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HomeMy WebLinkAboutFCMeetingMinutes_03.06.03 AMENDED FINANCE COMMITTEE MINUTES March 6,2003 ATTENDANCE: The following members were present: Jack Watkins,Chairman,Bernice Fink,Vice Chairman, Paul Stewart,Keith Mitchell,Mark Nichols,Melinda Coppa,Paula Porten, Steve Dawe and Mike Batsimm. Rosemary Smedile,Chairman of the Board of Selectmen and Donald Stewart,Board of Selectmen were also present. CALL TO ORDER: Jack Watkins,Chairman,called the meeting to order at 7:02 pm. AUDIT: Jack introduced Frank Byron of Melanson Heath&Company,PC,the firm that did the audit for the Town of North Andover year ending 6/30/2002. The Finance Committee received the reports before the meeting so they could follow along with the presentation. Frank began by stating that the Independent Auditors' Report is the opinion of the auditors that the financial statements of the Town of North Andover conform to accounting principles generally accepted in the United States of America. Two areas of exception to the accounting principles are the absence of Fixed Asset Accounts and the way the Town maintains the Enterprise Fund. These issues will not be a problem in FY03 because GASB 34 will be in effect. Frank then began discussions on the Combined Balance Sheet, Combined Statement of Revenues,Expenditures and Changes in Fund Balance,and Revenues and Expenditures— Budget and Actual Comparisons,Summary of Activity—Enterprise Funds,highlighting key numbers and answering any questions from the group. The Finance Committee thanked Frank for his thorough presentation. APPROVAL OF THE MINUTES: Jack began by saying the theory is the FinCom should take the Minutes in a much quicker format.Keith said the Finance Committee could get the materials a couple of days ahead of the meetings like the Board of Selectmen currently do.Keith volunteered to be the"Clerk"for the FinCom and in that capacity,will pick up the meeting materials each Tuesday at Town Hall and deliver them to the Police Station. The members would then pick up the packages that evening. The FinCom then discussed the February 13 Minutes. Melinda MOTIONED to approve the Minutes of February 27 as amended. Mike Batsimm seconded and the vote passed 8-0- 1 (Steve Dawe abstained). After a brief discussion,it was MOVED to have the packets for each FinCom Meeting ready for the following Tuesday after a meeting. COMMITTEE REPORTS: Budget Communication Group(BCG) Jack said he and Melinda met other members of the BCG that include Rosemary Smedile,Chairman of the Board of Selectmen,Wendy Wakeman,Selectmen,Dan Murphy,School Committee,Dr.Allen, Superintendent of Schools, and Mark Rees,Town Manager. A discussion ensued about the vote that the FinCom made the previous week, which requested the Selectmen revisit the Public Safety Budget(to find the money in other line items within the Fire and Police Departments to fund the second ambulance and four police positions). There was a question concerning the tone of the vote.Rosemary noted that the Selectmen and the Finance Committee are now on the same page after the initial meeting of the BCG.Jack distributed two documents he shared at the BCG meeting. He noted the report was to the other members of the BCG to detail the practical&financial issues,current activity of the FinCom,and the calendar of the upcoming FinCom Meetings. OLD BUSINESS: Finance Committee Report Update Paul Stewart said he met with Joyce Bradshaw,Town Clerk,concerning alternate methods of distributing the Warrant. Her recommendation was to take the entire supplemental information section and not distribute it with the Book. This section could be available on the web or as a handout at the Town Meeting. Savings would be made in postage and printing. Joyce's other suggestion was to place the Warrant in the Town Crossing as an insert. The group agreed to include the supplemental information in the Warrant. They also agreed to send the Book by bulk mail through the U.S.Postal System as it has been in the past,keeping an open mind for different options in the future.Paul then noted that the drafts from FinCom members are due next week. Snow&Ice Budget Paul referred to his document on"An Improved Way of Budgeting Snow&Ice". Expense for Snow&Ice is up to $837,000 as of March 3. Paul began by stating that the Town should budget for Snow&Ice the same way it does for everything else by using a more realistic figure. The group then discussed the fact that the DPW can use any surplus moneys(with the Town Manager's approval)from the Snow&Ice line item to another line item. Paul —� added that reflecting reality is the biggest advantage. Melinda said she thinks by shifting to a more realistic number more like$450,000,and if the Town has a bad year,the Board of Selectmen and Finance Committee can approve tacking it on taxes. "B"added that it doesn't affect the taxes;the deficit just gets pushed into the following year's budget. Steve's question was if there were extra money in the Snow&Ice Budget,is there some way it is not going to be spent by the DPW. He continued by saying if it comes out of the Finance Committee Reserve,it is literally budgeted for anyway. Paul noted that at the Annual Town Meeting the citizens have the right to transfer money in and out of line items. Jack stated he would like to create a list of line items and prioritize it in a way that makes sense. Jack then put"Snow&Ice plus$300,000"on the list. Practical/Financial Issues Melinda spoke of a specific item in the Finance Committee Handbook noting that the FinCom needs to look at long- term objectives,not just the current year. Jack noted that in the Governor's State Aid Budget,the Governor added one line item,which is a one-time transitional mitigation amount of$1.9M with the implication that the$1.9M goes away in FY05. Paul noted that the Town could use three quarters of the money