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HomeMy WebLinkAbout2006-08-30 Finance Committee MinutesFinance Committee Meeting August 30, 2006 RECEIVED TOWN CLERK READING. MASS. + 2001 JUN 18 A 97! 55 The meeting convened at 7:32 p.m. in the Town Hall Conference Room, 16 Lowell Street, Reading, Massachusetts. Present were Chairman Chuck Robinson, Vice Chairman Andrew Grimes, Finance Committee Members George Hines, David Greenfield, Paul Bolger, Marsie West, Ron Powell, Hal Torman and Michele Williams. Also present were Assistant Towne Manager/Finance Director Bob LeLacheur, Superintendent of Schools Pat Schettini, Schools Director of Human Resources and Finance Mary DeLai, Selectman Ben Tafoya and Paula Schena. Reorganization Chuck Robinson turned control of the meeting over to Bob LeLacheur for reorganization. _A motion by Hines seconded by Torman to nominate Chuck Robinson as Chairman was made. A motion by Robinson seconded by Hines to nominate Andrew Grimes as Chairman was made. A motion by Williams seconded by West to close the nominations was approved by a vote of 9-0-0. The motion to nominate Chuck Robinson as Chairman failed by a vote of 0-0-9. The motion to nominate Andrew Grimes as Chairman was approved by a vote of 9-0-0. ( A motion by Grimes seconded by Hines to nominate Chuck Robinson as Vice Chairman was made. A motion by Hines seconded by West to close the nominations was approved by a vote of 9-0-0. The motion to nominate Chuck Robinson as Vice Chairman was approved by a vote of 9-0-0. Finance Committee Liaison Assignments for FY07 - The following liaison assignments were made: Chuck Robinson - Schools and Audit Committee; Andrew Grimes - Selectmen, Audit Committee and Economic Development Committee; George Hines - Schools, Capital Improvements Advisory Committee; Paul Bolger - RMLD; David Greenfield - Public Works Department; Ronald Powell - Accounting, Committee Services, Finance, Economic Development Committee, Ad Hoc Nurse Advocacy and Capital Improvements Advisory Committee; Hal Torman - Schools; Marsie West - Public Safety and. Northern Area Greenway Committee; Michele Williams - Library and Economic Development Committee. Review Finance Committee FY07 Budget Calendar - Bob LeLacheur reviewed the budget calendar and no changes were made. Review Buffet Presentation Format - Bob LeLacheur noted that the budget would be split into categories including revenues, accommodated costs and operating costs. There will also be a section for community priorities for things that we really want but can't afford. State Aid doesn't come until mid-January so he would suggest projecting the use of free cash and State Aid and if the State Aid comes in short, then make it up with free cash for that year. He also noted that it would be helpful in planning the budget to know how much can be used. Finance Committee Meeting - August 30, 2006 - Page 2 Chuck Robinson noted that we don't typically use free cash to balance the budget, and the committee needs to review the reserve policy. He also noted that he likes the "community priority" section but feels that we need to move slowly with this. Paul Bolger asked if they tell the School Department to increase their budget by 2.72%, can they build their budget on that. Pat Schettini noted that if it is a realistic proposal, he can do that. Usually the percentage is low and then when more money comes in, he starts adding in items. This approach loses credibility with the employees and residents. He would rather have a more realistic percentage. George Hines noted that would preclude any chance for property tax relief. Paul Bolger noted that thinking we won't use the 2.50% every year is a long shot. Andrew Grimes noted that if we start with accommodated costs and take out 2.50%, then we will already be in the hole. George Hines noted that a three year average is usually good but we need to look at the trend. Chuck Robinson noted that we should only use a three year average for accommodated costs, unless there is no information. Bob LeLacheur referred to an article by Standard & Poor regarding financial management, and 1 the need for a reserve fund policy. He noted that a policy is also needed on capital and perhaps a policy on overrides. There was discussion regarding defining a level funded budget. Bob LeLacheur noted that there is really no way to define a level budget. The process goes smoother if we work with a certain percentage. Ben Tafoya noted that he sees a level funded budget as taking exactly what we did last year, and then look at what has to be added above and beyond. The departments prioritize the additional items. There was discussion among the Committee regarding capital. Chuck Robinson noted that the mandatory capital is the roads. Bob LeLacheur noted that a two tier capital plan would be helpful. He also noted that the unfunded pensions are a very large liability, and he recommends increasing the pension to earn returns. Approval of Minutes A motion by Robinson seconded by Torman to approve the Minutes of June 28, 2006 was approved by a vote of 8-0-1, with West abstaining. A motion by Grimes seconded by Greenfield to approve the Minutes of July 12, 2006 was approved by a vote of 8-0-1, with West abstaining. Finance Committee Meeting - August 30, 2006 - Page 3 A motion by Bolger seconded by Williams to adiourn the meeting of August 30, 2006 at 9:40 p.m. was approved by a vote of 9-0-0. Respectfully submitted, Secretary -