Town of Newbury
Finance Committee Meeting
Tuesday Feb 19, 2008— 7:00 pm, Town Hall
Meeting Summary
Committee: Eugene Case, Larry Guay, Pete Morse, Dave Newbert, Frank Remley, and
Anna Tenaglia
Ex-Officio: Chuck Kostro, Finance Director
1. Jan 10, 2008 meeting summary: Adopted with one minor edit on p. 2
(Attachment A).
2. Personnel Board: Issue of step increases for two DPW employees. (Don
Bade). Don explained a request from Tim Leonard for two requests:
a. Jan Surette has been promoted to Foreman, which warrants an increase
of $1.08 per hr from ($21.81 to 22.89).
b. Tim Tolman has received additional equipment operator training which
warrants and increase of $1.68 per hour (from $13.14 to $14.82).
The request was for FinCom approval of both. However a start date and
total for FY 08 were unclear. The FinCom expressed support, but asked
Chuck to calculate the exact total needed from FY 08 reserves and start
date before voting. The Vote was postponed until next meeting, now Mar.
12.
3. Request from BOS for “up to 10,000” in FY 2008 to fund a PI Beach
Replenishment advocacy consultant in Washington: The FinCom considers
this a serious issue, but sees problems in providing Town financial support, sole
source to an independent lobbyist. Concern was also expressed over the
decision by Mayor Moak of Newburyport to even bring it before the City Council.
Even though the FinCom considers this a critical issue to both the integrity of the
new Water and Sewer system, and to protecting the safety and property values
of island residents, some of the concerns expressed include:
a. There is still no formal, written request from the BOS or any town
department for such funds.
b. While it recognizes the focused expertise of Marlowe $ Co., the Town
would have to require a proposal process from three bidders for such
services.
c. The Town cannot contribute funds to independent groups without Town
Meeting approval.
d. It is not the business of the Finance Committee to deliberate town policy
and strategy with respect to such matters. It is only the FinCom’s
responsibility to determine whether funds were available and should be
used for such requests given overall financial needs of the Town.
e. New demands are being placed on the reserve fund, and we may not
have the money available until town needs are addressed.
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During the discussion, Mr. Robert Connors, who represents the PI group that is
pursuing the services of Marlowe & Co. explained that a private fund raising
effort was already underway and achieving substantial progress (e.g. $14,000 to
date in private contributions). He asked that the FinCom table this matter until
later in the spring when the success of private fund raising efforts was clearer.
He suggested leaving the door open to addressing this issue at town meeting in
May. He also advised the Finance Committee to leave the $4000 that he
personally contributed to this cause on account with the Town to cover travel
that may be needed by selectman or others to Washington, D.C. to represent PI
interests to Congress and other officials. The committee decided to table the
issue without further discussion.
4. January YTD Expenditure Report: Chuck Kostro distributed copies of his
January report. Expenditures appear to be tracking close to budget projections
with some exceptions:
a. Legal Services: 74.40% (due to largely to the
cost of T-Mobile litigation)
b. Public Bldg. Maintenance Expense: 60.65% (due to the assumption
of Yellow School Costs)
c. Police wages and expense: 62.45%
d. Newbury Call Fire wages: 62.22%
e. Whittier Regional Assessment: 85.00%
f. Snow and Ice Removal: 152.50%
g. Public Health Services Expense 72.04%
h. Town Library Expenses: 70.00%
Overall Town costs are at 55.44% against a benchmark of 58.33% thru January.
It was noted that the expenditure percentage would jump next month, as
biannual debt service payments were paid on February 1..
5. Revenue Collections, YTD: Chuck has created a new red, green, yellow
“dashboard” report to track actual revenue collections vs. projections on the
Recap sheet for FY 08 (Attachment B). As of 1/31, several revenue sources are
significantly behind projections, including:
a. Motor vehicle excise: 26% of projection (large yearly commitment sent
out on 2/13, revenues not yet realized.)
b. Penalties and Interest: 39% of projection (need more pressure on
collection of back taxes)
Licenses; Fees and Permits: 26% of projection (fees and licenses and permits
should be considered together. Accounting adjustments have moved some
items from one category to the other. For instance, transfer station coupons are
now under fees rather than licenses. Overall, however, these items are tracking
below projections at this point.)
