CAPITAL IMPROVEMENT PROGRAM COMMITTEE
TOWN Of WILLINGTON
WILLINGTON, CT ~06279
Meeting Minutes
Town Office Building
January 15, 2013
Members Present: Members Absent:
Allen Furphy Jim Poole
Vice Chairman, Jim Bulick
Kelly Trueb
Chairman John Patton
Donna Latincsics, Business Manager
Ken Schoppmann, BOF Chairman
Tyler Millix
Melissa Welsh (arrived at 7:10 P.M.)
Also Present:
Residents
Vice Chairman Bulick called the meeting to order at 7:06 P.M.
- Prepare final CIP report for Board of Selectmen consideration
Chairman Patton questioned the sweeper line item being leased for $35,000. He reminded the board that he suggested at a prior meeting that it should not be leased if you are looking to get the best price, reiterating you have to pay cash and wait for the right opportunity. If you want to buy stuff for a good price, you have to be on the lookout for it and it doesn’t work with a lease - you can’t do both. Anything that you want to buy used is subjective and doing so makes it much more difficult to lease, especially when you are rolling a bunch of things together to get a lower rate. He added that in most cases, leasing companies might not want to deal with used equipment. BOF Chairman Schoppmann asked what if we leased through the
seller? Chairman Patton said anything can be done. BOF Chairman Schoppmann said we looked at leasing because we want this stuff, but it is not affordable this year. We flat funded from last year to this year and we can increase it, but some stuff is still going to fall off.
BOF Chairman Schoppmann gave an analysis of the magnitude of the requests: If you go through the last five year totals, the bottom line is $16 million, but that also includes paying off the Library and the items on the top of the list (such as Station 13 mortgage and other lease commitments.). He gave an example - if we spread it out over 15 years, it might then be brought down to $12 million (taking the ambulance fund and STEAP grants we could receive into consideration as well). That would still mean we would have to put in a 1 mil increase over and above what we have already put in- and that is just for capital improvements alone. He added we really need to wean this list down and figure out what is realistic and what isn’t. He added he doesn’t think that any of us can stomach a 1 mil increase and noted there was a time when we were funding this stuff around $700,000 a year. If we had continued that trend, it probably wouldn’t be such a problem now. First Selectman Mailhos
asked if it was because there was a growth in the grand list back then? Chairman Patton said no, in 1996 we started out at $595,000 which is equal to about $700,000 in today’s dollars. We were able to get away from some of that because when the bonds came due we didn’t re-up them; it was a way to save money. He added that easiest thing to cut out was capital because you don’t see the effects for years. He reiterated that it is the easiest thing to cut and the hardest to reinstate; however it also causes the most lasting damage. He gave an example of our roads. The Town always has a plan to do major work on them in the two year plan, however when it comes to budget time, it gets pushed out another year, and then yet another. He said you can maintain them to a certain point and the costs still go up because the road becomes beyond repair after time. He added most of our roads were built in the 1950’s and he
believes they are coming towards the end of life.
BOF Chairman Schoppmann confirmed that the $100,000 is the number he is talking about – if you put another $100,000 in the baseline, you have your $535,000. The question is how far are we willing to go? He also added that his role for CIP is different than on BOF, and he is not sure what he is willing to support because he hasn’t seen the entire budget. He added this Committee’s job is to clarify the importance of all of these projects and figure out how we are going to fund them as well as keeping it moving ahead so we don’t fall further behind. Chairman Patton said this is why the BOF Chairman and the First Selectman sit on this committee – to keep the reality in perspective. He added that we go through
these exercises trying to figure out how to pay for these things because if we didn’t, none of the projects would happen.
Vice Chairman Bulick said last year we talked about having a one time favorable variance with the Region 19 Board of Education. BOF Chairman Schoppmann said if the rest of our budgets stayed flat, that would have been a great place to push some of it. He reiterated that the budget season hasn’t started yet, and it doesn’t say we still can’t do that. Vice Chairman Bulick said it would be nice if we could pair them up with one time expenses like for example replacing hoses or a sweeper. BOF Chairman Schoppmann warned that other assumptions are lurking – referring to the BOE increase of $400,000 this year might eat up that favorable increase. He also added that he is not sure what will pass at the budget. It was hopeful that the
extra $100,000 was going to come from the variance and he said it still can - it all depends what passes through the budget.
