Loading...
HomeMy WebLinkAbout2015-01-21 Finance Committee Minutes`J C � OFN c Town of Reading 10 -,' � ; Meeting Minutes ca �° 4naaoavoe` Board - Committee - Commission - Council: Finance Committee Date: 2015-01-21 Time: 7:30 PM Building: Pleasant Street Senior Center Location: Great Room Address: 49 Pleasant Street Purpose: Financial Forum Attendees: Members - Present: aECEIVEO (OWN CLERK '.DING. MASS. NIS MAR -9 A 4 53 Chairman Mark Dockser, Vice Chair Paula Perry, Members Peter Lydecker, Paul McNeice, Anne Landry, Craig Merry, Karen Herrick, and Marc Moll. Members - Not Present: Others Present: Town Manager Bob LeLachuer, Assistant Town Manager Jean Delios, Police Chief Jim Cormier, Deputy Police Chief Mark Segalla, Fire Chief Greg Burns, Superintendent of Schools John Doherty, Director of Finance of Schools Martha Syburt, Community Development Director Jessie Wilson, Recreation Director John Feudo, Director of Public Works Jeff Zager, Assistant Director of Public Works Joe Huggins, Business Administrator Jane Kinsella, Administrative Assistant Caitlin Saunders, Board of Selectmen Members John Arena, John Halsey, and Kevin Sexton, School Committee Members Chris Caruso, Chuck Robinson, Jeanne Borawski, Gary Nihan, and Elaine Webb, Board of Library Trustees Vicky Yablonsky, residents Pete Torell, Steven Zessis, Kristen Roberts, Elizabeth Gustaysen, Jennifer Hillery, Kate Grant, Denise Ewald, Heather Stepler, Nancy Docktor, Kevin Cashin, Alice Collins, Cherrie Dubois, Linda Snow Dockser, John Brzezenski, Mary Pastore, Lauren Dahm, Ashley Quinn, Sean Quinn, Dan Tremblay, Beth Tremblay, Ryan Morgan, Sarah Doane, Kate McLeod, Ben Tafoya, Rebecca Ward, Jessica Kaufman, Mark Liteplo, Kate DePalma, Elain O'Dea, Chris Copeland, Brian Souza, Christine Lotterhand, Steve Therrien, Heather Clish, Reginald Nichols, Bill Brown, Greg Richardson, and Barry Berman. Minutes Respectfully Submitted By: Topics of Discussion: Chairman Mark Dockser called the meeting to order. Mr. Dockser first wanted to go over how the budget process works in terms of the Finance Committee. He stated FINCOM reviews budgets and reports to Town Meeting. FINCOM sets budget guidance. Reading is doing a good job with their reserve funds, we are at the top of peer communities and we also received a Triple A Bond rating, which is the best you can receive. ® Mr. LeLacheur stated costs are going up faster than revenue and we cannot sustain them much longer. FY16 will require meaningful cuts and FY17 will be even worse. FINCOM has a 5% minimum for reserves but may be time to rethink that number. Page I 1 Finance Committee Minutes - January 21. 2015 - pace 2 Mr. LeLacheur discussed Prop 2 y2 which limits increases in property tax to a maximum of 2.5% per year on existing stock. It essentially forces local government to set priorities and rely heavily on state aid. Historically there's an override every 10 years, we are currently at 12 years without one. New growth brings more people to town but also puts a strain on current services. Town Accountant Sharon Angstrom said our reserves are at 7.7 Million. Our projected revenues for FY16 are an increase in property taxes by 3.3% and Increase in local revenue by 3.6%. No significant changes. The health insurance RFP came in at 8.2% which is good because we budgeted for 8%. The town also received $300,000 in funds from the state for roads. Ms. Angstrom explained the operating budget can only go up 2.75% in FY16 if we use that $1.7 Million free cash number. Borrowing will be going down because we just borrowed $11 Million for the library out of the $13 or $14 million total. Revolving funds have limited amount of uses which Is why it's not included in the cash number. We have regenerated around $1 Million dollars each year the past couple of years however, we cannot rely on that to happen again because it is an unknown. Superintendent of Schools Dr. Doherty explained the school budget. He noted the budget ®drivers were salary/benefits for employees, an increase in Special Ed, and non-union salary increases. He noted they made a reduction in substitute teachers and increased athletic fees. Dr. Doherty said they are trying their best to keep cuts out of the classroom but won't have a choice if it continues the way It is. FY17 will be the breaking point for continuing all of the services we offer today Dr. Doherty stated they will not need more staff for the new modular classrooms so it would not affect the budget that way. He noted the schools fall short providing non -sped help for struggling students. Dr. Doherty said there is a growing gap between expectations of schools and services being provided. Mr. Dockser said this is why we need to sort out the towns priorities to figure out what we want, as a town. Mr. LeLacheur stated the level of service gap on the Town side is large as well. The balanced budget took a $1 million hit. He noted FY16 will be tolerable but FY17 will be a hard struggle. He also mentioned the elderly are a growing population in