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HomeMy WebLinkAbout2025-09-17 Finance Committee PacketTown of Reading Meeting Posting with Agenda This Agenda has been prepared in advance and represents a listing of topics that the chair reasonably anticipates will be discussed at the meeting. However the agenda does not necessarily include all matters which may be taken up at this meeting. Page | 1 2018-07-16 LAG Board - Committee - Commission - Council: Finance Committee Date: 2025-09-17 Time: 7:00 PM Building: Reading Town Hall Location: Select Board Meeting Room Address: 16 Lowell Street Agenda: Purpose: General Business Meeting Called By: Jacquelyn LaVerde on behalf of Chair Joe Carnahan Notices and agendas are to be posted 48 hours in advance of the meetings excluding Saturdays, Sundays and Legal Holidays. Please keep in mind the Town Clerk’s hours of operation and make necessary arrangements to be sure your posting is made in an adequate amount of time. A listing of topics that the chair reasonably anticipates will be discussed at the meeting must be on the agenda. All Meeting Postings must be submitted in typed format; handwritten notices will not be accepted. Topics of Discussion: This meeting will be held in-person in the Select Board Meeting Room of Town Hall and remotely via Zoom: Join Zoom Meeting https://us06web.zoom.us/j/88082343807 Dial by your location • +1 646 558 8656 US (New York) • +1 646 518 9805 US (New York) AGENDA: •Public comment •Liaison reports •Discussion of policies and practices for projects that come in under budget •Discussion of financial policy review •Future Agendas •Review agenda for Financial Forum on October 8, 2025 •Approve minutes for August 13, 2025 To: Reading Finance Committee From: Joe Carnahan Date: September 10, 2025 Re: Discussion of policy for under-budget capital projects At our last meeting on August 13, we received a report on the RMHS Field House floor project and discussed concerns that some parts of the project might not be what Town Meeting members thought they had voted for when they approved the project. Since then, several residents have reached out to validate those concerns, expressing their surprise that certain items were included. As we discussed at our last meeting, a high level of trust between Town Meeting and Town staff is necessary for our town's government to function effectively. One way that we can reinforce that trust is by writing down our shared understanding of what kinds of alterations or additions to a project are and are not expected after Town Meeting allocates money for it. Emily Sisson and I have drafted a policy statement and shared it with Town staff, who are still discussing it and have promised to come back with feedback on it soon. In the meantime, we would like to share this draft with the rest of the Finance Committee and with the public and to hear your feedback on it as well. Note that this document is just a draft, and we are only sharing it now in order to generate discussion and solicit feedback. No part of this document necessarily represents the opinion of any specific person or organization. We would like to gather feedback from staff, residents, and of course the rest of the Finance Committee before anyone moves to adopt this as an official policy of the Finance Committee of the Town of Reading. Also, please note that no local policy is a substitute for the laws of the Commonwealth regarding how taxpayer dollars may be allocated and spent. This document is merely proposed as a way to clarify our shared understanding of existing laws and practices. With a policy, we aim to reduce the chance of surprises and reaffirm the trust between the voters of Reading who approve projects and the staff who make those projects successful. Draft policy: When Town Meeting votes to allocate money for a project, it is approving both the funding amount and the specific purpose for which those funds are appropriated. Project managers must often make practical decisions during implementation, and Town Meeting should expect those decisions to reflect its original intent—not to redefine or expand the project. To balance the need for professional judgment with Town Meeting’s authority, the following guidelines apply to any additions or changes to Town-funded projects: ●Necessary Adjustments: Funds may be used for minor modifications or incidental items that are reasonably required to complete the approved project (e.g., safety, compliance, durability, or related finishes). 