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HomeMy WebLinkAbout2008-11-24 Finance Committee Minutes Financial Forum November 24, 2008 The meeting convened at 8:22 p.m. in the Superintendent’s Conference Room, 82 Oakland Road, Reading, Massachusetts. Present were: Finance CommitteeChairman George Hines, members Barry Berman, Andrew Grimes, . Marsie West, Matt Wilson, Hal Torman and Tom WhiteAlso present were Town Manager Peter Hechenbleikner, Assistant Town Manager/Finance Director Bob LeLacheur, DPW Director Ted McIntire, Jane Kinsella, School Superintendent Pat Schettini, School Finance & HR Director Mary DeLai, Assistant Superintendent John Doherty, Director of Pupil Services Colleen Dolan, School Committee members Chuck Robinson, Lisa Gibbs, Elaine Webb, Karen Janowski and Chris Caruso, Board of Selectmen members Steve Goldy, Ben Tafoya and Rick Schubert. George Hines called the Finance Committee to order at 8:22 p.m. Mr. Goldy call the Selectmen to order at 8:22 p.m. Mr. Robinson reconvened the School Committee for a brief recess. Mr. Hines thanked the School Committee for the opportunity to hold this meeting and reviewed the agenda. Mr. LeLacheur distributed a handout and reviewed the FY10 Budget Calendar, revenues, free cash, stabilization fund, FINCOM reserves, interest earnings, accommodated costs and the FINCOM finance policies. He stated that January 30 is the date to have the final voted budget to the Town Manager who in turn has to have the Town Manager budget to FINCOM by mid February. He stated that Reading is in much better shape than many communities but we must be cautious and prudent in the ways we spend the reserves. Mr. Robinson distributed a handout to the committees proposing a judicious approach to using the reserves over the next three years (attached below). Ms. West cautioned the committees to go beyond one year because of the uncertainty on the state’s part. Mr. Robinson would like to see a commitment to the process. He understands that numbers change and it is important to have a continuing dialog. Town Manager Hechenbleikner stated that the FY09 numbers are still unknown. We should start to have a better idea mid to late January. He feels that departments should start to construct a 0% increase budget for FY10 and even then we may have to use a good amount of reserves. Departments must begin to establish priorities. Several members of the School Committee, Board of Selectmen and FINCOM spoke in favor of the 0% budget suggestion. Further, it was the consensus of the members of the Financial Forum that the: The Town of Reading has practiced good fiscal responsibility; It is early in the process and the boards need to continue to collaborate. As each department develops their budgets they must carefully prioritize, and seek stakeholder input; Departments shall develop a 0% increase budget for FY10 (when compared to the FY09 budget as approved by November 2008 Town Meeting). In addition, they should create lists that would illustrate: (a) a level service FY10 budget (the same employees as currently with a 2% expense increase), and (b) in priority order reductions from or additions to the 0% budget. On a motion by Mr. Goldy, seconded by Mr. Tafoya the Board of Selectmen adjourned at 9:45 p.m. The vote was 3-0. Mr. Robinson recessed the School Committee at 9:45 p.m. to reconvene in Open Session. The Finance Committee voted previous meeting minutes: On a motion by Mr. Berman seconded by Ms. West, FINCOM approved the minutes of October 9, 2008 by a vote of 7-0-0; On a motion by Ms. West seconded by Mr. Berman, FINCOM approved the minutes of October 15, 2008 by a vote of 7-0-0; On a motion by Mr. Torman seconded by Ms. West, FINCOM approved the minutes of November 10, 2008 by a vote of 7-0-0; On a motion to adjourn by Mr. Berman seconded by Ms. West, FINCOM approved the motion at 10:00pm by a vote of 7-0-0. Respectfully submitted, Secretary READING SCHOOL COMMITTEE Charles R. Robinson, Chair Christopher Caruso, Vice-Chair Lisa F. Gibbs Karen Janowski David C. Michaud Elaine L. Webb Administrative Offices 82 Oakland Road Patrick A. Schettini, Jr., J.D. Reading, MA 01867 Superintendent of Schools 781 944-5800 TO: Members of the Financial Forum FROM: Charles R. Robinson Chair, Reading School Committee DATE: November 24, 2008 The current Finance Committee Reserve Policy states that reserves shall be maintained at 5%. Historically reserves have been a combination of Free Cash, Stabilization Fund, Finance Committee Reserve Fund, Sale of Real Estate Fund etc. Currently reserves are at a very healthy 10% or 5% over the FINCOM policy. The current distribution is as follows: -Free Cash $4,917,000 -Stabilization Fund $1,453,988 -FINCOM Reserve Fund $127,375 There are various reasons that would require the use of reserves with probably the most important one being to balance the budget in a difficult year. Reading is headed into a difficult budget cycle which will probably last for the next two to three years. As such, we propose that we judiciously use reserves over the next three years in order to maintain services for our residents. A proposed schedule is as follows: -Year 1 (FY10): $1,000,000 -Year 2 (FY11): $1,000,000 -Year 3 (FY12): $1,000,000 In doing this, without accounting for annual regeneration, Reading will still have reserves at 5% ($3,500,000) satisfying the Finance Committee Reserve Policy. We respectfully ask that this proposal be given serious consideration as we are facing difficult times and our recent fiscal conservatism will allow us to get through this period without dismantling services. In the last five years we have worked too hard, both on the Town and School side, to make our community the envy of many in the area. We as the leaders of our community have the fiduciary responsibility to spend town funds wisely and spending funds to retain the level of quality in our town that our residents expect and deserve is maintaining our fiduciary responsibility. The citizens of the Town of Reading – whether they are our senior citizens or our students – deserve it.