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Town Council Minutes 10/07/2004
AVON TOWN COUNCIL
MEETING MINUTES
OCTOBER 7, 2004

CALL TO ORDER
The regular meeting was called to order at 7:30 p.m. in the Selectmen’s Chamber by Chairman Hines.  Members present: Mrs. Hornaday, Messrs Hines, Carlson, Shea and Woodford voted in favor.

PUBLIC HEARING:  None

MINUTES OF PRECEDING MEETING:
On a motion made by Mrs. Hornaday, seconded by Mr. Woodford, it was voted:
RESOLVED:       That the Town Council accept the minutes of August 31, 2004 as read.
Mrs. Hornaday, Messrs Hines, Carlson, Shea and Woodford voted in favor.

IV      COMMUNICATION FROM AUDIENCE
Bob Galiette reported he would like to thank the Town Council on behalf of Avon UNICO Chapter, for the opportunity to present the Citizen of the Year Award this evening.  Because of rain we had to cancel Avon Day, usually during the opening ceremonies we present this award.  This is our seventh annual award, and he would like to recognize the committee; Caroline B. LaMonica, Robert August, Steve Gaffney and himself, and thank them for helping over the past seven years. We are the search committee for the citizen of the year award.  Mr. Gaffney reported first of all he would like to thank all of the volunteers that were rained out, it was a lot of work for all of us.  He further reported on behalf of UNICO, it gives him a great deal of pleasure this year to present the 2004 Citizen of the Year Award to Henry R. Frey, Jr., not only because he is a deserving recipient, also because he is a friend o mine.  He is a rare breed because he was born, raised and still lives in Avon, he joins a distinguished list of prior recipients, who gives a lot more of himself than many people, he gives the time and energy to make Avon a better place to live, who does not have no in his vocabulary, when asked to do something he just does it. This is a brief list of the current things he has been involved with in 2004: Chairman of the Avon High School Building Committee, since 1999 Chairman of the Thompson Brook School Building Committee, since 1990 alternate member of the Avon Planning & Zoning Commission, since 1990 member of the Farmington Valley Salvation Army Service Unit, since 1980 a member and past President of the Avon/Canton Rotary Club, member of the Avon Sidewalk Committee, member of the Avon Park & Recreation Committee, the Avon Veterans Memorial Monument Committee, the Community Avon Inc., Director and President of the Avon United Fund, Member of the Avon J C’s,  Boys Club of Avon, Director of the Farmington Valley YMCA, Coach and President of the Northwestern CT Babe Ruth Baseball League, Coach of the Avon Little League and Connie Mack Baseball, Service Officer at the American Legion Post 201.  One of the ongoing activities that he spends quite a bit of time on through Rotary Club, is tutoring children at the Miner School in Hartford. He has been doing this for over five years, he organizes groups of children to assist them in reading and math, and working with 4th graders for the past few years.  He also works as a Real Estate Agent.  It gives us a great deal of pleasure to present the 2004 Citizen of the Year Award to Henry R. Frey, Jr.  

Mr. Frey thanked them for the honor, and reported he would like to thank his wife and children for their support, and Mrs. LaMonica for all of her support on the many building committees, without them he would not be receiving this award today.  

Chairman Hines reported on behalf of the Town Council we have appreciated the tremendous work you have done for the Town, we also appreciate all of the other activities you have done because it all makes Avon a better place.  You have been a tremendous Chairman of the Building Committees, and they go on forever, they meet early in the morning, and particularly with the Thompson Brook School working hard to finalize different areas, and it has been a tremendous effort, we have such confidence in your efforts and we appreciate it.        
                
Diane Carney reported she would like to readdress the chairs for the Senior Center. She spoke with the Recreation and Parks Director who said it has been in the works for several years, and wonders why we still do not have them.  Chairman Hines reported you have been a very vocal member on keeping the costs down in Town, speaking against tax increases, and that is the exact reason they are not in the budget.  Mrs. Carney reported we have plenty of money for playgrounds.  Chairman Hines reported the playground situation being referred to here and in your letters, had to do with Thompson Brook. Fortunately Chairman Frey and his Committee did a tremendous job, and at the end did not use all of the contingency, so there were funds in the Thompson Brook School Building Account available to help an event that was being largely sponsored by an outside group. If the Seniors want to come in and offer us $10,000 to $20,000, we will consider that.  It is not that we are spending money on recreation and ignoring the seniors.  We have all been elected to represent all of the residents of Town and we have to do that.  We have to look at every item, and many items are in the budget for several years before they get approved.

The Recreation Director reported the Senior Center chairs will be in the next budget presentation, they have decided on material for the chairs, but they are not out to bid, therefore the amounts are not firm prices.  Based on replacing the 115 chairs at some of the prices he is working with it is going to be close to $17,000.  Mrs. Carney reported there are plenty of seniors that are willing to contribute, it does not have to all come from the Town.  Mr. Shea reported the Director is going to go out and do his work, come in with a capital budget request.  Their job is to inform, educate and promote on things that are needed in Town, and for better or for worse the Town Council in its role chooses the priorities to the best of our ability based on public input and what we can and cannot afford, but you have to realize that what can be a priority for one person might not be a priority for someone else.  As we go through this process, someone who has the time to go to people and ask different groups if they would like to participate in this process, which will continue this fall and winter into the spring, this gives people many opportunities to stand up and speak, and to get anybody who wants to participate financially to do that.  

V       COMMUNICATION FROM COUNCIL
Mrs. Hornaday reported a resident from another community told her that no town takes better care of the rails-to-trails than Avon, which was very nice to hear.  

Mr. Woodford reported Town Public Works did a fine job with the demolition of the house on Sunnybrook, it looks great.   

Chairman Hines reported he received a call from Mr. Waltock, who served for many years on the Planning & Zoning Commission, he was at Brightview for a long time and because of diabetes complications lost his leg, he now has visiting nurse care.  His question to the Town was whether we could provide service, as he is now in a wheelchair, to Hartford for occasional medical treatments, he was told by American Medical that it would be $37.50, when he received the bill it was $328.00.  Chairman Hines reported he spoke with the Town Manager, and the Social Services Director, who is hit very hard by all of the loss of funds from Avon Day and therefore it is in difficult times.  The Director looked at both Simsbury and Farmington, and neither have service to Hartford, Canton received a $5,000 grant recently being used for that purpose but when the grant goes that is the end.  He also checked with the firm we have doing dial-a-ride services, and for $1,500 they could offer maybe two half days a week of a service to Hartford if there is enough need.  The Director will look into this and bring it up in our budget session.  Mrs. Hornaday reported if the other communities are interested in it, that would be the kind of thing that would be really a good intra-community effort, with the towns around us.

VI       OLD BUSINESS
96/97-32        Review and Discussion: Final Report: Facilities Maintenance Study Group (Dated January, 1998)
The Town Manager, in a report to the Board of Education in August, wrote that it might be appropriate to reactivate the facilities study committee, who previously served in the late 1990’s, to take another look at combining the buildings and ground maintenance operations.  The Board of Education discussed it, and said yes, and informed him that Board of Education Chairman Roell and Mr. Eagan would like to be on the committee.  Mr. Woodford reported it was suggested for the group to review it periodically, but he is not as convinced today as he was in the past, that there can be any savings in money whatsoever, with union contracts, etc, but it would not hurt to take a look at it.  Mrs. Hornaday reported it is a good idea, because it kept being mentioned at the budget hearings, and this way we can say to people, yes we have looked at.  Chairman Hines reported it should not be too large of a committee, last time it was Superintendent of Schools, Town Manager, Director of Public Works, School Finance Person, Councilman Ed Jeter, resident Mike DeCicco, and a member from the Board of Finance.   We should have them start with this report, not reinvent the wheel, and for not more than six months to look it over and see if there is anything that can be done.  One of the things that should come out of this study is all the joint work the Town and Board of Education are doing right now in this area.  

