HomeMy WebLinkAbout2019-10-09 Finance Committee Minutes Town of Reading
Meeting Minutes
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Finance Committee
Date: 2019-10-09 Time: 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:
Chair Eric Burkhart, Vice Chair Paula Perry, Dan Dewar, Andrew Mclauchlan,
Shawn Brandt, Ed Ross, Sean Jacobs, Karen Herrick
Members - Not Present:
Mark Moll
Others Present:
Town Manager Bob LeLacheur, Town Accountant Sharon Angstrom, Chuck
Robinson, Dave Gentile, Thomas Clough, Colleen Loughlin, Carol Roberts,
Celeste Kracke
Minutes Respectfully Submitted By: Jacquelyn LaVerde
Topics of Discussion:
Chair Eric Burkhart called the meeting to order at 7:30pm.
Retirement Board Warrant Article
Sharon Angstrom, Town Accountant was present with members of the Retirement Board
seeking the Finance Committee's support of Article 9 of the November Subsequent Town
Meeting warrant. The article requests to increase the COLA base for retirees from $12,000
to $14,000 annually. The Retirement Board can award 3% up to $12,000 per the law
passed in 1998. The law was updated in 2010 which allows Retirement Boards to ask Town
Meeting to increase the COLA base. The 3% COLA amounts to $360 per year per retiree
earning $12,000 pensions. The increase to a $14,000 COLA base would increase to $420
per retiree earning $14,000 pensions. Out of 352 retirees, 62 earn less than $12,000 and
would receive no benefit with the increased base. All others who earn more than $12,000
would receive an additional $60 per year. Overall, it would increase the FY21 appropriation
by $267,300 and total liability by $1.6 million. Only 25 of 104 retirement systems in the
commonwealth are still at the $12,000 COLA base. Of the 22 peer communities to Reading,
only two are still at the $12,000 COLA base: Andover and Shrewsbury.
Though the increase would affect new liabilities, the Town is still committed to fully funding
its pension liability by 2029. Once the pension obligation is fully funded, the Town can shift
the funds toward paying OPER liabilities. Funding of OPEB is not yet mandated, but it is
expected that the state will mandate in the future.
On a motion by Mr. Brandt, and seconded by Ms. Herrick, the Finance Committee
voted to recommend Article 9 to Town Meeting by a vote of 8-0-0.
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Town Meeting Instructional Motion
Mr. Burkhart reviewed Instructional Motion #3 from the Annual Town Meeting which
proposes to develop a review policy of authorized but unused debt. Ms. Angstrom noted
that the only current outstanding debt authorizations are for the Birch Meadow Lighting
Project and MWRA sewer loan. Both items are proposed to be rescinded at the upcoming
November Town Meeting. The instructional motion was generated from discussion at Town
Meeting relating to the Birch Meadow project and why the debt authorization was still on the
books. While the debt was authorized, bids came in higher than the amount budgeted.
Even though the project was still needed and planned for, it was tabled until timing was
more suitable.
The Committee discussed whether a policy was needed to address unused debt
authorization. Following discussion, the consensus was in favor of having a policy. Rather
than set an automatic sunset or review schedule, the Committee agreed to establish a
policy to have the Town Accountant prepare an annual review and provide an update of
unused debt authorization at the annual Financial Forum.
Review Capital Plan
Mr. LeLacheur provided an update on the Capital Plan. New growth figures were lower than
what was budgeted, but no projects proposed in November would create a hardship for the
Town. The request for HVAC in the schools was moved up to November so that it can be
completed over the summer. A piece of DPW Equipment needs to be replaced before the
winter. He noted that capital and buildings are in good shape and asked which debt
projects not mentioned should be prioritized.
Celeste Kracke, member of the Climate Advisory Committee, was present to facilitate better
communication with the Town and gain visibility to capital projects. The CAC would like to
advise the Town on replacement of utilities and alternatives, possible grants available, and
form a sustainability and renewable energy plan. Mr. LeLacheur noted that the performance
contracting round would be the best opportunity for that conversation. The Facilities
department has done a lot to standardize equipment to lessen repair costs and is better
suited to speak about those capital projects.
Preview FY21 Operating Budget
Mr. LeLacheur provided a brief update on the operating budget. The School Department
changed some Special Education costs, mostly offsets. While there is some uncertainty with
the Senate's plan for Reading at this time, it benefits SPED, not chapter70 state aid. If the
pension COLA base is approved, it will affect the operating budget. Health insurance
assumptions about revenues and expenses are expected to be consistent. Free cash,
though not yet certified, is good. Further details on the operating budget and future capital
plan will be provided at the Financial Forum next week.
Agenda for Financial Forum
Mr. Burkhart reviewed the topics anticipated for the upcoming Financial Forum including: a
presentation by the Permanent Building Committee, capital project update, current budget
review and FY21 projections, budget guidance for 2021, vote on warrant articles, and a
FINCOM schedule update. Mr. LeLacheur reminded the Committee that capital projects
including building security, turf 2, and the elementary space study would be reviewed at the
financial forum. RMLD is scheduled to attend a Finance Committee meeting in November.
Minutes
On a motion by Mr. Brandt, seconded by Ms. Perry, the Finance Committee
approved the minutes of the September 11, 2019 meeting by a vote of 8-0-0.
On a motion by Mr. Brandt, seconded by Ms. Herrick, the Finance Committee voted
to adjourn by a vote of 8-0-0.
Meeting adjourned at 9:21pm.
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