6. Revenue Forecast for FY 09: Chuck presented a preliminary estimate of FY 09
revenues (Attachment C). At this juncture, it would appear that growth of Town
revenues in FY 09 might only be 2.1%. This estimate will be refined as the
budget process is conducted. Additional emphasis will be placed on increasing
departmental revenue projections, including seeking out opportunities for new
fees, and enforcing existing fee and permit collections.
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7. FY 09 Budgeting Process and schedule: Chuck explained the budgeting
process which has already begun with a department head meeting at Byfield
Fire Hall on Feb. 14. He also presented a budget calendar.
8. Interest Correction for PI Betterments: Chuck explained that a letter was
prepared by the Assessor’s Office that will be going out from to PI homeowners
concerning a small correction to interest payments for the Sewer portion of the
betterment obligation. The Assessors should have calculated a rate of 2.65%
instead of 2.0%. This will add approximately $65 to each sewer betterment
assessment in FY08.
9. Request to allow overrun of Snow and Ice budget appropriation: Chuck
requested that the Finance Committee approve an overrun of the Snow and Ice
Budget appropriation of $95,000 at the beginning of the fiscal year. Current
expenditures were $144,878 (152.5% of budget) as of 1.31. It is noted that this
is the only line item that the state allows an overrun in excess of town meeting
appropriation. However, such an overrun requires BOS, Finance Director and
Finance Committee approval. The request was approved unanimously.
10. Update on reserve fund transfer needs: Several issues involving the Reserve
fund were addressed:
a. Amendment of Reserve Fund vote to recapture $11,385.82
(approved): Chuck explained that, after reviewing current pay rates in
detail and due to over-funding certain salary line-items the previous
transfer total was miscalculated.. The vote on Jan. 10 to approve a 3%
compensation increase for all non-contract town employees beginning
Jan. 1 should have been for a transfer of $11,385.82, and not $21,406
as approved. The committee voted unanimously to recapture the
difference in funding from reserves. A memo amending the prior transfer
will be issued.
b. Request for transfer of $11,602.50 to pay for police detail in arrears
(Pending legal review): This has been an on-going issue dating back
to the 11/20/07 meeting when it was first introduced by John Lucey.
There continues to be a shortage of cash in the detail fund to pay all
outstanding officer claims. The Police association filed a grievance which
was approved by the Board of Selectmen in January.. Chuck also
advised that the Board of Selectmen voted to request that the Finance
Committee transfer these funds from the Reserve Fund at the most
recent Selectmen’s meeting. Notwithstanding, it appears that the Town
may be legally required to pay these arrears regardless of a lack of
adequate reconciliation from the Police Association, which retains the
right to administer them. However, questions still remain regarding the
Police Association’s responsibility to produce adequate accounting
records to support these claims. (There is no audit trail to identify
companies who requested details, or whether or not they actually paid.
This problem dates back a number of years and occurred before the
current Finance Director and John Lucey took over the accounting for
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Police details). Apparently some payments were not received as the
practice has been to pay officers for detail work on a first-in, first-out
basis. After discussion, the Committee elected to table this matter until
Chuck is able to obtain a formal written letter to the Finance Committee
from the BOS requesting this transfer and to request opinion from town
counsel as to whether this is a prior year expenditure and if any
appropriation requires a town meeting vote.
c. Transfer of $11,020 to the Finance Department to pay the Division
of Unemployment Assistance (DUA) $11,010 (approved): This
amount is owed to the DUA per an award to Sandy Liebman in a claim
for unemployment. In October of 2007, Ms. Liebman submitted her
resignation from the Finance Department to the Board of Selectmen.
Her original claim for unemployment was denied by DUA. However, the
request was granted on appeal. The town has since appealed this ruling
and the claim has been remanded back to the original hearing officer for
further findings relating to certain issues that were raised by the town. A
new hearing has been scheduled for February 28th at 10:00 am at the
DUA offices in Lawrence. However, the DUA requires that the town pay
this bill even though it is still pending an appeal. The $11,010.00 the
town must pay will come from the Finance Department budget. The
entire expense budget for the Finance Department is only $42,800.00.
