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HomeMy WebLinkAbout2016-01-20 Finance Committee Minutes� OFR O Town of Reading ?' a Meeting Minutes ''•,xmnvpP�r- Board - Committee - Commission - Council: Finance Committee Date: 2016 -01 -20 Time: 7:30 PM Building: Pleasant Street Senior Center Location: Great Room Address: 49 Pleasant Street Purpose: Financial Forum Session: Forum Attendees: Members - Present: RECEIVED TOWN CLERK READING. MASS. 2011 MAR 15 A II: 021 Chair Mark Dockser, Paula Perry, Members Craig Merry, Marc Moll, Peter Lydecker, Anne Landry, Vanessa Alvarado, David Neshat and Vice Chair Paul McNeice Members - Not Present: Others Present: Town Manager Bob LeLacheur, Assistant Town Manager Jean Dellos, Town Accountant Sharon Angstrom, Community Development Director Julie Mercier, Town Treasurer Nancy Heffernan, Police Chief Mark Segalla, Community Services Director John Feudo, Director of Administrative Services Matt Kraunelis, DPW Director Jeff Zager, Assistant DPW Director Jane Kinsella, Facilities Director Joe Huggins, Superintendent of Schools John Doherty, Director of Finance of Schools Martha Syburt, Administrative Assistant Caitlin Saunders, Board of Selectmen members John Halsey, Barry Berman and Kevin Sexton, Ben Tafoya, Angela Binda, Amy Cole, Harriet Lyons, Ashley Quinn, Melissa Murphy, Katherine Dufosse- LaPlant, Caitlin Koehler, Michele Sanphy, Katherine Brown, Karen Herrick, Ann Cruickshank, Ruth Urell, Alice Collins, Vicki Yablonsky, John Brzezenski, Eileen Lettereo, Elizabeth Love, Elaln O'Dea, Michael Moran, Joel Murdock, Meg Powers, Robyn Ferrazzani, Denise Iozzo, Victoria LeBlanc, Brian Souza, Carolyn Wilson, Craig Martin, Bob Holland, Samantha Carreiro, Kerr! Fahey, Maryann Sweester, Rochelle Luongo, Martha Moore, Eric Guffa, Kristen Roberts, Connie Quackenbush, Linda Snow Dockser, Kate Grant, Jen Hillery, Harry Wheeler, Josh Goldlust, Mike Boston, Mary McGrath, Eric Goldstein, Colleen DeRosa, Pam Boston, Julie Gilchrist, Maria Morgan, Brian O'Marla, Rebecca Schruman, Julie Joyce. Minutes Respectfully Submitted By: Secretary Topics of Discussion: Finance Chair Mark Dockser called the meeting to order at 7:30 PM. The Library Trustees called to order. The School Committee called to order. Town Manager Bob LeLacheur gave a financial overview of the town. State aid is lagging and Reading depends heavily on state aid. He noted a lot of towns around us have a lot of undeveloped land, however, Reading does not. The Board of Selectmen called to order at 7:40 PM. Page I 1 Fingno Committee Minutes - January 20, 2016 - naae 2 Mr. LeLacheur explained the difference between an override and debt exclusion. An override Is a permanent change to your taxes where as a debt exclusion your taxes go up until the debt is paid off and then it goes back down. Our neighbors are growing at a 1.8% rate while Reading is at 1.2% which is about a $300,000 annual average difference. Reading was compared to 25 peer communities to show the differences. Reading has a big difference in the amount of taxable land. Reading's CIP% is much lower. Reading is behind on revenue compared to our peers. When it comes to spending Reading is similar. Reading spends a tad above average on public safety and culture and recreation. Reading spends average on education and DPW. Reading spends below average on human services however stabilization and free cash are average. Overall Reading falls a little short on the revenue side however our spending is very average considering we have a large number of school kids compared to our peers. Eric Burkheart asked if we changed the unit of measurement does the story change about how we compare. Mr. LeLacheur noted we average 2.6 people per household and Massachusetts at 1.9 so yes the story would change slightly however, he could not find the per household numbers for our peer communities so he used the per capita. Harry Wheeler of 51 Ash Hill Road asked what free cash number Is. Mr. LeLacheur noted it Is the percent of everything we have. Dr. Doherty gave an overview of the schools financials. He noted the schools are funding the budget based on the goals that focus on where they want to go as a school district. The state aid Chapter 70 funding formula was created in 1993 and has not ever been changed. Costs have certainly changed from 1993 but the formula for the amount of aid we receive has not. The budget before the School Committee is $150,000 higher than the 3.25% budget number. The $150,000 is for implementation of a new science program. Dr. Doherty noted to have level service the budget would need 4.6 %. Level service reductions have gone down the past 3 years. The budget priorities are