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Minutes of Board of Finance, 08/24/2020

AGENDA: Board of Finance

RECEIVED 08/31/2020 9:57am
Kathleen R. Miserendino - Redding Deputy Town Clerk

BOARD OF FINANCE
REGULAR MEETING MINUTES
MONDAY, 8/24/2020 7:30PM
ZOOM MEETING

Filed subject to approval.

Present:
Dr. Kimberly Yonkers, Chair; Ward Mazzucco, Vice Chair; Rob Dean; Jenifer Wyss; Jamie Barickman; Ed Miller

Also Present:
Steve Gniadek, Finance Director; Pat Moisio, Tax Collector; First Selectwoman Julia Pemberton; Chris Parkin, Redding BOE; Peg O’Donnell, Selectwoman; Michael Thompson, Selectman; Members of the Public

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

1.      To Approve the Minutes of the BOF Meeting held on Monday, July 27th

MOTION:
Mr. Mazzucco made a motion to approve the minutes of the Monday, 7/27/2020 BOF Meeting with the added corrections:

Mr. Mazzucco said the fifth paragraph under item 4 should be changed from, “Mr. Mazzucco asked if Personal Property taxes can be collected from every resident since many people are working from home. Discussion followed concerning this. This would require a state statute”, to, “Mr. Mazzucco asked if personal property taxes can be collected from people who use business property working at home.  Discussion followed and the consensus was that it would be difficult to enforce, relative to the amount of potential revenue”.

Mr. Mazzucco said in the second paragraph under item 6, the sentence, “As of today, the Town is on track to collect all it’s tax revenue,” should be changed to, “As of today, the Town is on track to collect all its tax revenue”.

Mr. Barickman said in the seventh paragraph under item 5, the sentence, “The current balance in the Debt Reserve Fund to approximately $1.1 million”, should be changed to, “The current balance in the Debt Reserve Fund increased to approximately $1.1 million”.

Mr. Dean seconded the motion. There were five yes votes (Yonkers, Mazzucco, Wyss, Dean, and Barickman) and one abstention (Miller). The motion carried.

2.      Public Comment

Chair Yonkers opened the floor to Public Comment.

Peter Bonfanti asked the BOF two questions:

1.      Has the BOE or BOF done an analysis of alternatives to a phone system?
2.      Why is the school maintenance budget separate from the town maintenance budget?

Chair Yonkers said this will be addressed at a future point in the meeting.

3.      Tax Collector’s Report

Pat Moisio addressed the BOF.

As of Friday, 7/31/2020, 45.6% of the FY 2020-2021 budget had been collected. As of Monday, 8/24/2020, 52.8% of the FY 2020-2021 budget has been collected.  Collections are tracking ahead of FY 2019-2020.

There were some collection issues with the Lockbox system and the bank, causing delays. Tropical Storm Isaias caused issues as well.

Mr. Barickman asked Ms. Moisio if she could compare the Town’s month by month collections rate versus the projected scenarios of collection rates that were discussed in the months prior to FY 2020-2021. Discussion followed concerning this.

Ms. Wyss asked Ms. Moisio about escrows and how tax collection works for homes in escrow. Ms. Moisio said when a home is in escrow, the bank pays the taxes on the home. If the homeowner is late on mortgage payments, the bank will continue to make tax payments. The difference is added to the homeowners’ mortgage balance. Foreclosure on a home would happen before the tax payments stop.

4.      Finance Director’s Report

Steve Gniadek addressed the BOF.

Insurance: The Town switched the carrier of its Life, Short-Term Disability, and Long-Term Disability insurance from Anthem to Mutual of Omaha. The coverage is the same and results in an annual savings to the Town of $12k, or 23%.

Medical Insurance: Due to a decrease in claims caused by COVID-19, the Town will be receiving a one-time 10% premium credit, which will amount to approximately $12k.

CCM Rebate: CCM has given the Town a rebate of 50% of its annual dues, or approximately $3k.

