TOWN OF REDDING
BOARD OF FINANCE SPECIAL MEETING
WEDNESDAY, 5/27/2020 7:00PM
Click here for recording of meeting. – Access Password: 2m$18p?2
Filed subject to approval.
Dr. Kimberly Yonkers, Chair; Ward Mazzucco, Vice Chair; Jamie Barickman; Rob Dean; Ed Miller; Jenifer Wyss
Steve Gniadek, Finance Director; Wes Higgins, Treasurer; First Selectwoman Julia Pemberton;
Peg O’Donnell, Selectwoman; Michael Thompson, Selectman; Dr. Tom McMorran, Superintendent of Schools; Chris Parkin, Redding BOE Chair; Scott Reiss, Central Office Finance Director; Pat Moisio, Tax Collector; Members of the Public.
Chair Yonkers called the meeting to order at 7:03PM.
1. To approve the minutes of the BOF Meetings held on May 5, 2020 and May 13, 2020.
Mr. Mazzucco made a motion to approve the minutes of the Tuesday, 5/5/2020 BOF meeting with the proposed changes below. Ms. Wyss seconded the motion. The vote was unanimous, and the motion carried.
The changes are as follow:
Under item 4, 2020-21 Budget Revisions, paragraph 6, Chair Yonkers asked to change the sentence, “He said there is $850k of spending that will be spent to…”, to, “He said there is $850k of spending that will be needed to…”.
Under item 4, 2020-21 Budget Revisions, paragraph 43, Mr. Mazzucco asked to change the sentence, “The POCD said tax stabilization…”, to, “The town-wide survey said tax stabilization…”.
Mr. Mazzucco made a motion to approve the minutes of the Wednesday, 5/13/2020 BOF meeting. Mr. Barickman seconded the motion. Mr. Dean requested to remove a sentence. Discussion followed.
Mr. Mazzucco made an amendment to the prior motion to include the removal of the sentence. Mr. Barickman seconded the amendment. The vote was unanimous, and the motion carried.
The change is as follows:
Under item 3, paragraph 8, Mr. Dean requested the removal of the sentence, “Mr. Dean said the allocation of the unspent funds from FY 2020 towards the Health Insurance Reserve was responsible”.
2. Public Comment
Chair Yonkers opened the floor to public comment.
Chair Yonkers read the 9th Public Comment. The link is below:
3. Treasurer’s Report and Cash Flow discussion
Chair Yonkers asked Mr. Higgins to present his Treasurer’s Report.
Mr. Higgins said in April 2020, the Town collected just under $30k in interest income. For FY 2020, the year-to-date interest income is $370k. The Town will most likely end FY 2020 with a total interest income of $380k.
Mr. Barickman asked Mr. Higgins what the amounts are for assigned and unassigned cash balances. Mr. Higgins said that assigned and unassigned are accounting terms, versus what he deals with in the General Fund versus Capital Funds.
Mr. Higgins discussed a cash-flow scenario with modest stress. A modest stress scenario would result in 30% delayed tax payments and 3% tax delinquencies at year-end. The Town would maintain a healthy cash balance under this scenario.
Mr. Higgins discussed a cash-flow scenario with high stress. A high stress scenario would result in 70% delayed tax payments and 5% tax delinquencies at year-end. The Town would dip underneath the $4m threshold in cash balances with this scenario. $4m is the average monthly expenditures of the Town and Schools and this needs to be maintained to fund operations.
Mr. Higgins discussed a cash-flow scenario with high stress and a Tax-Anticipation-Note (TAN). This scenario would result in 70% delayed tax payments and 5% tax delinquencies at year-end. The TAN would provide necessary funds to the town to weather the period of delayed tax payments.
Chair Yonkers asked Mr. Higgins if any invoices due in September could be delayed until October. Mr. Higgins said this could be possible depending on what the expense is. Mr. Gniadek said there are certain items (healthcare, pension payments, etc.) that could be delayed. Payroll cannot be delayed.
