HomeMy WebLinkAbout2009-04-15 Finance Committee Minutes Finance Committee Meeting ri E C E I V c u
AprTOWN' CLERK "—
Conference
LERK "--
' Room,
READING, MA.
Conference Room,Reading Town Hall
2019 JUN -6 PM 4: 15
The meeting convened at 7:35 PM in the Conference Room, 16 Lowell Street, Reading, MA.
Members Present: George Hines, Bary Berman, David Greenfield, Thomas White,Andrew Grimes,
and Bryan Walsh.
Members absent: Mathew Wilson, Music West and Hal Torman.
Also present: Town Manager Peter Hechenbleikner, Assistant Town Manager/Finance Director Bob
LeLacheur, School Superintendent Pat Schettini, School Director of Finance and Human Resources
Mary DeLai, and Facilities Director Joe Huggins.
There being a quorum the Chair called the meeting to order at 7:35 PM.
1. Review Town Meeting Warrant—Article 15: Performance Contracting
Director of Finance and Human Resources Mary DeLai lead a very thorough review of the process and
the current status of the project. In summary,the team has identified approximately$5 million of
capital repairs that would improve the energy consumption of the town& school buildings, and settled
on a 15yr period of time. The items identified range from water conservation measures with paybacks
of less than one year, to a few energy system changes that would require very long payback periods.
About$3.8 million of these items are self-funding: the energy saved over 15 years would reasonably
pay back the cost of the capital invested. Additional sources of funding—such as rebates and grants—
will supplement the self funded portion. The Town expects to use about $750,000 from the capital plan
over the next 15 years to supplement the project. The identified capital at this time does not include
over$2 million in window replacements.
Assistant Town Manager/Finance Director Bob LeLacheur reviewed the financing options, which
range from lease-only to debt-only, with combinations in between. The advantages of leasing are the
ability to customize the cashflows(for example to step the payments up higher over time)and the fact
that no debt authorization is required. The advantage of debt financing is a cheaper cost. One unclear
factor is if all of the proposed work in this project may legally be funded for a term of up to 20 years,
under special legislation passed last summer by the Commonwealth. If it is, a debt-only option will be
the suggested best solution.
On a motion by Barry Berman to recommend Article 15 with a maximum debt authorization of
$5 million,seconded by David Greenfield. FINCOM voted 6-0-0
Tom White excused himself from the meeting.
Bob LeLacheur reviewed Article 5, where the MA DOR has suggested one more modification to the
FY09 enterprise fund budgets to complete action taken by November 2008 Town Meeting. This step is
I
to formally remove funds from water ($347,625)and sewer($234,651)that were added to the general
fund in November. This is an accounting exercise, with no change in any expenditure.
On a motion by Andrew Grimes to recommend Article 5 as revised to include the water and
sewer revisions,seconded by David Greenfield FINCOM voted 5-0-0
Bob LeLacheur reviewed Article 7, and explained that the Capital Plan for FYI was unchanged from
the most recent presentation,with additional requests from the school department being prioritized in
FYI 1. Some of these requests are expected to be addressed sooner under Performance Contracting, so
there is no need to fund these directly.
On a motion by Barry Berman to recommend Article 7 seconded by Andrew Grimes FINCOM
voted 5-0-0.
Peter Hechenbleikner reviewed Article 12, and explained the rational for placing funds in a
stabilization fund for sick/vacation buyback for Municipal Government employees. This would be
funded through a$25,000 refund of Town Manager FY09 legal expenses that would flow through free
cash. FINCOM had objected that the amount was too small to have any impact, but after hearing that
typical amounts of buyback are often less than$10,000, they agreed to reconsider.
On a motion to reconsider Article 12 by Barry Berman seconded by David Greeufield FINCOM
voted 5-0-0.
On a motion by Barry Berman to recommend Article 12 seconded by David Greenfield
FINCOM voted 5-0-0.
On a motion made by Barry Berman,seconded by Andrew Grimes the meting was adioumed at
9:25 PM by a vote of 5-0-0.
Respectfully submitted,
Secretary
2
SUMMARY for TOWN MEETING
At their meeting on April 15,2009 the Finance Committee took the following actions:
Article 5(bottom of page 5 in the Report of the Warrant dated 4-27-09)
The FINCOM recommends the subiect matter of Article 5 Enterprise Funds by a vote of 5-" This
change is an accounting change—there is no implication to any change in previously approved funding.
FINCOM had not previously seen or voted on this information.
Article 7(top of page 7 in the Report of the Warrant dated 4-27-09)
The FINCOM recommends the subiect matter of Article 7 Capital by a vote of"-0 The final list of capital
remained as previously presented and additional school capital requests were moved to a FYI priority status
from various other future years. FINCOM had previously voted 0-0-8 to abstain, pending a final decision on
some capital requests.
Article 12(pages 10-11 in the Report of the Warrant dated 4-27-09)
The FINCOM moved to reconsider this Article by a 5-0-0 vote and then voted to recommend the subiect
matter of Article 12 by a 5-0-0 vote. FINCOM had previously not recommended the Article by a 14-3 vote.
Upon further consideration, FINCOM agreed with the request to start a sick/vacation buyback fund for Municipal
Government employees, funded by$25,000 in Free Cash. This free cash comes directly from a reimbursement
of FY09 Municipal Government legal expenses. Previous objections that the amount was too small were
contrasted with typical payments in the several thousand dollar range, and with the small size of some wage
budgets that could not absorb even such modest amounts.
Article 15(pages 12-13 in the Report of the Warrant dated 4-27-09)
The FINCOM recommends the subiect matter of Article 15 by a vote of 6-0-0for an amount of up to and
including $5 million in debt authorization.About$3.8 million of the proposed Performance Contracting
project is considered to be'self-funding' in that the cost of the improvements will pay for themselves with
expected energy savings over the next fifteen years. The remaining$1.2 million will come from a combination of
rebates, grants, other funds and funding from the capital plan. Any FYI budget implications(if any)will be
discussed, but any formal votes will not occur until a future Town Meeting(such as November 2009) after the
exact costs of debt issuance are known.
3