Board of Finance
Regular Meeting
Monday, 8/27/2018
Town Hall Meeting Room
7:30PM
Present:
Dr. Kim Yonkers, Chair
Rob Dean
Ward Mazzucco
Susan Clark
Ed Miller
Also Present:
Joseph Centofanti, Auditor; Steve Gniadek, Finance Director; Peg O’Donnell, Selectwoman; Dr. Tom McMorran, Superintendent of Schools; Katherine Stauffer, Tax Collector’s Office; Melinda Irwin, Chair of the BOE; BOE members; Members of the Public
The chair called the meeting to order at 7:30PM
- To approve minutes of BOF meeting held on Tuesday, June 26, 2018
Mr. Mazzucco made a motion to approve the BOF minutes from Tuesday, June 26, 2018. Ms. Clark seconded the motion. The vote was unanimous, and the motion passed.
- Public Comment
Chair Yonkers opened the floor for public comment. No members of the public volunteered to comment.
- BOE Procedures Audit Draft
Joseph Centofanti, the auditor, was present at the meeting.
Chair Yonkers stated that the current audit is a preliminary draft.
Chair Yonkers discussed two issues with the draft. The first issue was to provide preliminary feedback to Mr. Centofanti so that he may be able to clarify issues in the draft. The second issue was whether there were conflicts of interests on the BOF due to members having served on the BOE.
Chair Yonkers noted that Mr. Barickman was not present and discussed that because the audit focuses on the BOE procedures, and Mr. Miller was a member of the BOE for the period of time the audit focuses on, he may have a conflict of interest. Chair Yonkers discussed the possibility of recusal.
Mr. Miller asked what the conflict of interest would be. Chair Yonkers stated that Mr. Centofanti was charged with reviewing BOE financial policies and procedures and Mr. Miller was a member of the BOE during the period of time in question.
Mr. Mazzucco cited the town ethics policy and how the BOF could solicit Mr. Miller when they needed his input if he recused himself.
Mr. Dean said that recusal is appropriate because a potential conflict of interest reduces the effectiveness of the board’s decision making and diminishes public confidence.
Mr. Miller stated that he will not recuse himself at this time but will do so if he finds a conflict or his conduct comes into question.
Ms. Clark stated that being on a board isn’t conflicting unless the time one served is being analyzed.
Chair Yonkers suggested that Mr. Miller should read the ethics policy and reflect on what he should do moving forward.
Chair Yonkers opened the floor to Mr. Centofanti so that he could discuss the preliminary report. She asked him about the Health Reserve Fund and how it is accounted for.
Ms. Clark asked about the Special Education budget and the need for Mr. Centofanti to have access to information about it. Mr. Mazzucco stated that the town’s auditor, Scott Bassett, has access to this data, but Mr. Centofanti does not. Mr. Mazzucco stated he has heard the argument advanced that Mr. Bassett is an agent of the BOE, but Mr. Centofanti is not. Mr. Mazzucco wants to get beyond this impasse to analyze procedures related to the budget.
Mr. Dean said that this was a discussion about procedure and not the budget and that there should be no need for public disclosure of any confidential information. He said procedure is public, and if it is said to be private, the legal requirement must be proven.
Chair Yonkers asked the BOE why Mr. Centofanti has not been declared an agent of the board given that the subcommittee that selected him included members of the BOE. She suggested that the BOE consider taking a vote to address this at a future meeting.
A member of the BOE stated that this issue has not come up for discussion prior to this evening. BOE Chair Irwin stated that the BOE reached out to their legal counselor to address this question. BOF Chair Yonkers responded to this statement by saying the BOE letter from the attorney stated Mr. Centofanti was not an agent of the board.
A representative of the BOE responded that the letter they sent was what their legal counsel suggested was appropriate. Confidentiality is a concern when Special Education is analyzed. They mentioned FERPA laws.
