Present: Chris Carlin, Paul Desmond, Peter Fimognari, John Goodrich, Bob Margerison, Maureen O’Sullivan, Peter Ross, Jim Pennington, Ann Lee (FinCom Admin. Asst.)
Also Present: Deb Mahar (Town Accountant), Ed Harrison, Carol Woodbury (School Superintendent), Dorothy Jenkins (Town Collector), Marty Harris (Fire Chief), Karen Patenaude, John Morrell (Highway)
Absent: Christine Edwards, Richard Crane
The meeting was convened at 6:30 p.m.
A motion was made, seconded, and SO VOTED to accept the minutes of the 3/7/05 meeting.
CORRESPONDENCE
A letter dated March 2, 2005, was received from Andrew M. and Nick L., students of Mrs. Knight’s Quarry Hill Community School 3rd grade class. They thanked Mr. Carlin and Mr. Goodrich for speaking to their class about the responsibilities of FinCom members.
A lease to purchase proposal for a dump truck was received from John Morrell, Highway Surveyor. He added he is meeting with the company representative March 15 to update the proposal. Mr. Margerison asked if any add-ons could be eliminated by re-using pieces of the truck being replaced, and if the proposed truck was a diesel. Mr. Morrell explained the vehicle being replaced does not even have most of the add-ons. The proposed truck is diesel, and the GVW of the new specs will increase. Mr. Goodrich noted the total interest paid on six trucks would equal the cost of one truck. Mr. Morrell explained, after being questioned, that standard warranty coverage includes 12 months.
A lease payment calculator for a tanker was received from Fire Chief Marty Harris. It compared the costs of three year, five year, and ten year leases at a rate of 6%. Mr. Goodrich asked if the 3500 gallon capacity is adequate. Chief Harris explained that a larger capacity tanker would require too large an engine. The proposed tanker includes a Porta-Bag and is capable of pumping directly from a pond.
Mr. Carlin asked if any members planned to attend the MMA meeting in Amherst on March 31, as all attendees must register. Ms. O’Sullivan plans to attend – Ms. Lee will mail the registration.
Copies of the town by-laws, Article II – Finance Committee, were received by all members. Mr. Carlin stated the committee will return to this matter to give it consideration.
OLD BUSINESS / NEW BUSINESS
Departmental Budgets: Committee members discussed the FY 06 budget and it’s decision at the last meeting to use $480,000 Free Cash in the FY 06 budget. Mr. Goodrich shared a spreadsheet he created to look at potential reductions and determine the amount of the deficit.
Mr. Desmond asked if it within the scope of FinCom to suggest fee increases, in order to avoid having to make cuts. Mr. Carlin answered it is not, but FinCom can make that suggestion to the Board that oversees rates.
Mr. Fimognari noted the following possibilities for reductions to the FY06 requests:
decrease Finance Reserve Fund by $50,000
decrease land acquisition for conservation from $1,000 to $500
have School fund entire SRO position
decrease the library to the FY 04 figure – as they can file a waiver
decrease building site inspector from $2000 to $500
Mr. Goodrich added the $6000 requested to upgrade assessors’ computer software can be removed if it will be funded under the proposed capital purchase plan. Mr. Carlin asked if the $50,000 Reserve Fund reduction would be used elsewhere; Mr. Fimognari said it would. Ms. Mahar explained the School could not entirely fund the SRO because the officer does not work exclusively for the School; Mr. Fimognari suggested the School could fund two-thirds of it.
Mr. Ross wondered if departments took fuel cost increases into effect when doing their FY06 budgets. Mr. Morrell answered he did not. Ms. Mahar stated departments did not and added she will give FinCom requests for fuel bills to be paid out of the Reserve Fund at the end of March. This led to a discussion about fuel costs for FY06.
FY 06 Fuel Budgets: Ms. Mahar explained the School reported at its last Info Share meeting that its FY05 fuel budget will be short. Mr. Fimognari feels that should be part of the FY05 NSS, because if the town gives the School additional money for fuel for FY05, it will in essence fund above NSS. Mr. Carlin asked Mr. Goodrich if the Schools budgeted for an FY06 fuel cost increase. Ms. Mahar said she believes they did what everyone else did – did not allow for the fuel cost increase. Mr. Goodrich said he stated at the last Info Share meeting the energy fund was intended for FY 05 only, and FinCom does not anticipate having such a fund in FY06. Ms. O’Sullivan wondered if other departments budgeted for FY06 increases. Mr. Carlin noted the even greater fuel price
volatility expected this year. Mr. Goodrich felt that department heads, knowing and expecting an increase in fuel costs, need to budget by moving funds in order to maintain level funding. Mr. Goodrich expressed concern over departments’ most likely confusion. Mr. Morrell added he understood the utility reserve would be available; he was not told to level fund and absorb fuel costs. Mr. Margerison stated he is concerned departments will fill their tanks at the end of the heating season, and spend the entire $100,000 reserve.
