HomeMy WebLinkAbout2009-09-09 Finance Committee Minutes
Finance Committee Meeting
September 9, 2009
Reading Senior Center
The meeting convened at 7:30 PM in the Senior Center.
FINCOM Members Present
: Committee Chair George Hines, Vice Chair David Greenfield ,
Matthew Wilson, Bryan Walsh, Marsie West, Tom White, Barry Berman, Harold Torman, and Kevin
Leyne.
School Committee Members Present:
Chair Chuck Robinson, Chris Caruso, Lisa Gibbs, Karen
Janowski, David Michaud and Elaine Webb.
Board of Selectmen Members Present
: Chair Ben Tafoya, Camille Anthony, James Bonazoli, Steve
Goldy and Rick Schubert.
Also Present:
Town Manager Peter Hechenbleikner, Assistant Town Manager/Finance Director Bob
LeLacheur, Town Accountant Gail LaPointe, Fire Chief Greg Burns, Library Director Ruth Urell,
DPW Director Jeff Zager, DPW Business Manager Jane Kinsella, Police Business Manager Andrew
Scribner-Maclean; Acting Superintendant John Doherty, Director of Finance & Operations Mary
DeLai, Director of Pupil Services Colleen Dolan; Resident Bill Brown and Christine Lyons from the
Reading Chronicle.
The Town Manager gave an introduction to tonight’s budget discussion. The focus of the meeting will
be the FY10 budget and to review conservative estimates for future budgets. The Town only used a
small amount of free cash this year and must continue to be conservative because the exact amount of
available free cash is unknown.
FY10 Town Revenues
Ms. LaPointe gave a Power Point presentation about the FY2010 revenues. There is not a lot of change
in tax revenues but there will be some telecommunications money available in FY2011 by legislation.
FY2010 telecommunications money is still subject to pending court cases, and has been assessed and
held fully in the overlay account. It is too early to gauge the FY2010 local revenues but is most likely
less than what was collected last year in FY09. State aid has been reduced and replaced with the
Federal Stimulus money for FY2010 and possibly for FY2011. FinCom member Mr. White asked why
the other revenue source category is significantly lower. Due to a major renovation project, the
Reading Ice Arena Authority will not have any FY10 funds available (usually $120,000 is collected).
The Town Manager explained that the ice arena’s remodeling included a new female locker room to
comply with Title 9.
Impact of State Aid
Ms. LaPointe presented a slide showing state aid over the years beginning in 1989. In 1990 there was a
decline in aid which took 6 years to fully recover. She explained that towns can take a long time to
recover and we could possibly be looking at 3 or 4 low budget cycles particularly in 2011 and 2012.
Board of Selectmen member Mr. Schubert asked what the meal tax footnote was on the revenues slide.
Ms. LaPointe explained that revenue estimates did not include a local meals tax as there is none
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proposed at this time. Mr. Hines asked if the state sales tax would help the Town’s revenues and Ms.
LaPointe answered that it would not impact the Town’s budget.
School Department FY10 Revenues
The School Director of Finance & Operations, Mary DeLai, presented a revenue overview for the
school department. Ms. DeLai reviewed the projected and actual revenues for FY10. Total education
state aid was originally projected to be $9,284,893 for FY10 and the actual revenues will be
$9,110,708, creating the difference of $174,185. However, the schools will also be receiving $944,132
from the American Recovery & Reinvestment Act for the State Fiscal Stabilization Fund (SFSF) which
was not initially included in the projected FY10 budget revenues. Reading public schools will receive
$944,132 in SFSF funds for FY10 – this amount will offset the $174,185 school shortfall and the
$627,521 general government shortfall in state aid.
American Recovery & Reinvestment Act:
State Fiscal Stabilization Fund (SFSF)
Massachusetts will be receiving a total of $994 million to be shared with the local communities. 82%
of the $994 million is earmarked for education and the remaining 18% is for general government such
as public works. The state has already spent $412 million in FY09 to offset cuts to Chapter 70 for
which Reading received $974,264 last year. It is not known at this time how much SFSF funding will
be available in FY11 but there is only $414 million remaining ($177 million earmarked for education)
and some of the money will go to higher education and to balance the state budget in FY10 and the
remainder will be allocated based on the Chapter 70 formula.
Individuals with Disabilities Education Act (IDEA
)
The Town’s application was approved in early August to receive $583,870 for FY10. This funding is
more restrictive than SFSF money because at least 50% must be for investment and no more than 50%
for recovery. $251,162 will be used for recovery programs which include the Special Education
‘circuit breaker’ shortfall and class size staffing while $332,708 will be used for investment which
includes staff for new programs with the intention of becoming self sustaining, adaptive technology
and equipment. Mr. Hines asked to clarify how this was being used as investment. Ms. DeLai
explained that investment goes above and beyond what is already in the budget and is generally
technology for new programs that will attract more students and thus become self sustaining. The
IDEA grant money will be used for the $171,162 circuit breaker revenue surplus for FY10. Mr.
Berman asked if the IDEA money could be used for the following year and Ms. Delai responded that
the IDEA money going towards the circuit breaker shortfall needed to be spent that year.
FY10 Expenses
Finance Director/Assistant Town Manager Mr. LeLacheur presented the FY10 expenses. The
unemployment deficit is high ($25,000) but should decrease soon. The Veteran’s aid deficit of $50,000
will need a transfer at Subsequent Town Meeting in November because it has been increasing and may
remain at higher levels because of the economy.
One member of the audience asked if the upcoming special election will impact the Town’s expenses.
The Town Manager responded that the State is obligated to pay the cost of the election.
Mr. Berman asked why there is a deficit of $10,000 in the Community Services department budget and
Mr. LeLacheur answered that it was because of the new Community Services Director/Town Planner
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position that was recently filled. He also explained that the Board of Assessors budget may also change
because the Town Appraiser is leaving this month and new technology is being considered.
FY11 Revenues
The FY11 revenues estimates are more conservative than FY10. Right now the Town has
approximately $5 million in reserves but the Town should be conservative for FY11 and FY12. More
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detail for future fiscal years will be presented at the next financial forum scheduled for October 14.
Taxes are expected to increase from FY10 to FY11 as a result of new growth but local revenues are
expected to be a little less especially as excise tax has been declining. One member of the audience
asked if the local meal tax was included in any of the estimates. Ms. LaPointe answered that it was not
included because it would first need Town Meeting approval and this is not on the warrant. Discussion
continued about a local meal tax and if the Town would be willing to consider it to increase revenues.
The Selectmen Chair, Ben Tafoya, was present and explained that a local meal tax has not been
discussed by the Selectmen but they will consider it at one of their regular scheduled meetings. A
couple members of the Finance Committee suggested adding the local meals tax to the Town Meeting
warrant noting that it could be removed if necessary.
The Town Manager concluded by emphasizing the importance of being financially conservative and
recommended developing a FY11 budget without the use of free cash. More will be known by the
next financial forum and by November Town Meeting.
FINCOM Chair suggested that the Finance Committee hold another meeting in advance of the
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financial forum scheduled for October 15. A meeting time will be decided and announced.
On a motion by Mr. Berman seconded by Mr. White the meeting was adjourned at 8:45 PM on a
vote of 9-0-0.
Respectfully submitted,
Recording Secretary
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