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Minutes of Board of Finance – Special, 01/21/2015

AGENDA: Board of Finance – Special

RECEIVED 01/26/2015 8:30am
Michele R. Grande – Redding Town Clerk


Present: Alvarez (Chairman), Clark, Dolan, Mazzucco, Yonkers

Also present: First Selectman Pemberton, Selectmen Karvelis & Thompson, Finance Director Gniadek, Treasurer O’Donnell, Tax Collector Moisio, 10 members of the public, and the videographers

Chairman Alvarez called the Special Meeting on January 21, 2015 to order at 7:35 pm in the Redding Town Hall.


Motion: move that the Redding Board of Finance approve the minutes of the December 15, 2014 special meeting and the December 15, 2014 Joint meeting as corrected.

Correction:  under Board of Selectmen, line 4, change regulator to regulatory.


Ms. Moisio reported that the collection rate, as of today, is 70.3% of budget.  She anticipates additional payments by the February 2 deadline date.


Mr. Gniadek provided a listing of end of year projections for the Town.

The variances over $10,000 are as follows:

Heath Insurance         $50,000, favorable employee changes

Transfer Station Salary  32,000, Director of Public Works now overseeing operation

Highway Salaries         28,000, 3 new hires

Selectman Salary         20,000, current vacancy

Contingency              12,000, remaining balance

Fuel oil                         10,000, lower prices

Pension                  10,000, salary savings

Transfer Station Salary (10,000), Clerical assistance

Town Service Revenue     (22,000) per department heads

Legal Expenses           (50,000) Assessment Appeal

Salt                     (50,000) estimated requirement

Retirement of Notes      (87,500), Principal pay down when BAN renews in June, if Bond, no pay down but additional fees


Town Air Road Fund (TAR)        $50,000, can be used to offset cost of Salt

Adjusted Total Variance, ($7,500)

Mr. Alvarez asked why the BAN payment was not budgeted.  Treasurer O’Donnell indicated that she was not aware of the payment since she did not have the information from the Town advisor. Mr. Alvarez asked Ms. O’Donnell to obtain the necessary information for all future BAN payments in order to prepare a proper budget.


Treasurer O’Donnell provided a report on the status of funds.  The current total in the General Fund is $10,938,404.  She noted that interest rates have not changed substantially.  She is exploring the option of investing in a short-term FICA program through Stone Castle Partners.  They invest funds in a variety of banks, with no investment in one bank of over $250,000, funds are guaranteed, and the banks in which the Town has current investments are excluded. The rate is currently 23 basis points, which is higher than we are getting from Webster Bank. Mr. Mazzucco questioned the use of this FICA option because it was unclear from the preliminary description who had control of the funds.  He stated he is not sure this is consistent with the Board’s investment policy if FICA has the ability to transfer funds.  Treasurer O’Donnell said she was just starting to review the paperwork and would be checking on those issues.


Ms. O’Donnell reported the BAN, ($7,873,000) is due in June, and carries the requirement that a pay down be made if the BAN is rolled over. The pay down required is $87,500. .  Additional long term financing has been approved (Highway Department Road Program), but has not yet been borrowed. No action was taken on this. Mr. Alvarez said that the rate of interest on BAN funds is so low that he is inclined to let the BAN roll over in June and not to refinance it with a bond until we have a need to borrow more funds.  He thought that the opportunity to pay down principal was a positive aspect of the process but questioned why the 2015 pay down was not included in the budget.


Mr. Alvarez allowed comments from the public.

Leon Karvelis:  Mr. Karvelis asked if the financial advisor had been consulted regarding refunding opportunities for the outstanding debt. Ms. O’Donnell responded that this has been looked at.

Jeff Fligelman, Pocahontas Road: Mr. Fligelman thanked the members of the Board of Finance for their work on behalf of the residents. He hopes the budget discussions between the board and the Board of Education will be more amicable than they were last year. The proposed education budget is at an increase of 1.27% which he feels will is reasonable and will pass.  He commented that the buildings need to be taken care of, especially the electrical and heating/cooling needs.  He noted that it appears that a school will not be closed, but in any event, the buildings are a town asset and need to be maintained. He concluded stating that today’s children deserve the same opportunities as the children before them.

Mr. Alvarez responded that the Board of Finance has not been presented with the budget and no discussions have taken place regarding the education budget.

Steve Hunter, Chestnut Woods Road:  Mr. Hunter spoke of the importance of the proposal for re-generation of the middle school, noting how education and job opportunities have changed since he went to school.  He noted the importance of innovation in education.  He also commented that the aging physical facilities need to be addressed.

Darrell Bradford, Cross Highway:  Mr. Bradford expressed his opposition to the proposal of a two-tier bus system for the school, stating that he wanted to raise awareness of the issue.

Mr. Alvarez responded that the Board of Finance has no line item authority over the Board of Education budget, but rather is responsible for developing overall budgets that the town can afford and the taxpayers will support, but thanked him for his comments.

Amy Arnold, Werf Drive:  M. Arnold questioned whether Board of Education funds were transferred to the Town and asked for information on the issue.  Mr. Alvarez responded that at the end of the fiscal year, if the Board of Education has unspent funds, they can allocate them to the Health Insurance Reserve Account, or return them to the Town The budget is what will be needed to provide educational services, and if there is unspent money, it should go back to the tax payers. Information and the state statute will be provided to Ms. Arnold.


Motion: move that the Redding Board of Finance meeting be adjourned. Mazzucco, Yonkers. Approved. Unanimous.

The meeting adjourned at 8:15 pm

Submitted by Mary Maday, Recording Secretary