These minutes are for informational purposes only. For official minutes, please contact the Town Clerk's Office.
BOARD OF FINANCE
DECEMBER 17, 2001
SPECIAL MEETING
1. CALL TO ORDER
The Special Meeting of the Board of Finance was called to order at 6:01 P.M. in the Board of Education Conference Room at the Simsbury Town Offices. The following members were present: Chairman Paul Henault, Peter Askham, James Belfiore, Candace Fitzpatrick, Kevin North and Michael Wade. Also present were First Selectman Thomas Vincent, Finance Director Kevin Kane, Board of Education members Chairman Mary Margaret Girgenti, Richard Hogan, David Horowitz, Charles Moret and other interested parties.
2. 2002/03 BUDGET WORKSHOP
Mr. Henault reviewed the budget process and stated that this meeting, which was labeled as a workshop, was to talk about some of the issues on the table with respect to the budgets, the impact of tax increases and the challenges that are facing all of them.
Mr. Henault passed out a copy of his December 7th memo to the Board of Selectmen and Board of Education with an attached financial worksheet (Addendum I). He noted that some figures had changed, and he would pass out a revised worksheet later.
Mr. Henault invited the workshop attendees to an open discussion. Ms. Girgenti deferred to Mr. Hogan of the new Finance and Budget Sub-Committee. Mr. Hogan noted that they are still very early in the process yet went over some areas of concern and increase: employee insurance, property and casualty insurance, workers comp insurance, increased staff needs, sewer use charges, contract settlements and special ed. Mr. Hogan stated that the Finance and Budget Sub-Committee would have five in-depth meetings in January and will recommend a budget to the full Board in February. He added that anyone was welcome to attend those meetings. Mr. Hogan entertained questions from the other attendees. Discussion ensued.
In response to questioning, Mr. Kane discussed the need for an increase in pension funding, primarily due to the bad market.
Mr. Vincent handed out and reviewed the report “Town of Simsbury Projected 2002/03 Budget Impacts” (Addendum II). He stated that there had been one department head meeting two weeks earlier and that there will be another one the first week in January. That will be followed by individual meetings with department heads. There will be budget workshops in February which the public can come to. (A schedule will be printed at a later date.) Mr. Kane explained the projected impact of unnegotiated salaries. He also led the discussion on falling interest rates and the interest revenue shortfall. He stated that last year the average rate of return was around 5.66 – 6%. This year the average rate is in the low 3% range. He reminded the Board that January
collections, the second payments, are most important. The collection rate will be better determined in February.
Mr. North passed out his report “Select Economic Statistics – Revised” (Addendum III). In analyzing the report, he noted that Town expenses are increasing at 5% a year (using a 5-year average) while the Grand List is increasing around 2.25% a year. It was noted that David Gardner, Assessor, expects no more than 1.5% Grand List growth this year. Mr. Henault commented on the two aspects the Boards have to deal with: the Town and BOE needs vrs. the economic indicators.
Mr. Henault passed out and reviewed his “Projected Mill Rate” report (Addendum IV) which represented a revision of the report he had handed out earlier. The new report shows a 3.31% tax increase as opposed to a 2.20% increase on the previous report. Declining Reserves was discussed as well as the hold on Surplus in the event the self-insurance fund needs to be funded. Mr. Kane brought up the negative effect of revaluation due to a lack of commercial base. Mr North reminded the attendees that Simsbury’s mill rate is one of the highest around. He suggested that it is a forgone conclusion that we’re not going to see any economic development if we keep pushing taxes at the rate we’re pushing them. He added that taxes are 25% less in Farmington than in
Simsbury for businesses considering going there.
Mr. Horowitz stated that taxes don’t seem to be so high in Simsbury that they are negatively affecting property values. It was generally noted that West Hartford is experiencing that. Mr. Hogan remarked that the people moving into Simsbury for the school system are typically wealthy and can afford a 5.5% property tax increase. Mr. North warned that because of the stock market troubles, people aren’t as wealthy today as they were five years ago. He agreed that some people are willing and able to pay higher taxes, but he reminded the attendees that this is not a town of exclusively $1,000,000 houses. He recalled meeting many people while he was campaigning for the BOF who lived in much more modest homes and were struggling. Mr. Henault added that some residents are in
jobs where salaries have been frozen or bonuses have been cut. Ms. Fitzpatrick reinforced that it is a different voting climate today. Mr. Henault brought up the budgetary significance of the high school project. Mr. North added that that itself will drive the mill rate up 3.5 – 4%.
Mr. Henault summarized the items discussed in the workshop and invited the BOE to sit in on tomorrow’s BOF meeting where the BOF would try to decide what to do: set a guideline, do something different such as set a cap on spending or on taxes or delay a decision.
3. ADJOURNMENT
Mr. Henault called the meeting to a close at 7:13 P.M.
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Paul W. Henault, Chairman
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Roxanne Farrell, Clerk
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