HomeMy WebLinkAbout2010-10-27 Finance Committee Minutes r RECEIVED
FinanceFinancialForum mittee Meeting READINGLERK
, MA.
' r ,October 27 2010 2919 FEB
.,,Ma..,. 21 PM 4: 33
The meeting convened at 7:00 PM in the Great Room at the Reading Senior Center.
FINCOM Members Present: Chair Marsie West, Vice Chair David Greenfield,Mark Dockser,Bryan
Walsh,Barry Berman, Kevin Leyne,Francis Fardy,Hal Torman and George Hines.
Members Absent:None.
Board of Selectmen: Ben Tafoya, Camille Anthony and James Bonazoli
Economic Development Committee Members: Sheila Clark,Michele Williams
Board of Library Trustees: David Hutchinson, Richard Curtis, Karyn Storti, Cherrie Dubois
School Committee: Hal Croft, Karen Janowski,Chuck Robinson
Town Meeting Members: Bill Brown,John Arena,Karl Weld
Also Present: Town Manager Peter Heckenbleikner, Assistant Town Manager/Finance Director Bob
LeLachem,Town Accountant Gail LaPointe,Patty de Garavilla(School Department),Jeff Zager
(Public Works Director),Mary DeLai(School Department Finance),Dora Lyons, Greg Bums (Fire
Chief),Jim Cormier(Police Chief), Community Services Director Jean Delios, Patricia Puglisi
(RMHS), Dr. John Doherty(Superintendent of Schools),David Mancuso(Making Reading Better),
Karen Callan(Barrows),Erin Cavio-Bacci,Kim Oliveira(School Dept.),and recording secretary Abby
McCabe.
There being a quorum the FINCOM Chair called the meeting to order at 7:15 pm.The Chair of the
School Committee and the Board of Library Trustees called the meeting to order. The Board of
Selectmen called their meeting to order at 7:30 PM.
Ms. West gave opening remarks and introduced everyone to the second financial forum of the budget
year and explained that this foram will focus on expenses.
Financial Update:
Mr. LeLacheur reviewed the recurring revenues from what was budgeted and the actual budget from
FY10.Ms. LaPointe reviewed the expenditures for FYIO.The Town was over a million dollars under
the expenditures budget last year because a lot of the appropriations weren't spent in FYIO. The
savings from health insurance,unfilled staff vacancies and gasoline were also contributing factors to
the FYI O expenditures.
The total revenues for FYI l is$50,000 under budget due mainly to the change in the medical
calculation for Medicaid and the use of free cash is on the November Subsequent Town Meeting
warrant to make up the difference.In FYI 1,Reading received the$350,000 from the state for adopting
the Downtown Smart Growth Zoning and $35,000 from Reading Ice Arena Authority that will help off
set FYI 1.
Ms. LaPointe reviewed the Town's reserve funds as of November 2010. The Town had$4.9 million in
free cash as of June 30,2010 and two Articles to use free cash are proposed at November Subsequent
Town Meeting.If Town Meeting approves the use of the $2 million in free cash,the Town is still over
the 5%in reserves.
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Ms. LaPointe reviewed the projected FY12 Revenues.A chart comparing FYI I and FY12 revenues
was presented. So far in FYI 1, local revenues are down and Reading is estimated to have a 10%
decrease in state aid which means less revenue to work with in FYI 1. Ms. LaPointe also reviewed the
preliminary accommodated costs for FY12. It's hard to predict the health insurance cost benefits
before February but it is currently estimated at 10%but this figure will not be known until early 2011.
Energy costs, financial costs,which include veteran's aid and unemployment costs,out of district
SPED and vocational education will contribute to the accommodated costs.Essentially, it is projected
that FY12 will have less revenue and greater accommodated costs.
Mr. LeLacheur summarized the FY12 budget.Even with a 0% increase the Town is still short by$2
million. We expect to use the $2 million in reserves but the Town relies on state aid and the outcome
of the election will be significant.A member of the Board of Selectmen expressed concern that
Reading used too much in free cash last year and encouraged FINCOM to consider this for the FY12
budget.A couple members of FINCOM spoke in response to a question about who makes the
decisions to use free cash.
The Chair of the.FINCOM recognized Mr. Hines for his service and presented him with a gift.
Financial Forum I(Revenue)Recap:
The Chair summarized the September Financial Forum on revenues and explained that the suggested
recommendations are being researched for feasibility and the results will soon be posted to the website.
The meeting handout includes the lists of recommendations from the last Financial Forum and the
party responsible for following up.
Page 6 of the meeting handout is a summary of the budget breakdown for a sample$400,000 single
family home in Reading.The three main uses of funds categories are Town government, schools and
facilities. Wages are paid to employees and non-wage expenses include expenses related to personnel
such as benefits and other items independent of the workforce. Wages make up 55%of the funds and
expenses are 45%. Police,Fire and Dispatch are the most expensive service provided by the Town.
