These minutes are for informational purposes only. For official minutes please contact the Town Clerk's Office.

SPECIAL MEETING

FEBRUARY 15, 2000

CALL TO ORDER: Chairman Paul Henault called the meeting to order at 6:05 p.m.
Present: Candace Fitzpatrick, James Belfiore, Peter Askham and Mary Glassman.
Also Present: Finance Director Kevin Kane, Simsbury Public Schools Business Manager David Holden, and other interested parties.

1. APPROVAL OF MINUTES

January 18, 2000 Special Meeting
January 18, 2000 Joint Meeting
January 21, 2000 Special Meeting

Mr. Belfiore moved that the minutes of the January 18, 2000 Special Meeting and Joint Meeting and the January 21, 2000 Special Meeting be approved. The motion was seconded by Mr. Askham and passed unanimously.

Mr. Henault referred to page three of the January 18, 2000 Special Meeting and questioned if anyone had followed up on Ms. Fitzpatrick's question regarding the referendum question. Mr. Kane stated that the Town Clerk has been asked but his is not sure what the answer is. Mr. Henault stated that he would follow up on this issue.

2. BUDGET TRANSFERS

Mr. Henault referred to Mr. Kane's memo dated January 31, 2000 regarding budget transfers (addendum 1). Mr. Kane stated that each fiscal year there is a line item for un-negotiated salaries and that going into this fiscal year there were Public Works and Police Union employees whose contracts had not been settled. He also stated that the First Selectman/Board of Selectmen decided to increase salaries of some non-union employees and added that those funds had been set aside in the previous fiscal year.

Mr. Henault asked how many of the supervisory personnel received a ranking of commendable or excellent. Mr. Kane stated that he was not sure. Mr. Belfiore asked who determined if the employees were eligible for a merit bonus. Mr. Kane stated that the First Selectman made that determination.

Mr. Belfiore moved that the request for budget transfers as outlined in Mr. Kane's memo dated January 31, 2000 be approved. The motion was seconded by Mr. Askham and passed unanimously.

3. BOARD OF EDUCATION CAPITAL PROJECTS, OPERATING TRANSFERS REQUEST

Mr. Holden stated that he did not have a specific request to bring to the Board this evening. He stated that the request revolves around the Henry James Construction Project and that the transfers would be from the initial authorization for design services. He added that the Public Building Committee is meeting tomorrow to discuss several change orders for the Henry James Project. Mr. Henault stated that the issue would be tabled for a future meeting.

4. SECOND QUARTER 199/00 FINANCIAL REPORTS

Mr. Henault stated that the Board received information from School Superintendent Joe Townsley and Finance Director Kevin Kane.

Mr. Holden explained that while there is a projected deficit of $11,000 in the Board of Education operating budget, the BOE will receive additional Project Choice funds. He added, however, that since the report was prepared, the price of fuel oil has doubled. Mr. Askham asked if Mr. Holden anticipated that the Board of Finance would need to take money from the reserves to offset a deficit in the Board of Education budget. Mr. Holden stated that the Board of Education is doing everything they can to avoid that and added that he would have a better understanding after the next quarter.

Mr. Kane reviewed the Town's Financial Performance Report for the six month period ending December 31, 1999. Mr. Holden explained that, historically, the Town has experienced favorable insurance claims and has been able to offer premium holidays but that insurance costs for the upcoming fiscal year will increase due to collective bargaining agreements and cost of prescription drugs.

Mr. Henault asked Mr. Kane if the projected surplus in tax revenue was accurate. Mr. Kane stated that it was and added that it may even be more than $200,000. Mr. Kane provided additional information regarding specific line items.

5. CAPITAL DEBT POLICY - REVIEW AND POSSIBLE ACTION

Mr. Henault stated that he included this item on the agenda because of the upcoming capital projects. He noted that the policy was developed in 1989, when the Town's debt load was around 12%-13%, and suggested that it might be beneficial to review the policy to determine if it is still applicable today given the current needs of the Town.

Mr. Henault stated that according the Connecticut General Statutes, towns have a great deal of latitude regarding expenditures and that a town the size of Simsbury could have a debt load as high as $300 million. He added that the Town currently has a debt load of $13 million.

Mr. Henault noted that the current debt policy states that the Town's debt load should be between 5%-7% and that over the past several years, the debt load, for valid reasons, has been at the high end of that range. He added that he, personally, would not feel comfortable with a debt load of 12%-14%. He suggested that the Town should begin to scale back some of the capital projects and bring the debt load closer to 5%. This would free up funds for the high school project and leave the Town with a debt load of 10% for a short period of time. He added that given the escalating operating budgets, the Board will need to look at the balance between the operating and capital budgets.

Board members reviewed the Twenty-Five Year Forecast prepared by Mr. Kane which provided information on the current debt load as well as scenarios for future debt load. Mr. Kane stated that if the Board wanted to keep the debt load close to 5%, there would be approximately $5.5 million available for capital projects over the next 2 years.

