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Home My WebLink About2012-09-12 Finance Committee PacketFinance Committee Wednesday, September 12, 2012 at 7.30 PM Town Hall Conference Room Printer - Friendly Version Agenda Public Safety staffing levels Board of Assessors Role of Board, Committee, Commission & Department liaisons FINCOM liaison assignments FINCOM FY13 Meeting Schedule September Financial Forum review 00 la o October 10th Financial Forum planning Approve August 8, 2012 Minutes . •...M N l Town of Reading, Massachusetts 16 Lowell Street, Reading, MA 01867 Website Disclaimer Virtual Towns & Schools Website I of 1 gil�i�nl� �•SO n>v1 O� OFRp._' HEADQUARTERS a = READING FIRE DEPARTMENT Reading, Massachusetts 01867 ,sJefNC0P40p1, GREGORY J. BURNS, Chief 757 Main Street BUS. Phone: 781- 942 -9181 STA. Phone: 781 - 944 -3132 Fax: 781 - 942 -9114 TO: Mr. Robert LeLacheur, Assistant Town Manager/Finance Director FROM: Chief Gregory J. Burns DATE: September 12, 2012 RE: Fire and Emergency Management The Reading Fire Department is responsible for four major functions: fire suppression, fire prevention, the emergency medical system and emergency management. The Fire Department is also responsible to coordinate and apply for all reimbursements for State and Federal disaster declarations. The Reading Fire Department provides emergency medical treatment at the Advanced Life Support level (ALS) of care to sick and injured patients. This is the highest level of pre - hospital care available and we are continually expanding this program wherever possible. Emergency Management continues to expand in importance. The primary goal for Emergency Management is to identify areas of vulnerability to the community, to prepare for all disasters whether natural or manmade, to coordinate the response of a wide range of agencies and assist in the recovery phase. A secondary goal is to ensure the Town of Reading is in compliance with all Federal and State requirements to enable the community to remain eligible to receive reimbursement for Federal and State disaster declarations. As a result, this fiscal year the Town of Reading was eligible to receive reimbursement from the Federal Emergency Management Agency for the following declared disasters: Tropical Storm Irene: Q� • Town Reimbursement $20,779 October 29 -30, 2011 Severe Storm and Snowstorm: • Town Reimbursement $40,524.25 • Reading Municipal light Department has been approved to receive $306,545.89 Page 1 of 4 Department Staffing: The on duty shift is responsible to respond to emergencies, perform training, equipment maintenance and routine fire prevention duties. The Department staffs two fire engines, a ladder truck and an ambulance 24 hours per day. Ten positions are required each day for shift staffing. This coverage requires 21,900 hours of staff time per year. Below in Figure 1 is how personnel are assignment to fire apparatus. Fire Apparatus Personnel Engine 3 Engine 3 Ladder Truck 2 Ambulance 2 Total 10 Figure I Overtime Budget: The overtime budget is used to fill vacant positions due to mandatory EMS training requirements, vacations, sickness and injuries. Emergency incidents can also require the use of overtime. The overtime budget requirements are driven by several factors including: shift staffing requirements, department vacancies, injuries, emergency incidents and EMS training requirements. For example the Reading Fire Department incurs training costs for State required paramedic recertification requirements. Each paramedic is required to undergo 56 hours of training every other year. Our normal procedure is to train half the paramedics every year. Salary Budget Expended In FY 12: The Fire Department received a total of $110,000 in two transfers in FY 12. These funds were requested to cover a projected overtime deficit due to several Firefighter injuries, a Firefighter retirement and a long term medical issue that may lead to retirement. The Fire Department did not need to expend all of these funds and returned $26,839 back to free cash at the end of FY 12. See Figure 2. FY 12 Salary Budget Budget Salary Appropriated $3,614,943 Transfers to Overtime $110,000 Total FY Amended 12 Salary Budget $3,724,943 Total FY 12 Salary Expended $3,698,104 FY 12 Salary Budget Surplus (returned to free cash) $26,839 Total Transfer funds Required $83,161 Figure 2 Comparison of Reading Fire Department Overtime Costs to Other Departments: Below in Figure 3 the FY 12 overtime expenditures and FY 13 budgeted overtime of comparable fire departments and fire departments in our area are shown for comparison. The average overtime expenditure in FY 12 for these 14 departments was $483,212. The Page 2 of 4 O 3 Reading Fire Department's FY 12 expenditure