Simsbury, CT - Board of Finance

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

BOARD OF FINANCE

The Regular Meeting of the Board of Finance was called to order at 6:03 P.M. in the Lower Conference Room of the Simsbury Town Offices. The following members were present: Chairman Paul Henault, Peter Askham, Candace Fitzpatrick, Nicholas Mason and Michael Wade. Also present were First Selectman Thomas Vincent, Finance Director/Treasurer Kevin Kane, Superintendent of Schools Joseph Townsley, Board of Education Business Manager David Holden, Insurance Committee Chairman Edward Sparkowski, Insurance Committee member Raymond Wahl, Board of Education Chairman Mary Margaret Girgenti and other interested parties

Mr. Mason moved to amend the agenda order to move item #1, "Approve Minutes", to the end of the meeting. The motion was seconded by Ms. Fitzpatrick and carried unanimously.

INSURANCE COMMITTEE

Mr. Henault introduced Mr. Sparkowski and Mr. Wahl and asked them to speak on the current insurance situation.

Mr. Wahl began by reporting on property and casualty insurance. The BOE and Town are finishing a three-year program. Initial estimates for 2002/03 increases were rather substantial because of the hard market in the insurance place generally and because current premiums are three years old. They had originally been forcasting an increase, excluding workers comp., from around $250,000 to around $475,000. Two and a half weeks ago the committee was advised that Kemper Insurance, that we have the program with, is exiting municipal business. At this time we have no renewal carrier. The committee had already been discussing some alternatives such as a self-insurance.

Mr. Henault noted that there are some insurance companies starting to jump into municipal insurance: Ace USA, Everest National and four or five others. He invited Mr. Wahl to call him to discuss those companies.

Mr. Askham asked if the number in the budget can still be considered a safe number. Mr. Holden answered that it is the best estimate that we can go with at this point in time. He noted that the BOE has a 100% increase budgeted.

Mr. Sparkowski stated that for quite a while we've had a reasonable trend because of the introduction of managed care. But now the doctors have had enough and hospitals are losing money, so insurance costs are going way up. The committee estimates about a $1,000,000 increase for next year for the BOE and Town combined. Mr. Sparkowski added that he feels this trend is going to continue. One solution is to get people more involved in the cost of their services.

Mr. Henault asked what the split was in the insurance programs offered. Mr. Holden answered that on the BOE side about 20% of employees are still in the indemnity plan, 30% PPO and 50% HMO. He anticipates significant change toward managed care during their open enrollment time in May and also because of contract settlements.

ACTION ON PROPOSED 2002/03 OPERATING BUDGETS

Mr. Henault referred to Dr. Townsley's 4/5/02 memo, "Capital Non-Recurring Fund/Computer Technology Appropriation" (Addendum I). He stated that when they went through the Capital Budget, there was an item for $500,000 for computers. The BOF decided to fund $135,000 of it for hard costs and talk about another method of funding computers through the use of Capital & Nonrecurring. Dr. Townsley reviewed his memo. In response to Mr. Askham's question, Mr. Kane presented two scenarios on the effect on the CNR fund from the BOE computer appropriation.

Mr. Henault referred to the 4/9/02 letter from Mr. Vincent regarding the possibility of the BOF restoring some or all of the reductions that had to be made in the BOS budget in order to meet the 3.5% spending guideline, especially items 1-7 (Addendum II). Mr. Vincent reviewed his letter, noting that these restorations had plenty of support from the citizens of Simsbury. Detailed discussion ensued.

Mr. Askham stated that he had been surprised when the BOS budget fell within the 3.5% since there were such compelling reasons for increase such as insurance and pension which were outside of anyone's control. He added that he has no problem with restoring some of the cut items. Each member discussed his or her preferences for which items should be restored. Mr. Kane helped work out varying budget impacts depending on how much was restored. Ms. Fitzpatrick expressed concern over the fact that nothing is being budgeted for Meadowood.

Mr. Henault opened discussion on the BOE Operating Budget. He referred to the letter from Nancy Haase who has been instrumental in circulating a petition in support of the initial 8.94% BOE budget increase (Addendum III).

