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HomeMy WebLinkAbout2010-10-13 Finance Committee Minutes OFT? fA Finance Committee Meeting �� .Tg6a October 13, 2010 Conference Room, Town Hall The meeting convened at 7:30 PM in the Conference Room of Town Hall. FINCOM Members Present: Chair Marsie West, Mark Dockser, George Hines, Barry Berman, Kevin Leyne, Harold Torman, and David Greenfield. Members Absent: Francis Fardy and Bryan Walsh. Also Present: Town Manager Peter Heckenbleikner, Assistant Town Manager/Finance Director Bob LeLacheur, Vinnie Cameron, RMLD General Manager, RMLD Board of Commissioners Chairman Mary Ellen O'Neil, residents Bill Brown and Gina Snyder, Matt Casey from the Reading Patch and Recording Secretary Abby McCabe. There being a quorum the Chair called the meeting to order at 7:31 PM. RMLD Presentation Reading Municipal Light Department General Manager, Vinnie Cameron, gave the annual presentation to the Finance Committee. The operating and capital budgets were explained. The monthly fuel charge is a significant part of the total revenue. The total operating revenue is approximately $86 million. The power costs is $27 million which includes all non-fuel public costs, maintenance costs are $2.5 million and the Town's payment is $1,320,000 as per the agreement with the RMLD and the four municipalities. Mr. Cameron reviewed other miscellaneous income items in the budget such as late payments and charges. Each year, approximately $2.2 million is paid to the Town and the net income for FYI is $2.7 million. Mr. Berman asked if it was possible for other municipalities to join RMLD in the future. Mr. Cameron said that it was possible but is difficult. The projected revenue is shown as residential rates, commercial rates, school rates (the cost of service rates, not a discount), industrial rates, street lights, fuel revenue and energy conservation. Generally, RMLD looks at the annual budget revenues and then they review the expenses. Expenses: Mr. Cameron reviewed the actual revenues over the last several years until 2009 broken down by department. The capacity and transmission to different plants and companies is an expense shown in the budget. Mr. Greenfield asked about the wind levels in Reading. Mr. Cameron explained that there was a study down recently throughout the state and it found that Reading has very low wind levels. Mr. Berman asked if RMLD has a stabilization fund and Mr. Cameron answered that they do. RMLD has a rate stabilization fund of approximately $6 million and a fuel reserve charge of approximately $2.6 million. The capital budget includes construction system projects, upgrades, new customer services connections and routine construction which vary from year to year and is difficult to predict. This year's total 1 capital budget is $5.6 million but is usually closer to $4 million. This increase is due to the station upgrades and meter readings. The Town Manager explained that RMLD pays the Town in three ways; earnings distribution, 2% town sharing, and the RMLD employees are paid initially through the Town but then is reimbursed. Budget Planning The Chair distributed a handout that she created that summarized the budget in a manner that was clear and concise. Ms. West emphasized the importance of presenting a budget to Town Meeting that is easy to understand and not too detailed. Mr. Brown suggested providing pie charts and graphics to visually explain the budget to Town Meeting. There was a brief discussion on budget transparency and ideas to distribute the information to residents. Mr. LeLacheur explained that the Town is in roughly the same place as last year at this time. The outcome of Question 3 on the November ballot will have an impact. A 0% operating (non- accommodated) budget or lower is recommended by FINCOM for FY12. Mr. Berman asked if there was a more accurate estimate on the revenue generated from the local meals tax. Mr. LeLacheur estimates it to be around $200,000. Financial Forums Mr. LeLacheur pointed out that the handout distributed to FINCOM members includes an email (on page 2) from a resident with two suggestions for revenue opportunities; a betterment charge for granite curbing and charging residents for road paving. The Town Manager explained that the Town can not legally charge the road improvement tax but the curbing betterment is a possibility. In the meeting handout there is a spreadsheet that includes the bucket list from the September financial forum on revenue opportunities. The Chair suggested that a member of the FINCOM should act as a point person for each revenue suggestion. Mr. Dockser recommended that the items be evaluated according to the votes received during the financial forum. FINCOM members would like to have staff or one of the committee members