Town of Newbury
Finance Committee Meeting
Wednesday Mar. 12, 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. Feb 19, 2008 meeting summary: Adopted unanimously without further
discussion. NOTE: It was requested that an effort be made to make the minutes
more succinct if possible.
2. Update on Police Detail payment: Chuck Kostro presented a request for a
reserve fund transfer (Acct. No. 100-132-5780-000) of $11,602.50 to (account
No. 215-000-4840-000) Police Detail Receipts to cover a shortfall in police detail
funds available to pay officers who served on those details. Larry Guay moved
to approve the transfer, Gene Case seconded, and the motion was
unanimously approved.
Larry Guay cautioned that this not be a precedent setting event and that the
process of tracking such expenses be better defined. Subsequent discussion
centered on the town’s responsibility in matters dealing with public safety
requests outside normal town responsibilities. It was noted that the Police
Association undertook full responsibility for the assignment of police details, and
billing and collection from private parties. It then failed to produce adequate
records to support billing and payments, especially concerning non-paying
clients. Larry Guay raised several important questions, including:
• Is the Town responsible for uncovered costs associated with such private
police activity, when proper records on billing and collection are not kept?
• Are such services covered by Massachusetts General Law?
• Who is financially responsible for insurance coverage or liability claims?
• What are the rules on rates, hours and payments to Police Officers, and
who sets them? Do payments get added to retirement credits?
• Who should be maintaining records of requests, assignment, billing, and
collection of costs?
• Do the fees collected adequately cover the overhead needed to process,
administer, and insure such service costs? If not, how should they be
adjusted to cover all costs?
Chuck will discuss these issues with Police Chief Reilly and/or Lt. Lucey and
come to some resolution regarding any changes needed to adequately address
proper record keeping and coverage of costs in the future.
3. Finance Director’s report: (Chuck Kostro)
a. February YTD Expenditure Report: Chuck noted that, with a few
exceptions, the budget line items were tracking well and within original
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projections. In general, line items should be at or under 67% of budget.
Key line items that are over-budget at this juncture include:
i. Public Bldg Maintenance wages and expenses (74% and
79%): due in part to higher heating, including the vacant Yellow
School in Byfield, and higher maintenance and repair costs.
ii. Insurance Expense 99.9%: insurance costs for the Woodbridge
School, Yellow School, and Byfield Town Hall alone are costing
the town $14,000 in FY 08.
iii. Police Expenses (80%): Chief Reilly is working to reduce
spending and meet budget commitments for the year.
iv. DPW (89.5% overall): Major overrun due mostly to Snow
removal, which is currently 235% of its original budget of $95,000.
This is allowed by the state, and if necessary, can be carried over
to FY 09. Vehicle maintenance and town garage expenses are
also higher than expected due to aging fleet.
v. Library Expenses (76%): Dave Newbert has discussed this with
the Library Board and they are aware that these costs must be in
line by year’s end.
vi. Debt service (99.2%): Essentially paid for FY 08. However,
there will be an additional cost of approximately $25,000 in Short-
Term Interest as a result of a Bond Anticipation Note (BAN)
payable on June 28, 2008. Chuck has met with First Southwest
Company and there is no way to roll this over a few days to get it
in to Fiscal Year 2009. Surpluses from other debt service items
should reduce the amount from the Reserve Fund for this to
approximately $7,000. Chuck also confirmed existing debt costs
with First Southwest and explored possible future savings
opportunities. Refinancing of the debt does not appear to be
feasible in the short-term but longer term actions such as paying
off the school bonds when they are callable in 2011 may be a
possibility.
Strategies for closing a $128,000 gap in Snow and Ice costs were
discussed. Options range from line item savings transfers of
potentially up to $62,500 at a special Town Meeting in May, to use
of remaining reserve fund balance, to use of anticipated additional
FEMA payments of $75,000, to use of a stabilization fund transfer if
needed, although not desirable. The Committee concluded that
the snow and ice deficit should be addressed in the FY08 budget
and not carried over into FY09.
b. Revenue “Dashboard” update (See Attachment A): Revenues are on
target as of Feb. 29 but it will be very close by year end.
c. Reserve fund update: With the approval and transfer of the Police
Detail funds explained above, the Reserve Fund is down to $90,661.
4. Need for outside legal assistance to assist back tax collections: Chuck and
Frank have met with James Coppola of Coppola and Coppola, a Salem law firm
that specializes in the legal process of tax title and foreclosure on delinquent
properties. Based on these discussions, the cost for this service would be
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approximately $250 per property. Placing properties in tax title is an essential
step in preserving the town’s ability to collect delinquent taxes. It was concluded
that the Finance Committee should petition the BOS to pursue the availability of
funds to support this service.
