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Present: Chris Carlin, Richard Crane, Paul Desmond, Christine Edwards, Peter Fimognari, John Goodrich, Michael Laferriere, Bob Margerison, Maureen O’Sullivan, Peter Ross, Ann Lee (FinCom Admin. Asst.)
Also Present: Gretchen Neggers (Town Administrator), Deb Mahar (Town Accountant), Ed Harrison, Carol Woodbury (School Superintendent), Dorothy Jenkins (Town Collector), Donna Hall Adams, Nicole Souci (Journal reporter)
Absent: Jim Pennington
The meeting was convened at 6:30 p.m.
A correction to the minutes of February 7 was made: Peter Ross was not present at that meeting.
CORRESPONDENCE
The latest copy of The Beacon was received. It is on file.
OLD BUSINESS / NEW BUSINESS
Fiscal Year 2006 Budget Worksheet: Deb Mahar presented a budget worksheet to the committee (see attached).
Local receipts include Motor Vehicle taxes of approximately $1 million. The House 1 budget did not include the debt for the school, but Ms. Mahar did include it in the worksheet. She used last year’s Free Cash number. Ambulance receipts are reserved for appropriation. Mr. Ross mentioned he had spoken to Chief Harris, who thought the extra money needed by the ambulance for FY 06 would be available in ambulance receipts by the end of FY 05. Ms. Mahar explained it has to be in the account by the end of April to be included in the FY 06 budget.
The Snow and Ice account needs another $50,000, as $47,000 of the last appropriation of $50,000 has been used.
Based on the worksheet, the amount of Free Cash needed equals $384,300 used in FY05, plus an additional $157,364, totaling $541,664.
Any figures that are bold, Ms. Mahar changed to reflect the salary grid, including step increases, but based on FY 2005 rates. There is no contractual percentage increase included in these calculations. The School budget is the NSS figure, and Transportation is level funded.
Mr. Carlin asked Ms. Mahar to provide what a 1%, 2% and 3% salary increase would be for the police, AFSCME and school personnel. Ms. Mahar can give the figure for 1%, and FinCom can calculate the others. Mr. Goodrich questioned if that would be “sending a signal”, but there seemed to be no concern among members. Mr. Margerison asked if he could get a breakdown of how much Department Head salaries have increased over years.
Ms. Mahar continued that she level funded the Library, but the department needs an increase in order to meet standards. Pathfinder is level funded to the nearest $1000, and there is a little money left in the current year.
Mr. Margerison questioned the debt figure. He noted it seems there is almost $48,000 less this year. Ms. Mahar said this is not so.
Mr. Ross questioned if his impression of the substantial swing in the tax rate is correct. Ms. Mahar explained that Monson received the money for Granite Valley in 2005, two years earlier than expected. DOR would not certify the tax rate in 2005 including that money; the tax rate was certified higher. The Debt Escrow account has approximately $800,000, which DOR insists must be used in FY 2006, effectively lowering the tax rate. The “spike” will appear in 2007, when the rate goes back up. Mr. Goodrich asked if the overall revenue generated from taxes is affected, and expressed concern over the appearance of a large tax hike. Ms. Mahar answered revenue will generally be “in line”, and the increase will not be “massive.” Mr. Margerison asked Ms.
Neggers if there is any way to re-visit the Debt Escrow money. She explained it is law. Mr. Fimognari agreed the law is in place to protect the taxpayers.
Mr. Ross noted the accounts for FY 06 which are likely to need additional funds, namely Pathfinder, contractual negotiations, Snow and Ice, and the Margaret Street landfill project, all of which are estimates as of the time of this spreadsheet. Ms. Neggers explained the landfill project is currently funded separately from the budget, but within the next few years will become a standard line item. Ms. Mahar added any critical capital that may be needed has not been figured in, the School is funded at NSS, and Transportation is level funded, which won’t meet needs. Mr. Ross noted the $541,000 needed from Free Cash could potentially become a larger number. Ms. Mahar answered it depends on what is funded. Mr. Carlin noted the current $200,000 deficit spending for Snow and Ice, and the
additional money needed for the landfill, and Mr. Ross added the Ambulance needs additional funds and the SRO position needs to be funded. Ms. Mahar reminded the committee the ambulance figure in this spreadsheet covers only current services, and the SRO salary is figured into police salaries, but the School contributes $20,000.
