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HomeMy WebLinkAbout2019-03-13 Finance Committee Minutes Town of Reading RECEIVED Meeting Minutes z TOWN CLERK READING, MA. Board - committee - commission - council: 2019 JUL -2 AM 9: 21 Finance Committee Date: 2019-03-13 Time: 7:30 PM Building: Reading Town Hall Location: Conference Room Address: 16 Lowell Street Session: Open Session Purpose: Budget Meeting Version: Final Attendees: Members - Present: Chair Eric Burkhart, Vice Chair Mark Dockser, Paula Perry, Karen Herrick, Marc Moll, Anne Landry, Dan Dewar Members - Not Present: Shawn Brandt, Paul McNeice Others Present: Town Manager Bob LeLacheur, Assistant Town Manager Jean Delios, Accountant Sharon Angstrom, Administrative Services Director Matt Kraunelis, DPW Director Jane Kinsella, Assistant DPW Director Chris Cole, Fire Chief Greg Burns, Deputy Police Chief Dave Clark, Facilities Director Joe Huggins, Assistant Facilities Director Kevin Cabuzzi, School Chief Financial Officer Gail Dowd, Assistant Superintendent of Learning &Teaching Christine Kelley, Vanessa Alvarado, Barry Berman, Chuck Robinson, Linda Snow Dockser, Geoffrey Coram, RCN Executive Director Phil Rushworth, RCN Board President Kathi Crook, Deputy Director RCN Angela Merrill Minutes Respectfully Submitted By: Jacquelyn LaVerde Topics of Discussion: Chair Eric Burkhart called the meeting to order at 7:35 pm and stated that the goal for tonight's meeting is to conclude the budget review and ask any remaining questions, review Enterprise Funds and Capital, and vote on the budget line items and finance related Town Meeting warrant articles. Article 10 Mr. LeLacheur reviewed article 10 which asks to establish an enterprise fund for RCN. The budgeted amount is anticipated to be in the $550,000-$600,000 range. The Town is currently in negotiations with RCN, as the current agreement expires in May. Currently, cable PEG fees are paid to the Town Manager's Office to be paid to RCN. Due to recent legislation, if this article does not pass, it is not clear if the Town will be legally allowed to pass money along to RCN, and PEG access could end July 1st. Mr. Dewar asked what would happen to the PEG funds received if the article does not pass. Mr. LeLacheur stated that it might go into the general fund or be segregated, and explained that RCN will not be able to spend more than what is budgeted if it does pass. Kathy Crook, President of the RCN Board of Directors, stated that RCN does not spend more money than it brings in, and expressed concern if the article does not pass, as they have staff and equipment they need to pay for, and the Town has expectations for PEG. Mr. Dockser asked if the Committee would be presented with multiple budget line items like other enterprise funds. Mr. LeLacheur asked the Finance Committee for their input on the level of detail they would like to see included. Ms. Herrick asked if RCN was seeing an upward or downward trend in Page I 1 revenues. Phil Rushworth, RCTV Executive Director, stated the revenues are trending down. Ms. Crook noted that many people are "cutting the cord" and no longer subscribing to cable services, though the contributions received from individual subscribers has been stable. Mr. Dockser asked what other communities are doing to accommodate the new legislation. Mr. Rushworth noted that different communities are doing different things including adopting a PBS style model which relies more on sponsorship. If RCN adopts such a model, viewers may see "Programs brought to you by"a sponsor, and possibly some advertisements if funds are received from local businesses. Mr. LeLacheur plans to speak with Town Counsel to gain a better understanding of how the PEG funds would be received and paid, and whether RCN will be able to raise funds in addition to what is budgeted through the enterprise fund. Motion by Mr. Dockser to approve Article SO as written, seconded by Ms. Perry, and approved by a vote of 7-0-0. Enterorise Funds Following the Select Board's approval of Water and Sewer rates on March IV, Mr. LeLacheur provided the updates to the Committee. Water rates increased 3.7% to $10.37/HCF and sewer rates increased 8.5% to $11.03/HCF beginning next December. This increased the reserves usage to $550,000 for Water and $450,000 for Sewer. Mr. LeLacheur suggested the Finance Committee might want to create a policy on