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Home My WebLink About2025-10-08 Finance Committee MinutesRECEIVED Town of Reading TOWN CLERK Meeting Minutes RCA0ING, MA.04c_ 0b �`'`��^^°° � 2625 OCT 16 AM h 32 Board -Committee -Commission -Council: Finance Committee Date: 2025-10-08 Time: 7:00 PM Building: Reading Public Library Location: Community Room Address: 64 Middlesex Avenue Session: Open Session Purpose: General Business Version: Final Attendees: Members - Present: Chair Joe Carnahan, Vice Chair Emily Sisson, Geoffrey Coram, Joe McDonagh (remote), Marianne McLaughlin -Downing, Ed Ross, John Sullivan, Mark Zarrow (remote) Members - Not Present: Endri Kume Others Present: CFO Sharon Angstrom, Town Manager Matt Kraunelis, School Superintendent Tom Milaschewskl, School Finance Director Phil Littlehale, DPW Director Chris Cole (remote); Select Board Members: Chris Haley (remote), Karen Rose -Gillis, Karen Gately Herrick; Erin Gaffen, Tom Wise, Angela Binda (remote), Jeffrey Dietz (remote) Margaret Donnelly -Moran (remote), Danielle Betancourt (remote), Shawn Brandt (remote), Sandy Matathla (remote), Kate Harrington (remote) 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. Call to order and Welcome Chair Joe Carnahan called the meeting to order at 7:03 pm. Roll call attendance: Joe McDonagh (remote), Mark Zarrow (remote), Geoffrey Comm, Ed Ross, John Sullivan, Emily Sisson, Joe Carnahan. Marianne McLaughlin -Downing arrived shortly after at 7:10 pm. As there was a quorum present, Select Board Chair Chris Haley called the Select Board to order at 7:07 pm. Roll call attendance: Karen Rose -Gillis, Karen Gately Herrick, Chris Haley (remote). Public Comment Angela Binda, Town Meeting Member, of Orchard Park Drive prepared a statement, which was read by her husband Jeffrey Dietz, also a Town Meeting Member, in which they expressed their concerns about a proposed agreement with Burbank Ice Arena, which they believe trades parking for 50% of Burbank rent payment funds to be allocated for unified sports, which they feel is inappropriate. Discuss and Vote on Finance Committee Reserve Fund Transfer Request Page 1 1 The Finance Committee discussed a $50,000 reserve fund transfer request for radio amplification work at the High School. CFO Sharon Angstrom and Fire Chief Rick Nelson explained the need for the project due to radios not working in parts of the building. On a motion by Ed Ross, seconded by Emily Sisson, the Finance Committee voted 8-0-0 to approve the Reserve Fund Transfer Request in the amount of $50,000. Roll call vote: Joe McDonagh - Yes, Mark Zarrow - Yes, Geoffrey Coram - Yes, Ed Ross - Yes, Marianne McLaughlin -Downing - Yes, John Sullivan - Yes, Emily Sisson - Yes, Joe Carnahan - Yes. CFO Sharon Angstrom provided a presentation on free cash projections, financial forecasting, and long-term financial obligations. She noted that free cash use has been more than what the Town is comfortable with, though regeneration has trended around $3 million each year. She shared several changes to the budget to try and save money including decreasing capital, moving salaries of stormwater employees to the enterprise fund, aiming for a 2.75% increase to the operating budget, and leveraging the special education stabilization fund. She reviewed projected revenues and estimated $132.2 million projected revenue for FY27. Free cash is not yet certified but Is estimated at $17.3 million. Accommodated costs are projected to increase 15.8% in FY27 and 12.6% in FY28. Pension is 79.8% funded with a $51.34 million unfunded liability. Other Post Employment Benefits (OPEB) is 10.64% funded with an $80.69 million unfunded liability. Once pension Is fully funded, those funds will be redirected to fund OPEB. Reading's obligation for the Northeast Metro Vocational School has Increased due to increased enrollment of Reading students and funding their new school building. Excluded debt increases 71.6% in FY27 due to the excluded debt for the Killam and Reading Center for Active Living projects. Ms. Angstrom provided an overview of the free cash usage over the past five years, and a comparison of other communities' use of free cash. Reading Is using 20%-39.9% of free cash, whereas many others are using between 40%-100% of their free cash, which illustrates how Inflation has impacted communities