it back up. ¶ Elaine Webb asked what drives the variation in free cash, and Ms. LaPointe noted items such as interest earnings. Ms. LaPointe also noted that anything that doesn’t get spent goes back into free cash. The Town Manager noted that unexpended appropriations from DPW, Police, Fire, etc. go back into free cash. Pete Dahl asked for a three year analysis of variances and what drives it. Joint Meeting of Finance Committee, Board of Selectmen, School Committee and Library Board of Trustees – February 15, 2006 - Page 2 Board of Selectmen Chairman Camille Anthony asked where the Finance Committee is regarding the RMLD distribution. Chuck Robinson noted that the Finance Committee met with them in the Fall, and they are thinking of changing the formula. The Assistant Town Manager noted that benefits costs have increased 2% less than last year. Deleted: The debt service will decrease in five years. The Reading Memorial High School project costs each household approximately $300 per year. When the MSBA reimburses, that will drop to Deleted: If $150 per household. The health insurance increase is 1.9% but we had estimated a 15% Deleted: then increase. The Assistant Town Manager did note that the 1.9% increase could change due to open enrollment. The costs are $550,000 less than anticipated. He also noted that 17.50% of the health insurance is paid by the enterprise fund. The Town Manager noted that we changed the health insurance year to June 1st so that we will know 11 of 12 months costs. Carl McFadden noted that the Town Manager resigning from the MIIA Board of Directors helped us to get good results. The Assistant Town Manager noted that the budget deficit is $277,992. Chuck Robinson noted Deleted: surplus that the FY06 budget split was the schools at 66.50% and the Town at 33.50%. He suggests splitting the deficit with the Schools cutting $184,865 and the Town cutting $93,127. John Carpenter noted that the School initial requests were 10%. Elaine Webb noted that the Superintendent’s original budget had a 6.2% increase, has been cut to a 5.9% increase, and is level service. Chuck Robinson noted that we have a deficit to deal with and this is a historical split. Superintendent of Schools Pat Schettini noted that he did not get these numbers prior to this meeting. It was noted that all of the Board and Committee members received the numbers this evening. Camille Anthony asked the School Department if there is no new money in the School budget. Rob Spadafora noted that 5.9% is level service plus a little of the district improvement plan. He noted that 6.2% is the current school request. Pat Schettini noted that he didn’t think there would be a deficit tonight. Chuck Robinson noted that the School Department knew there was a deficit that was even bigger than the one we are dealing with now. Elaine Webb noted that they need technology people to train the teachers to teach the children. Carl McFadden noted that the Town needs to improve their departments too. He reminded everyone that there is also a substance abuse issue in Town that needs to be dealt with and could have an impact on the budget. Joint Meeting of Finance Committee, Board of Selectmen, School Committee and Library Board of Trustees – February 15, 2006 - Page 3 Paul Bolger noted that there is still a deficit of $200,000 and the budgets are not level service numbers. He is surprised that the School Department is surprised when the Finance Committee told them to level service. Pete Dahl noted that what was level service last year changes; i.e., funding special needs is a changing situation. Pat Schettini noted that the Technology person is a new position. They also like to keep similar class sizes every year. They did not fill the neuropsychologist position this current year but will fill it in FY07 to maintain the youngsters in our district. David Morgan noted that the issue of level service is that it is below State average. The technology person is needed to teach 200 teachers/staff. The Town Manager noted that it is disappointing that we can’t do everything. He also noted that next year, the Finance Committee needs to define “level service budget.” He noted that the school budget is increasing $1.8 million. He also noted that there is new growth in Town, and the Health Division is requesting an increase in the Inspector’s hours due to the new restaurants in Town. He noted that there is an increase in crime at Walkers Brook Crossing. The residential development will impact the schools, Town, public safety, Library, etc. Schools Director of Human Resources and Finance Mary DeLai gave an overview of Chapter 