was $380,514 (10.3% of our salary budget). Departments that provide emergency medical services are indicated with an ALS or BLS after the name of the community indicating the level of service they provide. Departments who provide Advanced Life Support (ALS) services have higher training costs due to the additional training requirements of maintaining paramedic certification than departments that do not provide emergency medical services, or provide Basic Life Support services (BLS). The Stoneham Fire Department has an insurance policy that provides coverage for an injured Firefighter. Under this policy when a Firefighter or Police Officer is out injured, Stoneham is eligible to collect up to $1,000 per week towards their salaries. Any funds received under this policy are deposited into the overtime account. • / -1 :il Itl 11 1.11 . r1 111 11 I11 If 111 11 Ii1 Ii Ii i 11 111 Fire Department Overtime Comparison FY 12 Actual and FY 13 Budget I of '��BPo \� , �° °* aF P °0 S \� °c v ■ Seriesl El Series2 Series 1: FY 12 Overtime Expended in FY 12 Series 2: Overtime Budgeted in FY 13 Figure 3 �r New Hire to Reduce Overtime Expenditures: A six month review of overtime was conducted in in FY 11 to examine Fire Department overtime expenditures. This study indicated savings were possible with the addition of one additional Firefighter. However, it was also determined that as the new Firefighter progressed through the step system, significant savings could not be guaranteed. Page 3 of 4 This data was reviewed again and broken down by month and Group. This review indicated additional savings could have been achieved by moving personnel to cover vacancies as they occurred on each Group. This savings could have been achieved during this this period because the injuries and illnesses did not occur at the same at the same time. Group - Variable Assign. Hours O.T. Hours O.T Rate O.T. Cost Firefighter Salary Savings Overtime 183 1,738 48.20 83,772 0 0 Firefighter Step 1 183 1,738 48.20 83,772 49,180 34,592 Firefighter Step 4 183 1,738 48.20 83,772 60,350 23,422 Firefighter w/De ree 183 1,738 48.20 83,772 63,080 20,692 Figure 4 Ambulance Revenue: The Reading Fire Department's emergency medical program in addition to delivering high quality patient care generates revenue from ambulance billing. The revenue received goes directly to the Town of Reading's general fund. In FY 12 we generated $590,308 in ambulance revenue. This revenue in effect reduces the cost of the Department. Below in Figure 5 is a chart of ambulance revenue for the last four fiscal years. Ambulance Revenue FY 09 FY 10 FY 11 i FY 12 Lil� $560 $570 $580 $590 $600 $610 $620 $630 $640 Thousands Figure 5 Page 4 of 4 & OFI�p� _ �C HEADQUARTERS READING FIRE DEPARTMENT Reading, Massachusetts 01867 GJ9. lNCOi��P� GREGORY J. BURNS, Chief 757 Main Street BUS. Phone: 781- 942 -9181 STA. Phone: 781 -944 -3132 Fax: 781- 942 -9114 Fire Department Overtime Comparison FY 12 Actual Expenditures and FY 13 Budgeted Overtime We're Your Friends for Life 1 Actual FY 12 Community Overtime FY 13 Budget EMS Level Stoneham * 246,367 228,000 N/A Winchester (ALS) 284,980 347,469 ALS Wakefield 301,340 140,000 N/A Melrose (BLS) 338,551 240,000 BLS Weston (BLS) 380,000 385,000 BLS Reading (ALS) 380,514 355,000 ALS Average 483,212 458,419 Walpole (ALS) 469,426 500,000 ALS Belmont (BLS) 492,407 465,000 BLS Woburn (BLS) 520,077 500,000 BLS Wilmington (BLS) 604,000 500,000 BLS Needham (ALS) 627,381 616,759 ALS Burlington (BLS) 646,881 580,000 BLS Lexington (ALS) 726,215 776,997 ALS North Reading ALS/BLS 741,354 783,636 ALS/BLS We're Your Friends for Life 1 Fire Department Overtime Comparison FY 12 Actual Overtime Expenditures and FY 13 Overtime Budget 900,000 77,771, 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 ZNII �N $ 'Ole - $ $ $ 10 \tI tP 0 I\e 0 V 01c, OIQI 0 41 ,�Pe 0 e N110 A 4F�� Series 1: FY 12 Overtime Expended in FY 12 Series 2: Overtime Budgeted in FY 13 ■Serlesl 0 Serles2 Jamee w Cormier Chid of Po&,- READING POLICE DEPARTMENT OFFICE OF THE CHIEF 15 Union Street, Reading, Massachusetts 01867 Emergency Only: 911 All Other Calls: 781 -944 -1212 Fax: 781- 944 -2893 E -Mail: JCormier @ci.reading.ma us Reading Police Overtime Summary The following table compares Reading Police staffing and overtime budgets / spending with peer communities. There are also tables and charts which describe Reading's historical overtime spending amounts, hours, and by types of overtime. The Peer Communities table shows that Reading budgets and spends less for overtime than comparable communities. Exact comparison between communities is not possible as each has unique staffing, salaries, priorities, and police services which impact overtime. However, looking at a group