Town of Newbury
Finance Committee Meeting
Monday July 14, 2008— 7:00 pm, Town Hall
Meeting Summary
Committee Present: Eugene Case, Bill Cooper, Larry Guay, Pete Morse, Dave Newbert, Frank Remley (Chair).
Ex-Officio: Chuck Kostro, Finance Director
1. June 18, 2008 meeting summary: Unanimously approved without revision.
2. June YTD Revenue and Expense summaries (posted on Town web-site): Chuck
Kostro presented a preliminary, un-audited FY 08 year-end expenditure report. Based
on these preliminary numbers, it appears that we will be under-budget this year.
Preliminary revenues also show that the town may not have a revenue shortfall this
year. This is good news given the potential shortfalls in revenues expected earlier.
The motor vehicle excise collections could exceed $1 million in FY08, well above the
estimated amount of $943,000. Newbury is likely one of a very few communities that
actually increased their motor vehicle revenues in the current economic climate. This
increase in collections is due exclusively to improved collection practices. Motor
vehicle bills are moved to the next stage of collection now in less than 10 days
typically. Previously, they could languish for months. However, all expenditure and
revenue numbers are not final and are subject to change.
3. Final year-end transfers: To balance various excesses and shortfalls in individual
line items, Chuck requested 13 line item transfers totaling $14,961.36. Such transfers
are allowed under state law as long as they are not larger than 3% of a line item
budget or over $5000, whichever is greater. A listing of the specific transfer requests
appears in Attachment 1. The requests were unanimously approved. The Chairman
signed the transfer request forms.
4. FY07 Audit Recommended Abatements: Chuck presented a memo to the Finance
Committee updating the committee on the abatement of certain old, unpaid MV, Boat
and personal property taxes for the years 1984-2001. Attachment 2 is a copy of the
memo. This action was recommended by our auditors and has been approved by the
board of assessors. In total, $90,194.39 in motor vehicle excise was abated,
$16,824.42 in boat excise was abated and $14,254.88 in personal property tax was
abated. The committee agreed with this action.
5. FY 08 Reserve Fund Update and Final Transfers: Attachment 3 shows a final
reserve fund summary and request for four remaining transfers totaling $3,425. The
balance in the reserve fund for FY 08 is $1,192.22. The four transfers were
unanimously approved. The Chairman signed the transfer request forms.
6. FY 09 Reserve Fund transfer: Chuck presented a beginning FY 09 reserve fund
balance (Attachment 4) with an initial request for a $23 transfer to the Finance
Committee Expense line item to cover a shortfall in annual AFTC dues. It was
unanimously approved. The Chairman signed the transfer request forms. The
Committee also discussed the necessity to set-aside approximately $30,000 in the
Reserve Fund for potential fuel expense shortages that may occur later in the year
due to the rising cost of gas and oil.
7. Formation of Capital Fund with Land Sale Proceeds: The committee resolved that
the Capital Planning Committee should be reactivated soon and should renew work
on a five-year capital plan. This is in response to the receipt of $175,000 in new
capital from the Hutchins Rd. land sale, and anticipation of further land sales. It is also
in response to pending requests for resurfacing work and other ad hoc capital
requests. Dave Newbert, current CPC Chair said that he is trying to organize the next
meeting for late July or early August, but that one open appointment involving a
second member of the FinCom needed to be resolved. However, he agreed that the
next meeting could go forward pending the filling of this slot.
8. Request for quarterly updates on Debt Service payments, including PI
betterments: Pete Morse presented a request to establish a periodic report showing
outstanding debt service by project, including current payments and remaining
balances. Attachment 5 is a preliminary example of the sort of report he proposed.
All agreed that his was a good initiative and that the report should be provided by our
Bond Counsel, First Southwest and posted on the Town website. The purpose of the
report will be to maintain and on-going, transparent summary of outstanding debt by
project. It was noted that our debt payments only occur twice per year, in August and
February, so it would only be updated at those times, but posted permanently.
A question was raised about why the $160,000 debt for AirPak equipment for the two
fire companies, authorized by voters in 2006 as debt exclusion, was not shown and
apparently not as yet paid. Gene Case pointed out that such a debt exclusion could
be most likely paid in a single year and suggested that is be part of the Recap
estimate for FY09 thus authorizing additional tax assessment to pay for this item
approved by voters. Chuck agreed to look into this.
9. Other: The committee commended Chuck on the outstanding performance of the
Finance Department in FY 2008, and assured him that the efforts to improve the
Town’s financial management were not going unnoticed. It was resolved that the
Committee would draft a letter of appreciation to all members of the Finance
Department and plan to have a small gathering to celebrate a job well done at our
September meeting, to be held on a Tuesday night.