Chairman Patton said we are still looking at a $16 Million over the next five years. Even if you take the unrealistic requests out- would be more like $10 Million. This tells him we need to get this number up from $434,000. BOF Chairman Schoppmann said it can be done on paper, but can it go through referendum? Chairman Patton said if we as a Town want these things, we need to pay for them. First Selectman Mailhos clarified that we need to define the things that we absolutely need and put them on the plan. It would be irresponsible for us not to add them on the plan and bring it to the voters. Melissa Welsh said we keep the requests on the list and our charge says we need to keep the Town’s current financial capabilities into consideration
and we have said many times that is not sustainable given the amount that is coming in. She questioned the authority the Committee has to say where the money should come from – (giving an example of the favorable number from E.O. Smith could go for a one time shot to pay for and knock some things off the list). That decision ultimately comes from the Board of Finance and the Selectmen, not us.
BOF Chairman Schoppmann referenced the projects on the list – there is a $4.5 million fire station, an $800,000 renovation to another fire station a ton of equipment on there – some of which needs to be replaced, and some of which doesn’t. That is where we spend our money on a year to year basis. He added that we never had road improvements added on here until the Turnpike Road project was added. BOF Chairman Schoppmann added we are not consuming a ton of money by leasing but the current plan consists of equipment; not roads. Discussion began about bonding. Chairman Patton reviewed some of the things that could be bonded like the salt shed and Turnpike Road, Phase IV.
Tyler Millix said the majority of the stuff on this list is what people in their professional opinion think needs to be on here but as a group we have to buy into that and then justify it to the public if we feel it is important. Chairman Patton said we also have to provide funding. Tyler Millix said we always say that people aren’t going to accept it at referendum, but we don’t know what they will accept. He added we may have missed prior opportunities to really boost this thing up when past referendums have sailed by.
Melissa Welsh referenced a question on the Town Survey that was taken last year.~ One of the questions asked: Are you willing to pay higher taxes to maintain the services the Town of Willington currently provides?~ The answer no was 61%.~ First Selectman Mailhos said that it doesn’t say anything about capital though.~ Melissa Welsh said that it is still going to ultimately increase taxes.~ First Selectman Mailhos clarified that was in reference to increase the services – being able to drive~ down your road isn’t necessarily a “service” and added we have some roads that are beyond repair.~~ Kelly Trueb added that’s not all the taxes pay for, so if you put all the money in the roads, then there is none left for the services because they didn’t~want to pay any more, that is how that question was asked.~ Vice Chairman Bulick said it is almost like you are looking at the left-over from the budget and it might make more sense to have the CIP Committee made up of members from all the
departments who are stakeholders such as the BOE, Fire Departments and Public Works. Ms. Welsh agreed the people who know the business better than we do should be sitting here. They can duke it out as to what the priorities are. Chairman Patton reiterated that the charge is simple; if you think the things are important, they need to be paid for. ~Ms. Welsh said she looks at it as a business standpoint – you have to have the right leaders in the group to get it done. She added that we don’t have any say in the money that is going to fund this stuff and she feels it is irresponsible to say that we are going to spend that money in 2013 – 2014 when we don’t have the money there to do it. BOF Chairman Schoppmann clarified Committee’s charge is to mediate the decisions based on the knowledge of what is needed to be done most. Ms. Welsh said we need to take into consideration the anticipated financing
capability - which is key. BOF Chairman Schoppmann argued that something has to be put in at a reasonable level and we need to sell to the Town. We need to push that we believe this stuff has to be done in order to maintain the infrastructure and operations of the Town. Ms. Welsh reiterated that she feels it is irresponsible to support it if the funds are not there. First Selectman Mailhos clarified that we do not know that the funds aren’t there yet. We will know as the budget season progresses.
Discussion was held on budget projections. BOF Chairman Schoppmann gave a brief synopsis of the preliminary budget and he stated that right now the way it stands; we are looking at a .3 mil increase with the requests that have come in so far and that may be palatable for some people. If we were to add another $100,000, it would bring it up another ½ of a mil. That is on top of where the numbers are right now. He clarified that would be the case only if everything that is brought to the table passes. He warned that it has never passed in the eight years he has sat on the Board of Finance. The parts that pass are from what is needed and how it would best serve the town of Willington. The BOF will put something out to Referendum based on what they feel the
Town needs. He clarified that he is not taking any sides; he was just explaining how the process works.
Chairman Patton stated that the $434,000 number really should be up at $485,000, and should grow another 3% each year. BOF Chairman Schoppmann said the only problem with that is it is going to push many of these projects out 12 to 15 years, and to him that would be irresponsible. He repeated that we also spend way too much on equipment and he is in disagreement that we need to buy new equipment. The road projects are more important and if they are legit, we need to find a way to fund them. Can we afford to push some of them out for another five years? He added he would be happy if we got another STEAP grant, but is not planning on it. First Selectman Mailhos stated that she has an application in to finish Turnpike Road.
Vice Chairman Bulick agreed with BOF Chairman Schoppmann that we are equipment heavy and less project heavy in this capital budget. He added that there are safety issues that should be addressed, such as the trash compactor, which would also have a return investment, as well as the exhaust system at the fire house.