of similar communities across the region does show how Reading spends significantly less than its peers in this category. The Annual Overtime Spending and Hours chart shows the six year spending on Police Overtime for fiscal years 2007 — 2012 in dollars and hours. FY2012 was the first year in more than a decade when the department staffing was at 100 %. Predictably, the additional overtime spent over budget was lower than in previous years. Finally, Overtime by Type, is a pie chart which shows categorically how FY12 Overtime was spent. We use four major categories of overtime - Patrol Shift, Investigations /Court, Training, and special assignments. These percentages fluctuate from year to year but the FYI 2 numbers are representative of the amounts expected each year. We have been asked if adding officer(s) will reduce overtime. The answer is complicated as assignments in patrol can reduce overtime but as there are five different patrol groups, the department would have to assign five new officers to avoid some overtime. The cost of five benefitted officers approaches $500,000 annually — nearly double the entire overtime budget for the department. As the Overtime by Type chart shows, Shift overtime is only 60% of all overtime and adding staff would not reduce the other types. There are other considerations in our overtime profile. In the past three collective bargaining agreements some required training time has been added to the officer's scheduled commitment and vacation and sick time accruals have been reduced. These changes will reduce overtime. Conversely, the department needs to provide more training to maintain our expectations, and this training is no longer offered locally (Camp Curtis). Sending officers to training facilities in Lowell or Boston will increase our overall costs for training — including some increase in overtime. IN Overtime Budget and Actual FY07 -FY12 $350,000 Overtime Hours per Year 6000 5836 5750 5000 4595 4673 $300,000 3000 Mo 5000 2000 $250,000 1000 4500 0 FY07 FY08 FY09 FY10 FY11 FY12 ■ Hours $200,000 ... � Actual 3500 _Hours $150,000 $100,000 ■ Budget $50,000 ■ Actual $ ■ % Over FY07 FY08 FY09 FY10 FY11 FY12 ■ Budget $192,312 $197,120 $207,372 $207,000 $227,000 $246,000 Actual $250,543 $281,625 $301,853 $318,163 $315,852 $278,302 ■ °. Over 130.28% 142.87% 145.56% 153.70% 139.14% 113.13% 7000 Overtime Hours per Year 6000 5836 5750 5000 4595 4673 4000 3000 Mo 5000 2000 0 1000 4500 0 FY07 FY08 FY09 FY10 FY11 FY12 ■ Hours $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 Annual Overtime Spending & Hours FY07 FY08 FY09 FYIO FY11 FY12 i .000 5500 M Mo 5000 0 ir 5— 1 4500 r■■■■�:.:. ... � Actual 3500 _Hours FY07 FY08 FY09 FYIO FY11 FY12 i 5 B C D E I F H I J K I L IMI N 1 0 1 Q 1 Reading H Police Overtime Comparison of Peer Communities O O O 'T ,% °�o o O 2 Winchester $ 2,914,145 t o # a Q � � y aO > 4 z9 Q. M aQa z o L 3 , C/D 30 > > 14. A& u .Q a I/H J/H ,a L/K 4 5 Belmont 6 Lexington 7 No. Andover 8 No. Reading 9 Stoneham 10 Tewksbury 11 Wakefield 12 Westford 13 Weston 14 Wilmington 15 Winchester 24729 4.65 53181 47 1 $ 3,168,845 $ 285,843 $ 350,413 $ 3,430,601 $ 285,843 31394 16.43 1911 48 $ 3,629,074 $ 570,015 $ 722,911 $ 3,710,464 $ 570,219 28487 27.80 1025 40 $ 2,914,145 $ 291,115 $ 295,468 $ 2,964,688 $ 315,000 14892 13.50 1103 30 $ 2,297,180 $ 541,550 $ 643,702 $ 2,242,138 $ 702,148 214371 6.02 3561 36 $ 2,587,588 $ 279,000 $ 273,542 $ 2,719,691 $ 279,000 28961 21.10 1373 55 $ 3,832,023 $ 238,103 $ 335,000 $ 3,908,663 $ 245,000 24932 7.36 3388 44 $ 3,385,299 $ 464,952 $ 464,952 $ 3,560,413 $ 471,235 21951 31.30 701 41 $ 3,213,631 $ 323,188 $ 303,818 $ 3,213,631 $ 323,188 11261 17.30 651 25 $ 2,228,170 $ 272,852 $ 473,960 $ 2,249,196 $ 289,151 22325 116.98 1315 48 1 $ 3,657,586 $ 445,000 $ 475,000 $ 3,947,947 $ 475,000 21374 16.03 3545 1 38 $ 3,110,138 $ 200,200 $ 467,900 $ 3,160,025 250,200 9.02% 11.06% 8.33% 15.71% 19.92% 15.37% 9.99% 10.14% 10.63% 23.57% 28.02% 31.32% 10.78%1 10.57% 10.26% 6.21% 8.74% 6.27% 13.73% 13.73% 13.24% 10.06% 9.45% 10.06% 12.25% 21.27% 12.86% 12.17% 1 12.990 12.03% 6.44% 1 15.04% 171 Averages 122886 1 15 12172 1 41 $ 3,093,062 1 $ 355,620 1 $ 436,970 1 $ 3,191,587 1 $ 382,362 11.50% 1 14.13% 1 11.98% 19 Reading 247471 9.95 12487 1 41 $ 3,207,0411 $ 246,000 1 $ 278,302 1 $ 3,250,166 1 $ 275,000 I 1 7.67% 1 8.68% 1 8.46% 1 20 Reading +/- 1861 -5.37 315 0 $ 113,979 $ (109,620) $ (158,668) $ 58,579 $ (107,362) -3.83% -5.45% -3.52% 21 22 * From 2010 US Census data. quickfacts.census.gov 23 Highest value 24 Lowest value 25 Reading value is below the average FY12 Overtime by type $26,265,9% $16,606,6% ■ Patrol Shift Coverage ■ Investigation / Court ■ Training ■ Special Assignments $69,880, 255/. $165,551, 60% 6 FY12 % of