Select Page

Minutes of Board of Finance, 01/28/2019

AGENDA: Board of Finance

RECEIVED 01/31/2019 5:51pm
Michele R. Grande – Redding Town Clerk

BOARD OF FINANCE
REGULAR MEETING
MONDAY, JANUARY 28, 2019
7:30PM
COMMUNITY CENTER MAIN ROOM

Filed Subject to Approval

PRESENT:
Dr. Kim Yonkers, Chair; Rob Dean; Susan Clark; Jamie Barickman; Ward Mazzucco; Ed Miller

ALSO PRESENT:
Pat Moisio, Tax Collector; Steve Gniadek, Finance Director; Wes Higgins, Treasurer; First Selectwoman Julia Pemberton; Selectwoman Peg O’Donnell; Selectman Michael Thompson; Superintendent of Schools Dr. Tom McMorran; Rich Regan, WPCC Chair; Dave Pattee, WPCC; Jim Miller, WPCC; Members of the public

Chair Yonkers called the meeting to order at 7:40PM.

1. TO APPROVE THE MINUTES OF BOF MEETINGS HELD ON NOVEMBER 24, 2018 AND DECEMBER 17, 2018.

MOTION:
Mr. Mazzucco motioned to approve the November 24, 2018 meeting minutes. Mr. Barickman seconded the motion. The vote was unanimous, and the motion carried.

MOTION:
Mr. Mazzucco motioned to approve the December 17, 2018 meeting minutes. Mr. Barickman seconded the motion. There were five yes votes (Yonkers, Mazzucco, Barickman, Clark, and Dean) and one abstention (Miller). The motion carried.

2. PUBLIC COMMENT

Ron Gass, 76 Hopewell Ridge Road, is one of the three commissioners for Redding Fire District #1. He explained his role concerning the telecommunications upgrade and the progress that has been made so far.

Chair Yonkers stated that the telecommunications upgrade could be added to the next BOF agenda. Mr. Nass wanted the BOF to know what the town will contribute for this project.

Chair Yonkers asked First Selectwoman Pemberton if this telecom upgrade project is part of the long-term capital plan. First Selectwoman Pemberton said that this project is not part of the long-term capital plan. This has moved to the Capital Project requests.

Mr. Mazzucco asked if this topic would be put on the ballot along with the proposed budget. First Selectwoman Pemberton answered his question by saying that this would be put on the ballot, but the BOS needs to discuss this before it is brought before the BOF.

Discussion followed concerning the specifics of the project.

Chair Yonkers suggested that the BOF should table discussion about this topic until it is an agenda item.

Chair Yonkers asked Mr. Gniadek to inform the BOF when the BOS has discussed this project.

3. TAX COLLECTOR’S REPORT

Ms. Moisio did a comparison of tax collection in December 2018 versus December 2017. December 2018 ended with 65.5% collected versus December 2017 with 73% collected. Collections were extraordinary at the end of 2017 because some residents thought they might benefit under the new federal income tax law.

Ms. Moisio said that as of today, January 28, 2019, almost 90% of the tax has been collected.

$42,200,000 has been collected as of January 28, 2019.

Ms. Stauffer has been keeping track of the Georgetown Project debt. The debt totals $4,700,000.

The tax sale is moving forward. Adam Cohen of Pullman & Comley is the legal counsel handling the tax sale. This will happen at the end of March/beginning of April.

Ms. Clark asked Ms. Moisio if the Government Shutdown affected any Redding resident’s ability to pay their taxes. Ms. Moisio said she is not aware of any residents who have been affected. She said that there are new regulations in place the town must comply with.

4. FINANCE DIRECTOR’S REPORT

Mr. Gniadek discussed the 2018 Comprehensive Annual Financial Report (CAFR). He submitted the CAFR to the GFOA to see if it qualifies for a certificate of achievement. He provided the BOF with three documents: the CAFR, the single state audit (an itemized list of state grants), and a letter from RSM stating there are no management comments or adjustments for FY 2017-2018.

