Work Session
June 18, 2012
Present: Mayor Grenier, Councilors Otis, Remillard, Higbee, Rozek, Nelson and Théberge; absent were Councilors Ducharme and Morgan Allain
Others present included Bob Vachon, Patty Chase, Corinne Cascadden, Bryan Lamirande, Patrick MacQueen, media and public
Mayor Grenier called the meeting to order at 6:30 p.m.
Councilor Rozek moved to add Historical Society Request and information on Speedway proposal to the agenda; Councilor Higbee seconded and the motion carried.
Audit Presentation
Bob Vachon reported that his firm, Vachon, Clukay, provided an unqualified opinion on financial statements for year ending June 30, 2011. Every year they take a fresh look at risk assessment, testing for fraud, and analyzing risk of noncompliance with the City’s internal controls. Berlin Water Works is included in the City’s financial statements; however it is audited by others.
Mr. Vachon reported on the City’s General Fund, and Enterprise Funds. Overall actual revenues exceeded actual expenditures by $856,000. Two material deficiencies were reported and two other tax collection findings were noted in a separate management report. The City had over $6 million in federal funds and there were no federal compliance findings.
It was a difficult audit in part due to the City having three finance directors since 2010. Mr. Vachon acknowledged the work of Blandine Shallow, the former finance director and Patty Chase the current director, to bring the City’s records to auditable condition.
Mayor Grenier asked for Mr. Vachon’s opinion on the general condition of the City and he replied that it is normal to a city of its size and the current director has done a good job at reconciling.
Councilor Théberge asked why the problems in Finance were not detected before and Mr. Vachon noted that when Ms. Shallow was in charge, there were no problems. There was a short time when cash was not reconciled and that problem was dealt with. There is a new finance director and the former director are working together to be sure the department runs smoothly.
Mr. MacQueen questioned a $2.6 million deficit in the unassigned general fund balance and Mr. Vachon clarified that is due to the bond issue. When the bond issue is done, it will be a positive balance.
Mayor Grenier asked if the city would be better served with a 20 year bond to pave city streets. Mr. Vachon established that paving would last for the life of the loan and it would be preferable to bonding $1 million per year provided that the rates were favorable.
Councilor Remillard asked how general fund revenues came in lower than estimated. Mr. Vachon noted that some of the difference is in tax abatements which reduce revenue amounts. Mr. MacQueen added that these are estimates and it is never exact. Mr. Vachon indicated that the differences are within a good range. With his report complete, Mr. Vachon thanked the Council for choosing his firm and he left the meeting at 6:55.
Budget Update
Mr. MacQueen explained that he received bulk purchase fuel oil at a price less than budgeted resulting in a $30,000 savings. He suggested putting the money is street rehabilitation commenting that it does not affect the tax rate.
He presented the Council with a report that implements the changes talked about at previous meetings: positions are reinstated, insurance savings, and a correction due to an omission. Council members conceded that they were amenable to the changes. Mayor Grenier noted that the resolution will need to be amended to accept the changes as presented in Resolution #2012-R2
Mayor Grenier stated that the net effect for street rehab is $280,000 of new money which will do improvements on Hutchins Street. Mr. MacQueen indicated that estimates will be provided. Mayor Grenier added that he does not want to be paving in November.
Councilor Théberge proposed that pedestrians use Hutchins Street and a walkway could be added to increase safety. Councilors Otis and Nelson questioned putting money into improving that portion of Hutchins Street when there will be a major road project there soon and the money could be used somewhere else. Councilors agreed that they would review cost of adding a pedestrian way.
Historical Society
In a letter from Renney Morneau, the Historical Society was asking for an exemption from the fire alarm fee. Mr. MacQueen suggested putting the issue off, noting that there are 30 non-profits who will want the same treatment.
NH Motor Speedway
Mr. MacQueen reported that Scott Spradling from NH Motor Speedway called to inform the City of a promotion for the speedway that will give away $20,000 to one city. A representative of each of the 13 NH cities will draw a driver’s name and the winner will take back $20,000 for a school program of their choice. The event will occur in July.
There being no further business in work session, Mayor Grenier called for a recess until 7:30, the start of the regular meeting.
Respectfully Submitted,
Susan Tremblay
Administrative Assistant
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