TOWN OF REDDING
BOARD OF FINANCE SPECIAL MEETING
VIRTUAL ZOOM MEETING 7:00PM
Filed subject to approval.
Present: Dr. Kimberly Yonkers, Chair; Ward Mazzucco, Vice Chair; Jamie Barickman; Rob Dean; Jenifer Wyss; Ed Miller
Also Present: First Selectwoman Julia Pemberton; Steve Gniadek, Finance Director; Wes Higgins, Treasurer; Steve Stafstrom; Pat Moisio, Tax Collector; Peg O’Donnell, Selectman; Michael Thompson, Selectman; Dr. Tom McMorran, Superintendent; Mike D’Agostino, Region 9 BOE Chair; Chris Parkin, Redding BOE; Scott Reiss, Region 9 Finance Director; Members of the Public
Chair Yonkers called the meeting to order at 7:00PM.
- PUBLIC COMMENT
Chair Yonkers opened the floor to Public Comment. There was no public comment.
- EXECUTIVE ORDERS UPDATE
First Selectwoman Pemberton discussed the recent Executive Orders passed by Governor Lamont.
Steve Stafstrom said Executive Order 7B suspends the requirement for Public Open Meetings. He then discussed various changes the new Executive Orders have put into place.
Executive Order 7C extends deadlines for municipal budgets an additional 30 days. It allows the BOS to create a new budget schedule.
Executive Order 7I grants permission to the BOS and BOF to operate like a charter form of government. The BOF sets the budget and mill rate without the requirement of a town meeting.
Mr. Gniadek said that the BOF should set up a new email address to consolidate budget commentary.
Mr. Miller wants the email address to forward comments to all BOF members. He asked how the commentary will be made public.
Mr. Stafstrom said that the comments must be made public for FOIA.
First Selectwoman Pemberton said that a recording secretary could add the comments to the BOF minutes.
Chair Yonkers said these budget comments should come with a name and address.
Ms. Moisio asked if anonymous comments could be deleted. Mr. Stafstrom said deleting emails/comments is not a good idea.
Mr. Stafstrom said that all comments should be published but the BOF will consider comments that have correct attribution more seriously.
Mr. Gniadek said Zachary Smith, recording secretary, could post the comments on the website in PDF format. He said Mr. Smith would consolidate the comments into a simple document for clarity.
Mr. Dean said that these things should be available to residents prior to the BOF meeting. He said there is a demand for real-time data.
Mr. Gniadek said he will reach out to Michele Grande, Town Clerk, to set up a link for these comments.
Mr. Mazzucco made a motion to adopt the process of sharing budget comments. This process will include the creation of an email address where comments will be collected. The collected comments will be published as a PDF and will be shared on the Town of Redding website. Mr. Barickman asked for clarification about the process. He also asked about how the BOF will communicate with the public. First Selectwoman Pemberton said the BOF will post a draft budget to the website along with a notice concerning this. Chair Yonkers will post this video. Mr. Barickman seconded the motion. The vote was unanimous, and the motion carried.
Chair Yonkers said the BOF public hearing is Thursday, April 16th. She said there should be a meeting between the Thursday, April 16th meeting and the Tuesday, May 5th meeting.
Mr. Barickman asked Mr. Stafstrom if Executive Order 7I gave the BOS time to wait for a town meeting or referendum. Mr. Stafstrom said that he doesn’t read the order like that. Mr. Barickman said he is worried the Town is cutting the public out of the process early on. Mr. Dean said that the public needs to be included in the communication of this process the entire way. Chair Yonkers said there should be something on the website explaining this process and how it is different from business-as-usual.
Mr. Gniadek said that the draft budget will be proposed on Tuesday, May 5th.
Chair Yonkers said the proposed budgets from all three boards have not been adopted yet. She said the public hearing (Thursday, April 16th) will be when these will be presented.
Mr. Dean asked if they would be adopting a draft budget.
Mr. Stafstrom said the BOF could vote on adopting a draft budget so that public comment could be collected.
First Selectwoman Pemberton said that the BOS and BOE have been through their processes. She said these budgets have been proposed and proper notice has been given.
Bob Moran, Channel 79, asked Chair Yonkers asked how Zoom is capturing video. Chair Yonkers said she is recording the meeting.
Mr. Stafstrom asked the BOF if they needed additional commentary or information from him. He left the meeting at 7:51PM.
- FINANCIAL CHALLENGES
Mr. Higgins addressed the BOF.