Mr. Gniadek discussed the FY 2019 audit. He said that RSM carried out a five-year audit contract with the Town, He stated that conducting all three audits (Town, Region 9, and Easton) with one auditor can save money. He reached out to Scott Reiss to discuss the possibility of using one auditor, and Mr. Reiss was in favor of extending RSM’s contract. Mr. Gniadek proposed a cost-of-living increase for the ensuing years.

Mr. Mazzucco asked Mr. Gniadek if going out to bid without a cost-of-living increase makes sense given RSM’s familiarity with the Town and its structure/organization. Mr. Gniadek stated that RSM has the benefit of having worked with the Town. He said that their fees have leveled off and that they could be asked to keep their rate flat.

Mr. Gniadek said that adding 2 years of audits onto the current contract makes sense. He said he’d be willing to contact RSM about maintaining the pricing.

Mr. Gniadek gave a summary of the budget workshop. Mr. Gniadek suggested using $260,000 of the debt service fund reserve to smooth out the debt service year-to-year payment. This was done for FY 2018-2019. He asked the BOF to discuss this as a possible option for the FY 2019-2020 budget.

Mr. Barickman asked about the urgency of making a motion. Mr. Gniadek said that this is specifically related to debt.

MOTION:
Ms. Clark made a motion to transfer $260k from the debt service fund to the general fund to cover the budgeted increases in debt, principal, and interest. Mr. Mazzucco seconded the motion. Discussion followed. The vote was unanimous, and the motion carried.

Mr. Gniadek had asked Mr. Smith to create digital copies of the CAFR so that it could be put on the website. Accordingly years 2004-2013 have been added.

Mr. Gniadek discussed the BOE audit. Mr. Centofanti was caught up with delayed audit reports for other towns. Mr. Mazzucco asked Mr. Gniadek to ask Mr. Centofanti if the audit can be ready by the next BOF meeting near the end of February. Mr. Gniadek said that Mr. Centofanti suggested February 15, 2019. He said it could be feasible that the audit would be ready for the February 25, 2019 BOF meeting.

5. TREASURER’S REPORT

Mr. Higgins stated that the Town was running roughly $4,000,000 behind on tax collections at year end.

Mr. Higgins stated that $150,000 of interest has been earned as of December 31, 2018, and accrued an additional $50,000.

The discussion on interest rate increases has slowed, and there is talk now about interest rate decreases. Mr. Higgins said that whatever the Federal Reserve decides, the town must deal with the decision.

Mr. Higgins is looking at an investment opportunity with Stone Castle. Stone Castle would be hired as an advisor. US Bank would be the Town’s custodian for this program, transferring money into bank deposits and helping to increase interest earned on the Town’s money.

Mr. Higgins stated that the Stone Castle investment program is always FDIC-insured, as opposed to the State Treasurer’s Investment Fund (STIF).

Mr. Higgins said this new plan would start by replacing the STIF account. This would reduce the modest credit risk that the STIF account currently assumes. This investment would allow the Town to move money every day into FDIC-insured interest-bearing accounts. The long-term difference in basis points between the current bank investments and the Stone Castle program would be 25 to 30 basis points more with the Stone Castle program.

Mr. Higgins explained the due-diligence call he took with Stone Capital to review the IT controls that are in place. He also discussed Stone Castle’s fee structure.

Mr. Higgins assumes that on average $3,000,000 will be kept in this program during the year, and the interest earned from this investment would be about 30 basis points more (or almost $10,000) than current investments.

Mr. Higgins said that FDIC insurance requires that the Town of Redding owns the account. Mr. Mazzucco asked if Stone Castle is a custodian. Mr. Higgins said that Stone Castle is an advisor, and that US Bank is the custodian. The Town of Redding would always own the investment.

Mr. Mazzucco asked Mr. Higgins to comment about cybersecurity risks. Mr. Higgins expressed that any organization, banks or governments, are at risk of being hacked. Mr. Higgins expressed that there is redundancy involved in the process of wiring the money between the advisor and the Trust Bank, reducing the risk.

