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HomeMy WebLinkAbout2008-10-15 Board of Selectmen Minutes Board of Selectmen Meeting October 15, 2008 The meeting convened at 7:20 p.m. at the Senior Center, 49 Pleasant Street, Reading, -Massachusetts. Present -were Finance Committee Chairman George Hines, Vice Chairman Andrew Grimes, Committee Members Barry Berman, David Greenfield, Hal Torman, Marsie West and Tom White; Board of Selectmen Chairman Stephen Goldy, Vice Chairman Ben Tafoya, Board Members Camille Anthony and Rick Schubert; School Committee Chairman Chuck Robinson and Committee Members Chris Caruso, Lisa Gibbs, Karen Janowski and David Michaud, Town Manager Peter Hechenbleikner, Assistant Town Manager/Finance Director Bob LeLacheur, Town Accountant Gail LaPointe, DPW Director Ted McIntire, Town Engineer George Zambouras, DPW Business Manager Jane Kinsella, Fire.Chief Greg Bums; Police Chief James Cormier and Library Director Ruth Urell, Superintendent Pat Sehettini, Assistant Superintendent John Doherty, Director of Pupil Services Colleen Dolan, School Director of Human Resources and Finances Mary DeLai, and members of the Administrative Council including Joseph Finigan, Doug Lyons, Karen Callan, Cathy Giles and Eric Sprung, Reading Legislators Senate Minority Leader Richard Tisei and House Minority Leader Brad Jones, Melissa Russell (Chronicle), residents Paula Perry and,Bill Brown. Finance I Committee Chairman G I eorge Hines called the meeting to order at 1 7:20 1 p.m. with some introductory remarks. He indicated that the impacts of the current economy and the recent State budget cuts would make for challenging times ahead especially given sips that potential cuts to Local Aid may be forthcoming. He added that Reading has followed budgeting practices that leave us in better shape to deal with possible cuts than many of the neighboring communities but cuts in Local Aid could'add to problems of a* budget that is already projected to be short by a million plus. He asked that members of the audience turn up their fiscal conservatism gene, and at the same time remain positive that working together we can solve our challenges. Legislative Overview—State FY 2009 Budget Senator Richard Tisei described current Massachusetts law that requires the Governor to ascertain by October 15th that the projected revenues can support the budget that was passed for the current fiscal year. Thus earlier today, Governor Deval Patrick announced several measures to balance updated revenues to expenses. Senator Tisei pointed out that in his opinion — and others who voted against the Budget last Summer — the budget was about $1 billion out of balance already, and today's acknowledgement of a $1.4 billion budget deficit before adjustments was certainly not caused exclusively by the recent disruption in the financial markets. He described that under Section 9-C, the Governor has the authority to adjust about 70% of State budgets. The remaining 30% is the purview of the Legislature, the Judiciary and various Constitutional Officers. The authority to reduce Local Aid remains with the Legislature, and they have thus far refused the Governor's requests to grant that authority. Board of Selectmen Meeting—October 15, 2008—Page 2 Representative Brad Jones agreed that the budget as passed had a structural deficit last Summer, and that the recent Wall Street crisis had made things worse. He had steadfastly opposed giving the Governor authority under expanded 9-C to reduce FY09 Local Aid, at the very least until he had seen what the budget facts were and the Governor's plan to correct the situation. Senator Tisei stated that legislators were reluctant to grant this authority to the Governor because when the State is in pain, local communities have shared that pain but when times improve at the State, local communities have often been left out. He noted that the MWRA debt assistance was eliminated by the Governor but the MWRA had agreed.not to change rates for customers mid-year, and would instead find ways to absorb this lost revenue within their budget. Both legislators noted that they had very little detail on the announced budget cuts, but would be sure to advise the Town as the details come out over the next several days. Both legislators agreed that January 3, 2009 was the next key date for State and local officials to be aware. On that date, the State should have a good read on the status of capital gains. In FY09, $1.7 billion of revenue was assumed for the State's budget, which was a 14% reduction from the assumption used in FY08. Senator Tisei noted that for FY10, the lottery portion of State Aid that the Town receives would not be supplemented— only a portion of actual lottery receipts would be passed along. In terms of FY09, that would-suggest-a reduction of about$300,000 for Reading.