Ms. Fitzpatrick stated that the BOE budget still seems too high knowing the financial situation of the Town and the tax impact but felt that it is defensible as presented. Mr. Askham stated that there were compelling reasons to go over the guideline. Mr. Mason expressed concern about compounding large percentage increases year after year, and he warned that over the years this would result in huge tax increases. He noted, though, that from input at the Public Hearing, the Town seems to want this budget, and he agreed to support it reluctantly. Mr. Henault stated that the BOE's budget is 3/4 to 1% higher than he would like to support. He noted that there are some very significant factors affecting the revenue side. Aside from these, he noted that both the BOS and BOE have made some legitimate and compelling arguments as to where they need to be. However, he warned that we cannot sustain these kinds of increases. He made a strong suggestion that an outside consultant be brought in to look at the program. He would like to see a "blue ribbon panel" instituted by the BOE which may or may not include a member of the BOF. This should be a sub-committee run by the BOE to determine what the scope of the project should be, who the consultant should be and get an idea on the cost. He stated that this was a reasonable quid pro quo in order to move the BOE budget forward at 7.51%.

Ms Fitzpatrick agreed that this was a reasonable request and reminded the Board that the Town did the same thing a few years ago when the tax increases were in a high range. She suggested that it would help the working relationship between the BOE and BOF.

Mr. Askham moved to bring forward the Board of Education budget for $45,734,366 for fiscal year 2002/03. The motion was seconded by Ms. Fitzpatrick.

Ms. Girgenti stated that she will bring Mr. Henault's request for a budget sub-committee to choose an outside consultant before the BOE for discussion, but it is something that they will need a good deal of clarity on. Mr. Henault responded that it is something that should be done prior to the next budget season which he sees as October 1, 2002. He suggested having the BOE assign a couple people to work on the scope of the project, and they could be included in a dialogue on that at the next BOF meeting or the one following. He also invited Ms. Girgenti to give him something in writing if she needs clear direction. Ms. Girgenti thanked Mr. Henault and stated that she will be looking forward to bringing this issue before the BOE goal-setting workshop in May. Mr. Henault added that this certainly shouldn't be taken as a criticism of the administration. It's a suggested remedy to get out of the pattern of the last couple years.

A vote was taken, and the motion passed unanimously.

Mr. Kane referred back to Mr. Vincent's letter (Addendum II). He explained the reasoning behind Mr. Vincent's decision to request restoration of the listed reductions. He noted that the Town has to be run like a business while still being very aware of providing decent service to the citizens. In the original cuts, after cutting some "niceties", some of the "core business" needed to be sliced in order to meet the 3.5% guideline. Since then, the citizen's have spoken, and Mr. Vincent has listened. The "core business" is very important for customer service, and customer service is very important to the citizens.

At the request of Board members, Mr. Kane worked out budget impacts using various restoration figures. The Board discussed and agreed to reduce the Debt Service Budget by $188,000 as a compromise to allow the restorations.

Ms. Fitzpatrick moved to accept the Board of Selectmen budget of $13,754,248 which includes priority items one through six from the memo dated April 9, 2002, from First Selectman Mr. Vincent, and items one through six equal an addition of $234,307 which is included in the overall amount. The motion was seconded by Mr. Askham and carried unanimously.

Ms. Fitzpatrick excused herself from the meeting temporarily at 7:35 P.M.

Mr. Wade moved to accept the amended Debt Retirement budget of $4,098,630. The motion was seconded by Mr. Askham and carried unanimously.

Mr. Wade moved to accept the Non-Public Schools budget of $345,565. The motion was seconded by Mr. Askham and carried unanimously.

Ms. Fitzpatrick rejoined the meeting at 7:39 P.M.

Mr. Wade moved to approve the Sewer Use Fund budget of $1,222,947. The motion was seconded by Mr. Askham and carried unanimously.

Mr. Wade moved to accept the Residential Rental Properties Fund budget of $47,722. The motion was seconded by Mr. Askham and carried unanimously.

Mr. Wade moved to accept the Dog Fund budget of $72,631. The motion was seconded by Ms. Fitzpatrick and carried unanimously.

Ms. Fitzpatrick moved to accept the Simsbury Farms / Special Programs Fund budget of $1,491,604. The motion was seconded by Mr. Wade and carried unanimously.

