BOARD OF FINANCE
MINUTES
October 22, 2007
I. CALL TO ORDER
Chairman Harrison called the meeting to order at 7:30 p.m. at the Countryside Park building. Members present: Margaret Bratton, Catherine Durdan, Tom Gugliotti, and Tom Harrison. Bill Hooper, Jim Speich, and Mike Monts were absent.
II. PLEDGE OF ALLEGIANCE – Led by Tom Gugliotti.
III. COMMUNICATION FROM AUDIENCE – Moved to the end of the agenda.
IV. MINUTES OF PRECEDING MEETINGS
September 24, 2007 Minutes
On page 3, paragraph 3, last line, delete “would” to read “cover what bonding would fund”.
On a motion by Mr. Gugliotti, seconded by Mrs. Bratton, it was voted:
RESOLVED: That the Board of Finance approve the minutes of September 24, 2007 as amended.
Mr. Gugliotti, Mmes. Bratton and Durdan voted in favor. Mr. Harrison abstained due to his absence from the September 24th meeting.
V. OLD BUSINESS
04/05-18 Avon High School Renovations and Addition Bond Sale,
October 17, 2007 and Debt Financing: Dennis Dix
Dennis Dix, of Dixworks, LLC, reported on the marketing and sale of General Obligation Bond Anticipation Notes totaling $26,422,000 for the Town of Avon. The sale date was Wednesday, October 17, 2007. There were 8 bids with 7 bidders. The winning bids were from Roosevelt and Cross for $4,100,000 at 3.75% with a premium payment of $14,099.90, and Commerce Capital Markets, Inc. for $22,322,000 at 4% (yield 3.4%) with a premium payment of $150,790.35. The notes will mature October 23, 2008. Mr. Dix explained that the rates were lower than anticipated and beat the market by about 8 basis points, a savings of about $21,000 and 18 points less with savings to the Town of $47,000. Additional bonds will be issued next fall for approximately $23,700,000 for Avon High School renovation costs
as well as $1,990,000 in bonds for the Town Hall renovations.
06/07-21 FY 07/08 Budget: Update on Capital Improvement Budget
Projects: Blythe Robinson
The renovation of Town Hall Buildings 5 and 6 continue to be within budget. Issues that have been dealt with include lead paint removal, insulation, roofing, and foundation underpinning. The connector addition between Buildings 6 and 7 has been framed and foundation has been poured for Buildings 5 and 6. Interior framing and electrical wiring is underway as well. The project should be completed by the end of March, 2008.
The Avon High School Renovation project continues under budget. The construction budget is under contract by $726,798. The combined unspent contingency funds for the Town and the CM total $726,800. Because the State of CT has not yet approved bonding for education, cash flow will be a problem if not resolved by early 2008. The renovation should be substantially completed by April 2008 with the kitchen and cafeteria ready in December. The Roaring Brook School roof replacement was budgeted for $715,000 and the construction cost is estimated to be $652,650. The roof work has been completed and the balance of the work is due to be completed by the end of the month.
The Avon High School Emergency Generator is under budget by approximately $280,000 due to cost being lower than originally estimated. A $100,000 grant from DPUC is still being pursued and would cut the cost further.
The Deercliff Road Reconstruction is nearly completed with paving finished on September 25. The project was budgeted for $273,971.12 and is over budget at $310,182.55. The shortfall will be funded out of the road overlay account. Items not included in the original plan caused the overage and were thickness of paving, longer stretch of road, curbing, and driveway tie-ins.
The design phase contracts for the Dept. of Public Works roof and the Senior Center roof have been executed.
The generator replacement at AVFD Company 1 is underway.
Painting at the Senior Center and at AVFD Company 4 is complete.
