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The Board of Finance held a regular meeting on Thursday, May 27, 2010 in the Council Chambers,
3 Primrose Street, Newtown, CT. John Kortze called the meeting to order at 7:35pm.
PRESENT: John Kortze, James Gaston, Martin Gersten, Joseph Kearney, Harry Waterbury and Michael Portnoy.
ALSO PRESENT: First Selectman E. Patricia Llodra, Finance Director Robert Tait, Selectman William Furrier, Pension Committee members Tom Murtha, Barbara Bloom, Frank Krasowksi and Mark Korotash, Director of Building and Grounds Gino Faiella, one member of the public and one member of the press.
VOTER COMMENTS: none.
COMMUNICATIONS: Mr. Kortze referred to emails regarding the Middle School Roof appropriation (Att. A) Also mentioned was a letter from Board or Education Chair Lillian Bittman regarding spending (Att. B)
MINUTES: Mr. Gersten moved to approve the minutes of April 12, 2010. Mr. Gaston seconded. All in favor.
FIRST SELECTMAN REPORT: First Selectman Llodra reported the demo of Litchfield and Yale has been awarded to Cherry Hill Construction for $58,000 less than what was originally anticipated. The Trades Lane roof project will be awarded to Epifano and is coming in about $1,000 less than what had been anticipated. The target number identified in the CIP for the water main project was $450,000; so far the costs look to be around $300,000. The Old Mill Dam is ready to go to bid. The bids for Castle Hill/Castle Meadow came in at $542,000. This will be completed with Federal Stimulus money. All prepatory work has been done for Hook & Ladder leading up to going to the Borough P&Z. The $200,000 in the CIP for each year in the Sandy Hook Streetscape Project will work
well. Two documents relative to self funding insurance were presented: Calculation of Estimated Contributions to a Self Insured Medical Benefit Plan (Att. C) and the Letter of Memorandum (Att. D). Also presented was a Pension Fund Advisor Selection from CCM (Att. E). Mr. Kortze asked for a tracking of CIP projects and the actual bids. He said he had been invited to a SHOP meeting relative to the Sandy Hook improvements and suggested they organize more formally so they can speak as one voice. Mr. Tait reported Lindberg & Ripple has been chosen as the insurance consultant and would begin July 1. The total fee is $50,000, split evenly between the town and education. Mr. Tait explained the
contribution for next year with a self insurance plan is based from twelve months worth of claims going backwards. Estimates were factored twelve months up to March 31st. Mr. Gaston asked for a breakdown of expenditures regarding the Newtown Youth Academy parking lot and asked to be briefed on the tax litigation involving NYA. First Selectman Llodra said there is no processing of the suit because negotiations are ongoing. She will brief the board if it continues to litigation. First Selectman Llodra noted that she wasn't sure if herself and Mr. Tait, representing the town budget and Dr. Robinson and Diane Raymo, representing the Board of Education have the same understanding of how self funding works. The claims influence next years contribution to the fund; working essentially the same way as the pension. Mr. Tait said we are taking the risk from the insurance company but reducing it because we have stop loss. Next year there won't
be this confusion, fund balance and interest earnings will be taken into account. First Selectman Llodra said this is characterized as low risk or no risk; we would not be leading the town in this direction if we felt we were putting anyone at risk. First Selectman Llodra explained there will be a Special Town Meeting on June 1, the call of the meeting is to send the budget to referendum. Statute 7-7 allows the Board of Selectman to move the item directly to referendum, there doesn't have to be a petitioning process to do it. She trusts the process and will get a legal opinion in writing.
FINANCE DIRECTOR REPORT: none.
UNFINISHED BUSINESS:
Discussion and possible action:
1. Board of Education Monthly Financial Report, March 31, 2010: not discussed.
2. Town of Newtown Year-To-Date Budget Report, May 4, 2010: not discussed
NEW BUSINESS:
Discussion and possible action:
1. Pension Committee, Board of Selectmen: Mr. Murtha addressed the board about questions that were presented in June 2009 (Att. F) saying the pension committee recommends lowering the assumption rate to 7.75%, which represents an additional cost of approximately $164,000 per year. Mr. Kortze asked for the names of funds we are in and their expenses. Mr. Murtha said that there are monthly and quarterly reports. Mr. Kortze said that underfunding the pension can have demonstrative impact over multiple years and be substantially more expensive. The plan has not been bid in years; First Selectman Llodra said it can be discussed with the pension committee. Mr. Kearney said that a request for proposal would need to be very clear and a bid could be rejected "for any or no
reason".
2. Resolution: Mr. Gaston moved to waive the reading of the entire resolution entitled Resolution Providing For A Special Appropriation In The Amount of $4,257,690 For Roof Replacement At Newtown Middle School And Authorizing The Issuance of $4,257,690 Bonds Of The Town To Meet Said Appropriation And Pending The Issuance Thereof The Making Of Temporary Borrowings For Such Purpose. Mr. Kearney seconded. All in favor.
Mr. Gaston moved the resolution entitled Resolution Providing For A Special Appropriation In The Amount of $4,257,690 For Roof Replacement At Newtown Middle School And Authorizing The Issuance of $4,257,690 Bonds Of The Town To Meet Said Appropriation And Pending The Issuance Thereof The Making Of Temporary Borrowings For Such Purpose. Mr. Gaston seconded for discussion. Mr. Tait said that there are two line items in the 2010-2011 CIP that total $4,803,000, of which $3,500,000 is to be bonded and $1,303,000 is to be received in the form of a state grant. Bonding is always authorized in the full amount of the project to be reduced by state grants. Mr. Kearney asked if the contracts are signed for the full amount without certainty of the grant funds. Mr. Tait confirmed that is the case. Mr. Portnoy stated he has concerns that the Middle School may not be used as a Middle School in the future pending new enrollment projections. There is a real possibility the Middle School will
be used for something else, a police department, a fire station, a senior center. He prefers to patch the roof at this point until it is known what direction the town is going with the utilization of facilities. First Selectman Llodra said we don't want to pass up the opportunity to get a state grant for this. The building is a municipal building with a failing roof that needs to be fixed, no matter what use the facility is used for. It is unwise to delay this process. Mr. Gaston agreed with Mrs. Llodra saying that the State of CT is talking about a $3-4 billion dollar deficit next year. The financial support on projects such as these will be drying up. He believes the project should be moved forward, the money will not be wasted, the project needed to be done years ago. Mr. Gersten asked if we can secure the funds now and agree not to go forward until we are satisfied that it will be used for purposes anticipated. Mr. Kearney
is not comfortable in bonding huge amounts on "guesstimates" and is not comfortable with the number as it stands right now. Can a metal roof be reimbursed by the state? Mr. Faiella said that it is a municipal building and would be a disservice to the facility not to change the roof as it will potentially cause structural damage going forward. There is a leaking condition, students are at risk, it is paramount to get this done right away. This resolution will let the state know we are serious about doing the project. It's an ongoing battle; $28,000 was spent this year on repair work, $22,000 last year and $40,000 previously. Motion failed 3-3 (YES: Gaston, Waterbury, Kortze) (NO: Gersten, Kearney, Portnoy).
Mr. Gaston moved to reconsider the vote on the motion relative to the Resolution Providing For A Special Appropriation In The Amount of $4,257,690 For Roof Replacement At Newtown Middle School And Authorizing The Issuance of $4,257,690 Bonds Of The Town To Meet Said Appropriation And Pending The Issuance Thereof The Making Of Temporary Borrowings For Such Purpose. Mr. Kearney seconded. Mr. Gaston said that there is water leaking into the cafeteria, the stop gap measures are not working, there is a hazardous condition. The project will provide the bonding, Public Building and Site will review it and it will ultimately have to come to a referendum vote. Mr. Waterbury said it is an issue of timing; we need to go forward regardless of the use of the building. Mr. Kearney said if this
amount is authorized and the bids came in at this amount we wouldn't have any say over that. Mr. Waterbury pointed out the high school project is different because it was an addition to the facility; the middle school roof is a problem that has to be fixed. Mr. Kortze suggested a second resolution be crafted. He said this is a structural need and finds it remarkable that nobody from the Board of Education was present at the meeting. Mr. Kearney would feel more comfortable if another group looked at the project to see what can be done at the absolute lowest cost. First Selectman Llodra said that the work has to be done in the summertime, the state requires this process before applying for the grant and stated there were three options in the study, one reason this particular number was chosen is because it allowed for granting. Mr. Gaston suggested adding to the adopted resolution: We resolve, by strenuous request, prior to acceptance of the
bids, and after opening of bids on this project, a joint meeting be had involving the Board of Selectmen, The Board of Education, the Board of Finance, the Legislative Council and the Public Building and Site Commission to review the bids. Mr. Portnoy believes there are scenarios that could close the middle school this September or in September 2011. Can we spend $500,000 to clear 90% of the problems? Mr. Faiella said that everyone that has come has said the roof has lived its life expectancy and is failing miserably; it is problematic in the winter. Mr. Gersten said that the Board of Education refuses to recognize the reality in the change in demographics. It is a critical issue to the health and well being of the kids. Spend $200,000 now to get through the winter and force the Board of Education to deal with the issue of closing the school in the next sixteen months. The addition to the original resolution does not give the Board of
Finance ability to dialogue or affect the process. Mr. Kortze said there is a clear issue of process; something has to be done, it is a town asset. Mr. Portnoy questioned Mr. Gaston’s right to reopen the vote for consideration. It was determined, through Roberts Rules of Order, that in this case the motion to reconsider can only be made by a member who voted against it. Mr. Kortze ruled the motion out of order because it is in violation of Roberts Rules of Order. Mr. Kearney moved to reconsider the vote on the motion relative to the Resolution Providing For A Special Appropriation In The Amount of $4,257,690 For Roof Replacement At Newtown Middle School And Authorizing The Issuance of $4,257,690 Bonds Of The Town To Meet Said Appropriation And Pending The Issuance Thereof The Making Of Temporary Borrowings For Such Purpose. Mr. Gaston seconded. Motion passed 4-2 (YES: Kearney, Gaston, Waterbury, Kortze) (NO: Gersten,
Portnoy)
Mr. Gaston resolved that the Board of Finance, by strenuous request, prior to acceptance of the bid, and after opening of bids on this project, a joint meeting be had involving the Board of Selectmen, The Board of Education, the Board of Finance, the Legislative Council and the Public Building and Site Commission to review and discuss the bids and bid options. Mr. Kortze seconded. Motion passed 5-1 (NO: Portnoy).
