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Minutes of Board of Finance, 09/24/2018

AGENDA: Board of Finance

RECEIVED 09/26/2018 5:16pm
Michele R. Grande – Redding Town Clerk

Board of Finance
Regular Meeting
Monday, 9/24/2018
Town Hall Meeting Room
7:30PM

Present:
Kim Yonkers, Chair; Ward Mazzucco; Rob Dean; Ed Miller; and Jamie Barickman (7:55PM)

Also Present:
First Selectwoman Julia Pemberton; Selectwoman Peg O’Donnell; Pat Moisio, Tax Collector; Wes Higgins, Treasurer; Jim Miller, WPCC; Rich Regan, WPCC Chair; Dr. Tom McMorran, Superintendent; Melinda Irwin, BOE Chair; Members of the BOE; Members of the Public

The Chair called the meeting to order at 7:30PM.

1. To approve minutes of BOF meeting held on August 27, 2018
Mr. Mazzucco made a motion to approve the minutes of the BOF meeting held on August 27th, 2018. Mr. Dean seconded the motion. The vote was unanimous, and the motion passed.

2. Public Comment

Chair Yonkers opened the floor for public comment. No member of the public commented.

3. Tax Collector’s Report

Ms. Moisio informed the BOF that 53.8% of the budget has been collected. Thirteen delinquent accounts have been turned over to Town Counsel, amounting to approximately $432,000 in back taxes. Notices have been sent out, and the notified accounts have 90 days to pay these taxes. The delinquent accounts are for the 2014 Grand List.

4. Finance Director’s Report
Steve Gniadek was not present at the meeting. Mr. Mazzucco read his report.

The accounting assistant position has been filled by Zach Smith. Both Krista Gramer and Zach Smith have been enrolled in a GFOA Government Accounting course which started on 9/14/2018.

Mr. Gniadek is currently at the NESGFOA Annual Conference in Mystic, CT, and will be there until Wednesday, 9/26.

The 2018 Audit is progressing well.

Sexual Harassment Training is underway for all full-time Town of Redding employees.

The latest 5 years of budgets and 4 years of CAFR are available on the Town of Redding website.

Discussion followed the website item concerning what information could be uploaded to the website. Mr. Dean suggested 20 years of budgets.

Mr. Mazzucco asked the BOE what kind of data they have on their website. Chair Irwin responded by saying that 5 years of budget data are available. Mr. Mazzucco suggested that both the BOS and BOE consider posting more information, such as union contracts, personnel, and so on.

5. Treasurer’s Report

Wes Higgins addressed the BOF about his report. He stated that the balances in all of the accounts ending August 31st are similar to last year. The notable exception to this is treasury bills of $2,000,000. He said that, on an accrual basis, the Town is well ahead of its financial goals.

Mr. Higgins is waiting on the BOS discussion on Roads. First Selectwoman Pemberton responded to Mr. Higgins comment. She the road topic will be addressed on October 15th. She said that roads not completed this summer will be addressed in Spring 2019. She also discussed the communications modernization study.

6. Waste Water Treatment Plant Modernization Project Update

Jim Miller of the WPCC discussed the Waste Water Treatment Plant Modernization Project Update. He discussed the presentation to the Town Meeting on February 13, 2018. The three projects for modernization were as follows: the $688,000 plant update, a $12,000 power supply project, and $96,212 to cover June 15-June 30, 2017 period at the Plant.

Jim Miller brought the discussion towards current events. Item #8 on the schedule has been completed. Piping has been installed at the plant to load trucks without disturbing the neighbors.

$96,212 was transferred from the Unassigned Fund Balance (UFB) to the WPCC to make payments.

The payment schedule for the lease is $149,280, including interest, annually over a five-year period. The last payment is due July 15, 2022.

Jim Miller discussed voltage interruption at the plant. He said they occur frequently: 29 voltage upsets occurred in a 31-day period. A comprehensive study determined the problem is internal. The various pumps and compressors at the plant are controlled by VFD’s, and these are affected heavily by voltage interruption. He said Harmonic distortion minimization is something that can address this. He obtained two quotes for this work: $45,000 and $35,000. He said that $12,000 from the UFB can be used to do the Harmonic Distortion Minimization. The rest of the money would have to come from the BOF.

The modernization project is moving along as scheduled.

Mr. Dean asked what happens when voltage surges occur. Jim Miller answered that there are 31 VFD’s, and VFD’s shut down during voltage surges. If the VFD’s shut down too much, they fail. It costs $5,000 to replace a VFD. Thus, it is economical to protect the VFD’s from voltage surges.

Chair Yonkers asked if the WPCC can get another quote. Jim Miller said it is unlikely that they will be able to get a better quote than $35,000. He followed this up by saying he can get another quote to satisfy this requirement.

