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HomeMy WebLinkAbout2021-10-20 Finance Committee Minutes�orwtaO ECEIVEL) WN Town of Reading TO CLERK Meeting Minutes ADING, MA, 11" NOV - 0 8 AM 9 35 Board - Committee - Commission - Council: Finance Committee Date: 2021-10-20 Time: 7:00 PM Building: Reading Public Library Location: Community Room Address: 64 Middlesex Avenue Session: Open Session Purpose: Financial Forum Version: Final Attendees: Members - Present: Chair Ed Ross, Vice Chair Jeanne Borawski, Eric Burkhart (remote), Geoffrey Coram, Marianne Downing, Jackie McCarthy, Joe McDonagh, Mark Zarrow Members - Not Present: Andrew Mclauchlan Others Present: Town/School Staff: Town Manager Bob LeLacheur, Town Accountant Sharon Angstrom, Facilities Director Joe Huggins (remote), Library Director Amy Lannon (remote), DPW Director Jane Kinsella (remote), School Superintendent Tom Milaschewski (remote), Assistant DPW Director Chris Cole (remote), School Director of Finance Susan Bottan Select Board Members: Chair Karen Herrick, Vice Chair Anne Landry (remote), Carlo Bacci (remote), Chris Haley School Committee Members: Chair Tom Wise, Vice Chair Shawn Brandt (remote), Erin Gallen (remote), Carla Nazzaro Public: Eileen Sickler (remote), Debbie Hattery, Robert Forsythe, Ian Nelson, Debi Haynes, Dave Ferreria, Rich Abate Minutes Respectfully Submitted By: Jacquelyn LaVerde Topics of Discussion: This meeting was held in-person in the Community Room of the Reading Public Library, and remotely via Zoom. Chair Ed Ross called the meeting to order at 7:03 pm. School Committee Chair Tom Wise called the School Committee to order at 7:03 pm. Mr. Ross Introduced new School Superintendent Tom Milaschewski and new School Director of Finance Susan Bottan, then welcomed them and thanked them for joining the School Department. Public Comment: Bob Forsythe, representing the public safety professionals of Police, Fire, and Dispatch, read a prepared statement that requested American Rescue Plan Act (ARPA) funds to be used for backpay for hours worked by Public Safety employees who had to work in-person during the pandemic, as it qualifies under premium pay for essential workers [Attachment A]. Review of FY21 Revenues & Expenses/ Page 1 1 Update for FY22 Revenues & Free Cash/ Proiected FY23 Revenues/ Proiected FY23 Accommodated Costs Town Accountant Sharon Angstrom provided an overview of projected FY23 revenues: property tax increases 3.6% to $84.3 million, other local revenues decrease 1.7% to $7.6 million, state aid Increases 2.5% to $15.2 million, other transfers increase 1.6% to $4 million, and the amount of Free Cash to be used is to be determined. FY22 revenues are projected at a 4% increase to $107.81 million, with $2.87 million used from Free Cash for a 4.7% total increase in Revenues plus Free Cash to $110.78 million for the operating budget. FY23 projected revenues increase 3% to $111.12 million, or 0.3% increase to the operating budget without the use of Free Cash, which has not yet been determined for FY23. Current Reserves are $19.64 million, with $17.7 million in Free Cash, which was just recently certified by the Mass. Department of Revenue, $1.7 million In the General Stabilization Fund, and $200,000 in the Finance Committee Reserve Fund. FY21 revenues saw $1.7 million in regeneration, and expenditures came in $3 million under budget. Town Manager Bob LeLacheur reviewed FY21 through FY24 accommodated costs. The Department of Revenue found a glitch in their system that resulted in new growth coming in $400,000 higher then projected, which means new growth currently and for the new budget will be $1.6 million higher. Accommodated costs are up 3.6%. Benefits are up 4%. Other Post Employment Benefits (OPER) is the most discretionary benefit. It was reduced to $0 at the start of the pandemic, but is Increased to $350,000 for FY23, and $500,000 in FY24. Once the pension is fully funded in 2031, then those savings will be directed toward OPEB obligations. Insurance increase is anticipated at 2% next year. There may be a surplus in insurance with so many open positions, but the projected increase will not be known for certain until the first week of February when IIIA provides a quote. Because a quorum was now present, Select Board Chair Karen Herrick called the Select Board to order at 7:26 pm. Mr. LeLacheur continued with an overview of Capital and Debt with the current debt issued, approved, and requested through FY25. The Capital Plan requests $27.9 million for projects between FY23-FY33, and projected funds are $41.4 million. This results in a projected $13.5 million excess capacity. Though the Capital Plan is usually pretty thorough in the near term, it can be less reliable in years