Mr. Jeter, who was in the audience, reported his recollection was that the tasks were very dissimilar, they sounded the same but when we got into it, they were a lot of differences, and we do a lot in Town with contracting out.  Some of the problems were – how do you have somebody really responsive to both the school and the Town, with separate budgets, it was going to be a little difficult. There would be someone complaining about no response to their need with a big game coming, or whatever it is.  It really seemed to be much more of a mess to deal with separate things that they were doing differently.  Chairman Hines reported for example if the Director of Recreation and Parks had control of all the fields, and he said suddenly that they could not use it today, because the weather is bad, we would run into problems there.  Mr. Jeter reported it was much more complicated, but it sounded great in the beginning it made a lot of sense at first but then as you got into it, you began to understand the differences, it did not seem to fit together the way it was intended or thought to be.  Mr. Woodford reported the people who were interested in this during the budget process, he would like for them to sit in on these meetings or the Committee to hear this.  Chairman Hines reported the Committee should just review what has been done and move forward to consider sharing financial operations, purchasing activities, and information technology systems which could have savings.  It was the consensus of the Town Council for the Town Manager to prepare a draft charge for the November meeting, and speak with the Superintendent of Schools.             

99/00-19        (03/04/97)  Review, Discussion, Approval: Sale Brochure, 435 Waterville Rd.(Foster Property)
The Assessor reported a neighbor has already shown interest in the property, on close inspection there are a number of items needing attention, but we will leave it as is for sale.  The Town Manager reported, by Charter, we would have to have a public offering, we would need approval to proceed to publish it, and accept proposals, we are doing this without a real estate agent, but will be sending literature to active real estate offices in the Farmington Valley.  The Assessor reported we will start the marketing process, put a sign out front to contact the Assessor’s Office, we may have an open house, we will put it in the Hartford Courant under new listings, and there is a brief description in the packet as to what the ad might look like, with an asking price of $295,000.   Mr. Woodford reported, a real estate company could never say river access, because that would be going over private property.  He suggested it not be advertised as such.  Mr. Shea reported, remove river access and place the ad.  The Assessor reported if we are made an offer, they would have to fill out a contract, provided to us by the Town Attorney, we will execute it subject to Town Council approval and notify the Town Manager to put it on the Agenda.           

On a motion made by Mr. Shea, seconded by Carlson, it was voted:
RESOLVED:       That the Town Council authorize an advertisement to be placed in a newspaper, for the purpose of the sale of 435 Waterville Road at an asking price of $295,000.
Mrs. Hornaday, Messrs: Hines, Carlson, Shea and Woodford voted in favor.      

         00/01-52   Post Retirement Medical Trust Fund (GASB Statement 43, GASB Statement 45)
The Town Manager reported we have been talking about the Governmental Accounting Standards Board Statements 43 and Statements 45, which relate to post-retirement employee benefits.  The Governmental Accounting Standards Board is the standards setting body for governmental accounting, it was also a Financial Accounting Standards Board, or FASB, both of these organizations receive funding from the Financial Accounting Foundation, and are looked upon nationally and internationally as the standard setting bodies for the respective groupings of organizations.  The Governmental Accounting Standards Board has notified us that all municipalities are now going to have to define through an actuarial analysis what their liabilities are for post-retirement employee benefits.  Once that amount has been determined actuarially, municipalities are encouraged to establish funds to offset those liabilities, very similar to a pension system which is a post-retiree employment benefit, but that is treated separately because they have been around a longer period of time.  The idea behind this is to have a better presentation of an organization, in this case a municipality or governmental entity, liabilities that they have on their balance sheet so that the credit rating agencies and those that are investing in the paper, bonds, notes and so forth of that organization can better get a feel for the credit risk that is being undertaken.  It is also a method to reduce and basically bring these liabilities to light.  This has been on the horizon now for 4 or 5 years, it has now been formalized within the last year.  The Town of Avon has taken steps going back to the year 2000 to start preparing for the implementation of this particular requirement.  

The Town Manager reported both the Town Director of Finance and Chris Kachmar from UBS Financial Services are here to walk us through what we are going to be recommending to you, and we are going to be asking you to adopt several resolutions and agreements so that we can establish what we should be establishing under these particular Governmental Accounting Standards Board Statements.  In addition to that, we hired UBS/Prime Asset Consulting, Chris Kachmar, after Watson/Wyatt, our Investment Advisor, indicated that they were getting out of the Municipal Pension Investment Advisor business.  It went out with an RFP earlier this year, we went through that process and we retained Mr. Kachmar, he has undertaken a review of our Investment Manager, ING/Aeltus, which used to be Aetna who handles our pension funds.  He has some comments on what he has found in terms of that evaluation and some recommendations to proceed ahead to the next step.  We are covering quite a bit of ground in this presentation, and some of it may be rather technical, but we need to listen because this is a major financial policy that we are enacting in terms of the post-retiree benefits that we have to provide.  Once you are comfortable with it, and if you approve our approach, we then would have to go to the Board of Finance and repeat the presentation, we would need both boards approval on this.  

The Director of Finance reported other than the specifics included in the memo, one of the things that we had to do as a result of Mr. Kachmar’s analysis and recommendation to fund, according to the CT Statute, was to restate the Fund Resolution, which was approved back in November of 2000.  As a result we requested the Town Attorney to review the resolution so that it would be in compliance with the Statute, and that is one of the things that we brought here tonight for your approval.  Mr. Kachmar will talk about what is in the document specifically starting with the Post Retiree Trust Account, the policy and some guidelines.  

Mr. Kachmar, UBS, reported with respect to the pension plan, there are four aspects of the investment process, they include reviewing and refining the investment policy statement, doing formal asset allocation work and linking in the actuarial observations from the Town Actuary, and making sure that the plans assets are allocated in a manner that over time gives the plans the opportunity to meet their invested trusts, how much in stocks, bonds and international equities.  Finding actual managers to undertake those various assignments.  In the pension plan, we will be talking about some of our initial observations, but again at your size there are opportunities to find specialty expertise managers with different styles that compliment each other well, and we will do a tremendous amount of research in covering those managers, nationally there are at least 2,500 registered investment advisors.  We will provide a workable list for the Town of candidate managers, then finally completing the process, doing formal and fairly regular, disciplined performance letters.  He will meet with the Pension Committee on a quarterly basis, looking at the performance of the managers, looking at the manner in which the plans are allocated, and making sure that we have this process in place that over time the plans have the best chance of meeting you investment package.  The effort is really focussed on process, you as a municipality are not subject to a risk technically, but if you talk about best process, in the municipal world a lot of people will under perform the broad market, and proper asset allocation helps to reduce the impact of this risk.   We do this for many of your peers around the State, we have 21 municipal towns, we provide similar services to.  

Mr. Kachmar reported included is the plan to fund the Post Retiree Medical benefits, completed after the initial analysis with the Town Manager and Director of Finance.  There are a couple paths that you can potentially take, only one of which has precedent in the State, that is of forming under existing Connecticut State Statute, a dedicated fund to meet these obligations.  There are opportunities to do other types of things in terms of the retiree medical benefits association, called VIVA plans, there is no precedent in the State, and after analysis we were not comfortable with that, there are of a number of issues in terms of affordability and IRS provisions that make those very unwieldy solutions.  Our thought was that we have an existing model that has been recognized in the State, that is being used successfully, and that is the model that we made the recommendation to the Pension Committee to adopt.  That is done under Section 7-403a of the existing Connecticut State Statutes.  What that statute says, basically that you can form this pool of assets, you can do in terms of investment and what type of managers you want to use, you have a lot of flexibility, but in terms of how aggressive you can be as a municipality we are, as far as the Legislature, going to set fairly restrictive guidelines.  So as we look at this particular guidelines, we gave you information – the legislation as it is currently construed, only allows for example for up to 40% of aggregate assets to be in equities, it allows that only a certain percentage of assets has to be in U. S. government bonds.  One of the things that you can see are happening at the Legislative level is that we are kind of stepping out into this new frontier, there is a recognition that this is an increasing, and a fairly rapidly increasing liability of a lot of municipalities around the State, but it is still developing and somewhat immature.  We are going to give you the opportunity with these Statutes to do some investing to support and hopefully grow a pool of assets to satisfy the liability, but we are going to do it in a somewhat restricted fashion initially.  One of the things that West Hartford has dealt with is that it started very strictly with respect to how much you can do, and over time as the Legislature goes back into session is liberalizing those constraints to the point where we think over the course of the next 3, 4, 5 years they are going to have the restraints as such liberalized so that these assets can be invested the way they need to be to support the long term growth-in liability. The form here is, this is the pool of monies, you can invest the pool of monies, but we are not where we need to be yet in terms of allocation.  The Legislature recognizes that, but we are starting kind of slowly and over time as the pool of monies grow and more municipalities come on line funding this allocation, the constraints against it will start to be liberalized so that we can get where we need to be.  

