BOARD OF FINANCE
DRAFT
MINUTES
REGULAR MEETING
December 15, 2008
I. CALL TO ORDER
Chairman Harrison called the meeting to order at 7:30 p.m. in the Selectmen’s Chamber at the Avon Town Hall. Members present: Margaret Bratton, Thomas Gugliotti, William Hooper, Brett Eisenlohr, James Speich, and Tom Harrison.
II. PLEDGE OF ALLEGIANCE
The Pledge of Allegiance was led by Mr. Gugliotti.
III. COMMUNICATIONS
There were none.
IV. MINUTES OF PRECEDING MEETINGS: November 24, 2008
On a motion by Mr. Speich, seconded by Mr. Eisenlohr, it was voted:
RESOLVED: That the Board of Finance approve the minutes of November 24, 2008, as written.
Messrs. Harrison, Speich, Hooper, Eisenlohr and Ms. Bratton voted in favor. Mr. Gugliotti abstained.
V. OLD BUSINESS
08/09-03 Supplemental Appropriation: Demolition of 457 New Road, $5,738.07
Mr. Gugliotti stated that there are legal fees associated with this demolition that are not lienable. He questioned if the charge for attorney fees could be charged back to the owners of the house. Mr. Schenck, Town Manager, stated that the Town can initiate a judgment against the owners if they do not pay the attorney fees.
On a motion by Mr. Gugliotti, seconded by Ms. Bratton, it was voted:
RESOLVED: That the Board of Finance hereby appropriates a sum not to exceed $5,738.07 from General Fund, Other Financing Sources, Undesignated Fund Balance, Account #01-0390-43913, to General Fund, Building Inspection, Demolition of 457 New Road, Account #01-2401-53318 for the purpose of demolition of property at 457 New Road to be performed by Public Works.
CERTIFICATION
This is to certify that there are sufficient Undesignated Fund Balance resources to finance the following appropriation:
The sum of $5,738.07 from the Town’s Undesignated Fund Balance from Account #01-0390-43913 General Fund, Other Financing Sources, Undesignated Fund Balance.
Messrs. Harrison, Eisenlohr, Speich, Gugliotti and Hooper, and Ms. Bratton voted in favor.
08/09-07 Review and Discussion: FY 09/10 Budget
Regarding the revenue stream, Mr. Schenck stated that the expense and revenue sides have both been reviewed. The revenue side will be almost as important as the expenditure side this year. Mr. Schenck stated that the conveyance tax is due to sunset this coming year. This money was used last year to offset the cost of the boiler at Roaring Brook School. He stated that they have not included $200,000 of conveyance tax revenues in the budget that will be submitted to the Town Council.
Mr. Schenck stated that up until 1995, the State paid for interest and principal on bonded indebtedness related to schools. In 1996, they changed their method of payment; they paid cash up front in order to reduce the amount of the bond issue, relieving themselves of having to pay any interest over the life of the bond issue. Mr. Schenck stated that there are still several projects that were completed prior to 1995 that were bonded, although there continues to be less and less projects over the years. Because of this, the Town will see a $200,000 drop in the amount of reimbursements from the State that they receive under school construction grants.
Regarding interest rates, Mr. Schenck stated that the Federal Open Market Committee will be meeting tomorrow. It is possible that there could be a further decline in interest rates. This will filter through to the cash management and investment side of the Town’s operation. He stated that the Town is anticipating having to lower the interest on the investment line item in the revenue side of the budget.
Mr. Schenck stated that there may be other adjustments that they are not aware of, that the State Legislature may be looking at. These include, primarily, the Education Cost Sharing (ECS) grant, which is the largest grant that most Towns receive.
In response to Mr. Speich’s question regarding interest, Mr. Schenck stated that there is $925,000 in the current budget. He stated that the Town has lost a great deal of money because they had to go to three referendums. That tax money did not come in during the month of July; they received the tax money at the end of August. The delay in receiving that money lost interest.
Chairman Harrison questioned how the Town was doing regarding conveyance tax and building permits. Mr. Schenck stated that they were down $25,000-$50,000 on building permits. They are receiving approximately one building permit per month; they had been receiving 8-10 per month in the past. He stated that the Planning and Zoning Commission has approved a 100-unit elderly project in Avon Park South. This will be a significant increase in some fee areas.
Regarding tax collection, Mr. Schenck stated that the Town is doing well. They are 1/100 of a point off from one year ago. Regarding foreclosures, they currently have 5 in Town. Regarding the revaluation, 5%-6%, of the residents have set up a meeting to go over their assessment.
In response to Mr. Speich’s question regarding the grand list, Mr. Schenck stated that, on average, the grand list is larger than normal because of the revaluation.