Chair Yonkers stated that Mr. Centofanti is an expert on auditing special education in the state of CT and that confidentiality would be respected.
Mr. Dean stated that this is a technical problem with a simple solution. The solution is to audit the procedures and protect the confidentiality of those involved. He said that the auditor would know how to do that.
Chair Yonkers stated that Mr. Centofanti’s review is happening to protect the BOE from embezzlement, fraud, and other financial issues.
Mr. Mazzucco asked if the BOE will consider voting on the status of the auditor at the next BOE meeting.
BOE Chair Irwin asked a clarification question to Mr. Centofanti. She asked how audits have been carried out elsewhere. Mr. Centofanti stated that the Town of Darien hired him to review the special education funding and spending of the BOE. Mr. Centofanti added that he has never been prevented from accessing information during an audit.
Mr. Mazzucco read a passage from the BOE’s attorney that explained what an auditor would need to qualify to be an agent of that board.
Mr. Mazzucco asked Mr. Centofanti about end-of-year payments and anomalies concerning staff spending. Mr. Centofanti answered by stating he could look at that question but did not find anything anomalous. Mr. Mazzucco asked about the need for consultants. Mr. Centofanti stated he could request additional information.
Chair Yonkers summarized the discussion by asking the BOE to discuss allowing Mr. Centofanti to be considered an agent of their board (as well as the town) so that he could assess procedures related to Special Education expenditures. She said that Mr. Centofanti would provide the verbiage to Dr. McMorran to ensure the respect of privacy. She asked the BOE if they had any comments or recommendations for Mr. Centofanti.
Dr. McMorran said that Mr. Centofanti has been attentive and careful. He stated that FERPA rights are a concern and that the BOE does not want to violate one code of laws to comply with another set of laws. He said that the BOE would have to decide if Mr. Centofanti is an agent of the board.
One or more of the members of the BOE said they will discuss the issue but no decisions can be made tonight.
- Tax Collector’s Report
Katherine Stauffer is sitting in for Pat Moisio. Ms. Moisio could not attend this meeting.
Ms. Stauffer stated that July was very busy. The tax bills were sent out in the first week of July. Only one or two advanced collections came through.
Ms. Stauffer stated that on July 31st, 45% of the tax bill had been collected. During FY 2018, 47.8% had been collected as of July 31st. This is due to the late tax bill. As of August 27th, 53% of the tax bill had been collected. A total of $21,325,53.86 had been collected by July 31st. As of August 27th, $25,142,129.81 has been collected.
Ms Stauffer said the 2014 grand list has been suspended. This means personal property, motor vehicle tax, and business taxes that could not be collected from this period have been suspended. This amounts to $38,197.39 in uncollected taxes. She asked the BOF to sign the suspension.
Chair Yonkers asked for clarification about these taxes. Ms. Stauffer clarified what the consequences of not paying these taxes.
Ms. Stauffer stated that the GLDC owes $4,400,000. Half of this is interest.
Ms. Stauffer said that the tax sale is moving forward. The contract is moving forward next week, and it will take 12 weeks to take place.
- Finance Director’s Report
Mr. Gniadek stated that the Town Aid Road payments have been $270k per year for the past four years. He said that the town did receive all of the $270,000 for FY 2018 and that the first payment for FY 2019 of $135,000 has been received.
Mr. Gniadek stated that projected expenditure surplus for FY 2018 is $325,000. He also stated that the surplus does not include BOE expenditures.
On the revenue side, Mr. Gniadek said that interest income and increased tax collections more than made up for reductions in state aid. He said that the increase for FY 2018 is at $308,000.
Mr. Gniadek commented on the Finance Department and the role changes that have occurred in the past two months. Krista Gramer is now the Accountant and the Accounting Clerk position is going to be filled.
Mr. Gniadek discussed CIRMA. The town received a member’s equity distribution check of $27,575.