Mr. Higgins said the primary challenge is that there is no interest income for the upcoming year. He said there is a significant need for social services to be enhanced as well as overtime for various town employees. He said financial markets are shaky and that bonding should be delayed.
Mr. Mazzucco asked about bond anticipation notes (BAN). Mr. Higgins said the GFOA stated that State and Local Governments will need lending resources that markets cannot provide. The GFOA said that the Federal Reserve will have to buy up municipal debt or the Federal Government will have to create a lending program outside of traditional lending markets.
Chair Yonkers said the implications of this means that large-scale projects that can be delayed must be delayed.
First Selectwoman Pemberton said no road work will be done until the BAN can be obtained. She said maintenance work will be completed instead. The Community Center project should be completed. Local Capital Improvement Projects (LoCIP) funding should be used as much as possible.
Chair Yonkers asked First Selectwoman Pemberton if the BOS could put together a priority list of projects in regards to LoCIP funding.
Mr. Miller suggested that the priority list of projects for LoCIP funding as soon as possible. First Selectwoman Pemberton said she needs direction from the Governor in regards to this.
Mr. Gniadek said the three-year road plan and the communications project were approved by voters and that the Town needs to communicate to voters that borrowing will be delayed. First Selectwoman Pemberton said that these projects will continue. Chair Yonkers asked how these projects will be paid for. First Selectwoman Pemberton said that these projects are being paid for through fund balance currently.
Mr. Higgins said the cash balance as of June 30th, 2020 will be $8M.
First Selectwoman Pemberton said she will contact Steve Schnell, Communications Director, about the Communications Project.
Chair Yonkers said this discussion should be tabled.
Mr. Barickman said it is premature to say the Town doesn’t have money to pay for these projects.
First Selectwoman Pemberton said that the communications project is very important. She said the Town of Redding is currently handling the Town of Weston’s dispatch duties.
Mr. Thompson said the Town of Redding is depending on a system that functions.
Mr. Mazzucco said that the capital markets may not be available for six or seven months.
Chair Yonkers asked Mr. Gniadek and Mr. Higgins to do financial projections concerning the town and how to handle the upcoming financial challenges.
- FINANCIAL SAVINGS
Chair Yonkers invited the BOE to discuss possible savings.
Mr. Parkin, Redding BOE, said this is a day-by-day operation. He said that savings in the current fiscal year are unlikely due to recent Executive Orders. Any savings in electricity, overtime, substitute costs, and other items won’t be significant. He said that distance learning is challenging and there are costs that weren’t anticipated.
Mr. Reiss said that the Region 9 is a self-insured district. He said that there is an increased risk of claims due to Covid-19.
Chair Yonkers asked what the upper limit on claims are for the Self-Insurance Fund. Mr. Reiss said after $175,000 of claims, supplementary insurance kicks in. Chair Yonkers said that amount is the cost of one ICU stay at a hospital.
Ms. Wyss said Executive Order 7R authorized the BOE to amend the agreement between the BOE and the bus company. Mr. Reiss said negotiations are ongoing.
Chair Yonkers said that there could be savings in relation to substitute teachers and overtime. Dr. McMorran said there is savings in relation to spring athletics.
Mr. Miller asked Dr. McMorran if there are potential costs concerning distance learning in the future. Dr. McMorran said that students qualifying for special education could require additional teaching during the summer that would require additional teacher compensation
Mr. Gniadek said that he and Mr. Reiss have reached out to Eversource to discuss the electricity contract. He said fuel oil will be saved.
Mr. Gniadek presented his forecast for end-of-year numbers. He said that the town will receive less revenue from the Building Department and the Park and Recreation Department. He said there will be a shortfall in revenue of $200,000. Salaries for Full-Time Equivalent and Permanent Part Time employees will be included. Savings are in the on-call part time employees. Overall, the town will be $200,000 favorable at end-of-year.
Mr. Barickman asked if Mr. Gniadek has all of the data he needs. Mr. Gniadek said that State Aid is the only number that is currently unknown. He said that state aid is no longer a material aspect of the Town’s budget.
Mr. Barickman asked about the FY 2020-2021 budget and how the revenue and spending changes will affect the overall budget and resident tax burden. Chair Yonkers said these discussions can continue in a future meeting.
Chair Yonkers asked Mr. Reiss if it’s possible for Region 9 and the Redding BOE to have a forecast for EOY. Mr. Reiss said this can be done.
Mr. Miller said there should be revenue forecasts regularly.
- DISCUSSION OF QUARTERLY TAX BILLINGS
Chair Yonkers said the Town could change its tax billings from bi-annual to quarterly. She said there could be a loss of revenue.
