MINUTES
BOARD OF FINANCE
JUNE 19, 2008
A REGULAR MEETING of the Board of Finance, adjourned from Tuesday, June 17, 2008, was held on Thursday, June 19, 2008 in the Council Chambers.
Those in attendance included Mayor Ryan J. Bingham, members of the Board of Finance Daniel Farley, Laurene Pesce, Mark Bushka, Thomas Scoville, and Wendy Traub, Comptroller Alice Proulx, Superintendent of Schools Dr. Susan O’Brien, and Director of Business Services Nancy Haynes. Board of Finance member James Zeller and Corp. Counsel Ernestine Yuille Weaver were absent.
Mayor Bingham called the meeting to order at 5:00 p.m.
MINUTES #015
On a motion by Mr. Bushka, seconded by Mr. Farley, the board voted unanimously to accept the minutes of the public hearing held May 6, 2008 on the school budget.
On a motion by Mrs. Pesce, seconded by Mrs. Traub, the board voted unanimously to accept the minutes of the joint meeting with the City Council on May 14, 2008.
On a motion by Mr. Farley, seconded by Mrs. Traub, the board voted unanimously to accept the minutes of the regular meeting held May 20, 2008.
On a motion by Mrs. Traub, seconded by Mr. Scoville, the board voted unanimously to accept the amended minutes of the special meeting held May 20, 2008 to set the mill rate. (Page 1, change Mr. Proulx to Ms. Proulx.)
OPEN TO THE PUBLIC #080
On a motion by Mr. Farley, seconded by Mr. Scoville, the board voted unanimously to open the meeting to the public. There was no public participation.
BOE’S REQUEST FOR CONTINGENCY FUNDS #090
Mayor Bingham read the item on the agenda and stated that the motion would be to approve the item.
On a motion by Mr. Bushka, seconded by Mr. Farley, a discussion took place in regard to the Board of Education’s request for $250,000.00 set aside by the city as a contingency fund to assist them with the anticipated shortfall in their out-of-districts placements.
Mrs. Traub stated that the Board of Education was projecting additional revenue of $570,000.00, yet the state only shows $507,000.00 and asked if there was more money expected that they hadn’t received yet.
Nancy Haynes, Director of Business Services, stated that the city was notified that there wasn’t enough money in the grant and that 5% of the excess money will be coming in May and the remainder in June.
Mrs. Traub stated that the reason the funds went into the Board of Finance contingency as opposed to the Board of Education’s budget was because the funds were supposed to be specifically for out-of-district costs and the Board of Finance would have the ability to approve additional funds for out-of-district costs. She noted that the additional $570,000.00 coming from the state goes directly to the Board of Education because it’s directly related to the additional costs, so she preferred to see the $570,000.00 applied first and then the Board of Finance could approve the transfer of whatever the amount will be to offset the remainder of the deficit.
Mrs. Traub reported that some of the Board of Education members didn’t understand; they thought they could spend that excess money now until the end of June. The $250,000.00 was set aside specifically for out-of-district costs and cannot be used to purchase anything else within the district. She said she’d rather do the opposite of giving the Board of Education the $250,000.00, and say that the $570,000.00 would automatically go to them, and then make a motion to approve the transfer of funds to balance the Board of Education’s budget up to $250,000.00.
Ms. Proulx said they would first have to modify the budget for whatever the excess revenue is. They would increase the Board of Education’s budget on the revenue and the expenditure side, and make a recommendation at the end of the year to transfer whatever is necessary into the Board of Education line item for any costs above whatever the additional revenue was.
Mrs. Traub said she wants the public to understand that the $570,000.00 is directly associated with out-of-district costs and goes directly to the Board of Education, and the $250,000.00 in Contingency is directly related to out-of-district overages. She noted that they have $1.1 million in out-of-district costs right now and the $250,000.00 can be used to balance their budget, and the remainder will come back to the city.
Mr. Bushka said, last year when the Board of Education received more than budgeted revenue, the Board of Finance made an amendment to their revenue budget to allocate it to the Board of Education. He asked if that’s what Mrs. Traub was suggesting they do at this time.