Ms. Mahar asked if FinCom will discuss energy line items for each department once it is known how much each department uses this year. She began to ask if it is fair to ask the School to absorb fuel costs, but Mr. Carlin stated the School has a NSS number, and received an increase, where other departments do not get looked at the same way, and said it is like comparing apples to oranges. Ms. Patenaude was recognized. She explained net NSS increase is $340,000, $299,000 of which is needed to cover step raise increases. Fixed costs are greater than the balance of the NSS net increase. The school’s FY06 budget is level funded for electricity, oil and gas, and is still $36,000 over NSS, with no ideas where else to cut. Mr. Ross stated he appreciated the School’s position, and
added the department has not controlled growth. He believes the school should have planned ahead when it received the message last year, and not created new positions. Ms. Patenaude said the School Committee can not micro manage the department.
Mr. Goodrich suggested FinCom determine departments’ fuel costs for this year, and increase fuel line items by appropriate amounts for next year, using the utility reserve.
Snow and Ice Fund: Mr. Goodrich stated he realizes once the account is increased, it can not be decreased. However, the year’s first order for salt, at $86,000, exceeded the year’s allocation. He felt it would be sensible to increase that line item to $80,000 to $100,000. Mr. Carlin clarified that Snow and Ice funds not spent revert to the General Fund. Mr. Morrell explained that FinCom should be aware that the Snow and Ice fund now pays for overtime and plow blades. Mr. Carlin suggested looking at the account long term, and increasing it by $10,00 each year for four years. Mr. Morrell clarified that, by law, the town has to appropriate at least an amount equal to the previous year, or it can not deficit spend. Ms. O’Sullivan asked what the Highway’s “road machinery” and “emergency repairs” accounts covers. Mr. Morrell explained “machinery” pays for maintenance of the approximately 32 vehicles, and “repairs” pays for cave-ins; potholes are covered under regular maintenance.
Pathfinder for FY06: Mr. Ross mentioned we still do not have Pathfinder’s number for FY06. Ms. Mahar stated she had gotten the number that day, and it would be $772,000. The assessment may go down, but won’t go up. A credit of $45,000 for FY05 will revert to Free Cash. Mr. Fimognari will attend the Pathfinder meeting March 15.
Free Cash to be used FY06: Mr. Ross expressed concern over using the voted upon $480,000 Free Cash for FY06. He noted the amount is $100,000 over the amount used last year, and it is highly unrealistic Free Cash will be replenished by that amount. Mr. Goodrich added better budgeting will erode Free Cash replenishment. Mr. Ross wished to re-visit the Free Cash discussion. Ms. O’Sullivan stated FinCom should speak to Selectmen and department heads, and tell them our concerns. We are failing to fund capital, and now need to use the Stabilization Fund to do so. Mr. Ross stated that we have the money now, and to not use it would put greater burdens on departments, reduce services and possibly force layoffs. Mr. Carlin added it has been three years of asking departments to
level fund, and to ask for cuts now when we have the Free Cash is very difficult. Mr. Ross brought up the “elephant in the room”, and stated that if he were a School Committee member, he would ask for additional funding at the Town Meeting, and point to Free Cash. Mr. Goodrich said he feels the School will come forward at $36,000 above NSS. He related the Superintendent was told to present a budget at NSS, and came back with $36,000 above. She was sent back by a 3-2 vote and told to budget to NSS, and came back at $36,000 above. Ms. Patenaude explained that signifies the cutting of five positions that have the least impact to students.
Mr. Ross noted it seems we always spend more money at the Town Meeting. Ms. Mahar explained that when that has been done, it was because Monson received more revenue from the state. The only additional Free Cash used at Town Meeting was $65,000 for Debt Reserve. Mr. Goodrich asked if there is a state mandate that additional state revenue must be spent in the year received. Ms. Mahar explained it depends on state mandates. Ms. O’Sullivan mentioned FinCom could make a commitment to put any state revenue back into the Stabilization Fund.
