BOARD 0F FINANCE
MINUTES
OCTOBER 23, 2006
I. CALL TO ORDER – Chairman Tom Harrison called the meeting to order at 7:30 pm in the Selectmen’s Chamber, Town Hall. Members present: Cathy Durdan, Tom Gugliotti, Bill Hooper and Mike Monts. Margaret Bratton and Jim Speich were absent.
II. PLEDGE OF ALLEGIANCE – Led By Chairman Harrison.
III. COMMUNICATION FROM AUDIENCE – None.
IV. MINUTES OF PRECEDING MEETING: September 25, 2006
Mr. Monts indicated that his name was omitted from voting on the amendment concerned with returning $119,500 to Surplus, if possible when considering the FY 07/08 Budget; on the motion approving $18,770 for a dump truck and snow plow, $18,800 for the roof on Company #1 Firehouse, and the motion on the policy on Supplemental Appropriations and on the Motion to adjourn. Mr. Monts voted in favor or each.
On Page 2, Paragraph 1, line 6, Mrs. Durdan suggested that Mr. Schenck’s name be substituted for “he” for clarification.
Mr. Harrison reported he wanted something in the minutes acknowledging and thanking the Clerk for her many yeas of work with this Board and wishing her well on her retirement. He wanted the minutes to reflect this.
On a motion made by Mr. Monts, seconded by Mrs. Durdan, it was voted:
RESOLVED: That the Board of Finance approve the minutes of the September 25th meeting, as amended.
Messrs. Harrison, Gugliotti, Hooper, Monts and Mrs. Durdan voted in favor.
V. OLD BUSINESS
05/06-24 - Review and Discussion of the 06/07 Budget
Mr. Harrison reported he recommended this item be included on the agenda. He is recommending that at the November or December meeting we discuss setting targets and what should we look at? Do we want to get that done before the other two Boards start their budget deliberations. He feels it has been helpful in the past couple of years that we set targets and the Board concurred. The Chairman commented on several items that will be coming up such as the completion of the Town Hall complex renovations, staff increases in the Board of Education for the new school. Mr. Gugliotti was under the impression in the upcoming budget that there would not be any large increases in teacher staff. The Town Manager reported on budget amounts previously discussed for the first year of the new school. There was $100,000 of $425,000 included in our projections for FY 07/08. The $325,000 was in the subsequent year (FY 08/09). It now looks like the school will be ready for the fall of 2008 so
the total of $425,000 might be included in the 08/09 budget.
Mr. Harrison suggested the Town Manager talk with the Assessor to get an idea of the Grand List growth. Based on the tax impact study that was done, the Town Manager reported the Assessor indicates a 1.5% increase. The Board agreed to consider this item at the November meeting, and possibly the December meeting, if needed. Mr. Hooper indicated that if the single family housing is down, that means that the Board of Education will not get as many new students in. This may cause us to look at that a little more closely. Mrs. Durdan commented that with resales, if families who have young children purchase homes from families whose children have grown away from home, there may still be an increase in student population.
VI. NEW BUSINESS
06/07-05 – Transfer Appropriation: $451,280 Open Space Fund
For Demolition of Towpath School.
The Town Manager reported we have received monies into the Open Space Fund. This expense was anticipated when we received the proceeds for the sale of the Foster property (house and 2 acres) on Waterville road, as well as the sale of a lot that the Town owned on Avonwood Road. We received money from the Avon Water Company for their well on the Fisher Property. Another source of money comes from a State Statute which allows the municipality to receive cash payments in lieu of land as part of subdivision approval. In Avon we’ve required that developers set aside 5% of the land as Open Space. In addition to the demolition bid, there are additional funds being used to separate the water line that comes into Towpath; that needs to be terminated outside and reconnected to continue
on to Sperry Park. Bruce Williams explained that would be another $6,000. Also, there’s another $15,000 for fencing because when we remove that school, there will be areas where vehicles can get by without using the side street or the other driveway. The Cupola from the school will be moved over to the former MHRhodes facility for storage until it can be restored.
