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Home My WebLink About2000-10-21 Finance Committee MinutesFinancial Forum October 21, 2000 Parker Middle School Community Room VI . SS. CALL TO ORDER 2CDf IYUH -3, A 8: 51 Finance Committee Chair Carol Grimm called the meeting to order at 8:10 a.m.. Present were Finance Committee members Catherine Martin, James Francis, Andrew Grimes, Mary Grimmer, Richard McDonald, Chuck Robinson, and Robert LeLacheur. Board of Selectmen members present were Sally Hoyt, George Hines, Matt Nestor, and Matt Cummings. School Committee members present were Chair Susan Cavicchi, Pete Dahl, William Griset, Jim Keigley, Robin D'Antona, and Tim Twomey. Library Board of Trustees present was Steve Conner. Also present were Town Manager Peter Hechenbleikner, Assistant Town Manager Russ Dean, Superintendent of Schools Dr. Harutunian, Library Director Kimberly Lynn, Town Accountant Richard Foley, Treasurer Beth Klepeis, and Reporter Nadine Wandzilak. The residents present were Fred Van Magness, Bill Brown, Paula Perry, Kathy Guyott, Paula Koppel, Jan Jones, Cathy Mandolese, Paula Tucci, Nancy Ortiz, Karen Epstein, Rosemary Lewis, Thomas Ryan, Alex McRae, Marie Cullen-Oliver, and Jeff Struble. Introduction of Facilitator Carol Grimm introduced the facilitator Fred VanMagness. Review of Guidelines Fred Van Magness reviewed the guidelines for this Financial Forum. The Financial Forum discussed the goal. George Hines stated this goal may not be achievable or accepted by everyone in the community. The goal was changed to: "The goal of the Financial Forum will be to develop a consensus and timetable on ways to close the gap for FY 2002 and beyond between available revenues, and expenditures." Options for solutions The Financial Forum discussed options for addressing the $3.5 -$4 million "gap": 1. Increase property tax 2. Run government within the resources the community gives. 3. Offer solutions that add to revenue without having to ask the taxpayers. Review current and projected revenues Richard Foley reviewed the projected revenues from 2001 -2005. Peter Hechenbleikner stated the figures are a general projection, not exact. Financial Forum - October 21, 2000 - page 2 Review current and projected expenditures 1 Peter Hechenbleikner reviewed the projected expenditures for 2001- 2005. He stated that 2001 will not change and 2002 - 2005 are estimated figures. Peter Hechenbleikner reviewed a 5 year "heads-ups", including factors that will affect the Town of Reading's Financial Forum. Options for Solutions Fred VanMagness asked the group to identify options for addressing the gap. Peter Hechenbleikner reviewed a fact sheet listing requirements to reduce expenses adequately to address the shortfall. He stated that certain expenses are fixed or very difficult to change such as employee benefits, debt service and SPED. He stated the last time the Town voted on an operating override 55.6% of the voters voted against it. Peter Hechenbleikner reviewed the estimated effect on real estate taxes with a capital exclusion or general override of $1,000,000. He stated there would be an increase of $124.75 on a house valued at $250,000. Peter Hechenbleikner reviewed fact sheets on a Capital Exclusion Override, a Debt Exclusion Override, and Increasing Revenues. - At 9:30 a.m. Fred VanMagness asked the Financial Forum to break into groups to discuss additional options. At 9:45 a.m. the Financial Forum took a 10 minute break. At 9:55 a.m. Fred VanMagness called the meeting back to order. Review Ideas: The Financial Forum discussed ways to decrease the financial gap, such as: 1. Increase volunteerism - The town already has a high volume of volunteers and this doesn't really reduce expenditures. Some towns have a volunteer fire department. 2. Sell Assets - The light department brings in $1.9 million a year and customer rates are the lowest in the area. The town just entered in a ten year agreement with the electric company, but there are provisions in the agreement that it could be sold. There needs to be an independent consultant to determine if this is a viable solution. 