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HomeMy WebLinkAbout2003-10-09 Finance Committee Minutes.RECEIVED TOWN CLERK Joint Meeting of Board of Selectmen, Finance Committee E A D I N G, M A S S, and School Committee October 9, 2003 ZO~U JUL - b P 4~ 4 The meeting convened at 7:30 p.m. at the RMLD Audio/Visual Room, 230 Ash Street, Reading, Massachusetts. School Committee Member Robert Spadafora called the School Committee to order, Board of Selectmen Chairman George Hines called the Board of Selectmen to order, and Finance Committee Member Catherine Martin called the Finance Committee to order. Present were School Committee Members John Carpenter, John Russo, Robert Spadafora and Elaine Webb, Board of Selectman Chairman George Hines, Vice Chairman Richard Schubert, Members, Camille Anthony and Matthew Cummings, Finance Committee Chairman Richard McDonald, Members Paul Bolger, Andrew Grimes, Catherine Martin, Robert LeLacheur, Charles Robinson, Harold Torman and Marcie West. Also present were Superintendent of Schools Pat Schettini, Assistant Superintendent Dennis Richards, Town Manager Peter Hechenbleikner, Town Treasurer Beth Klepeis and Town Accountant Richard Foley. Town Manager Peter Hechenbleikner reviewed the projected general fund revenues for FY 2005 through FY 2009. He asked that the group pay careful attention to the footnotes. He discussed property taxes, local revenues from sources other than property taxes and intergovernmental revenue. I George Hines stated that he had a problem including anything from Pearson and the Landfill Phase 2 and Moore Phase 2. He stated that if we are not already in the permit process, projected revenues should not be included. Matthew Cummings agreed with George Hines regarding not including any revenue from projects not in the permit process. Catherine Martin agreed with George Hines and Matthew Cummings and stated her opinion that we should be conservative in our estimates. She confirmed with the Town Manager that he did not take into consideration there would be more money to invest because of the school projects. The Town Manager confirmed that he did not take into account money for the school projects. He stated that he level funded State Aid to estimate revenue for the next five years. Matthew Cummings stated that he would not assume for at least FY 2005 flat State Aid and he recommended a decrease be assumed. After discussion, it was decided that State Aid would be on the agenda for the meeting with the legislators that will be scheduled for some time in November. Board of Selectmen Meeting - October 9, 2003 - Page 2 The Town Manager discussed free cash. He stated that the only way to estimate free cash is historically. Camille Anthony asked what figure was used for RMLD for modeling purposes, and the Town Manager stated that he used the increase of 2% CPI. John Russo asked why there was no figure in the Stabilization Fund. The Town Manager stated that would be established this Fall at Town Meeting, and the goal for cash reserves is 5% of the operating budget. The Town Manager reviewed the projected expenses. He again asked the group to pay special attention to the footnotes. He stated that for the model, he used 4% salary increase for Town employees which included salary and step increases and he increased expenses by 2.5% all five years the school side used 6.5%. He also stated that the 6.5% was determined by taking the average increase in the School Department budget over the last ten years. He noted that the operating costs for the new school were not included in the projections. He discussed the rising cost for health benefits. Superintendent of Schools Pat Schettini discussed the estimated operating costs for the new school for FY 2005 and FY 2006. He noted that the impact on the FY 2005 Budget is estimated at $280,000 for additional bussing of Barrows' students to the new elementary school. He distributed a chart showing operating expenses, and noted that there would be one year where maintenance contracts are not required because of the ~warranties. Camille Anthony asked if there would be any cost for Barrows' utilities during construction. Pat Schettini stated that utilities would be taken over by the contractor during construction. Pat Schettini stated that the number of busses needed for FY 2005 was not a firm number. He also stated that the School Department is doing a detailed route analysis, and the School Department would need to go out to bid for the transportation services. Matthew Cummings asked if the increase after FY 2005 was still projected at approximately $145,000. Pat Schettini stated that the School Committee needs to have additional discussion on the operation of the new school but he is estimating personnel costs at $325,000. He also stated that personnel and other operating costs would total $438,453. Robert Spadafora noted that the previous administration presented a net cost which deducted the cost of maintenance to the portables, a decrease in bussing and electrical expenses. Camille Anthony stated that the Selectmen should move forward on getting assistance from RMLD on electrical rates. She also stated that with the increase in operating costs for next year for the schools, the projected deficit is $1.2 million. Board of Selectmen Meeting - October 9, 2003 - Page 3 Richard McDonald stated that the School Department should be looking at 4% to 4.5% rather than 6.5% Matthew Cummings agreed with Richard McDonald. He stated that the increase in operating costs for the new school should be taken back to the voters. Robert Spadafora stated that the voters have affirmed the decision for the fifth elementary school on three different occasions, and he thought that it was clear there would be an increase in the budget to operate an additional school. Matthew Cummings stated that the fluids have to come from somewhere, and the School Department may have to pare back its budget. John Russo requested that a more liberal estimation be done by the Town Manager. George Hines disagreed with John Russo. He indicated that the conservative estimate is closer to reality. Camille Anthony stated that during negotiations, the Selectmen and School Committee members must be cognizant of what the Town can afford. Paul Bolger stated that we need a strategy to keep expenses at what we estimate. He also stated that we might need to look at independently funding some programs like Hamilton Wenham did. John Carpenter noted his concern over the increase in expenses such as health insurance and over the prospect of cutting more programs. The Town Manager stated that he would spend more time solidifying the numbers based on what the Boards indicated this evening and come back to the Boards with an outline for them to review. Elaine Webb noted a misprint in the local paper regarding the district's MCAS score and per pupil spending. She stated that Reading is rated 20th in the State on the MCAS scores while its per pupil spending is ranked 227th Catherine Martin stated that the Finance Committee would discuss the Warrant Article on the Stabilization Fund at the next Finance Committee Meeting. The Committees agreed that the next Financial Forum Meeting would be November 20th On motion by McDonald seconded by Robinson, the Finance Committee voted to adjourn the meeting of October 9, 2003 at 8:45 p.m. by a vote of 8-0-0. On motion by Spadafora seconded by Carpenter, the School Committee voted to i adjourn the meeting of October 9, 2003 at 8:45 p.m. by a vote of 4-0-0. Board of Selectmen Meetinja - October 9, 2003 - Page 4 On motion by Cummings seconded by Schubert, the Board of Selectmen voted