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HomeMy WebLinkAbout2007-10-17 Finance Committee Minutes Finance Committee Meeting Financial Forum October 17, 2007 The meeting convened at 7:20 p.m. at the Senior Center, 49 Pleasant Street, Reading, Chairman Andrew Grimes, Vice Chairman Marsie Massachusetts. Present were West, Finance Committee members Tom White, Barry Berman, Hal Torman, and David Greenfield . Also present were Town Manager Peter Hechenbleikner, Assistant Town Manager/Finance Director Bob LeLacheur, Town Accountant Gail LaPointe, Fire Chief Greg Burns, DPW Director Ted McIntire and Jane Kinsella, Superintendent of Schools Pat Schettini, Associate Superintendent John Doherty, HR Director and Business Director Mary DeLai, School Committee members Lisa Gibbs, Elaine Webb, David Michaud and Chuck Robinson, Board of Selectman members Camille Anthony, Ben Tafoya and James Bonazoli and Chronicle reporter Melissa Russell. The meeting began with Warrant Article 11 (a $4.5 million sidewalk and curbing debt exclusion). Peter Hechenbleikner explained that he receives several calls per year for sidewalks and curbs. He reported that the Board of Selectman thought this was a good idea but it needs more discussion, and they did not vote on Article 11. Some examples for the need of sidewalks and curbing are Hunt Park, Washington Park and Sturges Park where there is a need for safety. The cost would be $450,000 per year for 10 years. The cost for the average owner would be approximately $50 per year. Hal Torman asked if there was a prioritized list. Peter explained that a plan is being worked on and will be fine tuned over the winter. They would start with the schools, parks and the high traffic areas. Marsie West mentioned that sidewalks were once done with a betterment. Peter explained that betterments for sidewalks have not been done in 20 years. Peter expressed how pleased he was with the Franklin Street project. Franklin Street residents are very happy with the completed project. Barry Berman asked if the town would consider a betterment. Peter explained that it would have to be a forced betterment and the community does not like to do that. Peter thinks the community would be receptive to this and it will have a huge positive impact. The School Committee called their meeting to order at 7:35 PM. The Board of Selectman called their meeting to order at 7:35 PM. Bob LeLacheur reviewed the budget process FY 08 goals that are listed on the hand out. He reported that they have accomplished most of the goals. He reviewed the FY09 budget calendar, as well as the FINCOM 5% reserves policy and the FINCOM 5% net debt & capital policy. He said the latter was strongly complimented by many members of the community over the past year. Town Accountant Gail LaPointe gave a summary of Revenues. Property tax levy – built on last years levy plus new growth. New Growth – What has been the average for the last 10 years, took out the big projects, i.e. Walkers Brook. Fiscal 08 not finalized. Abatements & exemptions. - a 2.5% increase as per a previous agreement. Chuck Robinson asked where the 2.5% increase for abatements and exemptions came from. Gail reported that was an agreement with the Assessor’s. Local Receipts - Excise, charges for Services, and Investments are the largest components of local receipts. Gail explained that the 5% formula increase for the 09 budget would be unwise for local receipts. A 5 year average was used instead. This resulted in a 1.3% increase from FY08 to FY09. Gail gave a summary of State Aid and MSBA School Construction Reimbursement. She reported there is an increase in funds for the FY09 budget of $1,959,959. Bob LeLacheur reviewed the estimated Accommodated costs as listed in the hand-out. Benefits - 9% - Health (12% includes enrollment increase) Capital - 5% increase – modest Net Debt - 5% - modest Energy - 10% - may be too low Financial - no change Sp. Ed. - 10 % net Vocational - 5% - conservative – increased enrollment Misc. - Rubbish – fixed contract for 3-4 years Snow & Ice - $50,000 This totaled a $1.8 mil increase, leaving less than $200,000 for the operating budgets, or a 0.375% increase. Moving on to the budget process, Andrew Grimes explained the procedure. They are going to follow essentially the same policy as last year: Baseline Budget 1.The is defined as the exact same workforce as today, rolled forward to FY09. If there are unsettled labor contracts, the assumptions used should be explained. In addition, expenses for the three functional departments (Municipal Government; School Department; Facilities) should be mechanically allowed to increase 2% each for purposes of this budget. Individual line items may increase or decrease as needed, until a 2% total is achieved across the functional departments. Budget Lists 2.After the Baseline Budget is built, should be made that explain differences from this budget. The first list should be one that balances the budget against available revenues – this figure is +0.375% as of today. Other Budget Lists may be made to explain other scenarios. For example, one list may attempt to explain level service - the functional department should be prepared to explain this meaning in detail. Camille Anthony asked about Health care. She mentioned that two years ago healthcare went out to bid and we did very well, and wanted to know what happened last year. Peter explained that last year, our 6.4% increase was very good compared to the range of MIIA communities (which varied from +6% to +16%). He explained that when the new State GIC program has been awarded, the Town will study it in detail to see if there are advantages. Camille Anthony also mentioned she was impressed with Mary DeLai’s presentation. Mary DeLai spoke in support of the new software program, MUNIs, for the budget format for the school department. She also mentioned she will also be able to more easily report to the DOR and the DOE, and that the budget format may change as a result. Andrew Grimes moved on to Policy Discussion and opened the discussion to the floor. The following items were discussed: Accommodated Cost – Health Insurance - this year we are at 12% because of an increase in enrollment forecast to be +3% plus 9% price inflation. Sidewalks - How much control will there be over the exact projects? If approved at Town Meeting then it is up to the residents at a Town-wide vote. The Town may need to have a Prop 2-1/2 override within a couple of years. A suggestion was made to move Town Meeting to the end of May to have more accurate budget numbers. Peter said there is not much of an advantage and at this time it is too late to change the dates of Town Meeting for this year. Another suggestion was to move the January Financial Forum to the end of the month so everyone will have more time to get their budgets together and the schools will have a better idea of enrollment. This was agreed upon so the January Financial Forum will take rd place on the 23 of the month. School Committee members voted to enter into executive session at 9:00 PM with a role call vote. Article 6 - On a motion by Andrew Grimes seconded by Marsie West to recommend adding $500,000 to the stabilization fund. FINCOM voted 6-0-0. At this time a discussion between Finance committee members and Selectman regarding Article 11, Sidewalks and Article 12, CPA. Some issues brought up are: is this the right time to go to residents for more funds, are we asking for too much, the overview needs more discussion. Members from both committees feel the community deserves a certain level of service and a method to get Town Meeting members more involved. A suggestion was to use the new website to put out more information and also inform members of meetings to attend. Peter Hechenbleikner feels the Selectman think Article 11 and Article 12 are good ideas but have to be put in concept to the big picture. Article 11 - On motion by David Greenfield seconded by Marsie West to recommend the subject matter Article 11. FINCOM voted 2-4-0, not passing the Article. Tennis Courts – There are 3 Articles related to the tennis courts: Article 4; Article 8; and Article 9. This is on hold until the November 5 Finance Committee meeting. Will have a full cost estimate and recap of how much non-Town money there is available. The following assignments were handed out. Article 12 Marsie West Article 11 Andrew Grimes Article 3 Hal Torman Article 4 Barry Berman Article 6 David Greenfield Article 8 Tom White Article 9 Tom White Article 10 Marsie West On motion by Marsie West seconded by Andrew Grimes the meeting was adjourned at 10:00 PM on a vote of 6-0-0. At this time the Board of Selectman ended their session by a vote of 4-0-0. Respectfully submitted, Secretary