Sandy Liebman’s unemployment bill represents 26% of the entire
department budget. The town’s position in this matter is that the
proximate cause of Sandy Liebman’s resignation was not related to her
job reorganization but rather due to other circumstances which are
detailed in town counsel’s brief to the DUA hearing board. The Finance
Committee voted unanimously to transfer reserve funds to cover this
cost. A memo authorizing transfer will be issued.
11. Preliminary TRSD FY’09 Funding request: Frank informed the committee that,
at a meeting with the TRSD Superintendent, and subsequent preliminary
approval by the school committee, TRSD is seeking an overall 5% increase for
FY09. Unfortunately, because of a change ordered by the DOE in minimum
contribution percentages among the three TRSD towns, the Newbury share
would increase by 5.87%. Including capital charges, the request from Newbury
in FY09 will be $8,479,509. It was agreed to request that the three members of
the TRSD School committee from Newbury should be asked to attend the next
FinCom meeting to address questions.
12. Other:
- Capital Planning Committee progress: The next CPC meeting will be held on
Tuesday, Mar. 4 at 7:00 pm. Anna Tenaglia has agreed to replace Bill Cooper as the
second FinCom representative on the Committee.
- Town Hall custodial services (new issue): There have been a number of complaints
from employees about the cleanliness of Town Hall. Subsequently, it has been urged that
the Town look into new custodial services. There is also an apparent need for re-staining
one side of Town Hall. The FinCom agreed that Town Hall maintenance should be
reviewed, but that any new contract services must replace existing services, which are
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costing around $11,000 per year. Chuck was asked to seek three bids for such an outside
contractor and to determine the its cost.
13. Meeting schedule: The Committee agreed to meet in March as follows:
a. Mar. 12, 7:00 pm, Town Hall
b. Mar. 26, 7:00 pm, Town Hall
Additional meetings will be needed in April during the Budget process.
Town of Newbury
Finance Committee Meeting
Thursday Jan 10, 2007— 7:00 pm, Town Hall
Meeting Summary
In Attendance: Eugene Case, Pete Morse, Dave Newbert, Frank Remley, and Anna
Tenaglia
Ex-Officio: Chuck Kostro, Finance Director
1. November 20, 2007 meeting summary (attached): Approved without further
discussion or change.
2. Potential expenditure of $9,000 in FY 08, and $9,000 in FY 09 to gain
federal funding for beach replenishment and rebuild of South Jetty: Mark
Sarkady of Plum Island and Howard Marlowe, of Marlowe & Co., a Washington
DC based consulting/lobby firm specializing in coastal management and beach
reclamation, explained the need for dredging, beach replenishment, jetty repair
and the challenges of obtaining federal funding for this purpose. Mr. Marlowe
spoke knowledgeably about the situation and his firm’s background in beach
reclamation. He described the PI beach as “terminal” without federally funding.
He said that the focus should be on the Energy and Water Appropriations subcommittees
in congress as well as the Corps of Engineers, who have recently
agreed that the situation is now serious but lack the funds to fix it. Mr. Sarkady
stressed the financial, property and public health risks to Newbury in not taking
action soon. Recent storms combined with a degraded South Jetty have
caused serious losses to mid-island beaches in particular. These beaches are
shared between Newbury and Newburyport. Their proposal consists of a
$40,000 effort over the next calendar year for Marlowe & Co. to promote this
matter in Washington with the purpose of securing federal funding for mitigation
and jetty repair. $36,000 of the contract would be split between Newbury and
Newburyport, while Robert Connors of Plum Island has already contributed
$4000 to the cause. While the Finance Committee acknowledged the
associated public and financial risks in not taking action, it also clarified the
following:
c. That any funding for this purpose would have to come from the FY ‘08
reserve fund, which already has a number of priority needs to address;
d. That the Board of Selectmen would have to make a formal request for
the funds along with a decision to go ahead with the project;
Attachment A
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e. That any current fiscal year funding would be limited to six months, or a
total of $9000, and the balance for calendar year 2008 would have to be
appropriated at Town Meeting in May as part of the FY ’09 budget;
f. That there would have to be an appropriate contract vehicle to
accommodate the expenditure with no financial or legal risk to Newbury
beyond the initial request;
g. That there would have to be a formal procurement process involving a
minimum of three interested bidders for the work.
h. That we needed to know whether or not Newburyport would participate.