Mr. Askham moved to accept the Capital & Nonrecurring budget of $1,012,919. The motion was seconded by Ms. Fitzpatrick and carried unanimously.

ESTIMATED 2002/03 OPERATING BUDGET REVENUES

Mr. Mason asked Mr. Kane if he were still comfortable with the previously projected $5,989,230 number for 6/30/02. Mr. Kane said that he is although there could be a timing problem with some of the revenues. They may not all come in this fiscal year.

INVESTMENT INCOME

Mr. Henault noted that on March 31, 2001, the Town had an interest rate of 4.99%, and ending February, 2002, the rate was 1.67%.

ACTUARY'S RESPONSE REGARDING "PENSION NOTES" IN THE JUNE 30,2001, AUDIT REPORT

Mr. Mason stated that the whole issue boils down to the fact that they're changing methods. All agreed. Mr. Kane stated that they are using a change in calculation. Mr. Mason noted that they are using a known number rather than an estimate.

AUTHORIZE THE ESTABLISHMENT OF THE "SIMSBURY MEADOW

BANDSHELL" SPECIAL REVENUE FUND

Mr. Kane stated that there is a State grant for $150,000 to assist the Town in building a bandshell. Mr. Askham asked if the Town had to contribute anything. Mr. Kane answered that at this point it is in-kind services, but there is a possibility that if the Town constructs a bandshell, it will be in excess of $150,000. Mr. Henault noted that there is another grant on the way. Mr. Askham wanted to be sure they would not be committing to any Town funds at this point, that they would just be setting up the mechanism to receive the grant money

Mr. Askham moved to establish a Special Revenue Fund for "Simsbury Meadow Bandshell". The motion was seconded by Mr. Wade.

Mr. Mason expressed concern over the effect on the Town if the bandshell doesn't get used. Mr. Henault referred to that very situation in Springfield. They are now trying to sell their bandshell. Mr. Mason also mentioned that Windsor is getting into this act and will possibly be competing with Simsbury.

A vote was taken, and the motion carried unanimously.

BUDGET TRANSFER REQUEST FROM RESERVES PURSUANT TO SECTION 908 (a) OF THE CHARTER - $20,900 SOFT BODY ARMOR (PUBLIC SAFETY REQUEST)

Mr. Henault stated that the Town will be reimbursed half of that amount through a grant, $10,450.

Ms. Fitzpatrick moved to approve an appropriation of funds for the soft shell armor in the amount of $20,900 as outlined in Tom Vincent's March 28, 2002 memo (Addendum IV) and supported by Chief Ingvertsen's February 5, 2002 memo (Addendum V). The motion was seconded by Mr. Askham.

Mr. Wade asked what happens to the old body armor. Mr. Henault stated that used body armor cannot be sold. He asked Mr. Kane to check into what will happen to the old armor.

A vote was taken, and the motion carried unanimously.

March 11, 2002 Budget Workshop

Ms. Fitzpatrick moved to approve the minutes from the March 11, 2002 Budget Workshop. The motion was seconded by Mr. Wade and carried unanimously with Mr. Mason abstaining.

March 12, 2002 Regular Meeting

Ms. Fitzpatrick moved to approve the minutes from the March 12, 2002 Regular Meeting. The motion was seconded by Mr. Wade and carried unanimously.

March 12, 2002 Public Hearing

Ms. Fitzpatrick moved to approve the minutes from the March 12, 2002 Public Hearing. The motion was seconded by Mr. Wade and carried unanimously.

March 19, 2002 Regular Meeting

Ms. Fitzpatrick moved to approve the minutes from the March 19, 2002 Regular Meeting as amended. The motion was seconded by Mr. Wade and carried unanimously.

The Board briefly discussed the Kensett painting and the money the Town is to receive from the Wadsworth Atheneum for it. Mr. Askham asked if a Reserve Fund for Eno were going to be set up with that money, and Mr. Kane said that that was the intention of the BOS although it hasn't been set up yet.

Mr. Henault thanked the members, especially Mr. Mason who came in in the middle of the process, for the time they spent on these budgets.

Ms. Fitzpatrick moved to adjourn the meeting at 8:08 P.M. The motion was seconded by Mr. Wade and carried unanimously.

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Paul W. Henault, Chairman Roxanne Farrell, Clerk