Mr. Shea reported to keep your ratios in tact percentage wise, do you do that annually and revisit quarterly?   Mr. Kachmar reported we would visit it quarterly in terms of the allocation, the sample model contemplates approximately the $700,000 of initial funding, what we think makes best sense given the size of funds that are contemplated being invested is to use what we call a fully indexed approach to get started.  The plan is not at the size yet, in our estimation, where you can get access to active managers in a cost effective manner.   Let us index it with being respectful of the constraints as the pool of monies grow over time, both from investment results and perhaps future contributions.  It will become a scale where you can go out and look for active managing through the years where you think it makes sense.  Our current thought is to use exchange traded funds, index shares, because they are the most cost effective manner to do that and to basically build out this portfolio.  On this target allocation page what we have done, legislation actually lets you go to 40%, we have modeled 37.5% just to be conservative and to give the Town a little flex on the front end, as it initiates the program, a conservative buy makes more sense than a more aggressive one, a model portfolio is basically sensitive to all the constraints that exist under current legislation.  It is extremely cost effective, the cost to administer this plan is approximately less than 1/5th of 1% per year.  

Mr. Kachmar reported the next question becomes if it is thought that this is the right approach, how do you actually go out and logistically create this portfolio.  In working with the Town Manager and Director of Finance, we went out with a formal RFP to the market place, to various financial institutions in the area, we received four or five responses, we did some analysis on their ability to execute the transactions, to do the custody work, to provide us electronic capability to go on line, and see those balances so that we ensure that the allocations are consistent with the legislative constraints.  After doing that analysis we concluded that Simsbury Bank & Trust would be the institution best able to do that, and happened to be the cheapest of the five as well, there the year one cost is $1,300, for a $700,000 fund. They are going to start with the transaction based execution cost that basically is ascertained from looking at these underlying allocations, seeing in the various exchange traded funds what did that asset value of those funds are, then going out and buying the appropriate number of shares to build this.  Mr. Shea reported let us say it grows to whatever level you say it is going to grow to or someone would want to take it over, now would we not stay on this present model, assuming we stay with Simsbury Bank, if we have benchmarks?  Mr. Kachmar reported over time what would happen is that this gets a little bit into our consulting phylosophy.  Again $700,000 is not a lot, let us pretend the fund has grown to $5 million, that is an opportunity for you to go out in areas where we think there is opportunity for good active managers to add value.  This basic model in terms of the broad asset allocation, were always subject to that, but we may have a scenario where international equities now are at 7.5%, at $5 million, for example, is a size that we can go out and look for an active manager as opposed to the $51,000 we are talking about now.  In those areas where we think there is opportunity to add value with active management, when the fund becomes of sufficient size we will go to make that effort.  Mr. Shea reported he was asking questions, to follow up because there are administrative questions that are going to come, and that we would not need active management.  Mr. Kachmar reported you may not, he would say when you look at the research on domestic large cap equities, domestic fixed income tend to be more efficient asset classes, we can make a very good case for going along with that.  International equities, small cap equities, there is some pretty persistent evidence that with good active managers can consistently generate incremental returns over benchmarks and data fees.  Mr. Carlson reported if we did not, the transaction costs would go up too.  Mr. Kachmar reported that is correct, but over time what will happen is that the cost benefit analysis will be done, as to is this a good manager, is there scale, can they do it cost effectively, do they have a track record generating return?  If in fact they do, they are a candidate for consideration.  Over time you do probably always have a large cap, and a fixed income, index component to this to be sensitive to the cost direction.  

Mr. Carlson reported you said you are going to do this on a quarterly basis, are you balancing on a quarterly basis?  Mr. Kachmar reported we balance certainly if we have pierced the thresholds, we have to make the recommendation.  Mr. Carlson questioned whether, at Simsbury Bank, are they capping their costs per year?  Mr. Kachmar reported the quote contemplates a $.15 a share to do this transaction.  If we were at 42.5% equities, that is obviously something that is documenting the process, something that is discussed with the Ad-hoc Pension Committee.  With the margin, there is the potential to incur, for example, a couple hundred dollars of expenses to bring that mandate back in line with the target.  So it is a transaction base pricing initially, on a recurring basis the ongoing costs from Simsbury Bank, is $75 a year.  Mr. Carlson reported his only concern is that as we get into trading, we are going, potentially, to be in a break even point where we would have been better off with asset based model.  Mr. Kachmar reported that is a consideration, and something we are obviously going to keep track of.  Mr. Carlson questioned whether it would be an annual contract.  Mr. Kachmar reported it is an open ended contract, so you have full flexibility to review that model, then make recommendations.  Mr. Carlson questioned what services are they going to provide, and what is their experience in providing those services?  Mr. Kachmar reported they will be providing the consulting and the investment recommendations, as provided from our organization, they are strictly a transaction and custody agent and they do have some experience in these size plans doing that, they do not have any discretion to do anything from an investment perspective, nor do they seek it.  They have what we believe is the most robust reporting platform, where we on the performance reporting side can link into them electronically and do the type work that we need to do in terms of reconciling balances on a quarterly basis.  Of the five presenters, they had the most robust model in terms of reporting.  To be clear, there is no investment responsibility associated with the Simsbury Bank & Trust, that ultimate responsibility resides with the Adhoc Pension Committee.  

Mr. Shea reported he is glad it is local.  Mr. Carlson reported yes, and given their relative experience over only a few years.  Chairman Hines questioned who the other four were.  Mr. Kachmar reported Wachovia, Webster Bank, Citizens Bank and Sovereign Bank.  One of the considerations which drove us towards Simsbury Bank, was asset based pricing, different from a lot of the other entities, they were the most cost effective.  Mr. Shea reported say it was $5 million, would he be making that recommendation to Pension Committee, then the Pension Committee comes to the Town Council and the Board of Finance?  The Town Manager reported that is correct, this is a matter of review, you created the Adhoc Pension Investment Management Committee, the only thing they do is get involved with the investments, they have nothing to do with the provisions of the pension plan.  Any changes in the allocation strategy, or in terms of the investment advisor or the investment managers, will flow back up to the Town Council, and you will be making the decision as the Custodians of the plans.  

Chairman Hines questioned whether there is anything we should do from a legislative standpoint, to allow us to have more flexibility, obviously we are caught in the middle here, we want to have stability and protect the funds.  On the other hand if there is an opportunity to grow the fund, which we are going to need because it is a liability for the Town, we want that flexibility.  Mr. Kachmar reported in West Hartford they have had this ongoing discussion forever and they worked very directly with their representation in the State Senate to make this case.  Not only to say that this is an obligation of the    town, it is growing very rapidly, their fund is $30 million currently, and they are going to need more le-way over time to keep pace with the growth and underlying liabilities.  So to the extent that there can be conversations with representatives and what not, that would go a long way towards helping.  The Town Manager reported CCM is already aware of that, the Mayor of Norwalk brought it up at the last Legislative Committee Meeting, as they are getting heavily involved with this in Norwalk.  It has been added to the CCM Legislative Program, and now that this has been approved by the Governmental Accounting Standards Board, and everybody is going to be in an implementation stage over the next couple of years, the State, he is sure, will go ahead and modify their guidelines.  But it might be something that CRCOG could add to theirs, or at least be supportive, and COST was well.  

