Present: Chris Carlin, Tina Augustin, Paul Desmond, Christine Edwards, Peter Fimognari, John Goodrich, Joel Keller, Bob Margerison, Maureen O’Sullivan, Jim Pennington, Pete Ross, Ann Lee (FinCom Admin. Asst.)
Also Present: Gretchen Neggers (Town Administrator), Deb Mahar (Town Accountant),
Ed Harrison (Selectman)
Absent: n/a
The meeting was convened at 6:30 p.m.
A motion was made to accept the minutes of the 7-11-05 meeting as written. Marty Gilmore, Assistant Town Account, will be added to the “Also Present” section. It was seconded and SO VOTED.
CORRESPONDENCE
A letter dated September 1, 2005 was received from the Association of Town Finance Committees, inviting FinCom members to attend the 2005 Annual Meeting on November 5, 2205. Committee members will e-mail Ms. Lee if they plan to attend.
A memo dated August 15, 2005 was received from Gretchen Neggers, Town Administrator. Because of substantial increases in fuel costs Monson is facing a significant shortfall. Ms. Neggers requested all departments immediately implement all realistic conservation measures. A list of gasoline conservation tips was attached.
A copy of “What are Requirements for Meeting Minutes?” from the Municipal Advocate, Vol.22, No. 1 was given to each member. FinCom is meeting all requirements.
Copies of the Expense Ledger Variance for end date 6-30-05 and end date 7-31-05 were received. A total of $18,534.12 was returned to the General Fund at the end of FY05 from the following accounts:
FC Reserve Fund
FC Utility Reserve Fund
FC Expenses
FC Other Charges
FC Salaries
Ambulance Account memo
Water Sewer account memo
ealth HH
OLD BUSINESS / NEW BUSINESS
Filling Oil Tanks in FY05: Mr. Fimognari complemented Ms. Mahar’s recommendation to fill the Schools’ oil tanks at the end of June. With the escalation of energy costs, it was a wise decision.
Fiscal Update from Ms. Neggers: Ms. Neggers presented the following information:
State assessments - e.g. pensions, RMV fees, on the Cherry Sheet - increased, creating a budget deficit of approximately $17,000
In early August, it became apparent there was a shortfall - which has since increased - in the account for the purchase of petroleum products. The FY06 gasoline and diesel budget is equal to the amount spent in FY05. Using prices as of August 16 - diesel @ $2.45 and gasoline @ $2.31 - the deficit would be approximately $38,000. Making that more current - assuming a 60% increase over FY05 – increases the deficit to approximately $58,000. The FY06 heating budget is equal to the FY05 budget increased by 10%. The FY06 budgeted amount will not even cover the amount expended in FY05. Ms. Neggers reminded FinCom that the FY06 budget was compiled before all fuel bills were known for FY05. For that reason, it would have been impossible to know total expenditures
for FY05. Assuming a 35% increase in heating costs over FY05 – not counting the Schools – creates a heating budget shortfall of approximately $27,000 for FY06. The total shortage expected in the purchase of petroleum products account - $38,000 plus $27,000 – is $65,000.
The School Transportation budget for FY06 assumed gasoline cost at $2.25/gallon. The expected shortfall is approximately $8,000
Total Energy shortfall is expected to be between $73,000 to $93,000:
The approximate $17,000 in additional assessment on the Cherry Sheet must be added to the above total.
One positive Ms. Neggers noted is a potential increase in revenue from New Growth. New Growth was estimated to be $125,000. The revised estimate is $180,000. This additional $55,000, subtracted from the above total shortage, means that FY06 budget cuts will have to equal between $35,000 to $55,000.
$38,000 |
Petroleum |
$58,000 |
$27,000 |
Heating |
$27,000 |
$ 8,000 |
School transportation |
$ 8,000 |
$73,000 |
Energy Shortfall Total |
$93,000 |
$17,000 |
Cherry Sheet assessments |
$17,000 |
$55,000 |
New Growth increase |
$55,000 |
$35,000 |
FY06 BUDGET CUTS |
$55,000 |
Mr. Goodrich noted that FinCom added 10% to heating budgets for FY06. He questioned whether Department Heads should be responsible, and should have been for FY06, for developing an appropriate budget. Ms. Neggers explained that FinCom requested level funded budgets for FY06. She herself developed her budget to the detriment of repairs and maintenance. She suggested FinCom needs to look at individual budgets and line items. Mr. Goodrich maintained that would put FinCom in a position of micromanaging. Ms. Neggers said FinCom can request budgets, pinpoint requested increases, and determine the reasons for the requests. Mr. Carlin noted that FinCom meets for a few hours at a time, and questioned the Department Head’s responsibility to be fiscally responsible and accurate. Ms. Neggers replied
department budgets are not being mismanaged.
Mr. Keller questioned that, in general, if the fuel increase is subtracted from the total estimated shortfall, what is the bottom line. Ms. Neggers replied the budget would be about even. Mr. Keller summed up that the shortage is the results of international events and natural disaster.
Mr. Goodrich questioned if Department Heads should have alerted FinCom that additional funds were needed in their budgets, after FinCom noted to Department Heads that the committee had increased their FY06 budgets by 10%. He was clear to add he was not placing blame on the Department Heads. Ms. Neggers explained the bulk of the shortage was in her budget – heat for Town Hall, Memorial Hall, and diesel costs.
Ms. Neggers will present this information to the Selectboard at their meeting tomorrow night. The Selectboard will create a plan and present it to FinCom.
Mr. Pennington asked where the additional money could be found. Ms. Neggers answered significant cuts will be needed. Mr. Harrison added cuts would be prioritized by public need. Possible cuts could be made to the Library, Senior Center, Park and Rec, and Highway departments. Mr. Margerison asked if the shortage could decrease. Ms. Neggers answered that the most promising calculation is a $30,000 shortage.
Mr. Fimognari asked if the recommendations of the Selectboard would be presented at the Town Meeting. Ms. Neggers explained the Selectboard would present their recommendations to FinCom, which will set the recommendations for the Special Town Meeting. She added the earliest the STM would be scheduled would be the end of October.
Ms. Neggers added this is the time to phase in cuts. It is not prudent to utilize Free Cash or the Stabilization Fund, and certainly not wise to increase the structural deficit.
Mr. Margerison noted this same type of problem occurred at the same time last year, but then “everything seems to fall into place.” Ms. Mahar explained more money became available last fall. Ms. Neggers added there is talk of a supplemental budget for local aid, but no mention of that on the MMA website.
Mr. Margerison asked if any bonds are will be paid off. Ms. Neggers explained if there are, the additional funds available have been figured into the total shortage.
Mr. Goodrich asked if the School Committee has been informed of this budget crisis. Ms. Neggers answered Superintendent Woodbury, Mr. Tassinari, and Ms. Mahar have communicated.
Mr. Pennington asked about the police cruisers lease. Ms. Neggers explained it is level funded for the purchase of three cruisers every two years. She added that many departments must be “netted out”, that there are no places to make cuts. Water, Sewer and Trash are self-sustaining; Accounting, Treasurer, and Building departments are operating on a bare-bones basis and cuts would hamper the basic functions of those vital departments.
The next scheduled meeting of the Finance Committee will be October 3, 2005 at 6:30.
The meeting was adjourned at 7:25 p.m.
Respectfully submitted,
Ann M. Lee, Administrative Assistant to the Finance Committee
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