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HomeMy WebLinkAboutFCMeetingMinutes_05.30.06 Finance Committee("FinCom")Meeting Minutes May 30,2006 Attendance: All members were in attendance with Steve Dawe arriving at 6:49pm. Town Manager Mark Rees (until 6:58pm) .—d a number of citizens sat in observance. I. Call to Order: Chairman Keith Mitchell ("CM") called the meeting to order at 6:30 pm. H.Minutes of Last Meeting–May 25,2006: Jack Watkins made a motion to approve the minute included in the handout. Mark Nichols seconded the motion which carried 7-0-1 with Eva Hamori abstaining. M. Old Business: A.FY07 Recommended Operating Budget: CM opened the discussion by giving a summary of where the FinCom left off at the last meeting. He highlighted a$2.3 million and$750,000 shortfall in the"To Be Balanced later"("TBBL")budgets. In addition CM offered two new budgets proposals up for discussion: a compromise between the two ranges and another approach prepared by Mike Giarratano ("MG"). CM then directed the members to discuss the budgets then decide how to handle at Annual Town Meeting. Mark Nichols ("MN")asked if there was support by the Board of Selectmen("BoS")to institute a trash fee. Paul Stewart("PPS")then pointed back to his original TBBL budget which highlighted other options available to increase revenues other than trash fees. PPS further added this is not about a trash fee but a right way to enhance revenues or reduce expenses. Melinda Coppa("MC") asked whether a change in the Special Education Circuit Breaker formula would count towards the revenue enhancements. PPS replied it would and both agreed it would also need to be clear. The members then moved onto MG's proposal and followed along as he discussed his reasons for changing the various lines; some which took a 3%reduction from the Town Manager's latest budget,while eliminating the FinCom reserve and Mosquito Control. He noted he did not include a Pay-As-You-Throw program. He expects next year to be worse and in the event some sort of trash fee gets instituted it would help in FY2008. Town Manager Rees suggested granting the Selectmen the ability to reallocate the money between departments as they see fit. Citizen Ted Tripp suggested relocating the hazardous waste expense to either the Water or Sewer Enterprise Funds and noted Wilmington does this to protect the water source. Jack Watkins ("JW')raised concerns over some department cuts over the last few year; highlighting Public Safety. In addition,he noted Chief Dolan had previously r-roposed reducing the hours of the second ambulance,to part time,to save money but the BoS chose not to implement the age. MC noted her concern about the elimination of the Mosquito Control in light of the flood and discussed a conversation she had with a Board of Health member. A straw poll showed favor among the members to eliminate Mosquito control for purely financial reasons. The members then deviated to III.D of the agenda. D. Warrant Articles: Paul Stewart then moved to recommend Unfavorable action on Article 17-Mosquito Control Program. Jack Watkins seconded the motion and the motion carried 5-3-1, with Melinda Coppa, Vice Chairman Batsimm, and Chairman Mitchell opposing and Steve Dawe abstaining because he would like to hear from the Health Department since the flood. The members then reverted to the budget discussion. A.FY07 Recommended Operating Budget: Eva Hamori asked if there was a precedent for setting an unbalanced budget. Steve Dawe ("SD")noted in 19$6 the Town approved an unfunded budget,by approximately$1.0 million, which Iead to the first operational override. He further noted this cost the Town Manager his job. MC stated the scope of the FinCom's responsibility is to make good financial recommendations and she is not comfortable doing that with an Unfunded budget; she could never advise a client to operate in the red without knowing where the revenues were coming from. However,MC further added the cuts are just not acceptable and suggested presenting both options at Town Meeting in order to let the citizen decide which way they wish to go. She further added the need to present an alternative budget to control the process by protecting other departments from incurring devastating cuts. PPS noted the mechanics of the motion will not allow for two budgets since the FinCom must move one budget. PPS continued to point to the process in which Town Meeting only approves the expense half while the BoS control the revenue half. CM agreed with MC,by presenting two budgets,the FinCom has performed its function while allowing Town Meeting to decide which approach is better. He added the tricky part was getting around the motion. SD then asked if the FinCom's job was to recommend what is best for North Andover,balanced, or one we agree is better for the Town,preserving services. Citizen David Pinzer questioned whether the FinCom would remain an objective voice and what we would see as the immediate impact with special interest groups in attendance. JW estimated the stabilization would get raided and a shift of resources would go to the schools from other municipal departments_ He further added the real point is the budget moved in the motion. MN stated he felt a sense of urgency but is so concerned with the revenues. He noted he would be more comfortable with having some reassurances the revenues will come in. MN continued to add that he is struggling