5. Fiscal Reality Spending Freeze: In order to address the snow and ice deficit
in FY08, all available funds will be needed. In order to maximize all potential
budget savings, the Finance Committee unanimously voted to freeze spending
under the following conditions:
1. No new hires or replacements for existing positions will be funded through
to July 1.
2. A complete ban on all non-essential travel not approved prior to this date
until July 1.
3. No expenditures over $100 without written justification and the prior
approval of the Finance Director.
Anna Tenaglia commented that the City of Gloucester, where she is Finance
Director, already has such a freeze. After some discussion, Larry Guay moved
to support this, Pete Morse seconded and the committee voted unanimously to
approve such a freeze. Chuck will draft a resolution for the next BOS meeting,
and announce the freeze at Thursday’s department head meeting.
6. Preliminary Budget for FY 09 (Chuck Kostro)
a. Revenue Forecast for FY 09 (See attachment B): A preliminary
revenue forecast submitted to the Committee prior to the meeting
anticipated 2.1% revenue growth, or $340,807 in new revenues for FY
09. The most recent revenue forecast shows only a 1.3% revenue
growth and this includes the possible use of one-time revenues, such as
from the Stabilization Fund, to close a gap of approximately $150,000.
Even with the use of a one-time revenue source, a $21,266 gap still
remains to be closed. Chuck summarized the decline in revenues as
follows:
i. Substantial slowing in new growth revenues, dropping more than
$200,000 from FY07 levels;
ii. Continued decline in motor vehicle excise due to the economy
and a decrease in new vehicle registrations;
iii. Penalties and Interest, down $65,000, due to a leveling of back
tax collections;
iv. Fees, Licenses and Permits, down a combined $23,000 due to
reduced new construction;
v. The FY08 budget was balanced with $112,398 of one-time
revenues from closing out of two funds. This money is not
available in FY09.
b. Preliminary Expenditure forecast for FY 09 (See attachment C):
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The present draft FY09 budget still has a substantial gap of $150,000
to $200,000 that will need to be closed. At present, the proposed
budget does accomplish the following:
• Increases education spending by 4.0%, including a 4.5%
increase for Triton’s operating budget.
• Increases public safety spending by 1.3%, including a 2.9%
increase for Police and level funding the Fire Department.
• Keeps employee benefit spending to an increase of less than
1.0%.
• Accounts for a 4.9% increase in Cherry Sheet assessments.
To accomplish these increases, the budget is looking at potentially
significant reductions in general government operations, highway,
human services and culture and recreation. The degree of reductions
in these areas will be severe.
c. Strategic issues/decisions: A summary of strategic issues discussed:
i. Potential FY 08 unbudgeted expenses
Potential Expense Estimate Proposed Source
Police Dept. extra cost $15,000 Manage to budget
Legal Exp. (Cell Tower) $25,000 Reserve Fund
Public Bldg. MTCE $10,000 Reserves or defer
Vehicle MTCE overrun $5000 Reserves or defer
Extra S.T. debt Interest $13,400 Reserves
Tree Warden overrun $3,400 Reserves or Disallow
Harbor master computer $1,200 Reserves
Snow removal deficit $128,000 Reserves, Free cash
Legal fees $25,000 FY 07 Free Cash
GASB 45 assessment $9,000 Finance Department Salary
Transfers
d. Additional $150,000 deficit in FY 09 Revenue-Expenditure
projections: Use of Stabilization fund was discussed. The committee
also discussed the possibility of a general tax override. If the
Stabilization Fund was used, it could be replenished by proceeds from
the sale of town land. Committee consensus was that neither was
appetizing, but that an override was unlikely to pass in the current
economic conditions. Thus, it was agreed to continue to work on budget
reductions and revenue projections to close the gap as much as
possible, and unless conditions changed for the worse, to not request
the BOS to pursue an override in the May general election. Further
reduction in the TRSD budget, cited below added to the view that the
budget gap can be closed. Chuck was directed to prepare a budget that
did not rely on an override and did not commit to use of the Stabilization
Fund. With an override off the table, the Finance Committee can work
the budget through the month of April in preparation for town meeting.
