REDDING BOARD OF FINANCE
SPECIAL MEETING MINUTES
May 10, 2016
Board of Finance: Alvarez (Chairman), Clark, Dolan, Mazzucco, O’Donnell, Yonkers
Also present: Finance Director Gniadek First Selectmen Pemberton, Redding Board of Education Chair Sobel, five members of the public, a representative of the Redding Pilot and the videographers
Chairman Alvarez called the meeting to order on May 10, 2016 at 7:30 pm in the Hearing Room of the Town Hall.
APPROVAL OF MINUTES
Motion: move that the Redding Board of Finance accept the minutes of the April 25, 2016 meeting as submitted. Mazzucco, Yonkers. Approved. Unanimous.
DISCUSSION AND ACTION ON THE FUNDING OF SCHOOL HVAC APPROVED PROJECT
Mr. Alvarez stated that the school Finance Director, Peggy Sullivan, has requested $2,750,000 for the HVAC work to be done this summer at John Read Middle School and $1,000.000 for the pre-purchase of equipment for the HVAC work that is to be done at Redding Elementary School during the summer of 2017. The remaining $1,700,000 will be requested for work to be done during the summer of 2017.
Discussion followed. Mrs. O’Donnell suggested consideration be given to borrowing funds from our cash accounts, with repayment to the accounts upon going to BAN or bonding. This concept was discussed. The purpose of using available cash funds on hand is to save costs associated with interim financing of the HVAC project before a Bond is obtained.
Mr. Alvarez questioned whether the cost numbers for the project were final or estimates. Mike D’Agostino (Redding Board of Education member and member of the board’s Facilities Committee) responded that the project has been bid through the State ECIQC program. Seven constructions bids were reviewed and one recommended. The quote includes the purchase of equipment for RES in October, prior to pricing increases at the end of the year. The manufacturer will store the equipment at no cost. This will eliminate delays in getting the equipment for the summer of 2017. Mr. Mazzucco urged the Board of Education and building committee to make certain that the Town’s investment in the prepaid equipment would be protected in case the manufacturer was to go bankrupt. The building committee representative agreed to look into the issue.
Following further discussion, a motion was considered.
Motion: move that the Redding Board of Finance authorize the funding of up to the approved $5,450,000 for the HVAC project for the schools, to be funded through available cash from the Town’s bank accounts until it becomes necessary to obtain either a BAN or Bond. Dolan, O’Donnell. Approved. Unanimous.
DISCUSSION OF 2016-17 BUDGET AND DRAFT MILL RATE SCHEDULE
Discussion of the mill rate worksheet followed. The current estimated revenue reduction is $496,000. The increase in the Elderly Benefit, as of now, is $34,000, bringing the total to $1,836,744. That information brings the mill rate to 29.24, or a 1.14% increase over the current year.
Mrs. O’Donnell commented that she reviewed the Board’s investment policy on the use of the Fund Balance, to meet temporary revenue shortfall or to meet emancipated expenditures. She did not think the current situation meets either of those two uses.
First Selectmen Pemberton commented that the Board of Selectmen could make some reductions (between $50,000 and $100,000) in the approved budget, primarily by postponing some purchases. Chairman of the Redding Board of Education, Sara Sobel, reported that the Board could not commit to any savings in next year’s budget at this point.
Mr. Dolan thanked Jeanne Wendschuh for her comments on the GFOA best practices guidelines, recommending two months of expenditures, for the Fund Balance. That amounts to about $7,900,000, while the current Fund Balance is at $6,500,000. He recommended not entertaining a reduction in Fund Balance. Mrs. O’Donnell added that the taxpayers approved a budget and she thought that reductions to that budget should not be taken at this point.
ACTION TO SET THE MILL RATE FOR 2016-17.
Motion: move that the Redding Board of Finance set a mill rate for fiscal 2016-17 at 29.24, reflecting a 1.14% increase over the current year. Mazzucco, O’Donnell. Approved. Unanimous.
PUBLIC COMMENT
James Miller, Middlebrook Pond Road: Mr. Miller commented that the State has not finished the budget approval process and asked what would happen if the revenue number changes. Mr. Alvarez responded that the Board is setting the mill rate based on the best information they have now, and to facilitate getting the tax bills printed and mailed to taxpayers in a timely manner. He added that if the reduction in the revenue increases, consideration will be given to other options including using the Fund Balance.
Frank DeSalvo, Mountain Road: Mr. DeSalvo questioned why the Board was not waiting until the State budget approved process was complete. Mr. Alvarez responded that a decision is needed by May 15 to facilitate the printing of tax bills.
Sara Sobel, Redding Board of Education: Mrs. Sobel reported the Board of Education would like to schedule some joint meetings between their board and the Board of Finance, and will prepare a schedule of those meetings for the fall.
Jeanne Wendschuh, Deer Spring Road: Mrs. Wendschuh suggested the Board consider a revision of their policy regarding fund balance to reflect the GFOA best practices. Mr. Alvarez will put the item on the agenda for the next meeting.
NEXT MEETING
Mr. Alvarez suggested that the meeting scheduled for May 23, 2016 be cancelled.
Motion: move that the Board of Finance cancel the meeting scheduled for May 23, 2016. Dolan, Clark. Approved. Unanimous.
ADJOURNMENT
Motion: move to adjourn the meeting. Mazzucco, O’Donnell. Approved. Unanimous.
The meeting was adjourned at 8:19 pm.
Submitted by Mary Maday, Recording Secretary