BOARD OF FINANCE
December 22, 2003
MINUTES
I. CALL TO ORDER – The Regular Meeting was called to order at 7:30 p.m. by Chairman Harrison in the Selectmen’s Chamber, Town Hall. Present were members Tom Gugliotti, Bill Hooper, Steve McGuff, Michael Monts, Jim Speich and Mark Zacchio. Also present were Town Manager Philip K. Schenck, Jr., and Clerk Elinor Burns.
II. PLEDGE OF ALLEGIANCE – Led by Mark Zacchio
III. COMMUNICATION FROM AUDIENCE – Mr. V. Santos prepared a statement outlining what he personally feels should be done to help control runaway spending and keep within the budget. There are things that we can do, retirements of older employees who could be replaced with lower paid employees; offer an early retirement program too. Also, when some employees retire, don’t replace them – just arrange more efficient work methods. One very big item is school transportation; we could purchase transportation equipment and operate our own fleet with our own employees, or use a transportation company to operate and maintain the buses. Simsbury has been successful in doing that and he would like to encourage the Board
of Education to look at that possibility. The Chairman thanked Mr. Santos for all the time and effort he has put into these projections to distribute to everybody. He has a close eye on the situation and his suggestions are certainly appreciated.
IV. MINUTES OF PRECEEDING MEETING: November 24, 2003
On a motion made by Mr. Gugliotti, seconded by Mr. Zacchio, it was voted:
RESOLVED: That the Board of Finance accept the minutes of the November 24, 2003 meeting,
as submitted.
Messrs. Harrison, Gugliotti, Hooper, McGuff, Speich and Zacchio voted in favor. Mr. Monts abstained, absent from the meeting.
V. OLD BUSINESS
03/04-03 Review and Discussion FY04/05 Budget Process
The Chairman opened the discussion by reminding the Board and the Audience that all we’re going to do tonight is discuss procedures and then set a target number for the operating boards as they develop the 04/05 Budget. He stressed that this is not a binding cap or anything of that source. Simsbury has flat out advised their operating Boards that under no circumstances will they recommend a number higher than whatever their guideline is. We will phrase it that we are asking the operating Boards that they develop their budgets to try to meet a target. This target does not represent our evaluation of what the needs of the operating Boards are, or what their desires are, or reflect what we think might be the mood of the voters who ultimately have the final say on how much they want to pay
in taxes. What we are trying to do based on a host of things that we will discuss tonight is provide some sense of where we think the voters are likely to be when the budget is submitted for their approval in May. Two years in a row now we have made those estimates and have been proven wrong each time. The voters were not in as generous a mood as we thought they were. We are hoping to need only one Referendum that will be acceptable to the voters.
Phil Schenck and Peg Colligan have put together a tremendous body of statistical data tracing the history of budget increases over the years and spending increases and what’s been the mood of the voters; a lot of voter statistics on cost of living, likely State Aid, etc. So, we will tonight set a target number, not legally binding, but it’s something we think ought to be respected and adhered to. We will then listen to the Town Council and the Board of Education when they present their budgets and we hope they’ll keep the target in mind, and then we’ll take those requested budgets to the Public Hearing, usually the first Monday in April, and listen to the comments there and we will deliberate and come up with a recommendation that we’d like to see adopted the first time. The
complicating factor this year, which we’ve not had the last couple of years really comes from revaluation. As a result of the revaluation, a portion of the tax burden has been shifted to residential, private homes and condominiums; commercial and industrial properties will have a smaller proportion this year. The bottom line is that even if we were to recommend a zero increase in the overall spending level, I think the levy last year raised about 47 million, even if we were to recommend a zero increase in dollars, most home owners and condo residents would have a tax increase over the amount of dollars they paid this year just because of the proportionate shift away from commercial and industrial. We go into this process with the fairly strong likelihood that there’s going to be some concern that even if we were to do nothing, they would still write checks for a larger amount in taxes. Obviously, if the voters are prepared to approve any
increases over the current levels, that would mean an even further increase in the size of the check that they have to write out. He stressed that the number is not a cap on the operating Boards – nor is it a guarantee that if the Boards come in at that number that’s what we’ll recommend to the voters. We will confirm everything we’ve talked about here in a written communication, as was our letter in August in which we informed both Boards that we were going to go into this process. This letter will go out in the middle of January.
To start the discussion the Chairman indicated after his personal consideration of the items he feels will be important, he is ready to recommend an increase in dollars somewhere between 5% and 6%. He feels this figure can be justified; this percentage will be figured above their current Operating Budget in terms of dollars. He doesn’t believe the spirit is there for dollar increases in the Operating Budgets above 6%; some people want us to seriously consider a zero percent increase, just keep everything frozen for a year. We have to recognize that the Town is growing, we have more of a lot of things in terms of people living in the Town, streets to be paved, students in the schools, we have labor contracts that have clauses that are due next year, he feels 5% or 6% more than the current operating
budgets for the Town Council and the Board of Education, will provide a reasonable basis.
Mr. McGuff assumed he is referring to the total aggregate budgets and questioned what the portioning would be. Mr. Harrison is looking for that 5% to 6% in the Board of Education Budget; the Town Council should look to its current operating budget and not come in above that 5% to 6%. Each Board should limit its requested increases to what he believes is the appropriate range of between five and six percent. Mr. McGuff asked if the Town Operating Budget will include the Debt Service and Capital Program as part of that.
Mr. Hooper stated he assumes we are talking about their operating budgets. For example, under Capital Improvements, this coming year if it’s an automatic 5.5% increase, that’s a ton of money that’s not spent. We paid off the fire truck last year … I think we’re just talking about the operating budgets. Mr. Harrison pointed out that within a year or two we’ll be facing a big capital expenditure with High School improvements; possibly the Library, he doesn’t know. That will be a pretty big chunk we’ll be asked to approve. We’ve got to keep some control over our Operating Budgets in the meantime so we can digest whatever the High School improvements involve.
Mr. Gugliotti reiterated we are trying to come up with a recommendation. No one’s setting a cap, we don’t have a Charter mandate to set a cap, but we’re stating the obvious which is ultimately that this process comes back to this Board and we do effectively have the last say before it goes to the tax payers for a vote. When we do make a recommendation, and whatever the Boards come back with, whether it’s greater or lesser than our recommendation, or whether we want to make it greater or less, somebody’s got to make a case as to what that number will be before it goes out to the tax payer. We as a Board will have to listen to the tax payers, to what goes on at Town Meetings and what the individual boards have to say. They will have to make a case on each item. He feels
there are two constituents, those who want to see it higher and those who want to see it lower. He would wish to see those two groups of citizens getting together themselves and talking about the budget process before the Town Meeting, before it comes to our Board and try to get a feel for what each of the other side is looking at.
Mr. Zacchio reported he could support that range; he’s mostly concerned about the revaluation and its impact on a lot of voters who will see an increase in taxes, even if we stay the same across the board. He was actually lower than 5% but has since been convinced that would not be practical. It addresses this Board’s concern about asking the Board of Ed and the Town Council to exercise some fiscal restraint ahead of time, and know at least where our heads are collectively about where we think the voters are going to be and based on the revaluation and what’s happened the last couple of years, he thinks that’s probably on the top of everybody’s mind. Yet 5% to 6% still gives them the flexibility to fund some of the “big rocks” in their budgets and perhaps even
add some additional spending in the preparation of their budgets next year.
The members discussed some of the material supplied by the Town Manager and how it will affect our deliberations this year. The Town Manager reported our revenue stream to fund the budget is about 88% to 90% property taxes and about 10% other revenues. He suggest, although they have not done all the revenue analysis, it may be that some of the 2.6 million dollars may not need to come from the property tax, it may come from other revenue sources. That would reduce the amount to be raised by the tax levy. If you do the math, you’ll see the Board of Ed has gone up to close to 60%. There has been a shift to the Education side in the past 10 years with the Board of Ed getting a larger percent increase with a smaller reduction when you modify the budget in those last few weeks of the process.
Mr. Monts reported that Phil has pointed out the difficulty in coming to conclusions in advance instead of waiting until we have the information requested for the budgets. He feels one of the reasons he is comfortable in pursuing this review and target in a preordained version is he feels part of this will be an appropriate analysis of the operating budgets. He hopes the coordinate political branches will see that what we are doing is not inappropriate. He thinks at the end of the day, we do listen to our effective constituents and take the input also received from Town Council and the Board of Education and make a judgment that will be heavily influenced by not just me, not just the Board but also ………We have to try to find a balance.
Mr. Speich indicated the salary commitments that are in place – we have to allow the Town and the Board of Education enough room to be able to put things in the budget they think they really need. He feels 6% will give the boards enough room to maneuver. He would just like to leave the Capital program alone. 6% for the Board of Education, 6% for the Town Operating Budgets; just let the Cap float. He thinks the Town Council should plan because we have some big projects over the next couple of years.
The Chairman suggested that the Current programs be reviewed to see if there is anything that has outlived its usefulness, or positions that have become vacant that maybe could be frozen for a year. Mr. Speich said this is outside of our Charter. He always worries about how much the Town can afford without getting into the administrative budgets. He assumes the Town and Board of Ed will look at all those things.
Mr. Hooper stated he is agreeing with everybody; his number is in the 5.5% area, it’s what the operating budgets increased last year, it’s a good starting point. If somebody has to come in a little bit higher, and can justify it, great, we’ll bring it to the Annual Meeting and let the tax payers speak.
After further discussion, it was agreed that anything over or under our “target” will be discussed and/or brought to the voters for approval.
On a motion made by Mr. Hooper, seconded by Mr. Gugliotti, it was voted:
RESOLVED: That the Board of Finance recommends a target increase of not more than 5.5%
for the Board of Education and not more than 5.5% for the Town Council
including the Capital Budget, which will result in a 2.913 million dollar increase
over the current operating budgets.
Messrs. Harrison, Gugliotti, Hooper, McGuff, Monts, Speich and Zacchio voted in favor.
03-04-11 Approve 2004 Meeting Schedule
On a motion made by Mr. McGuff, seconded by Mr. Speich, it was voted:
RESOLVED: That the Board of Finance approve the 2004 Meeting Schedule, as submitted.
Messrs. Harrison, Gugliotti, Hooper, McGuff, Monts, Speich and Zacchio voted in favor.
VI. NEW BUSINESS – None.
VII. MISCELLANEOUS – None.
VIII. OTHER BUSINESS – None.
IX. ADJOURN
On a motion made by Mr. Zacchio, seconded by Mr. Gugliotti, it was voted:
RESOLVED: That the Board of Finance adjourn at 8:45 p.m.
Messrs. Harrison, Gugliotti, Hooper, McGuff, Monts, Speich and Zacchio voted in favor.
Respectfully submitted,
Thomas A. Gugliotti, Secretary
Attest: Elinor Burns, Clerk
12-22-03 Minutes
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