Loading...
HomeMy WebLinkAbout2011-02-09 Finance Committee Minutes OF RFgO'l Finance Committee Meeting bog February 9, 2011 Fp� O Conference Room, Reading Town Hall The meeting convened at 7:30 PM in the Conference Room at Town Hall. FINCOM Members Present: Chair Marsie West, Hal Torman, Mark Dockser, Bryan Walsh, Barry Berman, Kevin Leyne, Francis Fardy and Paula Perry. Members Absent: David Greenfield Also Present: Assistant Town Manager/Finance Director Bob LeLacheur, Arthur Katz from the Reading Advocate and recording secretary Abby McCabe. There being a quorum the Chair called the FINCOM meeting to order at 7:39 PM. FY12 Budget Schedule Overview Mr. LeLacheur reviewed the March meeting schedule with the Committee. The March 2nd, 9th, 16th, and 23rd meetings will be held at Reading Municipal Light Department. On the homepage there is a link to the FY12 Budget that posts the meeting calendar and the complete text and dollar amounts for the operating budget by department. It was recommended that the Town Meeting presentation include more text and less detail on the actual numbers so that it easier to follow. FINCOM should be voting on the budget at the March 28th meeting and vote on the warrant articles on March 30tH Snow & Ice Budget Update The FYI snow and ice budget is now over budget by $402,137. The Town's DPW hasn't always had enough staff to clear the large amounts of snow and has had to contract out some of the work which has contributed to the increased costs. Reading also only has 4 sidewalk plows and for a while 2 were broken and needed repairs. Mr. LeLacheur recommends under-budgeting for snow and ice because this figure can never be predicted but you don't want to cut other service in case there is a winter where there isn't a lot of snow in which case other areas and services would have been cut for no reason. Therefore, it's better to under-budget and then use reserve funds if more is needed. Update on Fuel Prices The Finance Director/Assistant Town Manager reviewed the monthly fuel prices (diesel and contract prices) over the past year shown on page 7 of the meeting packet. This is for all town vehicles including police, fire, schools and DPW vehicles. The fuel account for FYI is on target. Meals Tax Update The Town has received almost $26,000 in the local meals tax for the months of October and November. The numbers are reported and sent quarterly so this only includes October and November but if this number is sustained it will total $155,000 for the year. Municipal Building Committee Report The ad hoc Municipal Building Committee's final report is provided on pages 9 — 16 of the meeting packet. The Committee visited Town buildings throughout 2010 to understand the existing conditions and identify any major upgrades or maintenance work that would be needed in the future. The final report ranks priorities for public building projects. 1 Pulte Homes Development Proposal Pulte Homes of New England has submitted a development application with the planning commission for the former Addison Wesley site and a fiscal impact report was included with the application. Mr. LeLacheur has reviewed the report and has provided a memo with his comments and questions provided in the FINCOM meeting packet. The developer is estimating 8 to 10 years before the property is completely built out which is important to note since a common misconception is that the FY12 budget could benefit from this project. This is not necessarily the case since this is a project that will generate revenue over a long period of time due to property taxes and one time fees associated with the Gateway Smart Growth District. It was recommended for FINCOM to follow this project and take an active role while it is being developed. One member also noted that this project may also impact or cause a need for new services in Town. It was also mentioned that Reading residents may move to this property thus leaving a single family home that may bring in school aged children. SEC New Rules about Municipal Advisors Finance Committee members are not required to register as "municipal advisors" as outlined in the SEC regulations. Committee members are far enough removed that the regulation requiring one to register as a municipal advisor is not applicable to local government's finance committee members since they are not generally actively involved in making recommendations on investments. FINCOM Preliminary Comments on FY12 Budget The Board of Selectmen approved the Town Manager's recommended budget earlier this week. The Town Manager's proposed budget will be available to the FINCOM next week. Page 39 of tonight's meeting packet shows the projected revenues for FYI through FY14. Projections show revenues increasing by 2 to 2.5% after FY12 which is better but typically we experience a 3.5 to 4% increase. Mr. LeLacheur commented that it is difficult to continue services with less than a 3% increase. Accommodated costs will likely go up by 5% in FY13 &FY14. The projected budgeted assumes that the amount of free cash used to support the operating budget will steadily decline over the next few years from $1.5 million in FY12, $1 million in FY13 and $500,000 in FY14. Ms. West asked what the ramifications were for using this level of free cash. Mr. LeLacheur explained that communities in many other states keep their reserve funds at 10%but Massachusetts is different because of the proposition 2 '/2. Reserves are important because they impact a community's ability to borrow money and bond rating agencies like to see 8%. Many Massachusetts municipalities generally have 5% while Reading has typically has had 8 or 9% in reserves. FINCOM Pre-Town Meeting Communications The Committee expressed satisfaction with the amount of budget information that has been made available to the public through the website and financial forums. Mr. LeLacheur mentioned that the Board of Selectmen is interested in looking at the employer wage benefits and Town Meeting may be too. The employer contribution for health insurance was discussed. The Committee agreed that the example of how the average home owner's taxes are distributed is good and it was suggested to show these numbers in percentages over time to show the past trends. Town Meeting FY12 Budget Presentation Town Meeting is expected to be three nights and Mr. LeLacheur recommended that FINCOM make the presentation early and preferably on the first night of Town Meeting. FINCOM's budget message should be strong and more detailed than usual because Town Meeting members will be looking to the Committee for advice. It was suggested that a letter be mailed in February in advance of Town Meeting. Ways to get Town Meeting members email addresses were discussed. Ms. West, Mr. Dockser, Mr. Berman and Mr. 2 Leyne volunteered to prepare the draft presentation and will report back to the rest of the Committee for feedback at one of the March meetings. The Finance Director prepared a memo explaining the budget overview for the Finance Department as a model for what the FINCOM might want to consider for each department. The memo includes a summary highlighting the changes as well as figures and charts. The impacts on services and the dollar amounts should be described. Fall 2010 Financial Forum Updates Mr. LeLacheur gave an update on what suggestions from the Financial Forums have been implemented and which ones are being considered for this budget. Several of the expense saving ideas has been implemented. After a brief discussion several FINCOM members identified cell towers, billboard advertising and parking fees at the train depot as priorities for enhancing revenues. Liaison Reports Mr. Dockser attended a recent Reading Municipal Light Department (RMLD) meeting and reported that he found it surprising that RMLD seemed to have higher than expected revenues and a stable operating budget. He asked if there was a way the Town could partner more with RMLD to share some of the burden of the current budget problems. Mr. LeLacheur suggested contacting RMLD directly for more information but felt that the RMLD already pays the Town a fair share as part of a previous long-term agreement. On a motion by Mr. Torman, seconded by Mr. Dockser, FINCOM approved the minutes dated January 2e 2011 as written by a vote of 7-0-1 (Mr. Fardy abstained). On a motion by Mr. Walsh, seconded by Mr. Berman, FINCOM voted 8-0-0 to adiourn at 9:52 PM. Respectfully submitted, Recording Secretary 3