the reserve fund even though they have not had much of a role in the past, because it is a financial issue. Mr. Dockser asked if there is a portion of the reserves set aside for emergencies, for known future capital projects, and anticipated MWRA rate increases. Mr. LeLacheur stated that the budget had not changed from previously presented, and that Water and Sewer have 25-30 year long term plans. When there are emergencies, such as a water main break, they need to be fixed. Ms. Herrick asked if funds for the new water tank are coming out of the water enterprise fund. Mr. LeLacheur confirmed that they are. Capital Mr. Dockser asked if the Permanent Building Committee was able to meet all the needs in the budget. Mr. Huggins stated that the Permanent Building Committee has been performing an assessment of buildings which evaluates the exterior, grounds, building envelope, interior, finishes, and overall structure to compile a deficiency list for each building. Based on an index that rates each system on its condition, Facilities will be able to determine how and when to address a problem. Most problems can be fixed within the operating budget, and the capital budget is in good shape. Warrant Article Review and Vote Article 2: Mr. LeLacheur reminded Mr. Burkhart that he will need to prepare a Finance Committee report for Town Meeting. Article 4: Capital Improvement Program. Mr. LeLacheur stated that DPW was able to secure a $500,000 grant in FY19 for bridge repair following the approval of the budget. The line item was adjusted to $0, as the repair needs to be in the capital plan in order to accept the grant. For FY20, five items were pushed to FY21 in order to make funds available for Turf II upgrades. There were no changes to capital needs, rather rearranging of priorities. Mr. LeLacheur explained that there is not currently a request to allocate money for Birch Meadow field lighting. It is still in the future capital plan, however, there is no immediate funding. On a motion by Mr. Dockser, seconded by Ms. Perry, the Finance Committee voted 7-0-0 to recommend Article 4 to Town Meeting. Article 5: Amendments to the current year's budget. Mr. LeLacheur stated that he anticipates the health insurance budget this year will have a $400,000 surplus, and would like to apply $275,000 of it to the OPEB liability. He then reviewed other changes and noted that the Public Services Department is requesting $4,000 for a sound engineer. Ms. Delios explained that this is for a sound study near one of the developments in Town as there have Gage 1 2 been noise complaints by the neighbors. Mr. Brandt had submitted a question in advance asking if the developer could pay for it. Mr. LeLacheur stated that the developer could, but by bringing in a neutral third party, we can be confident in the data. Ms. Perry asked if there were regulations for noise levels. Ms. Delios answered that the DEP has a standard and other communities have noise bylaws or ordinances. Reading does have a construction hours bylaw that addresses noise impacts during construction, but she will review the results with Town Counsel to assess which regulations, if any, the developer might be violating. Mr. Moll expressed concern about the potential for the developer to dispute the results and the potential of having to pay Town Counsel to help resolve this conflict. Mr. LeLacheur noted that he is hopeful that the developer will be presented with suggestions, agree to them, and not have to involve Town Counsel. On a motion by Ms. Perry, seconded by Mr. Moll, the Finance Committee voted 7-0- 0 to recommend Article 5 to Town Meeting. Article 7: Disposition of surplus. Mr. LeLacheur stated that most of the equipment will be traded in and noted that there were two items received as donations. However, they still need to be declared as surplus, and still require permission. On a motion by Ms. Perry, seconded by Ms. Herrick, the Finance Committee voted 7-0-0 to recommend Article 7 to Town Meeting. Article 8: Change the process for surplus. If passed, this would replace the current bylaw. When the general bylaw was accepted, it mirrored the state threshold of$5,000 for Town Meeting approval. This article proposes to change the bylaw to the current state limit of $10,000. If an item is below $10,000, the Select Board can approve. Ms. Herrick asked if there are checks within the