six through ten, as unexpected equipment replacements can arise despite established replacement plans. The figures also do not account for the Birch Meadow Master Plan estimated at $10 million, and the School Athletic fields estimated at $3.1 million. Use of Free Cash to support FY23 budaet/ FY23 Operating Budget guidance Mr. LeLacheur presented a chart of Free Cash Usage for FY23 ranging from $1.5 million,or 2.1% of the operating budget, to $3 million, or 4.3% of the operating budget. Free Cash has regenerated an average of approximately $3 million for the past few years. The Committee engaged in a lengthy discussion about School needs including: hiring additional counselors, addressing students' increased social/emotional needs, and a Killam space study. The Committee agreed that they were comfortable with using $2.75 million to balance the FY23 operating budget given the high free cash balance and needs In the community. On a motion by Mr. Coram, and seconded by Ms. Borawski, the Finance Committee voted 8-0-0 to recommend using $2.75 million from Free Cash to support the FY23 operating budget. Page 12 Roll call vote: Eric Burkhart -Yes, Geoffrey Coram -Yes, Jeanne Borawski-Yes, Joe McDonagh -Yes, Jackie McCarthy -Yes, Mark Zarrow-Yes, Marianne Downing Yes, Ed Ross -Yes. Discuss Working Group to Identify Community Needs for ARPA Funds/ Discuss uses of ARPA Funds Mr. Ross and Ms. Borawski presented their plan to establish a working group to assess community priorities using American Rescue Plan Act (ARPA) funds and excess Free Cash. The time frame is driven by the Town Meeting schedule, so that Town Meeting receives regular updates and remains engaged in the process. The proposed members of the working group would be the Chair and Vice Chair of the Finance Committee, the Chair and Vice Chair of the Select Board, the Chair and Vice Chair of the School Committee, the School Superintendent, the School Director of Finance, the Town Manager, and the Town Accountant. The Working group would be charged with working with the community to identify priorities, and to present a plan to Town Meeting in November 2022 on how to spend the ARPA funds and excess Free Cash. Where Chair and Vice Chair can change each year, it would be up to each represented Board/Committee to identify their representatives for this working group. Mr. Haley, Mr. Wise, and Ms. Landry agreed that a seventh member may be beneficial, perhaps a third representative from the Finance Committee, to be a tie -breaking vote if needed. Following discussion, Ms. Angstrom reviewed the acceptable uses of the $7,592,234 awarded in ARPA funds. Mr. LeLacheur reviewed the outstanding articles for the October Special Town Meeting: Article 6 for Performance Contracting, Article 7 for the Auburn Street Water Tank replacement, and Article 9 for the acquisition of land adjacent to Meadow Brook Golf Club. He noted that the article for the Wakefield Vocational School for the November Subsequent Town Meeting can be tabled, as two communities did not support the project, though it would be a good opportunity to educate the community. Ms. Borawski asked if ARPA funds could be used for Performance Contracting, to which Ms. Angstrom answered no. Because one of their members had to leave, Mr. Wise called for the adjournment of the School Committee. On a motion by Ms. Nazzaro, and seconded by Mr. Brandt, the School Committee voted 4-0-0 to adjourn at 9:46 Pm. Roll call vote: Shawn Brandt -Yes, Erin Gaffen-Yes, Carla Nazzaro-Yes, Tom Wise - Yes. The Finance Committee began with discussion on Article 9 to purchase Meadow Brook land. There are two options presented by the prospective developer: buy all five lots at $2.25 million, or one lot at $450,000. Ms. Downing stated that she felt that $2.25 million is a lot of money for not a lot of land and was opposed to the purchase of all five lots. Mr. Coram stated that the price is not a lot considering there is $17 million in free cash, and felt the Town could purchase the land now, but resell it in the future if it does not find a use for it. Ms. Borawski stated that she was persuaded by the presentation by Conservation Commission Chair Annika Scanlon, and cited her own experience on Strout Avenue and agreed that there is a parking and safety issue and lack of access to Town Forest. However, she noted that she is struggling with the $2.25 million cost, and the impact it may have on future capital projects. Members of the Committee and the Select Board raised additional concerns including: the benefits of preserving more open space, not having a use for the lots, still needing an easement to access Town Forest, potential additional costs such as making the lot ADA compliant, and the Town's role not