 |
Town of Willington
BOARD OF SELECTMEN • 40 OLD FARMS ROAD • WILLINGTON, CONNECTICUT 06279 • (860) 487-3100 • FAX (860) 487-3103
BOARD OF SELECTMEN
SPECIAL MEETING MAY 8, 2006
TOWN OFFICE BUILDING 5:30 P.M.
First Selectman Eldredge called the meeting to order at 5:30 P.M. with the following in attendance: Selectmen Patton and Lewis, L. Brown, D. Latincsics, L. Nicholls, J. Prusak, Attorney R. Roberts, Auditor S. Trenholm and residents.
BUDGET REVIEW
First Selectman Eldredge commented that the Public Works budget was overspent by $40,000 in April. There were questions about what went wrong and how are we going to correct it. Around April 14, 2006 we realized the P.W. budget was overspent and we started working on it then, not only the over expenditures but what we needed to finish out the year. We planned to make a transfer and then an appropriation of $144,000 but we did not make that by the end of April. I had written a letter to the Board of Finance for their next scheduled meeting of May 18th. Then information regarding the fire truck came in and I was going to the BOF meeting to cover both of these subjects. We did not do that by the end of April so the budget was overspent. Selectman Patton commented that at
the Feb. 6, 2006 Board of Selectmen’s meeting we knew we were going to run out of money and the First Selectman was going to go to the Board of Finance for $48,000 that would be coming back from FEMA and then make adjustments in May or June. You didn’t do that and I would like to know why; that is the direct cause of why we ran out of money on the P.W. line item. First Selectman Eldredge asked Lynn when we made the first FEMA submittal? Lynn commented the original $48,000 was from the first storm and we talked about getting that back in by budget. FEMA came in on April 3rd told us we had until April 10th. At that point it was up to $80,000. Selectman Patton commented we knew it would be $48,000 and that we would be out of money. Lynn commented before that, when we were working on the budget, I said I only had $8,000.
Selectman Patton commented I am accused of nagging if I bring these things up, I decided I wasn’t going to nag. First Selectman Eldredge commented he was waiting for the final figures from FEMA so when I went to the BOF I could tell them how much was coming back. We got 75% back. Selectman Patton commented so what you agreed to do in Feb. you didn’t do. First Selectman Eldredge replied yes. Selectman Patton asked how did we run out of money and continue to write checks? I assume I am responsible also. Attorney Roberts commented that the wording in the statute says no officer shall expend, it doesn’t say who an officer is but it seems that anybody who participates in the expenditure of money beyond what is appropriated for the department falls under the statute as
having done something they are not supposed to. Selectman Patton commented and this carries some penalties. Attorney Roberts replied potentially yes. Selectman Patton asked how were we potentially exposed to these penalties? First Selectman Eldredge commented because we didn’t get to the BOF before the end of April. If we got to the BOF we would not have overspent in May. Selectman Patton asked why is it that on May 1st. when we had a meeting this was never brought to our attention? You had all those figures in April; when we sat down on May 1st. you never said anything about this. First Selectman Eldredge commented that he just didn’t bring up the subject. Selectman Patton commented you just didn’t bring up the subject that we were out of money. First Selectman Eldredge commented that where we overspent was at the department level. Selectman Patton commented that is where our
authority lies.