organization to ensure that assets are being disposed of properly. Ms. Angstrom stated that the process is coordinated through the Procurement Office and every effort is made to get the most for our asset. On a motion by Mr. Dockser, seconded by Ms. Herrick, the Finance Committee voted 7-0-0 to recommend Article 8 to Town Meeting on the conditional premise that the Select Board adopts written policy for disposal of surplus prior to Town Meeting. Article 9: OPEB contributions. Mr. LeLacheur stated that the total contribution is budgeted at $850,000, including $275,000 reallocated from the Health Insurance surplus. Reading's current OPEB liability is $64 million and is 62% funded. On a motion by Ms. Herrick, seconded by Ms. Landry, the Finance Committee voted 7-0-0 to recommend Article 9 to Town Meeting. Article 12: Expenditure limits. Mr. LeLacheur stated that there were no recommended changes from last year. Mr. Dockser asked if$225,000 was enough for the Building Inspections Revolving Fund and said he would be inclined to increase it to $250,000. Mr. LeLacheur agreed there would be no harm in increasing the revolving fund limit to $250,000. On a motion by Mr. Dockser, seconded by Mr. Moll, the Finance Committee voted 7- 0-0 to recommend Article 12 to Town Meeting with an increase of$250,000 for the Inspections Expenditure Revolving Fund. Article 13: Annual housing allocation plan. Mr. LeLacheur noted that there is a Select Board subcommittee that might change this in the future. On a motion by Ms. Perry, seconded by Ms. Herrick, the Finance Committee voted 7-0-0 to recommend Article 13 to Town Meeting. Page 1 3 Article 14: Authorization for extended contracts: Mr. LeLacheur stated that Town Meeting needs to give permission to allow him and the Superintendent of Schools to negotiate contracts longer than three, but less than six years, to get a better price. On a motion by Ms. Perry, seconded by Ms. Landry, the Finance Committee voted 7-0-0 to recommend Article 14 to Town Meeting. Article 15: Turf II improvements. Mr. LeLacheur reviewed the project and Ms. Dowd noted that the project will go out to bid with different pricing options. The Committee briefly discussed whether to borrow the funds, or supplement the project with free cash. Mr. LeLacheur noted that they could make their final decision at the meeting on April lith. On a motion by Mr. Dockser, seconded by Ms. Perry, the Finance Committee voted 7-0-0 to recommend Article 15 to Town Meeting. Article 17: Auburn Street Water Tank. Mr. LeLacheur stated that the funds for the tank replacement will be absorbed by the Water Enterprise Fund. On a motion by Mr. Moll, seconded by Mr. Dockser, the Finance Committee voted 7- 0-0 to recommend Article 17 to Town Meeting. Article 18: Grave Street water main improvements. Mr. LeLacheur noted that this is to resolve an issue that was caused when the Town shifted to MWRA. Mr. Moll asked if there was any type of insurance policy available to protect the Town should something catastrophic happen. Mr. Lelacheur noted that he would speak with the Business Administrator, as she is familiar with insurance products MIIA has to offer. On a motion by Mr. Dockser, seconded by Ms. Perry, the Finance Committee voted 7-0-0 to recommend Article 18 to Town Meeting. Article 19: Accept Chapter 90 funds from the state for highway projects. Mr. LeLacheur noted that the Town adds $400,000 to this funding through capital planning. On a motion by Ms. Perry, seconded by Mr. Moll, the Finance Committee voted 7-0- 0 to recommend Article 19 to Town Meeting. Vote on Budget Line Items Motion by Mr. Dockser to approve line 699 Benefits in the amount of$18,139,050, seconded by Ms. Perry, and approved by a vote of 7-0-0. Motion by Ms. Perry to approve line C99 Capital in the amount of $2,599,500, seconded by Ms. Herrick, and approved by a vote of 7-0-0. Motion by Ms. Herrick to approve line D99 Debt Service in the amount of $5,248,414, seconded by Mr. Moll, and approved by a vote of 7-0-0. Motion by Mr. Moll to approve line E99 Education - Vocational in the amount of $452,400, seconded by Ms. Landry, and approved by a vote of 7-0-0. Motion by Ms. Landry to approve line F99 Finance Committee Reserves in the amount of$200,000, seconded by Ms. Herrick, and approved by a vote of 7-0-0. Motion by Mr. Dewar to approve line G91 Administrative Services wages in the amount