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HomeMy WebLinkAbout2008-01-23 Finance Committee MinutesECE ~N°FR o, Finance Committee Meetinj K Financial Forum t, i January 23, 2008 7OQg. p~ *1: P' 91INCOP41 4 The meeting convened at 7:10 p.m. at the Senior Center, 49 Pleasant Street, Reading, Massachusetts. Present were Chairman Andrew Grimes, Finance Committee members Tom White, Barry Berman, Hal Torman, Matthew Wilson, George Hines and David Greenfield. Also present were Town Manager Peter Hechenbleikner, Assistant Town Manager/Finance Director Bob LeLacheur, Town Accountant Gail LaPointe, Police Chief James Cormier, Andrew Scribner-MacLean, DPW Director Ted McIntire, Jane Kinsella, Superintendent of Schools Pat Schettini, Associate Superintendent John Doherty, School Director of Finance and H.R. Mary DeLai, Special Ed. Director Colleen Dolan, School Principals Joseph Finigan, Richard Davidson, Karen Callan, Catherine Giles, Craig Martin, School Committee members Lisa Gibbs, Elaine Webb, Chris Caruso, David Michaud and Chuck Robinson, School Budget Parents Gary DeRusha, Michelle Hopkinson, Christine Parks, Priscilla Hollenbeck and Robert Kraft, Library Director Ruth Urell, Library Board of Trustee members Suzy Axelson and Karyn Storti, Board of Selectman members Camille Anthony, Ben Tafoya, Rick Shubert, Steve Goldy and James Bonazoli, Reading Residents Bill Brown, Dick McDonald, Sheila Smith and Karen Janowski and Advocate reporter Steve V ittorioso. Andrew Grimes called the FINCOM meeting to order at 7:10 PM. The School Committee called their meeting to order at 7:10 PM. The Board of Selectman called their meeting to order at 7:10 PM. Andrew Grimes began the meeting discussing the Fiscal 09 Budget. He explained that Gail LaPointe would review the Revenue side of the budget and Bob LeLacheur would review the Expense side of the Budget and then FINCOM will discuss a bottom line budget of what will be spent overall this year. Gail LaPointe began her presentation discussing the Cash reserve policy of trying to keep 5% of net available revenue in the cash reserves for unforeseen events. She reviewed the Town of Reading's Reserves reporting that free cash is at approximately at $3.7 mil, Stabilization fund $1.4 mil. LaPointe reviewed the Budgeted Revenue amounts and explained the increase in funds from the October Financial Forum. Major changes were Property Taxes and Other Available funds which came in higher. Bob LeLacheur began his presentation discussing Accommodated Costs. He reported that Accommodated costs are $1.2 mil lower than they were in October. Everyone received a handout explaining what the reasons were. Bob went over a few of the changes, Health Insurance, Debt & Capital, Energy costs and Out of District Special Education. At this time we have approximately $1.5 mil more to send to the Operating Budget. It now works out that we can afford a 3.83% increase in the operating budgets. Municipal Government $ 13.504 mil +3.74% School Department $ 28.247 mil +3.75% Bldg. Maintenance $ 2.482 mil +5.23% Peter Hechenbleikner reported that these are pretty much the final figures. He spoke of the proposed State Aid to the Town based on the Governors budget could be about $290,000 more and another $300,000 if casino gambling goes through. He talked about using the $290,000 or should it be banked for upcoming years. Andrew Grimes discussed if the $290,000 should be included in the budget. Hechenbleikner explained at this time that no impacts of the proposed Addison Wesley project, are anticipated in this budget. He feels this is a sustainable budget. Bob LeLacheur reported that the extra state aid gives us a modest surplus above the baseline budgets for the operating budgets, raising the 3.75% increase to just under 4.5% for the town & schools. Camille Anthony asked about Health Insurance for retirees. Bob LeLacheur explained the Health Insurance obligation. Reading is looking at approximately $100 mil. OPEB liability. An actuarial study will identify that liability later this spring. The Pension fund is not fully funded but is on a reasonable path. School Committee members discussed level funding and salaries increased by 3.4% and how that compared to the Town salaries. Bob LeLacheur reviewed an excel worksheet and explained the increases on the Town side. Andrew Grimes discussed whether the town should spend the additional $290,000 from the Governor's budget. The floor gave their opinions regarding the additional money. Some were against using the money while others thought the money should be used especially for school issues. Grimes explained that the Town and School have to submit a balanced budget to the Finance Committee by mid February, and it is either going to include the State Aid or not. A questioned was asked if the $290,000 is a guaranteed amount. Hechenbleikner explained that in past years the state aid to the Town has met or exceeded what was in the Governor's budget. Discussions continued regarding the use of the State Aid. Peter Hechenbleikner's recommendation is to utilize what is in the Governor's budget. Next order of business was for the Finance Committee to make its recommendations. Hal Torman is in favor of putting it in the Budget, David Greenfield will support it; Barry Berman will support it and also Matt Wilson. A suggestion was made to take a few minutes so each committee can discuss the state aid amongst themselves. After the break Andrew Grimes asked each committee their decision: School Committee - Unanimously supports using the $290,000 in the budget. budget. Board of Selectman - Unanimously supports using the $290,000 in the Andrew Grimes understands everyone's concerns and is in favor of including the State aid in the Budget. George Hines expressed his view that the additional aid should NOT be recognized. The relationship between the current Governor and the legislature does not suggest that the Governor's budget will be a reliable indicator. Using a 5% increase (which is a long-term historical average) will be seen as aggressive whenever the actual number is lower, and the Town is forced to use free cash to balance the budget. On motion by Andrew Grimes to use the State Aid and the model as shown as recommendations for the Town and the School to use. Fincom voted 6-1-0 (Hines voting no). At this time the School Committee adjourned at 8:15pm. Also the Board of Selectman adjourned at 8:15pm. The Finance Committee had one more item to discuss regarding snow and ice removal. Peter Hechenbleikner updated the FINCOM on the costs of snow removal this winter. Under Chapter 44 Section 31d of M.G.L. ha has approved spending in excess of the FY08 budgeted amount, subject to approval by FINCOM. As in nearly every past year, it is his intent to amend the budget at the Annual Town Meeting and therefore rescind this action. On motion by Andrew Grimes seconded by David Greenfield to support the Town Manager's decision, FINCOM voted 7-0-0. On motion by Andrew Grimes seconded by Hal Torman the meeting was adiourned at 8:25 PM on a vote of 7-0-0. Respectfully submitted, Secretary