SPECIAL MEETING -2- MAY 8, 2006
Attorney Roberts commented that is the wording of the statute, it has been there since 1917. Selectman Patton commented historically we consider a department to be a line item. Our authority goes to the department level. Attorney Roberts and Auditor Scott Trenholm agreed. Selectman Patton asked isn’t there some mechanism in the software that would prevent us from writing checks when we run out of money? Auditor Trenholm commented that he would suggest that there is something that would indicate that you might overspend. It is a monitoring function. First Selectman Eldredge asked do we have that in our system? Donna Latincsics commented yes we have something that shows a warning. Selectman Patton commented that was ignored. The March 31st account
probably showed a little money left over, $7,000 or $8,000. The April one report showed $41,000 in the hole. First Selectman Eldredge commented that is correct. Selectman Patton asked who during that month, when we have to sign checks, who would monitor that? Donna Latincsics commented that would be me; we had a plan in place to request additional appropriation and we knew we would take care of it; it was a timing issue. We did not get to the BOF. First Selectman Eldredge commented we should have gone to the BOF before the end of April. Selectman Patton commented you should have gone in Feb. and we should not have cut checks in April when we ran out of money. Auditor Trenholm commented we would have a generated a letter expressing concern about the timeliness of the transfers. I don’t know if, so long as the transfers/appropriations were done prior to the end of the fiscal year, it would be considered a legal item or
something that was not in accordance with the statue. Selectman Patton commented he assumes that if you make up the money, the transfers/appropriations will eventually make up the money. As long as the townspeople are willing to accept we just do it and then ask permission later. First Selectman Eldredge asked do you consider the bottom line budget or just on the department level? S. Trenholm commented from a budgeting standpoint it is illegal to budget more than you have, now you can consider fund balances part of what you have as existing reserves but then as you go along during the course of the year the legal level control is at the department level. You would want to make sure at the end of the day appropriate transfers and appropriations, whatever is necessary, were made in order to cover the department level. From a practical standpoint, it is not good practice to make those transfers after the fact. Selectman Lewis commented it is
illegal because you are actually spending more money than was not appropriated by the BOF. Attorney Roberts commented that the wording of the statute is the same as it was in 1917, you couldn’t build a contingency into your budget so if you spent more than had been appropriated you had to go running around with supplemental tax bills. Technically it reads the same, as far as not being able to spend more than you have at the department level. Selectman Patton asked if there is a different warning for encumbrances and no money? Donna replied no. First Selectman Eldredge asked if the warning comes up for any department? Donna replied it comes up for each line item not just the department. Scott Trenholm commented ideally it should warn when you do the purchase order. Selectman Patton asked what do other towns do? Mr. Trenholm commented they monitor their budget vs. actual, reports and project ahead to the extent that in Feb.
you realize you are going to have a problem and take action at the time you are aware you have a problem. It gets a little complicated with grants but you monitor reports and it is good practice that when you become aware of problems you inform the BOF so that appropriate action can be taken in a timely fashion. Selectman Patton asked who should notify the BOF, the Business Manager, the Board of Selectmen or the First Selectman? Mr. Trenholm commented that the protocol could work with the Business Manager notifying the BOF but you could set it up whatever way you want. First Selectman Eldredge asked Attorney Roberts how can we prevent this from happening again? Attorney Roberts commented that he thinks that when you get a printout like you did at the end of March, a thin margin, particularly compared with what the remaining known obligations are, you should go directly to the BOF. The alternative is to not pay people or not pay contractors until
you have gone through the process of moving money to stay within technical compliance. A little more preventive, pro-active moving of the money in advance is the only way I can see to change that. All Department Heads get monthly reports on their line items. First Selectman Eldredge commented we were looking at 2 things, transfers for now and also to make it viable for the rest of the year. Selectman Lewis commented there should be something in place, between the
SPECIAL MEETING -3- MAY 8, 2006
