HomeMy WebLinkAbout2009-08-12 Finance Committee Minutes
Finance Committee Meeting
August 12, 2009
Conference Room, Reading Town Hall
The meeting convened at 7:30 PM in the Conference Room, 16 Lowell Street, Reading, MA.
Members Present
: Vice Chair David Greenfield, Matthew Wilson, Bryan Walsh, Marsie West, Tom
White, Barry Berman, Harold Torman, and Kevin Leyne.
Also Present:
Assistant Town Manager/Finance Director Bob LeLacheur
Members absent
: George Hines
FINCOM Handbook:
Mr. LeLacheur provided each committee member with a handbook with the rules and regulations, the
current Town Charter, an overview of the Finance Committee, and the agreement between Reading
Municipal Light (RMLD) and the other Towns. The handbook should be reviewed by all members.
Liaison Assignments:
The committee reviewed the liaison assignments compiled by the Chair. The Chair and Vice Chair
typically serve on the Audit Committee. Mr. White asked why a RMLD liaison is needed when they
are a separate entity from the Town. Mr. LeLacheur explained that although they are a separate entity
the Town is ultimately responsible - for example the RMLD debt service. Mr. Wilson (Community
Services) switched assignments with Mr. Walsh (Public Safety). Mr. Greenfield encouraged members
to attend their assigned committee meetings and report back to FINCOM with the highlights. He also
noted that the Economic Development Committee will be an important committee to stay connected
with especially once the downtown construction project is complete.
Debt Sale/S&P Credit Evaluation
Mr. LeLacheur informed the committee that Fidelity Capital Markets was the winning bidder on a
Bond issued by the Town, which raises funds for a new fire truck and the energy performance-
contracting project. The press release is provided on page 3 in the Committee’s meeting packet. Page 4
of the packet shows the net cash flow and expected savings compared to what was discussed at Annual
Town Meeting. Pages 10 and 11 in the packet show the total debt services. The energy costs have not
yet been adjusted to the energy savings cost. Standard and Poor Rating Group gave Reading an AA
which is a very strong financial rating. The 5% reserve fund policy was noted as a positive factor. Mr.
Greenfield asked how Reading’s rating compared to other towns in the State. Mr. LeLacheur answered
that Reading is in the top one-third.
FY10 Budget Update
Mr. LeLacheur directed the committee’s attention to page 10 of the handout that shows the Town’s
projected operating deficits. The FY2011 is $1,176,391 which is not huge, but larger than in recent
years and also assumes federal money. Mr. LeLacheur states that the primary reasons for the financial
forum in the fall will be to review the FY10 budgets and prepare for 9-C cuts, in addition to the usual
FY11 budget process. The Committee should look ahead to FY12 and save the free cash because we
will likely lose the federal money. Mr. Berman asked if Reading was considering the meal tax. Mr.
LeLacheur explained that the Board of Selectmen would have to bring this type of tax to Town
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Meeting and he has not heard any discussions on the topic. Mr. Berman and Mr. Greenfield felt the
Selectmen should consider the meal tax.
Mr. LeLacheur pointed out that by changing the health insurance plan the Town saved some money
this year. He also noted that the Veteran’s Assistance money is under funded for FY2010 which may
need to be addressed by November Town Meeting (page 11 of packet). The Northeast Vocational
school budget is also still unknown at this point in time.
The Capital Priorities plan was also discussed and was included in the packets on page 13. The Capital
Plan will not likely be on the subsequent Town Meeting warrant in November because there is no
funding available. A new patient care reporting system was added because the state standards and
regulations have changed.
September Financial Forum
As stated earlier, one of the main reasons for the financial forums in the fall will be to review the FY10
budget and to prepare for 9-C cuts. Mr. LeLacheur thinks all four forums will be necessary in the fall.
Mr. Berman asked if there has been any new news from the state. Mr. LeLacheur replied that there
was not, but that FINCOM should be thinking about FY2011 and FY2012 as possible negative
operating budget environments, year-over-year. Mr. Torman asked if FINCOM is expected to
comment on the budget at the September financial forum. Mr. LeLacheur recommended FINCOM to
be prepared to comment on how to use the free case while considering FY2011 and FY2012. He also
recommended being conservative and advised against the spending of free cash in FY2011. Mr. White
asked if the Town could reduce the amount that goes to Capital to save police officers, fire fighters and
teachers. Other FINCOM members stated that it has been done in the past but wouldn’t recommend it
because it’s very difficult to increase the money after it’s been decreased.
On a motion duly made by Mr. White, seconded by Mr. Torman, the meeting adjourned at 8:50 PM,
by a vote of 8-0-0.
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