BOARD OF FINANCE
MINUTES
MONDAY, July 23, 2012
I. CALL TO ORDER
Chairman Thomas Harrison called the Board of Finance meeting to order at 7:00 PM at the Avon Town Hall. Members present: Chairman Thomas Harrison, Vice Chairman / Secretary Thomas Gugliotti, Margaret Bratton, Catherine Durdan, Dean Hamilton and Brian Stoll. James Speich was absent. There was the presence of a quorum.
II. PLEDGE OF ALLEGIANCE
The Pledge of Allegiance was led by Thomas Harrison
III. COMMUNICATION FROM THE AUDIENCE:
Peggy Roell stated the new software processed the first payroll with auto deposits and everything is going well. Custodian negotiations are just about completed.
IV. MINUTES OF PRECEDING MEETINGS:
June 25, 2012
Section III, page 1, 3rd paragraph, 3rd line: change to read – as our
Section V, page 5, 2nd paragraph, 7th line: correct punctuation
Section V, page 5, 6th paragraph, 1st line: correct spelling to statute
Section V, page 5, 7th paragraph, 3rd line: change to read – criterion mentioned
Section V, page 6, 1st paragraph, 1st line: correct punctuation
Section V, page 6, 2nd paragraph, 5th line: correct spelling to statute, change “is” to “are”
Section V, page 6, 6th paragraph, line 5 & 13: correct spelling to counsel
Section VI, page 7, 3rd paragraph, 1st line: delete: “the”, add “which”
Section VI, page 8, 1st paragraph, 1st line: correct punctuation, add “and”
On a motion by Mr. Gugliotti, seconded by Ms. Bratton, it was voted:
RESOLVED: That the Board of Finance approve the minutes as amended.
Messrs. Harrison, Stoll, Gugliotti, Hamilton and Mmes. Durdan and Bratton voted in favor.
As a follow up to last month’s discussion on the level of detail provided in the minutes, Mr. Robertson consulted with our town attorney who verified that with respect to the annual town meeting there is neither a FOIA nor a Roberts Rule’s requirement that transcripts be kept of municipal meetings. There is nothing in Avon’s Charter or Code of Ordinances that refers to transcripts or recordings of meetings. The FOIA position is that minutes must reflect all votes and should discuss generally all subjects discussed at the meeting. The level of detail will be at the discretion of the recording clerk.
V. NEW BUSINESS
12/13-01 Board of Education: Supplemental Appropriation Request, $50,688.27 (unbudgeted revenue)
Mr. Robertson stated this is similar to the requests we have previously received to realign accounts. There is expected to be one more.
On a motion by Mr. Gugliotti, seconded by Mr. Hamilton, it was voted:
RESOLVED: That the Board of Finance hereby amends the FY 11/12 Budget by increasing:
REVENUES
General Fund, Charges for Services, BOE Employee Bnft Contrib, Dent/Life, Account #01-0340-43505 in the amount of $18,517.27; General Fund, Charges for Services, BOE Tuition Receipts-Parent Paid, Account #01-0340-43507 in the amount of $2,800.00; General Fund, Charges for Services, BOE Education Program Grants, Account #01-0330-43343 in the amount of $22,371.00; General Fund, Charges for Services, BOE TEAM Mentor Prog. State Pmts, Account #01-0340-43509 in the amount of $7,000, for a total of $50,688.27.
and increasing
APPROPRIATIONS
General Fund, Board of Education, General Service, Account #01-9401-52185 in the amount of $50,688.27, for the purpose of recording unbudgeted revenues received to cover Board of Education operating expenditures.
Messrs. Harrison, Stoll, Gugliotti, Hamilton and Mmes. Durdan and Bratton voted in favor.
VI. TOWN MANAGER”S REPORT
A. Monthly Financial Report Summary
Mr. Robertson stated under revenue highlights, property tax assessments show nothing out of the ordinary. On foreclosure activity, we are behind where we were last year, 7 versus 11. We are also behind in regards to Lis Pendis. These are good trends. Licenses, Fees & Permits are one of our larger revenue categories. This is where we account for conveyance tax receipts and building permits fees. We are running at 114% collected for the year. One area where we see strong activity is in building structures and equipment where we are tracking at 137% vs 108% for May of last year. This is due to a couple of reasons. While we are not seeing the same activity we have in the past with respect to new housing permits, we are seeing a great deal of renovation/addition work, all kinds of work that requires
permits. Generators have seen a large increase since the first of the year.