70 and Education Reform Requirements for School Spending. She noted that the Ed Reform Act established a school funding formula based on three principles that include providing adequate funding, local community contribution, and the State will bridge the gap. She also noted that the target local contribution is $23,925,045, the required local contribution is $24,268,349, and the Town received Chapter 70 aid. George Hines questioned the numbers for preschool and full day kindergarten. He asked if parents pay, and Carl McFadden noted that they pay for half a day. The Town Manager asked how the Circuit Breaker is affected, and noted that it is not reflected in the 5.9% increase. He also noted that the increase in the Circuit Breaker is approximately $200,000 and not subject to appropriation so that equals a 5.9% increase plus $200,000. Carl McFadden noted that the Circuit Breaker money is accounted for under tuitions. Chuck Robinson suggested taking $150,000 from reserves and put it towards the deficit, and later next Fall put the regeneration into the stabilization. He suggested that both the Schools and Town cut $30,000 out of their budgets and use the same split for the remainder. Carl McFadden asked about the RMLD’s financial situation. The Town Manager noted that the increase in the electric bills is based on fuel costs. Carl McFadden asked if they ever streamline, and the Town Manager noted that everything they had in stabilization is gone. The head count is lower, legal costs are lower, and the cost of operation is small compared to the cost of fuel. Elaine Webb noted that if they still have to cut $48,000, it will have a direct impact. Joint Meeting of Finance Committee, Board of Selectmen, School Committee and Library Board of Trustees – February 15, 2006 - Page 4 The Assistant Town Manager noted that agrees with the technology comments. Rob Spadafora noted that he did not understand the Town’s numbers. The Town Manager noted that 4.9% was nothing new – level staffing. The next number included additional people to keep up with community growth. The Assistant Town Manager noted that the original budget had some items left out that he wasn’t aware should have be in there. The Committees broke down into groups to brainstorm. Rob Spadafora noted that the School Committee voted a 5.9% budget with flexibility to move that number up or down $30,000. Camille Anthony noted that the School Committee states that they have a 5.9% increase but they also have a $200,000 Circuit Breaker. Ms. DeLai noted that is an offset under Special Ed on Page 12. Andrew Grimes noted that if you compare this year to last year, there is an additional $200,000. Ms. DeLai noted that the DOE doesn’t guarantee a certain amount. Andrew Grimes noted that the expenditures are $200,000 higher because they are offsetting $200,000. Camille Anthony noted that the Town budget has been hurt severely, and we help offset the high cost of special students – it affects us all. Paul Bolger asked for a five year history of the Circuit Breaker. Camille Anthony noted that the School is asking the Town to cut $100,000 and that is unacceptable. John Carpenter noted that ½ of $128,000 equals $64,000, and that is equal to 2/10 of 1% of the school budget. He pointed out the imprecision of all of the revenues and expenses, and that it should be a simple matter to balance this budget. Pete Dahl suggested letting the Superintendent, Town Manager, Town Accountant and Assistant Town Manager/Finance Director work out the numbers. He noted that he is willing to take another vote if need be. Andrew Grimes noted that if the budget is not balanced when the Finance Committee starts their hearings next week, then the departments need to come in with a list to cut. The Assistant Town Manager noted that the open enrollment for the health insurance could increase the numbers. The School Committee broke down into a separate group. Rob Spadafora noted that the School Committee voted to grant the Superintendent to cut up to $65,000 off the 5.9% budget. Joint Meeting of Finance Committee, Board of Selectmen, School Committee and Library Board of Trustees – February 15, 2006 - Page 5 A motion by Bonazoli seconded by Tafoya to adjourn the Selectmen Meeting of February 15, 2006 at 11:00 was approved by a vote of 4-0-0. A motion by Grimes seconded by Hines to adjourn the Finance Committee Meeting of February 15, 2006 at 11:00 p.m. was approved by a vote of 7-0-0. A motion by Dahl seconded by Carpenter to adjourn the School Committee Meeting of February 15, 2006 at 11:00 p.m. was approved by a vote of 6-0-0. Respectfully submitted, Secretary