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Minutes of Board of Finance Special Meeting, 10/05/2016

AGENDA: Board of Finance Special Meeting

RECEIVED 10/11/2016 3:21pm
Michele R. Grande – Redding Town Clerk

MINUTES OF BOARD OF FINANCE
October 5, 2016

Present: W. Alvarez, Chairman; S. Clark; W. Mazzucco; J. Dolan; K. Yonkers; P. O’Donnell.

Also present: J. Pemberton, First Selectman; L. Karvelis, Selectman; M. Thompson on phone; Finance Director Gniadek; Treasurer Meehan; Board of Education Chairman S. Sobel, members of the public; videographers.

On the motion of L. Karvelis and the second of J. Pemberton, the Board of Selectmen voted unanimously to go into Executive Session with the Board of Finance to discuss GLDC legal proceedings at 6:30 p.m.

The Board of Selectmen and the Board of Finance came out of Executive Session at 7:35 p.m.

  1.  Chairman Alvarez called the meeting to order at 7:36 p.m.
  1. To approve Minutes of meeting held August 29, 2016
    On the motion of S. Clark and the second of W. Mazzucco, the Board voted unanimously to approve the Minutes of the August 29, 2016 meeting.  J. Dolan abstained.
  1. Tax Collector Report
    S. Gniadek reported tax collection is ahead of last year.
  1. Finance Director Report
    S. Gniadek reported on disbursement from the General Fund to Millenium Builders.

Money will be transferred out of the General Fund for Stepney Road Bridge Project pending receipt of State Grant Bridge reimbursement.

The Region 9 Bond sold on September 22, 2016 at a rate of 1.92%.

Mr. Gniadek reported on his attendance at the New England States GFOA conference in New Hampshire. Cyber security and fraud prevention were addressed.

The CCM Policy Committee annual meeting is October 11, 2016 and Mr. Gniadek will be representing Redding.

The audit field work, by the outside accountants RSM, will be concluded this week.  A presentation on the report will be made at the November Board of Finance meeting.

  1. Treasurer Report
    J. Meehan reported on a debt service payment due later this month and noted ample funding for it.
  1. Review October 1, 2016 Enrollment Report
    Sara Sobel reported on the Enrollment Report noting an enrollment of 935 for RES/JRMS for the 2016-2017 year down from 953 from 2015-2016.

A new Pre-K section has been added to accommodate the increased special needs population.

  1. Report of BOF Subcommittee meeting with BOE
    W. Mazzucco reported on the joint BOF/BOE subcommittee meeting attended by himself, Dr. McMorran, P. O’Donnell, and G. Denny. S. Sobel had been absent. The focus continues to be on determining what districts are comparable for both the BOF and the BOE other than District Reference Group A. K. Yonkers noted the need for a measurement other than median income.
    J. Dolan suggested that Redding consider averaging the statistics from its 7 contiguous neighboring towns.

The BOF/BOE subcommittee and B. Alvarez noted the desirability for early involvement of the Board of Finance in the BOE budgeting process.  J. Dolan stated his desire for the BOE to prepare a list of specific budget items to be considered should a reduced budget be necessary.

The next BOE/BOF subcommittee meeting is TBA.  This item will remain on the BOF Agenda for continued discussion.

Mr. Alvarez noted that the refinancing of the BANs to bonds must take place by March of 2017.  He and S. Gniadek made some estimates indicating that the likely overall impact to next year’s budget would be an increase in debt service of about $700,000.  Part of that takes into account a one-time payment from a previous refinancing, so, after next year’s budget, the impact of the refinancing will be even higher.  Mr. Alvarez would like to find a way to defray the impact of that built-in budget increase to restrain any increase in taxes.

  1. Discussion of RES Boiler Replacement
    Mr. Alvarez indicated that he had requested all the emails relating to the replacement of the boiler and payment for the boiler.  He received three and thought additional emails may well exist.  He reminded the BOF of the 2/11/16 inspection at RES and the assurance at that time that the boiler would not be replaced for many years.  He noted that an email dated 2/12/16, the very next day, reported a crack in the boiler.  He expressed surprised that no one in the administration thought to inform the BOF, the BOE, or the Superintendent from February until the end of August.

    S. Sobel stated that she became aware of the boiler correspondence after receiving a Cease & Desist Order forwarded by J. Pemberton. She stated that although funds have been allotted for the repair, money has not yet been spent.

    B. Alvarez stated that the boiler repair is a capital expense that needed to be voted on. He felt all of this reflected a total break-down of internal financial controls and reporting. He noted the need for procedures to prevent a recurrence of this type of situation.

Ms. Sobel reported on the current status of water potability at RES.  J. Pemberton added that the Health Department is involved and that the Highway Department will work on the leaching fields if needed.

W. Mazzucco reiterated the need for real-time communication and transparent information.

Mr. Alvarez has received correspondence relating to the boiler and will be in contact with Dr. McMorran.

  1. Reports from Individual Board members as assigned
    P. O’Donnell attended the BOE meeting on 10/4/16 and commended S. Sobel on her handling of the boiler situation. Further, the BOE learned at that meeting of a surplus of $570,000 as of 6/30/16. The BOE’s Director of Finance applied $300,000 to future health care insurance reserves, $115,000 to handle a special ed reimbursement formula error that resulted in an excessive reimbursement to the town, and $70,000 to the boiler. Detailed information re: significant categories of overage will be submitted by Ms. Sobel.  In the end, the BOE will return only about $85,000 to the Town.  A meeting will be scheduled with Dr. McMorran, Sara Sobel and Bill Alvarez.

Dana Gray noted her disappointment that P. Sullivan and Dr. McMorran were not present to explain the problem with the boiler replacement.  S. Sobel responded that she had decided to handle the presentation, herself.  James Miller stated that it is difficult to compare Redding and the budget with other towns if we are not aware of how their budgets are done.

  1. Correspondence and Administrative matters
    No items.

On the motion of W. Mazzucco and the second of J. Dolan, the Board voted unanimously to adjourn the meeting at 9:00 p.m.

Submitted by:
Kristi C. Reilly

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