Reading and we are struggling to provide the services they need. Mr. LeLacheur noted we need to figure out what the Town wants to be versus what we're willing to pay for. Our level of services will go down in FY17 if we don't get a random, positive surprise in the budget. Barry Berman asked if the town has a conservative state aid number because there is a Aft shortfall in the state budget that may Impact us. Mr. LeLacheur answered state aid will probably be shorter than 2.5% which is what we budgeted for. He noted there is a serious problem at the state level but there Is no immediate impact to Reading. Pege 12 Finance Committee Minutes - January 21 2015 - paae 3 Dr. Doherty then went on to present the School Committee's presentation asking for modular classrooms. He explained three elementary schools have a large incoming population that requires more space. He noted there has been a steady Increase in enrollment for full day kindergarten over the past couple years and they need space to put them or else they are going to have to do a lottery system. Nancy Docktor of Pearl Street said other states have had lawsuits over charging for full day kindergarten so she does not think it is responsible for the town to fund this when we can't count on tuition if Mass ever has a lawsuit and we have to stop charging. Mr. Caruso wanted to note that having tuition free Kindergarten would not change our Chapter 70 funding as we thought it would, because Reading makes too much money. Dr. Doherty noted that is also why we are only getting $25/ per student from State Aid. Mr. Arena stated if we are not going to get a lot of State Aid why wouldn't we make it available to as many students as possible so we can pull in their tuition. Mr. LeLacheur noted that if we were to offer free full day kindergarten it would cost about $120 extra per household to taxpayers. Mr. McNeice said there seems to be such a high demand for full day kindergarten with parents willing to pay the tuition, why would we not make space for those kids? Mr. Dockser asked if they have looked Into costing for used modular instead of buying brand new ones. ®Ms. Syburt stated she only found one vendor that has used modulars and they would be available in March which would be good for our timeline, however she does not have the cost differences for those. She also noted the life expectancy of a modular that is taken care of is 20-25 years. Assistant Town Manager Jean Delios noted that the modulars are considered structures and would need to follow all building codes. Fire Chief Greg Burns noted that It is too early to have any concerns other than making sure there is fire access to all modulars. Ms. Herrick made a motion to recommend Article 5. second by Ms. Perry. and approved with an B-0-0 vote. Ms. Perry will report to Town Meeting on Article 5. Ms Herrick made a motion to recommend Article 6. second by Ms. Landry, and approved with an 8-0-0 vote. Mr. Dockser will report on Article 6 to Town Meeting. Mr. Arena noted free cash is meant for a one time use/emergency and these modular classrooms qualify as that. WMr. Halsey said we are going to have a $200,000 shortfall annually if we don't do this and we'd have to go to free cash for that anyway so why not get the modulars. Ms. Herrick wanted to know if free cash is the right place for this to be coming from though or if there is a better place to find the money. Page 13 Finance CommitUe Minutes - January 21 2015 - page 4 Mr. McNeice stated he does not like the idea of leasing the modulars and would rather us use the free cash now and buy them. Ms. Landry said she would like to make it known that she has heard a lot of positive community comment in support of these modulars. Bill Brown asked to speak to FINCOM about the Cemetery Department and what they are asking for. He stated they are asking for $2 Million for a new building based on estimates from Town Engineer George Zambouras. He noted the building Is safe but it is falling down and the truck does not fit in the building. He told FINCOM the most recent renovations on the building were back in the 60's when they only had two cemeteries but now we have four. Mr. LeLacheur stated this is something that should go before the Permanent Building Committee. Mr. Let.acheur explained Article 3. Article 3 states there is a $1 million premium on the $10 million we sold for the library project. We can either borrow the $1 Million now or in 2 years at an unsure Interest rate. Mr. LeLacheur said he would rather do it now so we don't have to borrow more in the future. Me Landry mane a motion to recommend Article 3 second by Ms. Herrick. approved by a vote of 8-0-0. Ms. Herrick will report on this article to Town Meeting. Ms Landry made a motion to recommend Article 4 second by Mr. McNeice. approved with an 8-0-0 vote. Mr. McNeice will report on Article 4 to Town Meeting. Mr. McNeice made a motion to adiourn at 10 pm. second by Ms. Landry and approved with an 8-0-0 vote. Respectfully submitted, Secretary • Page 1 4