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HomeMy WebLinkAboutFCMeetingMinutes_01.16.03 DRAFT FINANCE COMMITTEE MINUTES January 16,2003__Meeting ATTENDANCE: The following members were present: Jack Watkins, Chairman,Bernice Fink,Vice Chairman, Paul Stewart, Steve Dawe,Keith Mitchell,Mark Nichols,Melinda Coppa,Paula Porten and Mike Batsimm. Also present were Mark Rees, Town Manager,Chuck Benevento,Finance Director,Chief Dolan,Fire Department,DPW Director Bill Hmurciak, Joyce Bradshaw,Town Clerk and Charles Ormsby,resident. CALL TO ORDER: Jack called the meeting to order at 7:01 PM. Jack noted that Dan.Murphy, School Committee Chair, was grateful for those Finance Committee members who attended the recent School Committee meeting. APPROVAL OF THE MINUTES: A MOTION was made to approve the Minutes of the November 14,2002 meeting. There were no comments on the Minutes. Melinda made a MOTION to approve the Minutes as written. Mike Batsimm seconded and it passed 8— 1 with Jack abstaining. The Finance Committee agreed to defer approval until revisions are made to the Minutes of November 21,2002. Mike then made a MOTION to approve the Meeting Minutes of December 9,2002. Melinda seconded and the vote passed 7—2 with`B"and Mark Nichols abstaining. The group then agreed to change the order of the agenda items as follows. NEW BUSINESS FY03 Budget—Forecasted Shortfalls Town Manager Mark Rees stated that the problem areas within the FY03 budget are health insurance, snow and ice, the Health Department and Fire Department. He noted that the snow and ice appropriations can extend beyond budgeted figures,but the Town Manager and Finance Committee must approve the transfer of funds. Mr.Rees also said that reduction in state aid to the Town could be from $250,000 to$IM;this would make a significant impact on FY03. Chief Dolan then distributed a document listing the Fire Department sick and injury leave for FY03 to date. The department frequently uses overtime to cover for employees out on leave. He noted that a replacement for the firefighter who transferred to Lawrence is due to begin work February 1,2003. This move will create another vacancy on Unit 4. The Chief said that the Fire Department could end the year within budget and that he has come to the Finance Committee to report the potential for an overrun. Steve Dawe said it is commendable that the Chief report a possibility of a shortfall rather than approach the FinCom at the last minute. Bill Hmurciak,DPW Director,began the discussion on the snow and ice budget. He noted that the Town has enough salt and sand due to a recent shipment. There have been 22 snow operations in FY03 consisting of fourteen sanding and eight plowing days. The cost of these operations has exceeded the $300,000 FY03 budget. Paul noted that as he sees it,the Finance Committee still has no control over the snow and ice budget. Mark Rees stated that snow removal is one of the critical services the Town provides to its residents. Two years ago,a storm that occurred late in the season literally shut down the town for four days. The snow and ice policy changed due to this incident. The Town now rents larger and better equipment. Keith MOVED and Paula seconded to authorize deficit spending for snow and ice removal. "B" asked the committee to amend the MOTION by requesting the DPW Director come back to the FinCom when the deficit reaches $400,000. Mike Batsimm seconded the amendment. The amendment failed by a vote of 3 to 6 with Steve,Keith,Paul,Jack,Mark, and Melinda opposed.Jack then asked the group to vote on Keith's original MOTION(which was seconded by Paula)to approve deficit spending for the snow and ice. The vote passed 8 to 1 with Steve Dawe abstaining. Mark Rees opened discussions on health insurance. Chuck Benevento distributed a spreadsheet detailing group health insurance funding projections for FY2004. Chuck noted that the ratio of the HMO premium is 90%town contribution and 10%employee contribution. The projected insurance plan increase is estimated at 25%for FY2004. Mark Rees said that changing the ratio of employee/town payments would be extremely difficult because 94% of the town's employees are members of the unions. All changes would have to be decided through collective bargaining. Mark Rees said that he is meeting with union officials on January 