The Town Manager certified that there are sufficient Reserved Fund Balance resources to finance $451,820 for the purpose of hazardous material removal and demolition at the Towpath School.
On a motion made by Mr. Gugliotti, seconded by Mr. Hooper, it was voted:
RESOLVED: That the Board of Finance hereby appropriates a sum not to exceed $451,820 from Account #02-0390-43923, Capital Projects Fund (Facil & Equip), Other Financing Sources, Fund Bal. Res. Land Acq./Pres. to Account #02-4848-53052, Capital Projects Fund (Facil & Equip), Town
CIP-Facil/Land Acquisition Preservation, Towpath School Demolition Project for the purpose of hazardous material removal and demolition at the Towpath School.
Messrs. Harrison, Gugliotti, Hooper, Monts and Mrs. Durdan voted in favor.
06/07-06 – Review and Discussion: Standard and Poor’s
“Public Finance Criteria: Financial Management Assessment.
In response to a question from the Chairman, Peg Colligan, Director of Finance explained that this is the first time we have seen either of the rating agencies articulate, in detail, their expectations of what the term “Financial Management” is. “Financial Management” is the criteria by which the rating agencies help determine creditworthiness. They review economic analysis, revenue forecasting, risk management, accounting practices, financial strategies, cash and liquidity administration and debt management. Other factors that are reviewed are local economic conditions, debt levels, statutory limitations. There are seven criteria on which such “Credit Ratings” are based, as itemized in the material submitted to the Board. Peg Colligan
explained the premium on the bids received for the Town’s 18 million BAN issue, and how it affects the numbers. It is something to be said for the Town of Avon that the lending institutions are willing to pay a premium. In essence this premium comes in as proceeds and is offset by any interest we have to pay. The Town Manager explained that the premium is often the difference between a round number interest rate and a specific calculated number.
Because of the rating agencies interest in “Financial Management”, the Manager feels this is something the Board of Finance should take an interest in. It deals significantly with the Town’s financial health and gives us a good picture of where we stand. There’s always room for improvement and although we may be AAA rated, there’s always changes to accomplish. The Board requested they be kept abreast of developments and how we can take advantage of this.
VII. MISCELLANEOUS
The Town Manager reported the repairs to the Town Hall are moving along – we are prepared to sign a contract with the Architect. We won’t be getting detailed cost information until probably in March.
The Chairman also asked about the development off Lovely Street. Has the Brighenti family filed suit against the Town? The Town Manager reported there are two suits – one against the specific subdivision approval and one against the change in the regulations. They are both moving forward in the court system. Because of the confidentiality of the matter, there are literally hundreds of tapes to be transcribed before a court date can be set.
Mr. Harrison commented on the Executive Order developed by Governor Rell on the issue of “sprawl” and smart growth, developing a sort of task force to coordinate how the State uses its economic development funds.
Mr. Gugliotti commented the Town of Avon prides itself on its excellence. He wants to introduce the letter from the GFOA which once again has awarded a Certificate of Excellence to the Town of Avon. When awarding the Award of Excellence, the GFOA also awards a certificate to the parties responsible for preparing the awarded budget. He wants to point out that this is again awarded to Peg Colligan, our Director of Finance. He would like to compliment Peg on behalf of the Board and Phil and the entire staff.
VIII. OTHER BUSINESS
The Town Manager submitted a draft schedule for the sewer payment plan and he wanted to alert you that assuming the schedule stays in place, in September of ’08 we will have to make a one time cash payment somewhere in the neighborhood of $300,000 and subsequent to that we will paying approximately 30% or 24% of each subsequent payment. We have been escrowing funds in anticipation of this responsibility. However, we’re going to review with the Water Pollution Control Authority to assure that the sewer use fees we have will be adequate into the future.
X. ADJOURN
On a motion made by Mrs. Durdan, seconded by Mr. Hooper, it was voted:
RESOLVED: That the Board of Finance adjourn at 8:30 pm.
Messrs. Harrison, Gugliotti, Hooper, Monts and Mrs. Durdan voted in favor.
Respectfully submitted,
Thomas A. Gugliotti, Secretary
Attest: Elinor Burns, Clerk
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