Mr. Carlin suggested getting the discussion away from line items, and looking at a broader picture. He asked Ms. Neggers if she has any information she can share regarding any attempts by the Selectmen or any other office to enhance revenues. She answered she has asked department heads to look at revenues. She also noted Ed Harrison is looking at ways to attract industrial development. Mr. Carlin asked Mr. Harrison if vacant industrial buildings generate revenue. Mr. Harrison answered they do, but less than occupied ones. Ms. Neggers explained the owner of the Zero Corp. building is trying to market it, but being based in California makes the process difficult.
Ms. Neggers went on to say that revenue can be raised by state aid, or, at the local level, by a vote to raise taxes. Other than that, the town is forced to lower expenditures. Mr. Margerison noted the idea of an override for three years only. Ms. Neggers explained that could only be done for capital expenditures. She addressed Mr. Carlin, saying that the current information is not encouraging, and that FinCom should alert the Selectmen, School, and department heads of the possibility of cuts. Mr. Goodrich noted it is within FinCom’s power to ask these groups to meet to discuss the budget. Mr. Carlin felt FinCom would have to have a strong, definitive plan in place to present to the group. Mr. Goodrich felt that until department heads take action, FinCom could not have a
clear plan. Mr. Ross asked Ms. Neggers if it would be beneficial to present this spreadsheet to department heads. She agreed it would, and suggested seeing what impact a $157,000 reduction would have on departments. She expects initial dismay, but then a team effort on the part of department heads, after giving them time to decide where to recommend cuts. She added voters become annoyed if not alerted to issues and allowed to decide. Mr. Carlin mentioned this confirms Mr. Goodrich’s suggested direction.
Mr. Carlin asked the amount of certified Free Cash. Ms. Mahar answered it was $773,000, but $65,000 was used. She added that $290,000 is earmarked for bond premium. Mr. Carlin, Mr. Ross and Mr. Goodrich discussed this, and Mr. Goodrich reminded the committee they decided to leave $290,000 in Free Cash last year for this purpose. Mr. Carlin noted it was placed there to satisfy the financial obligation, and, if used, will not be available when the payment is due.
The committee again discussed inviting department heads to meet to discuss the budget. They meet the 4th Wednesday of every month. Ms. Neggers reminded everyone of the importance of formally communicating with the BOS as well. She asked Mr. Carlin when FinCom plans to make a decision on how much Free Cash to use for FY06. He responded FinCom is not yet ready. He asked everyone his/her opinion. Mr. Ross wants time to study the worksheet. Mr. Goodrich, Mr. Desmond and Ms. O’Sullivan are unsure. Mr. Crane feels the minimum is $384,000. Mr. Margerison wants to know if everyone is in agreement about not using the bond premium portion. Ms. Edwards is not prepared to address the issue at this time. Mr. Goodrich asked if there would be any
additional funds added to Free Cash in FY05, and if so, the estimated amount. Ms. Mahar and Ms. Neggers said possibly a small, unknown amount.
Mr. Ross questioned why Free Cash should be the place to start to correct a structural deficit. Mr. Carlin responded that Free Cash has been incorporated into the budget for the last ten years.
Mr. Margerison motioned to ADJOURN at 8:05 P.M. The motion was not seconded.
Mr. Carlin summarized tonight’s meeting. FinCom should take the time necessary to digest the spreadsheet information before making any decisions regarding cuts. The committee does not have enough lead time to make a valuable contribution to the department head meeting February 23. FinCom can meet with department heads at their March meeting, or invite them to an earlier meeting if decided. Suggestions for budget cuts, and prioritization of departmental needs, can take place at the next FinCom meeting. Also, FinCom should share the spreadsheet information with the BOS at their March meeting. Ms. Neggers said she e-mailed the BOS today after completing the spreadsheet with Ms. Mahar, and related “we’re in the cutting zone.”
Highway Department Snow & Ice Removal: The Snow & Ice removal account needs additional funds. Ms. O’Sullivan motioned to allow the Highway Department to deficit spend for $50,00, the motion was seconded, and SO APPROVED. It was signed by all members present.
Utility Reserve Fund Transfer Request: A Request For Transfer from the Utility Reserve Fund was submitted by Gretchen Neggers, Town Administrator, dated February 14, 2005, in the amount of $2000 to be transferred to the Public Building Maintenance account. This is to pay for heating costs at Memorial Hall. The transfer is needed because of the increased price of oil combined with the flat revenues for the rental of the hall. Ms. O’Sullivan motioned; it was seconded, and SO VOTED unanimously to approve the request. It was signed by all members present.
The next scheduled meeting of the Finance Committee is February 28, 2005 at 6:30 p.m. at the Town Accountant’s Office.
The meeting was adjourned at 8:20 p.m.
Respectfully submitted,
Ann M. Lee
Administrative Assistant to the Finance Committee
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