to implement courses and keep the class sizes down. The budget drivers are salaries and benefit obligations. The additions to the FY17 budget are to restore the per pupil building funding back to FY15 levels, a social worker at Killiam and restore some regular teachers. Reductions to the FY17 budget include 2 elementary teachers, 3.4 high school teachers, extended day, full day kindergarten, athletics and extra - curricular activities. Sixty-one percent of the budget goes to regular day operations. What the budget does not address is long term improvements such as full day kindergarten, restructuring the elementary school schedule, restructuring the high school and providing more opportunities for our students. Dr. Doherty commented that five teachers left this year for higher wages and better benefits. Cherrie Dubois of 9 Meadow Brook Lane said she would like to compare MCAS scores with peer communities forgetting about the per pupil expenditure. Michele Sanphy of 75 Glenmere Circle asked if the offsets are sustainable and Dr. Doherty answered for the most part, yes. Eric Burkheart asked what percent of state aid is Chapter 70. Mr. LeLacheur answered about a quarter. Page 12 lnanQg C52mmittee Minutes - ja nuary 20. 2 Mr. Burkheart then asked what the cuts have been in the past couple of years. Dr. Doherty answered that he tried to do non - personnel cuts up until this year. This is the first year they have to make personnel cuts. Mr. LeLacheur noted unlike the schools, it is hard to compare town services to other towns. The fY17 Town Operating Budget department requests are about $1.6 Million over the target and the town needs about $.7 Million to level service. Next year's budget will have to reduce services and quality of services. It would cost about $1.6 Million to have the services the community desires. The town is budgeting for 8% health insurance increase however it will probably be more. Jeanne Borawskl asked Mr. LeLacheur to break down the Pension and OPEB funds. Mr. LeLacheur noted $3.5 Million for the pension and $500,000 for OPEB. He also noted in 2029 pension will be fully funded. Ben Tafoya asked if the number for free cash used was what we budgeted for or what we actually used and Mr. LeLacheur noted that number is what we actually used. Mr. Tafoya then asked about regeneration and Mr. LeLacheur noted it has gone up the past couple of years. Mr. Tafoya asked what new growth percent Is and Mr. LeLacheur noted it is the percent of collected property tax. Angela Binda asked where capital improvements are in the budget and Mr. LeLacheur noted they are under capital and debt. Karen Herrick asked if we have any idea where we should be with free cash. Mr. LeLacheur noted conversation is 10% of operating budget. The town has a 5% rule. Mr. Dockser commented free cash is like our rainy day fund but also if health insurance comes in high, free cash will take the extra hit, state aid shortfall and unseen litigation would also be free cash uses. Elaine Webb asked if there was data to show the amount of teachers that leave for higher paying jobs. Mr. LeLacheur said the cost of turnover is real and the effort or hiring and finding the right is not an easy task. Connie Quackenbush, a teacher, noted not getting raises will not attract more teachers. Colleen DeRosa asked if we are paying our teachers in the middle of the pay grade, are we only trying to attract middle grade teachers. Michele Sanphy commented that people need to take into consideration that teachers spend a lot of their own money on supplies and things for their classrooms. Angela Binda asked if Reading's teachers' salaries have historically been higher or lower than average. Mr. LeLacheur noted we have been slipping every year. Eric Burkheart asked what the turnover percentage is in teachers. Dr. Doherty noted there are a lot of reasons why teachers leave but we average about 30 -40 (10 %) new teachers every year. Mr. Burkhart asked, with regards to town staff, if it is solely a pay and class problem or If he was serious with the hard working conditions as well. Mr. LeLacheur noted it is not uncommon for staff to work until 10 or 11 PM and then be In the next morning at 7 AM. Kate Grant asked how we compare with turnover compared to other towns. Mr. LeLacheur noted it is hard to compare turnover rates for a lot of reasons because it all depends on the type of employee you hire. Page 13 Finance Committee Minut - January 20 2016 - oaae 4 Melissa Murphy asked in regards to commercial tax, why has the town never raised it since we are so far behind compared to our peer communities. Selectmen John Halsey commented one reason Is because Reading does not have as much