Mr. Barickman asked Mr. Higgins about the insured depositor and who would pursue collections. Mr. Higgins said that Stone Castle will pursue collections but are not liable if the pursuit is unsuccessful. He also discussed legal opinions from FDIC’s counsel supporting the insured depositor information.

Ms. Clark asked Mr. Higgins if he could start the investment with a smaller amount of money than $4,000,000. Mr. Higgins said that Stone Castle requires that $1,000,000 is invested to participate in its fund. The STIF fund would be liquidated and put into the Stone Castle investment.

MOTION:
Mr. Dean made a motion to concur with Mr. Higgins about his recommendation to pursue Stone Castle as an investment opportunity. Mr. Mazzucco seconded the motion. Discussion followed. The vote was unanimous, and the motion carried.

6. 2019-2020 BUDGET UPDATE

Chair Yonkers asked Dr. McMorran and First Selectwoman Pemberton for updates on their FY 2019-2020 budgets.

Dr. McMorran said the Region 9 budget will be discussed in early February. The Redding BOE is holding two budget workshops next week (Tuesday, 2/5 and Thursday, 2/7).
Dr. McMorran said the high school budget is apportioned based on enrollment from Redding and Easton. This year, there is a 2.3% enrollment swing towards Redding, meaning that Redding’s share of the budget increases by 2.3%, or about $577,000. This does not factor in any additional changes in the budget.

Dr. McMorran explained Special Education requirements and how this influences the budget. He said that this is the most difficult variable to account for; how the number of students qualifying for special education varies throughout a school year. Dr. McMorran said that outplacement of students adds to the cost, and the district is working towards providing more in-house services to reduce this cost.

Dr. McMorran discussed teacher salaries and their share of the budget. Dr. McMorran discussed changes in teacher placement and possible cuts

Dr. McMorran emphasized that declining enrollment means less reimbursement from the State. This is due to expenditures per student increasing because of lower enrollment.

Mr. Barickman asked if combining the special education services of Redding, Easton, and Region 9 would increase reimbursement. Dr. McMorran said that combining the three districts would result in a marginally lower net current expenditure. This would not affect reimbursement as much as a significant increase in enrollment.

Dr. McMorran said the new transportation contract has gone down, saving some money.

Dr. McMorran discussed general education and showed that guidance counselors are being considered separately as their own line item in the budget.

Ms. Clark asked Dr. McMorran about the definition of special education. Dr. McMorran said that there are 14 ways to become eligible for special education. He said dyslexia has been added and defined more carefully. He also said that the right of a parent to request an independent evaluation of their child has increased costs.

Ms. Clark asked Dr. McMorran why the percentage changes between Easton and Redding are so large and if he has considered hiring a consultant to help with Special Education. Dr. McMorran said that this will be addressed at next Tuesday’s BOE meeting.

Mr. Mazzucco asked Dr. McMorran how often the schools are in court. Dr. McMorran said that the schools are in mediation several times a year. He said that going to a hearing is risky and is only done when a school is 100% certain they will win their case.

Mr. Mazzucco asked about the administration’s current estimate of 17% for students eligible for special education as compared to the recent state average of about 13%. Dr. McMorran said the state as a whole has this number increasing and that averages can be deceiving.

Mr. Dean asked Dr. McMorran if he is tracking how other towns are dealing with various education issues. Dr. McMorran said he spends his free time researching this but does not have any dedicated staff members pursuing this.

First Selectwoman Pemberton discussed the budget workshop. She said the BOS meeting on Monday, 2/11 will focus on the budget.

First Selectwoman Pemberton stated that the Town budget proposed will increase by 1.65%. This proposed budget does not include Maintenance needs and capital projects. These items total $146,000.

First Selectwoman Pemberton discussed various maintenance projects that need to be completed.

Mr. Dean asked First Selectwoman Pemberton about historic preservation. First Selectwoman Pemberton said the Connecticut Trust for Historic Preservation has visited the Old Town Hall to consult the Town about window replacement. Mr. Dean emphasized that historic preservation brings value to the Town.