Mr. Carlson questioned whether the expenses of administration of the plan, including audit, borne out of the fund or do we bear those out of the general account.  The Town Manager reported it is out of the fund, that is in the authorization to cover those expenses and actuarial expenses.  Mr. Shea reported that flexibility that everyone has been interested in, he is also concerned about the checks and balances, it would flow through your office to ensure, as this fund grows and it is going to grow fast, those are going to become very important. The Town Manager reported those are being instituted as part of this process.  Mr. Shea reported we are all hoping the funds will continue to go up under professional management, also how would we govern it if we are not as fortunate.  The Town Manager reported basically, the way it is going to work is that we will have an actuarial report that will recommend a funding level, just like we do with the pensions, then we will have to appropriate that amount of money that will go into the fund.  If the fund does not perform at the level it is supposed to with the actuarial assumptions that we have, then the amount of funding we are going to have to do, just like in dealing with the pension fund the last few years, is going to go up, we are going to have to add to it.  Mr. Shea reported his concern is our money that is in there, if we do not do as well with the flexibility investment wise, who monitors and stops that?   The Town Manager reported the Pension Investment Management Committee will get a report, they meet twice a year and get quarterly reports, Mr. Kachmar will be monitoring the reports, if there is a tanking of the market, or the market goes south, then we will be looking to him for guidance and recommendations on how we would stop the bleeding at that particular point in time, just like we would on the pension fund.  Mr. Shea questioned without using legislative bodies, can it be monitored more often than every three months.  The Town Manager reported no, the legislative bodies, in the sense of the Pension Investment Management Committee and the Town Council, are intimately involved in this and no major decisions in terms of changes of allocation strategy can be made without you being involved.  Mr. Shea reported say we put $10 away, and say to Mr. Kachmar that if it gets to $8 pull it, or to $12 pull it, is that kind of governing control available to us?  The Town Manager reported that is in the documentation we are asking the Town Council to approve, as to giving the authorization for those types of things to take place, by the Pension Committee and investment manager.  

Chairman Hines questioned whether the Pension Committee will be the prime one to make the recommendations.  The Town Manager reported they do not make the recommendations on whether we buy one stock or another, we do not have enough money to get that involved in it.  What we have is investment managers and right now we have one investment manager, it is ING/Aeltus, they manage the pension funds which have about $18 million, and they basically through their internal process have the authorization to sell this and to buy this within guidelines.  For instance on fixed investment vehicles they have to have certain credit ratings on bonds and so forth, they have the allocation strategy which says how much they are supposed to have which you have approved, which says how much can be in equities, the maximums and minimums, how much is in cash, how much in internationals.

Mr. Kachmar reported we are looking at this more dynamically of course, it is not in a vacuum where in we say at the end of March we should look at it, we are looking at it on a continual basis, and having interim conversations, if for whatever reason something were to arise of a magnitude we would bring it to the Town’s attention.
   
On a motion made by Mr. Shea, seconded by Mr. Carlson, it was voted:
RESOLVED:       That the Town Council authorize the restatement of the Fund Authorization for the Retiree Benefits Reserve Fund to be created as a separate medical/health reserve fund per CGS Section 7-403a, and authorize the selection of the Simsbury Bank and Trust to serve as transition agent and custodian for the investment portfolio under the investment policy and actuarial guidelines as recommended by the Ad Hoc Pension Investment Management Committee to the Town Council for their approval.
Mrs. Hornaday, Messrs Hines, Carlson and Shea voted in favor, Mr. Woodford abstained.

Mr. Kachmar reported we will be covering Town Pension Funds, there are five pension plans with roughly $18.4 million, and ING/Aeltus is the sole investment manager for those funds.  They have been giving discretion within reason to make recommendations and to take investment action on behalf of those plans, that starts at the broad allocation level, by that we mean we like large cap value and growth equities and small cap equities, we do not like international, we like fixed, and having within ranges the ability to make those type of allocation calls on behalf of the plans.  At the next level we then use underline strategies, for example International – picking individual stocks.  So we have a two tier approach here.  It is a little bit unusual and different than the model that some of your peers have adopted, and we will talk to the pros and cons.  We have emphasized that we talk about process, we are not market timers, we do not advocate market timing, we use models, we need to be in the markets, we need again to have a disciplined approach, we need to have a wide investment policy statement, and good managers over time to get to where you need to be.  As you look through this information, you basically see all of those points laid out.  Our basic philosophy when everything is said and done the most powerful tools that you have is asset allocation and diversification, everything after that is in essence yielding residuals in the process.  The current allocations for the plans and their balances are shown.  At your size in our estimation you should not have all your monies with a single investment organization, you will have access at your size to specialty managers and that is something we feel is a serious consideration.  ING/Aeltus may be good for some of it, but it is our experience that firms are good at some but not all, it is difficult to find someone that can do good at everything on behalf of the plans.  One of our recommendations is to diversify, the second is to broaden from a diversification stand a little the allocation ranges from the plans.  The plans currently have allowable allocations to domestic Equities, both large cap and small cap, the international equities vary nominally at a 5% target rate into fixed income.  Mr. Shea questioned if Mr. Kachmar will assist the Pension Committee if we diversify, in qualifying the groups that bid on our business.  Mr. Kachmar reported absolutely.  The Town Manager reported the thrust of the portion of the presentation that we are dealing with now, is that we are looking for authorization from the Town Council to have Mr. Kachmar work with the Pension Committee to move towards the diversification of investment managers.  He has done the research, the research is here and we are now looking for permission, do the next step, then return with recommendations.  Mr. Shea reported it is an open bid process, the due diligence is done by Mr. Kachmar and the Committee.  The Town Manager reported not open bid in that sense, it is a process of looking for who the best performers are within a category, then looking at the price they charge, within that category.  Mr. Kachmar reported we have a list of these different disciplines and managers we like, most municipalities, either by charter or by practice, would put some type of formal notification in the newspaper, for example; the Town is searching for an international equity manager, listing the kind of character and attributes they would have to have, you are welcome to bid, we will send information through UBS/PRIME Asset Consulting.  Mr. Shea questioned whether the Pension Committee would want to contact other towns that Mr. Kachmar does business with to see whom they have chosen.  Mr. Kachmar reported absolutely, we could give all of our contacts names to you.

The second observation away from the notion of diversifying from a pool is what we call empty risk, which is trying to find more than one manager from a diversification standpoint, is increasing a little the diversification within the allocation ranges, in the present; 50 % is US Equity, 45% US Bonds, 5% Non US Bonds = the current target allocations that the Town has given to ING/Aeltus.  The model we are recommending is basically; 47.5% US Equity, 37.5% US Bonds, 10. % Non US Equity, and 5% REITS.  We think the Town needs a little more international equities as they are a very powerful tool to diversify plans, we also added a nominal allocation to real estate, and again the notion here is the diversification into the larger plan, by incrementally adding two new asset classes, enhancing one and adding a new one to make the plan more diverse.  Mr. Carlson reported you said real estate, are you open to other types of plans.  Mr. Kachmar reported yes, when he said real estate, the model works off of REITS which are publicly traded trusts, they sometimes can look like small cash stocks, and act a little differently although the underlying investment within those trusts is real estate, there are other ways to get at real estate.

The Town Manager reported this fund currently only has only 55% of our employees, we terminated this plan for all new employees back in 1997, and we estimate that in 15 to 18 years there will be no active employees currently in this plan, so we are working towards the termination of even active involvement, it has a long tail because people tend to live longer.  

