BOARD OF FINANCE BUDGET WORKSHOP
MINUTES
April 9, 2008
I. CALL TO ORDER
Chairman Harrison called the meeting to order at 7:00 p.m. at Library Alsop Community Room. Members present: Margaret Bratton, Catherine Durdan, Jim Speich, Tom Gugliotti, Bill Hooper, Tom Harrison and Brett Eisenlohr.
The Pledge of Allegiance was led by Chairman Harrison.
II. OLD BUSINESS
06/07-21 FY 08/09 BUDGET: ALL THREE BOARDS
Chairman Harrison thanked everyone who attended the Public Hearing on Monday night and all who wrote e-mails. He stated that he has, and will continue, to read and respond to the e-mails.
Chairman Harrison stated that the purpose of this workshop is explained in the Town Charter. After the Public Hearing, the Board of Finance shall confer with the Town Council and the Board of Education and make such adjustments to the proposed budget that it deems advisable. He stated that he is hopeful they can adopt a final recommended budget at tonight’s meeting.
Chairman Harrison stated, that at previous meetings, the three Boards agreed to do some things through bonding going forward. A draft policy has been written and revised regarding this. He questioned if the Town Council and the Board of Education would like to discuss this issue prior to the discussions of the proposed budget. It was decided to discuss the policies first.
Ms. Colligan discussed the Lease Policy and the Debt Policy. She stated that she would appreciate any input regarding the policies. They have started with a larger policy in order to present all of the options; they will then refine it to something that a layperson could understand and that the staff can easily implement. Ms. Colligan stated that they are also trying to keep this policy flexible, but also stay in line with what the Boards and Management have in mind going forward. She stated that she has already received input from the Town Council regarding the Operating Lease Policy.
Mr. Hooper questioned if they would be adopting these policies tonight. Mr. Schenck stated that there should be a strong consensus to adopt the policy if the budget discussions lead to a leasing alternative that needs to be implemented. He stated that the policy needs to be adopted prior to July 1st. Ms. Colligan stated that even though it is a Town Council policy, the Board of Finance should vote on this also because it is in regard to issuing debt. Mr. Carlson stated that he would not like to work on the Debt Policy tonight, but to move ahead on the Leasing Policy only.
The Town Council adopted the Leasing Policy with the following changes:
1) The first sentence of the Leasing Policy will now read, “The Town may choose to lease assets rather than buy as leases offer more flexibility in terms of adjusting to changes”.
2) Line F will now read, “The entrance into an operating lease, which has unequal payments or is in excess of 60 months, shall require approval by the Town Council and the Board of Finance”.
Chairman Harrison stated that the Debt Policy will be addressed at another meeting. Not addressing this policy tonight will not have any impact on tonight’s discussions.
Referring to Slide 18 of the Board of Finance’s slide presentation from the Public Hearing presentation, Mr. Gugliotti stated that there is a 9.05% spending increase. Using these numbers, which takes into account the Grand List increase of 1.53% and a Mill Rate of 27.6, it indicates that the tax increase would be 8.02%. He stated that the spending increase of 9.05% translates into a tax increase of 8.02%. He stated that it was voted on by the Board of Finance at a prior meeting that the tax target would be 5%.
Chairman Harrison asked each member of the Board for their comments.
Mr. Speich thanked Chairman Harrison for all that he does. Regarding what was said at the Public Hearing and after listening to all of the public input, he stated that the Town needs to be prepared for the opening of the high school and to make sure it is ready. He stated his concerns that the grand list growth is not as high as they would like, so the available money to spend is less. There are always capital improvement projects that are needed, many projects of which are currently in their second and third years. Regarding the Board of Education, Mr. Speich stated that the enrollment has increased, along with increased special education spending. Although the timing is not right for a tax increase, an increase higher than in the past is needed. In summary, Mr. Speich
stated that with the decrease in the grand list and with the requested spending increase, he would like to see a 5.7% tax increase.
Ms. Durdan stated that all Avon residents are facing increased utility costs and there is an increase cost of doing business as well. Everyone is facing difficult economic times. She talked about the many concerned residents regarding Roaring Brook School and the student to teacher ratio. She suggested that the Board of Education address what was recommended in the budget for the school with the parents and the PTO, so they understand what was recommended and proposed and what needs to be cut. Commissioner Durdan stated that she would support a tax increase of a 5.60%.
Ms. Bratton thanked all of their Boards for all of their input. She stated that she appreciated the comments at the Public Hearing, although she did not agree with many of the residents who stated that Avon was playing “catch-up”. She feels that this has a lot to do with the economy and utilities. She stated that she would be willing to go above the 5% tax increase.
Mr. Eisenlohr stated that, in the past few years, Avon has had stable and relatively low tax increases. It is evident that this year needs a higher increase. He stated his concerns regarding having a tax increase of 8.02% because of the current economic trends. Mr. Eisenlohr stated that he would like the tax increase to be 5.99%. This would reflect a 7.65% spending increase. He also stated that he feels the Town Council did a great job deferring a lot of the capital improvement projects over the course of the five year program.