23 to discuss this issue. Exploring other medical carriers for less costly premiums is another option. Jack noted that the best priced product in Massachusetts is Tufts. Chuck said that it is possible to change carrier if the new carrier provides comparable coverage. Charles Ormsby asked what percentage of part-time employees are receiving medical benefits. He noted the Town could save by hiring part-timers at 18 hours per week(the law sets the minimum hours at 20 per week for eligibility of medical benefits). Mark Rees noted that another shortfall in the FY03 budget is special education,which he hopes can be absorbed within the school budget. Finance Committee Report(Joyce Bradshaw) Town Clerk Joyce Bradshaw spoke on the upcoming Town Meeting Warrant. She noted that the deadline for completion of the warrant is by the end of the first week in April. This gives the printer ample time to complete the job and pass it over to the mailing house.Residents should receive the document by May 1. Citizen petitions will be accepted up until St.Patrick's Day. Jack noted that the FinCom had an exceptional volunteer(Paul Stewart)who assisted in the format and organization of last year's warrant. Keith suggested this issue be an agenda item for the next meeting. Paul said that reviewing Iast year's document would be of great value in producing this year's warrant. Jack thanked Joyce for updating the committee. OLD BUSINESS Initiatives with Accountability Jack asked Mark Rees about the status of the PILOT program,noting that the issue was presented to the Board of Selectmen at the May Town Meeting. Mark Rees noted that the role of the Finance Committee is to advise the BOS and approve transfers of town funds. He also stated that the Board of Selectmen should be setting objectives,not the FinCom. Keith added that the FinCom is not a policy making group. Mark Rees stated that he and the BOS are always looking into increasing revenue. He stated the following projects that will produce revenue: ➢ Construction of the new complex off Route 125 under Chapter 40B will minimize costs to the town. ➢ Construction of the new complex on Route 125 that offers one and two bedroom units(25% are affordable housing). Town employees will have preference. ➢ The Smolak complex for citizens 55 and older. ➢ The Lawrence Airport project. Mark met with the Mayor. ➢ The proposed ice rink. ➢ A new high-end retail store to be built on the 15-acre parcel directly across from the Eagle Tribune facility. ➢ Improvement of the downtown facade provided through a grant. Traffic changes and underground utilities for the Old Center. ➢ Negotiations have begun on the sale of the Lucent plant. ➢ Discussions with North Andover non-profit organizations that are tax exempt but receive town services (PILOT). ➢ All town fees have increased. School Department Administrative Offices There is nothing to update concerning the lease space for the Administrative Offices. School Administrators have received bids and are now reviewing the information. FY04 BUDGET Capital Improvement Plan Mark Rees noted that the plan is pared down due to the decrease in state aid. Certain projects from last year are financed through bond notes. A Capital Improvement Plan Workshop is set for Thursday,January 23,2003. Department heads will address the Board of Selectmen,Finance Committee,Town Manager Mark Rees, and Finance Director Chuck Benevento. Discussions will be held concerning the Capital Improvement Plans for each department. OTHER Free Cash Jack noted the purpose of Free Cash is emergencies and non-recurring issues. Chuck Benevento said that there was $2M in this fund. Mark Rees said the FinCom decides whether to use the Free Cash for capital expenditures or 2 borrow the funds(which would 'increase the debt service).Paul Stewart suggested that Finance Committee members -- re-read the Town of North Andover Financial Policies and the Charter for a better understanding of the issues. Steve Dawe noted that a member of the FinCom participated in formatting the school budget. Paul Stewart volunteered to assist the school department in budget formatting only. The group was comfortable with that. ADJOURNMENT There being no further business,Keith made a MOTION, seconded by Paula,to adjourn the meeting. The vote passed unanimously to adjourn the meeting at 9:15 PM. 3