See attached handouts from Mark Sarkady and Howard Marlowe.
[Note: the finance Committee has now received 137 cards from PI residents
supporting the proposed action to hire Marlowe & Co.]
3. TRSD FY’09 Funding process: Diana Sullivan of the Newbury contingent to
the TRSD school committee expressed an interest in maintaining regular
communications with the Finance Committee during the FY ’09 budgeting
process. The Committee acknowledged that communications had improved
and agreed that it was open to further updates as the budget was formulated
over the next three months. The Finance Director noted that a 5% increase in
Triton’s budget in FY09 would be on top of a 10% increase in FY07. The total
increase of 15% in Triton’s budget is during the same period when revenues
have increased for the town of slightly more than 5%.
4. Finance Director Report: (Chuck)
a. YTD Expenditure and Revenue Reports: Chuck Kostro briefly covered
the December YTD expenditure and revenue reports. There are no
major surprises as both are tracking well vs. projections. Discussion
focused on:
i. The Public Building Maintenance is trending high due to the costs
associated with the operation of the Yellow School. This will be a
budget problem before the year is out unless some action is taken
to address the long-term implications of this arrangement.
ii. BOS Chair Vince Russo addressed the issue of selling the
Woodbridge School. The study committee decided that it would
be too costly to renovate as a Town Hall. BOS Chairman Vince
Russo attended the meeting and stated that there would be a
warrant prepared for Town Meeting to sell the Woodbridge School
Building, as it is costly to maintain and falling into disrepair.
iii. The December expenditure report shows the snow and ice budget
as nearly depleted. Due to the late December storm, additional
expenses were incurred in the first warrant in January. The snow
and ice budget is presently in a deficit of approximately $24,000.
iv. Through November 30, revenues are on track. December is
typically a slow month. Areas of concern appear to be related to
the economy. There is a tremendous slow down in License and
Permit fees and we will likely be well under projections in this
item. A key is how the excise tax revenue does. A major drop in
excise revenues will be a problem for the town. Everything else
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appears on track but things are extremely tight and there is no
margin for error.
v. There is a minor issue with the commitment for the sewer
betterment interest in FY08. The Assessor’s Office is working to
correct the matter and developing a solution to the problem.
5. FEMA and Chapter 90 Collections Status
All FEMA funds have been collected except for the $15,000 due for the
state share of the May 2006 floods. The $7,000 deficit for the PI
drainage work has been addressed through the approval of Chapter 90
for the town’s share of the project.
6. Reserve Fund Summary: Currently at $135,000, the following requests for
funds transfers were advanced by Chuck Kostro:
i. 3% Wage Increase ($21,406): Chuck submitted a request for a
transfer of $21,406.28 to cover a 3% increase for eligible town
employees. Separate transfers will be made to various
departmental accounts totally this amount. Request APPROVED
by a 4:1 vote. (Anna Tenaglia voted against the 3% compensation
increase at this time because, although merited, it may be unsustainable
in current difficult economic times. She expressed concern that the
increase is beyond prop 2 1/2 [plus growth] within which we need to
live, and the State's current economic crisis may make any legislative
increase in local aid from the State unlikely for FY 09.)
ii. Office space rental agreement totally $12,210 for rent and
moving costs: Due to overcrowding at Town Hall, Chuck Kostro
requested a transfer of $12,210 to support the renting of 500 sq. ft
of nearby office space across the upper Green. The purpose of
this would be to move the Town Engineer, ConsCom agent and
Harbor Master to the new space, while expanding the space
needed by the Finance Department to the room vacated by the
Town Engineer and ConsCom agent. This would also eliminate
the need for the Harbor Master and Board of Health to share the
same small cubicle. Questions arose regarding the exact cost of
such a move, the implications of having three departments
isolated albeit across the Upper Green, and the longer-term
implications. The Finance Committee put this decision on hold
until further analysis of space needs, ramifications of such a
move, and the full cost of it could be accomplished. No action
taken.
iii. ADA Compliance Proposal for Town Hall (vote to transfer
$7,500 for ADA ramp upgrade): Chuck explained the need to
improve the handicapped access to Town Hall. It is currently not
in compliance with state regulations and Newbury risks being
cited for this. He requested $7,500 for a contract for Charles Bear
& Co. to make the improvements. The contract was selected out
of three proposals received to a town solicitation. The selected
vendor was the low bid by a substantial amount. Request
(unanimously) APPROVED.
iv. Computer Replacement for Building/Conservation failed computer
($895): Chuck Kostro requested $895 to be transferred from the Reserve
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Fund for replacement of a failed computer for the Town Engineer.