Mr.LeLacheur described past efforts by the Town to save money which are shown on page 7 of the
meeting handout and also shows if the cost saving suggestions were implemented. The list is broken
into one time expenses and ongoing expense reductions.Regionalization of specific services has been
suggested in the past but is very difficult for Reading,particularly since state aid is provided to
municipalities and not the region.
Brainstorming Session—Potential Expense Reductions:
Mr. Dockser facilitated a brainstorming session focused on ways the Town can save on expenses.Each
table brainstormed possible cost savings ideas in a small group before coming back together to hear
from each table before the voting took place. FINCOM will record the votes and identify priority items
after tonight's financial forum.
Some of the expense reduction ideas included eliminating sidewalk plowing,regionalizing vehicle
maintenance and vehicle sharing,transitioning from a Representative Town Meeting form of
government to a Town Council, less polling booths at elections, less elections,reduce staff at evening
board meetings,reduce the Town's contribution to heath insurance,decrease park and street lighting,
reduce the compost hours,regionalist the health department, reduce trash pick up to twice a month,
regionalize the community services department,reduce the number of boards and committees,reduce
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the capital budget by 25%over the next 3 years,eliminate permits coordinator position,reduce Police
and Fire overtime, reduce Town Hall hours.
The Board of Selectmen, Library Board of Trustees and the School Committee adjourned at 9:15 PM.
After the Financial Forum concluded, the Finance Committee conducted regular business from their
agenda.
November Town Meeting Warrant
Mr.Hechenbleikner described the previous night's actions by the Board of Selectmen on Article 1 I
(Causeway Road). The road is in two parts:450 feet of public roadway at the top of the hill, and then a
private road section with twelve houses.In addition to these houses,both the Town of Reading and the
Reading municipal Light Department own land are will both be involved in the proposed betterments
to improve the private section before it is taken by eminent domain and becomes a public roadway.
Mr. Hechenbleikner reviewed the final plan as to the costs and apportioned share of betterments.The
average house will have approximately$15,000 in costs,which may be paid immediately after the
project is completed or financed over a period of up to twenty years.The interest charged will depend
on the Town's cost to borrow at that time plus a margin of 2%-today that would be a 5.5%rate of
interest, paid through the property tax bill. The betterment figures presented are a worst-case,and
hopefully and historically the project will be done for less.
On a motion by Mr.Greenfield, seconded by Mr. Torman.FINCOM voted 9-0-0 to recommend that
Causeway Road be accepted as a public road under Article 11.
Budget Guidance for FY12
FINCOM had an extensive discussion about the reserves policy and the next few budgets the Town
will face,as well as the prospects for an operating override. Several members spoke in favor of using
less free cash than the indicated$2 million budget shortfall for FY12, in light of the$6 million cash
reserves position and the desire to keep 5%($3.5 million)as a baseline.They acknowledged that there
would be a further reduction in services if the Town and Schools were forced to use less money in
FY12 operating budgets than in FYI 1,which the<$2 million figure will do.
On a motion by Mr. Berman. seconded by Mr.Fardy. FINCOM voted 7-2-0(Mr. Greenfield&Mr.
Levine opposed)to use a maximum of$1.5 million in free cash to support the FY12 budgets.
FINCOM discussed the possible impact of state ballot question#3 which seeks to reduce the sales tax
from 6.25%to 3%. If it is passed and implemented, in FY 12 it is projected to cost the Town $1.5
million in state aid.The prospects for an operating override were discussed as being more urgent if this
ballot question succeeds. Only through a combination of lower cash reserves and Town and School
budget cuts would the majority of the Town voters likely support such a request.The majority of
FINCOM leaned towards a several million override,not just to restore lost sales tax revenues but to be
able to offer a level of services that residents have come to expect from the Town and Schools.
On a motion by Mr. Fardy, seconded by Mr. Leone.FINCOM voted 7-2-0(Mr.Berman&Mr. Walsh
opposed)to use a maximum of$2 million in free cash to support the FY12 budgets in the event
Question#3 passes and state aid is forecast to be lower for FY12.
On a motion by Mr. Leone, seconded by Mr.Hines.FINCOM voted 8-0-1 (Mr. Walsh abstaining)to
approve the minutes of August 4.2010 m written.
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On a motion by Mr.Berman seconded by Mr. Greenfield FINCOM voted 7-0-2 (Mr. Torman and Mr.
Hines abstaining)to approve the minutes of September 15 2010 as written.
On a motion by Mr. Hines seconded by Mr. Greenfield. FINCOM voted 7-0-2(Mr. Walsh and Mr.
Fardv abstaining)to approve the minutes of October 13,2010 as written.
Marsie West requested that FINCOM be posted to meet at the RMHS Performing Arts Center at 7pm
on November 8,2010(the first night of Town Meeting).
On a final motion by Mr.Hines who will soon be moving out of Reading and leaving a lone and
distinguished career in public service behind as a legacy,seconded by the other members of FINCOM
to a round of applause FINCOM voted 9-0-0 to adioum at 10:35 PM.
Respectfully submitted,
Recording Secretary
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