BOARD OF FINANCE
MINUTES
February 26, 2007
I. CALL TO ORDER – Chairman Tom Harrison called the meeting to order at 7:30 p.m. in the Selectmen’s Chamber, Town Hall. Members present: Margaret Bratton, Catherine Durdan, Bill Hooper, Tom Gugliotti and Mike Monts. Jim Speich was absent.
II. PLEDGE OF ALLEGIANCE – Led by Bill Hooper.
III. COMMUNICATION FROM AUDIENCE
David Goldsholl of Old Kings Road offered for consideration a suggestion that the Board of Finance entertain communication from the audience after each agenda item. Mr. Gugliotti responded that while meetings are open to the public, they are not public hearings and are not part of a dialogue. When asked if there were any exceptions, the answer was that there are none but that the work sessions are less formal and comments can be made at the beginning and the end of the session but not during.
Mr. Harrison noted that Board of Education President Peggy Roell and her son Garrett were attending so Garrett could work on a Boy Scout project.
IV. MINUTES OF PRECEDING MEETING: January 22, 2007
On a motion made by Mr. Monts, seconded by Mrs. Bratton, it was voted:
RESOLVED: That the Board of Finance approve the minutes of the January 22nd meeting.
Messrs. Gugliotti, Harrison, Hooper, Monts and Mmes. Bratton and Durdan voted in favor.
V. OLD BUSINESS
05/06-24 – Review and Discussion: 07/08 Budget
a. FY 07/08 Budget Update
Town Manager Schenck reported that the budget being presented to the Town Council on Thursday, March 1 is for $65,685,528. It represents an increase of $3,727,209 or 6.02% and a tax increase of 4.9%. To reach the target of a 3% increase, the budget would need to be reduced by about $1 million. He also stated that at this time there is a lot of uncertainty primarily in the intergovernmental revenue category particularly in regard to state grants. Many towns are including Governor Rell’s budget figures. Most, however, are not including the phase out of the property tax on cars. There is still a lot of jockeying on issues such as income tax and ECS grants. The conveyance tax is another major issue and has bipartisan support. The strong real estate lobby is an opponent of
the conveyance tax. Revenue from conveyance taxes has not been included in the budget being presented to the Town Council.
b. Establish FY 07/08 Budget Work Schedule
Due to holiday conflicts, the date for the Public Hearing was changed to Monday, April 9.
On a motion made by Mr. Harrison, seconded by Mr. Hooper, it was voted:
RESOLVED: That the Board of Finance establish the following schedule for the public portion of the budget deliberations: the Public Hearing to be held on Monday, April 9 beginning at 7:30 p.m. at the Senior Center; and the Workshops scheduled for Tuesday and Wednesday, April 10 and 11, to begin at 7 p.m. in the Avon Room.
Messrs. Harrison, Hooper, Gugliotti, Monts and Mmes. Bratton and Durdan voted in favor.
c. Debt Modeling: Dennis Dix
Mr. Dix reported on the status of the Town’s debt service. Historically, interest rates have remained relatively flat. The chart he distributed shows that long term money is still fairly cheap. There is existing debt principal of $21,560,000. The principal amount for the High School Renovation is $23,070,000. For the $1.5 million for the M.H. Rhodes property, Mr. Dix has proposed a three year serial note which would require payment of interest only in the first two years. It would give the Town a “breather” in the debt service. He would have local banks such as Northwest Bank for Savings, Simsbury Bank, and Farmington Savings Bank bid on the note as a bank loan.
On page 2 of his report, Mr. Dix illustrated further categories of debt: Added to the $2.2 million for Town Hall Renovations were the costs for public water and road improvements in Secret Lake. Since the Secret Lake Association vote to install public water was defeated, a portion of the SLA figure (approximately $825,000) will be subtracted. There is a figure of $7.5 million for Library renovations. In a third category, there is $1 million for Fisher Meadows and $5 million for a Fire Station/Training facility. This brings the total of the debt principal to $62,355,000
Because the vote was against the installation of public water, Town Manager Schenck said the Town will go forward with the road improvements in Secret Lake. It will be funded in the Capital Improvement Budget over 3 years starting in 2008/09 at about $250,000 to $300,000 per year.
