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HomeMy WebLinkAbout2010-10-27 Board of Selectmen Minutes Joint Meeting of Board of Selectmen, Finance Committee, School Committee and Board of Library Trustees October 27, 2010 For ease of archiving, the order that items appear in these Minutes reflects the order in which the items appeared on the agenda for that meeting, and are not necessarily the order in which any item was taken up by the Board. The meeting convened at 7:00 p.m. in the Great Room at the Senior Center, 49 Pleasant Street, Reading, Massachusetts. Present were Finance Committee Chairman Marsie West, Vice Chairman David Greenfield, Members Mark Dockser, Bryan Walsh, Barry Berman, Kevin Leyne, Francis Fardy, Hal Torman and George Hines; Board of Selectmen Chairman James Bonazoli, Vice Chairman Camille Anthony and Selectman Ben Tafoya; Economic Development Committee Members, Sheila Clarke and Michelle Williams; Board of Library Trustees Chairman David Hutchinson, Vice Chairman Richard Curtis, Members Karyn Storti and Cherrie Dubois; School Committee Vice Chairman Chuck Robinson, Members Harold Croft and Karen Janowski; Town Meeting Members Bill Brown, John Arena and Karl Weld. Also present were 'town. Manager Peter Hechenbleiker, Assistant Town Manager/Finance Director Bob LeLacheur, Town Accountant Gail LaPointe, School Department Principal Patty de Garavilla, Public Works Director Jeff Zager, Director of Human.Resources and Finance Mary DeLai (School Department), Principal Doug Lyons (Parker Middle School), Fire Chief Greg Burns, Police Chief Jim Cormier, Community Services Director Jean Delios, Patricia Puglisi (Reading Memorial High School), Superintendent of Schools John Doherty, David Mancuso (Making Reading Better), Karen Callan, Erin Cavio-Bacci and Kim Oliveira (School Department) and Recording Secretary Abigail McCabe. There being a quorum, FINCOM Chairman Marsie West called the meeting to order at 7:15 p.m., the School Committee and the Board of Library Trustees called the meeting to order, and the Board of Selectmen called their meeting to order at 7:30 p.m. The FINCOM Chairman gave opening remarks and introduced everyone to the second Financial Forum of the budget year, and explained that this Forum will focus on expenses. Discussion/Action Items Financial Update -The Assistant Town Manager Bob LeLacheur reviewed the recurring revenues from what was budgeted and the actual budget from FY10. Town Accountant Gail LaPointe reviewed the expenditures for FYI 0. The Town was over a million dollars under the expenditures budget last year because significant appropriations weren't spent in FYI 0. The savings from health insurance, unfilled staff vacancies and gasoline were major contributing factors to the FYI expenditures. The total revenues for FYI 1 are $50,000 under budget due mainly to the change in the calculation for _ Medicaid, and the use of Free Cash is on the November Subsequent Town Meeting Warrant to make up the difference. In FYI 1, Reading received the $350,000 from the State for adopting the Downtown Smart Growth Zoning, and $35,000 from the Reading Ice Arena Authority, Meals Tax revenue for three quarters, higher than estimated State Aid, and higher than estimated new growth. These will help offset revenue shortfalls for FYI 1. Board of Selectmen Meeting October 27, 2010—Page 2 The Town Accountant reviewed the Town's reserve funds as of November 2010. The Town had $4.9 million in Free Cash as of June 30, 2010 as well as cash reserves in undesignated stabilization funds and the reserve fund. Two Articles to use Free Cash are proposed at the November Subsequent Town Meeting. The Town Accountant reviewed the projected FY12 revenues, and a chart comparing FYI I and FY12 revenues was presented. So far in FYI 1, local revenues are down and Reading is estimated to have a 10% decrease in State Aid in FY 2012. She also reviewed the preliminary accommodated costs for FY12. It is hard to predict the health insurance cost benefits before February but it is currently estimated at 10%. This figure will not be known until early 2011. Energy costs, financial costs which include veteran's aid and unemployment costs, out of district SPED and vocational education will contribute to*the accommodated costs. Essentially, it is projected that FY12 will have less revenue and greater accommodated costs. The Assistant Town Manager summarized the FY12 Budget. Even with a 0% increase, the Town.is still short by $2 million. We expect to use the $2 million in reserves but the Town relies on State Aid, and the outcome of the Election will be significant. If Town Meeting were to approve the use of $2 million in Free Cash to balance the 2012 Budget, the Town would still retain over the 5% in reserves. A member of the Board of Selectmen expressed concern that Reading used too much in Free Cash last year, and encouraged the Finance Committee to consider 'this for the FY12 Budget. A couple of members of the Finance Committee spoke in response to a question aboutwhomakes the decisions to use Free Cash. The FINCOM Chairman recognized George Hines for his service and presented him with a gift. Financial Forum I (Revenue) Recap - The FINCOM Chairman summarized the September.Financial Forum on'revenues and explained that the suggested recommendations are being researched for feasibility, and the results will.soon-be posted to the website. The meeting handout includes the lists of recommendations from the last Financial Forum and the party responsible for following up. Page 6 of the meeting handout is a summary of the budget breakdown for a sample single family home assessed at $400,000. The three main uses of funds categories are Town government, schools and facilities. Wages are paid to employees and non-wage expenses include several areas of expenses related to personnel such as benefits as well as other items independent of the workforce. Wages make up 55% of the funds and expenses are 45%. Public Safety (Police, Fire and Dispatch) is the most expensive service provided by