Mrs. Traub noted that the Board of Education was anticipating a $590,000.00 deficit at this point, and after using the $570,000.00 in additional funds from the state, they would only need approximately $20,000.00 from Contingency to cover their deficit.
Dr. O’Brien said that wouldn’t work for them because they’re already looking at a $1.2 million shortfall according to their last projection from May 2008.
Mrs. Traub said the bottom line is that they are showing year end balance of $230,000.00 in the black, which will come back to the city anyway.
Dr. O’Brien said “Not necessarily.” She said that was the projection as of May 2008, and bills are still coming in. They were just notified by the city that they need to do some repair work at Forbes School for $20,000.00. So that figure is nothing more than an estimated projection. The city may or may not get $241,000.00. In fact, she was there to say the city probably won’t get it because they have a number of bills coming in all this month and more bills relative to this fiscal year will be coming in in July before they are finally able to get down to the real bottom line number of their budget.
On the opposite end of it, Mrs. Traub said whatever their deficit ends up being, the $250,000.00 will cover it.
Ms. Haynes stated she was recently presented with a huge stack of out-of-district and Special Education expenses that need to be paid. She said what they thought they could cover out of their own funds, they’re finding things like the retaining wall at Forbes that needs repair, they are no longer, in some instances, able to cover those special education out-of-district expenses out of their own budget to the extent which they thought they could. They projected a 1.2 million deficit for their out-of-district expenses. The additional revenue is approximately $750,000.00. They need the contingency to pay their bills. Their request is for the Board of Finance to authorize the $250,000.00 in Contingency to the Board of Education, plus whatever comes in from the state’s Excess Cost Grant,
and anything that is not spent will go back to the city.
Mrs. Traub said she informed the Board of Finance, that when the Board of Education approved the budget transfers, they approved a transfer of $90,000.00 out of legal and consulting, to instructional and non-instructional equipment accounts, which was used to purchase things she didn’t think was appropriate for the Board of Education to purchase items which they are clearly not in need of because school is already out for the summer. Her concern, after attending last night’s Board of Education meeting, was that some members were suggesting they utilize that money to buy things. The city budget is frozen for the rest of the year. Her question was “Are you suggesting that you’re going to even need more than $570,000.00.”
Ms. Haynes reiterated that they were $1.2 million in the hole in out-of-district costs and last year this board approved $250,000.00 specifically to use in the event they were over budget in out-of-district expenses. They’ve been documenting the out-of-district expenses all year. They’ve given the city the excess revenue and all they’re asking is for the Board of Education to get the money that was promised to them.
Dr. O’Brien added, that when the arrangement was made last year, which they considered to be a solid and honorable arrangement, she specifically asked how the Board of Finance would like to be notified that they needed the funds. She was told “Just let us know that you need it”. They let the Board of Finance liaison know that they needed it as early as January. She also wrote a letter in April as their projections were getting worse saying they needed the $250,000.00. They expected the arrangement to be a firm and honorable one.
Mr. Bushka said his recollection was that the Board of Finance set this amount specifically for out-of-district placements and they went over their budgeted amount.
Mr. Farley asked if he was correct in stating that the ECS funds that are coming back, have to be used for out-of-district placements and nothing else.
Dr. O’Brien said that was correct.
VOTE #505
The board, with the exception of Mrs. Traub who opposed, voted to approve the Board of Education’s request for $250,000.00, set aside by the city as a contingency fund to assist them with the anticipated shortfall in their out-of-districts placements.
Ms. Haynes furnished the board with a list of adjustments they made to their budget.
USE OF FUNDS: FINANCIAL MGMT UPGRADE ENCUMBRANCES #530
On a motion by Mrs. Pesce, seconded by Mrs. Traub, the board voted unanimously to authorize the Comptroller’s request to expend up to $8,000.00 from financial management upgrade encumbrances for the implementation and user training of the GASB 34 Government Reporting module as recommended by the City’s auditors UHY, LLP. This amount includes vendor charges as well as some funding for possible internal labor costs (if needed).
BUDGET TRANSFERS #555
On a motion by Mr. Farley, seconded by Mrs. Traub, the board voted unanimously to accept the budget transfers from 1/1/08 to 5/31/08, as submitted by the Comptroller on 6/11/08.
The board reviewed several of the transfers with Ms. Proulx.
Mr. Bushka asked how the Contingency account looked for the end of the year.
Ms. Proulx said she didn’t expect much more coming out of Contingency, other than a small amount for wage line items because some of the increases were slightly above what was budgeted.
BUS: MAYOR & MEMBERS #895
On a motion by Mrs. Traub, seconded by Mr. Scoville, the board voted unanimously to consider business by Mayor Bingham and members of the Board of Finance.
Mr. Farley noted that he has been working with the Assessor in trying to match her figures with those of the Board of Assessment Appeals and asked Ms. Proulx to review the paperwork.
Mrs. Traub wanted to follow up on the Board of Finance’s discussion in February regarding the role of the liaison to the Board of Education. The Board of Finance had directed her to go through Frank Rubino to get answers and information. She reported that she attempted to get information on the state reimbursement and their fuel contract via e-mail through Mr. Rubino and got no response. She then asked Ms. Haynes, and Mr. Cavagnero for the information and still received no response. She also reported that she was called out at the Board of Education meeting as having blind sighted them during the process because she did not communicate with them ever. She was here to tell the Board of Finance that she is constantly sending them e-mails and not receiving responses, or even any
acknowledgments that they have received her e-mails. She asked the board to make a motion to have the Board of Finance send a letter to the Board of Education indicating what they discussed in February, which was their rights per the City Charter, and the rights of the Board of Finance liaison. Technically, it’s not a city position; it’s just an appointed position. Perhaps that’s where the confusion is coming from.
Mayor Bingham said ultimately it was always assumed that the Board of Education liaison would receive any information that they asked for; however, it’s been an issue during the past few months. For the sake of flowing information from one board to the other, a chain of command was set up whereby the Chairman of the Budget Committee was the contact person. However, during the past month or so he hadn’t seen any responses from them. It would behoove them as a board to understand that Mrs. Traub is asking questions that are pertinent to her role and asked the board to add a motion by 2/3rds vote to authorize Mrs. Traub to have the title of Board of Education liaison. After conferring with Corp. Counsel Weaver about the matter, it was her belief that such a motion would be appropriate.
Mr. Farley thought they could allow the Board of Education a little flexibility with how long they have to respond. On occasion, it may take a day or two, especially with some of the volunteers. He wondered if that may be the case at this time.
Mrs. Traub indicated that she waited patiently for probably two months for some of the information she requested a while ago. She understood the position that the board members are in, and that’s why she contacted Ms. Haynes. Mrs. Traub would have appreciated an acknowledgment of her e-mails. Her concern at this point is the Board of Education’s situation with their fuel. It’s her belief that they want to use the additional funds at the end of this year, if they have any, to buy fuel for next year.
She felt the Board of Education should have let the Board of Finance know if they were having a problem negotiating a contract for fuel. She realizes that there’s a strain and she’s trying to work very professionally, but her job as a Board of Finance member is to make sure that the taxpayer’s money is being spent wisely and that there’s communication between the two boards.
Mayor Bingham indicated that he has been speaking with Dr. O’Brien during the past few weeks and they do intend to talk about communication starting with the new fiscal year.
ADD TO AGENDA # 1290
On a motion by Mrs. Traub, seconded by Mr. Scoville, the board voted unanimously to add an item to the agenda by 2/3rds vote in regard to the Board of Finance’s liaison to the Board of Education.
AUTHORIZE A LIAISON #1305
On a motion by Mr. Scoville, seconded by Mr. Bushka, the board voted unanimously to authorize the Board of Finance’s liaison to the Board of Education to request information from the Board of Education that is determined to be necessary to aid in communication in decision making by the Board of Finance.
Mrs. Traub said the important thing to understand here is that it’s not her, it’s a Board of Finance liaison position, which could be anyone, so it should be there for whoever is in place.
ADJOURNMENT #1325
On a motion by Mrs. Traub, seconded by Mr. Farley, the board voted unanimously to adjourn at 5:40 p.m.
ATTEST: JOLINE LeBLANC
ASST. CITY CLERK
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