HomeMy WebLinkAboutFCMeetingMinutes_01.27.05 Town of North Andover
Finance Committee Minutes
January 27,2005
ATTENDANCE:
Finance Committee: Jack Watkins, Chair; Mike Batsimm; Melinda Coppa; Steve Dawe; B Fink; Mark Nichols; Paula
Porten; and Paul Stewart.
Town Employees: Mark Rees,Town Manager(arrived at 7:45 p.m.,left at 8:45 p.m.)
CALL TO ORDER: Jack called the meeting to order at 6:33 p.m.
MINUTES:
After a brief discussion of the Minutes of January 13, and some suggested changes, Melinda MOVED to accept the minutes
as amended. Paul SECONDED the motion. The vote was unanimous(5-0-3),with Jack,Mike,and Mark abstaining.
NEW BUSINESS:
Benchmarking:
Paul agreed to undertake some research on this project. Paula noted that from past experience,it is very difficult to determine
against whom we should be benchmarkin, and also difficult to fund commonality in the categories. .lack distributed a
handout showing 2004 and 2005 average real estate taxes by community,ranked by percentage of increase from 2004. North
Andover ranked 254 out of 305 (meaning most other communities had a higher increase in avg.taxes this year).
Police Station:
First, the Committee discussed the letter to the editor written by Ted Tripp. Melinda asked the Committee whether they felt
she should abstain from Police Station votes, given her relationship to a member of the Building Committee. After a short
discussion, the Committee decided informally that it was not necessary (no vote taken). Jack noted that he had written a
letter of response to the Citizen,taking issue with Mr.Tripp's letter.
Mark Rees distributed a handout that was being sent out on the need for a new Police Station. There was a discussion
regarding some of the components of the new Station. Mr. Rees noted that the Selectmen were trying to reduce the debt as
much as possible before going forward, resulting in some cuts to the original design. At the last Selectmen meeting, the
scope of the project changed by eliminating the fitness center, training room and the shower in the Chief's office for a total
cost reduction of$238,000. He also noted that the budget calls for the existing land to be sold for$900,000—if it sells for
more than that,any excess would be used to pay down the debt service.
There followed a discussion about the financing of the Police Station, and whether to pay in equal principal amounts (more
upfront, less later),or even mortgage-style payments, where the principal starts out lower but increases over time. Melinda
presented some information prepared by David Eisenthal, to which she had added some net present value information. The
schedules showed, using 2.5%and 3.5%discount rates,that the equal payment(mortgage)schedule results in a slightly lower
net present value amount.
Paul then distributed a letter proposing a different way of looking at the Police Station debt structure, and there was some
discussion regarding the merits of the different approaches. Steve then asked the question: "Where do the School Folks come
down on this issue?" Paul followed up with concern that he didn't know how the general public felt on this issue. Paul
questioned whether the Committee should vote on the merits of the article when it was questionable whether it will even pass
at the ballot box. The Committee's general opinion was that the Town's opinion wasn't germane to the discussion of
whether the Committee should support the proposal. Melinda suggested a possible re-wording of the article to address the
variability of costs of construction.
Special Town Meeting:
The Special Town Meeting will take place Monday, February 7, and will consist of three articles asking the Town to approve
the land transfer, appropriate the money(subject to passage of a Prop.2 '/2 debt exclusion override), and a transfer of funding
from a previous article. The Committee will take up these articles at next week's meeting.
February 2, 2005
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Health Insurance Rates:
Jack distributed some information which suggests that the Town's health insurance rates will increase less than what was
previously expected, approx. 1-6%for most employees, and 9%for most retirees. These rates go into effect on March 1, and
therefore will somewhat affect current year spending.
Snow Removal Budget:
Jack noted that Mark Rees will be submitting his budget for FY '06 in a few weeks. Snow removal will likely be at the same
level as was budgeted for FY '05. Jack asked the members to think about where the FY '06 level should be. The Committee
re-armed its support for getting the snow removal amount right, as opposed to the traditional practice of budgeting a lower
amount.
Free Cash:
Free Cash was certified at approx. $1.4 million. It was noted that the Town has had recurring shortfalls in budget line items
and has been using Free Cash as a stop-gap, while hoping that this wouldn't be a permanent practice. Paul stated that he has
calculated that about half of Free Cash is due to underestimated revenues, while some is due to budgeted, but unspent
expenses, and some due to true one-tune revenue items. The Revenue Committee hopes to capture the recurring items into
the new budget and projected revenues. Steve proposed that we allocate Free Cash from recurring sources to cover recurring
expenses, while setting aside non-recurring Free Cash for Stabilization or other reserve accounts. Paul and Jack both stated
that snow&ice coverage should come from other sources before Free Cash is attacked.
Fixed Asset Inventory:
Paul distributed a draft of a chart which showed the inventory of all major Town buildings, with a timeline of when they
would need to be renovated and/or replaced. He proposed to augment the schedule with some more specifics. There was
some discussion of this,and Paul agreed to get some more information without going too crazy.
CIP:
Mark Rees reviewed the CIP budgets with the Committee. The general fund CIP was approved by the Board of Selectmen.
Two items of note were the removal of the money for the Fire Station in order to reduce Police Station cost, and some
amount changes on the Mosquito Brook drainage project. The Water and Sewer CTP budgets have not yet been approved by
the Selectmen. The Water budget includes three new projects for FY '06, plus a pickup truck. The Sewer budget extends
some sewer projects,and includes a waste water management plan.
NESWC Status:
Manager Rees then distributed a Host Community Fund spreadsheet, which indicates that the town will get back approx.
$887,000,plus a reduction in FY '06 Tip Fees. While this was good news,the Committee was concerned that an amount of
this magnitude had not even been hinted at during NESWC's presentation last year.
Other:
Manager Rees discussed the Governor's preliminary FY'06 budget,which would suggest a$260,000 increase to the Town.
NEXT MEETING: The next meeting is scheduled for Thursday,February Yd at 6:30 p.m. in the Town Hall.
ADJOURNMENT: There being no further business, Mark MOVED to adjourn the meeting. Mike SECONDED the
motion. The vote was unanimous. Time of adjournment: 9:35 p.m.
Michael Batsimm,Secretary
February 2, 2005
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