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HomeMy WebLinkAbout2011-01-26 Finance Committee Minutes OF RFgO'l Financial Forum bog January 26, 2010 Fp� O W Reading Senior Center The meeting convened at 7:00 PM in the Senior Center at Town Hall. FINCOM Members Present: Chair Marsie West, Vice Chair David Greenfield, Mark Dockser, Bryan Walsh, Barry Berman, Kevin Leyne, Hal Torman and Paula Perry. Members Absent: Francis Fardy Also Present: Board of Selectmen Chair James Bonazoli, Vice Chair Camille Anthony and member Steve Goldy, School Committee Chair Chris Caruso, Vice Chair Chuck Robinson, and member Lisa Gibbs, Town Manager Peter Hechenbleikner, Assistant Town Manager/Finance Director Bob LeLacheur, Town Accountant Gail LaPointe, Superintendent of Schools John Doherty, Assistant Superintendent Patty de Garavilla, School Finance & HR Director Mary DeLai, Community Services Director/Town Planner Jean Delios, DPW Director Jeff Zager, DPW Business Administrator Jane Kinsella, Town Engineer George Zambouras, Fire Chief Greg Burns, Joshua Easton Principal Karen Fenney, , Marry Ann Quinn (42 Benton Circle), Pamela Higgins (315 Summer Ave.), Erin Calvo-Bacci (494 Main St), Town Meeting member Jeff Struble, Michelle Hopkinson (21 Sherwood Road), Reading Patch Matt Casey, Council on Aging Chair Steve Oston, and recording secretary Abby McCabe. There being a quorum the Finance Committee (FINCOM) Chair called the meeting to order at 7:15 pm. The Chair of the Board of Selectmen called the meeting to order at 7:15 pm. Ms. West gave an introduction to the third financial forum of the FY12 budget year. The forums are an attempt to keep the community involved in the budget process and to maintain transparency in government. Update on Revenues & Free Cash Status Mr. LeLacheur noted that the complete budget is posted to the Town's website. The Finance Director briefly summarized the Town's revenues and sources of funds and gave an example of how the average homeowner's taxes are distributed throughout education, employee benefits, public safety, public works etc. The Town Accountant reviewed the FY12 projected revenues and compared them to FYI which are expected to be less in FY12. The local revenues for FY12 are expected to increase slightly because of the local meals tax that was recently adopted but the intergovernmental revenue (state and federal aid) is expected to decrease by 12%. The proposed budget plans to use $1.5 million in free cash. Ms. LaPointe explained that the projections of state aid were calculated by reviewing the Governor's budget over the last several years and analyzing how they changed in the legislature. The legislature has recently created a more conservative budget than the one the Governor proposes. Update on Accommodated Costs Mr. LeLacheur gave an update on the FY12 accommodated costs. Energy and out of district special education costs for FY12 declined since the last October Financial Forum, so the operating budgets only need to be reduced by -0.5% instead of-1.75%. Health insurance is still unknown at this time but the budget assumes it will be around 10% for FY12 ($8,387,500). The Finance Director showed the projected revenues, accommodated expenses, wages and budget gap from FYI through FY14. Over the past twenty years revenues have increased at 3.0%to 3.5%, but the Town is currently struggled with lower revenues and a future with below-average revenue growth forecast. Free cash will help over the next couple of years but usage must be reduced each year from the $1.5 million level so the operating budgets can ease into a new fiscal reality. 1 Overview of Town Budget In mid-February the Town Manager will present his budget to the FINCOM after the health insurance rates are set. In March, the FINCOM will begin reviewing the budget in preparation for Annual Town Meeting in April. Mr. Hechenbleikner reviewed scenarios for a level service budget, a level funded budget and the most likely budget with a 0.5% reduction. When budgeting for a level service and level funded budget it soon became clear that it would not be possible to reduce each department equally. A —0.5%reduction would mean eliminating 3 police officers and 3 firefighters which were not acceptable outcomes. If public safety employment is held constant, all other Town departments must be cut by 3.9%. That is not desirable because library hours would be reduced, a key DPW mechanic position would be eliminated, and smaller departments (Town Administration& Town Accountant) were too small to be reduced. Accordingly, Community Services and Finance will be reduced by more than 3.9%. The Town Manager reviewed the guiding principles that were influential in creating the proposed budget with an overall -0.5% reduction. The guiding principles include; sustainability, maintaining a strong financial position, regional opportunities, partnerships, and a direct customer services focus. The Town Manager's proposed FY12 budget will reduce the Community Services Department budget by -11.1%, Finance by -5.6%, DPW by -2.4%, Town Administration by -1.8%, and the Library by -0.5%. The Town Manager reviewed staffing levels across departments over the last few years and compared it to the FY12 staffing levels. The possibility of regionalization is being reviewed for the health, conservation and elder services. The proposed budget reduces the administrators of these departments to part time and these positions may be shared with other communities in the future. Staffing levels for conservation, health and elder services of other communities were also reviewed by the Town Manager. Professional development funds have been reduced in all departments. The seasonal appraiser position in the Finance Department will be eliminated. The public safety departments (Police, Dispatch and Fire) will keep the same number of full time employees, increase the overtime budget while professional development and other various expenses will also be reduced. One seasonal Parks employee will be reduced in the Public Works budget, overtime will be reduced and one of the engineer positions will move from the general fund into the storm water fund. The Library will close for 13 Saturdays in June, July and August, hours of support positions will be reduced and the materials budget will also be reduced. Several legislative actions are also proposed for the next year. The proposed legislative actions include rescinding the Reading Wetlands