VI. NEW BUSINESS
07/08-04 Review and Discussion: Process for Selection of Auditor FY 07/08
The three year agreement with Blum Shapiro is ending with the audit this year. To date the Director of Finance has been satisfied with the work they have done and recommends two one-year extensions. Mr. Gugliotti suggested that the Board of Finance authorize one two-year extension at a fixed price. Ms. Colligan will present a price proposal at the November meeting.
VII. OTHER BUSINESS – Agenda Item III follows:
III. COMMUNICATION FROM AUDIENCE
Mr. Harrison explained to the audience that there would be no need for Executive Session and therefore, the audience could remain. He explained the budget process and the role of the Board of Finance. Avon is fortunate that, because of the Town Charter, the people decide on the budget through the mandatory budget referendum in May of each year. Usually the process begins in November or December when Town departments develop their fiscal needs. The Board of Education asks the schools to submit their budget requests to them for review and adjustment. The department requests are submitted to the Town Council and then, along with the Board of Education requests, all are sent to the Board of Finance. The main components included in the budget are the Board of Education operating budget, the
Town operating budget, the Capital Improvement Program (for items such as fire apparatus, snowplow, repaving, etc.), and Debt Service (the interest paid on bonds the Town issues). In the current budget, 60% is Board of Education and 40% is the Town while 92% of debt service is Board of Education and 8% is Town related.
In April, the Board of Finance hosts a Public Hearing on the budget at the Senior Center. The Board of Finance then holds Budget Workshops with both the Board of Education and the Town Council. At the end of the workshops, the Board of Finance votes on a recommended budget. The public is welcome to attend. The recommended budget is presented to the public at the Town Meeting held during the first week in May. Both the Town Council and Board of Education members are present to explain their portions of the budget. The referendum is held in the second week of May. Mr. Harrison stated that the Board of Finance gives a recommendation only; the voters decide. The Board does not set a cap on increases but does set a target or guideline percentage increase. The target
is not binding but is where the Board feels the voters will agree based on the history of budgets voted for and against. Because Avon is considered to be a wealthy town, the State does not supply much funding and property taxes in Avon fund approximately 90% of the annual budget.
Mr. Gugliotti added that the target/guideline came into existence, not because the Charter required it, rather because the people asked for it.
Mr. Harrison cautioned the audience there was nothing to vote on at the evening’s meeting and that, in fact, the Board of Finance never determines how the Board of Education spends their budgeted funds. In addition, the Board of Finance meetings are not public hearings and the Board deliberates on items the Town officials bring to the agenda. The Board of Finance meetings do have on the agenda “Communication from Audience” and those present were invited to speak.
Jay Spivak, 125 Northgate, felt that he was misinformed by the Board of Education. There is overcrowding at Roaring Brook School and the Board of Education told them to come to the Board of Finance to ask for higher spending on education to reduce the class size. Most of the growth is on the west side of town so overcrowding will continue. Dr. Kisiel is not interested in redistricting, even for the short term. A near term solution would be to hire a couple of teachers and portable classrooms.
Bud Usich, 59 Highwood Drive, stated that his wife has been a 2nd grade teacher for 26 years and his grandchildren attend Roaring Brook which is now 150 over its’ design capacity (625 students). The class sizes are now at 24 students and the Board of Education stated it may go to 25 students. Mr. Usich feels there should be 2 additional teachers and seed money for a long-term solution to the overcrowding at Roaring Brook School. Pine Grove School is under capacity and a serious look at redistricting needs to happen. There are still 200 plus lots to be developed on the Roaring Brook side of town.
Cheryl Keller, Alcott Way, asked if the Board of Finance could tell the audience why the negotiations with the teachers failed and why it is going to binding arbitration. Mr. Harrison answered that Mrs. Bratton had been only an observer and was not permitted to give any details. Since the Board of Education and the teachers are going to binding arbitration, more information will become public. The risk is that binding arbitration is like a court judgment and there is no appeal to the ruling which one or both sides may not like.
Pam Samul, 24 Foxcroft Run, is currently on the Planning and Zoning Board and is running for Town Council. She stated that 2 potential locations for new schools have been identified on the west side of town.
