BOARD OF FINANCE
MINUTES
REGULAR MEETING
November 23, 2009
I. CALL TO ORDER
Chairman Harrison called the regular meeting to order at 7:33 p.m. in the Avon Room at the Avon Town Hall. Members present: Margaret Bratton, Catherine Durdan, Thomas Gugliotti, James Spiech and Brett Eisenlohr.
II. PLEDGE OF ALLEGIANCE
The Pledge of Allegiance was led by Ms. Durdan.
III. COMMUNICATIONS
Chairman Harrison congratulated Board members Spiech, Durdan, Bratton and Gugliotti for their successful campaigns and for their re-elections.
Chairman Harrison stated that Superintendent Erwin put together a Board consisting of Clergymen in Avon, several people from Town Government, business interests and people from citizen organizations to have non-crisis discussions. He stated that this group met for the first time last week. A handout was distributed at that meeting regarding statistics for the school year, which Chairman Harrison distributed to the Board of Finance members.
IV. MINUTES OF PRECEDING MEETINGS: October 26, 2009
On a motion by Mr. Gugliotti, seconded by Mr. Spiech, it was voted:
RESOLVED: That the Board of Finance approve the minutes of October 26, 2009 as written.
Messrs. Harrison, Spiech, Eisenlohr, Gugliotti and Mmes. Bratton and Durdan voted in favor.
V. OLD BUSINESS
There was none.
VI. NEW BUSINESS
09/10-11 Supplemental Appropriation: State of CT Department of Education Youth Services Bureau Grants, $20,250
Mr. Schenck, Town Manager, stated that this is the second or third year that a supplemental appropriation
has been needed for this. He stated that because this will probably be occurring annually, he would like
to include this in the FY 10/11 budget, unless the Board feels otherwise.
Mr. Gugliotti questioned how this money was put to use. Mr. Schenck stated that the Town of Avon set this up three years ago to provide ancillary services for youth group activities. The Town of Avon pays the Town of Farmington, with additional funding from them, to fund a full-time person that works on youth activities for both schools. This provides services that the Board of Education does not feel they need to provide.
RESOLVED: That the Board of Finance hereby amends the FY 09/10 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 Services Bureau Grants.
Messrs. Harrison, Spiech, Eisenlohr, Gugliotti and Mmes. Bratton and Durdan voted in favor.
09/10-11 Review and Discussion: FY 10/11 Budget
Chairman Harrison stated that the Board of Finance members usually start their discussions now regarding guidelines for the 10/11 budget.
Ms. Bratton questioned if the supplemental appropriation for the youth service grant was approximately the same amount every year. Mr. Schenck stated that it has been the same amount for the past several years. He stated that the Town Council is in favor of including this in the 10/11 budget.
Mr. Gugliotti stated that he would be reluctant to include this in the budget because it is not a definite that it will occur every year because there is no commitment from the State. He questioned if the Town of Avon would continue to fund this if the State does not. Mr. Schenck stated that he would not recommend continuing that service.
Mr. Spiech stated that he also would not recommend putting this into the budget because this may cause problems because of the big increase as a line item for Social Services. He stated that he would also not recommend it because at this point in time, the State cannot be relied upon to continue funding this.
Ms. Bratton, Ms. Durdan and Mr. Eisenlohr also agreed that this should not be included in the 10/11 budget.
Regarding guidelines for the 10/11 budget, Mr. Gugliotti stated that, looking at years past, he does not want to set any guidelines this year.
Ms. Durdan stated that there is a new Superintendent this year; he has never worked with a Board of Finance before. She stated that she does not want to set any targets or guidelines, although she hopes that everyone keeps the voters in mind when they set their budgets.
The Board of Finance agreed not to set any targets or guidelines for the 10/11 budget.
VII. OTHER BUSINESS / TOWN MANAGER’S REPORT
Regarding the third quarter financial report, Ms. Colligan, Finance Director, stated that the Town is in good shape regarding expenditures. She stated that some of the procedures that were instituted this year were very helpful, including Department transfers. She stated that collections are slightly behind by .003%. There has been a small improvement in the Building Structure and Equipment Permits, which are up to almost 60% of the budget amount. Also, Recording and Conveyance is up to 35% of the budgeted amount. Ms. Colligan stated that the other revenues are running in line, although they continue to see stress in the interest area.
Regarding Capital Projects, Ms. Colligan stated that they are running on a reimbursement basis. She believes that there may be some small returns back on several projects.
