MINUTES
BOARD OF FINANCE
APRIL 15, 2003
A REGULAR MEETING of the Board of Finance was held on Tuesday, April 15, 2003 in the Council Chambers.
Present were Mayor Owen J. Quinn, Jr., members of the Board of Finance Theodore Miasek, Diane Libby, Roger Dickinson, and Bruce Cornish, Corp. Counsel Albert Vasko, and Comptroller Alice Proulx. Absent was Board of Finance member Michael Nejaime.
Mrs. Libby called the meeting to order at 4:10 p.m.
MINUTES #030
On a motion by Mr. Miasek, seconded by Mr. Dickinson, the board voted unanimously to approve the minutes of the regular meeting held March 17, 2003.
OPEN TO THE PUBLIC #040
On a motion by Mr. Dickinson, seconded by Mr. Cornish, the board voted unanimously to open the meeting to the public. No one spoke.
PRESENTATION BY AUDITORS #050
Bill Sawicki, partner with Scillia, Dowling & Natarelli, reviewed the June 30, 2002 results of the city’s audit.
Mayor Quinn arrived at 4:12 p.m.
Mr. Sawicki reported that the audit resulted with a qualified opinion on the financial statements due to the ongoing issue of teacher and summer pay liability, and an unqualified opinion regarding compliance with laws and regulations. Two items were reportable conditions cited in regard to the financial statements and single audit. He reported that there were no unusual transactions or controversial accounting policies. The methodologies used by management were reviewed and determined to be reasonable. All adjustments were in the routine course of the auditor’s work and insignificant.
Mr. Sawicki stated that the columns entitled “General Fixed Assets” and “General Long-Term Debt” will be combined and incorporated into the city’s results next year as a result of GASB34, which was intended to present as consolidated a financial picture of a governmental unit as possible.
He pointed out that the city had a $9,300,000.00 fund balance at the end of 2002 of which $3 million was reserved for encumbrances and $1.6 million was appropriated into the current year, leaving approximately $4.6 million as unreserved, undesignated. He noted that the budget was almost $83 million for the year ending June 30, 2002 and that it came out with a net surplus from operations of approximately three quarters of a million dollars, which, when added to the city’s opening fund balance produced a fund balance of $6.2 million.
The two findings from the auditors in governmental auditing standards included 1) The reconciliation between the board and the city which are currently up-to-date and will disappear in the next year, and 2) That the Water Pollution Control Project didn’t have the grant revenues and expenditures recorded into the General Ledger.
Out of ten prior year audit findings, one was a repeat of the reconciliations, the other nine were remedied. This spoke well for the Finance Department.
Based on the city’s budget, Mrs. Libby asked Mr. Sawicki what dollar amount the Board of Finance should be striving for in the Undesignated Fund Balance.
Mr. Sawicki indicated that the rule of thumb was anywhere between 5 and 9% or 10% of a general fund budget to keep as a surplus. There was no finite mandatory number. That was left to the discretion of the city.
Mr. Dickinson asked if that was inclusive of the Board of Education numbers.
Mr. Sawicki noted that the Board of Education and the city were one and the same; they all fell through the general fund. Towns having school districts were different.
Mayor Quinn inquired whether the city’s unique situation of having a private Tax Collector and being able to collect 100% of the property taxes had any bearing on the 5 to 10% equation.
Mr. Sawicki indicated that it wouldn’t have a bearing because there were too many other factors.
Mrs. Libby indicated that the only way they could eliminate the teacher’s liability issue was to take a hit to their fund balance. That would entail going from a $4.6 to a $2 million fund balance. She asked Mr. Sawicki if he would recommend the city taking that hit?
As an outside auditor, Mr. Sawicki said he couldn’t make a management decision for the city, however, having statements in conformity with GAP was much better than not having them in conformance from an auditor’s perspective.
TRANSFER OF FUNDS #1220
On a motion by Mrs. Libby, seconded by Mr. Cornish, the board voted unanimously to accept the Council’s request to authorize the transfer from line items 0010.0044.5759.0000 and 0010.0044.5753.0000 in regard to the Local 1579 Contract.
HALLORAN & SAGE #1250
On a motion by Mrs. Libby, seconded by Mr. Dickinson, the board voted unanimously to accept the Council’s request for the payment of $1,206.00 from Contingency to Halloran & Sage for professional services rendered in regard to the DECD Downtown Redevelopment Master Planning Grant.
SCULLY & WOLF #1270
On a motion by Mrs. Libby, seconded by Mr. Dickinson, the board voted unanimously to discuss the update in regard to Scully & Wolf.
Ms. Proulx indicated that she and Mrs. Lewis, her assistant, had met with Mr. Hoffman, Mr. Murphy, and Domenic from Scully & Wolf in regard to the restructuring of the Chart of Accounts to review the needs of the city and the Board of Education and to arrive at a happy medium. The Board of Education would have to decide how much to archive and how much to move over to the new system. Another meeting was scheduled to review Scully & Wolf’s amended structure.
Mr. Miasek inquired whether we were still on target for July 1.
Ms. Proulx indicated that we should be.
UPDATE BUDGET PROCESS #1330
On a motion by Mrs. Libby, seconded by Mr. Dickinson, an update on the budget process took place.
Ms. Proulx noted that the City Council had reviewed most of the budgets. The Police & Fire were meeting with their subcommittees to see if further reductions were possible.
A new budget calendar had been prepared.
The Board of Education was at a 6.44% increase.
Mr. Miasek inquired whether the shifting of premiums from the School Board to the city was determined on pure head count or number of claims.
Mayor Quinn noted that it had been done on head count for the last number of years. After conducting an analysis of the past four years, Ms. Proulx determined that their claims ratio was 64% and their census was 67%. It was up to the Board of Finance to decide whether to go with claims versus census.
Mrs. Libby inquired whether the Board of Education was looking to go back or merely move forward with that change.
Ms. Proulx indicated that she hadn’t heard any discussion about going back.
Mayor Quinn felt the Board of Finance would have to make budget decisions prior to getting real figures from the state.
It was noted that the city would survive cuts to the current budget. Department Heads had given back all they could, more revenues were received than expected, and planned LOCIP projects were delayed.
Mrs. Libby stated that LOCIP projects still should be prioritized and done at some point in time. They shouldn’t make the assumption that LOCIP projects won’t get done if there are no LOCIP funds to do them.
Mr. Dickinson reminded Mayor Quinn that he had requested information from the Fire Chief and Police Chief.
Mayor Quinn stated that he had requested information from the Research Department at CCM in order to compare other municipalities and he had yet to follow up on it.
Mr. Miasek inquired whether a resolution had been reached on the $219,000.00. Mayor Quinn said no.
BUS: MAYOR AND MEMBERS #2070
Business was presented by Mayor Quinn and members of the Board of Finance.
Mrs. Libby inquired about the brush pick up.
ADJOURNMENT #2150
On a motion by Mr. Dickinson, seconded by Mr. Miasek, the board voted unanimously to adjourn at 5:12 p.m.
ATTEST: JOSEPH L. QUARTIERO, CCTC, CMC
CITY CLERK
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