Barbara Zuras, 428 Deercliff, is running for the Board of Education and said that they are $240,000 in the red and, therefore, do not have the money for new teachers and portables. She suggested that the Board of Finance and Board of Education should meet to see how to prevent this situation. The teachers were told the first day of school that there was a spending freeze and they are asking the PTO for basic supplies.
Mr. Gugliotti commented that the unanticipated influx of special needs students and the increasing cost of utilities have impacted the budget.
Mitchell Piper, 129 Stagecoach, moved to Avon from West Hartford and lived through the redistricting wars there. He commented that 6 special needs students at a cost of $300,000 blows a budget equals poor planning.
Sue Henneberry, 488 Huckleberry Hill Road, introduced herself as a Board of Education member and said she was glad to see so many people there. The Budget keeps getting tighter and the guideline seemed like a directive. It seems like the cart before the horse: the guideline is set before the needs are known. Mr. Harrison explained that by 2004, after several years of defeated budgets, the Board of Finance set a target at the end and everyone was upset. The next year and since then, the Board sets a target early on at the request of the Board of Education not to set it at the end. Mr. Gugliotti stated that setting a target was done to facilitate passing the budget.
KC O’Brien, 3 Bluestone Lane, commented that the problem seems to be the development on this (the west) side of town and asked if there was any way that developers could be taxed. Mr. Gugliotti answered that a tax cannot be set to curtail development. The Town can set open space by zoning not by tax and it is difficult for the Town to stop development. Town Manager, Mr. Schenck explained that by Connecticut state law, towns are not allowed to charge “impact fees”. They can, however, require that developers pay for infrastructure such as catch basins, roads, utilities and signage.
David Goldsholl, 57 Old King’s Road, asked what will happen if the Board of Education cannot find the money over the year. Mr. Harrison stated that the Board of Education could request money from surplus funds. It is not used for salaries and generally is used for construction and sometimes is postponed to the next fiscal year. Mr. Gugliotti stated that they (the BOE) may have to curtail expenditures. If requesting surplus, they would have to go to the Town Council for approval and then it would go to the Board of Finance. However, if you consume your surplus, you risk the Town’s AAA rating. Mr. Goldsholl asked why all the “money people” cannot get together. Mr. Gugliotti answered that our Town Charter prevents us from going into the Board of
Education’s books; we don’t have the authority. Mrs. Henneberry added that the Board of Education is charged by the state with certain mandates but that the state does not fund the same. We are supposed to get 24% to help build schools but we are not getting that at this point.
Mr. Schenck pointed out that the Town Council considered a fund that people could contribute to in lieu of higher taxes overall, designating their contributions to the Board of Education or to the Town Council. It did not go forward but what came out of it was the Avon Education Association.
Christine Organ, 171 Northington Drive, said she has a second grader at Roaring Brook School and that a voluntary redistricting letter was sent out but then dropped. She was told at a PTO meeting that redistricting was not to be mentioned. We knew this was coming when another teacher was hired for the kindergarten three years ago, but now, we cannot get another teacher.
Mr. Harrison stated that the various boards do work together and that they are sympathetic to problems that arise. The boards try to do the best for the town and welcome residents’ input.
Mr. Spivak thanked everyone for coming to the meeting. He stated he had walked away from the Board of Education meeting unsatisfied and wanted to leave the Board of Finance having been heard.
Mr. Harrison thanked everyone for the very civil level of the discussion.
VIII. ADJOURN
On a motion by Mr. Gugliotti, seconded by Mrs. Bratton, it was voted:
RESOLVED: That the Board of Finance adjourn at 9:30 p.m.
Messrs. Gugliotti, Harrison, and Mmes. Bratton and Durdan voted in favor.
Respectfully submitted,
Thomas A. Gugliotti, Secretary
Attest: Susan Burdsall, Clerk
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