Request (unanimously) APPROVED.
v. Cost of bonding ($1945.78): Chuck Kostro requested the transfer of
$1945.78 from the Reserve Account to the Cost of Bonding, Account
No. 100-700-5900-000 for additional short term bonding costs. Request
(unanimously) APPROVED.
vi. Potential Departmental Transfers (update – no vote needed)
a. Legal Department: Chuck Kostro had no request at this time,
but estimated that a $20,000 transfer may be eventually needed
to cover the cost of legal defense in the T-Mobile cell tower siting
suit (i.e. location on Iron Moon Farm on Route 1A) in Federal
Court.
NOTE: Policy on Hiring Counsel: The Board of Selectmen has
adopted a policy requiring all town departments and committees
to submit requests for counsel services to Town Counsel.
b. Finance Department
- Liebman Unemployment Claim: Sandy Liebman
has filed an unemployment claim as a result of leaving the
Finance Department. This is being contested as she wasn’t
fired but officially resigned. Her request was originally
denied but was granted on appeal. The town is now
appealing the decision. If granted, a Reserve Fund transfer
will be necessary to pay this expense.
- Other Expense Items: Public Building and vehicle
maintenance budgets may each be $10,000 short for the
year, but no request is currently being made. There is a
growing concern about the on-going liability and expense of
maintaining the Yellow School in Byfield.
c. Expense Item Policy for FY08: Chuck stated that the
budget process would begin at the end of January. Initial
projections show a very tight FY09. To balance increases
in salaries, there could be reductions in department
expense items. Chuck suggested that departments might
be given bottom line totals for their expense item at the start
of the budget process as a method of controlling costs.
This is still being developed at this time.
7. Police Department Updates
i. Police Detail Fund Status: Chief Mike Reilly and Officer John
Lucy attended the meeting and explained that the Police
Association has now filed a grievance in an effort to resolve this
situation. John Lucey estimated the cost to be $11,900 to
completely recover all monies claimed by officers who covered
requested details and still have not been paid. The FinCom
expressed its concern about basically underwriting businesses,
which didn’t pay, or the Police Association’s apparent mishandling
of accounts payable prior to Officer Lucy taking over. The
committee needs more background and justification to resolve this
situation and especially before spending taxpayer funds to cover
unpaid private details that was handled by the police association.
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Chuck Kostro and Chief Reilly have met numerous times to try
and develop a solution to this problem which pays the officers but
does not adversely affect the finances of the town. Both
commented that the filing of the grievance changes the nature of
the situation. Chuck and the Chief suggested that we treat this as
a “friendly grievance” and allow it to run its course. The
Association can prove, through the grievance process, why the
town should be liable for this cost. Now that a grievance has
been filed, however, the burden to prove the town’s liability has
shifted to the association. Everyone wants the officers to be paid
but the town’s financial rights need to be protected as well.
Discussion also focused on possible compromises that might be
reached during the grievance process. Chief Reilly and Officer
Lucy stressed that the new policy now included obtaining advance
payment from smaller, riskier companies before assigning the
details, and to charge a 10% administrative fee to all solicitations.
ii. Police Station Refurbishment Grant Status: It was determined
that it was not in the best interests of the town to pursue this grant
at this time. Restrictions on the grant, particularly requiring that
the money be spent and the project completed by June 30, 2008
were too difficult for the town to achieve. In addition, there was
some question about spending nearly $250,000 on upgrades that
may need to be ripped out in a few years when a new station is
built. In the final analysis, it was not practical for the town to
spend the money required by this grant in the time frame
specified.
8. Other:
• Plum Island Land Sales Status: Chuck indicated that no significant action had
been taken on this matter. Next steps are to obtain appraisals and solicit
possible offers.
• Free Cash Certification Letter: Certification letter has now been received from
DOR. Free cash now available is nearly $93,000.
• Capital Planning Committee progress: Dave Newbert has established January 24 at
7:00 pm for the initial meeting.