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7. Final TRSD FY’09 Assessment (see attachment D): As of 6:30 pm the latest
Triton budget proposal was available which indicated that Newbury’s assessment for
next year would be reduced to $8,209,998. This would reduce expenditures by another
$36,000, and help to close the budget gap for FY 09. It was noted however, that the
$357,034 increase in the TRSD budget was higher than the total $349,807 projected
revenue increase for the town in FY 09. This trend cannot continue without a substantial
tax override in the future.
8. Other:
Capital Planning Committee progress: Capital requests from Departments have amounted
to over $500,000, although not all projected for FY 09. Some equipment needs for the
DPW can be covered by state Chap. 90 Highway Grant. The DPW has already purchased
a new truck and street sweeper through Chap. 90 this year. After some discussion about a
tentative projected need for $225,000 as a possible debt exclusion for the May ballot, it
was agreed that more work was needed to refine and detail the capital budget before
further discussing and attempting to raise funds through the ballot box.
9. Next Meeting: March 26.
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ATTACHMENT A – REVENUE DASHBOARD, FEBRUARY
TOWN OF NEWBURY
FY08
REVENUE DASHBOARD
Through the Month of February 2008 % OF THE YEAR PAST = 66.7%
Source
Recap
Estimate
Revenues as of
2/29/08 % of Estimate
FY08 Real Estate Taxes 12,021,654 8,579,829 71%
Prior Year Real Estate - 277,660 N/A
Personal Property Taxes 125,824 99,487 79%
State Aid 1,502,539 1,167,032 78%
Motor Vehicle Excise 943,326 383,590 41%
Other Excise 13,260 14,212 107%
Penalties and Interest 195,000 80,897 41%
PILOT 96,294 2,625 3%
Fees 60,000 152,514 254%
Licenses and Permits 463,000 159,774 35%
Special Assessments 655,968 - 0%
Fines and Forfeits 145,000 87,612 60%
Investment Income 75,000 51,823 69%
Miscellaneous Recurring 6,100 3,282 54%
Miscellaneous Non-Recurring 12,000 5,103 43%
Total Revenue 16,314,965 11,065,440 68%
REVENUE DASHBOARD KEY
On or Ahead of Target
At or Near Target - Closely Monitor
Below Target - Action Necessary
This chart shows how the Town of Newbury is doing collecting revenues v. its projections.
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ATTACHMENT B – FY 09 REVENUE FORECAST
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 315,780 143,320 110,000
Override to Prop 2 1/2 0 0 0
Subtotal 10,452,523 10,857,156 11,238,585
Debt Exclusion 1,389,074 1,293,388 1,202,010
Maximum Allowable Levy 11,841,597 12,150,544 12,440,595 290,051 2.4%
Cherry Sheet 844,325 844,325 863,000 18,675 2.2%
School Building Authority Payments 658,214 658,214 658,214 0 0.0%
State Aid 1,502,539 1,502,539 1,521,214 18,675 1.2%
Motor Vehicle Excise 908,324 943,326 905,000 (38,326) -4.1%
Other Excise 12,689 13,260 17,500 4,240 32.0%
Penalties & Interest 117,999 195,000 135,000 (60,000) -30.8%
Payment in Lieu of Taxes 0 96,294 96,250 (44) 0.0%
Fees 25,719 60,000 225,000 165,000 275.0%
Licenses and Permits 503,421 463,000 275,000 (188,000) -40.6%
Special Assessments (Betterments) 639,595 655,968 657,048 1,080 0.2%
Fines and Forfeitures 21,890 145,000 130,000 (15,000) -10.3%
