FINANCE COMMITTEE
Town of Becket
557 Main Street
Becket, MA 01223
Minutes for Wednesday, August 22, 2012
Call to Order: 1:00 PM
Present: Ann Spadafora (AS); Dan Parnell (DP); Maria Wallington (MW); Jeremy Dunn (JD)’ Jeanne Prior (SelectBoard (SB)) (JP).
Absent: Steve LaBelle’
Special Guest: Jim Podolak, Becket liaison to State DOR
Public Present: None
AGENDA
- FinCom will meet with Jim Podolak from the D.O.R. prior to regular FinCom meeting to hear his perspective on Enterprize Funds (EF) and OPEB - ‘other post employment benefits’ - issues)
Enterprise Fund Overview – separate set of books for transparency and excess revenues over expenses stay within the fund. A set of questions were forwarded ahead of time for discussion at the meeting.
- What is the process and governing rules about the use of Enterprise generated revenues. If revenues are estimated for the following year and there is an overage is there any process to appropriate these or is it necessary to wait for them to be certified as Free Cash. What if there is an underage of revenues for the year causing a deficit in the Enterprise Fund for a given year.
Revenue use for the coming year has to be appropriated before the Tax Rate is set for the town through the ATM or an STM. Once the tax rate is set any excess revenues will flow towards the Free Cash calculation for the Enterprise Fund after the year is closed. If there is a revenue shortfall it too will close out to Free Cash after the year is closed. Excess Free Cash becomes Retained Earnings of the fund.
B. If expenses are exceeded in a budget year what are the options to cover these shortfalls, Free Cash, Transfers from other Town budgeted areas with excess budgets after May 1st , excess revenues over appropriations of the EF for the current year.
Transfers within the EF accounts or Interdepartmental transfers within the Town Budget during the last 2 months of the year. Available Certified Free Cash can also be used through an approved Article at the ATM or an STM.
C. What governing body oversees these processes? Town Administrator, Select Board, Finance Committee, Voters?? Same as other Town Departments.
D. How can certified Free Cash of the Enterprise Fund be used and under what time frames. Free Cash once certified becomes the EF Retained Earnings and can be used the same as Free Cash for the Town but it must stay within the EF. It can be used as a designated reserve for future needs such as Major Equipment Purchases through an establishment of a Stabilization Fund (recommended to keep the Stabilization Fund a general fund for flexibility) or it can be used to lower the cost of subsidization from the town or a combination of the above.
E. OPEB – (other post employment benefits ) - There was not much information on this at this time. Jim brought some handouts for additional information. It was noted that if a reserve is set up by the town for future OPEB liabilities and it is titled as such, it can only be accessed for OPEB liabilities. The best way to handle for flexibility purposes is to contain the reserve as part of the general stabilization reserve. There is not an established 3rd party fund such as the Retirement Fund so any monies set aside could only be invested as the Treasurer would invest.
Some additional information concerning the calculation of the liability: If Section 32B of the Mass General Statutes has been voted by the town then post employment benefits must be paid. A section 9A vote would require a 50% of benefits payment and a Section 9E vote would allow a higher % coverage for employees. The open question was what Becket has approved. Also under Section 18 of 32B all municipal eligible retirees must enroll in Medicare Part B when eligible.
F. A discussion about the transfer guidelines for year end transfers occurred. The amount that can be transferred is calculated on the Account being transferred out of. The total of all transfers from that account are limited for the 2 month period to 3% of the account or $5,000, whichever is greatest.
- Review and approve minutes for meeting of July 11, 2012
Motion: JD Second: AS All Approved
- Correspondence and transfers
Craig was not available. See attached memo from Craig for updates.
- Town Administrator updates
- Craig was not available. See attached memo from Craig for updates.
- Discuss Police Dept budget from ATM
No discussion
Update on employee wage data entry and access to other towns’ data.
Craig was not available. See attached memo from Craig for updates. Discussed how a survey could be completed if Craig cannot accomplish. Possibly hire a consultant to conduct. FC will write a letter to the SB asking for guidance since there is not a budget for expense as it was assumed the town would get this through their MMAAA membership. It is felt it is important to get this survey updated as much has changed since the last survey was done 10 years ago. @ members of the FC will attend the next SB meeting.
- Discussion re Bylaws governing the budget process & timeline
Tabled
- Any other business - None
- Public Input - None
Adjourn: 3:22 PM
Respectfully submitted by Dan Parnell
Approved by: Steve LaBelle – Chair _________________________________________
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