Mr. Henault asked how much money would be available for the high school project, if other capital projects were kept at 5% and the maximum debt load was 10%. Mr. Kane stated that assuming operating budgets will increase by 4% there would be approximately $40 million available for the high school project. Mr. Henault noted that according to the scenario, there would be a large amount of capital available in 2006, if the debt load for all other capital projects was kept at 5%.

Mr. Askham asked if capital projects were restricted, would the Board of Finance be able to approve additional funds for capital projects if the Town was experiencing a good budget year. Mr. Kane stated that the Board could only approve an additional 1% or approximately $500,000.

Ms. Glassman noted that section D.2. on page 4 of the Debt Policy states that no increase in debt retirement should exceed the maximum increase in the grand list. She asked what the figures would look like based on that formula. She also noted that Granby made funds available for capital projects by restricting increases in the operating budgets. Mr. Kane stated that Boards of Finance in other towns have the authority to reduce budgets but that Simsbury's charter does not give this Board that authority. He also pointed out that Simsbury has a much lower debt service than other towns. Mr. Askham stated that if the growth in the grand list is 2%, then debt service could be increased to 9% under this policy. He added that 10% seemed to be the "magic number" for bonding purposes.

Mr. Henault stated that the policy is intended to be a guideline and does not limit the authority of the Board. He stated that, if the Board is going to recommend changes in the debt policy, then they have the responsibility to review the policy and explain to the voters that those changes are reasonable and rational.

Ms. Fitzpatrick stated that she was comfortable with the concept of limiting capital projects, other than the high school, to 5% which would allow the Town to go forward with the high school project and keep the debt service from going above 10%. She suggested that this concept should be communicated to the other Boards along with a flow sheet which would show the availability of funds over the next several years.

The Board discussed how such a concept could be best implemented. Mr. Askham noted that, for every 10 million spent on the high school, it costs the Town 1.2%. Mr. Henault asked when the Town would need to bond for the high school. Mr. Kane stated that there would be some minor expenses in 2001 but the bulk of the bonding would take place in 2002/03.

Mr. Henault stated that, essentially, the Board is not altering the debt policy but making an adjustment for the high school project as a stand alone. Ms. Glassman noted that the policy allows for the Town to exceed a debt service of 7% for emergency purposes.

Mr. Askham stated that the high school project basically generates a debt service of 5% and that if the Board held to a 7% debt service, then they would totally restrict the Town's capital expenditures. He added that he would not like to see that happen, nor would he like to see a debt service of 12%.

Ms. Glassman stated that she supported the idea of limiting all other capital projects to 5% which would allow for the high school project without exceeding a debt service of 10%. She also suggested communicating this concept to the other Boards and asking them for their feedback. Mr. Henault noted that there appears to be a consensus on this issue. He agreed to draft a letter to the other Boards. Mr. Kane suggested that perhaps the other Boards should also be given dollar amounts for keeping within these guidelines.

Members agreed that this discussion was very productive.

6. APPOINTMENT OF TWO MEMBERS TO SERVE ON THE VOLUNTEER FIRE AND AMBULANCE TAX ABATEMENT SUBCOMMITTEE

Mr. Henault explained that new legislation was passed last year which allows the Town to provide tax abatements to volunteer fire and ambulance members. He stated that towns are now trying to develop ordinances to address this issue and that Simsbury has established a subcommittee for that purpose. He added that the Board of Selectmen has requested that two members of the Board of Finance join the subcommittee.

Mr. Henault suggested that Mr. Wade would be interested in participating on the subcommittee. He also stated that he would be willing to attend the meetings on an alternating basis.

7. HIGH SCHOOL MODERNIZATION PROJECT UPDATE

Mr. Henault stated that there was nothing new to report. He stated that Mr. Kane is in the process of talking to his counterparts from other area towns that have been involved with major school construction projects. Ms. Glassman stated that she would like some information regarding the cost/per square foot of those school construction projects.

Mr. Askham stated that he attended a meeting with Superintendent Townsley and BOE member Richard Hogan. He stated that he found the meeting to be informative and that he was pleased to learn that the BOE is looking at creative ways to minimize costs. He also stated that he encouraged them to revisit their long term plans. Mr. Belfiore agreed that the BOE needs to look at their long-term plans. He also stated that they also need to develop strategies to "sell" those plans to the community.

Mr. Henault stated that Dr. Townsley was also available to meet with Board of Finance members on Friday. He stated that, at some point, this Board will have to decide if the project is feasible and give their approval or simply pass the project along to the voters to decide.

8. ADJOURNMENT

Mr. Askham moved to adjourn the meeting at 7:23 p.m. The motion was seconded by Mr. Belfiore and passed unanimously.