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HomeMy WebLinkAbout2007-06-27 Finance Committee Minutes Finance Committee Meeting June 27, 2007 The meeting convened at 7:35 p.m. in the Conference Room, 16 Lowell Street, Reading, Chairman Andrew Grimes, Finance Committee Massachusetts. Present were members, Hal Torman, Paul Bolger, David Greenfield and new member Barry Berman . Also present were Town Manager Peter Hechenbleikner, Assistant Town Manager/Finance Director Bob LeLacheur, DPW Director Ted McIntire, Facilities Director Joe Huggins, DPW Business Administrator Jane Kinsella, School HR Director & Business Manager Mary DeLai, Library Director Ruth Urell and also Tom White and Matt Wilson. Chairman Andrew Grimes called the meeting to order at 7:35 p.m and welcomed new members Barry Berman, who is taking the place of Chuck Robinson immediately, Tom White and Matt Wilson, who will begin their terms on July 1, 2007. Peter Hechenbleikner began the meeting explaining the budget transfers for 2007. First there is a FINCOM Reserve fund transfer request for the new Library HVAC system. Other transfer requests are to and from various line items within the municipal budget. This is something new for the Town – it became legal five years ago. The Town now has the ability to transfer funds, generally up to 3% of a given line item budget, by majority vote of both the Board of Selectmen and the FINCOM. The BOS voted these line items unanimously on June 26, 2007. Peter also informed the FINCOM that he signed the contract for the new financial software today. Peter had to leave the meeting at this time and Bob LeLacheur began the overview of the transfers that needed to be approved. Discussion of transfers was taken out of order to accommodate guests in attendance. Under the General Fund, transfer from Line D1, Library – salaries and wages to Line D2, Library expenses. Urell said that the library had surplus wage funding, and they would like to move some of it to expenses in order to cover the 15% materials requirement. Line G4 Town Building Maintenance expenses has a deficit of $80,000 due to unexpected HVAC work at the Library, done in May & June (after the annual Town Meeting). The School Department requests to transfer from Line C13 FINCOM Reserves which has a surplus of $50,000 to help offset this unexpected cost. The School Committee has already voted to move $30,000 from surplus funds in Regular Day/Line H School Department to cover the balance. Ruth Urell thanked Joe Huggins and reported that the new HVAC system is working very well. Joe Huggins told FINCOM that the entire unit was replaced and is more energy efficient. It is under a maintenance agreement with Cooling and Heating of Newton and has a 1-year warranty on the compressor and moving parts. The system should last for 15 to 20 years. Line J1 Debit Service has a deficit of $17,000 due to borrowing moneya little longer or the Barrows project. The SBA has already reimbursed the funds to the Town. Employee Benefits has a deficit of $35,000 due to health/life insurance increased enrollment and cases coming in for June for Worker Compensation. Line E7, E8 and F11-F15 (Public works) has a surplus in salaries and wages of $60,000 due to employment vacancies; a surplus in Rubbish of $65,000 due to a condo project not coming on board and a surplus in Snow and Ice of $20,000. These surpluses may fund the $120,000 deficit in DPW – Expenses, largely caused by continued Highway Equipment repairs. Ted McIntire handed out a worksheet of a 5 year expenditure history for the FINCOM to review. Ted pointed some of the problems were the cost of parts for repairs, fire apparatus’ breaking down as well as other vehicles. He reported that the master mechanic has resigned and he has only 3 mechanics left, so more repairs work will have to be temporarily sent out. The DPW has a study going on now with Municipal Resource of New Hampshire that will take about 3 months to do. Bob LeLacheur reminded FINCOM of their 5% Capital/Debt Policy. He mentioned that capital & debt should be discussed in the fall, ahead of the financial budget. FINCOM agreed that the lack of capital funding for periods of time in the past was a bit short- sighted and has caused increased expenses, such as these DPW repair costs. Andrew Grimes said that he would discuss the idea of a Capital Committee with the Board of Selectmen. Enterprise fund – Line L1 Water fund – salaries & wages has a deficit of $20,000 while Line L2 Water fund – expenses has a surplus of $20,000. The deficit in the salaries and wages are from having employees opening, closing and adjusting the valves to control the flow of MWRA water coming into town. By September or October it will be done electronically. On motion by David Greenfield seconded by Hal Torman to transfer as listed on Lines B26 – K8 of the General Fund, the FINCOM voted 5-0-0 . On motion by Hal Torman seconded by Andrew Grimes to Transfer Line C13 FINCOM Reserve Fund $50,000 to Town Bldg. Maint. Fund., FINCOM voted 5-0-0. Line H School Department of $30,000 to Town Bldg. Maint. Fund was already voted by the School Committee. On motion by Andrew Grimes seconded by Hal Torman to transfer from Line L2 Water Fund Expense $20,000 to Line L1 Water fund salaries & wages, FINCOM voted 5-0-0. Bob LeLacheur reported that permission was received from the Selectman to do some internal borrowing for the new Fire Truck ($410,000) and for some of the Financial Software ($500,000). This will save about $50,000 in debt issuance costs. The Selectman put a deadline of December 31,2007 to repay. The loan should by repaid by November, when the Town expects to issue public debt to pay for MWRA full-time entry and other general fund long-term obligations. Bob LeLacheur introduced new member Barry Berman, who will be replacing Chuck Robinson for 1 year. He also introduced Matt Wilson and Tom White who were appointed a couple of weeks ago and will begin a 3 year term on July 1, 2007. This is the last meeting for Michelle Williams and Paul Bolger. Andrew Grimes explained the Liaison committees to the new members and asked them to take a look at the committees and they will discuss them at another meeting when more members are present. Bob LeLacheur reviewed the FINCOM calendar for Fiscal Year 2008. He expressed interest in setting the dates for the Financial Forum. The dates seemed reasonable to everyone, and FINCOM agreed to adopt the proposed schedule, including a 7pm start for all meetings. Andrew Grimes suggested one more summer meeting – in August – to be arranged via email. Bob LeLacheur, Peter Hechenbleikner and Gail LaPointe will meet sooner to review the FY08 budget. Some items to take a look at are: a.Recognize more state aid to offset these items below b.Health insurance budget +$250,000 c.Vocational school – more enrollments +$50-75,000 d.DPW equipment +$50-75,000 Bob LeLacheur explained the process with MSBA regarding payment for the high school. He gave a pension update - it is 70% funded and on an acceptable funding path. This should be fully funded by the 2028 deadline. On motion by Andrew Grimes seconded by Hal Torman the minutes of March 28, 2007 were approved by a vote of 5-0-0. On motion by Andrew Grimes seconded by Hal Torman the minutes of April 10, 2007 were approved by a vote of 5-0-0. On motion by Andrew Grimes seconded by Hal Torman, FINCOM thanked Paul Bolger and Michelle Williams for their service, and the meeting was adjourned at 9:25 p.m. on a vote of 5-0-0. Respectfully submitted, Secretary