Mr. Kachmar reported you will notice this comes back to our conversation about retiree medical to some extent.  You will notice there that the model plan has a target return of 7%, that percentage comes from resources by looking at historically what the broad markets have done, then overlaying expectation of what we think is going to happen over the next ten to twenty years, and developing the term and risk in what we call correlation statistics to see how all of this interacts and we arrive at that 7% number.  You may not get 7% every year, you may get 5% in some years and 12 % in the others, but it is a basic guide for us to basically come forth with a recommendation.  The other observation you may have is the actuarial elements saying the 8.25%, yet the model that we have given you says 7%, that would be a shortfall of 125 basis points, and how do we get there.  Our modeling works in dealing strictly with the underlying asset classes, these are not manager returns, over time we will work to identify active managers who can add that incremental return in their asset classes, resulting in that 8.25% number.  There is a constraint on the model and that is something that we have to work around, basic return modeling and then looking for incremental return from the managers.  Chairman Hines reported then if we do not like that, we have to put more into it.  The Town Manager reported that is the averaging we talked about, after the presentation last year we changed the process, we are not doing it as a percentage of payroll basis, which is more friendly in terms of the significant deviations in the market.   

Mr. Kachmar reported in the model investment portfolio there is a lot of diversification, specific styles, specific specialties for managers, a very broad portfolio, a very diverse portfolio.  What is good about diversity from a municipalities perspective is that the return streams tend to be smoother and helps make your job from a contribution standpoint easier to work with for you.  Chairman Hines questioned whether Mr. Kachmar had experience with other towns that have shown this has worked.  Mr. Kachmar reported we have been working with 20 other towns, since 1989, the testament is we have never been terminated.  Chairman Hines reported if you take this diverse portfolio versus our more limited portfolio, how much more has that given to other towns if they use that over the years?   Mr. Kachmar reported every circumstance varies a little, but we just did some work for a town located southern in the state, and back tested this model portfolio, with similar allocations not precise, versus the model that they had which is not your managers but a single manager approach with reasonable returns, and the model is doing 2% to 2.25% per annum better, but there are no caveats on performance here, we just do not know what is going to happen in the markets, but there is some firm evidence that it is a less volatile approach and there is incremental returns to be had.  Mr. Shea reported that is the key.  

Mr. Carlson questioned if we have taken and compared our returns over the last ten years, versus using your model, and seeing both volatility comparisons as well as the overall return.  Mr. Kachmar reported we are going through that same exercise for the time, and we do not have the data with us tonight, but again there are incremental return opportunities, the standard deviation which is a manner in which we measure volatility of returns is less.  Again just from a practical standpoint, from an appearance standpoint a multi-firm approach looks better from an impartial observer.  We have the size, we can go out and find specialty managers, if we can do that we should have 4, 5 or 6 different shops running monies on behalf of the Town, as opposed to one.  Your present firm is an entirely different firm that it was when you hired them, they used to be a Hartford based operation, it used to be centered here in terms of the investment professionals and the staff, the operation is basically based in Atlanta now, and the operation in Hartford, it is not the organization it was even 3 years ago.  That is another sensitivity we have when we are doing our analysis, it is not all premised on the quantity, given the numbers, a lot of the value we add is the softer things, the quality of having conversations with the firms, having them in, going in and pulling and looking at their records, and understanding what is going on in the firm away from performance, that again would be the basis for recommendation.  

Mr. Kachmar reported there are many charts in the material, there is a composite portfolio performance chart showing the various portfolios, their performance that ING/Aeltus has achieved versus their composite benchmark, which is what they are trying to provide incremental returns over of course, and then there is a number which shows Peer Group Rank.  One of the services we add, is we have one of the managers come in and say the last quarter they did 4% and are really content with that and think that is a good number.  That number does not mean a whole lot if you do not have some sense of what the benchmark did, and in a more quarterly sense, it would in peer plans need to have single allocations.  So one of the ways we assess performance is not only the absolute number, but was the performance relative to a benchmark and then in a peer group ranking how does that performance compare.  As an example, one year for the police, through the end of last year, the plan was up 18.2%, the composite benchmark was up just under 19%, you can see there was a performance shortfall there in terms of ING/Aeltus adding value above the benchmark.  From a rank standpoint they are 54th percentile, which means when we go into our data bases, and we look at plans that have the same allocations that your plan has, this is telling us that the plan ran slightly below median in terms of performance, or 54% of our plans with the same allocation had better performance.  The lower that number is, the better the relative performance, that is how we rank and that is the way we determine it. This ranking shows that ING/Aeltus is doing an OK job, as you can see, but has not done a spectacular job.  When we look at the underlying mandates fairly extensively with the Investment Committee, their fixed income capabilities have been pretty good, their international equities have been atrocious and not acceptable.  Their domestic equity, large cap has been OK, their small index product cap has not been very good.  Chairman Hines reported so there are two things that are important, one that you could do better with the same allocations with other firms, and second you think with better allocation to more diversified we could do even better if we picked the right firm for each one.  Mr. Kachmar reported frankly, yes.  

Chairman Hines questioned whether he feels that we could get enough firms do that, even with the small size we have here.  Mr. Kachmar reported you are at $18.5 million, certainly we have a lot of peer plans with similar size assets that are using the multi-managing model.  Mr. Shea reported the peer group rank shows that we should diversify with a different firm.  Mr. Carlson reported his concern when he looks at it is that versus the peer group in the five year measurement, which is a more meaningful measurement or even the three, based on the 50th percentile we are right about at, in almost every category, that is not a good place to be.  Mr. Kachmar reported these are gross numbers, they are charging 63 basis points on a weighted average basis per annum, so we feel that you should strip another 63 basis points out of that performance to kind of get it at net versus benchmark type of analysis.  Mr. Carlson reported at a minimum to get to a multi-manager approach today is a much safer bet, the risk you run with a single manager approach is, that you have a certain set of assumptions regarding the economy, the industries, etc. You know there are different stock pickers in the firm, and can kind of go back and look at one approach at the top, and that always concerns him, so that having contouring views is a very good thing.  At the end of the day, with us having fiduciary responsibility for this, we have less risk with this approach.  Chairman Hines reported especially when we can pick specialized managers who have had good experience, so we are getting the best, so that we can get all of these somewhere in the 75% area.  If you go over 100 on a one year basis it would be very brave, but on a five year basis that is over a period of economic changes tool, which is important.  Mr. Kachmar reported that is an excellent observation, one of the things we look at, it would cause pause if we came back and said to you that out of a one, three and five years basis, we have identified the exact combination of managers that have generated the best performance, because our experience is that there is a lot of volatility in there, and the ones that have done very well in a particular period more often than not are the ones that lag very badly when their style comes out of favor.  So again, the return stability is  kind of key to this, if you can find consistent what we call top core managers, that is going to generate the kind of returns that you would be comfortable with as a Committee.  

Mr. Shea reported he has heard more than enough evidence that we should make the recommendation.  Chairman Hines reported he agrees.         

On a motion made by Mr. Shea, seconded by Mr. Carlson, it was voted:
RESOLVED:       That the Defined Benefit Pension Investment Advisor is authorized to search, evaluate and select alternative investment managers, as necessary, for the Town’s Defined Benefit Retirement Plan.
Mrs. Hornaday, Messrs Hines, Carlson, Shea and Woodford voted in favor.  

        02/03-72        M. H. Rhodes Contract Award: Site Remediation
On a motion made by Mr. Woodford, seconded by Mr. Shea, it was voted:
RESOLVED:       That the Town Council award the M H Rhodes Contract for site remediation to Red Technologies in the amount of $85 per ton, as recommended by Shanahan Consulting.  
Mrs. Hornaday, Messrs Hines, Carlson, Shea and Woodford voted in favor.

