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Minutes of Board of Finance, 10/24/2016

AGENDA: Board of Finance

RECEIVED 10/31/2016 8:30am
Michele R. Grande – Redding Town Clerk

MINUTES OF BOARD OF FINANCE
October 24, 2016

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

Also present: J. Pemberton, First Selectman; L. Karvelis, Selectman; M. Thompson, Selectman; Finance Director Gniadek; Treasurer Meehan; Tax Collector Pat Moisio; School Superintendent Dr. McMorran; Board of Education Chairman S. Sobel, members of the public; Redding Pilot reporter; videographers.

Chairman Alvarez called the meeting to order at 7:30 p.m.

Mr. Alvarez commended Leon Karvelis on his years of service and wished him well in his future.

1.     To approve Minutes of meeting held October 5, 2016
On the motion of W. Mazzucco and the second of P. O’Donnell, the Board voted unanimously to approve the Minutes of the October 5, 2016 meeting.

2.     Tax Collector Report
P. Moisio reported that tax collection is currently at 53.6% of the budget which is an increase from 53.3% at this time last year. Outstanding amounts for GLDC were discussed.

3.     Finance Director Report
S. Gniadek reported that the school HVAC project has been paid in the amount of $2,377,000 out of the General Fund to be reimbursed upon bonding.  The Stepney Road Bridge Project is slightly under budget and the State Bridge Grant approval has been received.

Mr. Gniadek reviewed his attendance at the CCM Policy Committee.

4.     Treasurer Report
J. Meehan stated that the status remains liquid.  She has forwarded an email regarding State of CT credit report to the Board members.

5.     Mark Twain Library Audit Report
Jen Wastrom, Beth Dominianni and Betsy Higgins were present from the Mark Twain Library to make the first annual presentation on their budget and anticipated capital expenditures.  J. Wastrom highlighted the new Small Business Circle Directory of small businesses in addition to newly reconfigured space to meet program needs.  Mrs. Dominianni reviewed current circulation statistics and new item acquisitions in addition to recent programs for children and teens.

The audit report and operating and capital budgets were reviewed in detail.  Mr. Alvarez requested that the supplemental report be included and the lines reconciled. B. Higgins responded to several questions about the Library’s accounting methods.

Mr. Alvarez commented that losses on their investments during the year totaled $71,435 or about 4.5% of their year-end balance. The audit report further noted that approximately 23% of the Library’s investments were classified as “Level 2” assets. The accounting regulatory authority defines “Level 2” as assets that do not actively trade in a market. Because of the loss reported, Mr. Alvarez suggested that the Library board review their investment policy and determine if it is prudent for a not-for-profit organization, handling endowment funds, invest in Level 2 assets.

J. Dolan asked about the special events profitability and requested information comparing last year’s budget to this year’s actual numbers.

Capital expenses for the next three years were reviewed.  Mr. Alvarez noted a 14% increase in the budget and reiterated the need to keep expenses down.

6.     Long Range Capital Planning Committee Report
S. Gniadek reviewed Minutes from the Long Range Financial Planning Committee meeting held on 9/22/16.  Items for both FY 2017-19 and FY18-19 were reviewed.  Additionally, options for replacement of the Police Department communications system were discussed.  More information will be presented regarding a leasing option. Police Chief Fuchs will present additional information at the November meeting. S. Gniadek will make a recommendation on what items may need to be bonded.

7.     Replacement vehicles for Town
J. Pemberton reported that the need to replace Town vehicles will preclude returning money to the Town.  M. Thompson asked if used vehicles were considered.  J. Pemberton responded that all options were explored. The Board approved leasing of two new replacement vehicles, a pickup truck and a rack body truck, for use by the Facilities and Park Y Rec departments.

8.     Bonding Date Options
The potential bonding date of March, 2017 will require an updated schedule for funding considerations. Discussion will be continued at the next meeting. Mr. Alvarez wants to know of all bondable items in time for the next meeting, so that we can be on track to refinance the BANS to bonds in January.

9.     BOE FY 2015-16 Year-end Surplus
P. Sullivan reviewed the items contributing to the year-end surplus, in an effort to explain why, despite the $570,000 Board of Education surplus, only about $85,000 will be returned to the Town. Further, since the administration applied about $300,000 of the surplus to future health insurance reserves, the magnitude of any future budget surplus would be even greater.

10.   Discussion of BOE FY 2017-18 Budget
W. Mazzucco stated that the school budget for the year ending June 30, 2016, having been previously described as “destabilizing” by the administration, is in reality more than adequate.  He continued that the Board of Education should consider a substantial cut due to the BAN to bond conversion and uncertainty of State aid.

Mr. Alvarez noted that the surplus leaves open the possibility of even more savings.  Mr. Mazzucco noted that administration’s public comments on salaries seem to be out of sync with the feeling of thrift that the Board of Finance would expect.  The Board suggested that the Board of Education begin their budgetary process $600,000 less than the current figure.

P. Sullivan clarified that $140,000 of the surplus will be returned in addition to additional budget reductions.  Dr. McMorran noted the uncertainty of snow days and would like a few years of allocations to be considered, not just the surplus of this year.

Chairman Alvarez stated that the Board of Finance is trying something different in this budgetary process by giving guidance to the BOE early in the budget cycle. Sara Sobel reiterated that both Boards agreed to approaching the budget with a target earlier in the process.

11.  Reports from Individual Board members as assigned
No items.

12.  Correspondence and Administrative matters
No items.

Dana Gray, Lamppost Drive, suggested a forensic audit of the BOE budget.

On the motion of J. Dolan and the second of W. Mazzucco, the Board voted unanimously to adjourn at 9:46 p.m.

Submitted by:
Kristi C. Reilly