Intergovernmental is also running ahead of last year at 124%. Reasons include FEMA reimbursements that are currently pending and smaller reimbursements related to storm Irene have been received, but not yet appropriated. That will occur during the year end process. BOE supplementals are also included in this account.
Charges for services are running behind. This account includes items such as landfill permits, library fees, sewer fees, etc. This may be due to a timing issue.
Other local revenues are at 55%. In fiscal year 11/12 we received a number of unexpected one time revenues, for example a 40K – 50K lump sum transfer of 401K monies (unvested employee contributions) that had accrued over a large number of years. Low interest rates are also a negative factor.
At the end of May, the estimated, unaudited, unassigned fund balance is 8.64% which is consistent with the recommendation of our fund advisor. Knowing we have a bond sale in October, we have really limited supplemental appropriations from unassigned fund balance. For the year we have appropriated $85,000.
There is nothing out of the ordinary on the expenditure side. Everything is tracking as anticipated. The legal expenses have leveled off. There were fairly significant expenses incurred as a result of a case involving tree cutting on town property. That case has been settled. The town will be reimbursed legal fees as a result. That will show as a year-end journal entry.
We have submitted all of our paperwork to FEMA on debris collection. The total calculated was $2.61M. If all goes as anticipated, our reimbursement will be at $2.2M. Our public works director was diligent in accounting for including all eligible costs. A secondary application will be going to the Federal Highway Administration, for state roads in Avon, and those will be reimbursed at 100%. It is a small number of mileage, but the reimbursement rate is higher.
Mr. Harrison asked how the FEMA reimbursement will be booked when it is received. Mr. Robertson stated it is an extraordinary entry. Expense entries were coded in the general ledger for public works as other projects. The BOE had submitted expenses of $88,000. There will be discussions as to how to apply the reimbursement to make the budgets whole. The balance will remain in general ledger unassigned, undesignated fund balance.
Mr. Harrison asked how collections are proceeding for the first half of tax payments. Mr. Robertson stated that traffic was good and that there are no anticipated issues.
B. Miscellaneous Updates
Mr. Robertson reported, in a memo from John Spang, Interim Director of Finance & Operations for the BOE, the BOE has approved the request for the Board of Finance to consider establishing a reserve account for school budgets funds pursuant to CGS 10-248a.
This is relatively recent statutory language, enacted in 2010 or 2011. It allows for the Board of Finance to establish an account that could be used for the deposit of funds that are left in the Board of Education’s General Fund Operating Budget for the prior fiscal year, in an amount not to exceed 1% of the prior fiscal year’s operating budget. The statute is very brief. It is 2 paragraphs and doesn’t provide a lot of guidance.
We have a research request out to CCM (Connecticut Conference of Municipalities), to look at the mechanics. Ms. Colligan is going to have a conversation with our auditors. Our auditor in charge at Blum Shapiro has not had any experience with it, but one of the partners has. He is currently on vacation. It has also been sent over to the town attorney for review. He has been asked to give a legal opinion on it, provide background on the statute, and to make sure there are no conflicts with the Town Charter.
It is anticipated that this will be on a future agenda. There is a significant amount of background information that is being put together.
A board member asked that if funds are not encumbered, where does it currently go. Mr. Robertson stated there are several options. After all year end entries are complete, then it will close to the town’s undesignated fund balance, unless it journalized out or in a capital fund.
Mr. Stoll asked how the Board of Ed would access this fund if we do go down this path. Mr. Robertson replied that that is part of what is in question. The statute doesn’t provide any guidance. It simply states that it can be established. For instance, the BOF has a policy statement with respect to accessing unassigned fund balance. It has to be extraordinary, a series of circumstances under which the BOF will consider it, and it has to be approved by both the Town Council and the Board. The argument can be put whatever policies around it that you want. Mr. Stoll asked Mr. Robertson in conjunction with the other research being conducted, if he would also include information on how other towns provide access to the fund, as well as, how it gets established. Mr. Robertson stated that the CCM has research on this and
they are working on it for us.