It is likely that there will be a bond issue for the improvements to Town Hall buildings 5 and 6 in the June referendum. Blythe Robinson reported on the memorandum she had prepared on the “Status of Building 5 & 6 Project” summarizing the guaranteed (until mid-June) costs of construction totaling $2,338,047. Several alternates were priced and recommended that would add $15,466 bringing the total to $2, 353,513. The referendum will be a referendum on just the Town Hall buildings 5 and 6 in June just before school is out for the summer.
Mr. Harrison thanked Town Manager Schenck and Assistant to the Town Manager Robinson for their reports and information on the budget developments.
VI. NEW BUSINESS
06/07-11 Review, Discussion and Acceptance: FY 05/06 Audit Report
Director of Finance Peg Colligan introduced Vanessa from Blum, Shapiro and Company, P.C., auditors of the Town of Avon’s financial statements for fiscal year 2005-06. The Letter of Transmittal in the Introductory Section of the Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2006 was noted. Also noted in the same section was the Certificate of Achievement for Excellence in Financial Reporting presented to the Town by the Government Finance Officers Association of the US and Canada. The Board added its congratulations to Peg Colligan. Vanessa continued with the review of the auditor’s report noting the Blum, Shapiro opinion. Other areas noted were pp. 3-13 Management’s Discussion and Analysis; p. 14 Statement of Net Assets; p. 15 Statement of
Activities; p. 16 Balance Sheet - Governmental Funds; and p.18 -20 regarding revenues, expenditures and changes in fund balances. The Fiduciary Funds information on pp. 70-71 was pointed out. Two additional reports prepared by Blum, Shapiro were “Federal Single Audit Report” and “State Single Audit Report” which were positive.
One are of concern for Blum, Shapiro is the year-end closing process. Director of Finance Colligan had written a Memorandum dated 6/30/06 to Phil Schenck, Town Manager answering the auditor’s recommendations. There are issues with the workload and timing. The two part-time positions in Finance are to be increased by 4 hours per week and it is hoped this will help alleviate the problem. In addition, there have been a significant number of retirements in the last few years and it takes a large amount of time to ensure all is accurate. Blum, Shapiro is satisfied with the answers.
06/07–12 Appointment of Auditor FY 06/07
On a motion made by Mr. Gugliotti, seconded by Mrs. Bratton, it was voted:
RESOLVED: That the Board of Finance approve Director of Finance Peggy Colligan’s recommendation to designate Blum, Shapiro and Company, PC to audit the books and accounts of the Town for the Fiscal Year 2006-2007, per Chapter 5, Section 3.1, of the Town Charter.
Mmes. Durdan, Bratton, and Messrs. Gugliotti, Hooper, Harrison, and Monts voted in favor.
VII. MISCELLANEOUS
CRRA (Enron related suit)
The CT Resources Recovery Authority Board of Directors (CRRA) voted to distribute $14.8 million to the 70 cities and towns of its Mid-Connecticut Project. The money comes 2 lawsuits related to the Enron bankruptcy. The suits are still ongoing and if there is to be money disbursed, it is unknown at this time if it will be in the form of a check or credit.
VIII. OTHER BUSINESS - None
IX. ADJOURN
On a motion by Mr. Gugliotti, seconded by Mr. Hooper, it was voted:
RESOLVED: That the Board of Finance adjourn at 8:50 p.m.
Messrs. Harrison, Gugliotti, Monts, Hooper, and Mmes. Bratton and Durdan voted in favor.
Respectfully submitted,
Thomas A. Gugliotti, Secretary
Attest: Susan Burdsall, Clerk
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