- -- — -- Both legislators agreed that Question One in the upcoming November Election would result in grave consequences for the State and local governments. The State would lose 40% of annual revenue' - it is unclear how much State Aid would be reduced. Representative Jones stated that his voting record suggests that he is not a fan of taxes, but he does not support Question One. If voters want to send a message, there must be a better way than to eliminate many of the services they have come to expect. Superintendent Pat Schettini noted that it appeared the Circuit Breaker account was reduced, and the legislators agreed that it was. The Assistant Town Manager Bob LeLacheur asked if any grants or earmarks awarded prior to FY09 would be impacted, and the legislators stated that they did not think so. George Hines asked if legislative action was required to enact Question One in the event that it passed, and the legislators explained that it did not require any action on their part, it would become law on January 1, 2009. Chuck Robinson asked if more cuts after January 3rd would be a certainty, and the legislators could not.be 100% certain. David Greenfield asked if a reduction in the capital gains tax receipts was presumed in the budget changes today, and the legislators stated that they believed the budget deficit might still be $500 million more than was corrected today. Barry Berman asked if we would hear more about casinos, and the response in part depended on the results of Question Three which seeks to eliminate greyhound racing. Board of Selectmen Meeting—October 15 2008 —Page 3 Representative Jones pointed out that the Wampanoags had applied for a federal ruling which may well give them permission to pursue gambling in the State, and it would be wise for the State to participate in some of the revenue sharing from such an endeavor. All three Committees led applause and gave thanks for the contributions of legislators Senate Minority Leader Richard Tisei and House Minority Leader Brad Jones. In turn, the legislators complimented the Town as being exceptionally well managed and very proactive on financial matters. Local FY09 and FYIO Budgets The Assistant Town Manager. gave a PowerPoint presentation describing the current budget status in the Town of Reading. The next Financial Forum has been scheduled for November 19, 2008 at which time specific budget guidance will be given to the Schools and Town by the Finance Committee. Additional meetings will be announced then in time to meet the Town Charter's January 30th requirement for the Town Manager to have budgets from everyone to balance against expected revenues (as needed) for FINCOM. FY08 revenues came in $1.37 million over forecast. This was the first full year since revenue forecasting methods changed to become as accurate as possible. A total of$1.35 million of the surplus revenue was from two sources: A $350,000 payment from the State for Smart Growth at the proposed Addison-Wesley site, $1 million in interest earnings, generated by having very high unexpected cas balances om s ow capita projects primarily from RMLD and RMHS. All other revenues generated only a $16,000 net surplus — and over $200,000 of that was due to a one-time payment from the Recreation Revolving Fund. FY09 revenues are thought to be on target thus far. Forecasts for declining excise taxes have been accurate thus far. Net new growth will be somewhat higher. Collections are running at typical historic paces although discussions with residents are becoming more commonplace. Cash balances are higher than forecast due to continued slowdowns in capital projects, which may lead to better interest earnings. State Aid was fully utilized in the FY09 forecast—any reduction will need to be funded or spending reduced. FY10 revenues look to be $750,000 higher than in FY09, a modest increase of 1.16/o. Property taxes should rise by $1.4 million but local receipts should decline by $0.6 million. This assumes no change in State Aid for FY09 levels. Accommodated Costs are forecast to be $26 million for FYI 0, a $2.25 million increase versus FY09. Some details include benefits +9%, energy +12%, financial +4%, out of district SPED +5% prices, unclear if there will be a $350,000 carry-forward next year so none is assumed, vocational education +4%, miscellaneous +6%. Changes.to the health insurance plan may modify this projection which assumes a June 1St renewal at +10% in prices—the current industry forecast. FY10 Budget Summary — A $0.75 million increase in revenues combined with a $2.25 million increase in Accommodated Costs means that the operating budgets face a $1.5 million decline or a 3.5% reduction. Board of Selectmen Meeting—October 15, 2008 —Page 4 Reserves—In FY08, $2.3 million of free cash was generated because of a combination of the previously mentioned $1.37 million in surplus