the Town. The Assistant Town Manager described past efforts by the Town to save money which are shown on Page 7 of the meeting handout, and also shows whether the cost saving suggestions were implemented. The list is broken into one-time expenses and ongoing expense reductions. Regionalization of specific services has been suggested in the past but is very difficult for Reading since Reading tends to provide services at a lower cost than other communities, and it takes willing partners to implement regional efforts. Board of Selectmen Meeting—October 27, 2010-Page 3 Brainstorming Session — Potential Expense Reductions - Finance Committee Member Marls Dockser facilitated a brainstorming session focused on ways the Town can save on expenses. Each table brainstormed possible cost savings ideas in a small group before coming back together to hear from each table before the.voting took place. The Finance Committee will record the votes and identify priority items after tonight's Financial Forum. Some of the expense reduction ideas included eliminating sidewalk plowing, regionalizing vehicle maintenance and vehicle sharing, transitioning from a Representative Town Meeting form of government to a Town Council, less polling booths at elections, less elections, reduce staff at evening board meetings, reduce the Town's contribution to heath insurance, decrease street lighting,reduce the compost hours, regionalize the Health Department and conservation and inspections, reduce trash pick up to twice a month, reduce the number of boards and committees, reduce the capital budget by 25% over the next three years, eliminate Permits Coordinator position, reduce Police and Fire overtime and reduce Town Hall hours. The Board of Selectmen, Board of Library Trustees and the School Committee adjourned their October 27, 2010 meeting at 9:15 p.m. After the Financial Forum concluded, the Finance Committee conducted regular business from their agenda. November Town Meeting Warrant—The Town Manager described the previous night's actions by the Board of Selectmen on Article 11 (Causeway Road). The road is in two parts: 450 feet, of public roadway at the top of the hill, and then a private road section with 12 houses. In addition to these houses, both the Town of Reading and the Reading Municipal Light Department own land and both will be involved in the proposed betterments to improve the private section before it is taken by eminent domain and becomes a public roadway. The Town Manager reviewed the final plan as to the costs and apportioned share of betterments. The average house will have approximately $15,000 in costs, which maybe paid immediately after the project is completed or financed over a period of up to 20 years. The interest charged will depend on the Town's cost to borrow at that time plus a margin of 2% - today that would be a 5.5% rate of interest, paid through the property tax bill. The betterment figures presented area worst case and, hopefully and historically, the project will be done for less. On motion by Greenfield seconded by Torman, the Finance Committee voted to recommend the subiect ratter of Article 11 by a vote of 9-0-0. Budget Guidance for FY12 - The Finance Committee had an extensive discussion about the reserves policy and the izext few budgets the Town will face, as well as the prospects for a Proposition 2 1/2 operating override. Several members spoke in favor of using less Free Cash than the indicated $2 million budget shortfall for FY12, in light of the $6 million cash reserves position and the desire to keep 5% ($3.5 million) as a baseline. They acknowledged that there would be a further reduction in services if the Town and'Schools were forced to use less money in FY12 operating budgets than in FYI which the $2 million figure will do. On motion by Berman seconded by Fardy, the Finance Committee voted 7-2-0 (Greenfield and Leyne opposed) to use a maximum of$1.5 million in Free Cash to support the FY12 Budizets. Board of Selectmen Meeting—October 27, 2010—Page 4 The Finance Committee discussed the possible impact of State Ballot Question #3 which seeks to reduce the sales tax from 6.25% to 3%. If it is passed and implemented, in FY12 it is projected to cost the Town $1.5 million in State Aid. The prospects for an operating override were discussed as being more urgent if this ballot question succeeds. Only through a combination of lower cash reserves and Town and School Budget cuts would the majority of the Town voters likely support such a request. The majority of the Finance Committee leaned towards the level of override necessary to not just restore lost sales tax revenues but to be able to offer a level of services that residents have come to expect from the Town and Schools. On motion by Fardy seconded by Leyne, the Finance Committee voted 7-2-0 (Berman and Walsh opposed) to use a maximum of$2 million in Free Cash to support the FY12 Budgets in the event Question 93 passes and State Aid is forecast to be lower for FY12. Approval of Minutes -On motion by Leyne seconded by Hines, the Finance Committee voted to approve the Minutes of August 4, 2010,as written, by a vote of 8-0-1 (Walsh abstaining). On motion by Berman seconded by Greenfield, the Finance Committee voted to approve the Minutes of September 15, 2010, as written,by a vote of 7-0-2 (Torman and Hines abstaining). On motion by Hines seconded by Greenfield, the Finance Committee voted to approve the Minutes of October 13,2010, as written, by a vote of 7-0-2 (Walsh and Fardy abstaining). The FINCOM Chairman requested that the Finance Committee be posted to meet at the RMHS Performing Arts Center at 7:00 p.m. on November 8,2010 (the first night of Town Meeting). On motion by Hines (who will soon be moving out of Reading and leaving a long and distinguished career in public service in Reading behind as a legacy) seconded by Greenfield, the _Finance Committee voted to adjourn the meeting of October 27, 2010 at 10:35 p.m. by a vote of 9-0-0 (with a round of applause for Mr. Hines). Respectfully submited, Secretary