MINUTES
BOARD OF FINANCE
JUNE 21, 2005
A REGULAR MEETING of the Board of Finance was held on Tuesday, June 21, 2005 in the Council Chambers.
Those in attendance included Mayor Owen J. Quinn, Jr., members of the Board of Finance Daniel Farley, James Zeller, James Nichol, and Bruce Cornish, Comptroller Alice Proulx, Chairman of the Board of Education Paul Cavegnaro, Superintendent of Schools Dr. Susan O’Brien, member of the Board of Education Douglas O’Connell, and Facilities Director for the Board of Education David Bascetta. Those absent included Board of Finance member Joseph Nader and Corp. Counsel Albert Vasko.
Mayor Quinn called the meeting to order at 4:05 p.m.
MINUTES #010
On a motion by Mr. Cornish, seconded by Mr. Zeller, the board voted unanimously to approve the minutes of the public hearing on the Board of Education Budget held 5/10/05.
On a motion by Mr. Farley, seconded by Mr. Cornish, the board voted unanimously to approve the minutes of the joint meeting with the Board of Education held 5/10/05.
On a motion by Mr. Cornish, seconded by Mr. Zeller, the board voted unanimously to approve the amended minutes of the public hearing on the city budget held 5/12/05. Mr. Cornish requested changing dollar amounts on page one from $990,527,000.00 to $990,527.00. (The minutes were amended to reflect the change.)
On a motion by Mr. Farley, seconded by Mr. Cornish, the board voted unanimously to approve the minutes of the regular meeting held 5/26/05.
On a motion by Mr. Cornish, seconded by Mr. Zeller, the board voted unanimously to approve the minutes of the joint meeting with the Board of Councilmen held 5/26/05.
On a motion by Mr. Cornish, seconded by Mr. Farley, the board voted unanimously to approve the minutes of the special meeting held 5/26/05.
OPEN TO THE PUBLIC #070
On a motion by Mr. Cornish, seconded by Mr. Farley, the board voted unanimously to open the meeting to the public. There was no public participation.
BUS: SECTION B #080
On a motion by Mr. Cornish, seconded by Mr. Zeller, the board voted unanimously to consider business in Section B.
TRANSFER OF FUNDS - BOARD OF EDUCATION #090
On a motion by Mr. Cornish, seconded by Mr. Zeller, the board, after a lengthy discussion, voted unanimously to approve the Board of Education’s request to transfer funds from the Capital Budget to the Operational Budget in the amount of $284,700.00 to address the fiscal year 2005 close out deficit.
Mr. Cornish explained that this request was on the agenda as a result of a 2003 agreement between the Board of Education and the Mayor’s Office that said the Board of Education would come back to the Board of Finance if they proposed to move more than 20% of their Capital Budget into their Operating Budget in any budget year. Since no other Board of Finance member was on the board when the agreement took place, Mr. Cornish felt it was an important piece of information which they should be aware of. The Board of Education respectfully came before the Board of Finance because a transfer of anything more than $230,000.00 needed the Board of Finance’s approval. (20% of their $1,150,000.00 Capital Budget.)
The superintendent of Schools Dr. Susan O’Brien addressed the Board of Finance. (See an attached memo dated 6/21/2005.)
Dr. O’Brien stated that the Board of Education was faced with a $276,261.00 deficit in the Operating Budget due to several errors and/or omissions throughout the current budget year. They have already identified $284,700.00 from their Capital Budget which could be used to address their deficit, with the Board of Finance’s approval. After a careful examination of all projects in the Capital fund, they selected two which would not be accomplished this year as a consequence of transferring the $284,700.00. Those two projects involved blacktopping at Vogel Wetmore School and the purchase of a tractor for East School.
Part of this request includes a buffer of $8,439.00 to be used at Dr. O’Brien’s discretion to address any last minute expenses in the final two weeks of school. The Board of Education has given her permission to use these funds to pay for any unanticipated expenses which would be billed to them on or before June 30, 2005.
Dr. O’Brien further explained how unfortunate it was that some of those errors and omissions have been carried forward into their Fiscal Year 2006 budget. They have already identified a deficit of approximately $250,000.00 in the FY’06 budget. She assured Mayor Quinn and the Board of Finance that they will continue to address their budget difficulties with a proactive, problem-solving posture. They were not pointing any fingers of blame, but identifying problems and solutions, and initiating plans for improvement in the future. They have enlisted the help of a forensic accountant to assist them in this task.
Mr. Farley asked Dr. O’Brien to share some of the errors and omissions that were made with the Board of Finance.
Dr. O’Brien stated that a step increase was omitted in salaries for non certified staff which amounted to approximately $184,000.00. Transportation for special education students totaling $126,000.00 was omitted, and under funding was made for fuel.
She reported that interim Superintendent Thomas Jokubaitis noted as early as November or December of last year, the possibility of a deficit as high as $700,000.00. He put a freeze into effect which Dr. O’Brien continued, and was able to realize many economies along the way, but those economies are very serious to her as an advocate to children and young adults in Torrington. As a result of the freeze, $330,000.00 was taken away from instructional programming for the children. That meant that they did not receive their academic programming this year as originally planned.
Mr. Zeller inquired whether the $250,000.00 deficit already identified from the FY 2006 budget was all on the operational side of the budget, and whether there has been any thought on what the impact would be by taking money from the Capital Budget.
Dr. O’Brien indicated that the deficit, including an estimate of $200,000.00 for under funding special education and $50,000.00 for not budgeting summer school for special education students, was all on the operational side.
Mr. Zeller asked Dr. O’Brien if other capital improvement deficits could arise from what they would be putting off from doing.
Dr. O’Brien pointed out that they only have $736,000.00 in the capital line and the majority of it, approximately $300,000.00 to $330,000.00, was dedicated to finishing Phase III of the roofing project at the high school, along with some other small projects.
Dr. O’Brien indicated that they would continue to work after July 1 realigning and reexamining the FY’06 budget. The forensic accountant will be working closely with them throughout the month of July to make certain they have sufficient funds in the line items. They may need to transfer from some line items to others depending on the needs.
David Bascetta, Facilities Director, was present to answer any questions and address any concerns the board may have in regard to their ability to maintain the buildings despite the requested transfer of funds. He validated that these numbers will not compromise their buildings.
Mr. Cornish thought the impact of transferring funds would be really light in terms of forgoing the two proposed projects. He offered his assistance to the Superintendent and/or the Board of Education. He hoped to be as involved as they would allow him to be in monitoring the activity and reporting back to the Board of Finance.
Mr. Zeller inquired whether the Board of Education might have had a surplus in their capital budget since the transfer request was $284,700.00 and the two projects which they were forgoing totaled approximately $100,000.00
Mr. Cornish said probably not this year, but it could have been depending on how the roof project was laid out. The roof project was split half and half between this year and next year. It’s budgeted in next year’s capital program so the impact this year is nil. It could have been done out of this year’s program; however the alternatives for financing the deficit were not perceived appropriately from his seat as well as other accounting seats, i.e., auditors. The alternatives to fill the gap were less advisable than the current alternative. This way they get the project and can fund the deficit without a lot of impact.
Mr. Cavegnaro indicated that the board voted unanimously during their special meeting held last night to approve the transfers, but also directed the Superintendent in their search for a new Director of Business Services, to find someone who could achieve a realignment and reconciliation of the Board of Education’s accounting practices with the New World System by the end of this calendar year.
Dr. O’Brien assured the Board of Finance that the forensic accountant who has been helping them during the past few weeks has extensive experience as a Director of Business Services on the school side and that his assessment of New World was highly positive. He indicated to Dr. O’Brien that New World was very powerful and could be modified to suit their needs and that it was simply a matter of training our staff and being willing to make that transition. She embraced the opportunity to fully implement New World and assured the board that New World would be an important criteria in the selection of a new Director of Business Services.
Dr. O’Brien stated that the Board of Education asked her to make certain the Board of Finance was aware that the past practice of using funds from the cafeteria fund to offset expenses on the operating side was not done this year and will not be done in the future.
Mayor Quinn thanked Dr. O’Brien and Chairman Cavegnaro for discussing every point in her memo. He agreed that no one should point fingers of blame. It was their job to identify errors and omissions and to find solutions, and he applauded their efforts. He pointed out that he has no prepared remarks on the search for a new Business Manager, and expressed his disappointment that we continue to find ourselves in this position.
In reading the minutes going back to 1999 when Scully & Wolf was brought in to incorporate shared services, New World was unfortunately not embraced. He applauded Dr. O’Brien’s decision that the knowledge of New World would be criteria in the search for a new Director of Business Services. He suggested that the city get together with the Board of Education and go head long into shared services that has been spoken about since 1999. In that process, they could discuss the co-location of staff, discuss the fact that the city has held in abeyance a certain amount of money for a Finance Director, discuss the city’s investment of $250,000.00 in retaining Scully & Wolf for various practices, and discuss the fact that they did have money available to get to the next paradigm of
what Board of Educations and cities can do together.
Mayor Quinn believed they had the perfect opportunity as they reconciled some of the problems of the past to move forward into something that will be unique in the State of Connecticut. It didn’t make sense to have two fiscal departments when we have one taxpayer group. This is a unique opportunity while they are looking to hire someone to partner with the city, to see if they could come up with job descriptions and new personnel who can work on both sides of the issue. What we’ve seen here, is that we’re balancing the books on the backs of the students. He and Dr. O’Brien agreed fundamentally that this was not the way education should function in the City of Torrington. It was absolutely necessary for Mayor Quinn and Dr. O’Brien to be able to rely on the numbers
that were given to them. He urged the members of the Board of Education to proceed down the path of co-location and shared information.
In selecting a new Business Manager, Mayor Quinn thought it would be important for the Superintendent to bring her staff and decision makers to the city to place questions they think will be important on the table in order to create a system that is going to guarantee fiscal integrity and improve communication so we don’t have to be in this position year after year, which seems to be the disturbing trend that really leads to frustration and a negative impact on education. He thought they had the talent to put something together that was unique, shared services and one financial department that guarantee integrity on both sides.
COOLING TOWER: POLICE DEPARTMENT #820
On a motion by Mr. Cornish, seconded by Mr. Zeller, the board voted unanimously to reallocate a sum not to exceed $20,000.00 from the Police Department’s Capital Expenditure Acct. (roof repair line item) to pay for repairs to the cooling tower at the Police Department.
CANINE PROGRAM #840
On a motion by Mr. Cornish, seconded by Mr. Farley, the board voted unanimously to overextend the police canine line item in the current budget by $3,000.00 to purchase a new canine and to readjust the canine line item through public donations and through the training and equipment line item currently in the budget.
CARDINAL ENGINEERING #850
On a motion by Mr. Zeller, seconded by Mr. Cornish, the board voted unanimously to approve the payment of $4,655.00 from Sanitary Sewer Capital Improvement Fund #490 to Cardinal Engineering Asso. for engineering services on the East Main Street/New Harwinton Road Sanitary Sewer Improvements.
HISTORICAL MARKER/MONUMENT #860
On a motion by Mr. Cornish, seconded by Mr. Zeller, the board voted unanimously to approve the use of $2,500.00 from Contingency to help pay for the design, construction and installation of a Historical Marker/Monument commemorating the1955 Flood.
BUS: MAYOR & MEMBERS #1020
On a motion by Mr. Cornish, seconded by Mr. Zeller, the board voted unanimously to consider business presented by Mayor Quinn and members of the Board of Finance.
Mr. Nichol inquired whether a Mayor’s group existed whereby Mayor’s of different towns could get together to compare issues.
Mayor Quinn indicated that the city belongs to and uses CCM (Connecticut Conference of Municipalities) as its source for research and comparison on almost any issue. The Litchfield Hills Chief Elected Officials, which encompasses all of Litchfield County, is also an organization that Mayor Quinn belongs to, and the Purchasing Agent belongs to an association where she can compare prices as well.
Mayor Quinn said he had made copies of minutes that contained quotes from former Board of Finance members, former Mayor Gryniuk, Richard Friday, etc., who all said it was high time to institute shared services, co-location and integrated systems. It was inconceivable to him for the Board of Education to transfer funds from their Capitol Budget in order to balance their Operational Budget. He said he had come to the end of his patience of not doing what was so logical and that it was time to change the way we are conducting business in the City of Torrington.
ADJOURNMENT #1670
On a motion by Mr. Cornish, seconded by Mr. Farley, the board voted unanimously to adjourn at 5:00 p.m.
ATTEST: JOLINE LeBLANC
Asst. City Clerk
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