Mr. Robertson announced that we just received the award from the Government Finance Officers of America. Avon has been awarded a distinguished presentation award for (CAFR) Comprehensive Annual Financial Report for the 2011 version. This is about 29 in a row. We have come to expect it, but Ms. Cooligan works hard for this. Mr. Gugliotti and the Board would like to recognize the special work and accomplishment of Ms. Cooligan, Mr. Robertson and his office and express their thanks.
Mr. Harrison asked Mr. Robertson to provide an update on a request from the last meeting on a 5 year growth outlook as the Board prepares for the September pre-board meeting. Mr. Robertson stated a couple of years ago a State of the Town presentation was made in February, well into the budget process. Many found the information useful, but the timing wasn’t great. It would be more useful at the front end of the budget process. We have not started on this yet, but our intent is to give the boards some idea where we are and where we are going in respect to revenue trends and what is going on in the development area. Mr. Harrison asked if it will look at non property tax revenue. Mr. Robertson said yes it will be addressed, but that it is expected to stay the same. The property tax is the most volatile variable. There are currently no legislative changes planned for conveyance tax fees.
Mr. Stoll asked for confirmation that expectations in regards to reevaluation will be built into the 5 year outlook being prepared for September. Mr. Robertson said he will be talking with the assessor to determine how it will be treated, but it will be mentioned. Reevaluation is scheduled to hit the October 2013 Grand List, so it will be effective for Fiscal Year 2014-2015 operating budget.
VII. OTHER BUSINESS
Mr. Gugliotti sent an e-mail to Ms. Santiago, our counsel from Shipman Goodwin, to clarify the parameters for reporting guidelines to the board during the negotiating sessions. It was confirmed that during the process all details should be held confidential. There is no law that relates to this, but good practice dictates that general information will be provided in executive session.
An organizational session meeting was held on July 9 among Mr. Mala, the negotiating team - Ms. Shea, Ms. Howard and Mr. Stokesbury, members of the Board of Finance and Mr. Gugliotti as an observer. The first negotiating session with the Union will be tomorrow. It will be a procedural meeting to establish ground rules, among them – what can people talk about with the public. There is a four part process going forward; Negotiate, Mediate, Arbitrate, Court. August 8, August 30, and September 10 are negotiating sessions. September 24 has already been set as a mediation date in case we don’t negotiate to a conclusion. The mediator has been pre-selected for the meeting, if needed.
The July 9th meeting was the statutory, obligatory meeting where the Board of Finance is supposed to give a State of Local Government to the BOE negotiating team, so they can take it all into account as they enter into their negotiations. Mr. Harrison gave a very encyclopedic evaluation of what is going on in the town. He did a great job.
VIII. EXECUTIVE SESSION: Heart & Hypertension
On a motion by Mr. Gugliotti, seconded by Ms. Bratton, it was voted:
RESOLVED: That the Board of Finance go into executive session at 8:00 pm.
Messrs. Harrison, Stoll, Gugliotti, Hamilton and Mmes. Durdan and Bratton voted in favor.
At 8:15 pm the Board concluded the session.
On a motion by Ms. Bratton, seconded by Mr. Stoll, it was voted:
RESOLVED: That the Board of Finance hereby appropriates a sum not to exceed $175,000 from General Fund, Other Financing Sources, Unassigned Fund Balance, Account #01-0390-43913, to General Fund, Claims & Losses, Services- Other, Account #01-8101-52189 for the purpose of paying a claim under the State’s Heart & Hypertension Laws.
Messrs. Harrison, Stoll, Gugliotti, Hamilton and Mmes. Durdan and Bratton voted in favor.
IX. ADJOURN
On a motion by Mr. Gugliotti, seconded by Mr. Harrison, it was voted:
RESOLVED: That the Board of Finance adjourn the meeting at 8:20 p.m.
Messrs. Harrison, Stoll, Gugliotti, Hamilton and Mmes. Durdan and Bratton voted in favor.
Respectfully Submitted,
Thomas A. Gugliotti, Secretary
Attest: Mary Marinello, Clerk
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