Town of Newbury
Finance Committee Meeting
Tuesday, November 16, 2010, 7:00 pm, Byfield Fire Hall
Meeting Summary
Committee: Gene Case, Bob Connors, Dick Passeri, Frank Remley (Chair)
Ex-Officio: Chuck Kostro, Town Administrator/Finance Director
Guests: Audrey Keller (BOS); Mike Bulgaris (BOS)
1. October 21 Meeting Summary: Approved unanimously
2. October FY 11 YTD revenue and expenditures (Chuck Kostro):
• Revenues: Overall collections are trending approximately as projected for the
first four months of FY 11, with some variations within categories. Licenses
and permits are ahead of FY 10 collections by $30,550, Motor vehicle excise
by $14,057, while interest and penalties are behind by ($27,355), and Fees by
(7,052).
• Expenditures: Overall expenditures are as projected through the first four
months (33% of the year), with some departmental variations:
-At 46% of budget, Accountant’s Expense is higher than projected due to the
need for a temporary replacement while Angel was on maternity leave.
-Assessor’s expense, at 64% is due to Patriot Properties early payment.
-Treasurer-Collector expense is at 45% due to early payment of the
anticipated Point Software update to the town’s web-site
-Police expenses slightly high due to payment for a software upgrade.
-However, wages are below budget even though there was a recent overtime
expense due to a successful search for a dangerous fugitive in Byfield.
-Street lighting expense is higher than budgeted due to a delay in National
Grid’s turn-off of 20% designated street lights in Newbury.
-Short term borrowing costs are higher than anticipated at this juncture due to
short term borrowing needs for water& sewer payments.
-Medicare expenses are higher than currently budgeted due to delayed OBRA
savings, but will drop soon.
• Projected Tax Rate: based on the projected Recap, at this juncture a tax rate
of 10.18 is estimated for FY 11.
3. Reserve fund update, transfers: there were now requests for transfers
4. Debt restructuring options: The finance Director presented an analysis of potential
savings from debt restructuring compiled by First Southwest Co (FSW), Newbury’s
bond consultant. FSW estimates that at reduced current interest rates, (as of Nov. 1),
total savings through 2020 (FY 2019) for excluded debt would be $428,972.50.
However, $1,985,000 of this debt is for NES and is subsidized by the MSBA. Thus,
savings must shared with the MSBA. Therefore, total savings to Newbury would be
$325,713.77 through 2/1/2020. These savings will begin as soon as the refunding is
accomplished. However, since this pertains to current debt exclusions, the annual
savings would result in a tax reduction tax burden and not accrue to the general fund.
Also, since interest rates for such debt fluctuate daily, the analysis is not firm until
actual refunding occurs. The finance committee urged the Finance Director to
continue to pursue this with FSW and, pending final analysis, conduct the refunding
process ASAP.
5. Other:
• Financial Planning Task Force update: a meeting will be held on Thursday,
Nov. 18 at 9:00 am, Newbury Fire Hall. All FinCom members are urged to
attend.
• TRSD update: Gene Case has joined the TRSD Financial Advisory
Committee on behalf of the Newbury Finance Committee and will attend its
first meeting on Nov. 18.
• Town Barn project update and projected costs/funding: Bob Connors has
offered to have his firm’s electrical/mechanical engineering consultant
conduct a walk-through of the Town Barn to provide an informal opinion of
the minimum repairs needed to render the facility safe and code compliant.
This would be a pro-bono site visit. The Finance Committee urged that this
be done to determine how to keep the Barn in operation for at least the short
term while other options, including financing, are studied. The Town
Administrator agreed that the engineer could observe the Highway Barn subject
to the approval of the Building Inspector. He also noted that the procurement
laws must be followed for any work performed on the facility.
• Middle Rd. flooding update: The Finance Director explained that permission
to enter the flooded property has not yet been granted, and that Middle Rd. is
currently shut down as a result of high water from recent rains. He also said
that septic systems on nearby properties were under water. The Finance
Committee felt that this represents a health and safety hazard, and urged that
all steps necessary, including legal action if appropriate, be taken to resolve
this situation and restore Middle Road to full, safe operation.
• Finance Committee open seat: Frank Remley identified the two current
candidates with whom he has met and summed up both as qualified and
attractive candidates. After brief discussion, it was concluded that Marshall
Jespersen, recently retired owner and CEO of an automotive franchise, was
likely a better fit at the moment because of the currently heavy demands on
the Finance Committee, and his more flexible schedule. However, during the
discussion it was also concluded that the Capital Planning Committee should
be revived and reconstituted, and that the other candidate, Frank Visconti
may be a good candidate for one of the two citizen seats on that committee,
which while, very important given recent capital needs, would likely demand
less time than the full finance committee.
6. Next Meeting: Monday, December 13, 7:00 pm, (venue to be determined)
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