2 ●Protecting the Town’s Investment: Funds may be used for measures that protect, preserve, or otherwise extend the useful life of the approved project. ●No New Features or Upgrades: Funds may not be used for additions, enhancements, or substitutions that introduce new features or materially change the nature of the project approved by Town Meeting. Any such requests must return to Town Meeting for approval. ●Return of Surplus Funds: Any funds remaining at the end of a project must be returned to the Town for reappropriation. Staff must have flexibility to complete projects properly, but the authority to approve new or different projects rests solely with Town Meeting. This policy does not restrict whether funds are spent through a single contract, multiple contracts, or additional expenses outside the scope of an initial contract. The only restriction is that appropriated funds are used for the specific purpose approved by Town Meeting. 3 To: Reading Select Board CC: Reading Finance Committee, Town Manager Matt Kraunelis, Assistant Town Manager Jayne Wellman, and Chief Financial Officer Sharon Angstrom From: Joe Carnahan Date: September 14, 2025 Re: Review of Reading's Financial Policies After consulting with the rest of the Finance Committee, I would like to ask if the Select Board could request a free review of the town's financial policies from the Division of Local Services' Financial Management Resource Bureau (FMRB). Such a review would reassure both voters and credit agencies of Reading's commitment to fiscal responsibility, and it could help us identify if there are any opportunities to further improve our planning and spending practices. Background: On June 3, 2025, I attended a webinar organized by the Massachusetts Municipal Association with Sean Cronin and Theo Kalivas from the Massachusetts Department of Local Service on "Developing Local Financial Policies" (mma.org/mma-webinar-with-dls-covers-financial-policies). I originally signed up for this webinar because of previous discussions the Finance Committee has had about our own policies: ●Debt and Capital ●OPEB ●Reserves ●Peer communities (The first three of these policies can be found at readingma.gov/546/Policies, while our Peer Communities Benchmarking Guidelines can be found at readingma.gov/DocumentCenter/View/2294/Peer-Community-Benchmarking-Guidelines-PDF.) The webinar outlined an ambitious set of policies, some 20 in all. Of those, roughly half concerned planning and were relevant to the Finance Committee, while the other half were operational and hence primarily relevant to town staff. Besides policies that we already have, the webinar discussed policies for ●the budget planning process itself ●the capital planning process ●financial forecasting ●indirect cost allocation (operating expenses that should be covered by enterprise funds) ●overlays (how to budget for property tax abatements and exceptions) ●special purpose appropriations. I am not aware of any problems with how any of these things work in Reading. Still, I think there is value in documenting these processes to keep them running smoothly into the future. I am also concerned by how and when policies are updated. Reading's peer community policy (which interestingly was not included as a standard local policy in the webinar) is almost 12 years old, and it includes peers that have undergone significant changes in the shape of their 4 community and their tax base since then. Even the newest FinCom policies date to August 2018, which means they were set shortly after the last override. The FMRB recommends that municipalities review their financial policies every 5-10 years. To enable this, the Select Board of any town can invite the FMRB to review the town's financial policies at no cost to the town. Such a review could provide direct benefits if it uncovers any opportunities to better manage taxpayers' money. Perhaps just as importantly, a review would provide the indirect benefit of reassuring voters and credit agencies that Reading is as serious as ever about fiscal responsibility. Given the possible benefits of this free service, I would like to ask the Select Board to invite the FMRB for a review of Reading's financial policies. I am happy to discuss this proposal further with any or all of you. Thank you for taking the time to consider this request. 