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Chairperson Janice Snyder called the meeting to order at 4:37 p.m.
Members Present
Dr. Kate Carter, Superintendent of Schools, Board of Education
Chris Chemerka, Director of Finance and Operations, Board of Education
Carol Driscoll, Board of Education (Vice-chairperson)
Matthew Galligan, Town Manager
Michael Gantick, Director of Public Works
Patrick Hankard, Director of Facility Services, Board of Education
Cary Prague, Town Council
Janice Snyder, Town Council (Chairperson)
Richard Stahr, Board of Education
Members Absent
Dr. Saud Anwar, Town Council
Guests Present
None
3. Approval of Minutes Previous Meetings
Mr. Richard Stahr made a motion to approve the May 16, 2012 Minutes; Ms. Carol Driscoll seconded that motion; and it was approved unanimously.
4. Discussion Items
Capital Projects Policy
There is a three-phase process to get Capital Projects on the road to recovery. The first phase is to get a Capital Improvement Program plan approved by the Town Council in place. Chairperson Snyder described the changes made to the Plan that were suggested by Town Councilors. Town Manager Matthew Galligan discussed how changing the debt percentage is viewed by both S&P and Moody’s and compared them to the views of the Town Councilors.
The second phase on the road to recovery is possibly putting out a referendum in the fall to cover critical needs for the Town and Board of Education. The third phase is moving forward with a Five-Year Capital Project Plan. Ms. Carol Driscoll asked if Chairperson Snyder would be presenting at the special Town Council meeting on July 30, 2012. Chairperson Snyder replied that she is hoping to get a resolution during that meeting so the Capital Improvement Policy can be approved.
Chairperson Janice Snyder reviewed the Capital Improvement Program, Exhibit A, with the Committee. She reviewed the fifth page of the Capital Improvement Program with the Committee and opened a discussion regarding General Fund Debt Service. The Program currently says that General Fund Debt Service may be 10% of the General Fund Budget. Town Manager Galligan said that the current General Fund Budget is $98 million, and 10% of that is $9 million. The Town only runs $4 million of debt service. Councilor Cary Prague asked if the debt service would go down to $2.8 million in two years. Chairperson Snyder said it would go down because some debt will be coming off.
Chairperson Snyder asked the Committee what they thought about keeping the General Fund Debt Service at 10% of the General Fund Budget. The Committee suggested that 8% would be a good compromise with the Town Council, and Town Manager Galligan said he would explain to the Town Council why 10% was originally chosen. Mr. Patrick Hankard asked if 8% would constraint the Board of Education when they renovate five elementary schools. Town Manager Galligan said that it was possible. Chairperson Snyder said that any big project that costs around $8 million would not be feasible with smaller debt limitation.
Councilor Prague asked if using 6320 Corporations counts for debt service. Town Manager Galligan said that 6320 Corporations are capital leasing. The lease would have to have an appropriation clause so that it is not considered debt. Moody’s would look at it, but it would not be considered debt. Councilor Prague asked if there were any gimmicks in the Program. Chairperson Snyder said there were none, and the Program defines a strategy while allowing the Town Council full jurisdiction. Town Manager Galligan discussed how the athletic fields are being funded through a public/private partnership.
The Committee discussed taking out the item regarding General Fund Debt Service, as it would not make much of a difference since the Town has always kept the same debt rate since Town Manager Galligan has been in office. Ms. Driscoll said that it does not need to be in print, but it is well understood. Mr. Patrick Hankard said that the Capital Projects Policy does not need to enforce Town Council policy, and Town Manager Galligan’s 10% amount was only a recommendation based on Capital Projects in other towns. Chairperson Snyder said the policy would be left as is, and she would put together a final draft.
Referendum
Councilor Prague discussed the Survey Committee made up of Mayor Thomas Delnicki and Councilors Prague, Dr. Saud Anwar, and Edward Havens, Sr. The first draft of the survey is scheduled to be discussed on Monday, and if approved, it would be distributed during the week. The survey asks how likely residents would vote on projects that are listed. Councilor Prague went into detail with the Committee on the various survey questions. The Committee wanted to know how a survey would affect the referendum. Councilor Prague said that it helps get an idea of what the residents will vote for in the referendum. Ms. Chris Chemerka asked if the Town had done other surveys in the past. Councilor Prague said a survey was done in 2006. The Committee discussed the language that would be best for the
survey questions regarding repairs, maintenance, and upgrades.
Chairperson Snyder reviewed the Capital Project Community Referendum Final Draft, Exhibit B, with the Committee. Town Manager Galligan reviewed the Various Community Projects spreadsheets with the Committee. One spreadsheet is the Pro Forma Financing Plan , Exhibit C. The second spreadsheet is the Budget Impact Analysis, Exhibit D. Chairperson Snyder asked how the taxpayers would be affected. Town Manager Galligan said that projects would be scheduled to match where debt goes down and comes up from previous projects. In any given year, a resident might have an extra $10 in taxes.
Mr. Patrick Hankard asked if the narrative that appears on the ballot notes that there is State reimbursement for the projects. Town Manager Galligan said that usually they are not noted. The bonds have the amount already calculated because the whole amount has to be bonded for appropriation. The notes will have the correct amount calculated.
Discussion pursued regarding the outcome of the Town Council voting to approve the referendum. Superintendent Kate Carter asked what the benefit would be of separating the projects instead of going forward with a community bond. She is in favor of having a community bond because it represents One Town, One Future. Ms. Driscoll suggested that educating the public that Capital Projects is about infrastructure instead of pet projects, it would be more powerful to people who would vote on a referendum. The Committee discussed the various situations that would happen if the referendum did not pass but critical projects still needed to be completed.
Chairperson Snyder emphasized that the voters need something that makes sense of the Town’s needs and properly explains the referendum so voters understand what the referendum is. Town Manager Galligan gave some suggestions to keep the referendum simple. Committee members discussed the possibility of cutting a project or two to keep the referendum at $12 million. Surpluses and budgets were also discussed for the funding of projects that might be cut from the referendum.
Committee members discussed how times have changed since projects were first proposed and voted against, and how these same projects might be viewed more favorably since the population has grown. A proposed indoor pool was used as an example. While there are other pools in surrounding areas, many of them are too crowded. Town Manager Galligan emphasized that right now is one of the best times to finance projects because of low interest rates.
Five-Year Future Projection List
Chairperson Snyder has spoken to several professional facilities employees at the State level, and they have suggested that having a ten-year plan is unrealistic. She will be asking Department Heads to supply her with a more realistic five-year plan.
Going Forward
Chairperson Snyder will try to get the Capital Improvement Program approved as a resolution at the Monday, July 30 Town Council meeting. The bond will need to be finalized. Councilor Prague’s referendum survey will be distributed if it is approved by the Town Council. Chairperson Snyder asked if Town Manager Galligan’s spreadsheets would be distributed to the Committee. The recording secretary will have them emailed to the Committee on the following day once Town Manager Galligan has finished calculations. Chairperson Snyder confirmed with the Committee the three phase process for the recovery of Capital Projects.
5. New Business
None
6. Old Business
None
7. Adjournment: A motion to adjourn was made by Mr. Patrick Hankard at approximately 6:00 p.m.; the motion was seconded by Town Manager Galligan; and all were in favor.
Respectfully submitted,
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Ashley Summers
Recording Secretary
Attachments:
Exhibit A Capital Improvement Program
Exhibit B Capital Project Community Referendum Final Draft
Exhibit C Pro Forma Financing Plan
Exhibit D Budget Impact Analysis
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