3. Reduce Expenses - Investigate duplicate services such as the main library and school libraries. Reform the State Education Board. What are the State Representatives doing with the education reform formula? Regionalization of town services - what could be combined with other towns. Financial Forum - October 21, 2000 - page 3 4. Increase Revenues - Camp Curtis Guild is on a prime location, consider the possibilities. Prioritize private development. Peter Hechenbleikner requested the members consider these projects as long range. He stated they should consider an alternative for education funding and not rely on real estate taxes. At 10:50 a.m. the Financial Forum took a 10 minute break. At 11:00 a.m. the Financial Forum reconvened. The Financial Forum discussed the advantages and disadvantages to their proposed solutions and if their suggestions are realistic to closing the $2.5 million gap. At 12:00 p.m. the Financial Forum broke into groups to discuss and prioritize solutions. Fred Van Magness asked everyone to consider if it solves the problem, the success rate and the impact on services. At 12:10 p.m. the Financial Forum prioritized their solutions. In response to the process utilized the Debt Exclusion Override was seen as the most successful possibility, they must make sure the public understands the consequences. The question was posed as to whether or not the Board of Selectmen had the information needed to make a decision. Matt Cummings indicated that further information would be needed, and Matt Nestor ( j said that there needed to be further discussion on the amount. At 12:35 p.m. the Finance Committee, the School Committee and the Board of Selectmen adjourned. Respectfully submitted, 9 /7~ Joy Mo Recording Secretary FINANCIAL FORUM OPTIONS DISADVANTAGES/ADVANTAGES "Parking Lot Ideas" • Part of Democracy (Green) • Eliminate reliance on property tax for education • Marketing: inform public • Public Info • Reduce Debt • Combination: Financial Analysis, Preventative (evaluate, business, development) • Can we reduce expenses? • Ask for increase in revenue increase Revenues (Fees) • Short term • Pay As You Throw Camp Curtis Guild: PILOT • Use Library to Generate Revenues • Advocate for Reform with the State Education Board • Sell Services to Other Towns • Form Economic/Industrial Development Committee, be pro-active • Camp Curtis Guild • Longer Term • Sell Assets (Land, Light Department): On Light Department, hire independent consultant working on commission as a part of the sale. Advantages (Green) • Short term • Need to be selective w.r.t. fees • May achieve other goals • Pay for what you get Disadvantages (Red) • Reduce federal tax advantage • Nothing short term addresses gap • Changes nature and community • Could be a distraction • BOS will not do PAYT for revenue purposes • Cost to implement • Disingenuous to have new fees • Voter resistance Operating Override • Menu approach: departmental, trash, athletic, extra curricular = 1.6 million Advantages (Green) • Honest • Average tax bill dropping vis-a-vis peers • Addresses increases in expenses • Solves problem • Permanent increase in fast Disadvantages (Red) • Low probability of success • Low voter support Reduce Expenses • Privatize services: technology, education, ambulance, maintenance, recreation • Increase volunteerism: enhance service, excess capacity • Regionalization of Town's services • Regionalize services • Investigate duplication of services Advantages (Green) Disadvantages (Red) • Do-able, fast • Loss of valuable employees • Control • Short tern savings could create long term cost • Perception of better pers. responsibility • Most vulnerable are impacted • Reduce property values • If reduce across the board - reduce quality of all • Anger of those affected Reduce quality of life Capital Exclusion Advantages (Green) • Lets voters decide • New debt will be override Disadvantages (Red) • May be limited constituency. • Will have to do every year • Disingenuous re: capital expenditures: preventive maintenance • One year only • Irrational • Not enough • Projects needed Debt Exclusion • Retroactive debt exclusion for: Marion Woods, Police Station, Parker Middle School, Coolidge Middle School =1.6 million Advantages (Green) • Is a way around operating override • Re-finance debt: property owners understood • Understandable by voters for length of debt • Decreases over time: tax payer relief • For historical projects, costs are known • Good for large items • Longer term solution • Can raise enough dollars to solve `02 • More probability of success • Solves '02. problem and longer tern • Lets voters decide Disadvantages (Red) • Is a way around operating override • Admission that prior CIP is flawed, should have done debt exclusion • Disingenuous - usually go in advance • Might have mixed reaction with mixed questions • Only for new projects, not historical projects • Asked question and don't like answer