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HomeMy WebLinkAboutFCMeetingMinutes_05.25.06 Finance Committee("FinCom")Meeting Minutes May 25,2006 Attendance: Eva Hamori was the only member not in attendance. Town Manager Mark Rees ("TMR")was present, as were a ---nber of citizens. 1. Call to Order: Chairman Keith Mitchell("CM")called the meeting to order at 6:30 pm. H.Minutes of Last Meeting—May 18,2006: Paul Stewart motioned to approve the minutes as provided in the handout, with a second from Vice Chairman Mike Batsimm. The motion carried 7-0-1 with Jack Watkins abstaining M. Old Business: C. "Budget Completeness"Motion: CM took this item out of order and turned the discussion over to Paul Stewart("PPS"). PPS then referred back to his memo. PPS moved that the Finance Committee formally `suggest', in accordance with North Andover Home Rule Charter section 9-2-7, that(1) the FY2008 and all subsequent budgets and related budget reports to the public or to the Finance Committee, and all documents associated with those budgets in the Charter or Bylaws shall conform in all respects to the Charter 9-2-7 requirements that they be "a complete financial plan for all town funds and activities"and "shall indicate proposed expenditures for both current operations and capital projects during the ensuingfiscal year; detailed by divisions, departments, offices, boards, commissions, committees, and specific purposes and projects"; and(2) that all those documents shall be produced in the row format last appropriated by Town Meeting, supported by a next lower level of supporting detail as accepted by Town Meeting, and with appropriate columns for the purpose of the document(and any additional information or further levels of detail in any format appropriate to the purpose of the particular document). Jack Watkins seconded the motion and the members moved to the discussion phase. Mike Giarratano ("MG") added this wasn't requiring a great level of detail and the School Department's format already complies with this motion. PPS added the "completeness"portion of the motion would have made the School Department Budget clearer. Melinda Coppa("MC")noted the change in leadership within the School Department and Committee will bring changes to the budget that will address the completeness issue. TMR reminded the members that he has conformed to the past budget format request changes and will continue to do so in the future. The motion carried unanimously. P— Budget Communication Group Meeting: CM gave a brief overview of the School Committee's budget vote. He noted his appointment in the fact the members did not make any changes to the budget, other than the additions. MC gave a brief update noting Dr. Harutunian had signed the termination contract and the lack of time remaining for the School Committee to analyze the budget for other types of cuts. MC did add that she showed her proposed changes to the School Committee and, even with additional adjustments,the School Department will most likely fall short by approximately$2.0 million(not the current$3.3 million). The budget communication group did talk of presenting a budget with a contingency of passing an override. At the meeting,Tom Licciardello talked of the School Committee advocating for full funding and pushing for an override. MC further added the School Committee had already taken action by voting to request an override. Unfortunately, timing is of the essence as the School Department layoff notices need to go out by mid-June. A.FY07 Recommended Operating Budget: Discussion then moved the Town Meeting presentation which Jack Watkins ("JW") offered to prepare. CM noted the need to drive on and to bridge the gap between the funds available and expenses requested. CM further added his belief the FinCom has adjusted revenues as much as possible, combined with state aid still unknown, services are still being cut. Credit was given to the Town Manager,by CM, for doing a fine job in preparing a balanced budget. CM then turned to PPS and VCB to present a"conceptual"idea for addressing the gap by recommending an unbalanced budget. PPS discussed where the powers lie to make changes. While Town Meeting does have some powers, it does not have the power to put a trash fee in place since the cost of the service still needs appropriation. In addition, Town Meeting can't control how Town revenues are generated;the Board of Selectmen("BoS") is the only governing body that controls local receipts. In turning to the handout,PPS noted the two objectives this concept accomplishes: 1) gives more time to balance the budget later and 2)funds all departments somewhere between the requested and Town Manager's amount. VCB added that some members of the community may still be asleep to the Town's financial problems and the current proposed cuts would kick those people awake. Despite this point,he believed some variation of this concept would appear on the floor of Town Meeting and it is better to prepare for this possibility. CM believes Annual Town Meeting will be very chaotic and the FinCom could lend stability to the meeting by proposing an unbalanced budget while forcing the BoS to take action. JW believes the concept is timely and reminded the members of past efforts where the FinCozn offered suggestions for addressing 4-lancial concerns and the BoS chose not to take action. CM disagreed with the notion that the BoS have taken no action and ,cifically noted the attempts to change health insurance. While, CM is hopeful there will be changes long-term,he sees nothing