Chair Yonkers asked First Selectwoman Pemberton if adding these projects into the overall Town Budget would result in a 3.2% increase. First Selectwoman Pemberton said that she has not done this math, but that an additional $130,000 would bring the budget increase to 2.5%. She said she is still recommending a facilities director.

First Selectwoman Pemberton discussed capital projects for various town buildings.

Chair Yonkers asked First Selectwoman Pemberton if the Four-Year Road plan could be scaled back to fund the capital projects. First Selectwoman Pemberton said she would not recommend that course of action. She explained how the road plan operated and why that it is important.

Mr. Gniadek read a letter to the BOF that discussed changes happening to CMERS. The rate of return for the pension is decreasing from 8% to 7%. This change will result in an increased cost to the town. This increased cost is imposed on the Town’s portion of the Town Employee Rate and Police Department Rate contribution. The Town Employee Rate increases to 14.22% and the Police Department Rate increases to 19.95%. This is a $100,000 increase that has not been budgeted for. The rates will increase by an estimated additional $100,000 over each of the next five years if this proposal is not changed.

7. WPCC MODERNIZATION PROJECT UPDATE

Mr. Miller addressed the BOF. Mr. Pattee and Chair Regan were present.

Mr. Miller said that the project is close to completion. The SCADA upgrade has been installed and the plant is up and running.

Mr. Miller said that Layne Christensen made the project more difficult due to its purchase by Granite Construction.

Mr. Miller said the installation of the pumping system allowed for the SCADA upgrade to go smoothly. Fifty trucks were filled with effluent during the update and Veolia footed the bill.

Mr. Miller said the plant is now fully digital and running on Windows 10.

Mr. Miller said that four of the five invoices for this project have been paid. The project is proposed to be finished on March 8, 2019.

Mr. Miller discussed using $12,000 for voltage corrections at the plant. A third bid is being obtained by Mr. Miller for this project.

8. “ASK QUESTION” WIDGET ON WEBSITE

First Selectwoman Pemberton said that this widget already exists. She said there have been 450 questions and comments come through the portal over the past two years. These questions go to the First Selectwoman, and then are sent to the relevant department.

First Selectwoman Pemberton explained the complexities of the BOF answering questions. She said that if any member of the BOF answers a resident’s question outside of a meeting, they must explain that the answer is just an opinion and not a position of the BOF. She continued by stating that anything said needs to be recorded in meeting minutes.

Chair Yonkers stated that there is a need for the residents of the Town to ask the BOF questions. She suggested adding an agenda item titled, “answering website questions”, to future BOF meeting agendas.

First Selectwoman Pemberton asked if the form is acceptable.

Mr. Dean asked First Selectwoman Pemberton why the BOS and the BOE have emails available, but the BOF cannot. First Selectwoman Pemberton said that it is acceptable for the BOF to put their email addresses on the website. She also said there are risks with this level of access.

Mr. Miller said that he would like the BOF to have their emails on the website to add transparency to the process.

Mr. Mazzucco and Mr. Barickman discussed emails. Mr. Miller discussed that input is beneficial and necessary.

Mr. Dean said that the board should facilitate communication, not suppress it. He said an email has an expectation of return. He said this requires caution.

Chair Yonkers said if the BOF uses this function on the website, there must be an agenda item to address it at meetings.

Discussion followed concerning using this function on the website.

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 discussed.

11. PUBLIC COMMENT

Susan Winters, 50 Seventy Acre Road, said that once an email is supplied for contact, it becomes an official way to contact the BOF. She said that each board should have one official email address to contact. These emails should be brought to meetings to be discussed.

Mr. Miller said that the WPCC is very familiar with FOIA rules. He said that if the WPCC receives an email, they reply “do not comment” to end the email chain. He brings the topic to the WPCC meeting to be discussed.

Chair Yonkers adjourned the meeting at 9:51PM.

Submitted by,
Zachary Smith

Accessibility Tools
hide