Minutes of the Special Board of Finance meeting held on Tuesday, July 06, 2015 at 7:30 p.m. at the Old Lyme Memorial Town Hall Meeting Hall.
Present: Regular Members:~ Andrew Russell, Bennett Bernblum, H. P. Garvin, III,
Christopher Kerr, Janet Sturges, David Woolley
Alternate Members:~ Robert Jose, David Kelsey, Gil Soucie
Nicole Stajduhar, Finance Director
Mary Jo Nosal, Selectwoman
Skip Sibley, Selectman UNAPPROVED
Absent: Regular Members:
Alternate Members:
Guest: Rich Prendergast, Vice Chairman, WPCA
Rob McCarthy WPCA member
Dimitri Tolchinski, WPCA member
Doug Wilkinson, Secretary-Treasurer, WPCA
_______________________________________________________
Mr. Russell called the meeting to order at 7:30 p.m.
Water Pollution Control Authority (WPCA) Discussion
Mr. Russell stated the reason for this special meeting is to come together and try to understand the processes followed by WPCA that led to the present financial issues. He said the board is more interested in the process rather than the project itself as their role is financial, in the interest of the budget.
Mr. Prendergast explained that the WPCA board is a task force of sorts, that works with the State of CT DEEP, and follows the procedures set forth which meet DEEP’s approval. Mr. Prendergast said the WPCA board appreciates the time each board is spending to clarify questions and transition forward in unity as this wastewater project will be ever present in coming years.
Mr. Russell outlined the chain of events that led to requests for additional financing, creating over expenditure of the WPCA budget. He quoted past minutes where $61,000 was requested by the WPCA of the Board of Selectmen, that was never brought before the Board of Finance. Mr. Kelsey reiterated that a motion was made at the WPCA meeting for an additional $61,000 for financial assistance, with no written documentation to the Board of Finance. He stated that the Selectmen were present at the WPCA meetings, and this request should have gone to town meeting.
Mr. Kelsey stated that when the WPCA came to the Board of Finance for the initial $185,000 in funding that was approved at town meeting, there were three scenarios presented; a community wastewater plant, the CT River plan, and in worse case, piping into New London’s treatment Center, which, Mr. Kelsey stated, was the last option the town wanted to be involved with. Mr. Prendergast stated that there have been many letters and emails from the State DEEP, continually asking for various steps and requests that changed the
direction of what was initially hoped for. He stated the three options available: a community septic system, the CT River (which wasn’t going to happen), and the third option, the least favored, sewers to go to the New London treatment plant. Somewhere during the wastewater option discussions of having a community septic center, there was a shift in options that would result in additional expenses that the Board of Finance were not made aware of, as well as never seeing in writing the elements from DEEP.
Mr. Wilkinson stated that the WPCA did an extensive study of all the wastewater options available to the town. They kept in constant contact with the DEEP and the State, which keeps asking for more information to which the WPCA has to keep answering their questions to remain in compliance, all of which comes with a price. Mr. Russell stated that at that time two beaches had already had consent orders and Point O’Woods already had moved forward with sewers. To that, Mr. Prendergast stated that the state actually wanted sewers for all of Old Lyme and the WPCA started a progressive study of the various areas in question.
Mr. Wilkinson stated that the WPCA board didn’t know that the DEEP was going to be continually working with the consultant, which incurred additional expenses to the town. He reported that when a WPCA submits plans to the state, the plan continues to be reviewed and changed, which is a cost to the WPCA. Mr. Prendergast agreed that the DEEP continued to spend money with the consultants, which the town had to absorb. Mr. Russell read a portion of July 8, 2014 WPCA meeting minutes which read, “A motion was made by Frank Chan, seconded by Doug Wilkinson, to recommend that the Board of Selectmen approve additional funding of $61,000 for the project. Motion passed. This amount represents anticipated engineering costs to make necessary adjustments to the project report in order to reflect the new
collaborative approach. The edited report will form the basis of the document needed for the design phase.”
Mr. McCarthy stated that throughout the process, it was implied that the costs would be into the bond which would have gone to a town meeting when that time arrived. Mr. Kelsey stated that the WPCA has continued to operate independently of the town, which should not have been the case. Mr. Russell elaborated that there are many agencies of the the town and the fire department was used as an example because Mr. McCarthy was Chief and had extensive dealings with the Board of Finance during the budget process. He stated that no other agency has felt that they can or should operate independently from the Town.
Mr. Russell read a statement from the WPCA regarding a collaboration of efforts and all of that takes financial backing. Mr. Russell stated that the additional appropriation of $15,500 requested by the WPCA and approved by the Board of Finance in June 2014 for various stormwater testing that was required or the town would be fined, did not go towards the intended invoices. Mrs. Stajduhar confirmed that the additional appropriation that was intended for stormwater invoices ended up being used for Woodard and Curran project invoices.
Mr. Russell stated that going forward, the WPCA has to submit a plan of intention and stick to it to avoid a situation of over budget. Mr. Kelsey reported that the Board of Finance was told back in December 2014, that the WPCA was going to stop the process, in order to halt the spending, and therefore, was under the impression that nothing would continue until further notice.
Mr. Russell asked Mrs. Stajduhar what can be done to move forward. She reported that presently, the $108,000 for project bills and $5,000 of the operating budget that are outstanding and cannot be paid without additional funding. Mr. Tolchinski stated that going forward, every invoice should be controlled by the two boards as well as the Finance Director. Mr. Prendergast added that going forward, a written request to cover any and all invoices be approved by both boards before being incurred. Mr. Russell commented that this procedure stated above is followed by each individual board when large, out of budget expenditures are
anticipated without issue taken. However, the WPCA has operated independently and with no regard to the functions of the Board of Finance or Finance Director. Mr. Wilkinson stated that when the WPCA initially started all monies were supposed to run through the town. However, the Board of Finance disagreed stating that it was never run through the town. Mr. Kelsey commented that the WPCA has been running separately outside of the town’s books, even though every other spending agency throughout the entire town goes through the town. He stated that the WPCA should have to come before the town to receive approval before moving forward with the project. Mr. Russell said that all monies should have documentation and approval before being spent, in order to keep open communication.
Mr. McCarthy stated that in reality, the recent statement from the DEEP is to move ahead, and it is his hope that the two boards come to an agreement so the project can move forward in unison. Mr. Russell stated that the WPCA board has to start complying and coming before the Boards of Selectmen and Finance first so its expenditures can be recommended to a town meeting for a town wide vote.
Mr. Wilkinson said that there is a State Compliance Order,with the State of CT DEEP’s adjustments to the plan, in which penalties of up to $25,000 per day can be incurred if compliance isn’t met. Mr. Tolchinski assured the Board that the practice which has been followed in the past should change in order for the project to move forward. However, he was uncertain of how much each process is going to cost before DEEP approval is granted. Mr. Wilkinson again stated that the WPCA did not realize that the DEEP would continue making so many changes and additional requests which kept incurring additional costs to the WPCA/Town.
Mr. Russell read the rules of town spending compliance, and stated that in the past, the WPCA’s request for an additional of $61,000 was requested of the Board of Selectmen, was never brought to the Board of Finance. As a result, this will create a finding in the audit of the town. Mrs. Stajduhar said that she cannot pay past invoices with this year’s budget. Mr. Bernblum suggested that a report be made that not only shows the budget of expenditures and how much is remaining in the budget, but should also show a projection of what is left to be incurred within that area. Mr. Russell commented that monies that were earmarked for the Operating budget were actually moved to pay for Project expenses and that the Board of Finance feels that there is a leadership and communication problem within the WPCA board
that needs to be rectified.
Mrs. Sturges wanted to it to be noted that these outstanding invoices are a reflection on the Finance Director’s reputation, as well as on the Board of Finance’s control over the town’s budget. Mr. Prendergast assured board that at their next meeting, amounts due going forward will be disclosed and made transparent as well as reported to the Board of Finance.
Mr. Soucie said that at the last Board of Finance meeting, the town auditor stated that the findings can affect the Town’s bond rating. Mrs. Stajduhar said that bond ratings may affect interest rates when bonding the project comes due. She stated that she works with every department head without issue, and that her door is always open to lend assistance with the WPCA’s budget.
Mr. Prendergast stated that the goal of this evening’s discussion is to know what the costs are before moving forward, separating the expenses under operating budget and project budget, and reporting all issues prior to having work performed to the Board and Finance Director. There was a discussion on the lack of confidence the Board of Finance has experienced with the leadership of the WPCA.
Mr. Wilkinson inquired if the Board of Finance has actually contracted an attorney in the amount of $19,900 and wanted it noted that, as a taxpayer, he doesn’t feel the expense is necessary. Mr. Russell stated that the Board of Finance all agreed that, if there was more open communication, and a change in leadership of the WPCA board, it could help in rekindling the confidence of the Board of Finance..
Mr. Woolley thanked the four members of the WPCA for attending, explaining and assisting in moving forward with open communication between the two boards.
Mr. Russell stated that the next regular Board of Finance meeting is scheduled for Tuesday, July 21, 2015 at 7:30 p.m.
A motion was made by Mrs. Sturges, seconded by Mr. Kerr to adjourn the Regular meeting at 9:35 p.m. Motion carried.
Respectfully Submitted,
Michele E. Hayes
Secretary
| 