of$1,472,300, seconded by Mr. Burkhart, and approved by a vote of 7-0-0. Motion by Mr. Burkhart to approve line G92 Administrative Services Expenses in the amount of$1,512,700, seconded by Mr. Dockser, and approved by a vote of 7- 0-0. Page 1 4 Motion by Mr. Dockser to approve line H91 Public Services Wages In the amount of $1,500,275, seconded by Ms. Perry, and approved by a vote of 7-0-0. Motion by Ms. Perry to approve line H92 Public Services Expenses in the amount of $355,750, seconded by Ms. Herrick, and approved by a vote of 7-0-0. Motion by Ms. Herrick to approve line I91 Finance Wages in the amount of $759,625, seconded by Mr. Moll, and approved by a vote of 7-0-0. Motion by Mr. Moll to approve line I92 Finance Expenses In the amount of $158,050, seconded by Ms. Landry, and approved by a vote of 7-0-0. Motion by Ms. Landry to approve line 391 Public Safety Wages in the amount of $11,217,400, seconded by Mr. Dewar, and approved by a vote of 7-0-0. Motion by Mr. Dewar to approve line 392 Public Safety Expenses in the amount of $522,750, seconded by Mr. Burkhart, and approved by a vote of 7-0-0. Motion by Mr. Burkhart to approve line K91 Public Works Wages in the amount of $2,725,275, seconded by Mr. Dockser, and approved by a vote of 7-0-0. Motion by Mr. Dockser to approve line K92 Public Works Expenses in the amount of$857,425, seconded by Ms. Perry, and approved by a vote of 7-0-0. Motion by Ms. Perry to approve line K93 Public Works Snow &Ice in the amount of $675,000, seconded by Ms. Herrick, and approved by a vote of 7-0-0. Motion by Ms. Herrick to approve line K94 Public Works Street Lights in the amount of $164,800, seconded by Mr. Moll, and approved by a vote of 7-0-0. Motion by Mr. Moll to approve line K95 Public Works Rubbish in the amount of $1,693,725, seconded by Ms. Landry, and approved by a vote of 7-0-0. Motion by Ms. Landry to approve line L91 Library Wages in the amount of $1,390,575, seconded by Mr. Dewar, and approved by a vote of 7-0-0. Motion by Mr. Dewar to approve line L92 Library Expenses in the amount of $370,900, seconded by Mr. Burkhart, and approved by a vote of 7-0-0. Motion by Mr. Burkhart to approve line M91 Core Facilities in the amount of $3,117,445, seconded by Mr. Dockser, and approved by a vote of 7-0-0. Motion by Mr. Dockser to approve line M92 Town Buildings In the amount of $334,800, seconded by Ms. Perry, and approved by a vote of 7-0-0. Motion by Ms. Perry to approve line U99 School Department in the amount of $46,767,348, seconded by Ms. Herrick, and approved by a vote of 7-0-0. Mr. Lel.acheur confirmed that this figure reflects the $300,000 adjustment reallocated from the original proposed Health Insurance budget. Motion by Ms. Herrick to approve line W99 Water Enterprise Fund in the amount of $6,635,925, seconded by Mr. Moll, and approved by a vote of 7-0-0. Motion by Mr. Moll to approve line X99 Sewer Enterprise Fund in the amount of $7,074,575, seconded by Ms. Landry, and approved by a vote of 7-0-0. Motion by Ms. Landry to approve line Y99 Storm Water Enterprise Fund in the amount of$485,800, seconded by Mr. Dewar, and approved by a vote of 7-0-0. Page 15 Mr. Lel-acheur added that line Z99 will be added if the Cable TV Enterprise Fund (Article 10) is approved at Town Meeting. Status Reports on Warrant Articigs at Town Meeting Mr. Burkhart assigned each member to give a status report for each article at Town Meeting: Mr. Dockser articles 4, 13, and 21; Ms. Perry 5, 14, and 22; Ms. Landry 7, and 17; Ms. Herrick 8, 15, and 23; Mr. Moll 9 and 16; Mr. Brandt 10 and 19; Mr. Dewar 11 and 18; and Mr. Burkhart 12 and 20, in addition to article 2. Minutes On a motion by Mr. Moll, seconded by Mr. Dockser, the meeting minutes from March 6, 2019 were approved as amended by a vote of 7-0-0. Mr. Burkhart reminded the Committee that the next meeting would be a joint executive session with the Select Board and School Committee on Thursday, April 1411 at 6:00 pm, where the topic will be building security. There should be enough members in attendance to vote on articles 16, 21, 22, and 23 at that time. He then thanked the Committee for all their attention, hard work, and attendance at Select Board and School Committee budget meetings during this budget process. On a motion by Ms. Perry, seconded by Mr. Moll, the Finance Committee voted 7-0- 0 to adjourn the meeting at 10:04pm. Page 1 6