Ms. Moisio said she asked her computer company how this change would affect the town. Her vendor stated that they would need to create a new tax program to allow for quarterly payments. This would require an upfront cost for computer upgrades. She said that there are 12 towns in CT that currently use quarterly billing. She suggested doing three payments instead of quarterly payments. These three payments would be in July, October, and January. The July and October payments would be half of the taxes owed, and the January payment would be the other half.
Mr. Barickman asked how a quarterly payment program would affect the town. Mr. Higgins said it would result in a loss of $15-20k in interest.
Ms. Moisio said the Governor would have to make an executive order in regards to eliminating the interest penalty on late property taxes.
Mr. Mazzucco asked Ms. Moisio how many taxpayers pay taxes in escrow. Ms. Moisio said 20 percent of Town residents pay their taxes in Escrow. Ms. Moisio said the option could be available to pay the first half of FY 2021 taxes all at once or in two installments.
Mr. Gniadek asked Ms. Moisio when the decision to change tax billings would have to happen. Ms. Moisio said her computer vendor requires two months to write a new tax program. She said due to this, the decision would have to be made soon.
Mr. Miller asked if the Town could extend the deadlines for tax payment. Ms. Moisio said this cannot happen without an executive order from the State.
- REQUEST TO ALLOW 3 STAMP SIGNATURES ON CHECKS
Chair Yonkers asked if this change would eliminate the need for a live signature. Mr. Gniadek said that this would eliminate temporarily the need to have live signatures.
First Selectwoman Pemberton said the BOF doesn’t have the authority to authorize this.
Mr. Mazzucco said he is against stamped signatures due to liability.
Mr. Miller said electronic signatures are legally binding.
Chair Yonkers said this should be discussed by the BOS.
- 2021 BUDGET CALENDAR REVISIONS
Chair Yonkers said this can be tabled.
- SCHEDULE AND FREQUENCY OF FUTURE BOF MEETINGS
Chair Yonkers said that the BOF should meet every week. She asked Mr. Gniadek and Mr. Higgins to provide weekly updates on revenues and spending.
Mr. Mazzucco said he is in favor of meeting weekly.
Mr. Mazzucco asked Mr. Gniadek and Mr. Higgins how the current financial situation will affect the town’s bond rating. Mr. Gniadek said the unassigned fund balance is one metric that bond rating agencies look at. He said that if the Town of Redding reduced the unassigned fund balance by a factor in the double-digits, the bond rating would not go down.
Mr. Higgins said that it costs $4M a month to run the town. He said the Town has to be careful and that the unassigned fund balance could only run the Town for two months in a financial emergency.
Mr. Dean said the dates of these future meetings should be clearly stated on the Town website.
Ms. Wyss said she is in favor of meeting on a weekly basis.
Chair Yonkers asked Mr. Gniadek to canvas the BOF about the ability to meet next week. The date would be Wednesday, April 8th, at 7:00PM.
Chair Yonkers asked Mr. Gniadek to cancel the Monday, April 6th BOF meeting.
Mr. Barickman said next week’s meeting will discuss the financial obligations the town must pay. Chair Yonkers said LoCIP should be discussed next week.
Mr. Gniadek said that there are $300,000 of LoCIP funds available to spend. Mr. Higgins said the Capital Non-Recurring Fund has $1M.
Mr. Gniadek said the Town would need to BAN for $4.5M.
Mr. Mazzucco asked Mr. Gniadek about the cost of oil and how this affects paving. Mr. Gniadek said that savings are unlikely despite the drop in oil prices.
- OTHER BUSINESS
There was no other business.
- PUBLIC COMMENT
Michael Thompson, Selectman, asked about the budget vote and if there was a 50-50 split on the vote. He asked how that would be rectified. Discussion followed concerning Robert’s Rules and procedure.
Dan Souza asked if the Town will tap into the Care Act funding of $13 billion for K-12 schools. First Selectwoman Pemberton said this is to be determined.
Carolyn said the e-signature act of 2000 would be helpful in determining signature protocol. Chair Yonkers said the signature stamp discussion is for the BOS to discuss.
Mr. Barickman asked Mr. Gniadek when there will be a forecast for FY 2021 revenues. Discussion followed.
Mr. Gniadek said next Wednesday, April 8th, 2020 at 7:00PM works. He said the public hearing on Thursday, April 16th, 2020 should be moved to Wednesday, April 15th, 2020. Chair Yonkers agreed.
Chair Yonkers adjourned the meeting at 8:00PM.