revenues, and a $930,000 reduction in planned spending. The latter came from the municipal government $360,000, Schools (including vocational) $100,000, benefits $125,000, FINCOM reserves $110,000, and $235,000 in one-time items. The reserve position as of September 2008 is $4.9 million in free cash (excluding the $350,000 Smart Growth payment), $1.4 million in the stabilization fund, and $127,000 in FINCOM reserves for a total of$6.5 million. Town and School Approaches to FY09 Budgets The Town Manager Peter Hechenbleikner and Superintendent Pat Schettini described their mutual approach to FY09 budgets. Each was asking staff to provide information about what FY09 funding was not absolutely essential to spend and if it was not spent, what the consequences would be for the community. Every dollar not spent built a lower base for FY10, and would contribute to our free cash `savings account' at year end. Municipal Building Committee Board of Selectmen Chairman Stephen Goldy and Selectman Camille Anthony reviewed previous Board of Selectmen discussion on this topic. The Town Manager added that this was a strategic level set of discussions, and not an operational one. George Hines described some previous FINCOM discussions about a `capital committee,' and thought the two concepts may well meld into one. Tom White asked about current proposed land acquisitions, and if they would fit into this dialogue. The Town Manager stated that the issue would likely be rendered moot since the State grants from the Main Street parcels would probably no longer be available. Barry Berman thought this topic was an extension of discussions from the World Cafe. Selectman Ben Tafoya added that the Oakland Road land issue was one that the Town needed to decide if we need the land before we design and implement any process to sell it. Selectman Camille Anthony contacted other Towns with standing municipal building committees but none were set up to be policy oriented in a long-term comprehensive manner. Each was geared towards specific building projects identified and funded by the Towns. Question One George Hines outlined his belief that the Town residents may benefit from a joint statement from the three Boards and Committees in attendance. He mentioned that if any of the groups did wish to advocate on a ballot question, strict rules including no use of Town staff or resources must be followed. He asked for each group to caucus for ten minutes. Finance Committee: Following a discussion on Question 1, Chairman George Hines made a motion that: "The Reading Finance Committee oppose Ballot Question No. 1 regarding the repeal of the Massachusetts State Income Tax and join with other Reading Boards or Committees who take a similar position in issuing a public Board of Selectmen Meeting—October 15 2008 —Page 5 statement of the opposition to the tax repeal listinIZ the potential impacts to the Town of Reading and its citizens." The motion was seconded by Andrew Grimes and passed by a vote of 7-0-0. Board of Selectmen: The Board'of Selectmen discussed in a caucus held as part of the open meeting whether or not to take a position on Question 1. The Board determined that they would not take a position at this time but they would have further discussion on this matter at their October 21st meeting when a full Board is expected to be present. Board members all indicated that they were personally opposed to Question 1, but questioned whether it was appropriate for an elected body of the Town to tell its residents how to vote on any issue. The Board members did feel that it would be appropriate to educate the community on what the impact of Question 1 would be on the community. School Committee: In an open meeting caucus of the School Committee, Chris Caruso moved to oppose Ballot Question One The motion was seconded by Lisa Gibbs and was approved by a vote of 5-0-0. George Hines noted that the FINCOM was unanimous 7-0-0 as both a Committee and as individuals to say NO to Question One. They expressed interest in warning residents what the impacts of a YES vote would be in terms of local services. Stephen Goldy added that the Board of Selectmen did not vote on any motion as they did not wish to instruct voters how to vote. They did state that it was appropriate to fully inform the residents of the consequences of a YES vote. Chuck Robinson stated that the School Committee voted 5-0-0 to say NO to Question One. He noted that it was their intention to both inform the community and advocate for a NO position. Discussion ensued between those in attendance and the Selectmen to clarify their intentions and opinions. Stephen Goldy stated that he would take the matter up next Tuesday with the full Board. On a motion by Anthony seconded by Schubert, the meeting of October 15, 2008 was adjourned on a vote of 4-0-0 Respectfully submitted, a Secretary