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Home My WebLink About2007-01-03 Finance Committee Minutes Finance Committee Meeting January 3, 2007 The meeting was convened at 7:35 p.m. in the Conference Room, 16 Lowell Street, Reading, Massachusetts. Present were Chairman Andrew Grimes, Vice Chairman Charles Robinson, FINCOM Members Paul Bolger, David Greenfield, George Hines and Harold Torman as well as Ben Tafoya (Chairman of the Board of Selectman), Chris Caruso (School Committee), Peter Hechenbleikner (Town Manager), Pat Schettini (School Superintendent), Bob LeLacheur (Assistant Town Manager/Finance Director), Gail LaPointe (Accountant), Ted McIntire (DPW Director), Greg Burns (Fire Chief) and James Cormier (Police Chief). Bob LeLacheur started the meeting by reviewing the Baseline and Requested budgets using a mechanical look of 2% inflation. Revenues The Baseline for FY08 Net available Revenue is $65,092,096, it is an increase from October. Taxes are an actual figure and New Growth is lower. Assessors did include the new Stop and Shop construction but not at 100% completion. Peter Hechenbleikner also noted Archstone was in FY 07 and the Johnson Woods second phase is not included in FY08. Paul Bolger questioned the concept of using free cash and a discussion followed. Accommodated Costs The Baseline for FY08 is $23.5 million. Health Insurance increased 12.5% due to an assumption of a 10% price increase and known enrollment increases of 2.5%. The net of Revenues and Accommodated Costs is a Deficit of $900,000 on the Baseline budgets and $2.4 million on the Requested budgets. There is approximately $600,000 more in funding than in the Adopted Revised FY07 budget. Bob LeLacheur suggested discussing Accommodated Costs in detail would be helpful for FINCOM going into the Forum. David Greenfield questioned that the Requested FY08 Energy budget was decreasing. Bob LeLacheur stated Mary DeLai has been working on energy management efforts to reduce energy costs. Peter Hechenbleikner suggested modifying the Energy Baseline costs for the forum, and FINCOM agreed. David also questioned Accommodated Costs for Education (SPED) Out of District. Patrick Schettini discussed that the percentage increase was leveling off over time. The percentage is based on actual costs from previous years and actual students. Bob LeLacheur noted that the in two instances School Dept. Operating expenses had exceeded the 2% FINCOM limit, so they had instructed him to move the excess of 2% to Comm. Priorities. Pat Schettini stated this was an obligation like the Teachers Contract. FINCOM Policies Peter Hechenbleikner recommended seeking a policy for Debt & Capital by the end of the evening. Paul Bolger questioned if the 5% on Debt & Capital expenditures was the correct number, and if large th capital projects would crowd out other needs for maintenance capital. Bob LeLacheur stated that 4 paragraph limits the amount of annual debt service to be 0.25%, or else the project should be brought forward to the voters as debt or capital exclusion. Bob LeLacheur also stated since there is a lot of debt the ideal is not to borrow too much. In the long run, it is better to be able to spend more effort on maintenance – therefore avoiding capital costs which eventually turn into debt costs. Andrew Grimes and Paul Bolger suggested a few edits of the policy for clarification. Peter Hechenbleikner stated his approval of the policies and reminded FINCOM either could be changed in the future after experiencing their impact. Finance Committee Meeting January 3, 2007 (continued) George Hines moved to adopt policy on Cash Reserves, Harold Torman seconded. FINCOM voted to unanimously approve 6-0-0. David Greenfield moved to accept the Debt & Capitol policy as amended, Paul Bolger seconded. FINCOM voted unanimously approve 6-0-0. Financial Forum FINCOM decided to show pages 1 – 5 but no details on the Operating Costs. Policies that were adopted. Gail LaPointe’s free cash balances. Reminder on Accommodated Costs +/- balances goes into free cash. George Hines moved, Harold Torman seconds the FINCOM Minutes from 11/1/06. FINCOM voted unanimously to approve, as Harold Torman states Michele Williams name misspelled. amended, 6-0-0. George Hines moved, Charles Robinson seconds the FINCOM minutes from 11/28/06. FINCOM voted unanimously to approve, 6-0-0. Harold Torman moves to adjourn, seconded by George Hines. FINCOM voted unanimously 6-0-0 to adjourn the meeting at 9:20pm . Respectfully submitted, Secretary