to do what is it for the town. MG suggested the members walk into the BoS meeting,held in the adjacent room, and ask them. MC stated sne is in fall agreement with MN's comment and struggles with the duties of the FinCom and teacher layoffs. SD added he would not be comfortable supporting an unbalanced budget number that is over the existing stabilization fund. MG agreed with SD and further called for some assurances from the BoS. CM then left the room to see if the BoS would talk to the FinCom. In CM absence, SD told the group he asked Town Counsel to determine whether trash fees could go into an Enterprise Finance Committee Meeting Minutes for May 30, 2006 page 2 ^FY07 Recommended Operating Budget(continued): or Revolving Fund and expressed his desire to see this service ,ome self sustaining. At 7:58pm the members left in recess to join the BoS meeting. At approximately 8:30pm the members returned. Paul Stewart then made a motion to recommend the budget compromise,prepared by CM, adjusted for the Mosquito Control Reduction and inclusion of Police dispatch officer, with a contingency. Vice Chairman Mike Batsimm seconded the motion. A discussion ensued on the mechanics of passing a motion with a contingency. Both SD and MN said they could not vote for an unbalanced amount which is greater than the stabilization fiend. The motion failed 3-6, with only Paul Stewart, Chairman Mitchell, and Vice Chairman Batsimm voting in favor. Paul Stewart then made a motion to recommend the budget he originally proposed plus the latest adjustments for Mosquito Control and Public Safety. Vice Chairman Batsimm seconded the motion and the motion failed 2-7, with only Paul Stewart and Vice Chairman Batsimm in favor. Mike Giarratano then made a motion to recommend the budget he presented with adjustments bringing it to about$1 million unbalanced Melinda Coppa seconded that motion. SD noted he expected to receive some information from the review of the School Department's financials before Town Meeting and questioned the status. CM then reminded the members of a rule, in the FinCom procedures, which allows a minority report. CM suggested moving a balanced budget,to meet the board's obligation, and present the TBBL budget through a minority report. The group agreed to this approach. Mike Giarratano then withdrew his motion on the table. The members agreed to suspend the budget discussion to address the Health Insurance for Elected Officials. B. Health Insurance for Elected Officials: CM highlighted a proposed compromise presented by the Town Manager, included in the handout. JW commented that this compromise would still add 3 more officials in the retirement years and still does not eliminate that retirement portion of the expense. The members then agreed to adjust the budget for the suspension of the Stipend and eliminate the cost of Health Insurance. C. Town Meeting Presentation ideas: JW will work with CM to prepare the presentation. Citizen David Pinzer requested the FinCom add a slide identifying who holds the power and noted that many believe the FinCom is the board with the power. The members agreed to make this additional slide clarifying the role of the FinCom. A. FY07 Recommended Operating Budget: The members went back to adjusting the balanced budget line items. Afterwards, there was still approximately$100,000 remaining for allocation. SD took out his laptop to make adjustments directly to the :—~eadsheet to avoid confusion. Jack Watkins made a motion to take the balance, approximately 5100,000, and apply 100%to Schools. Mark Nichols seconded the motion. Some members raised concern over the lack of funding for the library and senior center. Since the library provides a service to most all citizens, some members felt a strong need to add some funding back while also noting the cuts in previous years. The motion failed with a vote of 3-6, Jack Watkins, Paul Stewart and Mark Nichols voting in favor of the motion. Vice Chairman Batsimm made a motion to take the remaining available funds and split evenly between the library and schools. Eva Hamori seconded the motion and it passed 6-3, with Paul Stewart, Jack Watkins and Mark Nichols opposing. Mark Nichols then made a motion to approve the Budget, as described and adjusted in Steve Dawe's computer, column "S". Jack Watkins seconded the motion and it passed 7-2, with Paul Stewart and Vice Chairman Batsimm opposed. PPS noted that presenting just this budget at Town Meeting would cause chaos at Town Meeting. Paul Stewart then motioned to include a minority report to column "U"on the compromise budget as adjusted by the members. Mark Nichols seconded the motion. SD suggested offering an amendment to adjust the unfunded amount closer to the stabilization fund level. Eva Hamori said she would like to see the content and narrative before voting on the Minority Report. CM agreed to have a copy of that at the Thursday meeting. Five members, Chairman Mitchell, Vice Chairman Batsimm, Paul Stewart, Mark Nichols and Melinda Coppa, were in favor of a minority report, which only needed a two member vote to pass. E. End-of-year Wrap-up: CM asked members to bring their calendars to the next meeting to nail down a date for the wrap-up Ply IV.Adjournment: Mark Nichols made a motion to adjourn at 9:37pm. Melinda Coppa seconded the motion. All members voted in favor of adjourning. The FinCom will meet Thursday, June 1 at 6:30 pm. Approved: Vote: X: