HomeMy WebLinkAbout2020-05-12 Finance Committee Minutes Town of Reading R c ;E 1 V E v
g Meeting Minutes T0V.!..N CLERK
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eosrd - committee - commission - council: 2020 Su; p AM 9: 07
Finance Committee
Date: 2020-05-12 Time: 7:30 PM
Building: Location:
Address: Session: Open Session
Purpose: General Business Version: Final
Attendees: Members - Present:
Chair Eric Burkhart, Vice Chair Paula Perry, Andrew Mclauchlan, Dan Dewar,
Jeanne Borawski, Nick Boivin, Ed Ross, Sean Jacobs
Members - Not Present:
Marc Moll
Others Present:
Town Manager Bob LeLacheur, Town Accountant Sharon Angstrom, School
Superintendent John Doherty, School CFO Gail Dowd
School Committee members: Chair Chuck Robinson, Shawn Brandt, Erin
Gaffen, Carla Nazzaro, John Parks, Tom Wise
Select Board Members: Vice Chair Anne Landry, Carlo Bacci, Karen Herrick,
Vanessa Alvarado
Department Heads: Amy Lannon, Jean Delios, Joe Huggins, Greg Burns,
David Clark, Matt Kraunelis, Jane Kinsella
Others Present: Marianne Downing, Mark Zarrow, Phil Rushworth
Minutes Respectfully Submitted By: Jacquelyn LaVerde
Topics of Discussion:
The meeting was held remotely via Zoom.
Chair Eric Burkhart called the meeting to order at 7:30pm. Select Board Vice Chair Anne
Landry called the Select Board to order. School Committee Chair Chuck Robinson called the
School Committee to order.
Mr. Burkhart began by welcoming two new members, Nick Boivin and Jeanne Borawski, who
were appointed to one-year terms on May 6". He also welcomed Marianne Downing and
Mark Zarrow, who are attending tonight's meeting and will be joining the Finance
Committee as of July 1�t, 2020 when Paula Perry's and Marc Moll's terms expire.
The purpose of the meeting is to review the estimated impact of the COVID-19 pandemic on
the FY21 budget and revenue. The revised budget was put together by Town Manager Bob
LeLacheur, Town Accountant Sharon Angstrom, School Superintendent John Doherty, and
School CFO Gail Dowd. There is still a sense of urgency for Finance Committee to vote on
the budget so that it can be delivered to Town Meeting members ahead of Town Meeting in
accordance with the Town Charter. With the rescheduling of Town Meeting to June 15",
2020, the goal is to deliver the warrant no later than May 291M1. The Committee is scheduled
to meet again this Thursday, May 1411 so that the discussion and vote will not be rushed
tonight.
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Mr. LeLacheur explained that these are unprecedented times. He has been in contact with
20 of Reading's peer communities, but answers to finance questions have been hard to get.
Only four of those peer communities answered the question as to how they were handling
their FY21 budget: one community chose to do nothing and will ask their Town Meeting to
approve the budget as presented in February; two communities plan to use a large amount
of their rainy day funds; and only one community planned to revise their budget in a similar
way to Reading. With so much uncertainty, this revised budget provides some flexibility in
the process.
Overall, there is a $2.4 million anticipated reduction in revenue including: property taxes
reduced $150,000, local revenues reduced $690,000 including a significant decrease in
meals tax, State aid reduced $1.5 million, and a $50,000 reduction in transfers and other
categories.
Estimated costs associated with COVID-19 include $25,000 for legal expenses, $10,000 for
miscellaneous expenses, $30,000 for Health, $5,000 for Elder/Human Services meals,
$95,000 for personal protective equipment (PPE) for Town buildings and the community,
and $60,000 for PPE for School buildings.
There is $1 million expected to be permanently cut from state aid, and $1.6 million
expected to be temporary cuts to revenue. The temporary impacts can be resolved by
using additional free cash, reducing Capital, and reducing voluntary payments such as
OPEB.
Possible weaknesses with cash flow arise with an increase in abatement applications in
January 2021, and if people are unable to make their payments on time. Mr. LeLacheur
stated that he hoped that the State sets up a line of credit for municipalities should they run
out of cash for operations. Though it is a possibility, the chances of it becoming an issue
are slim. Free cash can also be used to help with cash flow issues.
To close the permanent $1 million gap, School and Town operating budgets were reduced
by $450,000, the pension assessment was reduced by $284,000, Health Insurance was
reduced by $125,000, and snow & ice was reduced by $25,000. To close the temporary
$1.6 million gap, Capital was reduced $930,000, OPEB was reduced by $400,000, and
Finance Committee is being asked for $500,000 support from free cash. Reductions slightly
exceeded the $1.6 million to allow funding for a known increase in enrollment for the
vocational schools, and anticipated increase of unemployment. These adjustments and
estimates were made in an effort to give the Town Flexibility with the budget until better
information is available and better decisions can be made.
Total school reduction was $430,000 by electing a 1% COLA reduction for all non-
represented employees, and staff reductions including the new Payroll/HR Assistant position
and one FTE Kindergarten classroom teacher. Both positions are currently unfilled. Other
reductions include keeping administration and district wide programming at FY20 levels, and
very little reduction in Special Education. Ms. Dowd explained that Reading will be receiving
a $98,000 grant from the CARES Act, which will need to be shared with private schools,
which will provide the ability to pay for technology needed for remote learning. Health
Services was not cut, as more nursing will be needed. More substitutes may be needed.
The Facilities budget has not been touched because it is not yet known what those expenses
will be.
Mr. LeLacheur reviewed further impacts on the Town staffing. Seven positions, including
five seasonal DPW employees were eliminated from FY21 with the hope of adding some if
not all back in for FY22. To avoid layoffs, two vacant full-time positions were reduced to
part-time 20-hour positions. The COLA for non-union employees was reduced 1%.
The Finance Committee discussed when to schedule the follow up discussion. Because the
School Committee also has a meeting scheduled for Thursday, May 14`^, the Finance
Committee agreed to cancel their meeting currently scheduled for Thursday, May 10,
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2020, and instead meet remotely via Zoom on Monday, May 181h, 2020 at 7:OOpm to
discuss and vote on the revised budget.
On a motion by Mr. Wise, seconded by Ms. Gaffen, the School Committee
adjourned by a vote of 5-0.
On a motion by Mr. Bacci, seconded by Ms. Herrick, the Select Board adjourned by
a vote of 5-0.
On a motion by Mr. Mclauchlan, seconded by Mr. Ross, the Finance Committee
voted to adjourn at 10:46pm by a vote of B-0.
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