10. Next Meeting: No meeting in August, September Meeting to be scheduled.
ATTACHMENT 1
FY 08 Line Item Transfers
From Account Amount To Account
Board of Health 4 ,699.41 Finance Department Expense
Finance Department Wages 383.41 Finance Department Expense
Finance Department Wages 96.24 Finance Director Salary
Board of Health 1 ,568.44 Legal Services
Police - Wages 1 ,107.00 Planning Board Wages
Town Hall Maintenance 80.00 Public Building Maintenance Wages
Police - Wages 500.00 Police Expense
Byfield Call Fire - Wages 140.00 Byfield Fire Protection - Wages
Byfield Forrest Fires - Wages 165.46 Byfield Fire Protection - Wages
Newbury Call Fire - Wages 1 ,200.65 Newbury Fire Protection - Wages
Highway Maintenance Expense 1 ,500.00 Town Garage Maintenance Expense
Highway Maintenance Expense 2 ,000.00 Parks Expense
Police - Wages 1 ,520.75 Cost of Bonding
Total 1 4,961.36
Part II - June 30, 2008
FY08 LINE-ITEM TRANSFERS
Attachment 2
MEMORANDUM
TO: The Finance Committee
FROM: Charles E. Kostro, Finance Director
CC: Catherine Gabriel, Town Accountant
DATE: July 14, 2008
RE: Old Accounts Receivable
Attached please find documentation relative to the abatement of boat and motor vehicle excise tax and
personal property taxes for the period of 1984 to 2001. The Board of Assessors has approved these
abatements.
This action is consistent with the recommendation of the town’s audit firm in their management letter dated
February 15, 2008 and which was previously provided to the Finance Committee. This action is also
consistent with the response to the FY07 audit dated May 12, 2008 and also previously provided to the
committee.
Attachment 3
FY 08 Reserve Fund Summary
ITEM AMOUNT
Reserve Fund Budget $ 135,000.00
Salary Adjustments $ (11,385.82)
Town Hall ADA Compliance $ (7,500.00)
Building Department IT $ ( 895.00)
Cost of Bonding $ (1,945.78)
Finance Department $ (11,010.00)
Police Detail $ (11,602.50)
Legal Expense $ (13,000.00)
Public Building Maintenance $ (10,000.00)
Legal Expense $ (12,000.00)
Insurance Expense $ (96.28)
Cost of Bonding $ (1,000.00)
Short-Term Debt Interest $ (8,421.59)
Personnel Board $ (30.00)
Hydrant Service $ ( 977.50)
Lower Green School House $ (2,705.00)
Snow and Ice Deficit $ (29,999.31)
Fire Protection #2 Wages $ (1,200.00)
Library Expense $ (3,000.00)
Veteran's Expense $ (3,687.00)
$ 4,544.22
Finance Department Expense (Potential funding of tax rebates fro the Senior Work-
Off Abatement Program and off-set any other last minute expense) $ (2,500.00)
Town Garage Maintenance Expense (Fund deficit in this account after final
FY08 warrant) $ ( 150.00)
Planning Department Expense (Shortage for new computer) $ ( 175.00)
Police Expenses (Fund deficit in this account after final FY08 warrant) $ ( 600.00)
Balance Remaining $ 1,119.22
Transfers Completed
Potential Transfers Required
Attachment 4
FY 09 Reserve Fund Summary
FY09 RESERVE FUND TRACKING
ITEM AMOUNT
Reserve Fund Budget $ 70,000.00
Transfers Completed
$ 70,000.00
Potential Transfers Required
Finance Committee Expenses (Increase in ATFC annual dues) ($23.00)
Estimated Fuel Costs (Set-aside for anticipated fuel increases) ($30,000.00)
Balance Remaining $ 39,977.00
Attachment 5
Example Debt Service Summary
TOWN OF NEWBURY
SUMMARY OF DEBT SERVICE BY PROJECT
PROJECT
ORIGINAL
PRINCIPAL
2008
PRINCIPAL
REDUCTION
2008
INTEREST
UNPAID
PRINCIPAL
BALANCE
YEARS TO
MATURITY
SCHOOL $ 7,045,000 $ 710,000 $ 196,420 $ 4,640,000 6
SCHOOL $ 350,000 $ 25,000 $ 9,763 $ 225,000 8
LIBRARY $ 1,798,000 $ 110,000 $ 55,123 $ 1,240,000 12
RECREATION $ 197,000 $ 15,000 $ 5,153 $ 120,000 7
LAND ACQUISITION $ 1,500,000 $ 85,000 $ 48,143 $ 1,075,000 12
LAND FILL CLOSURE $ 4,065,000 $ 220,000 $ 134,015 $ 2,975,000 12
RECREATION $ 270,000 $ 30,000 $ 10,500 $ 240,000 7
TRANSFER STATION $ 1,140,000 $ 65,000 $ 44,390 $ 1,075,000 14
PLUM ISLAND WATER
PLUM ISLAND SEWER
AIRPAK EQUIPMENT $ 160,000 $ - $ - $ 160,000
TOTALS $ 16,525,000 $ 1,260,000 $ 503,505 $ 11,750,000
| 
