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HomeMy WebLinkAbout2009-02-25 Finance Committee Minutes Finance Committee Meeting February 25, 2009 Conference Room, Reading Town Hall The meeting convened at 7:15 PM in the Conference Room, 16 Lowell Street, Reading, MA. Members Present: Barry Berman, David Greenfield, Marsie West, Harold Torman, Mathew Wilson, and Andrew Grimes. Members absent: Chairman George Hines, Thomas White, Jay Tangney, Also present: Town Manager, Peter Hechenbleikner, Assistant Town Manager/Finance Director, Bob LeLacheur, Public Works Director, and Ted McIntire. There being a quorum Andrew Grimes, the Vice Chairman, called the meeting to order at 7:24 PM. Barry Berman made a motion to change the time of future Finance Committee meetings from 7:15 pm to 7:30 pm. Seconded by Marsie West, FICNOM approved the motion 6-0. Review Budget Schedule The Town Manager summarized the budget for fiscal Year 2010. He has reviewed the FY10 budget very carefully and had to reduce services throughout the Town and School to create a balanced budget. Not all of the cash reserves are being spent in FY2010 but in the upcoming year the Town would like to minimize the amount of cash reserves being used and may make adjustments during FY2010 if projected revenues do not occur. The Assistant Town Manager/Finance Director, Bob LeLacheur, discussed the FY2010 and FY2011 budgets. The current Cash Reserves are $6.3 million, expected to be reduced by at least a $600,000 shortfall from this year’s snow. The remaining $5.7 mi8llion in reserves is above the $3.5 million recommended by FINCOM. The Town & Schools plan to have a 0% operating budget for FY2010, but that will be more difficult to accomplish in FY2011 and FY2012. Bob reviewed a pessimistic and an optimistic example of the projected budget for 2011 and 2012 described in detail on page 4. Bob then reviewed and discussed the Budget Summary noting that there was no substantial change to Accommodated costs as detailed on pages 7 and 8. He then reviewed the Shared Accommodated costs on page 9. The Retirement Board has set assessments up only 2.4% next year – the next revaluation of pension fund assets is next year, and future costs here may increase due to the decline in asset values. The worker compensation insurance budget will decline, but unemployment and police/fire indemnification will increase. Health insurance is up modestly, compared to recent trends. Board of Selectmen Chair, Stephen Goldy, joined the meeting at 7:40 pm. On page 11 Debt Services; FY09 original versus Actual 2009 is a lot less because some of it was removed at the November Town Meeting due to the April 2008 debt refinancing. There is no financial impact for the Performance Contracting in this budget. The Net Included Debt is 1 $2,426,543. One page 12 the Vocational School budget has not yet been discussed and determined but Reading has a decreased enrollment. The per pupil cost differs in each community and is determined by the state. David Greenfield asked how certain are we that the state’s assessment (mostly MBTA) is accurate? The Assistant Town Manager responded that the information is in the Governor’s budget, and is not likely to be impacted by any federal stimulus plans. FY 2010 Municipal Government Budget Bob summarized the municipal government budget changes from FY2009 to FY2010 on page 15. There are changes in every department including a reduction in some positions, reduction in overtime, and the hiring of the part time public safety dispatcher and the new firefighter positions have been deferred in FY 2009. Bob then moved onto the municipal government’s accommodated costs. The Veterans’ aid was revised recently because the $60,000 in the original 2009 budget was not enough and $40,000 in additional FINCOM reserves was transferred. As shown on page 18, the amount of money for snow and ice control was significantly over the original budget. The snow and ice budget has been steadily increasing but the price of salt has increased dramatically and accounted for 40% of the 2009 budget for snow and ice control. The budget for street lighting did not change too much (page 18). Andrew Grimes asked if energy saving light bulbs is an option to save money. The Town Manger responded that there are not any LED street lights at this time. Waste collection and disposal has decreased because the amount of trash has decreased which is typical in a recession because people are buying less. Town Accountant, Gail LaPointe, joined the meeting at 8:15 pm. The Town Manager explained that all union contracts will be honored until the end of FY2010 and the results of the pay classification study will be implemented as shown in the salaries budget starting on page 22. He noted that in several cases, non-union wages were increasing at a rate higher than 4% because at November Town Meeting only 6 months of the pay & classification changes were funded, and the Town needed to find the other half in this budget process. Normal non-union increases for FY10 included a 2% COLA and eligibility for a 2% step increase. The Town Manager reviewed the Town Administration budget. There will be a small reduction in overtime and part-time hours, and some expenses will be eliminated. The 2009 Actual budget for Legal and Labor Counsel was higher than expected because of an appeal case. David Greenfield asked if there were any other pending cases that could increase this cost. The Town Manager responded that there was but no more than any other year. Legal costs are down from where they were six years ago. The Town Accountant then reviewed the FY 2010 Accounting budget. Other than a reduction in overtime, the budget was a repeat of FY09. The Assistant Town Manager then reviewed the Finance Department. Net expenses didn’t change much, but the type of expenses did. For example, the election costs declined, but banking and postage costs increased. Overtime in the Finance Department is reduced for FY10. Some of 2 the responsibilities of the Coordinator of Volunteers will be shared between the staff in the Community Services and Finance Departments when this position is not filled after next month. Optional Professional Development money has been eliminated and the net Finance budget is down slightly overall. . FINCOM members were advised by the Town Manager and the Assistant Town Manager/Finance Director to carefully read through each section and send comments and questions. On a motion made by Harold Torman, seconded by Marsie West the meeting was adjourned at 8:58 PM on a vote of 6-0-0. Respectfully submitted, Secretary 3