302 Main Street Old Saybrook, Connecticut 06475-1741
BOARD OF FINANCE MINUTES REGULAR MEETING SEPTEMBER 6, 2016 at 7:00 P.M. FIRST FLOOR CONFERENCE ROOM TOWN HALL |
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BOF Attendant Members Absent Members
David LaMay, Chairman
Brad Thorpe, Vice Chairman
Tom Stevenson
Barry O’Nell
Breck Lindley
John O’Brien
Carol Rzasa
In Attendance
Carl Fortuna, First Selectman (arrived 7:11 P.M.)
Bob Fish, Treasurer
Lee Ann Palladino, Finance Director
Barry Maynard, Tax Collector
Call to order
Mr. LaMay called the meeting to order at 7:00 PM
Pledge of Allegiance
Mr. LaMay led the Pledge of Allegiance.
Minutes:
A motion to approve the minutes of August 2, 2016 was made by Ms. Lindley, seconded by Mr.
O’Brien. Motion passed with 1 abstention.
Presentation: RealTerm Energy
A proposal was presented by Paul Vesel, Director, Business Development for RealTerm Energy. He presented an initial assessment for illustrative purposes, based upon a basic “one-for-one” replacement technique. They have selected Eaton Cooper LED fixtures with comparative light outputs for all existing HPS fixtures in the Town of Old Saybrook’s current inventory. Mr. Vesel noted in his presentation that the team, capitalizing on the expertise of its members and their specializations, will deliver approximately 61% cost savings on our streetlight energy bill in the first year. Their services offer the following:
- An initial assessment of existing streetlight network
- A comprehensive Investment Grade Audit (IGA)
- Complete photometric designs to optimize energy efficiency and minimize costs
- Installation of new LED fixtures and recycling of old fixtures
- Creation and transfer of data management tools and software
- Transfer of all warranties at commissioning
- Review of project financing
Mr. Vesel presented each member and the town with a 40 page proposal which can be seen in the Selectman’s Office.
Mr. LaMay thanked Mr. Vesel.
Treasurer Report
Mr. Fish reported that our financial goals are to meet the service and infrastructure needs of the citizens of the Town of Old Saybrook while increasing town equity, limiting long-term debt, avoiding mill rate spikes associated with project bonding, and keeping tax rates as low as possible.
He noted that the Town of Old Saybrook remains in excellent financial condition. For the 15/16 fiscal year, General Fund revenues exceeded expenditures by approximately $760,000. This surplus will raise our unappropriated fund balance to near 10% of the new budget and help to provide a cushion against State cuts in municipal revenue for the coming years.
He further noted that the Town’s total bonded debt on June 30, 2016, stands at $35.4 million compared to an allowable debt by state standards of over $250 million for a town of our size. The Town established a new mill rate for the 16/17 fiscal year of 19.26, still one of the lowest in the State of Connecticut.
The Town maintains a municipal rating of Aa2 by Moody’s Investors Services, with our “conservative financial management practices” and “structurally balanced operations” supporting that rating. That is only two steps away from the highest Aaa rating. In today’s marketplace, that rating is important for maintaining a low cost of debt.
Mr. Fish noted going forward, it will be important to continue our conservative policies, maintain our assets, and build our fund balances in order to maintain or improve that rating.
Mr. LaMay thanked Mr. Fish.
Finance Director
Ms. Palladino discussed the hand-out of the budget performance through August 31, 2016, as follows:
Budget performance through August 31, 2016
Budget Fiscal Year 2017
The general government budget for Fiscal Year (“FY”) 2017 presently stands at $ 15,644,049, up $16,341 due to FY appropriations, from the FY17 budget of $15,627,618 approved at the May 2016 budget referendum.
Budget Appropriations
To date in FY17, budgetary appropriations of $16,431 was made to recognize the budget impact of the dispatcher’s collective bargaining agreement
Municipal Reserve Fund Appropriations
During FY17 appropriations against the municipal reserve fund (“MRF”) total $170,000 for the account software system, approved at the Town meeting in August 2016
The balance of the MRF stands at $1,182,268 as of August 31, 2016, please note that not all of the expenses associated with approved appropriations have been paid.
Unassigned Surplus Fund Appropriations – There have been no appropriations against the Town’s unassigned surplus funds to date in FY17
FY17 budgeted capital outlays totaled $675,000, of which $605,000 has been transferred to various reserve accounts. The difference, $70,000, was not transferred as the projects earmarked for these funds had been identified and will be expensed at some point during this fiscal year. The balance of the various reserve funds is noted below.
Municipal Reserve Fund |
FY 2017 Transfers |
Balance 8/31/2016 |
Capital Non- Recurring Budget |
$230,000 |
$767,268 |
Fire Apparatus |
155,000 |
315,000 |
Public Works |
60,000 |
100,000 |
Catastrophic Illness |
70,000 |
187,965 |
Retirement Payout |
40,000 |
37,705 |
Revaluation |
50,000 |
80,655 |
Total |
$605,000 |
$1,488,593 |
Capital Expenditures FY 2017 has used 28% of the budgeted amount as noted below.
Department Amount Budgeted Amount Used
Fire Department $35,000 $0
Police Department $94,000 $0
IT – Town $25,000 $101
Public Works $315,000 $125,000
Total $469,000 $125,101
Authorized Transfers – none
Fiscal Year 16 Budget Performance
Through August 31, 2016, 2 months or 16.7% of the budget equates to $2,607,342. Actual expenditures, which are running at 19.2%, are tracking slightly ahead of budget expectations. Actual expenditures through August 31, 2016 for general government equate to $ 3,005,952 ahead of the two month, straight lined budget figures by $398,612. The budget lines that have expenditures in excess of 22% are attached. All budget overages are explained by timing differences or seasonal activities.
Fiscal Year 2016 vs. Fiscal Year 2015
The general government budget for FY16 was $15,258,527, or $385,522 less than FY17. When comparing the first two months of FY 16 to FY17, the current fiscal year’s budget is tracking slightly better at 19.2% versus 21.5% (rounded) versus this time last year.
Mr. LaMay thanked Ms. Palladino.
At this time, Ms. Palladino presented the Pension Study document which objectives included:
- To assess the long term liabilities of the pension plan
- To assess the town’s obligation and budget implications
- To review the pension plan design and its current options
- To understand the implications that have been, or may be, placed on the employees
The Town’s current funding policy is to put aside 7% of salary for fiscal year 17 and to raise the amount of .24% each year. As demonstrated in the analysis presented, there is a disconnect between benefits and funding. As a result one of two path, or a combination thereof must be taken:
- Increase the Town ‘s funding to the ADC
- Change the plan design to fit within the Town’s financial means
Mr. Stevenson thanked Suzanne Taylor, Chairman of the Pension Board and other members of that board for attending the meeting.
Mr. LaMay thanked Ms. Palladino.
This report in its entirety can be seen in the Selectman’s Office.
Selectman Report
- CIRMA equity distribution check: Sinking fund request for Board of Education and General Government.
After a short discussion about the distribution of monies, the following motion was made:
A motion made by Mr. Thorpe, seconded by Ms. Lindley that the Board of Finance agrees that the Board of Education’s portion of the town’s distribution check from CIRMA be placed into their sinking fund. Discussion: Mr. Stevenson reminded the board that this was not discussed prior to this meeting. Mr. Thorpe withdrew his motion and Ms. Rzasa seconded and was so VOTED.
Mr. Fortuna reported on the following:
- Dan Moran is our new Facilities Manager; doing a great job
- Will be coming in for appropriation of monies for roof repairs at Park & Rec
- Condenser leak at The Kate
- Larry Hayden and Don Lucas attended class on Building Permit software
Mr. LaMay thanked Mr. Fortuna.
Public Comment
The following comments were made:
- LED lights; will there be a report – maintenance fees?
- How is PD off budget account funded; what are “outside services”
Comments from the Chair
Mr. LaMay thanked everyone for attending and noted to the clerk to invite the Police Commission to come to the next meeting for a budget discussion.
This meeting in its entirety was recorded on CD in Town Clerk’s office. It is also video taped and can be viewed on You Tube.
A motion to adjourn was made by Mr. Thorpe, seconded by Ms. Lindley at 8:47m. and so VOTED unanimously.
Submitted,
Gerri Lewis, Clerk
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