this year and one quarter next year. "B"began talking about the school state aid inequities referring to the differences between.Reading and North Andover and how the state should make the system fairer. Melinda said does it make more sense for the FinCorn to recommend additional service cuts now than to come back next year and cut again. Jack noted that the mitigation deal is$2M; if we take$500,000 of that and get the$700,000 in Free Cash in the revenue bucket,use$200,000 to mitigate the impact of losing this money next year. Rosemary Smedile added that at the MMA Conference,the recommendation was to plan two years.Paul said the best he could tell looking at the bottom line of his spreadsheet revenues minus expenses, it looks like if you use the Town Manager's and the Governor's budget,it's actually a few dollars extra on revenues and if you follow the Manager's expenses,we're plus in 2004,minus$1.5M in 2005 and $1.8M in 2006. With this information,Paul recommends that the FinCom should look to future years. He added that he's thinking of this as level bodies and equipment. Steve asked where does saved money go;does the $716,000 go into the Reserve Fund,the Stabilization,etc. Keith explained that the Stabilization Fund is the identifiable fund controlled by Town Meeting. "B"made the point that towns with extra cash could be penalized next year. Jack said the FinCom would prioritize these items at another time. He stated that next on the list is how to best use the transitional mitigation state funds.The third was the use of BANS by shifting debt slated to start in 04 to 05 which was part of the Town Manager's budget. Jack noted that he doesn't like pushing problems to the future except this time. "B"said that what troubles her is if the Town adds additional debt. Keith made a MOTION that the Finance Committee supports the use BANs to shift debt from FY04 to FY05 as per the Town Manager's recommendation. Melinda noted that Chuck Benevento said if the debt is pushed to 04 and combined with 05 debt,it makes a bigger debt pot so the Town may get better bonding rates. Keith withdrew his MOTION. "B"noted that the$676,874 is the principal payment,which will not be made in FY04_ After a brief discussion,the FinCom decided to add this issue to the list. The next item was taking$700,000 from Free Cash to pay for Operational Expense in FY04. The question is whether the FinCom decides to take some of this money and set it aside. The group decided to postpone discussion of this issue. Paul said he took a shot at balancing a budget for 04 and 05. He distributed a spreadsheet and noted the group could take it home and study it. Jack added that the Finance Committee Reserve Fund is also on the list. Finally,Jack noted that the FinCom had received a letter that discussed the Planning Assistant position. The group agreed that the Planning Department can enhance revenues and that the Planner's time is too valuable for him to do clerical work. The assistant position salary is at$26,456 plus benefits. This item was also set on the list. Melinda began discussions on employee benefits. She noted that in a conversation with the auditor he said health benefits and workers' compensation are not fixed expenses. Liability Insurance is a fixed expense. They did not shuffle money around to pay the benefits associated with the 21 new hires. Instead,that responsibility fell on the Town Manager's side of the budget. She stated that the FinCom needed a way to make a policy change that holds managers accountable for their actions and accountable for all expenses associated with their actions. The School Department should reimburse the Town for the payment of benefits for those new hires. She also stated that there should be new line items in the budget at least between the Town and School Department for the Salaries and Benefits. She noted that this was broken out by department in the past due to personnel support. Melinda made a MOTION to move from fixed expense all insurance,employee insurance,workers' comp,unemployment benefits 2 and other related employee benefits from the Municipal Budget to the School Budget that relates to School Department employees. The group agreed that they need more information on this issue before voting at the next meeting. Melinda withdrew her MOTION. Steve began a discussion on ways to find the$200,000 for the four police officers. The group made no decision on this matter. Jack distributed the list of tasks that the FinCom has to complete. Jack began with Revenues and Miscellaneous, going down the list with answers to each question. Please refer to document. 1. There are no available funds on the municipal side for FY04. 2. There is an overlay surplus of$200,000 that the FinCom can get their hands on. 3. There is possibly$90,000 set aside for legal funds for Edgewood. The assessors have to approve the use of these funds for purposes other than Edgewood. 4. Currently,there is$100,000 that is in the latest Treasur'er's Report. 5. The Manager has no current projection on State Aid. 6. Mark understood that the School Department is going ahead with the Foster School design. Jack noted that the FinCom could make recommendations on this issue. Jack will revisit the Police Department renovation issue with Mark Rees. 7. Jack said Mark Rees said Free Cash could not be used in the budgeting process. 8. Jack said there would be no Chapter 90 funds unclaimed. 9. We hope so. 10. Jack said there is a three-year analysis of this issue. The group agreed to continue the discussions on this list at the next meeting. Jack thanked everyone for a good meeting. The drafts are due by March 11 so they can be included in the meeting packet. ADJOURNMENT: At 10:00 pm,Keith MOVED and Mike Batsimm seconded to adjourn the meeting. The vote was unanimous. FUTURE MEETINGS The next Finance Committee Meeting is set for Thursday,March 13,2003. 3