        04/05-12        Approve FY05/06-FY14/15 Capital Improvement Program Review Schedule
On a motion made by Mr. Woodford, seconded by Mr. Shea, it was voted:
RESOLVED:       That the Town Council approve the FY2004/2005 Capital Budget Review as follows:
November 4:     Regular Town Council Meeting (7:30 p.m.)
Selectmen's Chambers
7:45  General Government
November 18:  Special Town Council Meeting (7:00 p.m.)
Selectmen’s Chambers
7:00 p.m.  Parks & Recreation
7:45 p.m.  Public Works
8:15 p.m.  Engineering
December 2:  Regular Town Council Meeting (7:30 p.m.)
7:30 p.m.   Board of Education
8:30 Fire Department
8:45 p.m.   Library
Mrs. Hornaday, Messrs Hines, Carlson, Shea and Woodford voted in favor.

04/05-19   Appointment: Zoning Board of Appeals
On a motion made by Mrs. Hornaday, seconded by Mr. Woodford, it was voted:
RESOLVED:       That the Town Council appoint Jill A. Coppola to serve on the Zoning Board of Appeals for a term to expire December 31, 2005.   
Mrs. Hornaday, Messrs Hines, Carlson, Shea and Woodford voted in favor.

04/05-21        Adoption of Ordinance #70: Nuisance Dog Ordinance: Review, Discussion, Set Public Hearing Date; November 4, 2004, 7:30 p.m.
Chairman Hines reported the Police Department feels that this is the right thing to do, but there were changes to some wording to address our concerns.  Chief Agnesi reported it is the right thing to do, it closes the loopholes in the State laws, to enable us to address dogs that are vicious against another animal.  
On a motion made by Mr. Woodford, seconded by Mrs. Hornaday, it was voted:
RESOLVED:       That the Town Council schedule a public hearing on November 4, 2004 regarding Ordinance #70, Nuisance Dog Ordinance, at 7:30 p.m.
Mrs. Hornaday, Messrs Hines, Carlson, Shea and Woodford voted in favor.

        04/05-23        Bid Approval: Police Vehicles
The Town Manager reported the request for the purchase and lease of these vehicles was previously approved, these are the results of the bid process.  Chief Agnesi reported he would like to proceed to lease the additional two vehicles that were scheduled for July 1, 2005.  This would allow us to cycle two additional vehicles that currently have 50,000 miles on them, to be used by patrol for at least three more years. The patrol vehicles are in turn passed down to staff and beyond the department to others, such as the animal control officers and public works, so that all of the vehicles are utilized, until they are just about worth $1,000.  All leases will be at the same rates.  The Town Manager reported we are going to be getting three SUV’s that will be used for Police administrative purposes.  Chief Agnesi reported the vehicles that we are cycling down, and also there is a tremendous saving here with the lease program over and above the cost of the lease.  Mr. Woodford questioned the rational for the SUV’s.  Chief Agnesi reported it allows us to have two more vehicles that will add to our capabilities, such as in the winter it is extremely difficult to get around.  Mrs. Hornaday questioned what happens to the vehicles at the end of the lease period.  Chief Agnesi reported we would have an option to purchase the vehicles if we so desire, it is his understanding that will be part of the agreement.  The only downside of that would be that we would have some responsibility afterwards for repairs.  The thought process with the leasing program is if you continue it, you do not assume any responsibility for repairs.  After a number of years, we would just recycle the lease, hopefully for the same amount of money or very close to it, we can have a second cycle for the same price.  Our former Public Works Director actually worked on this, and made the suggestion, it reduces the maintenance issues.    

Purchase
On a motion made by Mr. Woodford, seconded by Mr. Shea, it was voted:
RESOLVED:       That the Town Council award the bid to O’Neill Chevrolet in amount not to exceed $26,897 for the purchase of a Chevrolet Tahoe police package vehicle, as recommended by the Chief of Police.
Mrs. Hornaday, Messrs Hines, Carlson, Shea and Woodford voted in favor.
Leases  
On a motion made by Mr. Shea, seconded by Mr. Carlson, it was voted:
RESOLVED:       That the Town Council approve and authorize the Chief of Police to enter into a lease agreement with the low bidder O’Neills Chevrolet for two Chevrolet Impala vehicles at a monthly lease rate of $252 each, and three Chevrolet Trailblazer SUV at $310 monthly, to be used by the Police Department, as recommended by Police Chief Agnesi, all contracts to be reviewed by the Town Attorney.  
Mrs. Hornaday, Messrs Hines, Carlson, Shea and Woodford voted in favor.

04/05-24        Appointment: Inland Wetlands Commission
On a motion made by Mrs. Hornaday, seconded by Mr. Carlson, it was voted:
RESOLVED:       That the Town Council table the appointment to the November  4, 2004 meeting.
Mrs. Hornaday, Messrs Hines, Carlson, Shea and Woodford voted in favor.

NEW BUSINESS
04/05-27        Review, Discussion, Approval: Inter Local Agreement and Memorandum of Understanding for Reciprocal Tax Relief for Volunteer Fire Fighters with the Town of Farmington  
Mr. Woodford questioned how many people would this involve.  The Town Manager reported three or four if that.  We now have agreements with Canton, Farmington and Simsbury.    

On a motion made by Mr. Woodford, seconded by Mrs. Hornaday, it was voted:
RESOLVED:       That the Town Council authorize the Town Manager to sign on behalf of the Town of Avon the Inter Local Agreement and Memorandum of Understanding for Reciprocal Tax Relief for Volunteer Fire Fighters with the Town of Farmington.
Mrs. Hornaday, Messrs Hines, Carlson, Shea and Woodford voted in favor.

04/05-28        Review and Discussion: Creation of a Charter Revision Commission
Chairman Hines reported as background, we have known from the time this case was decided in the Supreme Court that there may be people who would ask for this.  He can understand people’s frustration and concern not being able to pass the budget referenda for the past three years.  We have to look at what the best interest is for the Town of Avon, which he has done a lot of thinking about this, not just when we are requested to put this on the agenda, but over the months since this case came, and he is of the opinion that it is not of the best interest of the Town to separate the two budgets.   He tried to look at what worked so many years here in the Town and the way we have been doing it, and we do not want to over react to a couple years of frustration with budgets that did not get passed.  If it worked for many years, why can it not work again?  If the three boards can work together and come up with something, that is probably in the best interest of the Town.  The Board of Finance is trying something new this year, they have given guidelines to the Board of Education and the Town Council.  What concerns him is if we start separating the budgets, we are going to get people thinking them and us, in other words that is not the best way to do it.  He is not in favor of setting up a Charter Revision Commission at this time to separate the budget, it is not in our best interest.

Mr. Carlson reported he is not in favor of it, for a couple of reasons.  The first reason, he is generally not in favor of separating budget votes because his question is where does it stop.  Do you stop when you go to a library district, do you stop when you go to a fire district vote, do your stop when you go to a snowplow vote?  He further reported there are towns in other states that are for taxing entities in the same geography, such as library, fire and school districts and general town services.  That is a great place for special interests groups to get in and lobby for their particular cause without regard to the other things that they get to take advantage of or do not get to take advantage of, he does not like that separation.  The second issue is that he believes the process is in place today, and that process is through the electoral process to change board members if they are not giving you the representation that you feel you want as a town’s person.  The process should not be every year that if you did not get the answer you want on the budget, either up or down, and therefore you want a charter revision to change things, because while there may be a group of people today who are in favor of having a charter revision to split this vote, w could be back here in two or three years doing the same thing again.  So his question is when does it stop, when do we start to realize that we are part of a bigger entity here?  There are all kinds of towns facilities that he has never used and hope that he never has to use, but he believes it is an obligation to pay for them as a Town member.  He is not in favor of a Charter revision at this time for this purpose, to separate votes.