review each suggestion and provide a brief reason or statement that would explain if it was or wasn't feasible. Mr. Greenfield recommended that the columns entitled "Revenue and Implement Cost" should include a figure or range because high, medium and low doesn't mean the same thing for everyone. The Committee discussed who would be responsible for following up with each of the revenue suggestions. The Town Manager said he would assign specific departments to research the recommendations from the financial forum. Some of the recommendations such as naming rights were briefly discussed. The next financial forum is planned for Wednesday October 27th beginning at 7:00 PM. The Committee discussed the logistics of the meeting and the role of the facilitator during the brainstorming session. Town Meeting Warrant Mr. LeLacheur reviewed and explained the backgrounds of the Subsequent Town Meeting warrant articles that the FINCOM needs to vote on. 2 Article 3: Capital Improvements Program (CIP) The Committee discussed the proposed amendments to the CIP. On a motion by Mr. Torman, seconded by Mr. Berman, FINCOM voted 6-0-1 to approve Article 3 as written. (Mr. Leyne was absent for the vote.) Mr. Berman to prepare the Town Meeting report. Article 4: On a motion made by Mr. Dockser, seconded by Mr. Greenfield, FINCOM voted 7-0-0 to approve Article 4 as written. Mr. Greenfield to prepare the Town Meeting report. Article 5: Mr. LeLacheur explained the there was an accounting error in the engineering department when a bill was not paid because it was thought to be a duplicate. On a motion made by Mr. Hines, seconded by Mr. Greenfield, FINCOM voted 6-0-1 to approve payment for the unpaid bill in Article 5. Mr. Leyne was absent for the vote. Mr. Leyne to prepare the report. Article 6: This Article authorizes the Selectmen to sell, exchange or dispose of various items such as surplus vehicles. On a motion by Mr. Torman, seconded by Mr. Dockser, FINCOM voted 7-0-0 to approve Article 6. Mr. Torman to prepare the report. Article 7: MWRA water main replacement on Haverhill Street and also includes redoing the street. On a motion by Mr. Torman, seconded by Mr. Berman, FINCOM voted 7-0-0 to recommend Article 7. Ms. West to prepare the report. Article 8: This article is to submit a grant application for the library construction grant. The legislative body needs to authorize the grant application submission and does not commit the Town to accepting the grant. On a motion by Mr. Hines, seconded by Mr. Torman, FINCOM voted 7-0-0 to approve Article 8. Mr. Fardy to prepare the report. Article 9: On a motion by Mr. Leyne, seconded by Mr. Greenfield, FINCOM voted 7-0-0 to approve Article 9. 3 Mr. Greenfiled to prepare the report. Article 11: Is a request to accept Benjamin Lane, Causeway Road and Kylie Drive as public ways. On a motion by Mr. Hines, seconded by Mr. Greenfield, FINCOM voted 7-0-0 to approve Benjamin Lane and Kylie Drive as public streets. On a motion by Mr. Hines, seconded by Mr. Leyne, FINCOM voted 7-0-0 to not take any action on the acceptance of Causeway Road until further information is available. Mr. Dockser to prepare the report. FINCOM Position on Question 3: The Chair recommended that the Committee discuss Question 3 at November's election and take a position and write an article in the local newspaper. FINCOM members discussed the possible impact to Reading on Question 3. Committee members expressed feelings that the proposal was too radical and would have a significant impact on Reading. On a motion by Mr. Greenfield, seconded by Mr. Dockser, FINCOM voted 7-0-0 to support a news article against Question 3. Ms. West will prepare the letter on behalf of FINCOM. Miscellaneous Page 35 of the meeting handout shows a break down of all the Town's expenses for the recent Special Election. The total cost of the special election was $15,994.16 and the unused balance was returned to free cash on June 30tH Page 3 7-3 8 of the meeting handout shows the Town's extra revenue from the budgeted amount from 2005 to 2010. There is $21,139 of extra revenue from 2010. Page 39 of the meeting handout are the Committee's liaisons for other Town boards, commissions and committees. Since Mr. Hines is moving out of Town and will no longer be a Reading resident, FINCOM should assign a new liaison to the municipal building committee. The Chair suggested this be voted on at the next meeting on October 27tH Approval of August 4th and September 15th 2010 Minutes Review and vote will take place at the next meeting on October 27tH Mr. Hines is moving out of Town and gave closing remarks on his time as a Reading resident and FINCOM member. On a motion by Mr. Berman, seconded by Mr. Leyne, FINCOM voted 7-0-0 to adjourn at 10:40 PM. Respectfully submitted, Recording Secretary 4