total Patrol Shift Coverage $ 165,551 59.49% -k � ^ Investigation / Court $ 69,880 25.11% Training $ 16,606 5.97% Special Assignments $ 26,265 9.44% $ 278,302 100.00% 6 Town of Reading 16 Lowell Street Reading, MA 01867 -2685 ASSISTANT TOWN MANAGERXINANCE DIRECTOR (781) 942 -6636 FAX: (781) 942 -9037 Email: finance &i.reading.ma.us To: Finance Committee Date: August 1, 2012 Re: Assessors update At your meeting on August 8th I will review the following areas listed below: ➢ Inter - Municipal Agreement approved and signed by the Boards of Selectmen in Reading and Wakefield. Agreement runs until December 2013, with a review in December 2012. If a full regional agreement is desirable after this period, it will require a vote of Town Meetings. ➢ New shared Appraiser Victor Santaniello will attend a FINCOM meeting after he drafts a financial and management plan of how the Assessing function should be run in Reading. This will be a multi -year plan. ➢ The software conversion has been slowed by some sketch conversion issues. It is now expected to be completed by August 8th. This will challenge Finnegan (see below) to complete the work by September 1St however that deadline, while contractual, is not urgent to meet the DOR time frame. Aoorooriation Town Meeting $ 24,000 FINCOWBOS $ 133,400 $ 157,400 Budgets Actual Diff. Personal Property $ - $ 6,500 $ (6,500) Full review 3,600x $27 $ 97,200 $ 94,680 $ 2,520 Field review 7,500x $8 $ 60,200 $ 28,700 $ 31,500 $ 157,400 $ 129,880 $ 27,520 ➢ Personal Property: in mid -July an invoice for $6,500 was received for FY12 work done. It was authorized by the prior Appraiser and by the Board of Assessors. No funding was in place, and no discussion with Town staff occurred. The exact same thing happened one year earlier when Assessing staff was lectured about the budget process. In FYI I surplus Finance funds covered this expense. FY12 was covered by surplus in the two inspections listed below. If there was not a surplus this would have required Town Meeting vote to pay a prior year's bill. ➢ Full review: Previous: March 2012 BOA RFP for 3,600 parcels awarded to Patriot Properties. Work to commence fall 2012 through April 2013. ➢ Field review: June 2012 Finance RFP awarded to Finnegan Appraisal. Test runs begun, awaiting final data from Patriot for live runs. Work to be completed early fall 2012. �L LeLacheur, Bob From: Hechenbleikner, Peter Sent: Tuesday, August 21, 2012 4:03 PM To: LeLacheur, Bob; Angstrom, Sharon; Burns, Greg; Cormier, Jim; Delios, Jean; Urell, Ruth; Zager, Jeff Subject: RE: FINCOM request The FINCOM liaison should always get a copy of the agendas — Electronically, and should get a copy of the full packet if that is also available electronically. Other than that I think they should be on call if needed, and perhaps plan on attending a meeting every 6 months to a year to allow the BCC to put a face with a name. They should not get drawn into non financial matters. Here is a copy of the Board of Selectmen policy on liaison roles, and the Board of Selectmen has a lot more to do with operations and policy of the various BCC (they appoint most of them) than the FINCOM has. C. Board of Selectmen Liaisons: I. The purpose of establishing Board of Selectmen liaisons to the various Departments is to maintain good communication and effective working relationships between other Boards, Committees and Commissions and the Board of Selectmen. 2. Liaison assignments shall be established by the Board of Selectmen on a yearly basis. 3. It is the Board of Selectmen's intention that every Board, Committee or Commission will have an assigned Board of Selectmen liaison each year. 4. Board of Selectmen roles as liaisons: (a) To attend as many meetings of the Board, Committee and Commission as possible; (b) To assist the Board, Committee or Commission where there is a problem with attendance of any member; (c) To act as a resource person for the liaison Board, Committee or Commission regarding Selectmen's issues; (d) To particularly understand and communicate to the full Board of Selectmen issues which affect budgets and other areas of concern of the Board, Committee or Commission; (e) To adhere to Policy 1.1.4 - 4 when dealing with staff support for the liaison Board, Committee or Commission. Peter I. Hechenbleikner Town Manager Town of Reading 16 Lowell Street Reading MA 01867 Please note new Town Hall Hours effective June 7, 2010: Monday, Wednesday and Thursday: 7:30 a.m - 5:30 p.m. Tuesday: 7:30 a.m. - 7:00 p.m. Friday: CLOSED phone: 781 - 942 -9043 fax 781 - 942 -9071 web www.readingma.gov email town manager(cD_ci. reading. ma. us Please let us know how we are doing - fill out our brief customer service survey at 1 N� http:/ /readingma- survey