Mr. Schenck stated that the Town budget will be coming in significantly lower than in past years. He stated that they are looking at keeping the debt service flat, as well as the capital budget or possibly down slightly. They will be recommending these reductions to the Town Council.
Chairman Harrison stated that the voters rejected three budgets last year; the economic times are now even worse. He asked the Board members for their thoughts about setting guidelines for the upcoming budget.
Mr. Gugliotti stated that he would be against setting a target number because on one hand it may not be severe enough and on the other hand it may be too severe. He feels that everyone knows the economic times. He would like to trust in the good faith of the Board of Education and the Town Council to come in with the best budget they can, knowing that the Board of Finance will not be receptive to what has been done in the past years.
Mr. Eisenlohr stated that he has reviewed the Town Charter, Section 9-3. He stated that they should not set any guidelines this year. He would like the Board of Education and the Town Council to come in with what they feel they need. Mr. Gugliotti explained that they started setting guidelines approximately 4-5 years ago; the guidelines are not binding, they are suggestions only.
Mr. Speich suggested sending a letter of guidance to the Board of Education and the Town Council stating that the economic times are tough and the Board of Finance expects little or no growth. He feels that this would be more appropriate rather than stating a percentage increase.
Regarding the three year budget lookback chart that was distributed to the Board members, Chairman Harrison made a correction. At the bottom of the page it states, “(***) Recommended by the Board of Finance after the third Referendum”. He stated that this should read, “…before the third Referendum”. After some discussion, it was decided to omit that sentence entirely. The (***) will now read, “Town Council approved on June 26th, 2008”. The Board would also like to add the (***) under the Board of Education Operating and the Town Operating budgets.
Mr. Speich questioned if it would help not to have the revaluation this year. Mr. Schenck stated that there would have to be extraordinary circumstances to delay the revaluation. In response to Mr. Speich’s question regarding surplus to offset the revaluation, Mr. Schenck stated that the means surplus for AAA rating communities in Connecticut is approximately 8.5%; he anticipates Avon’s will be 7.2%. He stated that he did discuss this with the rating agencies and, although they are not happy with the size of Avon’s surplus, there was no push back from them.
Chairman Harrison questioned how much surplus the Town used this year. Ms. Colligan stated that they have used $60,000, which included: $6,750 for the Avon Old Farms School study; $7,500 for the appraisal; $45,000 for administrative services study. This amount totals $59,250, although it does not include what might be approved tonight.
VI. NEW BUSINESS
08/09-08 Review, Discussion and Approval: Year End Transfers and Appropriations
Ms. Colligan stated that, overall, the Town had positive operating results for FY 07/08. She stated that they returned $13,600 into the General Fund. There were minimal appropriations for FY 07/08, which included an $18,000 appropriation for a police vehicle; $50,800 for the emergency roof repairs at Avon Middle School and the cost of the wood chipper.
Regarding transfers and encumbrances, Ms. Colligan stated that, per the Town Charter, the Town Council has the authority to approve transfers up to and including 1/10th of 1% of the Operating Budget, which is approximately $17,500. The Board of Finance approves everything over that amount. The amounts for Public Safety were for covering of unfilled positions and overtime. For Special Services, the amounts there are for the construction work on Avon Mountain; there was no appropriation for this. The Town also has to fund fire hydrant rentals. The Planning and Zoning Department did have funds left in their full-time account; they did not fill a position. This funding was used to offset deficits in other Operating Budget accounts. Mr. Colligan stated that this year, there are no encumbrances in any
fund; this is the second year that the Town could not reserve for encumbrances.
Regarding supplemental appropriations – General Fund, Ms. Colligan stated that there is no impact to General Fund, Fund Balance. There is an entry for Police services every year; this is a charge for agencies that use the Police for road construction work. She stated that they were able to cover the Town Operating deficit by CRRA funds that the Town received; these were unbudgeted revenues. The Town also received a recycling rebate of approximately $18,000 that was used to cover Solid Waste, which had some operating deficits.
Regarding supplemental appropriations – Other Funds, Ms. Colligan stated that this did not have an effect on Fund Balance. She stated that the Farmington River Trail project is run on a reimbursement basis; the Town usually has to do a supplemental at the end of the year to record the money that was received from DEP; this is strictly a timing issue. She stated that Avon also received extra funds from the State for Town Road Aid and Local Capital Improvement Program (LOCIP). For the first time in several years, there are no supplemental appropriations for the Board of Education State and Federal Grants or for their Cafeteria Fund because their baseline was increased.
Regarding transfers and fund balance designations, Ms. Colligan stated that there is a modest use of the General Fund. The 27th payroll will be coming up in FY 2012/2013; the Town is funding an additional $25,000 for this. The Town is also replenishing a Reservation of General Fund, Fund Balance for replacing some of the Capital assets. She stated that they have also closed some equity and capital projects; they are bringing these into Fund Balance in the amount of $31,324.00. This will be used to pay interest expense on bonds in the current year; this is per recommendation of the Town’s Bond Counsel.
