BOARD OF FINANCE
MINUTES
January 24, 2011
I. CALL TO ORDER
Chairman Harrison called the meeting to order at 7:00 p.m. at the Avon Town Hall, Selectmen’s Chamber. Members present: Margaret Bratton, Catherine Durdan, Thomas Gugliotti, Brett Eisenlohr and James Speich.
II. PLEDGE OF ALLEGIANCE
The Pledge of Allegiance was recited.
III. COMMUNICATIONS FROM THE AUDIENCE
There were none.
IV. MINUTES OF PRECEDING MEETINGS: December 27, 2010
The Board discussed what should and should not be reflected in their meeting minutes. Mr. Eisenlohr stated that he would like topics regarding revenues and expenditures reflected in the minutes as well as anything that the Town Manager or Town staff will be following-up on. Mr. Gugliotti stated that he believes the minutes should reflect all topics discussed.
Mr. Eisenlohr made an edit to the December 27, 2010 minutes to insert his comments regarding if it would be possible to charge residents an administration fee if they chose to send their child to a CREC school.
On a motion by Mr. Gugliotti, seconded by Mr. Eisenlohr, it was voted:
RESOLVED: That the Board of Finance approve the minutes of December 27, 2010 as amended.
Messrs. Harrison, Eisenlohr, Gugliotti, Speich, and Ms. Durdan voted in favor. Ms. Bratton abstained.
V. OLD BUSINESS
10/11-06 Discussion of FY 11/12 Budget Process
Mr. Robertson stated that the draft will be going to the Town Council. The workshop will be held on February 12th. He stated that the Operating Budget is going out as well as the CIP budget. Ms. Durdan questioned if changes will be made to the budget after Governor Malloy gives his budget. Mr. Robertson stated that adjustments will be made to revenues.
Mr. Robertson stated that he recently went to a regional meeting where ECS matters are the most significant issue many are dealing with. Also, there was a lot of discussion regarding municipal aid. He stated that there was some consensus with what municipalities should be looking at. When looking at the revenue side of the budget for Avon, he stated that he will assume that there will be a 10% decrease in State funding across the board. He stated that the expenditure side is challenging as well.
Mr. Gugliotti stated that he read an article regarding hotel room revenues. He stated that he would like to learn more about this issue. The Board members agreed. Mr. Robertson stated that he has not seen any language regarding the hotel tax, although he has heard public policy criticism regarding this issue.
Regarding regionalization of revenues, Mr. Robertson stated that regionalism is the new buzz word. The State Legislation wants to give Towns the tools so they can have services on a regional basis. If Towns do not head in this direction, this may be enforced.
Regarding emergency medical services, Mr. Eisenlohr questioned if Avon can recover any money when accident victims are non-residents. Mr. Robertson stated that this is billed through AMR, which is private billing. He stated that the Town of Avon has a contract with UCONN for their service as well.
Mr. Robertson stated that there is an association in Town that believes they are being overtaxed as well as not receiving certain Town services. They do not feel their assessments reflect this lack of service. He stated that the Assessor has already taken this into account.
Regarding the Grand List, Mr. Robertson stated that a good estimate is a .6 % increase. He stated that the previous year had a .5% increase. Most of the growth this year is in motor vehicles. He believes a .6% increase is not bad in this economic environment.
Mr. Robertson stated that the snow plow fund is already 34% expended. He stated that nights and weekends cost the Town double time.
VI. NEW BUSINESS
10/11-14 Presentation by Auditor: CAFR 2009-2010 including review of Board of Education “Revolving Fund”
Vanessa Rossitto, partner with auditing firm Blum Shapiro, told the Board that they had received copies of the CAFR, State and Federal Single Audits, and Auditor’s Letter. In the CAFR, she noted that the audit opinion could be found on Page One and that the Town had received a “materially correct, unqualified opinion,” which is the highest form of opinion available.
Ms. Rossitto noted that the MD&A was written by Ms. Colligan. It explains what happened during the previous year and is a good place to start reading.
Ms. Rossitto noted that the full accrual statements could be found on Pages 14/15. She pointed out that the Town’s assets totaled $118 million, with $109 million invested in capital assets net of related debt. She pointed the Board to Page 15, which stated that net assets were up slightly from the prior year’s total of $115 million.
Chairman Harrison asked about the Bank overdraft figures in the Liability section on Page 14. Ms. Rossitto stated that these were likely the result of timing issues related to deposits and checks in transit, but were not of concern to the auditors.
Ms. Rossitto then pointed the Board to Pages 16-18, where the more familiar looking modified accrual reports were located. She noted the two major funds – the General Fund and CIFA – and stated the rest were smaller, Non-Governmental Funds.
Ms. Rossitto pointed the Board to the bottom of Page 16, where they would find the General Fund Undesignated and Unreserved Fund Balance of $5.1 million, or 6.75% of total General Fund Expenditures and Transfers Out. She commented that this was a slight decrease of $153,000 from the prior year. In all, she noted that the balance was pretty flat.
In CIFA, Ms. Rossitto noted a significant increase from the prior year due to the permanent financing of $27.8 million, which could be found on Page 18.
Regarding the General Fund Budget to Actual Statement, Ms. Rossitto stated that the revenues were $890,000 less than budgeted and expenditures were $900,000 less than budgeted.
Ms. Rossitto also pointed the Board to the Statement of Net Assets Proprietary Fund, which is also known as the Self-Insurance Fund; and the Fiduciary Fund of the Town.
Regarding the management letter, Ms. Rossitto reviewed these comments with the Board members. She stated that the Board of Education’s Revolving Fund is on the balance sheet of the General Fund. There was activity netted; this year the net amount was big. After looking into this further, there are a number of items that are recommending be pulled out. She stated that Pay-to-Play was one of these items. Ms. Rossitto stated that they are recommending that this process be looked at to see if other items need to be pulled out and put into a Special Revenue Fund as well.
The Board had a discussion regarding the Board of Education Revolving Fund. Chairman Harrison questioned if there was internal control regarding this fund. Ms. Rossito stated that the Board of Education does have a system that accounts for the revenues and expenditures, although the tracking and the reporting of the revenues and expenditures is not the most desirable.
Chairman Harrison questioned if there is a way to tell the total balance of the Revolving Fund at any given time. Ms. Rossito stated that all of the activity of the Revolving Fund is reported. This would be netted in the General Fund. This total could be as high as $800,000, which is a substantial amount of money.
Ms. Bratton questioned if there is a deadline for these recommendations. Ms. Rossitto stated that the Town and the Board of Education will need to work together. She is hopeful that this can get cleaned up and completed prior to the next fiscal year.
Mr. Robertson stated that some of the recommendations will be done prior to the next budget season, although some may not. Ms. Colligan stated that they will be focusing on the larger pieces of the audit regarding Revolving Funds. In response to another question by Ms. Bratton, Ms. Colligan stated that she is unsure if all of the recommendations can be resolved by June 30th.
Ms. Rossitto stated that both the Town and the Board of Education did a good job responding to the management letter.
10/11-15 Transfer of Appropriation to State & Federal Education Grants Fund, $175,861
Mr. Robertson stated that this is a transfer from the General Fund to a Special Revenue Fund.
In response to a question by Ms. Bratton, Ms. Colligan stated that this money comes in several times during the year. This is an ECS component. This is done as a transfer so it gets recorded properly.
On a motion by Mr. Gugliotti, seconded by Mr. Speich, it was voted:
RESOLVED: That the Board of Finance hereby approves a transfer of appropriation from General Fund, Intergovernmental, Equalized Cost Sharing (ECS), Account #01-0330-43341, and General Fund, Board of Education, General Service, Account #01-9401-52185, in the amount of $175,861 to State and Federal Education Grants, Intergovernmental, Equalized Cost Sharing (ECS), Account #13-0330-43341, and State and Federal Education Grants, Board of Education, ARRA Stabilization Gov. Serv. State, Account #13-9401-59202, in the amount of $175,861 for the purpose of accounting for the Federal SFSF funds under ARRA through the ECS entitlement per the recommendation of the auditors.
Messrs. Harrison, Eisenlohr, Gugliotti, Speich, and Mmes. Durdan and Bratton voted in favor.
VII. TOWN MANAGER’S REPORT
Monthly Financial Report Summary
Ms. Colligan stated that the Town is doing well in numbers regarding revenues, although interest income is falling behind. She stated that she will soon be receiving the Board of Education’s report for December.
VIII. OTHER BUSINESS
There was none.
IX. EXECUTIVE SESSION
Litigation/Pending Claim; High School Boiler
On a motion by Mr. Gugliotti, seconded by Ms. Bratton, it was voted:
RESOLVED: That the Board of Finance go into Executive Session at 8:48 p.m.
Messrs. Harrison, Eisenlohr, Gugliotti, Speich, and Mmes. Durdan and Bratton voted in favor.
On a motion by Mr. Gugliotti, seconded by Mr. Speich, it was voted:
RESOLVED: That the Board of Finance come out of Executive Session at 9:20 p.m.
Messrs. Harrison, Eisenlohr, Gugliotti, Speich, and Mmes. Durdan and Bratton voted in favor.
X. ADJOURN
On a motion by Mr. Gugliotti, seconded by Mr. Speich, it was voted:
RESOLVED: That the Board of Finance adjourn at 9:20 p.m.
Messrs. Harrison, Eisenlohr, Gugliotti, Speich and Mmes. Bratton and Durdan voted in favor.
Respectfully submitted,
Thomas A. Gugliotti, Secretary
Attest: Alison Sturgeon, Clerk
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