BOARD OF FINANCE
MINUTES
April 28, 2008
I. CALL TO ORDER
Chairman Harrison called the meeting to order at 7:33 p.m. in the Selectmen’s Chambers of the Avon Town Hall. Members present: Margaret Bratton, Catherine Durdan, Tom Gugliotti, Bill Hooper, Tom Harrison and James Speich.
II. PLEDGE OF ALLEGIANCE – Led by Bill Hooper.
III. COMMUNICATION FROM AUDIENCE
There was none.
IV. MINUTES OF PRECEDING MEETINGS: March 24, 2008, April 7, 2008 and April 9, 2008
On a motion by Mr. Gugliotti, seconded by Ms. Durdan, it was voted:
RESOLVED: That the Board of Finance approved the minutes of March 24, 2008, April 7, 2008 and April 9, 2008 as written.
Messrs. Harrison, Gugliotti, Hooper, and Speich, and Mmes. Bratton and Durdan voted in favor. Mr. Speich abstained to the vote regarding the March 24, 2008 minutes.
V. OLD BUSINESS
06/07-21 Review and Discussion: FY 08/09 Budget
Chairman Harrison stated that he had not heard much from residents regarding the budget one way or another. Ms. Bratton stated that she did receive a call from a resident who would like to remain anonymous. Chairman Harrison stated that the Town has received 75 applications for absentee ballots, which is higher than in recent years.
VI. NEW BUSINESS
07/08-18 Review, Discussion and Approval: Bonding, Lease Policies
Mr. Schenck, Town Manager, stated that the Town Council has adopted the leasing portion of this policy, but not the bonding portion. Chairman Harrison stated that the Board of Finance has already seen earlier drafts of this policy.
Ms. Colligan, Director of Finance, discussed the changes that were made by the Town Council. She stated that they were concerned that there could be different kinds of leasing, so anything in excess of 60 months or anything that is outside of the normal lease situation, would get more review by the Boards. Mr. Gugliotti stated his concerns regarding the troublesome choice of words that they used.
Mr. Hooper stated his concerns regarding a Board or Department in Town leasing something for five years and not having to go through the Board of Finance and Town Council to do it. Ms. Colligan pointed out Item D, which states that all operating lease considerations will adhere to the Town’s Purchasing Policy. She stated that the Town’s Purchasing Policy is written in a way that there are dollar thresholds.
Mr. Gugliotti stated that they need to look at a lease as an alternate means to purchase something. The Board of Finance does not approve every purchased item, they only approve the budget. Now someone can lease something instead of buying it if it is in their budget. It will only come before the Board of Finance if there are unequal payments or payments for more than 60 months, etc. Mr. Hooper stated he agrees with Mr. Gugliotti, except that this will allow someone to get something in their budget but to lease it for five years instead of purchasing it. At the end of five years, this would still be a concern and possibly a higher cost.
Mr. Schenck stated that if someone leased something, they would need to build an encumbrance going forward for subsequent years up to the five years. He stated that leasing is nothing more than a method of finance.
Mr. Hooper stated that he would like to see everything for the first year; he would like to see all leases come through the Board of Finance for the first year. Mr. Gugliotti suggested that they track this in the budget as a separate line item. They would then be able to watch and make necessary changes if needed. Mr. Schenck stated that the Board of Finance could add an Item (h) regarding submitting a report of all leases or they could make it part of the motion to approve the policy subject to the Board of Finance being furnished with a comprehensive listing of all leases entered into by the Board of Education and the Town on an annual or quarterly basis. The Board of Finance discussed these possibilities.
Chairman Harrison stated that this policy has already been approved by the Town Council. The Board of Finance can approve it as is, approve it on a condition or approve with a recommendation. He stated that there is a consensus that the Board of Finance would want an annual report or list of leases. Mr. Hooper suggested that instead on an annual report it be a quarterly report, which he feels will create a control mechanism.