Chair Yonkers asked about the timeline for deciding if the Town needs to engage in a TAN. Mr. Higgins said the Town has set up the option to do a TAN of up to $5m if it is necessary. There would be a phone call within the first week of August to let the lender know what would be needed. Ideally, a TAN won’t be necessary.
Mr. Barickman asked if bond money could be used to fund operating expenses. First Selectwoman Julia Pemberton discouraged this approach. She said that even though it may not be “illegal” to do this, it was stretching the bounds of what is acceptable and may not be legal. Discussion followed concerning this.
Mr. Higgins discussed future fiscal years. He said that cash reserves will be affected in the long-run, not liquidity.
Mr. Gniadek reached out to the State of Connecticut about LoCIP (Local Capital Improvement Projects) funding. He said that Monday, June 15th will be the earliest this money is distributed to the Town of Redding.
Mr. Gniadek said that the Town of Redding Highway Department is taking some of the leftover diesel fuel that Region 9 was not going to use. This is a savings of between $12 and $13k.
Mr. Barickman asked how the stress tests that Mr. Higgins produced could be incorporated into future budgeting so that the BOF can engage in long-term financial planning. Discussion followed concerning this.
4. 2020-21 Budget Update – BOS, BOE, Region 9
Chair Yonkers asked FS Pemberton about the BOS budget. She said she had no comments.
Ms. Wyss asked FS Pemberton about the summer camp for 2020. FS Pemberton said some programs could be run.
Mr. Barickman asked FS Pemberton about Social Services. FS Pemberton said the Town will be able to meet the needs of Social Services.
Mr. Mazzucco made a motion to approve the proposed BOS budget for FY 2020-2021 of $14,918,871, which is a 0.48% decrease from the FY 2019-2020 budget. Mr. Dean seconded the motion. Mr. Dean said the BOF already endorsed this budget. The vote was unanimous, and the motion carried.
Chair Parkin said there have been no material changes to the Redding BOE budget.
Mr. Barickman made a motion to adopt the proposed Redding BOE budget for FY 2020-2021 of $22,573,796, which is an increase of 2.29% of the FY 2019-2020 budget. Mr. Dean seconded the motion. There were four yes votes (Yonkers, Barickman, Miller, and Dean) and two no votes (Mazzucco and Wyss). The motion carried.
Mr. Barickman made a motion to adopt a total budget for FY 2020-2021 of $50,720,269, which is a decrease of 0.47% from the FY 2019-2020 budget. Mr. Mazzucco seconded the motion. There were four yes votes (Yonkers, Barickman, Miller, and Dean) and two no votes (Mazzucco and Wyss). The motion carried.
Mr. Barickman thanked the BOF for their service.
5. Draft Mill Rate Schedule
Discussion followed concerning the Draft Mill Rate Schedule.
Mr. Barickman asked to approve a Mill Rate for FY 2020-2021 of 32.843. Mr. Miller seconded the motion. FS Pemberton asked about the Region 9 surplus. Discussion followed.
Mr. Barickman made a motion to approve a Mill Rate for FY 2020-2021 of 32.843. This is the same mill rate as FY 2019-2020. Mr. Mazzucco seconded the motion. There were four yes votes (Yonkers, Barickman, Miller, and Dean) and two no votes (Mazzucco and Wyss). The motion carries.
6. Discussion and possible action on Budget and Mill rate
These actions happened in other items.
7. Other business
Chair Yonkers asked Mr. Gniadek about leasing radio equipment for the communications upgrade project. Mr. Gniadek said if the Town took out a lease, the term would be seven years and the payments would be $350k-$400k per year. The first payment would be due July 1st, 2020, as opposed to the first bond payment in July 2021. In this particular market, it will cost more to lease than to bond.
The next BOF meeting will be Monday, June 22nd at 7:30PM.
8. Public Comment
Mr. Parkin thanked the board for deliberation. He addressed the Town-Wide Survey and that tax stabilization was not part of the survey.
Robert Davino thanked the BOF for their service and said the Town could reduce taxes and improve services.
Chair Yonkers adjourned the meeting at 9:04PM.