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HomeMy WebLinkAboutFCMeetingMinutes_05.04.06 Finance Committee ("FinCom") Meeting Minutes May 4, 2006 Attendance: Jack Watkins was the only member not in attendance. School Committee member Barbara Whidden and Town Manager Mark Rees (arriving at 6:50)were also present. A number of Citizens sat in observance. I. Call to Order: Chairman Keith Mitchell ("CM") called the meeting to order at 6:30 pm. II. Minutes: A)April 12, 2006: Paul Stewart motioned to approve the minutes as provided in the handout, with a second from Melinda Coppa. The motion carried 6-0-2 with Mark Nichols and Vice Chairman Batsimm abstaining. B) April 27, 2006: Mark Nichols motioned to approve the minutes as provided in the handout. Eva Hamori gave the motion a second. The motion carried 7-0-1 with Chairman Mitchell abstaining. C) Reconsideration of Previous Meeting Votes: a)Paul Stewart made a motion to recommend favorable action on Article 28, the Appropriation from the Community Preservation Fund. Vice Chairman Batsimm provided the second and the motion carried unanimously. b)Melinda Coppa then made a motion authorizing the Chairman of the Board to encourage the Board of Selectmen to allocate a portion of Town Accountant Lyne Savage's time to assist the School Department in reviewing the School Department Financials. Paul Stewart seconded the motion and it carried unanimously. III. Old Business: A. SpEd Budget Request Update: CM gave a brief overview summarizing the information exchanged in the working group. He highlighted the FY06 actual Special Education expenses will come in roughly$230,000 below budget while questions remain outstanding on the FY07 estimate. CM anticipates concluding this discussion next week. CM then brought up the request to consider establishing a Special Education Stabilization fund. He noted the Budget Communication Group also had this discussion. He summarized the School Committee's desire to establish a separate reserve fund to offset any potential overruns in Special Education rather than relying on the Town's Stabilization Fund. CM noted his personal preference to use one Stabilization Fund as we are one Town. Paul Stewart ("PS") expressed the need for the School Department to then be willing to allocate any surpluses to this fund; citing it needs to work both ways. Barbara Whidden ("BW") gave an overview on how the School Department is looking to incorporate Circuit Breaker monies in future budgets for better clarification. She did note that some members of her board expressed interest in using the FinCom Reserve as way to avoid Town Meeting Authorization for the fund transfers. PS noted that Town Meeting authorized the FinCom Reserve while CM stated there are limitations to what the FinCom can and can't do. BW noted a former School Committee member raised concerns with her citing a past Town Meeting refusal to use Stabilization fiends to offset Special Education overages. CM asked for details supporting this comment and noted, to his knowledge, this has not happened. Steve Dawe("SD")highlighted one area of concern is the way in which Superintendents go about adjusting line items and the need to go before the Board to discuss the changes in public. BW agreed and noted the School Department is revising not only the budget but the policy. CM noted the Town Manager("TM") is also adjusting the Municipal budget. He then asked the TM when the FinCom could expect the revised FY07 Budget. The TM referred back to the School Budget to which CM cited that was too late and the need to move ahead without the school details. B. School Committee"Audit": BW Gave an overview of the revised scope of work, focusing only on FY06 financial data, and reduced cost to $30,000. The revised scope incorporates two phases: analysis of the revolving funds and internal financial controls. BW told the members that the School Department is currently in a spending freeze situation and would like the FinCom to fund the full amount. Mike Giarratano ("MG") asked all involved to stop referring to this as an"audit"; rather an Engagement for agreed-upon procedure. He referenced the letter specifically stating it is not an audit. BW agreed. The members began discussing the ^` scope of work. PS raised concerns on whether the agreed-upon procedure would benefit the FY07 Budget. He followed this by questioning the completion dates and whether it made sense to do Phase I now and Phase 1I later. Mark Nichols ("MN") added that different time periods may cost more. PS further added the main purpose of the FinCom Reserve is to fund emergencies and while FY06 could qualify as an emergency, he was not comfortable saying Phase II would. Vice Chairman Batsimm ("VCB") interjected his belief in Phase II Finance Committee Meeting Minutes from May 4, 2006 Page 2 B. School Committee"Audit" (continued): being an emergency. Melinda Coppa("MC") agreed with VCB. SD questioned the cost and reason for the previous audit performed four years ago. TM stated the cost was approximately$6,500. CM, Chairman of the Board of Selectmen at the time, clarified the purpose was to set standards for proving improved performance associated with increased funding. VCB asked who would monitor or oversee the actual work to ensure the group stays on track. BW responded by saying Paul Szymanski would. MC asked if it would be appropriate to have one of the FinCom members, with a CPA, to assist the School Department in this process; citing Paul Szymanski's lack of financial background as a potential obstacle. MG then made a motion to approve the funding contingent upon changing e the scope of Phase II in the Engagement Letter to include interviews of, but not limited to, the users of the budget such as the Fin Com, School Committee, Town Accountant, Finance Director and TM as needed. VCB gave the motion a second. CM then stated this may alter not only the scope but the pricing and questioned whether MG was proposing to fund the fall $30,000. MG added that although he was a little uncomfortable with the value of the work proposed, he would support the full amount with the contingency since he understands the political value. MN did not see the value of adding the contingency and expected the firm would talk to everyone involved, not just the School Department employees. CM announced his intention not to support the full value but believed $15,000 could solve the political issues now and then the FY07 budget could fund$15,000 for the second phase. TM supported the full $30,000. MG also added that this procedure could also improve the FY08 budget process. MN would not vote in favor of this unless the letter reflected the change. CM reminded the group a portion of the FinCom Reserve is going to cover the cost of an additional mailing before Town Meeting and noted the Municipal side is also having cost overruns. VCB then motioned, seconded by W,, to remove the contingency from the motion. The motion carried 5-2-1 with SD and CM voting against and Paul Stewart abstaining. The original motion then carried 6-1-1 with Paul Stewart abstaining and CM voting against the motion. BW then asked if MN would be willing to come to the next meeting with the CPA firm. He agreed. C. Budget Communication Group: VCB gave an update on items discussed, including the consolidation of -)ositions and an establishment of a financial group. Bill Kelley will work with TM to further this along. In addition, members raised concerns over the proposed Chairman of the Search Committee, as well as discussed Stabilization/FinCom reserve funds, interim Superintendent search and the employee revenue enhancement/cost saving suggestions. PS asked if the Town could establish a suggestion box. According to the TM, the Department heads are currently reviewing this. D. Town Meeting Attendance: CM moved the discussion over to timing of getting a budget in place for Town Meeting and expressed his desire to have a mailing with a recommendation going out before hand. PS added, working backwards, this would give the members 20 days to finalize the budget. The group then discussed the timing of the State Aid information. Regarding the May 8 meeting, CM said we need to only have one designee there. MC made a motion to have Paul Stewart represent the Fin Com at the commencement of Annual Town Meeting on May 8. Eva Hamori seconded the motion. CM did not see the need to do this but the members chose to vote on the motion since it was on the table. The motion carried 7-0-1, with VCB abstaining. N. Adjournment: The members agreed to meet next week, May 11 at 6:30pm. At 7:50 pm Vice Chairman Batsimm made a motion, seconded by Steve Dawe to adjourn. The members unanimously voted to adjourn. Approved: Vote: X: