The Board of Finance held a regular meeting on Monday, September 13, 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, Joseph Kearney and Harry Waterbury.
ABSENT: Martin Gersten, Michael Portnoy.
ALSO PRESENT: First Selectman E. Patricia Llodra, Finance Director Robert Tait, two members of the Board of Education, six members of the public and two members of the press.
VOTER COMMENTS: none.
COMMUNICATIONS: An email from Bill Hart regarding system access (Att. A) was submitted for the record. Mr. Tait confirmed he has access to the Phoenix system. Mr. Kortze went on the CT FOI page (Att. B & C) and confirmed that minutes must be made available to the public within 7 days. The votes of each member on any issue must be put in writing and made available to the public within 48 hours, excluding weekends and holidays. He said it is helpful to expedite the minutes so that the boards can all be on the same page. FOI regulations state the records from meetings including information or data which is typed, handwritten, tape recorded, printed, photographed or computer stored and most inter-agency and intra-agency memoranda or letters be available to the public. These
items, including back up data and financial reports, can and should be scanned into the record and included as attachments on the website. Mr. Kortze clarified that he thought the Board of Education would be providing Bob Tait with access to the Board of Education Phoenix finance system by August 30 because the last time they met he asked the question directly and both Bill Hart and Ron Bienkowski indicated they would be ready for the 30th; obviously there was some confusion. (Att. D)
Mr. Kearney welcomed Matt Rosa and Sam Boland, two members of Boy Scout Troop 270 working to earn their merit badges in communication..
MINUTES: Mr. Gaston moved to approve the minutes of August 26, 2010. Mr. Waterbury seconded. All in favor.
FIRST SELECTMAN REPORT: First Selectman Llodra reported that in the past the total expenditure for insurance consultative services for both town and education was about $200,000, $90,000 for AON, $110,000 for TR Paul. Now the cost is $70,000, a cost shared evenly between the town and education side. Mr. Kortze asked what was presented as a total expense by the town side and by the board of education. First Selectman Llodra reported both lines, on both sides, were amended. The first step in developing an RFQ for the collaboration of systems is to speak with other districts that have done the same thing; this is being done now. First Selectman Llodra is waiting to hear from the town attorney relative to the education contingency fund.
FINANCE DIRECTOR REPORT: Mr. Tait reported on the town visit to Standard and Poors. (Att. E & Att. F). The town received a rating of AA+ with a stable outlook. An improved rating is in the future if fund balance plans continue. The financial management assessment rating is strong, which is the highest rating. First Selectman Llodra said that forecasting and public discussion of fund balance and debt cap made a difference in the financial management assessment rating. Mr. Kortze asked if it would be problematic if we veered from the plan to wean ourselves from the fund balance. Both Mr. Tait and First Selectman Llodra agreed it would be. Mr. Kearney asked for a current data on towns and debt per capita.
UNFINISHED BUSINESS:
1. Board of Selectman Month to Date Financial Report & Budget Summary Report: The report was submitted for the record. (Att. G).
NEW BUSINESS:
Discussion and possible action:
1. Board of Selectmen CIP: First Selectman Llodra presented the CIP and the Selectmen recommendations (Att. H) along with the financial spreadsheet with priority rankings (Att. I).
2. Oct. 6, 2010 joint meeting with Dr. Chung: Mr. Kortze said there will be a joint meeting with the Council that will include Dr. Chung. He will touch base to coordinate a definitive date.
3. Discussion on Board of Education financial report, transfers and access to Phoenix: Mr. Kortze read the motion from the Board of Education 9/7/10 minutes relative to transfers and encumbrances (Att. J). Mr. Kortze stated encumbrances are less clear and less transparent and possibly in violation of the actual statute. A transfer will show exactly where you are short and by how much, it will show exactly how much money was added. Transfers were always articulated in the monthly board of education report but are not any longer. There are items that come up that dictate public discussion, such as contractual issues, issues that add to overhead. He doesn’t believe transfers are being reviewed and discussed ahead of time and thinks it’s odd to wait
until the end of the year to see how things stack up when you present and prepare your budget in October. Mr. Kortze questioned BOE policy section 3-203 that states an audit needs to be done and presented to the BOE for examination. He said that if money is moving around and there are no transfer it should at least be documented and presented. Mr. Gaston concurs with Mr. Kortze with respect to transparency and clarity. He said it is easier for the boards and the public to see where the money is coming from and going to on an ongoing basis. He would like the opinion of town council as to whether the Board of Education is required to follow the statutes. Mr. Gaston referred to §10-222. The clear inference of the statute is that transfers are required because why would there be an emergency situation to the contrary. All words, sentences and phrases in statutory law are interpreted as if they have meaning, the legislature meant for them
to have some effect. Mr. Gaston referred to §2-130 of the Charter and §7-345 of the Statutes and the powers of the Board of Finance and also referenced §6-70, 6-80 and 6-90 of the Charter which talks about educational special appropriations and transfers. §6-90(c) says the Board of Finance shall keep under review the expenditures of town departments. Mr. Gaston believes the Board of Education is a department because §8-02 of the Charter reads “The term ‘department’ shall include each board or commission to which funds are appropriated in the Annual Budget”. Mr. Gaston said that it is within the province of the Board of Finance to require this type of transfer accounting, at least to them, not only for the benefit of the board but also to the public. The transfer procedure is a good transparency method. The Board of Education can also do a separate form with respect to encumbrances to look at year
to year, but they shouldn’t be mutually exclusive. Mr. Waterbury agrees and noted that procedures are looked at from an accounting standpoint. Mr. Tait said that all towns operate under GAP which addresses actual revenues and expenditures. Mr. Kearney said transfers have to be well documented. Mr. Tait said that we have both transfers and encumbrances now, they are separate and yet they work together. Mr. Gaston moved that the Board of Finance recommend that the Board of Education continue to provide the Board of Finance the monthly transfer budgetary accounting process that has been the practice. Mr. Waterbury seconded. All in favor.
4. 2009-2010 Year End Transfers: Mr. Tait explained that he checked with the auditors and this is the normal year end process and is accurate for financial statements. Mr. Gaston moved the 2009-2010 year end transfers dated August 29, 2010. Mr. Waterbury seconded. All in favor. (Att. K).
ADD TO AGENDA: Mr. Gaston moved to add an executive session for purposes of discussing litigation and the stipulation between the Town of Newtown and Newtown Youth Academy. Mr. Kearney seconded. All in favor.
5. Executive Session: Mr. Gaston moved to enter executive session for the purpose of discussing litigation and the stipulation between the Town of Newtown and Newtown Youth Academy. First Selectman Llodra and Finance Director Robert Tait were invited to attend. Mr. Kearney seconded. All in favor. Executive session was entered into at 9:10 p.m. and returned to regular session at 9:25 p.m. with no motion taken.
ANNOUNCEMENTS: none.
ADJOURNMENT:
Having no further business the Board of Finance adjourned their regular meeting at 9:25 p.m.
_______________________________
Susan Marcinek, Clerk
Att. A: Systems Access E-mail
Att. B: Freedom of Information highlights
Att. C: Freedom of Information Frequently Asked Questions
Att. D: Board of Education minutes, 9/7/10, page 1
Att. E: Bond Rating Memo to Robert Tait from Barry Bernabe
Att. F: Bond Rating email to Robert Tait from Berry Bernabe
Att. G: Town of Newtown General Fund – Budget & Actual – Fiscal Year 2009-2010
Att. H: Selectmen CIP recommendations
Att. I: Town of Newtown CIP
Att. J: Board of Education minutes, 9/7/10, page 5
Att. K: 2009-2010 Year End Transfers
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