Discussion was held on bonding. BOF Chairman Schoppmann said you must take a minimum of a million dollars and the payments would be $200,000 which allows you to implement it in a year’s time. It also could disrupt the flow of future plans unless you bond again. Chairman Patton added that there are additional costs involved with bonding, upwards to $50,000 or more. He explained the bond approval notice and bond anticipation notices that could take up to a three year period and several thousands of dollars. The interest rates are lower because they are short term notes. He noted that the salt shed, Turnpike Road, phase IV, Michalec Road realignment and Village Hill drainage are slated to be bonded. Separately, each one of these
projects is too big to pay cash for but to small to bond. He added that the advantage is that we could bid all of these projects together or break them up and bid separately. He gave an example that Turnpike Road might have a different contractor than one that would build the salt shed. Vice Chairman Bulick stated it might make sense to bid all of the drainage projects together.
Chairman Patton said we are almost at $500,000 in debt payments. If we are serious about doing these projects we need to ramp up our ability because we can’t dedicate everything to debt. BOF Chairman Schoppmann warned that this list doesn’t include anticipated debt - eventually equipment is going to break down and need to be replaced; buildings need to be maintained and fixed as well as whatever additional BOE requests come in. Vice Chairman Bulick asked if we have looked what other towns are doing? Chairman Patton said the financial report should have that information. He added that we are probably lower than 10% of our bonding capability. BOF Chairman Schoppmann added that we could borrow up to $34 million but is not saying we want to do that.
Chairman Patton said we are not even close to our debt ceiling and over the years our debt capita has been low amongst other towns. First Selectman Mailhos added as is our mil rate.
Chairman Patton said we should keep the plan in place from last year as a baseline.
Chairman Patton said $535,000 is realistic. BOF Chairman Schoppmann said it needs to be spent correctly and make sure we put the right projects out there.
Allen Furphy moved to increase the baseline to $535,000 for fiscal year 2013 – 2014 which is in line with last year’s.
BOF Chairman Schoppmann seconded the motion.
Vote: Yes – Allen Furphy, Ken Schoppmann, First Selectman Mailhos, Tyler Millix, Kelly Trueb & Chairman Patton.
No: Melissa Welsh & Vice Chairman Bulick
Motion passes
BOF Chairman Schoppmann referenced the updated spreadsheet – the July 1, 2014 balance is now $200,000. He said he feels we didn’t put the extra $100,000 in there so we could go back and add more items to the list this year. It is to start providing for the projects that are coming up the next year and year after. If that fund doesn’t grow, we won’t be able to do any of them unless we get outside grants or more bonding.
Discussion was held on the following:
The CES replacement doors; Kelly Trueb asked if the BOE is on the trend for returning money (as they have done every year ) again this year. BOF Chairman Schoppmann said he does not believe they will be able to this year. Vice Chairman Bulick asked if this might fall under the Siemens audit? First Selectman Mailhos said she doesn’t know the answer to any of the energy audit questions. She asked if she could see it beforehand, for the purpose of this meeting, but the representative from Siemens has not returned her call.
First Selectman Mailhos stated that she recalled it was discussed that the request for the 5” hose was cut in half. Kelly Trueb stated we discussed it but wasn’t cut. She added there is always a chance of running out of hose, and there is always have a situation where you don’t have enough. She recommends cutting it down to $5,000 to replace what is not passing, and also will give them a little extra.
The transfer switch at the Town Office Building will be removed.
The Ambulance request will be decreased to $220,000.
The exhaust system at WFD#1 will remain on the list as a priority.
The WFD#1 pickup truck has been decreased to $38,500. First Selectman Mailhos noted Public Works was able to get a new pick up for $35,000 last year.
The backhoe will be pushed out a year as an accurate cost is unknown. It will cost more than $70,000 if it is going to be leased. BOF Chairman Schoppmann would like to look into further leasing options.
Old Town Hall Renovations has been removed. First Selectman Mailhos stated that the funding source will be a STEAP Grant as well as Program Income funding that has been earmarked for ADA compliance upgrades.
Turnpike Road Phase III – has been moved to off budget as it will be funded by STEAP funds.
The Town office Building space study has been removed.
Chairman Patton will work on the spreadsheet and move some items around to make it work with the new changes made tonight. He will report back to the Committee at an additional meeting which has been scheduled for Thursday, January 24, 2013. The location will be determined this week (depending on availability).
Peter Latincsics asked to put on record that the public (he) was not able to speak.
Kelly Trueb moved to adjourn the meeting at 9:23 P.M.
Melissa Welsh seconded the motion.
All in favor.
Respectfully submitted,
Robin Campbell
Recording clerk
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