BOARD OF FINANCE
MINUTES
BUDGET WORKSHOP
April 7, 2010
I. CALL TO ORDER
Chairman Harrison called the Budget Workshop Meeting to order at 7:04 p.m. at the Avon Senior Center. Members present: Margaret Bratton, James Spiech, Catherine Durdan, Thomas Gugliotti, William Hooper and Brett Eisenlohr.
II. PLEDGE OF ALLEGIANCE
The Pledge of Allegiance was led by Chairman Harrison.
III. OLD BUSINESS
09/10-12 FY 10/11 Budget: All Three Boards
Board of Finance Workshop: Set Budget Goals and Objectives
Chairman Harrison stated that the Board of Finance has already held the public hearing, which had a great turnout. After the public hearing, the Charter states that the Board of Finance must confer with the Town Council and the Board of Education. He is confident that they can set a recommended budget, although there is a back up meeting scheduled for another workshop, if necessary, next week.
Chairman Harrison stated that the Board of Finance members will be using a computer program to calculate the dollar increase and percentages, which should be very helpful.
Chairman Harrison asked each member of the Board of Finance to discuss their impressions of the budget and where they might be in terms of budget recommendations.
Mr. Eisenlohr stated he was disappointed at first when he looked at the Board of Education’s budget. He looked to see where cuts could be made, although he could not find any. All of the items had a good return on their investment. He feels that education is Avon’s best chance to help their economic condition. Mr. Eisenlohr stated that many people emailed them and people rallied and spoke in support of this budget, more specifically the Board of Education’s budget. Clearly there are a lot of people who understand the Town’s position, but are willing to pay more during these tough economic times. He stated that there are also tax relief programs for people on fixed incomes. Mr. Eisenlohr stated that he fully supports both budgets as proposed by the Town Council and the Board of
Education.
Ms. Bratton stated that she is not going to be recommending the 7% but she will not be recommending a zero increase either. She stated that she is at a 2.50% tax increase.
Mr. Hooper stated that there were great comments on both sides of the budget issues. They have received many emails from residents. He stated that he went line by line for each budget. He is at just under a 4.50% tax increase.
Mr. Gugliotti stated that he is in favor of putting the budgets out as presented, which would include the Town’s operating budget having a 2.50% spending increase and the school’s operating budget having a 6.91% spending increase. He stated that no one likes taxes to go up. This is one place that people are heard and people can affect this budget. He would like to keep Avon the way it has been. He stated that Avon is at the breaking point and he asked that the other members of the Board of Finance not to let the Town of Avon break.
Mr. Gugliotti stated that teacher’s salaries are through arbitration; no one can change that. He stated that he has heard a great deal from the residents this year. There are a significant number of people who want the budgets to go out as proposed so the voters can decide. In order for him to make his recommendation, he stated that he also asks himself what will pass. He stated that the third factor that he looks at when deciding, is what the right thing is to do. After doing all of these things, he has decided to recommend putting the budgets out the way they have been proposed because he believes in these budgets.
Ms. Durdan stated that she has reviewed all of the materials that she has received, including all of the emails, phone calls and conversations. The Board of Education has voted unanimously to maintain what they have. When a budget is defined as to just maintaining what they currently have, that says to her that this amount will be needed on an annual basis in order to remain status quo. She stated that the grand list is also flat. There are a lot of empty store fronts on Route 44. She stated that the budget increase is large for a Town with a flat grand list. Some taxpayers support a 7% increase, and other taxpayers do not. She stated that we are living in a time where we can’t maintain the level of service we are used to having. She stated that there are more components than just the
Board of Education. She is recommending a 2.5% tax increase.
Mr. Spiech thanked everyone who came to the public hearing earlier this week. He stated that there are a lot of other people in Town that marched and came to the public hearing. There were people who spoke that were unemployed and under employed; these people have to be considered. Health care costs are also increasing. He stated that the Town needs a 1.5% increase in the mill rate just to cover the loss of revenue this year. The grand list only grew 1/2%. He stated that he would like to discuss using the surplus because a responsible budget needs to be given to the taxpayers. He stated that he feels that teachers’ salaries need to be addressed, also. He recommends a 3.8% tax increase.
Chairman Harrison stated that because of the fall in revenues, the mill rate needs to be increased 1.5% to maintain the current spending levels. He feels that everyone needs to make sacrifices regarding the budget this year. He stated that education is very important. If more sacrifices need to be made, bargaining units may need to get involved. He stated that he is looking at the 1.5% to get started and looking at the economy. He is recommending a 3.5% – 4% increase.
Chairman Harrison stated that sometimes additional revenue can be found by the Town Manager. Mr. Robertson stated that he took a careful look at the revenues. He stated that after working with the Department Heads, they made $160,000 in reductions, which can be added back into the revenue. Ms. Colligan stated that this reduction brings the mill rate down to 6.76%.
Ms. Bratton stated that there will be one teacher retiring. She questioned if this was a type of position where two new teachers could be hired at that same salary. She also questioned if there were any classes at the high school that have fewer than twenty enrollees. Mr. Goeler stated that the scheduling process has not begun yet for next year. For this year, there may be a handful, possibly ten or eleven classes with fewer than twenty enrollees; they are more of the academic classes. Ms. Bratton indicated what the budget increases have been for the past ten years for the Board of Education’s budget, which averaged 5.31 % per year. She also stated that several parents called her regarding some students feeling pressured to participate in the march, although she is sure that this was not
anyone’s intention.
Regarding stimulus money, Ms. Durdan questioned if any more funding was any applied for in the next budget year. Mr. Franzi stated that there were no additional opportunities for Avon to receive stimulus
money, except for what they received last year. She stated that there were questions in emails from residents who thought the Board of Finance cut line items, which they do not. People questioned why one sport would be cut and not another. Mr. Goeler stated that they have looked at all of the various programs across the board. There were some programs that are more expensive and have additional fees, which they also took into consideration. Ms. Durdan stated that open periods were also a concern of parents. Mr. Goeler stated that there are more open periods than in the past. Some children could not get into certain classes because they were already at capacity.
Ms. Bratton asked Mr. Zacchio to discuss the social services situation in Avon. Mr. Zacchio stated that the use for social services has been higher this year than what they have seen in the past. Mr. Robertson stated that he would get those statistics to the Board.
Mr. Hooper questioned how many retirees the school system has had over the last five years. Mr. Franzi stated that they have had 2-4 in the last five years on average.
Mr. Spiech questioned if either the Town Council or Board of Education have asked the unions if they would be willing to discuss reduced or flat increases this year. Mr. Goeler stated unions are looking at ways to help get this budget passed, although there is nothing specific on the table. Mr. Gugliotti stated that if concessions are made, the Town will have to pay them back in the future. He stated that if the budget is passed with a 7% tax increase that means that there is a greater ability to pay. The ability to pay in arbitration is based upon the economics of the Town, not the most current tax rate. He stated that it’s a fact that 80% of the Board of Education’s budget is salaries. That is something that cannot be changed.
Chairman Harrison stated that they have traditionally used surplus after the revaluation year. Normally, the Town would not use surplus to substitute in the non-revaluation session, although this is an extraordinary year. He read the statistics to the Board members regarding how much surplus has been used in the past. He stated that he would consider using surplus this year and feels that the Board of Finance members should have a discussion regarding surplus.
Chairman Harrison questioned what the current amount of surplus is in terms of dollars and percentage. Ms. Colligan stated that as of 6/30/2009 the surplus was $4,789,578. In the current fiscal year, the Town put on four budget amendments to use some Fund Balance, which totaled $167,000 of Fund Balance. The current balance as of today is $4,623,327, which is 7.01% of current budgeted expenditures. Mr. Robertson discussed Avon being a “Triple A” community, although Moody’s has put Avon on notice that they have concerns regarding the Town’s General Fund, Fund Balance. They would like this amount to be higher. He stated that the Town is moving in the right direction. Mr. Robertson recommended using no more than $100,000 of General Fund, Fund Balance.
Regarding using surplus, Mr. Zacchio stated that they need to be careful of sinking that fund. Undesignated surplus is where Avon lags behind. He feels that $100,000 is a good starting point. The Town needs to be careful not to take much more than that.
There was a consensus on the Board of Finance that they were in favor of using $100,000 of surplus.
The $160,000 of additional revenue that the Town Manager discussed along with $100,000 of surplus was put into the budget adjustment worksheets for their discussions.
Mr. Gugliotti suggested putting the budgets out as presented to the people at the referendum so the voters can vote. He stated that he is paying note of the signatures, letters, public hearing, and voices that have been heard. Mr. Hooper stated that he feels the proposed requests are more than the Town needs.
Ms. Durdan stated that she is willing to move her position and recommend a higher tax increase. Mr. Spiech stated that he would be willing to do the same and he would now recommend a 4.4% tax increase. Chairman Harrison stated that he is recommending something in the low 4% range. Ms. Durdan stated that she would recommend a 4.4% increase which includes the surplus. Ms. Bratton stated that with the $100,000 surplus, she would go up to a 4.4% increase.
On a motion by Mr. Harrison, seconded by Ms. Bratton, it was voted:
RESOLVED: That the Board of Finance recommend a budget that would result in spending that would require a mill rate increase of 4.44%.
Mr. Gugliotti stated that he does not believe the Board of Finance has given this sufficient consideration as to where this is going to come from.
Messrs. Harrison, Spiech, Hooper, and Mmes. Bratton and Durdan voted in favor of this motion. Messrs. Gugliotti and Eisenlohr voted in opposition of this motion. The motion passed 5-2.
Chairman Harrison stated that allocations for reductions are now needed. It is up to the Town Council as to where they get these reductions, either from their operating budget and/or capital improvements.
Mr. Hooper recommended 80% of the reductions come from the Board of Education and 20% of the reductions come from the Town Council.
Mr. Gugliotti questioned the proportions between the Town Council’s operating budgets and Board of Education’s budget. Ms. Roell stated that she believes it is 70% / 30%.
Chairman Harrison stated that the Town Council has already made reductions, which he does not want to ignore. Mr. Zacchio stated that they have experienced approximately $1 million in reductions in the operating budget from the Department Heads through the Town Council and Town Manager. The Town Council reduced about $190,000 in the first round and at the next Council meeting reduced it another $80,000 - $90,000. Ms. Roell stated that there were reductions from the Department Heads to the Superintendent.
Mr. Zacchio stated that the Town Council could get to these reductions through the operating and capital budgets. On the operating side, there is a supervisor who is retiring in Public Works; they will replace him with a lower level replacement. The Town Council will low fund the hospitalization account for insurance purposes. They will also reduce retiree health. On the capital side, the Town Council will remove the entire fire truck from this budget, although they do this with caution. They will also remove some of the funding for the playscape at Pine Grove School. Mr. Zacchio stated that this totals $67,800 on the operating side and $197,500 on the capital side.
Chairman Harrison stated that the new mill rate is 24.44, which is up from 23.41. In percentage terms, this is a 4.44 % mill rate increase. This is a total combined spending increase of 2.8%. The Town’s operating budget will go up 2.14 % and the Board of Education’s operating budget will increase by 4.5%. He stated that the CIP declines from the current year by 15.25% and debt service and sewers remain the same. In dollar terms, the new combined grand total is $72,873,138, which is an increase of $1,985,700.
On a motion by Mr. Harrison, seconded by Ms. Bratton, it was voted:
RESOLVED: That the Board of Finance recommend a budget totaling $72,873,138. This recommended budget would reflect a mill rate increase of 4.44%. The Board of Finance authorizes the Town Manager to exercise reasonable discretion to the extent any rounding of numbers may be necessary in order to have only two digits after the decimal point for the mill rate figure.
Messrs. Harrison, Spiech, Hooper, and Mmes. Bratton and Durdan voted in favor. Messrs. Gugliotti and Eisenlohr voted in opposition. The motion passed 5-2.
IV. NEW BUSINESS
There was none.
V. OTHER BUSINESS
There was none.
VI. ADJOURN
On a motion by Mr. Harrison, seconded by Ms. Durdan, it was voted:
RESOLVED: That the Board of Finance adjourn at 9:25 p.m.
Messrs. Harrison, Spiech, Hooper, Eisenlohr, Gugliotti and Mmes. Bratton and Durdan voted in favor.
Respectfully submitted,
Thomas A. Gugliotti, Secretary
Attest: Alison Sturgeon, Clerk
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