Regarding Appropriations from Undesignated Fund Balance – all funds, Ms. Colligan stated that this is for a variety of funds. She stated that there are standard and non-standard entries. The standard entries that are recommended every year are: funding compensated absences; Medical Claims; and for a Board of Education Use of School Facilities account. The non-standard entries included: the Roaring Brook School boiler, which was a timing issue, although this will be reversed on July 1st. Ms. Colligan stated that the Town was not able to put money into Other Post Employment Benefits (OPEB) this year.
Chairman Harrison thanked Ms. Colligan for her thorough report.
On a motion by Ms. Bratton, seconded by Mr. Eisenlohr, it was voted:
RESOLVED: That the Board of Finance hereby approves the Fiscal Year End Transactions: Transfers, Supplemental Appropriations, Designations and Appropriations from Fund Balance as outlined in the booklet Final Fiscal Year Transactions FY 2007-2008 and as described in the memoranda from the Director of Finance to the Town Manager.
Messrs. Harrison, Eisenlohr, Speich, Gugliotti and Hooper, and Ms. Bratton voted in favor.
08/09-09 Supplemental Appropriation: Simsbury Plant Upgrade, $67,147.12
On a motion by Mr. Hooper, seconded by Ms. Bratton, it was voted:
RESOLVED: That the Board of Finance hereby appropriates a sum not to exceed $67,147.12 from Sewer Fund, Other Financing Sources, Undesignated Fund Balance, Account #05-0390-43913, to Sewer Fund, Sewage Collection and Disposal, Simsbury Sewer Treatment Plant Payments, Account #05-3205-53388 for the purpose of funding payments to Simsbury for plant upgrade.
CERTIFICATION
This is to certify that there are sufficient Unreserved Undesignated Fund Balance resources to finance the following appropriation:
The sum of $67,147.12 from the Town’s Unreserved Undesignated Fund Balance from Account #05-0390-43913 Sewer Fund, Other Financing Sources, Undesignated Fund Balance.
Messrs. Harrison, Eisenlohr, Speich, Gugliotti and Hooper, and Ms. Bratton voted in favor.
08/09-10 Supplemental Appropriation: Fisher Meadows, $20,000
Mr. Schenck stated that this money will come out of the Fisher Meadows Fund. The deeds that the Town received from the Fisher Meadow property stated that the proceeds of anything sold would accrue to a special fund for maintenance of the property, capital improvements to the property and the purchase of adjoining open space.
On a motion by Ms. Bratton, seconded by Mr. Speich, it was voted:
RESOLVED: That the Board of Finance hereby appropriates a sum not to exceed $20,000 from Fisher Meadow Maintenance Fund, Other Financing Sources, Undesignated Fund Balance, Account #12-0390-43913, and Transfer Out from Fisher Meadow Maintenance Fund, Other Financing Uses, Interfund Transfer-Out, Account #12-8700-58000 and Transfer In to Recreation Activities Fund, Recreation Activities, Service and Consultant, Account #09-5107-52184 and Recreation Activities Fund, Other Financing Sources Interfund operating Transfers In, Account #09-0390-43918 in the amount of $20,000 for the purpose of retaining consultant services for soil testing, final schematic design, and unit pricing for additional playing fields at the Fisher Meadows Recreation Area.
CERTIFICATION
This is to certify that there are sufficient Unreserved Undesignated Fund Balance resources to finance the following appropriation:
The sum of $20,000 from the Town’s Unreserved Undesignated Fund Balance Account #12-0390-43913 Fisher Meadow Maintenance Fund, Other Financing Sources, Undesignated Fund Balance.
Messrs. Harrison, Eisenlohr, Speich, Gugliotti and Hooper, and Ms. Bratton voted in favor.
VII. OTHER BUSINESS / TOWN MANAGER’S REPORT
As a reminder, Mr. Schenck stated that there will be a joint meeting with the Town Council and the Board of Finance on January 8, 2009, to vote on the appropriate resolutions and background material for the referendum on February 26, 2009.
VIII. EXECUTIVE SESSION
There was no need for Executive Session.
IX. ADJOURN
On a motion by Mr. Harrison, seconded by Mr. Speich, it was voted:
RESOLVED: That the Board of Finance adjourn at 8:30 p.m.
Messrs. Harrison, Eisenlohr, Speich, Gugliotti and Hooper, and Ms. Bratton voted in favor.
Respectfully submitted,
Thomas A. Gugliotti, Secretary
Attest: Alison Sturgeon, Clerk
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