On a motion by Chairman Harrison, seconded by Mr. Gugliotti, it was voted:
RESOLVED; That the Board of Finance approves the True or Operating Lease Policy, dated April 24, 2008, as already approved by the Town Council. The Board of Finance also requires, as part of the quarterly financial report, there be added an item listing any true or operating leases entered into during the quarter for which the report is being submitted and designating, if appropriate, where any such lease is a change from an item previously listed as a purchase.
Messrs. Harrison, Gugliotti, Hooper, Speich, and Mmes. Bratton and Durdan voted in favor.
Regarding the debt policy, Chairman Harrison stated that this has not yet been voted on by the Town Council. Mr. Gugliotti stated that there is nothing in this policy that permits the Town to borrow short-term from a bank. Ms. Colligan referred the Board of Finance to Page 7, Item 9c, of the Debt Policy. She stated that this allows short-term borrowing with a financial institution.
Regarding the Debt Authorization (Charter Requirements) in the Debt Policy, Mr. Speich questioned what was the limit that the Town does not need to go to referendum. Mr. Schenck stated that it is 1 Mill, which is approximately $2,272,000, although it fluctuates. Mr. Speich also stated his concerns regarding the wording under the “Purpose” section of the Debt Policy. He feels that the wording forces the Town to take any action necessary to stay a “AAA” community. Mr. Gugliotti suggested that they could rewrite it to state that the Town shall endeavor to maintain its “AAA” credit rating.
On a motion by Mr. Gugliotti, seconded by Ms. Bratton, it was voted:
RESOLVED; That the Board of Finance approves the adoption of the Debt Policy as proposed with the condition that the words, “ The Town shall endeavor to take appropriate actions to maintain its Aaa/AAA…” replace, “shall take” in the third line of the first paragraph of the Section entitled, “Purpose”.
Messrs. Harrison, Gugliotti, Hooper, Speich, and Mmes. Bratton and Durdan voted in favor.
07/08-19 Supplemental Appropriation: $20,250 FY 07/08 Youth Service Bureau Grant
Mr. Speich questioned what this money would be used for. Mr. Schenck stated that this is used to fund the contract that Avon has with the Town of Farmington to provide staffing for Youth Services, which was established by the Town Council last fall.
On a motion by Ms. Bratton, seconded by Mr. Speich, it was voted:
RESOLVED; That the Board of Finance hereby amends the FY 07/08 Budget by increasing:
REVENUES
General Fund, Intergovernmental, Youth Services Bureau Grant, Account #01-0330-43383 in the amount of $20,250 and increasing:
APPROPRIATIONS
General Fund, Human Services, Service & Consultant, Account #01-4203-52184 in the amount of $20,250.00 for the purpose of funding expenditures, which will be reimbursed through approved State of Connecticut Department of Education Youth Service Bureau Grants.
Messrs. Harrison, Gugliotti, Hooper, Speich, and Mmes. Bratton and Durdan voted in favor.
07/08-20 Review, Discussion and Approval: Creation of Police Special Services, Special Revenue Fund (Fund 07)
Chairman Harrison questioned if the Town Council acted on this yet. Mr. Schenck stated that they have already approved this.
On a motion by Mr. Speich, seconded by Ms. Durdan, it was voted:
RESOLVED: That the Board of Finance approve the creation of the Police Special Services, Special Revenue Fund (Fund 07).
Messrs. Harrison, Gugliotti, Hooper, Speich, and Mmes. Bratton and Durdan voted in favor.
VII. OTHER BUSINESS
There was none.
VIII. EXECUTIVE SESSION
There was none.
IX. ADJOURN
On a motion by Mr. Gugliotti, seconded by Mr. Hooper, it was voted:
RESOLVED: That the Board of Finance adjourn at 8:35 p.m.
Messrs. Harrison, Gugliotti, Hooper, Speich and Mmes. Bratton and Durdan voted in favor.
Respectfully submitted,
Thomas A. Gugliotti, Secretary
Attest: Alison Sturgeon, Clerk
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