Simsbury, CT - Finance Minutes

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

BOARD OF FINANCE

JANUARY 21, 2003

The Regular Meeting of the Board of Finance was called to order at 6:03 P.M. in the Main Meeting Room at the Simsbury Town Hall. The following members were present: Acting Chairman Peter Askham, Candace Fitzpatrick, Nicholas Mason and Kevin North. Also present were Finance Director Kevin Kane, Althea Schwartz, FSA - Consulting Actuary from Milliman USA, Assessor David Gardner, Town Engineer Richard Sawitzke, Director of Public Works Michael Wrabel and other interested parties.

December 17, 2002 Regular Meeting

Mr. North moved to approve the minutes from the December 17, 2002 Regular Meeting. The motion was seconded by Ms. Fitzpatrick and carried unanimously.

DISCUSSION WITH TOWN'S ACTUARY REGARDING FUNDING FOR TOWN PENSION PLANS

Ms. Schwartz introduced herself and handed out a "Review of Pension Plan Contributions" and graphs pertaining to the General Government and Police Retirement Income Plans. She stated that money comes in from employee contributions, employer contributions and investment earnings. She noted that the investment earnings have been a problem over the past couple years because of the bad market. She added that the actuaries do an annual valuation process, or a "check-up" on the plan.

Ms. Schwartz stated than in the past, the Town's plan has had an over-funded situation, assets exceeding the liabilities. GASB25 allows for that surplus to be amortized and a credit taken over a period of time. This surplus was used elsewhere for other Town's services. Because of the bad market, the situation has flipped from having a credit to having an obligation to take care of. Ms. Schwartz added that the Town has been funding the plan on an actuarially sound basis.

Ms. Schwartz stated that for funding purposes, the actuaries come up with an artificial asset level. She added that their investment return assumption is 8%. Mr. North expressed concern that 8% may be too high. He asked Ms. Schwartz to run comparison reports using 7.5% and 7% rates. She agreed and said she would get the new numbers to Mr. Kane before the next BOF meeting.

REVALUATION UPDATE BY DAVID GARDNER, ASSESSOR

Mr. Gardner stated that he expects the notices to go out in the early part of February and that he would have some rough estimates and a breakdown around that time. Then he has to run enough numbers to prove to the State that the Town is in compliance with the results of the revaluation. Certain tests have to be done. Mr. North stated that it might be better to start this process earlier so that the results wouldn't come out right on top of budget-making season.

Mr. Askham asked about future revaluation requirements. Mr. Gardner stated that it would be done every four years but that inspections wouldn't have to be done again until after 2009. Mr. Askham asked what the total cost of this revaluation is. Mr. Gardner answered that the contract cost is $425,600 and that there will be an unknown figure for litigation support.

FINANCIAL REPORTS

Mr. North asked if the Town anticipates that the shortfall in investment income is going to be overcome by the excess tax collections. Mr. Kane answered in the affirmative.

Mr. North noted that the cost of the Simsbury Farms project was taken out of their report. He stated that there should be a way of reflecting the cost of amortizing the debt associated with that project. Mr. Kane stated that he can add an extra line on the report for debt service. Mr. North asked for two footnotes indicating the annual cost: one for the ice rink and one for the clubhouse.

Ms. Fitzpatrick moved to take a short break at 7:12 P.M. The motion was seconded by Mr. North and carried unanimously.

The meeting reconvened at 7:14 P.M.

UPDATE ON HIGH SCHOOL MODERNIZATION PROJECT

Mr. Sawitzke stated that they met the January 14th schedule to get the plans in to the State Board for School Facility Unit Review. He added that they hope to get the review out of there by the end of March and that the intent is to start coming out with bid packages in April.

DISCUSSION ON PLANNING AND ISSUANCE OF HIGH SCHOOL BOND

Mr. Askham referred to the timetable from PFM which each Board member received. Mr. Kane stated that it was for informational purposes only and that noting new had to be done.

UPDATE ON SEWER TREATMENT PLANT EXPANSION PROJECT

Mr. Wrabel stated that in December the consultant had a value engineering session where they brought in third party, non-interested consultants to go over the design at the 30% level. They made some suggestions; some were discounted immediately, and others are being factored into the design. They expect to be at 60% in April and have another v. e. session for areas of design that haven't been considered to date. Mr. Wrabel stated that Earth Tech doesn't anticipate any problems meeting the June 30th deadline for plans and specs to be in to DEP. He noted that the project still has not gotten on the agenda for the State Bond Commission. They will be having another meeting on the 31st. Mr. Wrabel added that the consultant was talking with people from DEP and said that the money is there; it's just politics. Mr. Sawitzke added that he suspects that if they are not on the Bond Commission agenda by June, they'll be asking for a modification of that order.

UPDATE ON STATUS OF ENO MEMORIAL HALL AIR CONDITIONING

Mr. Wrabel stated that Mr. Sawitzke put out a Request for Qualifications and they are going to interview three consultants on the 30th. Mr. Wrabel stated that he hopes one is chosen by mid-March.

UPDATE ON STATUS OF AUDIT MANAGEMENT LETTER

Mr. Kane stated that there will be no Audit Management Letter.

Mr. Kane stated that he would like to see the Capital Asset Policy tie in to CNR.

Mr. North moved to establish a capitalization policy with thresholds the same as the GFOA recommendations of $5,000 for equipment, $20,000 for improvements and $100,000 for infrastructure. The motion was seconded by Mr. Mason and carried unanimously.

Mr. North made a motion that, consistent with the recommendations of the Finance Director, the Special Revenue Funds be either allowed to remain open, be closed, or closed and accounted for as outlined in his January 14th memo (Addendum I): 23 funds to remain open, 9 closed, 7 closed and accounted for as pass throughs. The motion was seconded by Ms. Fitzpatrick and carried unanimously.

DISCUSSION ON BUDGETED REVENUES FOR FISCAL YEAR 2003/04

In reviewing his revenue budget worksheet, Mr. Kane stated that the Investment Income budget is down $200,000. The Board discussed the Governor's reductions, and Mr. Askham stated that they're talking different numbers than the Board originally had in mind when they set the cap. He suggested having a workshop within the next two weeks to discuss the changed information. Mr. Kane said he will e-mail a mill rate projection sheet to the Board members.

Ms. Fitzpatrick submitted a draft memo from the BOF to the Planning Commission with BOF input on the 2003 Plan of Development. The members will review the memo. Ms. Fitzpatrick will e-mail the memo to Mr. Henault and Mr. Wade.

Mr. Mason questioned whether the BOF needs to be concerned about the Small Pox vaccination program that is starting to be mounted across the country. He wondered if it would have any financial impact on the Town. Mr. Askham asked Mr. Kane to look into this. It was determined that the person to talk to would be Richard Matheny, Director of Health, at the Farmington Valley Health District.

Mr. North mentioned that Mr. Henault and Mr. Wade attended a PTC meeting and that the Board would like to get a report at the next BOF meeting.

Mr. Askham referred to the Municipal Management Bulletin which was handed out: "IRS Memorandum on Tax Abatements for Volunteers: Tax Abatements for Emergency Responders Are Taxable". Mr. Askham said he would keep the members posted on how it's working. He doubted that there is a way to change the wording in Simsbury's program to minimize the impact on its volunteers.

Mr. North moved to adjourn the meeting at 7:56 p.m. The motion was seconded by Ms. Fitzpatrick and carried unanimously.

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Peter K. Askham, Acting Chairman Roxanne Farrell, Clerk