throughout the state. She provided figures of free cash usage and the corresponding increase to the operating budget. The Committee discussed several factors impacting the budget including the stormwater salaries, spending the SPED stabilization fund, funds received from the fair share tax, bond issuance and debt payments by project, changes to the capital plan, the upcoming trash and recycling contract, bond rating, and projected use of free cash and regeneration. Ms. Angstrom noted that bond agencies prefer reserves to be somewhere near 15%. Reading is currently at 14.8%. She stated that she would prefer to do an override next year, as she is worried if the use of free cash continues to decrease the amount of reserves, the AAA bond rating could be In jeopardy of being downgraded for the next tranche of borrowing without enough in reserves. As there were not enough members of the Ad Hoc Community Preservation Act (CPA) Study Committee In attendance, their presentation will be rescheduled to a future meeting. Discussion of School Outlook and Impact of Federal Fundino Reductions School Finance Director Phil Littlehale provided a brief overview of how the uncertainty of federal and state funding may impact Reading. There is no impact on federal grants this fiscal year, as those are fiscal year 25 funds that were already approved. The state has a website called "The Impact of Trump Administration and Congressional Cuts on Massachusetts" that can help to answer questions. The only impact to FY26 might be with food service programs that Reading does not utilize. For FY27, entitlement grants probably will not be touched, but other grants might be affected. Page 1 2 The Committee briefly discussed free cash projections and factors impacting future budgets including accommodated costs, collective bargaining contracts, and health insurance contributions. The Committee will vote on their recommended free cash usage at their next meeting. Liaison Reports Geoffrey Coram shared that the School Committee discussed MCAS results, though the test is no longer a graduation requirement. While there were some good results, there were also some areas of concern and focus. Marianne McLaughlin -Downing shared that the American Rescue Plan Act (ARPA) funds allocated for the School curriculum seemed to have a positive impact on the English results of the MCAS. She also highlighted the Select Board discussions on the Burbank Ice Arena agreement for unified sports, the trash contract not being approved, and an informational presentation from the MBTA regarding the proposed tumback track. The Community Planning and Development Commission (CPDC) approved the Primrose School. Joe McDonagh shared that the Board of Library Trustees approved a bid for the terrace project, which will be fully funded by the Reading Public Library Foundation. Joe Carnahan shared that the CPA Study Committee continues to reach out to other stakeholder boards and committees. Future Agendas At the next meeting on October 15'h, the Finance Committee will discuss and vote on free cash, discuss and vote on Subsequent Town Meeting warrant articles, discuss financial policies and how they can impact bond rating, and tentatively schedule the presentation by the CPA Study Committee. Approve Prior Meeting Minutes: September 17, 2025 Emily Sisson clarified in her liaison report that Town Staff, not the Recreation Committee, is planning to develop an operational plan for the Reading Center for Active Living. On a motion by Geoffrey Coram, seconded by Ed Ross, the Finance Committee approved the meeting minutes of September 17, 2025, as amended. Roll call vote: Joe McDonagh - Yes, Mark Zarrow - Yes, Geoffrey Coram - Yes, Ed Ross - Yes, Marianne McLaughlin -Downing - Yes, John Sullivan - Yes, Emily Sisson - Yes, Joe Carnahan - Yes. On a motion by Geoffrey Coram, seconded by Emily Sisson, the Finance Committee voted 8-0-0 to adjourn at 9:06 pm. Roll call vote: Joe McDonagh - Yes, Mark Zarrow - Yes, Geoffrey Coram - Yes, Ed Ross - Yes, Marianne McLaughlin -Downing - Yes, John Sullivan - Yes, Emily Sisson - Yes, Joe Carnahan - Yes. On a motion by Karen Rose -Gillis, seconded by Karen Gately Herrick, the Select Board voted 3-0-0 to adjourn at 9:07 pm. Roll call vote: Karen Gately Herrick - Yes, Karen Rose -Gillis - Yes, Chris Haley - Yes. Page 1 3