commercial property as our surrounding towns. Another reason is if we split the tax rate it would have a large impact on our small businesses, a very small impact to the households and it would not Increase our revenues. Selectmen Barry Berman noted it is a very dangerous game raising taxes because our large elderly population can't afford them. He said we could do it but assessed value and assume people with pricey houses can afford more taxes but that is not always the case. Linda Snow Dockser noted she was at the Board of Selectmen meeting about the tax rate and small businesses are already struggling and if we raise the tax rate on them it will only get worse. Mr. Berman said we are not going to grow out of this budget and every now and then we need to hit the reset button. Mr. Halsey commented Reading has a very small opportunity for development and growth but there is some and the next step is to figure out how and what we want to develop these areas. Selectmen Kevin Sexton noted setting tax rates is not as easy as it looks. There are state guidelines for us to follow as well. He noted he did not think there was enough community feedback to make the decision last time. Caitlin Geller noted she heard there have been a lot of failed overrides in Mass recently and we need to find a way to make sure that doesn't happen here In Reading. Mr. LeLacheur said Melrose recently had a failure because they were trying to be proactive, as we are, when people tend to wait until they are hurting until they will vote yes for an override. Paula Perry noted tonight's meeting turnout is a wonderful start but now everyone in the room should start talking and educating their friends to get this Information out around town. Linda Snow Dockker noted she feels the Town is already hurting. We have so many employees doing a bunch of different jobs just to get things done. Mr. Berman said he feels for this to work we need to present one budget for the town and schools both agreeing they cannot sustain their budgets anymore so people will not vote no just because they think only the town or only the schools need it. Mr. Halsey agreed and asked the new faces in the room to bring more new faces next time so we can get even more feedback and educate their friends in town on what they have learned tonight. A resident asked if the town knew they were in this financial position when they asked for $18 Million for a new library, because if we did and now we are asking for an override, a lot of people are going to want to know the answer to that. Mr. LeLacheur noted as employees of the town we cannot tell the town what to do. We can educate the residents and that is it. We personally can have an opinion but professionally there is a big gray area of what we can't do. Page 14 Finance Committee Minutes - January 20 2016 - page Angela Binda brought the conversation back to the split tax rate and commented that a lot of people do not want to be seen as against local businesses but we need to consider a large part of our commercial is Walkers Brook Drive which is filled with big chains that can afford the increase. She also said she has heard conversation around town saying residents would not support an override until there is a split tax rate to show them that the town is trying to do something to correct it. Mr. Halsey said the real issue with the split tax rate is the fact that we have the smallest amount of commercial property in any town around here and we don't want to see empty store fronts because small businesses can't afford the rate. Michelle Sanphy asked when the Selectmen would decide if an override vote would go on the September ballot. Mr. Halsey noted only three Selectmen are present tonight but if they keep hearing from residents over the next month or so then they will decide. Mr. Berman wanted to mention that there are a lot of open spots for Town Meeting and if you join Town Meeting you would get to help make some of these decisions. Mr. LeLacheur noted that compared to our neighbors we have low /below average property taxes. Ashley Quinn asked how residents can contact the Board of Selectmen. Mr. Halsey responded that their emails are on the town website and please attend our meetings every other Tuesday night. Mr. Halsey made a motion the Board of Selectmen adiourn at 10.30 PM second by Mr. Berman and approved with a 3 -0 -0 vote. Vanessa Alvarado commented that people are talking about how we just paid for a library and want to know how much more our taxes would go up if we do an override too. Mr. McNeice made a motion to adiourn at 10:40 PM. second by Mr. Moll and approved with a 9 -0 -0 vote. Respectfully submitted, Secretary Page 1 5