virtualtownhall. net /survey /sid /7c8844ebldecdO98/ From: LeLacheur, Bob Sent: Monday, August 13, 2012 9:25 AM To: Angstrom, Sharon; Burns, Greg; Cormier, Jim; Delios, Jean; Hechenbleikner, Peter; LeLacheur, Bob; Urell, Ruth; Zager, Jeff Subject: FINCOM request Last week FINCOM discussed their role as liaisons to Town departments as well as various BCCs. They noted that some relationships (schools, library) are more formal with agendas and minutes as a regular occurrence, and at the other extreme some only require FINCOM attention when there is a specific problem or issue. They are interested in feedback from us as to what these relationships should be to be most beneficial to everyone concerned. For example they are willing to divide up Comm Services into groups of BCCs; and add anything from other departments that we deem to be missing. I would suggest we tie them in to agendas and minutes of all relevant BCCs — we can do that more easily through Laserfiche (minutes) but will need to be proactive for meetings & agendas. Below is a list of current liaisons: BOS - Greenfield Schools — Berman, Herrick, Torman RMLD - Dockser Acc/Fin dept - Greenfield Audit Comm — Greenfield, Berman Board of Assessors — Greenfield, Perry Comm Services - Borawski Econ Devel - Torman Public Safety — Borawski, N ari Public Works — Dockser Library - Perry )\,kvmY, I'd like your feedback by the first week of September. Thanks, Bob Robert W. LeLacheur, Jr. CFA Assistant Town Manager /Finance Director Town of Reading 16 Lowell Street Reading, MA 01867 (P) 781 - 942 -6636 (F) 781 - 942 -9037 (e) finance @ci. reading. ma. us (w) www.readingma.gov Please fill out our brief customer service survey at: http:/ /readingma - survey. virtualtownhall. net/surve ylsid/7c8844eb 1 decd0981 Town Hall Hours: Monday, Wednesday and Thursday: 7:30 a.m - 5:30 p.m. 2 FINCOM FY13 Schedule (All meetings are Wednesday at 7:30pm in Town Hall, unless noted) 2012 Aueust 8 regular meeting September 10 Financial Forum I (at Coolidge MS) September 12 regular meeting September 25 Warrant closes for November Town Meeting October 10 Financial Forum 11 (at the Senior Center) October 17 regular meeting (TM Warrant Articles) November 13- I5 -19 -26 Subsequent Town Meeting (begins Tuesday at RMHS) December 12 regular meeting 2013 January School Committee School budget meetings (7: 30pm at RMHS) Januaryl5 -22 Selectmen Town budget meetings (Tuesday 7pm — location TBA) February 6 regular meeting February 26 Warrant closes for April Town Meeting March 6 FYI Budget Meetings March 13 FYI Budget Meetings March 20 FYI Budget Meetings March 27 FYI Budget Meetings April 2 Local elections April 22 -25 -29 -May 2 Annual Town Meeting (begins Monday at RMHS) June 26 Year -end meeting 0 The Town of Reading - Financial Forum 1 nttp://www.reaaingnia.gov/rages/meauingivi,fA,_ivieetingk-iii/ 3v i Y3ovy.. Goo* Search -- fxr+c�� _ '11Th 14 Ip�TtPAM Financial Forum I Monday, September 10, 2012 at 7:00 PM Coolidge Middle School Community Room Printer - Friendly Version Joint meeting of the Finance Committee, Board of Selectmen and the School Committee to discuss School space needs. UPDATE: Please note the location is Coolidge Middle School Community Room. The Financial Forum portion of this meeting is expected to begin approximately 7:30pm. DRAFT Agenda Joint meeting: School Committee Board of Sdectmm FiNCOM Board of ilAibrary Board bloody, Svft=bea 1k X12 A WWv mum Schad Carom mar loom >, Wiwi 1001,00 Drhe moat K& L Cog to order • 8dmd Camdttm ♦ saw Of 3decows . va�ooat . BeaedofL4rsryil�sma L hoodWas es S A Conduce dwMan to move so m m t ar dal Kodergarlm asd egnWae of iory chidhaad peo�ame 3. Spew kaalw . N atChme.om• weaea • eapa ft at 4dgftg SMoenaael Sehook • C•strsaw Meaty. ♦ UnotmadsLrdmeraamt -emwpa yerpermawst 4. rhWWW ham CAPM • OpaaasS • StahAid— aapaisap s • Nwd hr kwuNW ai speraft amdkg ♦ Stab Aid —C4M (ASS► KNgWW S. I1ma Lrsa • Dedn6la ♦ RnBsdc ♦ 7Ympwar7 R permanent spars nhdon L pmmn ,f Schad Cmmutee decides se edocaden ♦ Pbmdd ♦ CMPtedP • OPIN+URs PINE ♦ Scud Enndi g OommimeeT % Not St" t Adjears 1� A /^/NAln IA.IO Al (31 � __- Search, g-, a-11, I.