HomeMy WebLinkAbout2006-09-20 Finance Committee Minutes
Finance Committee Meeting
September 20, 2006
The meeting was convened at 7:35p.m. in the Conference Room, 16 Lowell Street, Reading,
Massachusetts. Present were Chairman Andrew Grimes, Vice Chair Chuck Robinson, FINCOM
members George Hines, Marsie West, Michele Williams and Ron Powell as well as Peter
Hechenbleikner (Town Manager), Bob LeLacheur (Assistant Town Manager/Finance Director)
and David Michaud (School Committee).
On a motion by Robinson, seconded by Hines, FINCOM voted to approve the minutes of
August 30, 2006 by a vote of 6-0-0.
Assistant Town Manager/ Finance Director Bob LeLacheur reviewed the debt sale held on September 11,
2006. This is for $6.96 million bonds at an interest rate of 3.96%, and $3.7 million in BANs at an interest
rate of 3.62%. The bond rating by Moodys and Standard and Poors’ were reviewed.
Assistant Town Manager/ Finance Director Bob LeLacheur reviewed the proposed revised water budget.
The increasing cost is higher than anticipated because of the earlier full buy-in to the MWRA. The costs
are still less than the alternative of building new water treatment plant. The consensus of the FINCOM
was that more water reserves should be used to offset the FY07 rate increases, and that that
recommendation should be made to the Board of Selectmen before they settle on midyear rate increases.
The FINCOM went on to discuss long-term strategic policies. The first policy addressed was on reserve
fund balances. Following discussion, the finance committee agreed to the policy as proposed, which
would maintain via five percent of the operating budget (less SBA reimbursement and any exclusions or
overrides – ‘net available revenues’) in reserves. Reserves include free cash, the FINCOM reserve fund,
and the stabilization fund.
The finance committee reviewed a revised model of debt and capital. The consensus of the finance
committee was to maintain a level at a percent (around 5.0-5.25%) of the NAR, to be further discussed.
This would be distributed between debt and cash payment for capital.
George Hines indicated that the storm water enterprise funds should be placed in escrow because of
current litigation. Andrew Grimes thought that perhaps rather than doing that consideration should be
made in terms of what the appropriate amount of reserve fund in cash reserves would be. Michele
Williams asked about the cost of litigation.
Michele Williams & Ron Powell reported on the first meetings of Economic Development committee.
Michele Williams reported that the library had received grants totaling $15,000, and the library is delighted
at having their Wednesday night evenings restored.
On a motion by Robinson, seconded by West, FINCOM voted 6-0-0 to adjourn at 9:50pm.
Respectfully submitted,
Secretary