Business Manager and the BOF; they need to keep a closer watch. Selectman Patton asked Lynn Brown who on the BOF is assigned to review the monthly statements? Mr. Brown commented no one is assigned to review them. Selectman Patton asked Attorney Roberts to explain about the penalty phase in Sec. 7-349. Attorney Roberts commented that there has never been any statute enforcing this and I couldn’t find any reported incidents where anybody was held liable for the penalty. As far as I can tell, there has been no damage to the Town, checks have not bounced and contracts have not been breached. Selectman Patton commented they have not bounced because we have money. First Selectman Eldredge commented because the bottom line was still in place. Selectman Patton commented we
have no authority for the bottom line. First Selectman Eldredge commented that he has talked to other towns and they overspend on their budget and transfer once at the end of the year. Attorney Roberts commented people are probably violating statutes waiting until the end of the year. Selectman Patton asked how do we prevent this from happening. A lot of the safeguards are common sense but this did happen. Lynn Brown commented that he thinks it is up to the Selectmen and the Department Heads to monitor these line items. It is not up to the BOF to go over every line item. First Selectman Eldredge commented it must be monitored a lot closer. Selectman Patton asked who should monitor it? First Selectman Eldredge commented that it should be a combination of the business office and Department Heads. Selectman Patton asked First Selectman Eldredge do you see you having any role in this? First Selectman Eldredge commented I
review them every month but I didn’t pick up quick enough on this one that it was going to be out. I go through the sheets every month. Selectman Patton asked Donna to walk us through the steps and she did. First Selectman Eldredge commented that there were unique circumstances because Public Works was doing work and repairs from the storms. We were showing negative on a lot of line items because we had to charge back to P.W. It did not throw up a red flag because of the FEMA reimbursement. Lynn Nicholls commented she goes over her budget every week and we knew we were out of money. First Selectman Eldredge commented we were seeing over expenditures on the different line items within your budget and we knew the reasons for the over expenditures, the storms. Selectman Patton commented my problem is we are cutting checks without any authority to spend money and that subjects us to possible penalties. It sounds
like everybody ignored the safeguards. First Selectman Eldredge commented we saw the over expenditures on the individual line items and when we looked at it we justified it because we were recovering from the storm; when I looked at it I knew it was the contract being charged to it. But I also looked at the bottom line of that budget and they were being absorbed until the end of March. Selectman Patton commented you should have adjusted it in March; we should not have had the ability to make a $10,000 payroll in April. First Selectman Eldredge commented he did not realize it was a $10,000 payroll. May 3rd. is when it showed the over expenditure. Selectman Patton asked how far down does the red flag go, to the dept. level or sub levels. Donna commented that it goes down to the object level. Selectman Patton commented that he is not arguing why we are over budget, he knows why we are over budget, we knew that months ago.
I want to know how we fix the problem so it doesn’t happen again. It sounds like we need to stop having people ignore red flags. Donna commented that you must over ride the red flag. The suggestion was made that 2 signatures be necessary to over ride a red flag. This will be looked into. Selectman Patton commented what it all comes down to is who ignored all the red flags and started spending money we didn’t have? Who authorized that? Donna commented no one acknowledged that we were out of money. First Selectman Eldredge commented when I looked at the bottom line at the end of March, I probably should have seen that it wasn’t enough, I still thought it was enough, I can’t say I ignored it. Selectman Patton asked didn’t it concern anybody that we were out of money? Donna commented that she knew we were preparing transfers. P. Latincsics asked Lynn Brown didn’t something like
this happen with the Board of Education years ago; they had a shortfall late in the year and went to the BOF for transfers and then to Town Meeting. How is this situation different than that? Lynn commented this time they did not get to the BOF in time. They should have come in April. R. Hisey commented that he believes that for public safety we are allowed to overspend. The Treasurer keeps track of how much money we have so we do not bounce checks. First Selectman Eldredge commented I think when this happened in the past they would
SPECIAL MEETING -3- MAY 8, 2006
withhold making payment until they resolved it with the BOF. John Prusak, Treasurer, commented that the Treasurer also signs the check, we have plenty of money to cover checks, technically and legally we can write checks, practically we can’t. Selectman Patton commented we are not authorized to spend it and as far as an emergency goes would the October storm still be an emergency in May? Lynn Nicholls commented that she worked on FEMA work until April 3rd. We knew about the $48,000 we were over in February. Selectman Patton asked Donna if she would ask the software company if there is a way to not allow checks to be written if there is no money in that line item? Selectman Patton commented that it sounds like there were procedures in place but we are ignoring them, not