- 2 �ITwVYR pl A,..d T to A)09 Financial Forum Wednesday, October 10, 2012 at 7.00 PM Senior Center Printer- Friendly Version Joint meeting of the Finance Committee, Board of Selectmen, School Committee and Library Trustees to discuss the FY14 budget and other financial issues. DRAFT Agenda Call to order & FINCOM opening remarks Recap of FYI revenues Recap of free cash and reserves Projected FY14 revenues Update on Capital Preliminary FY14 accommodated costs Discussion: Use of free cash FY14 Operating Budget guidance FINCOM closing remarks Town of Reading, Massachusetts 16 Lowell Street, Reading, MA 01867 Website Disclaimer Virtual Towns & Schools Website I of 1 n /17 /rfn l'1 C.nA "LA DRAFT Policy on Funding Other Post Employment Benefits (OPEB) Finance Committee June 2012 The Finance Committee ( FINCOM) of the Town of Reading hereby establishes and adopts a Policy establishing a minimum target for annual OPEB funding in both the General and Enterprise funds (as defined below). Further, the FINCOM recognizes that circumstances may occur which would require the FINCOM to raise or lower this minimum from time to time. The FINCOM recognizes that the financial health of the Town of Reading is of paramount importance to its residents who receive essential services; to its bondholders who provide funding for long -term Town projects; to its vendors who provide services and equipment to the Town; and to its current and retired employees. This Policy on OPEB funding is designed to protect the community from a) the near - term budget impact of a sudden change in law that would require such funding; and b) the longer -term need to reduce a large liability. Health Insurance Premiums are defined as the best estimate from the Town's financial staff by early November of the cost of the Town's share of employee and retiree premiums for the following fiscal year. General Fund OPEB contribution: Not less than 5% of the estimated premium costs for employees and retirees covered by the general fund will be set aside in the following fiscal year as a preliminary OPEB contribution. It is expected that the estimate will be improved by mid - February when final premium rates are released. The preliminary OPEB contribution may be then adjusted higher or lower when final premium rates vary from the initial estimate. This policy will help cushion the budget process from any late adverse impacts of changes to health insurance premiums. Enterprise Funds OPEB contribution: These funds are expected to fully fund the OPEB liability annually, according to an actuarial schedule agreed to by the Town's financial staff, and a funding term not to exceed thirty years. C\�% From: bettergov @aol.com jmailto:bettergovOaol.com] Sent: Tuesday, May 01, 2012 9:37 PM To: Bettergov@aol.com Subject: OPEB I am speaking on OPEB at the upcoming MGFOA meeting. Please respond to the following questions ASAP but no later than this Friday. Please respond to Bettergov(cbaol.com 1. Have you accepted Chapter 32B section 20 to establish an Other Post Employment Benefits Liability Trust Fund? YES 2. If you have not accepted 326:20, what have you adopted (i.e., special legislation, home rule petition, stabilization) for OPEB? 3. Do you have an irrevocable OPEB trust agreement? YS 1� 4. Are you funding your OPEB ARC? NO 5. Have you irrevocably transferred assets to the OPEB trust? YES - $920,000 at April 2012 Town Meeting 6. Who is the custodian of the OPEB fund? Town Treasurer 7. In what instrument(s) are you investing OPEB funds? To be determined, hoping for state law to allow PRIT 8. What investment rate is used in your actuarial study? 7.75% 9. What is the one major OPEB issue your community is facing? To get on a full funding schedule before the pension is up to 100% Thank you. Mark Abrahams, CPA President, The Abrahams Group 508 788 -9172 phone 508 788 -6217 fax 617 803 -8529 cell BettergovO-aol.com www.theabrahamsgroup.com I , Finance Committee Meeting August S, 2012 The meeting convened at 7:35 p.m. in the Town Hall Conference Room, 16 Lowell Street, Reading, Massachusetts. Present were Chairman David Greenfield, Vice Chairman Barry Berman, FINCOM members Jeanne Borawski, Marie Ferrari, Hal Torman and Assistant Town Manager/Finance Director Bob LeLacheur. Members absent were Mark Dockser and Paula Perry. Karen Herrick arrived 7:45pm. Mr. Greenfield called the meeting to order. Mr. LeLacheur reviewed the proposed FINCOM FYI meeting calendar. He added that there would be two additional tentative meetings — one to include Chairs & Vice Chairs on September 6th and a full Financial Forum on September 10th . Each meeting would contain a single agenda item — school space needs. The School Committee is expected to conclude their deliberations on the subject by August 27th or August 30th. Assessors Karen Herrick joined the meeting. Mr. LeLacheur reviewed developments in the Assessor's function since the last update on June 27th. Highlights included two signed contracts: (1) the Full Review with Patriot Properties (October 2012'— April 2013) and (2) the Field Review with Finnegan Appraisal (current through September 2012). The latter came in greater than $30,000 under budget. Also, the Boards of Selectmen in both Reading and Wakefield approved an inter - municipal agreement to share the services of Appraiser Victor Santaniello, who has already begun