5 Town of Reading Meeting Minutes Page | 1 2016-09-22 LAG Board - Committee - Commission - Council: Finance Committee Date: 2025-08-13 Time: 7:00 PM Building: Reading Town Hall Location: Conference Room Address: 16 Lowell Street Session: Open Session Purpose: General Business Version: Draft Attendees: Members - Present: Joe Carnahan, Geoffrey Coram, Endri Kume, Marianne McLaughlin-Downing, Ed Ross, Emily Sisson, John Sullivan, Mark Zarrow (remote) Members - Not Present: Joe McDonagh Others Present: Town Manager Matt Kraunelis, CFO Sharon Angstrom, Assistant Town Manager Jayne Wellman, Facilities Director Joe Huggins (remote), Assistant Facilities Director Kevin Cabuzzi (remote), Karen Gately Herrick (remote) Minutes Respectfully Submitted By: Jacquelyn LaVerde Topics of Discussion: This meeting was held in-person in the Conference Room of Town Hall and remotely via Zoom. Call to Order and Welcome Chair Joe Carnahan called the meeting to order at 7:00 pm and reviewed the evening’s agenda. Roll call attendance: Mark Zarrow (remote), Ed Ross, Geoffrey Coram, Endri Kume, Marianne McLaughlin-Downing, John Sullivan, Emily Sisson, John Sullivan. Absent: Joe McDonagh. Public Comment There was no comment from the public. Discussion on funding status of past and current large capital projects: Field House floor, ReCAL, Killam, Birch Meadow phase 2, Haven Street, pickleball courts CFO Sharon Angstrom provided an overview of the funding status of past and upcoming capital projects. She explained the internal borrowing process, which provides a cash flow to get the ReCAL, Killam, and Birch Meadow projects started, and delays the full borrowing until January and debt exclusion to the FY27 tax bills. The internal borrowing will be paid back with the permanent borrowing in January. Facilities Director Joe Huggins provided a status update on the High School Field House Floor project, which included new bleachers. There was other equipment in the field house that needed to be replaced. The project was approved for $3 million, and bids came in at $2.683 million. Two change orders were issued related to the flooring part of the project, which included a new Reading Rockets logo on the court, side curtains on the bleachers, logos on the front of the bleachers, a court covering to protect the floor for event such as 6 Page | 2 voting, testing for slab compaction, painting the inside walls, electrical work to power the bleachers, duct work deep cleaning, new scoreboards, new backboards, new batting cage, and new divider curtains. An automatic scrubber will also be purchased to deep clean the new floor. There will be an estimated $15,000 to $17,000 remaining when the project is done. Savings were realized by using the Town’s electrical contractor and by naming Mr. Huggins as the Owners Project Manager (OPM). The project is expected to be completed by August 27th or the 29th. Some Committee members expressed concern that so many items seemed out of scope, and optional items should have been better communicated to Town Meeting. The Committee discussed the need for better communication and transparency in future project presentations to Town Meeting to ensure that members understand the scope and potential additional costs involved. Ms. Angstrom reviewed the status of other capital projects. Nothing has been expended yet for pickleball, and the project will go out to bid around December or January. Remaining funds from the West Street road improvement project have already been moved. Other completed projects with balances include the Police Station renovation with $1,300, energy improvements phase 2 with $17,977, the Parker roof with $30,000, building security with $13,996, Turf 2 with $882, and High School track and turf with $13.29. Birch Meadow, Maillet Sommes, and Haven Street projects are still in process. There is $90,000 left on the Library project, which could be used for the new Killam School or Reading Center for Active Living. She explained that borrowed funds leftover from capital projects can only be used for other projects with similar or longer borrowing terms , which reduces the amount needed to borrow for other projects. Mark Zarrow left the meeting at 7:50 pm. Vote to Reorganize Town Manager Matt Kraunelis opened nominations for Chair. Emily Sisson nominated Marianne McLaughlin-Downing as Chair. Ms. McLaughlin-Downing respectfully declined the nomination, noting that her work schedule has become very busy. Marianne McLaughlin-Downing then nominated Joe Carnahan for Chair, which was seconded by Endri Kume. With no further nominations, Endri Kume moved to close nominations for Chair, which was seconded by Emily Sisson, and passed by a vote of 7-0. The Finance Committee then voted 7-0 to elect Joe Carnahan as Chair. Chair Joe Carnahan opened nominations for Vice Chair. Marianne McLaughlin-Downing nominated Emily Sisson for Vice Chair. With no other nominations, Ed Ross moved to close nominations, which was seconded by Geoffrey Coram and passed by a vote of 7-0. The Finance Committee then voted 7-0 to elect Emily Sisson as Vice Chair. Liaison Reports Endri Kume shared that the Interim General Manager of RMLD resigned, and the RMLD Board of Commissioners is now actively collecting resumes for a new Interim General Manager. Marianne McLaughlin-Downing shared highlights from the Select Board meeting including a discussion on the Montessori School that is seeking to rent Mattera Cabin, approved internal borrowing for capital projects, and their discussion on potential revenue opportunities. 