reviewing finances in the appropriate time. What is our immediate action plan so we can meet payroll this week? First Selectman Eldredge commented we are going before the BOF at 7:00 PM requesting $37,000 inter-department transfers, we are also asking for a $20,000 transfer to bring the total to $57,000 for the Public Works department. Discussion followed on the various transfers and where they are coming from. First Selectman Eldredge commented we are asking the BOF for a Town Meeting for $143,000. Selectman Lewis asked if that will go back to the general fund? First Selectman Eldredge commented that $82,500 will go back into that from FEMA and around $15,000 from FEMA for the Feb. storm will also go back. Selectman Patton asked regarding the money from the Emergency Services Reserve Grant, how will we cover the $21,000 that was supposed to go into the fund? I don’t see any mechanism in here to put the money back into the fund. First Selectman Eldredge commented didn’t we
always used that to adjust the year-end budget. Lynn Brown commented at this point he could not answer that. Selectman Patton commented whether we have or not is irrelevant, the point is we are now planning on taking money out, we are planning on spend a fund balance down to almost nothing, which assumed that we were putting in $21,000; now you are taking the $21,000 out I want to know how we are going to put that money back so we don’t go into debt disposition. First Selectman Eldredge commented we have used the $21,000 for the last 3 years, it has never gone into the fund, it was always used at the end of the year to adjust the budget. Selectman Patton commented that fund balance is now down to almost nothing, about $3,000 or $4,000 in a couple of years assuming that we put the $21,000 in; if we are not putting it in there how is it that we will not go into a negative position. Discussion on the CIP plan followed. First Selectman Eldredge
commented that the main thing is that we have to put appropriations into P.W immediately. Then that money is available for transfer and will take care of the immediate situation. Discussion on the motion for the Town Meeting and diesel money from the Board of Education to Public Works followed. The Town is paying back the diesel money to the Board of Education. Scott Trenholm commented it is unusual and probably should not have happen. It should have been charged to the correct line item. This was done last year, not under this Business Manager. First Selectman Eldredge commented that Donna was trying to justify what someone did last year and bring it back in line. Selectman Patton asked what are we going to do to prevent what happened from happening again. Donna will talk to the software people regarding 2 people signing off for a red flag. S. Trenholm commented it should be the Board of Selectmen who sign off, the highest
level of authority. Attorney Roberts commented you need to keep your eye on the line items and the department as a whole. Selectman Patton commented that everyone ignored the procedures in place, management oversight was lacking. We need more oversight or insight into the budget and how we are spending money. This should not have happened at all. J. Prusak, Treasurer commented that the ultimate responsibility should be the First Selectman, the town has to have a head it can’t be a bunch of elected officials working on their own, someone has to lead and take responsibility not just dole out responsibility. First Selectman Eldredge commented yes and no, he does not enter stuff on the computers, I should be the one making the decisions but we need the idea that a red flag alerts us we are over and that we know about it and do something about it so we don’t get back in the same situation. Selectman Patton commented you knew about this since
February, you agreed to go to the BOF. First Selectman Eldredge commented for the $48,000 yes but there was a lot more. Selectman Patton commented if you did what you said you were going to do we would not have this problem today. First Selectman Eldredge commented if we had controlled things better, if we had
SPECIAL MEETING -5- MAY 8, 2006
gone to the Board of Finance in early April we wouldn’t be in this situation today. Selectman Patton asked could you apprise us at the next Board of Selectmen meeting what you found? Donna replied yes.
SELECTMAN PATTON MOVED TO RECESS THE MEETING AT 6:45 PM UNTIL AFTER THE BOARD OF FINANCE MEETING AT 7:00 P.M.
Selectman Lewis seconded the motion.
VOTE: 3 YES (ELDREDGE, PATTON & LEWIS) 0 NO
FIRST SELECTMAN ELDREDGE RECONVENED THE MEETING AT 7:42 PM
SET DATE FOR TOWN MEETING
FIRST SELECTMAN ELDREDGE MOVED TO SET MAY 16, 2006 AT 7:00 PM AT THE TOWN HALL FOR THE FOLLOWING: ITEM I TO SEE IF THE TOWNSPEOPLE, ON THE RECOMMENDATION OF THE BOARD OF FINANCE, WILL AUTHORIZE THE APPROPRIATION OF $92,044.00 FROM THE GENERAL FUND BALANCE TO THE FY 2005-2006 PUBLIC WORKS LINE ITEM 311.
Selectman Patton seconded the motion.
VOTE: 3 YES (ELDREDGE, PATTON & LEWIS) 0 NO
SELECTMAN PATTON MOVED TO ADJOURN THE MEETING AT 7:44 P.M.
Selectman Lewis seconded the motion.
VOTE: 3 YES (ELDREDGE, PATTON & LEWIS ) 0 NO
Respectfully submitted,
Mary Bowen
Mary Bowen
Secretary
Board of Selectmen
860-487-3100
You have received this e-mail because you have subscribed to the Town of Willington’s E-mail bulletin feature. If you wish to remove your name from this list please visit www.willingtonct.org/subscriber.html to unsubscribe.
| |