work in Reading. Lastly, Finance staff in mid -July became aware of a $6,500 invoice for personal property work completed in the spring of 2012 that was not funded or previously known, except by the prior Appraiser and the Board of Assessors. Surplus funds from the Field Review RFP are able to pay for this service. Mr. Greenfield stated that he met with DOR Chief of the Bureau of Local Assessment Marilyn Browne and one of her staff members. He reported that no one model works the best across the state in the assessing function. He expressed concern about a locally elected Board of Assessors with the power to appoint staff. She agreed that this presented a single point of failure, but that could be offset by a value placed on the independence of the Board of Assessors. Mr. Berman asked the committee what changes should be made? Ms. Herrick stated that from her past work on the ad hoc Tax Classification Committee as well as her professional Real Estate background that term limits should be encouraged. She said the lack of turnover on the Board caused it to lose focus on current practices and changes in the industry. The committee discussed the need for further changes and if a discussion at Town Meeting would be in order. Mr. Berman asked Mr. LeLacheur to get some Personal Property tax history, and Mr. Greenfield tabled further discussion until FINCOM's September meeting. FINCOM Organization Mr. Greenfield turned the meeting over to Mr. LeLacheur who opened the floor for nominations for FINCOM Chair. Mr. Berman placed the name of David Greenfield into nomination, and Mr. LeLacheur closed the nominations to a FINCOM 6 -0 -0 vote when no others appeared. On a motion by Ms. Ferrari seconded by Mr. Torman FINCOM elected Mr. Greenfield as Chair by a vote of 6 -0 -0. Mr. Greenfield opened the floor for nominations for Vice Chair. Ms. Ferrari placed the name of Barry Berman into nomination, and Mr. Greenfield closed the nominations to a FINCOM 6 -0 -0 vote when no others appeared. On a motion by Ms. Ferrari seconded by Ms. Herrick FINCOM elected Mr. Berman as Vice Chair by a vote of 6 -0 -0. On a motion by Ms. Ferrari seconded by Ms. Herrick FINCOM elected Mr. Greenfield and Mr._ Berman as representatives to the Audit Committee by a vote of 6 -0 -0. FINCOM discussed their role as liaisons to Town departments as well as various BCCs. They noted that some relationships (schools, library) are more formal with agendas and minutes as a regular occurrence, and at the other extreme some only require FINCOM attention when there is a specific problem or issue. They asked Mr. LeLacheur to follow up with the Town departments as to what the best relationships should be. Following is a list of current liaisons: BOS — Greenfield; Schools — Berman, Herrick, Torman; RMLD — Dockser; Acc/Fin dept — Greenfield; Audit Comm — Greenfield, Berman; Board of Assessors — Greenfield, Perry; Comm Services — Borawski; Econ Devel — Torman; Public Safety — Borawski, Ferrari; Public Works — Dockser; and Library — Perry. Building Projects Mr. LeLacheur reviewed the status of the Library renovation project. He pointed out a 90 -day maximum time frame between a Town Meeting and special election. Mr. Greenfield said that he'd like to get the pulse of Town Meeting in November and then have a special election before the local elections. Mr. Berman pointed out that a special Town Meeting would be cheaper to hold, the focus on one issue would be better, and then it could tie in to the April local elections. Mr. LeLacheur also reviewed the Killam building project. OPEB Mr. LeLacheur reviewed the DRAFT FINCOM OPEB policy. Mr. Greenfield stated a desire to not decide the matter tonight but to review the merits. Mr. LeLacheur reminded FINCOM that approximately $2 million per year would be required to fund the actuarial cost of the general fund's obligation on a thirty -year schedule. He noted the draft policy of 5% of prior year health care premiums was about 25% of this amount. Mr. Greenfield was concerned with any policy that removes flexibility from the budget process, in light of expected trickle -down effects from less spending by the federal government. He stated that Reading was positioned as well as possible for what might follow. Ms. Ferrari asked if a 3% to 5% band might instead be considered? Mr. Torman said he thought the discipline of a formal policy was important. Mr. Berman agreed that it had served us very well in capital planning over the past few years of decreased revenue growth. Ms. Borawski noted that the DRAFT policy allowed FINCOM to increase or decrease the amount in any year. This flexibility should address Mr. Greenfield's concerns about possible impacts from the federal government. Mr. LeLacheur noted that