Mr. Shea reported both Chairman Hines and Mr. Carlson’s comments were very well thought out, balanced and have the best interests of the community at large, and he applauds the Council for putting this on the agenda now, so that it does give everyone the chance to do what they would like to do.  That is why we are elected, and that is to try to be fair to everybody.  We are all in this together, he too does not have any children in the school system, and he does feel as though it is an obligation for him to participate, he does not use the public pool, he thankfully does not use the Police Department that often or the Fire Department.  In summation, he just thinks we are headed in a direction where we can maybe heal, people are starting to listen, people are starting to participate and the Board of Finance took a step recently that will help make this process a little smoother.  He too is not in favor of creating a Charter Revision Commission.         

Mrs. Hornaday reported she would agree with what the rest have said, it is so important for the community to see itself as a community, and that affects one area of the community affects us all, and that we are all working together towards all of the problems and issues that we have.  She would not want to go to a charter revision.  She also thinks that we have to consider Charter revision every ten years, which will be in three years.   

Mr. Woodford reported he has always been adamant about splitting votes, he does not think it is good for the Town, we are all in it together.  Although he must admit that he is not quite as adamant as he used to be, because he heard some compelling arguments.  He tends to be a little bit conservative in terms of budgets, and he heard people say that we are hurting the Town side of the budget, in order to make the whole process work smoothly.  That thought has entered his mind, but he still does not think that it is a particularly good idea to appoint a commission at this time.

Mrs. Stahl reported she would like to thank the Town Council for doing this, as we did do it in short order, we are so pleased, for allowing at least the discussion to take place.  Perhaps to everyone’s surprise she agrees with the Town Council.  She thinks the jury is still out, about whether the Town and the Board of Education will comply with the Board of Finance guidelines, at least the Board of Education has not in the past.  We need to give it more time, before we go to a rather draconian method of trying to have separate votes on the budget.  Certainly the sentiments of the Town Council, you are clearly against it, which is no surprise to her, and the Town is not ready for it, so she does not think this is the time to do it and we will not be pressing for anything like that.   

Tom Mortimer, Sunny Corners Circle, reported Mr. Woodford brought up a good point, that a lot of us saw the Town side of the budget take larger hits, so that the School side did not need to take hits but stayed at the capacity there.  Maybe some of the concerns about the budget were more on the school side than the Town side, and now you said that the moods changing and, the Board of Finance is giving, it sounds like credit guidelines to both the Town and the School Board, so we certainly can wait and see what happens.  But I also point out that the splitting of the budgets may not be the only issue that would come up before a Charter Revision Commission, anything could come up.  Mr. Mortimer reported that is the only thing we are thinking of, we are thinking kind of narrow.  Chairman Hines reported no it is not, in fact Mrs. Stahl spoke to him back in July about some items and he discussed several items that the Town Council was thinking of and she was also, and she had them in her letter. For example what happens if the third budget referendum is defeated, that is still unclear, and the Hartford Courant had an editorial recently about it which was incorrect, based on our Town Attorney’s advice, the Charter does not address it, it is by court cases not the Legislature that have said it probably comes back to the Town Council.  There are some bookkeeping things that the Town Clerk and Town Manager would like to see too, so we would do all of those.  But there has to be a very major item if you want to do a Charter revision because once you plan a Charter revision they can go off and study anything.  Mr. Mortimer reported that is why, we want what is in the best interest of the Town, and that is to give the Town’s people a chance to take a look at the whole situation. He can go along with the Town Council and Mrs. Stahl, and say, okay let us wait and see what happens this year.  But the small things over time become big things.          
        
Mrs. Hornaday reported with the conversation that has been going on in Town, comments like Mrs. Stahl made will be helpful.  It will have a soothing quality, it will reduce the tensions around these questions and around these issues, that is going to be a very helpful thing to get out in Town that you are not pressing forward - but that we are all trying to work with the community. That is going to be very helpful.  

Mrs. Stahl reported this was not done for the sake of creating tension, we just want to slow down the tax increases, which have become increasingly high.  Mr. Woodford reported he seconds what Mrs. Hornaday said, and would applaud Mrs. Stahl for her stance, it surprised him.  A good job.

Mrs. Stahl reported we are very grateful, the general consciousness of the community has been raised in terms of the process itself and that is a good thing.  On the one hand the Board of Finance is trying to control spending, on the other hand the Town Council has become very sensitized to the plight of some of its older citizens.  These are very good trends, and we are grateful for them.  She is not sure that it would ever have happened if the budgets had not been challenged, so that is the route we had to go, but she is very gratified at the trending at the moment.  

Mr. Edward Jeter reported probably the biggest negative for the Town, as we go forward would be if it becomes divisive.  Our Town as long as he can remember has always been a group get-together, and we get it done, and yes there are problems now, but we are not alone, there are high taxes everywhere.  It is important to try and maintain a process whereby we do it all together.

On a motion made by Mr. Woodford, seconded by Mr. Shea, it was voted:
RESOLVED:       That the Town Council remove this item from the agenda.
Mrs. Hornaday, Messrs Hines, Carlson, Shea and Woodford voted in favor.       
    
04/05-29        Road Acceptance: Southgate
The Town Manager reported the Engineering Department has inspected this road during all phases of construction and found it to be constructed in accordance with Town of Avon standards for road construction, and the developer of Southgate subdivision has requested its acceptance.  All necessary instruments to convey title to the road and storm drainage have been submitted and reviewed by the Town Attorney, and the Deputy Town Engineer recommends acceptance of this road.

On a motion made by Mr. Woodford, seconded by Mr. Shea, it was voted:
RESOLVED: That the Town Council accept Southgate into the Town of Avon Roadway System as
                 recommended by the Deputy Town Engineer.
Mrs. Hornaday, Messrs Hines, Carlson, Shea and Woodford voted in favor.

04/05-30        Approve Service Agreement: Farmington Valley ARC, Inc. (FVARC)
On a motion made by Mr. Carlson, seconded by Mr. Woodford, it was voted:
RESOLVED:       That the Town Council approve the Service Agreement with Farmington Valley ARC, Inc., FVARC, for provision of aids/interns for one to one assistance, as needed, at a contract price of $4,700 for September 1,2004 to August 31, 2005, $1,175 to be paid quarterly, subject to review at the end of the original agreement period.    
Mrs. Hornaday, Messrs Hines, Carlson Shea and Woodford voted in favor.

04/05-31        Review and Discussion: Buckingham Fields Playground
Lisa Seminara, Special Education PTA President, reported we are here along with the Avon Junior Women’s Club tonight, we have joined together to build an acceptible playground that would meet the needs of all children of all abilities to have an opportunity to play there.  Chairman Hines questioned whether we have one now.  Mrs. Seminara reported we do not, we have one with ADA guideline approval but that does not necessarily mean that it is usable by all children with disabilities.  We are looking to have one similar to the one in Simsbury, the information has been provided, and Sunlight Construction has agreed to help us apply for the special P&Z permits, and we have decided that the Buckingham field area would be the most appropriate site.  However, prohibitive for this project is a huge mound of soil and debris on the site, evidently the Town has looked into getting estimates to remove it.  We took it upon ourselves to solicit someone, and are pleased to say that Mr. Ferrigno of Sunlight Construction has graciously agreed to donate his time and resources, to move the soil and grade and prep the site for the playground.  We are here tonight to seek assurance from the Town Council that this site would be used for a playground of this particular type, not only to meet ADA guidelines, but to be determined to be usable by children with disabilities.  So the one issue is getting to the playground, and putting in a surface that is going to be appropriate for people to get to the site, once you get to the playground site, what you have to take into consideration is how or what a child or person with a disability – what can be done that could best able them to participate and play as every other person. Chairman Hines reported this is a very interesting ideas, and the Recreation and Parks Committee has been involved in planning of this area, and he would suggest we refer this to them to take a look at it.