Mr. Schenck stated that part of the reason that the Building Permits are up is because building permits were taken out for the 103 units of housing in Avon Park South, which totaled over $100,000. Regarding conveyance taxes, he stated that the Town is starting to see $1 million homes selling; there are buyers out there for these homes again. Regarding interest income, he stated that this has been reduced over the past two years; it will be reduced again this year. Mr. Schenck reminded the Board members that the Town appropriated $150,000 out of the surplus last year to ease the revaluation, which will need to be dealt with going into the 10/11 on the revenue side. He stated that the Town has also made some significant adjustments in the current year; they have dropped the conveyance tax $200,000; reduced interest
income by $125,000; the Town reduced their payments from the State for prior to 1995 school construction, which dropped $170,000. He stated that the Town, in the 09/10 budget, absorbed over $800,000 in revenue reductions.
Regarding revenue, Mr. Schenck stated that the Town will be receiving $186,000 from the State from the Clean Water Fund for doing the Master Sewer Facilities Plan, which will go back into the Sewer account. He stated that the Town of Avon also received an energy grant for $75,000. They will also be receiving money for the streetscape project under the Small Town Economic Assistance Program. Also, the Town received a grant for $200,000 for the work that is currently taking place and another $200,000 for work to take place on the other side of the street.
In response to a question by Mr. Eisenlohr regarding the Avon Water Company rate increase, Mr. Schenck stated that the Avon Water Company has agreed to phase in the rate increase over three years, approximately $28,000 per year over the next three years.
Regarding expenses, Ms. Colligan stated that the Town is not seeing the same stress on utilities as it did last year. She stated that the Town is in good shape regarding fuel, oil and gas consumption.
Mr. Schenck stated that the special election that will be taking place tomorrow is costing the Town $13,000. He stated that there is also an unemployment claim against the Town made by a Police Office. He stated that this could cost the Town $25,000-$30,000. He stated that although 2/3 of that money would be a cost this year and 1/3 in subsequent years, this is still a potential budget issue.
Regarding the Library project, Mr. Schenck stated that this project is moving forward. He stated that it may be prudent to start a building reserve in the Operating Budget.
Mr. Schenck stated that the Town is in the process of renegotiating with and working with Farmington on the UCONN Paramedic contract and the AMR contract; this has not yet been settled. He stated that UCONN has decided not to terminate paramedic services.
Mr. Schenck stated that OPEB (Other Post Employment Benefits), GASB 45, requires Towns to report the actuarial liability of any post employment benefits. This would be retiree health insurance for Avon. He stated that the liability has already been determined by the actuaries. A funding plan then needs to be set up. Mr. Schenck stated that the Town of Avon set up a Retiree Medical Benefits Reserve Fund for this in 2000 and they have been contributing to this fund over the years. There is approximately $2 million in this fund, although the liability is approximately $1 million per year. He stated that the Town has been budgeting $500,000-$600,000 per year, which makes them about $500,000 short on what they have been contributing. Going forward, he stated that the Town needs to take the shortage and start,
initially funding this out of the $2 million Retiree Medical Benefits Reserve Fund. Each year, they will need to increase the OPEB budget, which will be supplemented by a portion transferred from the $2 million Retiree Medical Benefits Reserve Fund, taking less out each year. The OPEB annual budget portion and the portion from the Retiree Medical Benefits Reserve Fund will be transferred to the trust fund. The $2 million Retiree Medical Benefits Reserve Fund will continue to exist until exhausted.
Regarding the audit, Mr. Schenck stated that they have had some trouble getting reconciled statements from the Board of Education. Because of this, the Town may need to ask for a waiver for a delayed audit. He stated that he will be calling the Superintendent tomorrow to discuss this issue with him. He stated that asking for a waiver in filing the audit is very undesirable because it will show up for the next five years against the Town.
Regarding the Board of Finance’s meeting schedule for December, the Board members agreed to move the meeting from December 28th to December 21st.
VIII. EXECUTIVE SESSION
There was no need for Executive Session.
IX. ADJOURN
On a motion by Mr. Gugliotti, seconded by Mr. Eisenlohr, it was voted:
RESOLVED: That the Board of Finance adjourn at 8:25 p.m.
Messrs. Harrison, Spiech, Eisenlohr, Gugliotti and Mmes. Bratton and Durdan voted in favor.
Respectfully submitted,
Thomas A. Gugliotti, Secretary
Attest: Alison Sturgeon, Clerk
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