FY08 REVENUE DASHBOARD
Project shows deficit of more Below Target - Action than 10% of estimate
At or Near Target - Closely Projection shows deficit of less than 10% of estimate
Monitor
On or Ahead of Target Projection shows no deficit or shows surplus.
REVENUE COLOR DESCRIPTION
Attachment B
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FY08 REVENUE DASHBOARD
Total Revenue 16,483,914 8,960,609 15,373,076 (1,110,838) 93% 16,483,612 (302)
State Aid 1,502,539 1,158,103 1,985,319 482,780 132% 1,502,000
Miscellaneous Non-Recurring 12,000 7,500 12,857 857 107% 12,850
Miscellaneous Recurring 6,100 3,193 5,474 (626) 90% 7,000
Investment Income 75,000 42,112 84,224 9,224 112% 90,000
Fines and Forfeitures 145,000 77,949 133,628 (11,372) 92% 137,500
Special Assessments 655,968 0 0 (655,968) 0% 655,968
Licenses and Permits 463,000 122,212 209,506 (253,494) 45% 300,000
Fees 60,000 106,053 181,805 121,805 303% 185,000
Penalties and Interest 195,000 76,161 130,562 (64,438) 67% 165,000
PILOT 96,294 2,625 4,500 (91,794) 5% 96,294
Other Available Funds 168,949 0 0 (168,949) 0% 204,000
Other Excise 13,260 10,791 18,499 5,239 140% 18,000
Motor Vehicle Excise 943,326 245,912 421,563 (521,763) 45% 930,000
Personal Property Taxes 125,824 90,981 155,967 30,143 124% 130,000
Real Estate Taxes 12,021,654 7,017,017 12,029,172 7,518 100% 12,050,000
% of Projection
Estimate
Estimated Deficit/Surplus
Receipts
as of June 30
Revenues
as of
1/31/08
Recap
Estimate
Source
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FY08 REVENUE DASHBOARD
Total Surplus/(Deficit) 1,050
Total Projected Revenues 16,483,612
Total Expenditures 16,482,562
Revolving Funds 56,551
Overlay 47,301
Cherry Sheet Offsets 10,327
Cherry Sheet Charges 158,421
FY08 Budget 16,209,962
FISCAL YEAR 2008 BUDGET
REVENUES
2007
Actual
2008
Estimated
2009
Estimated
Amount
Change % Change
Prior year Levy limit 9,889,505 10,452,523 10,857,156
+ 2.5% of prior year 247,238 261,313 271,429
new growth 315,780 143,320 200,000
Override to Prop 2 1/2 0 0 0
Subtotal 10,452,523 10,857,156 11,328,585
Debt Exclusion 1,389,074 1,293,388 1,265,000
Maximum Allowable Levy 11,841,597 12,150,544 12,593,585 443,041 3.6%
Cherry Sheet 844,325 844,325 865,000 20,675 2.4%
School Building Authority Payments 658,214 658,214 658,214 0 0.0%
State Aid 1,502,539 1,502,539 1,523,214 20,675 1.4%
Motor Vehicle Excise 908,324 943,326 900,000 (43,326) -4.6%
Other Excise 12,689 13,260 17,000 3,740 28.2%
Penalties & Interest 117,999 195,000 150,000 (45,000) -23.1%
Payment in Lieu of Taxes 0 96,294 96,250 (44) 0.0%
Fees 25,719 60,000 60,000 0 0.0%
Licenses and Permits 503,421 463,000 325,000 (138,000) -29.8%
Special Assessments (Betterments) 639,595 655,968 650,000 (5,968) -0.9%
Fines and Forfeitures 21,890 145,000 125,000 (20,000) -13.8%
Investment Income 57,636 75,000 75,000 0 0.0%
Misc. Recurring 215,668 6,100 10,000 3,900 63.9%
Misc. Non-Recurring 275,150 12,000 10,000 (2,000) -16.7%
Total Local Receipts 2,778,091 2,664,948 2,418,250 (246,698) -9.3%
Other Available Revenue 0 125,551 125,551
TOTAL REVENUES 16,122,227 16,318,031 16,660,600 342,569 2.1%
Attachment C: Preliminary FY 09 Revenue Forecast
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