the 5% was set aside in the fall in the early parts of the budget process. In late January, if actual health insurance premiums were higher than forecast in the budget, this 5% would serve as a cushion to fund those premiums. Two years ago last- minute cuts to school and town operating budgets were needed when health insurance came in higher than estimates. If the cushion were not needed, then it would be available to fund OPEB. Mr. LeLacheur briefly reviewed the S &P handout about the growing importance of management in terms of municipal bond ratings. The committee discussed various specific points raised by Ms. Borawski in an email. Mr. LeLacheur noted that the ratings agencies often prefer flexibility in spending plans, as most municipalities do not have the discipline that Reading has to be fiscally prudent during difficult economic circumstances. Thus the 5% capital policy can be seen in a negative light because it takes away operating revenues. The recent emphasis towards management in ratings criteria is an acknowledgment that communities with fiscal discipline, such as Reading for example, may well be able to keep up with capital needs during such difficult times without creating other long -term liabilities. Mr. Greenfield said he was concerned that the series of recent operating budget cuts could not be continued indefinitely into the future. He asked to circulate a word document of the OPEB policy to FINCOM for further discussion. He also asked for town staff to survey other communities for OPEB data. Ms. Borawski asked for additional discussion of enterprise fund revenues as part of the next budget process. On a motion by Mr. Greenfield seconded by Mr. Berman, FINCOM approved the minutes of June 5th as amended by a vote of 5 -0 -1 Berman abstaining). On a motion by Ms. Ferrari seconded by Ms. Herrick, FINCOM approved the minute! a vote of 6 -0 -0. On motion by Mr. Torman seconded by Mr. Berman the Finance Committee voted to adjourn it's meeting at 9:20 p.m. by a vote of 6 -0 -0. Respectfully submitted, Secretary 2z% 900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 Fire Department Overtime Comparison FY 12 Actual and FY 13 Budget h� �e Ai� �P 11�o _ I, 4 Seriesl 0_ � Series2l3 ` ar Community Stoneham * Winchester (ALS) Wakefield Melrose (BLS) Weston (BLS) Reading (ALS) Average Walpole (ALS) Belmont (BLS) Woburn (BLS) Wilmington (BLS) Needham (ALS) Burlington (BLS) Lexington (ALS) North Reading ALS/BLS Actual FY 12 Overtimf FY 13 Budget EMS Level 246,367 228,000 N/A 284,980 347,469 ALS 301,340 140,000 N/A 338,551 240,000 BLS 380,000 385,000 BLS 385,991 355,000 ALS 483,212 458,419 469,426 500,000 ALS 492,407 465,000 BLS 520,077 500,000 BLS 604,000 500,000 BLS 627,381 616,759 ALS 646,881 580,000 BLS 726,215 776,997 ALS 741,354 783,636 ALS/BLS Belmont Lexington No. Andover No. Reading Stoneham Tewksbury Wakefield Westford Weston Wilmington Winchester a b t 1< jxj� O C� O rp h O O +�. Average nr, o ate, o O Z O o \° kk sworn pay 24729 4.65 5318 47 $ 3,168,845 $ 285,843 $ 350,413 $ 3,430,601 $ 285,843 $64,893 9.02% 11.06% 22.59% 8.33% 31394 16.43 1911 48 $ 3,629,074 $ 570,015 $ 722,911 $ 3,710,464 $ 570,219 $71,005 15.71% 19.92% 26.82% 15.37% 28487 27.80 1025 40 $ 2,914,145 $ 291,115 $ 295,468 $ 2,964,688 $ 315,000 $64,031 9.99% 10.14% 1.50% 10.63% 14892 13.50 1103 30 $ 2,297,180 $ 541,550 $ 643,702 $ 2,242,138 $ 702,148 $61,643 23.57% 28.02% 18.86% 31.32% 21437 6.02 3561 36 $ 2,587,588 $ 279,000 $ 273,542 $ 2,719,691 $ 279,000 $70,853 10.78% 10.57% -1.96% 10.26% 28961 21.10 1373 55 $ 3,832,023 $ 238,103 $ 335,000 $ 3,908,663 $ 245,000 $64,662 6.21% 8.74% 40.70% 6.27% 24932 7.36 3388 44 $ 3,385,299 $ 464,952 $ 464,952 $ 3,560,413 $ 471,235 $65,924 13.73% 13.73% 0.00% 13.24% 21951 31.30 701 41 $ 3,213,631 $ 323,188 $ 303,818 $ 3,213,631 $ 323,188 $65,604 10.06% 9.45% -5.99% 10.06% 11261 17.30 651 25 $ 21228,170 $ 272,852 $ 473,960 $ 2,249,196 $ 289,151 $73,195 12.25% 21.27% 73.71% 12.86% 22325 16.98 1315 48 $ 3,657,586 $ 445,000 $ 475,000 $ 3,947,947 $ 475,000 $65,823 12.17% 12.99% 6.74% 12.03% 21374 6.03 3545 38 $ 3,110,138 $ 200,200 $ 467,900 $ 3,160,025 $ 250,200 $63,488 6.44% 15.04% 133.72% 7.92% $ 72,992 $ 77,301 $ 74,117 $ 74,738 $ 75,547 $ 71,067 $ 80,918 $ 78,381 $ 89,968 $ 82,249 $ 83,159 11 Averages 22886 15 2172 41 $3,093,062 $ 355,620 $ 436,970 $3,191,587 $ 382,362 $66,465 11.50% 14.13% 22.88% 11.98% $ 78,222 Reading 24747 9.95 2487 41 $ 3,207,041 $ 246,000 $ 278,302 $ 3,250,166 $ 275,000 $67,100 7.67% 8.68% 13.13% 8.46% $ 79,272 Reading + /- 1861 -5.37 315 0 $ 113,979 $(109,620) $ (158,668) $ 58,579 $(107,362) $ 635 -3.83% -5.45% -9.74% -3.52% $ 1,051 * From 2010 US Census data. quickfacts.census.gov Highest value Lowest value Reading value is below average