MINUTES
BOARD OF FINANCE
MARCH 21, 2006
A REGULAR MEETING of the Board of Finance was held on Tuesday, March 21, 2006 in the Council Chambers.
Those in attendance included Mayor Ryan J. Bingham, members of the Board of Finance Daniel Farley, Bruce Cornish, Mark Bushka, James Nichol, Joseph Nader, and James Zeller, Corp. Counsel Albert Vasko, Comptroller Alice Proulx, Police Chief Robert Milano, Deputy Fire Chief Jaye Giampaolo, Fleet Manager Michael Michaud, and Board of Public Safety Commissioner James Potter.
Mayor Bingham called the meeting to order at 4:00 p.m.
MINUTES #060
On a motion by Mr. Cornish, seconded by Mr. Farley, the board voted unanimously to accept the minutes of the regular meeting held February 21, 2006.
OPEN TO THE PUBLIC #070
On a motion by Mr. Cornish, seconded by Mr. Nader, the board voted unanimously to open the meeting to the public. There was no public participation.
RE-ALLOCATION OF FUNDS #090
On a motion by Mr. Cornish, seconded by Mr. Zeller, the board voted unanimously to authorize the Council’s request to use “Up To $5,000.00" from the Police Department’s Capital Expenditures’ “Roof Replacement Account” to fund the hiring of a structural engineer to examine disintegrating bricks at the Police Department.
Mr. Cornish asked Chief Milano to explain the Roof Replacement Account and how he planned to replenish the funds.
Chief Milano explained that the capital reserve includes several long-term projects, one of which is the roof replacement. The current balance in the roof replacement line item is $19,360.00, and $10,000.00 is earmarked for the next budget. Replenishing the account can be accomplished by funding a certain amount into it each year. What brings the balance down is taping into it for unexpected expenses such as this. He noted that the next item on the agenda, to hire a telecommunications consultant, will also use funds from this capital account. The current total balance in the capital reserve is $180,024.95, and is earmarked for $273,263.00 in the next budget.
TELECOMMUNICATIONS CONSULTANT #260
On a motion by Mr. Farley, seconded by Mr. Zeller, the board voted unanimously to allow the use of funds from the Capital Reserve Account in Fund #104B Police Dispatch Center Upgrades to hire a Public Safety Telecommunications Consultant.
Chief Milano indicated that members of the Board of Public Safety and the City Council thought it was appropriate to use funds from the Capital Reserve in the sub category of dispatch center upgrades to fund the telecommunications consultant. He was merely asking for the Board of Finance’s blessing as well.
Chief Milano said the opening balance under the sub category of dispatch center upgrades was $40,232.00, and that he wanted to fund another $25,000.00 to bring it up to $65,000.00. A potential of $40,000.00 will be used to hire a consultant. That sum will not be enough to pay for the concept that the city is moving towards, which includes a complete conversion of radio equipment and the re-structuring of the Police Department building. It’s a project which the Board of Public Safety completely supports. The use of a civilian dispatcher would benefit the city economically, and put police officers on the streets where they belong.
Chief Milano explained that the Purchasing Agent divided the proposal for the consultant into parts for the purpose of securing bids or proposals. It will determine where we are, where we should be, how to get there, how to fund it, and do project management at the same time. The Purchasing Agent will forward her recommendation to the Board of Public Safety.
Mr. Nader said he supported new technology. He hoped the city would consider all the information gathered and not concentrate merely on the cost.
Chief Milano indicated that this project will only occur once in his career and he would take all components into consideration. He was determined to make it a quality project. Several members of the Board of Public Safety, along with the Chiefs and Deputy Chiefs were working on this matter as a subcommittee, and had come up with perimeters on what the consultant should address.
Mr. Cornish agreed with Mr. Nader that cost should not be the only criteria used. He hoped the committee would have a recommendation that could be endorsed by everyone involved.
Chief Milano stated that post 911 issues have to be addressed. The city is wedged between New York and Boston where horrendous things could impact Torrington. We need a comprehensive, city-wide communication system that will encompass not only police and fire, but ambulance, public works, sewage treatment, etc. to respond to emergencies. At the same time, we can benefit from it economically, through civilian dispatchers.
Mr. Cornish agreed with the effort and thought it made perfect sense to hire a consultant to provide Chief Milano with the preliminary information they need to move that capital program forward.
VEHICLE REPLACEMENT PLAN #710
An up-date on the Vehicle Replacement Plan was given by Board of Public Safety Commissioner James Potter and Fleet Manager Michael Michaud.
Commissioner Potter stated that, back in 1998 or 1999, the Board of Public Safety under the Gryniuk administration, held discussions in regard to creating a Vehicle Replacement Plan which would include the volunteers on a rotation basis. There is no clear knowledge, however, as to what happened to the plan, and there is no concrete evidence that the plan was ever approved in a vote by any of the boards.
Commissioner Potter said the original plan for the Fire Department was to budget $140,000.00 for the replacement of their existing equipment based on a 15 year life expectancy. The Board of Finance increased the line item from $140,000.00 to $185,000.00 after some lengthy discussions to include the volunteers. In a joint meeting of the City Council and the Board of Finance in May of 2001, a discussion amongst the group was held about the progression of the plan and it was decided that rotation would start in 2003. Between 2001 and 2003, nothing became of the rotation plan. There was mention that no plan existed, and the volunteers were getting anxious about the whole idea. The Board of Public Safety than asked Chief Field to create a plan to at least include the career department so the
city could know how much to fund. Chief Field presented a plan to the Board of Safety in March of 2003. The plan included the addition of a Rescue Truck, and recommended that over a period of nine years, $300,000.00 would be put aside for the volunteers to assist them in the purchase of trucks.
In June of 2003, the Board of Safety approved the plan. It was then approved by the City Council in October of 2003, and discussed at the Board of Finance meeting on October 21, 2003. The Board of Finance supported the city side of the plan but had concerns over the recommendation to fund $300,000.00 to the volunteers, so they tabled it and it failed to be included in any future meetings of the Board of Finance.
Commissioner Potter said the members of the subcommittee were concentrating their efforts on a plan specifically for the Torrington Fire Department, including plans for future east end coverage, but leaving the volunteers out of the plan for the present. They felt there was not enough support from the volunteer system for the city to concentrate on their needs at this time. The City Charter leaves that up to the City Council and ultimately, it’s a Board of Finance decision.
Commissioner Potter stated that the Apparatus Replacement Plan started in the year 2000 when the city bought a new truck. Chief Field came up with a dollar amount which separated the paid department from the volunteer department. In taking the $140,000.00 for the paid department and the $45,000.00 set aside for the volunteers, minus the reduction of 22% in 2003, it is the subcommittee’s opinion that the paid department’s balance for major apparatus replacement is around $600,000.00 and the funds set aside for the volunteers is around $185,000.00.
Mike Michaud explained that there was no written policy to govern the Vehicle Replacement Plan. It became confusing because department heads didn’t have any direction. A committee was then formed and a policy was written. (He provided the board with a copy of the policy.) Everything that has to do with equipment is explained within the policy. That cleared up much of the misunderstandings. Originally, a spread sheet was created and it became Mr. Michaud’s responsibility to keep it up to date. ( He provided the board with a copy of the latest spread sheet.) The spread sheet has a grand total for each department, and it provides a total of expenditures for that budgetary year. Each
department is broken down into which vehicles are going to be replaced and at what time.
Mr. Michaud noted that the policy also stated that it will be reviewed each year, problems will be addressed, and it will be re-written as needed. A meeting is scheduled for Thursday to review the policy.
He noted that $606,000.00 is funded every year. At the current rate of deposits and expenses, the plan will be underfunded by the year 2018.
Commissioner Potter noted that not all pieces of equipment owned by the Fire Department is included in the spread sheet. That lead him to believe that equipment/vehicles are not being properly projected as replacements.
Mr. Michaud explained that anything costing under $5,000.00 was not included in the spread sheet. In addition, equipment is occasionally donated to the city and no one thinks about adding it the spread sheet. It is the responsibility of the department head to make certain it gets added to the spread sheet. Often times, donated equipment/vehicles become an expense to the city because no funds have been budgeted for its maintenance.
Commissioner Potter said the Board of Safety is currently budgeting $248,793.00 to the Vehicle Replacement Plan; however, $361,000.00 is needed annually to support the items on the existing spread sheet. He said he was informed that it didn’t matter what each department budgeted as long as there was $600,000.00 in the pot at the end of the day. That didn’t make sense to him. Personally, he thought an audit should be performed. He also felt that the Vehicle Replacement Plan for the Board of Safety should be separated from the rest of the city.
Mr. Cornish concurred that, if we put money aside, we sell our budget and tax rate, and we show a fire department budget of $300,000.00 for Vehicle Replacement, then the taxpayers should be able to expect that those funds will be spent on fire apparatus at some point in time and not on other types of vehicles. Department heads should understand that their vehicle may not be replaced until a year later if they don’t have the funds to pay for it. The Board of Finance should have the opportunity to understand what they approve and make certain the taxpayers are getting what they were taxed for.
Mr. Cornish asked Mayor Bingham to place Vehicle Replacement on his agenda. The Board of Safety is developing a revised plan, which may acknowledge money they don’t have according to the current Vehicle Replacement Account. He suggested that it be made user friendly for everyone to understand fully.
Mayor Bingham indicated that the city was also working on the matter and he was confident they would develop a set plan; a plan that will work, be reviewed and updated annually. He vowed to clearly spend the taxpayer’s money correctly and openly, in terms of the Vehicle Replacement Plan. He agreed with the basis of the plan, but because of all the miscommunication in the past, he wasn’t certain where it would lead them in the future. He thanked Mr. Michaud and Commissioner Potter for researching the matter.
Mr. Bushka inquired whether Ms. Proulx had a record of how much each department had invested in this Vehicle Replacement Account.
Ms. Proulx said she did have a record of each department’s contributions and expenses. She did say, however, they were trying to discourage that mind set because it was a pool of money that allows department heads to use it when they need it. It’s not so much “someone using someone else’s money”, but when they need to make a purchase, funds are available regardless of who it is or what department put the money in, as long as they remain within the perimeters of what was established initially in the spread sheet.
Commissioner Potter suggested once again that the Fire Department be separated from the rest of the city in terms of vehicle replacement. If that was impossible, then at least make it a separate line item.
Mr. Nader asked Mr. Michaud what formula he used to anticipate costs for various equipment and apparatus.
Mr. Michaud said he takes the purchase price and compounds it by 5% a year until it is replaced.
Mr. Nader asked if vehicles were usually paid for outright or financed.
Mayor Bingham said one of the major benefits of the Vehicle Replacement Plan was to allow the city to pay cash and eliminate any finance charges.
Mr. Michaud indicated that in years prior to the Gryniuk administration, the city used to lease/purchase and paid 8% interest a year. Currently, we accumulate interest in the account, and get a better bargain on vehicles and equipment by paying in cash.
Mr. Nader asked if the city ever looked into negotiating longer term plans where we could buy one product exclusively at a zero percent interest rate.
Ms. Proulx indicated that the Purchasing Agent would investigate that aspect.
Mr. Michaud noted that the Crown Victoria is the car that fits the Police Department’s needs. Ford actually designs this car for police use and it fits the program. That limits the bidding process. The city actually tried Chevy Impala’s in the past and they didn’t work out very well. If we go to another brand, we’d have to get an SUV type vehicle which would cost more to purchase and maintain. He said he could meet with the chief to see if he would be agreeable to something different and go from there. That may be an option to reduce the cost of some of these vehicles.
Commissioner Potter asked if the fire department should revise their line items for the coming budget.
Ms. Proulx thought it might be premature to revise the line items because they were still uncertain what changes they wanted to make.
Mr. Cornish said his only interest is to know what the plan entails, what is intended to be purchased, and when the purchase will take place. He didn’t think pooling the money was a problem. The plan is the plan and we ought to stick with the plan unless a catastrophic situation occurs that prevents us from meeting the plan. It was his belief that Mike Michaud and Alice Proulx had managed the plan professionally. If the financing of the plan is not sufficient to meet the demands at any point in time, that’s a significant problem. He noted that this board doesn’t get to see the plan on a regular basis.
Mr. Michaud said he would provide the Board of Finance with copies of the spread sheets in the future.
Once again, Commissioner Potter pointed out that several departments are not budgeting enough to cover their annual needs.
Mr. Michaud explained that this occurred when Mayor Quinn reduced the Vehicle Replacement Account by a flat 22%. He noted that the police department, for instance, will overcome this reduction in the coming year by not having to purchase any new cruisers. He explained that prior experience was used as a criteria to get projected life expectancy on vehicles, and they weren’t 100% certain that what the projected was accurate. They were still learning how to manage the account.
Mr. Cornish said that would be a problem. The goal at the beginning was to fully finance a purchase in the future. That’s a noble goal and it has worked fairly well. Hopefully we’re not falling too far behind on the situation that Commissioner Potter described.
Mr. Nichol inquired whether the city knew for certain that it was getting the best yield possible on the invested money from the Vehicle Replacement Account.
Ms. Proulx indicated that Treasurer Dick Friday is in charge of investments. He constantly monitors the rates and how he can get the best return.
Mayor Bingham said he could invite Mr. Friday to the next meeting to explain the manner in which he invests city funds.
CIRMA #2740
On a motion by Mr. Cornish, seconded by Mr. Farley, the board voted unanimously to authorize the payment of $6,762.71 from Contingency to CIRMA for the deductible in the Mascetti claim.
R.A.R. EXCAVATING #2760
On a motion by Mr. Nader, seconded by Mr. Zeller, the board voted unanimously to authorize the payment of $5,880.00 from Sanitary Sewer Capital Improvement Fund #490 to R.A.R. Excavating, LLC for sewer line point repairs on Birden Street ROW, Johnson Street ROW, and Sharon Ave. ROW.
R.A.R. EXCAVATING #2790
On a motion by Mr. Cornish, seconded by Mr. Zeller, the board voted unanimously to authorize the payment of $2,300.00 from Sanitary Sewer Capital Improvement Fund #490 to R.A.R. Excavating, LLC for additional sewer line point repairs on Birden Street ROW.
BYRNE & BYRNE #2815
On a motion by Mr. Cornish, seconded by Mr. Farley, the board voted unanimously to authorize the payment of $2,675.00 from Contingency to Byrne & Byrne for professional services rendered in the Dziedzic Properties, LLC vs. Torrington ZBA matter.
W. JUDSON REED, JR. #2840
On a motion by Mr. Cornish, seconded by Mr. Zeller, the board voted unanimously to authorize the payment of $950.00 from Contingency to W. Judson Reed, Jr. for an appraisal of the property located at 518 Main Street in connection with the city’s foreclosure of its anti-blight lien on the property.
BUS: MAYOR & MEMBERS #2870
On a motion by Mr. Cornish, seconded by Mr. Zeller, the board voted unanimously to consider business presented by Mayor Bingham and members of the Board of Finance.
Mr. Nichol said Thomaston Savings participates with the Waterbury and Bristol Housing Funds. This group is managed by a group of banks and managed independently. It’s all rehab money that goes into the inner city. He asked if Torrington participated with anything similar to this.
Mayor Bingham indicated that Torrington participated with Small Cities Funding.
Mr. Nichol stated that banks issue loans at very low interest rates and very favorable terms under these programs for those who qualify. This has helped some of the blight issues. He thought Torrington should look into these programs and offered to have someone get in touch with the city.
Mr. Zeller pointed out that he received a letter from Marjorie Petterson who wrote in favor of the proposed Board of Education budget. He asked that the letter be entered into the record of this meeting.
Mr. Farley said he spoke with Mr. Friday about the custodial credit risks mentioned by our auditors. His concern was the city’s unsecured deposits.
Mr. Friday informed him that, by law, the funds have to be in state and federal obligations such as bonds, and he does not know of any insurance or guarantees that could be purchased to protect these funds. Even if there was something available, he didn’t feel it would be financially prudent to spend additional dollars because they are backed by the state and federal government.
Mr. Farley asked for a clarification on revaluations.
Corp. Counsel Vasko explained that physical revaluations are performed every ten years and statistical revaluations are performed every other five years. Due to the fact that a recent law changed the statistical revaluations to every four years, it is uncertain whether the City of Torrington will have to perform a physical evaluation in 2008, 2009 or 2013.
Therefore, it was decided to budget an evaluation for the year 2009 to cover our ten year full physical revaluation instead of 2008. Instead of budgeting the annual $70,000.00 or $75,000.00, we will need to budget $200,000.00 this year.
Mr. Farley noted that he also received a letter from Marjorie Petterson. He also noted that many people had been talking to him about the upcoming budget. Some are pro-education, and want the Board of Education budget approved as is and others say that the whole thing is out of control. Seniors are telling him they can’t afford to pay more than they did last year. It was his personal feeling that the city could not increase taxes any more than 4 or 5% to be fair to everyone. It’s the Board of Finance’s fiscal responsibility to achieve this and he would find it very difficult to work with anything more.
Lastly, Mr. Farley volunteered his time to work on the budget with members of the City Council.
Mr. Cornish said he intended to reply to the same letter he received from Marjorie Petterson. As his role as liaison between the Board of Finance and the Board of Education, he encouraged each and everyone to take advantage of the opportunities that still exist to affect the budget process. The Budget Committee will review a list of cuts and recommendations later on this week, and submit their recommendation to the full board next week. The following week, the board will approve the budget and submit it to the Board of Finance. Comments and input will also be heard during a public hearing scheduled for May 9 by the Board of Finance.
Mr. Bushka commended Commissioner Potter and Mike Michaud for their presentation on the Vehicle Replacement Plan.
ADJOURNMENT #3620
On a motion by Mr. Cornish, seconded by Mr. Bushka, the board voted unanimously to adjourn at 5:30 p.m.
ATTEST: JOLINE LeBLANC
ASST. CITY CLERK
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