Mr. Carlin added the Town Meeting could be a time to settle negotiated contracts. Mr. Goodrich asked why FinCom members believe a salary increase automatically means a need for additional money. It could also mean layoffs. Mr. Ross noted FinCom voted to use $480,000 Free Cash last week because no one wanted to make those cuts. Mr. Margerison stated it is not FinCom’s money, it is the townspeople’s money. FinCom should tell them if they spend it, they face possible drastic reductions in the future.
Mr. Pennington stated he disagrees with Mr. Margerison, and that it is fiscally irresponsible to spend money because we have it. He felt increasing Free Cash leads to inevitable drastic cuts, and is only a “band-aid.” He added the School has not over the years tried to maintain and keep costs down. He asked if there is an energy conservation plan in place across town, and if every department has done everything they can to keep costs down. Those who have should be rewarded; yet we keep supplying those who don’t cut back. He is not in favor of layoffs, but feels easing into it may be better.
Mr. Carlin stated that unless there is a new motion, FinCom needs to move forward using $480,000 Free Cash.
Mr. Ross motioned to use $384,000 Free Cash in FY06. Mr. Pennington seconded it for discussion purposes.
The committee discussed the Free Cash used at 2 STM’s in FY05.
$26,000 vocational student
$20,000 circuit breaker
$19,000 health insurance
$ 8,000 FICA
$20,000 miscellaneous departments
The committee voted as follows:
Mr. Carlin no Mr. Fimognari no
Mr. Margerison no Mr. Ross yes
Mr. Desmond no Mr. Pennington yes
Mr. Goodrich no Ms. O’Sullivan yes
The motion DOES NOT pass.
Mr. Goodrich motioned to use $415,000 Free Cash in FY06. Ms. O’Sullivan seconded it for discussion purposes.
Mr. Goodrich discussed his worksheet. He explained to the committee his recommended reductions.
The committee voted as follows:
Mr. Carlin no Mr. Fimognari no
Mr. Margerison no Mr. Ross no
Mr. Desmond no Mr. Pennington yes
Mr. Goodrich yes Ms. O’Sullivan yes
The motion DOES NOT pass.
Mr. Carlin told FinCom to keep in mind the “clock is ticking, and we need to move forward.” The next Selectmen’s meeting is March 22, 2005.
Ms. Patenaude asked if FinCom expects the School to increase budgeted fuel costs and maintain NSS. Mr. Carlin explained there is not yet a definitive answer.
Capital Funding Proposal: Mr. Ross motioned FinCom recommend approving the Capital Funding Plan presented by Ms. Neggers at the March 8 meeting. Mr. Desmond seconded it. Mr. Margerison stated he understood there is an agreement with the Board of Selectmen that they are to come to FinCom with recommendations such as the capital plan. The committee responded Ms. Neggers did that. Mr. Fimognari stated he doesn’t question the need, he questions the timing. Mr. Harrison noted the Selectmen thought it would be difficult to justify layoffs, etc., if townspeople are aware of the money in the Stabilization Fund. Mr. Pennington questioned the sidewalk repairs and the emergency exit work. He felt they should be ongoing maintenance, which he believes the School does not do.
Mr. Goodrich explained it is an upgrade to the emergency exit system. Mr. Pennington stated Mr. Morrell maintains his vehicles, but the School does not fix broken items. Mr. Pennington states he disagrees only with some parts of the Capital Funding Proposal.
The committee voted as follows:
Mr. Carlin yes Mr. Fimognari yes
Mr. Margerison yes Mr. Ross yes
Mr. Desmond yes Mr. Pennington no
Mr. Goodrich no Ms. O’Sullivan yes
Highway Department Snow & Ice Removal: The Snow & Ice removal account needs additional funds. Mr. Fimognari 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.
Bill Payable: A motion was made, seconded and SO VOTED to pay $8.50 for FinCom’s portion of a bill for copy paper.
Mr. Carlin will not attend the next three meetings. Mr. Fimognari will facilitate the FinCom meetings.
The next scheduled meeting of the Finance Committee is March 21, 2005 at 6:30 p.m. at the Town Accountant’s Office.
The meeting was adjourned at 8:50 p.m.
Respectfully submitted,
Ann M. Lee
Administrative Assistant to the Finance Committee
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