available to affect FY07. JW added this concept puts a deadline for the BoS to take action. JW further stated, at first he thought,this approach was"gutsy"and now he sees it as"crafty"where the negatives aren't significant enough for him to go against it. CM wants the members to first discuss the concept before moving to the numbers. Mark Nichols("MN")believes Finance Committee Meeting Minutes,May 25,2006 Page 2 A.FY07 Recommended Operating Budget(Continued): putting this concept out in this late hour is courageous but it goes ^-iinst his grain of conservatism. He fiuther added that this approach leaves no other choice but to bring in new revenue and _,uld this revenue not materialize,the cuts will be more severe in a few months than now. While he likes the thought of using this as a way to poke the policy makers to take action,he believes the lack of notice to the citizens will actually deprive them of having a choice and even take their voice away. CM is less concerned with the notice and reiterated this concept will come to the floor with or without the FinCom. He further added it is better for the FinCom to attempt to control the process to ensure equitable distribution of funds among all departments,as apposed to one department(the Schools). The group had a brief discussion over whether this sets precedence for future years. MC added that the problems aren't just with revenues and pointed to bad choices made by our leaders. She added her concern that taking this approach validates those bad decisions. JW,not disagreeing with the point of bad decision,pointed to the fact that per pupil spending is much lower in North Andover than neighboring communities. MC agreed that the Town pays less per pupil;but when comparing ourselves against Andover, she gave credit to the School Department for giving the community more"bang for their buck". TMR reminded the group that Andover's unbalanced budget is $300,000 short not$2.3 million and that he could fiord$300,000 within the budget as it stands. The discussion moved back to moving a budget with a contingency for an override. TMR noted the change in the School Department budget and highlighted the need for the School Committee to retake the vote requesting an override. PPS noted his belief that an override just for the Schools would not pass. Steve Dawe ("SD') then made a motion to support, in principal, the School Department budget through an override. MG seconded the motion and the group began discussion. PPS objected to this motion believing it was not sincere. MG added the need for the FinCom to be"up front"about requesting an override. JW stated his belief that this motion did not address the needs of the other departments and would further create animosity between the municipal and school departments. SD added his need to see the details of the unbalanced plan while MN wants to get input from the other members. PPS then took the members through the numbers provided in the handout while answering questions along the way. The group then discussed Pay As You Throw programs which could produce 20-30% savings. TMR then added the DPW Director's response to MC's proposal which he believes improvements in recycling efforts will start to level. The members then returned to the theoretical discussion of ways available to balance the budget(as described on the handout). CM noted there is some discussion on sharing services with neighboring communities such as"regional dispatch". SD and MG -reed to withdraw the motion on the table. MN stated he would be more inclined to agree with the unbalanced budget concept .ie amount was closer to $750k; however,the question remains whether this lower amount would still meet the overall objectives of the plan. CM then asked for a straw poll by a show of hands: four were in favor(CM, PPS,VCB and JW),two were against (SD and MN)and two abstained(MC and MG). MC reiterated her concern over the level of cuts, should the plan fail to generate more revenue, in a few months and added to this a possibility of negative"free cash"in FY06. JW believes a larger disaster looms sooner on the Town Meeting floor. MN further added that he believes the appropriate venue to discuss this option is the Town Meeting floor,not with the FinCom; especially since the community looks to the FinCom as the people without an agenda.. SD believes this will set precedence and every year citizens will look to approve an unbalanced budget. The group then switched the discussion to School Committee Dr. Ormsby's education first proposal. The reaction of the members was tentatively negative,but we agreed to defer further discussion until(1)we saw if the proposal gained any traction with the School Committee and, if it did,until we could have Dr. Ormsby explain his ideas to us. PPS then passed out the latest revenue estimates to gage whether the members objected to him using this to develop the handout for Town Meeting. No one objected. TMR gave a brief update on the health insurance estimates_ CM announced the Department of Revenues decision to reverse the position on use of NESWC funds; therefore,not adjustments need to be made. CM also reminded the members of the Memorial Day parade beginning at 10:00. D. Warrant Articles: The members did not discuss any outstanding warrant articles. N.Adjournment: The members agreed to meet next Tuesday,May 30 at 6:30pm with the option of also meeting on Thursday, June 1. At 9:00 pm Steve Dawe made a motion, seconded by Tack Watkins to adjourn. The members unanimously voted to adjourn. A reproved: Vote: X: