BOARD OF FINANCE
MINUTES
OCTOBER 24, 2011
I. CALL TO ORDER
Chairman Harrison called the meeting to order at 7:01 p.m. at the Avon Town Hall, Selectmen’s Chamber. Members present: Chairman Thomas Harrison, Catherine Durdan, William Hooper, Margaret Bratton, Thomas Gugliotti, James Speich and Brett Eisenlohr.
II. PLEDGE OF ALLEGIANCE
The Pledge of Allegiance was led by Mr. Gugliotti.
III. COMMUNICATION FROM THE AUDIENCE
There was none.
IV. MINUTES OF PRECEDING MEETINGS: June 27, 2011
Mr. Harrison requested a change on page 3, middle of the page, within the motion to remove the word “return.”
On a motion by Mr. Gugliotti, seconded by Mr. Hooper, it was voted:
RESOLVED: That the Board of Finance approve the minutes of the September 26, 2011 meeting as amended.
Messrs. Harrison, Eisenlohr, Speich, Hooper, Gugliotti and Ms. Bratton voted in favor. Ms. Durdan abstained.
V. OLD BUSINESS
11/12-05 Review and Discussion: FY 12/13 Budget Process
Mr. Robertson commented that they are in the process of gearing up on the capital side. Over the next few weeks the Town Council will be meeting, November 15th, 16th and December 1st, and will be receiving presentations on capital budgets; operating budgets will follow shortly thereafter. Mr. Harrison commented that in the past they have set “targets” and questioned Mr. Robertson if there is anything he would like to say to prepare the Board of Finance to make such targets. Mr. Robertson responded that this is similar to the discussion the Board had last year. He spoke with Gary Mala and this year he’s really pushing forward the date to have the operating budget and if the Board of Finance had any ideas on targets and caps now would be the time to set
those. The Board found in the past that targets and guidelines had not been deemed very useful and after discussion decided not to set any for this year.
VI. NEW BUSINESS
11/12-06 Approve Board of Finance 2012 Meeting Schedule
After reviewing the scheduled meeting dates, Mr. Harrison questioned April 9th with Avon Public Schools or other conflicts. Mr. Gugliotti questioned the September/October dates regarding religious holidays. Mr. Robertson responded that each date had already been thoroughly checked for such conflicts.
On a motion by Mr. Speich, seconded by Mr. Eisenlohr, it was voted:
APPROVED: That the Board of Finance approve the 2012 Board of Finance Meeting Schedule. Messrs. Harrison, Eisenlohr, Speich, Hooper, Gugliotti and Mmes. Durdan and Bratton voted in favor.
11/12-07 Review Fiscal Year End Closing Process
Mr. Robertson introduced the discussion with a memo from Peggy Colligan and explained that this item contains the entire process as it rolls out throughout the year, which creates the comprehensive yearly financial report. Ms. Colligan provided a general overview of this memo. She began by mentioning that this is a result of the request to put the end of year transactions ahead earlier in the process, one of these being the new Board of Education financial systems. A lot of what they do at the end of the year they do regularly throughout the year as well. “We do a lot of monitoring and reconciling and budget amendments. What you see as the “End of Year Report” is actually what you see all year but for the end of year document we do a lot of “housecleaning” stuff
that would just make meetings longer than necessary. Other entries you see at the end of the year are unusual one-time occurring entries.”
Ms. Colligan added that the memo provided gives a breakdown in general terms of what is done internally throughout the year, plus it is required for the audit schedule. All the items roll into the financial statements in the comprehensive annual financial report. There is an additional handout that includes a “Schedule of Assistance to be Provided” from the audit firm which includes a lot of detail. The one page memo is a timeline with the end result being the production of the financials and the capper. Because the town participates in the GFOA Awards program, issues debt and is a municipality in the state of Connecticut, we are required to report within the 6 months of the close of our fiscal year. The goal is to get all the financials out, recorded and filed by December. We hold an
audit-planning meeting with the auditors and create preliminary analytics. They determine how far in to the account they have to go when they come back and anticipate what they’ll be seeing in the coming months. They are here 2 weeks in the Fall, not consecutive. This year they are here the 1st week in November. The next couple of weeks in November will be used to pursue open items such as something that may have come up as a result of their auditing. The main goal is to get it all done by November 15 because she needs a couple of weeks to put documents together. There are a lot of automated reports but also a lot of resolutions and we need to make sure account codes are correct and keep last minute changes to a minimum. After that they go to Town Council in December and come to Board of Finance at the end of December with end of year transactions.
Ms. Colligan continued pointing out the bottom of the page to the table, which includes the sections located in the budget booklet; Transfers: Budgetary and Charter Compliance, Encumbrances: GAAP requirement, Supplemental Appropriations, Transfers, Fund Balance Designations and Appropriations from Unreserved Designated and Undesignated Fund Balance.
Ms. Bratton commented that since we have a meeting during the 3rd week in December would that cause a problem for Ms. Colligan’s goal. Ms. Colligan answered no because it will be done by then. Mr. Harrison commented that the report was great but could she explain some terminology such as what is reclassification. Ms. Colligan answered that reclassification is correcting a coding error. This can happen during the year when someone may notice a vendor was paid out of a particular account and it was the wrong account so they ask the finance department to research it and determine if it was really paid from the wrong account or if it was a data entry error.
11/12-08 Review and Discussion: Selection of Independent Auditor-
FY 11/12 Audit
Mr. Harrison briefed the Board of Finance that it is time to select an Independent Auditor. Background shows that the current auditor, Blum Shapiro, has been on a 1-year contract and can be extended or search for someone else. Mr. Gugliotti questioned how many years the town has been with Blum Shapiro. Mr. Robertson answered 7 years and before that there was Kostin for 12 years and before that it was another company for 10 years. Mr. Gugliotti commented that we shouldn’t have the same auditor for too long as it diminishes the perception of the reliability but we benefit having someone for a long time because they get to know us and it gets easier. Mr. Hooper questioned if we will save anything by giving 3 more years. Mr. Robertson responded he did not know but he did include a list of auditors per
the request at September’s Board of Finance meeting. Most other towns in our rating also use Blum Shapiro. Mr. Robertson added that even though we may not change firm’s often there are different personnel in the mix, it is not necessarily the same person. Mr. Robertson also suggested discussing the Board of Education and Town’s process of implementing new finance packages and commented that it may be disruptive to change audit firms at this time. Mr. Hooper questioned when this needs to be decided and Ms. Colligan answered the Spring. Mr. Harrison requested that Mr. Robertson pursue Ms. Durdan and Mr. Hooper’s idea of signing up for multiple years to try and save money and Mr. Robertson said he would look into it.
11/12-09 Discussion of the Administrative Services Study Committee
Mr. Robertson included a copy of the most recent packet from the Administrative Services Study Committee. The Committee has been meeting for some time now. It was appointed in 2008 and technically ended in June 2011 but continues to meet. Mr. Robertson plans to make a recommendation to terminate the Committee. Mr. Gugliotti agreed and commented that he doesn’t believe the BOF has the authority to disband this Committee and that he thinks this should be up to the Town Council. He also believes that the Committee has plans to continue to meet. Mr. Gugliotti added that when the matrix report was done we spent approximately $50,000 and we told the town that we would continue to have this Committee meet to find out what’s been done and what can be done. At this point the things that can be done have
been done, therefore we don’t have a need for this Committee anymore.
Ms. Bratton added that maybe they could just give updates such as annual updates, what has been done and what we can’t afford yet. Mr. Harrison questioned if it would be accurate to tell the Town Council that we agree we don’t need to renew the Committee and the Board agreed.
VII. TOWN MANAGER’S REPORT
- Monthly Financial Report Summary
Ms. Colligan commented that collections are ahead; foreclosures are running behind, license fees and permits ahead overall for 11/12 versus 10/11. The building permit activity is very slightly ahead, again intergovernmental rarely sees anything at this time and charges for services is running in line for 10/11, most in that category are running on track. Larger ones are landfill fees, park and rec activity, etc. Interest rates are very low which worked to our advantage when we sold the notes for the library but unfortunately the down side is the revenue side where we are just not seeing the numbers. The Finance Department has not presented nor has the Board of Finance approved any appropriations out of the general fund. There is nothing to report in legal contingencies or capital projects, internal
service and revenue. The Board of Education is busy working on conversion and the budget.
Mr. Robertson added that they had a great experience of selling the library note where they received a net interest cost of .28%, the silver lining of low rates, a very nice one-year rate.
- Replacement of Roof Top Units at Roaring Brook School
Mr. Robertson mentioned that the roof-top heating unit at Roaring Brook has been replaced. The cost benefit analysis proved we should put in new units totaling $78,885. In terms of financing, Board of Education paid out of operating budget. The Town Council asked to find a source to refund their operating budget.
Mr. Robertson added that we have an issue with a sewer pipe on Eddy St. The cost to fix this issue was more than thought, totaling $75,000. This happened right after Tropical Storm Irene. It had a gravity line feed and was a 21” pipe that was just sheared off near the river. An emergency appropriation was submitted and was covered but will be part of year-end appropriations.
Mr. Speich asked if the sewer fund has some kind of fund balance that the appropriation would come from. Ms. Colligan responded yes unless for some reason revenues come through higher than we have balanced. Mr. Speich questioned if there is a level they would like to keep that at?
Ms. Colligan responded that they like to keep it at 10%. Mr. Speich questioned if all revenue has to stay in revenue fund and Ms. Colligan answered yes, it can’t be transferred. Mr. Gugliotti questioned if there were any environmental implications. Mr. Robertson responded that it is not in DEP’s first concerns due to everything else going on in the area. Mr. Eisenlohr questioned if there is any kind of insurance policies to assist with emergencies or something like this and Mr. Robertson answered no. Ms. Bratton asked if that’s because it’s an act of nature and Mr. Robertson answered yes but that there may be a FEMA reimbursement of up to 60%. Mr. Gugliotti questioned if there are any other areas that show concern now and Mr. Robertson answered that that had not been
reviewed yet.
VIII. OTHER BUSINESS
Mr. Gugliotti responded that Avon rated very well in the Connecticut ratings- ranking number 3. (Connecticut Magazine)
IX. EXECUTIVE SESSION
The Board did not find an Executive Session was necessary.
X. ADJOURN
On a motion by Mr. Gugliotti, seconded by Mr. Hooper, it was voted:
RESOLVED: That the Board of Finance adjourn at 7:56 p.m.
Messrs. Harrison, Eisenlohr, Speich, Hooper and Mmes. Durdan and Bratton voted in favor.
Respectfully Submitted,
Thomas A. Gugliotti, Secretary
Attest: Amber Lansing, Clerk
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