The Town Manager reported we have had the Town Engineer look at it, we tried through the previous bidding process to get someone interested, and no one was interested in paying for it, therefore it might be appropriate to take advantage of Sunlight Construction’s offer to remove the fill at some point in time, as the Recreation and Parks Committee has approved the master plan for Buckingham already, it shows a playground in this location, that plan has already been before the Planning & Zoning Commission and approved by them, any substantial deviation from it would be required to go back to the Planning & Zoning Commission.  Also Sunlight would have to get a permit to remove the fill requiring them to appear, Planning & Zoning Commission would put any appropriate conditions that are necessary on that permit. The cost of this type of playground is between $300,000 and $400,000, but no type of Town funding is implied, that would have to go through the normal budgeting process.  It was the consensus of the Town Council to refer this item to the Recreation and Parks Committee, include a letter of endorsement of the idea from the Town Council.
 
On a motion made by Mr. Woodford, seconded by Mrs. Hornaday, it was voted:
RESOLVED: That the Town Council add to the Agenda Item #04/05-32 Zoning Board of Appeals, Alternates.  
Mrs. Hornaday, Messrs Hines, Carlson, Shea and Woodford voted in favor.

        04/05-32 Appointment Zoning Board of Appeals, Alternates.  
On a motion made by Mrs. Hornaday, seconded by Mr. Woodford, it was voted:
RESOLVED:       That the Town Council appoint Marianne A. Landers Clark to serve on the Zoning Board of Appeals, Alternates, for a term to expire December 31, 2007.
Mrs. Hornaday, Messrs Hines, Carlson, Shea and Woodford voted in favor.

III    TOWN MANAGER’S REPORT/MISCELLANEOUS
The Town Manager reported Ensign-Bickford has come in with a 6,800 square foot retail expansion of the area on the northeast and easterly side of the Town Green, between Country Curtains and Talbot area.  They are going to cut down all of the trees adjacent to the Bakers place, a large maple in front of Talbot’s and putting in a roadway with parking on both sides of it.  They are going to be connecting the Country Curtains building with the former Baker Furniture building, building a new building northerly of the rear of the Baker building, between Talbot’s and Baker’s, and an extension of the Baker building out towards the Gazebo.  All on their property, the Zoning Board of Appeals gave them approval last week.  This is going to change substantially the vista of the Town Green from kind of a broad lawn type of town green, we are not going to have that really anymore.  What we are proposing through Planning & Zoning, the Town Planner is working with them, is that we will be moving more towards a small ornamental park, rather than a big broad green.  There will be ornamental trees planted, sections of a brownstone wall, more brick walks within the Town Green, lighting that matches what we installed here, the gas lamp type model.  He saw the renderings of what they are doing, and it is all very high end, it is a very positive thing in the sense that it is aesthetically appropriate, it is going to be heavily landscaped, but it is going to cut down the size of that green.  Mr. Carlson questioned whether the building will be a similar style to what is there.  The Town Manager reported yes, it matches architecturally.

The Town Manager reported the emergency generator at the Highway Garage that we got out of surplus back in 1985, is no longer operative.  We either have to come up with $20,000 to replace it or we have a lease option of $550 a month.  He needs some guidance as to whether we should take the money out of contingency to replace it, or put it in next year’s capital budget and lease something, but we cannot operate the gas pumps, without it.  He reported the lease option would be $550 a month to take the load over there until we could buy one, this would be a short term lease, until we get approval to put the money into the budget.  Chairman Hines reported that might be the better approach. The Town Manager reported we would not lease it until December, but he would want to look at what the lease agreement is, and if we are moving in that direction he will do some more research, it would be a six month lease.

The Town Manager reported there is some background material in your folders from our Financial Advisor, Dennis Dix.  It is a comparative analysis of indicators that AAA rated bond communities are reviewed by the rating agencies, and compare them to the last set that he did in 2002, which was actually 2001 or 2000 data.  His report indicates that we have not really changed at all, and if there are some changes, they are more to the positive than the negative.  Chairman Hines reported he is only looking at the AAA towns, he is wondering if there are others he should look at as well.  The Town Manager reported Moodys is going to be comparing us against our peer group, which is the AAA communities, and as long as we are not showing a trend of moving one way downward or backward, we will be okay.  That is what he is trying to spot, to see if we are doing that and if it does not appear that we are, then we may want to take some remedial action.  Chairman Hines reported he would be interested to know what several area towns have been doing.  The Town Manager reported we would then know how they are doing, in terms of per capita income, housing prices, and a lot of these other statistics.  If other towns are worse than ours, that bolsters us in terms of our position.

Chairman Hines questioned whether our Financial Advisor could include how much money we have saved on some of these bonding issues, since we had the AAA rating.  The Town Manager reported he has not given us those figures, interestingly enough he gave that same information to the Board of Finance, on September 27th.  The members of the Board of Finance felt we should go out to bid for a new financial advisor.  We have not been out for close to ten years ago, and they felt it was time.  We are going out for a new auditor as well, it has been ten years on that.  We are working with the Board of Finance to go out for a new auditor, and so the issue of the financial advisor came up, so we will probably be starting that process too.  

The Town Manager reported in going over the tax receipt situation, at this point in time, we are running about a percent and a half behind last year, in terms of collections.  That equates to $700,000 behind where we were last year in collections.  There is no one area, commercial, residential or anything, no one big delinquent, it is a whole bunch of different delinquents.  He further reported he is a little leery in drawing too many conclusions from it yet, but it is not a positive development at this point.  He just wanted to let the Town Council know that we are watching it and being concerned about it.

The Town Manager reported he mentioned in the packet that we are undergoing this audit with the power company on the streetlights.  We have received their tally, which shows 143 lights that were not on our list before.  We knew that, and if it is accurate and we are still going to check it, this may end up being about a $13,000 to $15,000 a year increase on our Street Light budget.

Mrs. Hornaday questioned the business of the Town buying the lights from the electric company?  The Town Manager reported we may want to at some point, we have not jumped onto that bandwagon.  There are number of communities, Torrington led the fight with CL&P to do that, and there could be some substantial savings to doing that.  The issue that we felt was the whole maintenance end, as to who was going to maintain them.  These communities that have bought these streetlights have gone out and contracted for maintenance work with providers.  One of the issues though on how you buy them is what are they charging you per fixture, and that is based upon the depreciation rate, and how old the fixtures are, and so part of this inventory is being done at our request.  One of the things though is that the power company has gone around and in most communities has completely made the inventories of their fixtures, changed a lot of their fixtures so that they are newer, so that they are not fully depreciated and that the price you pay for fixtures has gone up.  The cash pay out that you pay to the power company is a lot higher.  What has happened in the mean time though is that they paid a lot because they have been going around checking these things, and we have much fewer burned out lights and we have much better fixtures and everything else in place, but the price has probably gone up when we do buy them out.  But we did not want to jump on the bandwagon, and then find out that we cannot maintain them or that we have a bad contractor that will not come out.  But it is a potential savings, which we will continue to review.

EXECUTIVE SESSION: Negotiation/Property Purchase
On a motion made by Mr. Shea, seconded by Mrs. Hornaday, it was voted:
RESOLVED:       That the Town Council go into Executive Session at 10:40 p.m.
Mrs. Hornaday, Messrs Hines, Carlson, Shea and Woodford voted in favor.

On a motion made by Mr. Woodford, seconded by Mr. Shea, it was voted:
RESOLVED:       That the Town Council come out of Executive Session at 11:30 p.m.
Mrs. Hornaday, Messrs Hines, Carlson, Shea and Woodford voted in favor.

On a motion made by Mr. Carlson, seconded by Mrs. Hornaday, it was voted:
RESOLVED:  That the Town Council accept the recommendation of the Town Engineer and Town Manager to award Deputy Town Engineer Alan Slessler a $5,000 bonus based on performance.  
Mrs. Hornaday, Messrs Hines, Carlson, Shea and Woodford voted in favor.

ADJOURNMENT
The meeting was adjourned at 11:30 p.m.

Attest:



Caroline B. LaMonica
Town Clerk