Investment Income 57,636 75,000 70,000 (5,000) -6.7%
Misc. Recurring 215,668 6,100 6,000 (100) -1.6%
Misc. Non-Recurring 275,150 12,000 12,000 0 0.0%
Other Available Funds 112,398 0 (112,398) -100.0%
Stabilization Fund 0 150,000 150,000
Total Local Receipts 2,778,091 2,777,346 2,678,798 (98,548) -3.5%
Other Available Revenue 0 0
TOTAL REVENUES 16,122,227 16,430,429 16,640,607 210,178 1.3%
Total FY09 Expenditures 16,661,874
Surplus/(Deficit) (21,266)
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FY 2008 FY 2009
Account Name Budget Budget By Group
Starting
Estimate
$ Change
%
Change
TRANSFER FROM GENERAL FUND 0.00 0.00
TOWN MTG MODERATOR 100.00 100.00
SELECTMEN SALARY 15,000.00 15,000.00
SELECTMEN SECRETARY SALARY 43,029.00 44,968.16
SELECTMEN EXPENSE 5,000.00 4,000.00
FINANCE COMMMITEE EXPENSES 300.00 150.00
RESERVE FUND 135,000.00 85,000.00
FINANCE DIRECTOR SALARY 88,750.00 93,750.00
FINANCE DEPARTMENT WAGES 20,250.00 33,441.21
FINANCE EXPENSES 42,800.00 41,250.00
ACCOUNTANT'S SALARY 54,761.00 61,318.00
ACCOUNTANT'S EXPENSES 9,000.00 9,000.00
ASSESSORS SALARY 9,890.00 9,890.00
ASSESSOR'S WAGES 43,001.00 45,355.02
ASSESSOR'S EXPENSE 62,150.00 59,955.00
AUDIT TOWN BOOKS 25,000.00 35,000.00
TREASURER-COLLECTOR WAGES 37,900.00 22,927.63
LEGAL SERVICES 75,000.00 75,000.00
PERSONNEL BOARD 3,000.00 1,500.00
TOWN CLERK SALARY 49,921.00 51,418.63
TOWN CLERK WAGES 37,355.00 38,415.33
TOWN CLERK STIPEND 1,000.00 1,000.00
TOWN CODE BOOKS 4,000.00 4,000.00
TOWN CLERK EXPENSE 8,000.00 8,000.00
ELECTION 9,600.00 9,600.00
REGISTRARS OF VOTERS SALARIES 750.00 750.00
REGISTRARS OF VOTERS EXPENSES 5,000.00 5,000.00
CONSERVATION COMM AGENT SALARY 47,174.00 49,318.16
CONSERVATION COMM WAGES 11,157.00 13,303.68
CONSERVATION COMM EXPENSE 7,000.00 7,000.00
TREE WARDEN SALARY 3,000.00 3,000.00
TREE WARDEN EXPENSES 14,000.00 10,000.00
CLAM FLATS TOWN WAGES 5,185.00 5,185.00
PLANNING BOARD WAGES 57,564.00 60,184.27
PLANNING BOARD EXPENSE 5,500.00 5,500.00
MERRIMAC VALLEY PLANNING COMM 2,177.00 2,215.08
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ZONING BOARD OF APPEALS WAGES 900.00 900.00
ZONING BOARD OF APPEALS EXPENSES 500.00 450.00
PUBLIC BUILDING MAINT WAGES 11,800.00 11,800.00
PUBLIC BUILDING MAINT EXPENSE 45,030.00 57,000.00
TOWN HALL MAINT EXPENSE 50,000.00 40,000.00
TOWN REPORTS 3,000.00 3,000.00
INSURANCE EXPENSE 145,000.00 152,500.00
DIVISION OF UNEMPLOYMENT
INSURANCE
5,000.00
CAPITAL FUND 10,000.00
TOTAL GENERAL GOVERNMENT: 1,194,544.00 1,192,145.17
(2,398.83)
-0.2%
POLICE WAGES 1,083,668.00 1,127,014.72
EMERGENCY MANAGEMENT DIRECTOR 5,000.00 5,000.00
POLICE EXPENSES 108,700.00 110,000.00
Sub-Total Police: 1,197,368.00 1,242,014.72
44,646.72
3.7%
BYFIELD FIRE PROTECTION - WAGES 97,760.00 97,771.40
BYFIELD CALL FIRE - WAGES 70,658.00 70,658.00
BYFIELD FORREST FIRES - WAGES 2,500.00 2,500.00
BYFIELD FIRE PROTECT - FLAT RATE EXP 74,750.00 74,750.00
NEWBURY FIRE PROTECTION - WAGES 89,004.00 89,004.00
NEWBURY CALL FIRE - WAGES 70,658.00 70,658.00
NEWBURY FORREST FIRES - WAGES 2,500.00 2,500.00
NEWBURY FIRE PROTECT - FLAT RATE
EXP
74,750.00 74,750.00
FIRE ALARM MAINTENANCE 7,000.00 7,000.00
AMBULANCE SERVICE 15,000.00 15,000.00