3. Recommended actions to be forwarded to the Legislative Council: Mr. Gaston moved Resolved, that the Newtown Legislative Council authorizes the Newtown Board of Education to apply to the Commissioner of Education and to accept or reject a grant for roof replacement at Newtown Middle School. Mr. Waterbury seconded. Mr. Tait said this was drafted by Ed Arum, who was the interim director of business, stating the recommendations need to be approved by the council in order to apply for a grant. Motion passed 5-1 (NO: Portnoy).
Mr. Gaston moved Resolved, that the Public Building & Site Commission is hereby established as the building committee with regard to the Newtown Middle School roof replacement project. Mr. Gersten seconded. All in favor.
Mr. Gaston moved Resolved, that the Board of Finance recommends the Newtown Legislative Council hereby authorizes at least the preparation of schematic drawings and outline specifications for the Newtown Middle School roof replacement project. Mr. Gersten seconded. Motion passed 5-1 (NO: Portnoy).
Mr. Gaston moved that the Board of Finance recommends the Legislative Council hereby authorizes the expenditure of 100%, or $4,257,690, of the Newtown Middle School roof replacement project revenues to complete the project. Mr. Kearney seconded. There were concerns voiced over the wording of the recommendations.
Mr. Gaston moved to reconsider and rescind the motion Resolved, that the Newtown Legislative Council authorizes the Newtown Board of Education to apply to the Commissioner of Education and to accept or reject a grant for roof replacement at Newtown Middle School. Mr. Kearney seconded. All in favor.
Mr. Gaston moved to reconsider and rescind the motion Resolved, that the Public Building & Site Commission is hereby established as the building committee with regard to the Newtown Middle School roof replacement project. Mr. Gersten seconded. All in favor.
Mr. Gaston moved to reconsider and rescind the motion Resolved, that the Board of Finance recommends the Newtown Legislative Council hereby authorizes at least the preparation of schematic drawings and outline specifications for the Newtown Middle School roof replacement project. Mr. Gersten seconded. All in favor.
Mr. Gaston moved to reconsider and rescind the motion that the Board of Finance recommends the Legislative Council hereby authorizes the expenditure of 100%, or $4,257,690, of the Newtown Middle School roof replacement project revenues to complete the project. Mr. Gersten seconded. All in favor.
Mr. Gaston moved to recommend that the Council follow the established processes of the Bureau of School Facilities. Mr. Gersten seconded. Motion passed 5-1 (NO: Portnoy).
4. Transfers: Mr. Gaston moved the following transfers: From 01500-1003 Payroll, $17,000 to 01500-1006 Benefits, $500 & 01500-1004 Overtime, $16,500. $13,900 from 01650-4060 Contractual Services to 01650-2017 Fuel Oil. $33,000 from 01500-4064 Contractual Overlays to 01510-2032 Salt. From 01510-4060 Contractual Services, $36,725 to 01510-1003 Overtime, $22,925 & to 01500-5081 Capital Road Improvements, $11,800 & to 01500-2006, Drainage Materials, $2,000. $3,600 from 01500-4063, Contractual Line Painting to 01500-2018 Street Lights. From 01500-4061 Contractual Drainage, $80,000 to 01500-2016, Equipment Fuel, $40,000 & to 01500-3050 Repairs, $40,000. $7,100 from 01500-2029 Private Roads/Reconstruction to 01500-4060 Cont. Tree Removal. Mr.
Gersten seconded. All were in favor.
ANNOUNCEMENTS: none.
ADJOURNMENT:
Having no further business, the Board of Finance adjourned their regular meeting at 10:35p.m.
_______________________________
Susan Marcinek, Clerk
Att. A: Board of Finance emails re: Middle School roof project
Att. B: Spending memo from BOE Chair, L. Bittman
Att. C: The Calculation of the Estimated Contribution to a Self Insured Medical Benefit Plan
Att. D: Letter of Memorandum Regarding Medical Self Insurance
Att. E: CCM document on Pension Fund Advisor Selection
Att. F: Board of Finance/Pension Committee Q&A
Att. G: Middle School Roof Replacement Resolution
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