Mr. Dean asked Mr. Miller if the voltage problem is a proprietary problem related to the systems in place or if this is part of the overhead of running the plant. Jim Miller answered that this would be an additional capital project. He stated that Veolia commissioned the study on the voltage surges and obtained the quotes. Mr. Mazzucco asked if the nature of the study dictates the cost of the project.

Mr. Dean stated that the BOF would like the WPCC to follow normal bidding procedures.

Mr. Barickman arrived at 7:55PM.

7. Report on evaluation of Board of Ed Procedures and Discussion of Conflict of Interest Policy

Mr. Mazzucco began this discussion by elaborating on discussions carried out with the BOE and Dr. McMorran about the audit. He provided the relevant email chains to the other members.

Chair Yonkers read a letter written by Dr. McMorran for the BOF. The letter discusses the town auditor’s request for access to documents concerning four students IEPs in order to complete their audit. Dr. McMorran states that providing these documents would bring the district into violation of FERPA. He followed this statement by offering a series of actions the BOF could take to move their audit forward.

Mr. Mazzucco reiterated his question why RSM is considered a viable agent of the BOE but PKF O’Connor Davies would not be.

Mr. Miller asked why a procedure audit would require IEP data. Mr. Dean stated that sampling occurs in any financial audit, and this would indicate if procedures are being followed. Mr. Miller stated that this would work in a financial audit, but this is a special education inquiry and requires expertise in Special Education law and procedure.

Mr. Centofanti had told Chair Yonkers in a phone call that this process needs to be independent, and that utilizing a member of the schools to complete the audit would not comply with the independence.

Mr. Dean stated that this would not be an issue in a larger school district where sampling would not produce identifiable information. In a smaller school district, more effort must be made to protect the identities of the students.

Dr. McMorran stated that RSM has declined to conduct a further audit of the special ed funding for BOE.

Mr. Mazzucco asked Dr. McMorran and the BOE if a contract can be entered in which the BOE makes Mr. Centofanti’s firm an agent of the BOE for purposes of conduction the evaluation of special ed procedures. Various members of the BOE responded to this question.

Chair Irwin answered Mr. Mazzucco that most audits do not go to the detail that the BOF wants to delve into. This level of detail made RSM decline entering into a contract with the BOE.

A member of the BOE asked Mr. Mazzucco if the BOF is comfortable with the BOE having direct control over the auditor. Mr. Mazzucco stated that the auditor would be under the same level of control that town has over the auditor.

Chair Irwin stated that this must be discussed at the next BOE meeting.

Chris Parkin read the motion passed by the BOE that authorized the letter addressed to the BOF.

The motion is as follows: move to authorize the Chairwoman of the BOE to write a letter to the chairwoman of the BOF: 1. Confirming the BOE’s cooperation with the BOF’s audit of central office policies and procedures; 2. Proposing mitigating FERPA concerns by engaging the BOE’s council to review Special Education records and report back to the BOF auditor; 3. Enter into a specific, limited engagement with the BOF auditor in a manner that complies with FERPA and satisfies both the auditor and the BOE counsel. It was noted that these options differed from those offered to the BOF in a previous email and which the BOF had found unworkable.

Mr. Mazzucco had already asked PFK O’Connor Davies to make a limited-engagement letter that makes them an agent for special education analysis.

Mr. Barickman stated that he has a limited perspective because he was not present for the discussion that led to this audit. He said he was curious how much of the auditor’s process is compromised by not having access to the level of detail being requested. Mr. Barickman is worried that the BOF is pitting itself against the BOE. He stated that this audit is about procedures.

Chair Yonkers will entertain a motion for the BOF to accept one of the three motions discussed by the BOE.

Mr. Mazzucco made a motion to accept the BOE’s #3 proposal as read by Chris Parkin. The proposal is as follows: The BOE will enter into a specific, limited engagement with the BOF auditor in a manner that complies with FERPA and satisfies both the auditor and the BOE council. Mr. Barickman seconded the motion. The vote was unanimous, and the motion passed.

The conflict of interest policy is tabled to the next meeting.

8. BOF Presentation Policy

Mr. Mazzucco made a motion to table the BOF Presentation Policy because Susan Clark isn’t present at the meeting.

9. Reports from Individual Board Members as Assigned

There were no reports from individual board members.

10. Correspondence and Administrative Matters

There was no correspondence and administrative matters to address.

11. Public Comment
Jim Miller asked the BOF if they will come on a tour of the WPCC. He stated that the WPCC offered the tour last year. Mr. Miller asked Jim Miller what dates would work. Jim Miller said Saturdays could work.

The Chair adjourned the meeting at 8:37PM.

Submitted by,
Zachary Smith

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