Sub-Total Fire: 504,580.00 504,591.40
11.40
0.0%
BUILDING INSPECTION SALARIES 55,000.00 57,502.74
ASST BUILDING INSPECTOR 8,985.00 9,400.55
BUILDING INSPECTOR - WAGES 7,438.00 6,538.06
BUILDING INSPECTOR - EXPENSES 7,500.00 7,500.00
GAS INSPECTOR FEES 7,500.00 7,500.00
PLUMBING INSPECTOR FEES 10,000.00 10,000.00
SEALER WGTS/MEASURERS SRV FEES 2,500.00 2,500.00
ELECTRICAL FEES 20,000.00 20,000.00
CIVIL DEFENSE 1,500.00 0.00
ANIMAL CONTROL OFFICER SALARY 17,108.00 17,364.62
ANIMAL CONTROL EXPENSE 0.00
PARKING CLERK - SALARY 2,400.00 2,400.00
PARKING CLERK - EXPENSES 600.00 500.00
HARBORMASTER - WAGES 0.00
HARBORMASTER - EXPENSES 0.00
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GREEN HEAD CONTROL 3,355.00 3,355.00
MOSQUITO CONTROL 1.00 1.00
HYDRANT SERVICE 11,475.00 11,475.00
Sub-Total Regulatory: 155,362.00 156,036.97
674.97
0.4%
TOTAL PUBLIC SAFETY: 1,857,310.00 1,902,643.09
45,333.09
2.4%
TRITION REGIONAL OPERATION 7,852,964.00 8,209,998.00
357,034.00
4.5%
TRITION REGIONAL CAP IMPROVEMENT 181,953.00 165,399.00
WHITTIER REG'L ASSESSMENT 148,085.00 135,918.00
TOTAL EDUCATION: 8,183,002.00 8,511,315.00
328,313.00
4.0%
HIGHWAY LABOR WAGES 407,171.00 415,078.54
HIGHWAY MAINTENANCE EXPENSE 80,000.00 75,000.00
SNOW REMOVAL - WAGES 95,000.00 95,000.00
SNOW REMOVAL - EXPENSE
STREET LIGHTING 47,000.00 47,000.00
VEHICLE MAINT - EXPENSE 95,000.00 92,250.00
TOWN GARAGE MAINT - EXPENSE 25,000.00 25,000.00
BRIDGES, ROADS AND SIDEWALKS 0.00
TOTAL PUBLIC WORKS: 749,171.00 749,328.54 157.54 0.0%
BOARD OF HEALTH - WAGES 57,942.00 59,135.58
BOARD OF HEALTH - EXPENSES 273,540.00 230,000.00
PUBLIC HEALTH SERVICES - EXPENSES 11,875.00 11,875.00
COUNCIL ON AGING - WAGES 68,488.00 70,308.84
COUNCIL ON AGING - EXPENSE 14,040.00 14,100.00
VETERAN'S SERVICES EXPENSE 18,000.00 12,000.00
VETERAN'S SERVICES SALARY 2,400.00
TOTAL HUMAN SERVICES: 443,885.00 399,819.42
(44,065.58)
-9.9%
TOWN LIBRARY - WAGES 219,500.00 199,463.27
TOWN LIBRARY - EXPENSES 84,000.00 83,661.00
LIFEGUARDS - WAGES 47,750.00 47,750.00
LIFEGUARDS - EXPENSES 5,000.00 4,000.00
PARKS - EXPENSES 40,000.00 34,000.00
HISTORIC COMMISSION EXPENSE 650.00 650.00
375TH ANNIVERSARY COMMITTEE 375.00 375.00
MEMORIAL DAY 600.00 600.00
TOTAL CULTURE & RECREATION: 397,875.00 370,499.27
(27,375.73)
-6.9%
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PROP/EXCISE INTEREST 500.00 0.00
COST OF BONDING 30,519.00 18,075.00
LONG TERM DEBT PRINCIPAL 1,686,195.00 1,703,404.08
SHORT TERM DEBT INTEREST 27,982.00 15,000.00
LONG TERM DEBT INTEREST 702,759.00 631,151.46
TOTAL DEBT SERVICE: 2,447,955.00 2,367,630.54
(80,324.46)
-3.3%
STATE ASSESSMENTS (CHERRY SHEET) 162,420.00 0.00
TOTAL INTERGOVEMENTSAL: 162,420.00 0.00
ESSEX COUNTY RETIREMENT SYSTEM 334,181.00 327,194.00
HEALTH INSURANCE 536,389.00 549,798.73
DENTAL INSURANCE
EMPLOYEE LIFE INSURANCE 1,900.00 2,500.00
MEDICARE -TOWN EXPENSE 63,750.00 65,000.00
TOTAL EMPLOYEE BENEFITS: 936,220.00 944,492.73 8,272.72 0.9%
Charges Amount
Cherry
Sheet 169,000.00
Cherry Sheet Off-Sets 10,000.00
Overlay 45,000.00
FY08 Snow and Ice Deficit 0.00
Total 224,000.00
TOTAL GENERAL FUND (FUND 100) 16,372,382.00 16,661,873.75
289,491.75
1.8%
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