Mr. Gniadek discussed the 2018 audit and planning meetings. There was a meeting in New Haven last Thursday, 8/23 to discuss the audit with Scott Bassett, the RSM Auditor, and Chair Yonkers.
- Treasurer’s Report
Wes Higgins is not present tonight but sent his report to the Board. Chair Yonkers read the report.
The Town used $2,750,000 of the unassigned reserve to fund the first 10 days of operation in July before tax bills started to be processed. This illustrates the value of a robust unassigned fund balance.
There was no tax collection in June but by July 25th the collections match up to FY 2018.
Mr. Gniadek discussed the benefits of the unassigned fund balance.
- Discussion of Budget Process
Chair Yonkers stated that during the last BOF meeting, there was a discussion about how to modify the budget process to make citizens more positively engaged.
Ms. Clark suggested that the BOE could do a full-day budget meeting like the Town of Redding does every year. Chair Irwin responded by discussing the logistics of planning and running a full-day meeting. She continued by discussing what could possibly happen.
Chair Yonkers asked the BOE if they had been to the Town of Redding budget meeting. Mr. Mazzucco spoke about the effectiveness of a full-day budget meeting, when department heads each outline the needs of their departments.
A member of the BOE asked if constituents show up for the full-day budget meeting. Selectwoman O’Donnell stated that the public shows up for the full day Town of Redding budget meeting. She continued to explain how the full-day meeting operates.
Mr. Dean stated that the BOE is a far more centralized organization than the Town of Redding, but the schools could still present their budgets.
Mr. Miller stated that the Elementary School and Middle School are separate entities. One of the members of the BOE added Special Education to that list.
Mr. Mazzucco and Mr. Dean stated that historic data are very useful for analysis. Mr. Dean used annual reports to display 25 years of data. He said the spreadsheet available in the annual report is very useful to get a snapshot of how things have changed.
Chair Yonkers asked to move on from this discussion so that other matters could be addressed.
- Reports from Individual Board Members as assigned
Chair Yonkers learned that members of the BOF were having meetings with the public without prior notification to her or the rest of the BOF. At these meetings, the materials and advertising prominently displayed the fact that the members were part of the BOF. Chair Yonkers expressed her concern about this decision-making and the confusion that this could create.
Chair Yonkers stated that there is nothing in the BOF’s rules that forbids members of the BOF from having meetings with the public. She expressed her concern that the BOF should be notified prior to the meeting’s occurrence and that the financial information shared with the public should be vetted with Mr. Gniadek.
Mr. Mazzucco wrote a draft policy addressing this issue. He suggested that this draft could become a motion.
Mr. Miller agreed with the sentiment of the statement Mr. Mazzucco read. He disagreed with some of the policy due to the Constitutional rights of members to speak out about BOF matters, the difficulty of implementing it, and the wording. Ms. Clark volunteered to edit the statement so that the wording was clearer.
Chair Yonkers asked to add this statement to the agenda for the next BOF meeting: Board of Finance Presentation Guidelines.
Chair Yonkers asked if there were any other matters that needed to be addressed. She opened the floor to public comment.
- Public Comment
Peg O’Donnell, Chestnut Woods Road, wanted the board to know that the Finance Department has been working hard to adjust to a series of difficult changes. She said that Krista Gramer is an excellent candidate for Accountant.
Mr. Mazzucco asked Selectwoman O’Donnell about historic data for things like pay scales, Union contracts, number of employees, and the number of police calls in a year. Selectwoman O’Donnell mentioned the annual reports.
Jeannie Wendschuh, Deer Spring Road, stated that the information in the CAFR is a great resource for Town financial data. The information in the CAFR is accurate and high quality.
Robert Moran said the data is present but unorganized. This lack of organization means the connections are not present. Mr. Moran stated that the town needs a tech audit, and that the tech audit would save the town money, increase efficiency, and reduce agitation.
The Chair ended the meeting at 8:56PM.
Submitted by,
Zachary Smith