being to acquire property just to sell It. Page 1 3 Following discussion, the Committee voted on both options. For Option A, the purchase of all five lots: On a motion by Ms. Borawski, and seconded by Mr. Coram, the Finance Committee voted 1-7-0 to recommend the purchase of all five lots on Article 9. Motion did not carry. Roll call vote: Eric Burkhart -No, Geoffrey Coram -Yes, Jeanne Borawski-No, Joe McDonagh -No, Jackie McCarthy -No, Mark Zarrow-No, Marianne Downing -No, Ed Ross -No. The Committee discussed their recommendation on how to finance the purchase of all five lots should Town Meeting vote to approve. On a motion by Mr. Zarrow, and seconded by Ms. Borawski, the Finance Committee voted 3-5-0 to recommend authorizing $2.25 million in debt to purchase the five lots. Motion did not carry. Roll call vote: Eric Burkhart -No, Geoffrey Coram -No, Jeanne Borawski-No, Joe McDonagh -No, Jackie McCarthy -No, Mark Zarrow-Yes, Marianne Downing -Yes, Ed Ross -Yes. On a motion by Mr. McDonagh, and seconded by Ms. Borawski, the Finance Committee voted 7-1-0 to authorize $1.5 million in debt and fund the remainder from Free Cash to purchase the five lots. Roll call vote: Eric Burkhart -Yes, Geoffrey Coram -Yes, Jeanne Borawski-Yes, Joe McDonagh -Yes, Jackie McCarthy -Yes, Mark Zarrow-No, Marianne Downing -Yes, Ed Ross -Yes. For Option B, the purchase of just one lot: On a motion by Ms. Borawski, and seconded by Ms. Downing, the Finance Committee voted 8-0-0 to recommend the purchase of just one lot for $450,000. Roll call vote: Eric Burkhart -Yes, Geoffrey Coram -Yes, Jeanne Borawski-Yes, Joe McDonagh -Yes, Jackie McCarthy -Yes, Mark Zarrow-Yes, Marianne Downing -Yes, Ed Ross -Yes. On a motion by Ms. Borawski, and seconded by Mr. Coram, the Finance Committee voted 8-0-0 to recommend funding the purchase of one lot using $450,000 of Free Cash. Roll call vote: Eric Burkhart -Yes, Geoffrey Coram -Yes, Jeanne Borawski-Yes, Joe McDonagh -Yes, Jackie McCarthy -Yes, Mark Zarrow-Yes, Marianne Downing -Yes, Ed Ross -Yes. The Committee previously voted to recommend authorizing debt for the Performance Contracting recommended in Article 6. The Committee still agreed with that recommendation and the article did not need to be re -voted. The energy savings will help pay for the debt, and the Capital Plan is balanced with it being issued as debt. For the Auburn Street Water Tower replacement proposed in Article 7, Mr. Zarrow asked where the $4.5 million already borrowed was, and what else the funds could be used for. Ms. Angstrom explained that the funds are in the Capital Project fund waiting to be used, and Town Meeting would have to reassign the money for use on another project acceptable under the borrowing terms. ARPA funds cannot be used to pay for past debt. The Committee continued to discuss funding the additional $2.5 million needed using ARPA funds, Water Reserve funds, and additional borrowing. Ms. Borawski made a motion to recommend Article 7 to be funded up to $1 million in debt, $500,000 from Water Reserve funds, $1 million from ARPA funds, should the Select Board deem it appropriate, and if not, $1 million in debt. The motion was seconded by Ms. Downing. Following brief discussion about use of ARPA funds, Ms. Borawski withdrew her motion and issued a new one. Page 1 4 On a motion by Ms. Borawski, and seconded by Ms. Downing, the Finance Committee voted 7-0-1 to recommend funding the $2.5 million using $500,000 from the Water Reserve Fund, and up to $2 million using ARPA funds as determined appropriate by the Select Board, and any balance to be paid by debt. Roll call vote Eric Burkhart -Yes, Geoffrey Coram -Yes, Jeanne Borawski-Yes, Joe McDonagh -Yes, Jackie McCarthy -Abstain, Mark Zarrow-Yes, Marianne Downing - Yes, Ed Ross -Yes. On a motion by Mr. Haley, and seconded by Mr. Bacci, the Select Board voted 3-0-0 to adjourn at 10:58 pm, as Ms. Landry had already left the meeting. Roll call vote: Carlo Bacci-Yes, Chris Haley -Yes, Karen Herrick -Yes. Approve Meetina Minutes: September 30. 2021: On a motion by Ms. Borawski, and seconded by Mr. Coram, the Finance Committee voted 6-0-2 to approve the meeting minutes of September 30, 2021, with Mr. Zarrow and Ms. Downing abstaining, as they were not present at the meeting. Roll call vote: Eric Burkhart -Yes, Geoffrey Coram -Yes, Jeanne Borawski-Yes, Joe McDonagh -Yes, Jackie McCarthy -Yes, Mark Zarrow-Abstain, Marianne Downing - Abstain, Ed ross-Yes. On a motion by Ms. Borawski, and seconded by Ms. Downing, the Finance Committee voted 8-0-0 to adjourn at 10:59 pm. Roll call vote: Eric Burkhart -Yes, Geoffrey Coram -Yes, Jeanne Borawski-Yes, Joe McDonagh -Yes, Jackie McCarthy -Yes, Mark Zarrow-Yes, Marianne Downing -Yes, Ed Ross -Yes. Page 1 5