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HomeMy WebLinkAbout2019-09-11 Finance Committee Minutes OFNFgO O Town of Reading 6 Meeting Minutes TOWN CLERK READING, MA. Board - Committee - commission - Council: W& Finance Committee 2111 OCT 10 AM 8: 21 Date: 2019-09-11 Tlme: 7:30 PM Building: Reading Town Hall Location: Conference Room Address: 16 Lowell Street Session: Open Session Purpose: General Business Version: Final Attendees: Members - Present: Andrew Mclauchlan, Dan Dewar, Paula Perry, Shawn Brandt, Karen Herrick, Chair Eric Burkhart Members - Not Present: Mark Moll, Sean Jacobs, Ed Ross Others Present: Town Manager Bob LeLacheur, Town Accountant Sharon Angstrom, School Superintendent John Doherty, School Chief Financial Officer Gall Dowd, Facilities Director Joe Huggins, Assistant Facilities Director Kevin Cabuzzi, Linda Snow Dockser, Tom Wise; Select Board Members: Anne Landry, Mark Dockser, Vanessa Alvarado Minutes Respectfully Submitted By: Jacquelyn LaVerde Topics of Discussion: Ms. Perry called the meeting to order at 7:33pm. Retirement Board Warrant Article: Ms. Angstrom stated that the presentation would have to be postponed. As a future retiree who may benefit from the article if passed, she needed to complete the Conflict of Interest disclosure form and be approved by the Select Board to give the presentation. FY20 Budget Transfers: Mr. LeLacheur explained Article 4 of the warrant which seeks to amend the Town's FY20 operating budget. There is a surplus in health insurance premiums. Public Services has surplus available due to consolidating some positions and has three requests for expenses: $20,000 for a traffic study for the Eaton Lakeview project (which may be reimbursed as the developer promised $20,000 for it); $20,000 for Birch Meadow design; and $20,000 for an open space consultant. Public Safety expenses include: dispatch use of a Medical Director to review calls to determine if dispatchers responded appropriately; request for three police cruisers; and floor plan updates. The Town Forest Committee is planning a thinning project and though the Committee has a revolving fund, there Is currently no money in it. They are requesting a $25,000 transfer from the general fund to pay for the project, and funds from the timber sold will be deposited back Into the general fund. There will also be a water transfer request. Capital Plan and FY21 budoet discussion: There is approximately a $400,000 surplus in capital. There are a lot of unfunded items that need to be prioritized and the plan is to engage the community in discusslon to Page 1 1 determine a priority for capital. Mr. Burkhart arrived at 7:53pm. The preference would be to spend money on things that will save money in the long term. Possibilities include performance contracting and HVAC replacements. Other unfunded projects include: athletic and recreation improvements; elementary school space project; community/senior center; and DPW building project. Operating budget and forecasts are more likely to change than capital. Next year's revenue is forecast to increase 3.4%. There will be an Increased use of free cash to $1.25 million, which will be an increase of 3.6% of revenue plus free cash. The Retirement Board Is requesting a 24% increase. If that article does not pass, there will still be a 21% increase, as the actual retirement obligation has not changed. By increasing pension funding, the liability will be diffused more quickly, and the sooner the Town can fully fund Other Post- Employment Benefits (OPER). The Town is currently 78% funded as of the most recent valuation. Vanessa Alvarado arrived at 8:22pm and called the Select Board to order. Fiscal Sustainability - continued discussion: Mr. Brandt reviewed issues that the Finance Committee discussed at the previous meeting. The reserve position is double what the policy calls for and is slated to be approximately $14 million at the end of the year. People think that there is too much free cash and unspent override money. He suggested different ways of utilizing the excess funds, and emphasized starting a fiscal sustainability fund to fund Investment projects, which are often omitted from the operating budget to satisfy the short-term need. Examples included: full day kindergarten, additional FTE for counseling, and hiring a grant writer. The Committee discussed the need to establish the structure of such a fund, how to make it sustainable, who would determine how the money is spent, how to create a policy for the fund, and how to measure the return on Investment. Mr. LeLacheur noted that Town Meeting would be the approving authority when it comes to spending money. Mr. Dockser recommended sponsoring a warrant article with a specific dollar figure to remain transparent. Mr. Wise noted that Lowell yielded significant savings by in-sourcing some autism and special education programs. Ms. Herrick asked If the Town could fund a Community Preservation fund with free cash and get the matching funds through the state. Mr. Lelacheur noted that free cash can be used and that would be investing to provide more services. Ms. Herrick asked if grant writing would yield results for the Schools. Dr. Doherty answered that the tricky thing about grants is you have to qualify and meet certain criteria. A lot of public grants are entitlement and need based. A lot of publicly funded grants are not available anymore, so you would have to look to private organizations who offer grants. If grant money is used to fund positions, the grant money eventually dries up. If it Is important enough to keep, it has to be in the budget and things can get taken out of the budget. Financial Forum: The Committee agreed to start the Financial Forum at 7:OOpm and identified topics to be discussed including: review of capital and operating budgets; update on capital projects including Turf 2, the elementary space project, and security update; and review of warrant articles. They also agreed to schedule a separate meeting after September 28th, following the Select Board's vote on the Conflict of Interest disclosure, and prior to the Forum on October 16th to discuss the Retirement Board COLA presentation and the Instructional Motion regarding the removal of unused debt authorization. Page 12 Review: Mr. Burkhart noted that he was asked whether there was a liaison for the Board of Health as there has not been one historically. The Committee agreed that designating one for the Board of Health was not necessary, as there is a liaison for the Public Services department which consists of the Health Division. The Select Board adjourned at 9:39pm. Minutes: On a motion by Mr. Brandt, seconded by Ms. Perry, the Finance Committee voted 6-0-0 to approve the meeting minutes of July 31, 2019. On a motion by Mr. Brandt, seconded by Mr. Dewar, the Finance Committee voted 6-0-0 to adjourn. Meeting adjourned at 9:40pm. Page 1 3