By-Law, amending the General By-Laws to require property owners to clear their own sidewalks of snow and ice, amendments to the Zoning By-Laws to streamline permitting, adopting an expedited permit process for the industrial areas off of Ash Street behind RMLD and reducing the Historical Demolition Delay By-Law. Several administrative actions will also take places such as implementing the new CAMA system in the Assessor's office, purchasing the new licensing and permitting software, and implementing a "carry in— carry out" for rubbish in parks and school grounds. In the concluding remarks on the FY12 budget Mr. LeLacheur noted that many of the suggestions from the October financial forum were implemented or are being considered. Overview of School Budget Dr. John Doherty summarized the major challenges of the FY12 budget which includes the unknown number of next year's kindergarten enrollment and the various large class sizes in certain grades. The district's priorities that played a role when developing the budget were protecting low class sizes in grades K-2, maintaining school facilities to control the long term operating costs of those facilities and maintaining regular day programs such as art, music, physical education and foreign language. Most of the American Reinvestment and Recovery Act (ARRA) funds over the last couple of years were used for recovery expenses such as special education program staff and circuit breaker reimbursement and investment expenses such as adaptive technology, professional development, and networking and 2 infrastructure. Personnel cuts to the school department workforce from FYI and FYI were reviewed. The FY12 budget will likely be reduced by 0.5%. To develop a 0.5% reduced budget for FY12 the school department will eliminate 6.3 FTEs of Paraeducators, eliminate 3.7 full time teachers, and reduce the hours at the high school after school fitness center. Budget Process Comments /Questions The FINCOM Chair explained that the Finance Committee will be reviewing the budget in March and the Board of Selectmen will hold a public meeting on Tuesday February 1st on the FY12 budget. The Chair also noted that many of the suggestions from the fall financial forums had been implemented and the status of the recommendations will be posted on the Town's website. Mr. LeLacheur asked the audience to communicate with members of the community not present tonight particularly Town Meeting members and strongly encouraged Town Meeting members to provide email addresses to stay informed with budget updates. One meeting member asked why the budgets for police and fire were increasing while the other departments were decreasing. The Town Manager responded that those departments are currently understaffed or at the right levels and the proposed cuts in other departments will allow town employees to receive step increases that were eliminated in the FYI budget. The Chair of the Council on Aging expressed concern about the proposed reductions and regional efforts in the elder services department. The Town Manager explained that the opportunities for regionalization will be with the administrative staff and he believes this can be accomplished as many other Town's have one administrator in larger communities. FINCOM member Paula Perry left the meeting. Capital and Debt Update Capital - Mr. LeLacheur reviewed capital spending for FY12 and the next 10 years. Forty Four million dollars is expected to be spent over the next 10 years but the capital spending for school buildings are projected to decrease after the recent school renovation projects. The Town will need to spend more on roads in the future since the spending is somewhat low now. Mr. LeLacheur explained that Reading is in good shape in terms of its capital budget and equipment. Debt Services —Mr. LeLacheur reviewed debt services and spending over the next several years. More money will be spent on roads and possibly the library renovation project in the future as a debt exclusion. A member of the FINCOM asked when the debt from the high school project will be paid and the Mr. LeLacheur answered that it will be paid by FY25. He also noted that Reading typically pays off debt more quickly than many other communities. The West Street design project will also be another expense expected in FY12 or FY 13. On a motion made by Mr. Bonazoli, seconded by Mr. Goldy, the Board of Selectmen voted to adiourn at 9:05 PM by a vote of 3-0-0. The Town Manager explained to the FINCOM that as of today's date the Town has exceeded the money appropriated in the FYI budget for snow and ice removal. Annual Town Meeting will be reviewing the snow and ice budget. On a motion made by Mr. Berman, seconded by Mr. Walsh, the FINCOM approved spending more than what was appropriated in the FY11 budget for snow and ice removal by a vote of 7-0-0. The FINCOM continued discussion about the FY12 budget and preparations for Town Meeting in April. The Committee discussed the possibility of a proposition 2 '/z override in the future. Committee members expressed concerns about continuing to spend free-cash as well as cutting services. The Committee should 3 take a careful look at the cash reserves and what services could possibly be eliminated. A couple members thought a proposition 2 '/z override attempt is likely for the FYI budget. It was suggested that a future override be discussed at Annual Town Meeting so that people are aware of it. The next FINCOM meeting is scheduled for February 9th when the Committee should discuss the message it will be presenting to Town Meeting. The Committee should be prepared to make a full presentation to Town Meeting. The March FINCOM meetings will take place at the Reading Municipal Light Department. On a motion by Mr. Greenfield, seconded by Mr. Dockser, the FINCOM approved the minutes of December 8, 2010 as written by a vote of 6-0-1 (Mr. Torman abstained). The FINCOM added a Monday meeting the last week in March to allow the Committee more time to review the budget and vote on the Town Meeting warrant articles. The Town Manager suggested the FINCOM prepare a letter and budget information packet be mailed to Town Meeting members by regular mail to keep everyone informed. A letter to the editor or other newspaper publication was also suggested by the Committee. On a motion by Mr. Greenfield, seconded by Mr. Berman, the FINCOM voted to adiourn at 9:48 PM by a vote of 7-0-0. Respectfully submitted, Recording Secretary 4