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Home My WebLink About2009-02-09 Finance Committee Minutes Finance Committee Meeting February 9, 2009 Financial Forum The meeting convened at 7:35 p.m. Senior Center, 49 Pleasant Street, Reading, Massachusetts. Members present: Chairman George Hines, Vice Chairman Andrew Grimes, Finance Committee Members Barry Berman, David Greenfield, Marsie West, Thomas White and Matt Wilson. Members absent: Hal Torman and Jay Tangney. Also present: Board of Selectmen Chair Steve Goldy, Vice Chairman Ben Tafoya, Board members Camille Anthony and James Bonazoli; School Committee Chair Chuck Robinson and Committee members Chris Caruso, Lisa Gibbs, Karen Janowski, David Michaud and Elaine Webb; Board of Library Trustees Chair Susan Hopkins Axelson; Trustees Karyn Storti, Victoria V. Yablonsky, David P. Hutchinson, Richard Curtis, and Cherrie Dubois. Town Manager Peter Hechenbleikner, Assistant Town Manager/Finance Director Bob LeLacheur, Town Accountant Gail LaPointe, DPW Director Ted McIntire, Town Engineer George Zambouras, DPW Business Manager Jane Kinsella, Fire Chief Greg Burns; Police Chief James Cormier, Police Business Manager Andrew Scribner; Library Director Ruth Urell; Assistant Library Director Dorota Socha; Superintendent Pat Schettini, Assistant Superintendent John Doherty, Director of Pupil Services Colleen Dolan, School Director of H.R. and Finances Mary DeLai, and members of the Administrative Council including Karen Callan, Richard Davidson, Patty de Garavilla, Joseph Finigan, Cathy Giles, Doug Lyons, Craig Martin and Eric Sprung; Paul Feely (Chronicle) and Melissa Russell (Advocate); and residents Laura Busick, Lin Chabra, Gary DeRusha, Jeffrey Doucette, Priscilla Hollenback and Paula Perry. George Hines called the FINCOM to order at 7:35pm, followed by Steve Goldy calling the Selectmen to order and Chuck Robinson calling the School Committee to order. Hines made some opening remarks about the difficult financial situation across the globe. Town Manager Peter Hechenbleikner listed some Guiding Principles, Common Assumptions and Fees/Revenues to address the FY09 and FY10 budgets. Guiding Principles  Avoid Gimmicks;  Maintain necessary levels of Public Safety and Public Health;  Maintain necessary levels of local services to assist those in need during difficult economic times;  Retain the ability to take advantage of opportunities (stimulus package);  Retain the Town’s strong financial capability;  Maintain our ability to emerge from the current economic circumstances in a strong position (Economic Development); Finance Committee Meeting – February 9, 2009 – page 2  Understand and respect the impact of local government decisions regarding increasing costs on our residents and taxpayers;  Explore short and long range efficiencies, regional opportunities, organizational changes, and outsourcing of services;  Determine what things we are currently doing that don’t add value to the community, and what changes (state law) need to be made to avoid doing them;  Request “early retirement” legislation that the Town can tailor to its needs. Common Assumptions  Capital and Debt Service will remain at 5% of the budget;  Union Contracts will be honored;  The Pay and Classification system for non-union personnel will continue to be used;  We will set up a separate account (probably in the Finance Department Human Resources budget – for sick and vacation leave buy-back). Fees/Revenues Generally we would not recommend major changes in fees to address the budget shortfalls, but there are several areas that would not impact the general public but which we should consider:  Smoke Detector Fees – ours are very low;  Underground Storage Tank registration fees – ours are very low;  Site plan waiver fee – new;  Broader use of re-inspection fees for more that the initial inspection and one re-inspection;  Consider un-bundling the Community Access fee Commuter parking – our fees are very low o Compost center o Town Accountant Gail LaPointe reviewed the Revenues for both FY09 and FY10. Local receipts look to be just below the forecast for FY09, primarily due to the sharp drop in interest rates. State Aid will decline by nearly $400,000 due to the Governor’s 9c cuts announced last week. FY10 State Aid will over $700,000 compared to the original FY09 figures. Assistant Town Manager / Finance Director Bob LeLacheur reviewed reserves, which are at $6.3 million, or 9.2% of the FY09 budget. Snow & Ice are estimated to be at least $600,000 over budget this year; combined with the revenue shortfalls mentioned above, this reduces reserves closer to $5.3 million. However, the Schools and Town have held back spending in FY09 in preparation for this situation. Over $900,000 in holdbacks were identified since last November, including over $500,000 in the schools and over $200,000 for the Town (the rest are shared accommodated costs). Bob reviewed two scenarios for the period FY10 through FY12. A pessimist would see level-funded operating budgets (excluding accommodated costs) for FY10 and FY11 before running out of reserves. For FY12, a 10% cut in operating budgets would be required, given a set of assumptions. An optimist would see level-funded operating budgets for FY10 through FY12, and reserves would remain at $3 million – a figure less than $1 million below FINCOM’s policy levels. George Hines asked if there were any questions, and a general discussion about timing and underlying assumptions occurred. FINCOM has already realized that prior budget calendar Finance Committee Meeting – February 9, 2009 – page 3 models would be relaxed this year – as this Financial Forum would usually happen in early or mid-January. He and staff discussed the following budget calendar: > February 11 (School Committee voted budget); 13 (School budget to Town Manager); 23 (FY10 budget packet to FINCOM); 2/25 FINCOM budget meeting; > March 4,11,18,25 FINCOM budget meetings. Hines instructed all present to continue building budgets as outlined in the November Financial Forum. Level operating budgets (zero percent change) and accommodated costs as outlined would require a certain level of cash reserves in the FY10 budget, which under the circumstances FINCOM was prepared to recommend to Town Meeting. The Town managers indicated a desire to use not more than $0.5 million in cash reserves in the FY09 & FY10 budgets. If holdbacks in excess of FY09 shortfalls were achieved, the FY10 budgets should be allowed to carry forward those excesses in order to smooth the decline in services over a multi-year period. A motion by Grimes seconded by West to adjourn the FINCOM meeting of February 9, 2009 at 9:05p.m. was approved by a vote of 7-0-0. A motion by Anthony seconded by Tafoya to adjourn the Selectmen from the meeting of February 9, 2009 at 9:05p.m. was approved by a vote of 4-0-0. A motion by Gibbs seconded by Michaud to adjourn the School Committee from the meeting of February 9, 2009 at 9:05p.m. was approved by a vote of 6-0-0. Respectfully submitted, Secretary