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HomeMy WebLinkAboutFCMeetingMinutes_02.13.03 APPROVED FINANCE COMMITTEE MINUTES February 13,2003 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. Finance Director Chuck Benevento was also present. Residents wandered in at various times throughout the meeting. CALL TO ORDER: Jack Watkins called the meeting to order at 8:04 pm. He began by stating his intention to try to avoid long, drawn-out meetings. The first business of the meeting is the Town Manager's Recommended General Fund Budget. Chuck Benevento will make a presentation concerning the budget and then there should be time for questions. The second item is Paul's task designations for the Town Warrant Book. Thursday,February 20 the Finance Committee is meeting with the Board of Selectmen and Department Heads. Mark Rees is organizing this meeting. A meeting with Dr.Allen and staff will be held separately(perhaps February 27). FINANCE DIRECTOR'S COMMENTS: Chuck distributed the FY2004 recommended budget as well as inserts pertaining to FY2003. He began with the inserts stating that the Snow&Ice Budget has a deficit of$279,000 as of February 10. Concerning Town revenues,he stated that the figures are good for the half-year mark. Chuck began discussions on the Town Manager's Recommended Budget for FY2004. Property taxes are 70.7% of the total Town revenues. Although there is an increase in tax revenue of 8%,when the debt exclusion portion is removed, it is actually 4%. Local Receipts are 11.5% of the total revenue,an increase of 5%. Motor Vehicle Excise Tax has increased by 2%(he hopes this figure isn't too optimistic). Steve noted that at one point in this year's budget revenues were down and was this still the case. Chuck said the revenues have caught up with the budget figures noting that most of the excise revenues are due in February. Paul then asked why the budget could be reduced in May without the need for a Town Meeting. Chuck stated that the budget has to be reduced to match the revenues; otherwise,the state will not accept it. "B"then asked what the reduction in state aid would do to the present budget figures. Chuck noted that the state realizes the reduction will cause changes in revenue;therefore,the state allows the Town to make the adjustments to balance the budget. He then stated that increased Town fees would bring an additional $37,000 in revenues. Chuck opened discussions on Free Cash beginning with Reserve for Unemployment. Decisions on the $305,000 budgeted for Capital Improvement Plans will have to be made according to priority,keeping in mind that projects may be weighed against staff reductions. He was asked what the average is for unemployment compensation paid by the Town. Chuck stated that the average is$15,000 (50 people laid off multiplied by$15,000 equals the $750,000). Chuck then turned to Expenses. He noted that under Debt Service,the Town assumes a Bond Anticipation Note(BAN) instead of a Permanent Note for FY03 CIP projects(which means principal payments are not made to 2005). Paul asked if this was a Board of Selectmen decision. Chuck said the Town Manager made the recommendation to the Board of Selectmen(the state aid reductions were a big part of the decision). Chuck answered a question from"B"by noting if the Town receives additional revenues,the use of a BAN and/or Free Cash to balance the budget is not needed. The group discussed Health Benefits next. Chuck noted that the 18.5% increase in benefit payments assumes that subscribers will decrease by fifty. "B"asked if retirees receive health benefits from the Town. Chuck stated that the Town pays the benefits for both municipal and school employees. Steve asked at what level is it decided to increase employee contributions. Chuck said it begins with the unions. The Town Manager has approached the unions with a suggestion of a 10% increase in employee contributions and a possible increase in co-pay for HMOs(visits,prescriptions, etc.). This work is in progress,but Chuck noted that this could be a long process. Capital Projects and Reserves were discussed noting the reduction to the Finance Committee Reserve and no salary increases for By-law Employees. The Operating Expenses were then compared with the Budget Items for FY03 and FY04. He noted the last chart shows trends from FY02 through FY05. Chuck directed the group to the charts noting the loss of support positions in Municipal Government. Chuck then began discussions on the last chart. He noted that the chart demonstrates how the Financial Task Force projections were very close to reality. Paul said that cuts in Public Safety worry him. Others agreed. "B"noted that a prior Finance Committee opposed the COPS grant because it creates a level of expectation, and as it continues on,the Town can't sustain it. The Board of Selectmen approved the grant without any discussion with the FinCom. Paula wanted to know the cost of keeping the second ambulance operational. Paul said if fifty employees are cut,there isn't a chance that next year we're going to face the problem indicated on the chart because of the big structural changes. Jack fears that revenues will stay the same as expenses go up. Jack then highlighted the following areas of the Recommended Budget that concern him. He asked the group to think about these issues which will be addressed at future FinCom meetings. ■ The 10% estimate in State Aid reduction. Is this a reasonable estimate? Consider this issue for the neat couple of meetings. ■ The total reserve after the Snow&Ice Removal Fund is $300,000. The General Fund Subsidy is $677,000,where,perhaps it can be considered bolstering the reserves for the future. Looking at the last chart, it's going to get worse before it gets much better. ■ The FinCom should discuss the Town Manager's recommendation of pushing off the Debt Service for a year with a Bond Anticipation Note. ■ The decreased Finance Committee Reserve of$200,000 wouldn't take care of a snowstorm. ■ The loss of four Police Officers is a big concern. Next Thursday,February 20, is a joint meeting of the Board of Selectmen, Department Heads and the Finance Committee. Mark Rees is organizing the workshop The FinCom then thanked Chuck for his presentation. Paul Stewart then went over the assignments for the Town Warrant Book. Each member volunteered for a specific section(s). Paul will organize and distribute the list of assignments for the next meeting. ADJOURNMENT: Steve made a MOTION and Keith seconded to adjourn the meeting. The vote was unanimous to adjourn the meeting at 9:07 pm. 2