7 Page | 3 John Sullivan shared that the ReCAL construction estimate has decreased $1.3 million. The CPDC approved a childcare facility on Haverhill Street and discussed updating Accessory Dwelling Unit (ADU) bylaws. Emily Sisson shared updates from the Recreation Committee including the sad and unexpected passing of longtime member Michael Coltman, the election of Rich Hand as the new Chair, a 20% decrease in summer program revenue due to construction projects around town, and staff working to address providing programs that do not have adequate funding. Ed Ross provided an update on the Killam School Building Committee. The modulars were moved from the Killam site to the High School to be used for pre-k until the Killam project is complete, then as administrative space. The Committee will be discussing the design development and drawings at their next meeting. Joe Carnahan shared that the Audit Committee met to review the RMLD audit. The Community Preservation Act (CPA) Study Committee is continuing its work and is reaching out to stakeholder boards and committees. He stated that he attended the Town Forest Committee meeting to discuss the CPA, and the Chair noted that the Town Forest Committee is trying to secure funding for invasive species control. He also shared details of his conversation with the Conservation Administrator regarding the proposed Montessori School’s use of Mattera Cabin. Discuss FY26 Liaison Assignments The Finance Committee reviewed the list of liaison assignments and agreed to various reassignments, and added liaisons for the Conservation Commission, Town Forest Committee, and Eastern Gateway Steering Committee. [The full list of FY26 Liaison Assignments is appended to these minutes.] Discuss Financial Forum I Topics/ Discuss FY26 FINCOM Meeting Schedule/ Future Agendas Topics that will be discussed at the Financial Forum include the operating budget, updated free cash projections, override timing, free cash usage, accommodated costs, trash contract, and health insurance costs. The Finance Committee discussed and agreed to schedule the Financial Forum for October 8th, and a regular meeting the following week on the 15th to vote on Subsequent Town Meeting Articles. Joe Carnahan and Emily Sisson will discuss the agenda for the Financial Forum and decide whether another meeting on September 17th will be needed ahead of the Forum. The Committee also reviewed and agreed on the meeting calendar for the rest of FY 2026. There will also be a July 2026 meeting so that the Committee can reorganize. Discussion on Select Board’s response to Finance Committee Outreach and Policy Review Select Board member Karen Gately Herrick did not have an update. Approve Prior Meeting Minutes On a motion by Ed Ross, seconded by Endri Kume, the Finance Committee voted 6 - 0-1 to approve the meeting minutes of June 25, 2025, with Geoffrey Coram abstaining, as he was not present at that meeting. On a motion by Emily Sisson, seconded by John Sullivan, the Finance Committee voted 7-0-0 to adjourn at 9:35 pm. 8 NAME LIAISON ASSIGNMENTS Joseph Carnahan ('24-'27)Chair Audit Committee Community Preservation Act Study Committee Facilities Geoffrey Coram ('24-'27)Schools & School Committee Public Safety Marianne Downing ('23-'26) Select Board Conservation Commission/Town Forest Charter Review Committee Endri Kume ('24-'27) RMLD Administrative Services Public Works Joseph McDonagh ('25-'28)RMLD Library & Library Trustees Ed Ross ('25-'28) Killam School Building Committee Reading Ice Arena Authority Select Board Emily Sisson ('25-'28)Vice Chair Public Services/Community Services Public Safety John Sullivan ('23-'26) Public Services/Community Development Eastern Gateway Steering Committee Permanent Building Committee/ReCAL Mark Zarrow ('23-'26) Audit Committee Public Services/Recreation School Committee To contact the Finance Committee, email:finance@ci.reading.ma.us *Departments are underlined TOWN OF READING FINANCE COMMITTEE LIAISON ASSIGNMENTS - FY26 9