Capital Projects Fund: Over time, there has accumulated an unspent balance of $212k in one of our Capital Fund accounts. This balance is the result of underspending for projects primarily due to LoCip reimbursements and accrued interest. There are two options for the use of these funds:

1.      Pay down principal on existing bonds

2.      Utilize the funds for future approved Capital Projects

This is a potential funding source for the School Phone System once approved at Town Meeting. The Covid-19 related alternate approval process as defined by Executive Order could be utilized in place of a Town Meeting.

FY 2020 Audit: An audit presentation is in the planning stage for the October 2020 BOF meeting.

Encumbrance Policy: The Town uses Purchase Orders to encumber expenses for products/services, ordered or started, but not completed in the prior fiscal year, and paid in the current fiscal year.

Discussion followed concerning the importance of a clear and precise encumbrance policy for the Town and the Schools.

5.      Treasurer’s Report

Wes Higgins was absent from this meeting. The documents were shared with the BOF.

Chair Yonkers opened the floor to comments from the BOF.

Mr. Dean said Mr. Higgins’ reports demonstrate the trends that have been consistent for the Town.

6.      Debt Management Policy Update

Ms. Wyss said she has created a first draft and circulated this draft with the subcommittee members. She needs subcommittee input prior to sharing it with the BOF.

7.      Capital Projects Process

Mr. Gniadek said Mr. Higgins produced a flow chart that explains the Capital Projects Process. Mr. Gniadek created a form that will be utilized by the Town for Capital Projects.

Mr. Gniadek said 80% of Capital Projects should be planned.

Chair Yonkers asked Mr. Gniadek how Capital Project requests will be monitored. Mr. Gniadek explained how the request will move through the Town and be presented to the Boards.

Discussion followed concerning how this process will be open to the public and how the boards will interact with requests.

8.      School Phone Systems

Chair Yonkers said the Town can fund the phone system through the Capital Projects Fund or can lease it.

Mr. Parkin said the phones at the schools are obsolete because parts can no longer be obtained for them. The total cost of replacement is just under $60,000.

MOTION:
Mr. Mazzucco made a motion to approve the capital expenditure of $60,000 for the phone system at the schools as presented, provided that the First Selectwoman can provide a legal opinion from Town Counsel that shows this can be approved without voter input, and to be funded by the Capital Projects Fund. Mr. Barickman seconded the motion. Discussion followed. Mr. Mazzucco added that the capital expenditure must be approved by the BOS. The vote was unanimous, and the motion carried.

9.      OPEB Trust Follow Up

Chair Yonkers asked the BOF how they should move forward. Discussion followed concerning fees, initial starting amounts for the trust, and managing firms.

MOTION:
Mr. Mazzucco made a motion to table this discussion until the next meeting pending counsel providing an estimate for the cost of a trust document. Mr. Gniadek providing another vendor, and initial funding options.

10.  Encumbrance Policy – Town and Schools

There was no additional discussion on this topic.

11.  Other Business

There was no discussion of other business.

12.  Public Comment

Chair Yonkers opened the floor to public comment.

Peter Bonfanti asked why the school building maintenance is in the BOE budget and not the town’s budget. Chair Yonkers said the BOE or Scott Reiss can answer this question. Discussion followed concerning the Town’s Physical Plant and why there is a separation between the Schools and the Town concerning maintenance.

Mike D’Agostino asked the BOF about Bond Premiums and how they can be used.

Chair Yonkers

MOTION:
Mr. Mazzucco made a motion to adjourn to executive session. Mr. Mazzucco invited First Selectwoman Pemberton, Selectwoman Peg O’Donnell, Selectman Michael Thompson, and the Board of Finance to attend this executive session.

The regular meeting ended at 9:34PM.

13.  Executive Session to discuss pending tax appeal litigation.

The BOF held their executive session to discuss pending tax appeal litigation.

Submitted by,
Zachary Smith

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