Mr. Hooper stated that after listening to the public and reviewing all of the e-mails, he was happy to hear that people were willing to pay more for the seniors in Town. He stated that he would support a tax increase under 5.5%. With a 5.5% increase, between 60%-70% coming from the Board of Education and 30%-40% from the Town Council, and factoring in the found $248,000, that would be $778,000 from the Board of Education and $419,000 from the Town. The debt savings of $160,000 for “pay for play” and leasing the computers is $200,000, which is a total of $360,000.
Mr. Gugliotti stated that a significant element of Avon’s property values is the school system. Property values are depended upon the school systems. He emphasized all of Avon’s assets including the Police and Fire Departments, the Landfill etc, all of which cost money. He stated that, regarding education, there have been language classes that have been cut. He stated that this is a catch-up year. Although no year is a good year for a tax increase, he would support a 6.9% tax increase.
Chairman Harrison stated that the role of the Board of Finance is to look at the fiscal condition of the Town as a whole, given the budget requests and the ability of the residents to pay. The Board of Finance needs to see what the Town can afford, looking at the debt obligations and future projects, etc. Chairman Harrison stated that all of the requests are understandable. He discussed the current economy and the problems associated with it. He stated that the Grand List is declining. Although Avon has to have a tax increase, he feels that an 8% tax increase would not be fiscally responsible. He would like to see the spending increase down to approximately $71 million. Chairman Harrison stated that they have been looking around for additional sources of revenue,
as has the Board of Education. He stated that he would reduce the requested increase from the Board of Education and take a small amount from the Operating Budget and the CIP. He stated he would support a tax increase of 5.0% - 5.9%.
Mr. Schenck discussed the adjustments to the revenues, which are:
· Property taxes and assessments
· Licenses and permits
· Intergovernmental – Pilot Mft. Mach/Equipment
· Intergovernmental – Misc. State Grant Receipts
· Charges for Services – Landfill (Permits)
· Charges for Services – Landfill Bulky Waste
· Other Local Revenue – Investment Interest
· Other Local Revenues – Refunds and Reimbursements
The total adjustments equal $248,538. He stated that at this point, they have not increased the reserve for uncollectable taxes. He stated that the auditors felt Avon’s surplus, the Undesignated General Fund Balance, was on the low side. It is about 5.9% and they believe the range should be 5%-10% for Avon, which is a AAA rated community.
Chairman Harrison questioned if they would be able to deal with the shortage of funds without using the surplus. Mr. Schenck stated that he believes that they will have a small operating surplus, although they do not know what the expenditures might be. He stated that they are developing a plan to take care of the Board of Education’s situation, as well as the Town’s situation. They will be presenting this plan, hopefully, prior to June 30th.
Mr. Hooper calculated the numbers for a 5.4% increase, which were discussed. He then calculated the numbers for a 5.75% increase.
Chairman Harrison reviewed what each member suggested as their tax increase. After some discussion and some members going up and some going down regarding their various tax increase numbers, the Board members stated that they would be okay with a 5.75% tax increase.
Mr. Hooper wrote the following numbers for consideration, although these numbers do not include the revenues that were found:
Town Recommending $18,321,037
Sewers $ 1,787,233
Debt Service $ 5,416,670
Capital Improvements $ 2,086,000
Board of Education $43,845,436
TOTAL $71,456,376
On a motion by Mr. Harrison, seconded by Mr. Gugliotti, it was voted:
RESOLVED: That the Board of Finance adopt the following resolution to be placed before the Town on the ballot, “Shall the Annual Town Budget in the amount of $71,456,376 as recommended by the Board of Finance, for the fiscal year commencing July 1, 2008 be approved. The Board of Finance further resolves to authorize the Town Manager to make minor adjustments so that the number columns are rounded off if necessary.
Messrs. Harrison, Gugliotti, Hooper, Speich, Eisenlohr, and Mmes. Bratton and Durdan voted in favor.
Chairman Harrison stated that Board of Finance supports this budget. They feel that it is a budget that is required based on the requests. He stated that the numbers will be presented at the Town Meeting and will then be adjourned to the Referendum.
In response to a question regarding the new mill rate in coordination with the tax increase, Chairman Harrison stated that the Mill Rate would be 27.02.
Chairman Harrison thanked everyone for their participation.
On a motion by Mr. Gugliotti, seconded by Mr. Hooper, it was voted:
RESOLVED: That the Board of Finance adjourn at 9:30 p.m.
Messrs. Harrison, Gugliotti, Hooper, Speich, Eisenlohr and Mmes. Bratton and Durdan voted in favor.
Respectfully submitted,
Thomas A. Gugliotti, Secretary
Attest: Alison Sturgeon, Clerk
| 
