BOARD OF FINANCE
FEBRUARY 11, 2003
REGULAR MEETING
1. CALL TO ORDER
The Regular Meeting of the Board of Finance was called to order at 6:03 P.M. in the Board of Education Conference Room at the Simsbury Town Hall. The following members were present: Chairman Paul Henault, Peter Askham, Candace Fitzpatrick, Nicholas Mason, Kevin North and Michael Wade. Also present were Assessor David Gardner, Board of Education Business Manager David Holden, Director of Public Works Michael Wrabel and other interested parties.
APPROVE MINUTES
January 21, 2003 Regular Meeting
Ms. Fitzpatrick moved to approve the minutes from the January 21, 2003 Regular Meeting. The motion was seconded by Mr. Askham and carried unanimously with Mr. Henault and Mr. Wade abstaining.
FUNDING SCENARIOS FROM TOWN'S ACTUARY FOR TOWN PENSION PLANS
Mr. North stated that the actuary said that the pension plans are invested 60% in common stocks and equities and 40% in bonds. He added that he thinks an 8% rate of return is a very optimistic and aggressive assumption. He suggested that the Board seriously consider directing the actuary to help evaluate whether a lower assumed investment return is appropriate. He recommended 7.6%.
Mr. Mason noted that actuaries work with actuarial numbers and that a blending is going on. He expressed concern about the appropriate discount rate on the liability side.
Mr. Wade asked if the Pension Committee has seen the actuary's worksheet (Addendum I). He suggested having them come to the next BOF meeting to discuss how they are forecasting. Mr. Henault stated that his impression is that the Pension Committee relies heavily on the actuary. Mr. North asked who has the authority for directing the actuary on this policy. He further queried whether the Pension Committee actually has authority or whether it reverts back to the BOF based on the recommendations of the Pension Committee. In response to Mr. Henault's question, Mr. Holden answered that both the Insurance and Pension Committees are advisory committees and that they don't have the power to make decisions independently. Ms. Fitzpatrick stated that the actuary, Althea Schwartz, worked with
the IAP (Insurance Advisory and Pension Committee). She added that she believes Ms. Schwartz steered the committee to that number and that they accepted it. Ms. Fitzpatrick agreed that the committee is advisory. She recommended that the BOF alert the sub-committee that it has concerns in this area and that the committee should meet with the actuary to hash it out and then forward something to the BOF. She stated that she feels it is appropriate procedurally for the BOF to go through the committee.
Mr. Henault offered to write a letter to the Pension Committee, BOS and BOE expressing that the BOF has concerns in certain areas - the rate, the liability, the estimated administrative expenses, the possibility of underfunding - and ask them to provide the Board with information on how they are addressing this and whether they perceive it differently than the Board does. He said he would run it by the BOF members first.
Mr. Askham moved to amend the agenda to address item #5 next. The motion was seconded by Ms. Fitzpatrick and carried unanimously.
FINANCIAL REPORTS
BOE
Mr. Holden handed out his 2/10/03 memo "Financial Report/Budget Analysis as of January 31, 2003" and reviewed it. He stated that there is really no change since the mid-year report. He reminded the Board that they have frozen some equipment purchases and building improvements roughly in the $150,000 range.
BOS
Mr. Henault reviewed Kevin Kane's 2/11/03 memo which had been handed out "Financial Performance Report - Seven Months Ended January 31, 2003, 2002". Mr. Wade asked if the BOF had received a budget from Robinson and Cole yet. Mr. Henault answered that he had not and will follow up on it.
Mr. Mason referred to Mr. Kane's Projected Investment Income worksheet which had been handed out and noted that the projection being below $300,000 made sense.
Mr. North moved to amend the agenda to discuss item #7 next. The motion was seconded by Mr. Mason and carried unanimously.
UPDATE ON HIGH SCHOOL MODERNIZATION PROJECT
Mr. North reported on the most recent Public Building Committee meeting he attended that they are working very hard to control costs and that the building is on schedule.
Mr. Holden stated that they met the 1/14/03 submission deadline for the State. The State then advised that they couldn't complete their review until 4/30/03, so the Public Building Committee retained a private reviewer, and the review will be completed by 3/1/03. The independent reviewer cost between $5,200 and $6,000.
Mr. Askham asked if the funding is still secure. Mr. Holden answered that they continue to get their progress payments.
Mr. Mason moved to amend the agenda to address item #3 next. The motion was seconded by Ms. Fitzpatrick and carried unanimously.
REVALUATION UPDATE BY DAVID GARDNER, ASSESSOR
Mr. Gardner handed out his revaluation worksheet (Addendum II) and stressed that the totals were just projections. The ratio projections show a slight increase in residential vrs. commercial.
Mr. Gardner stated that the reval notices would start going out 2/12/03. Mr. North expressed concern that the notices were going out so close to the end of the legislatively mandated process.
In response to Mr. Henault's question, Mr. Gardner answered that a revaluation without inspections would be about half the cost of one with inspections. He added that a revaluation with inspections will not be required until some time after 2009.
Ms. Fitzpatrick moved to amend the agenda to address item #9 next. The motion was seconded by Mr. Mason and carried unanimously.
UPDATE ON SEWER TREATMENT PLANT EXPANSION PROJECT
Mr. Wrabel stated that the plant is probably 45% Design now. He referred to his e-mail to Paul Henault dated 1/27/03 (Addendum III). He stated that the project has still not gotten to the State Bond Commission. He added that he understands their 2/28/03 meeting will be canceled. He noted that this money is impacted by the State's financial problems. Mr. Wrabel said that he told Bill Hogan of the DEP that the three Towns cannot afford to proceed with construction. Mr. Hogan said he doesn't think that will happen, but within 30-60 days prior to November 30th the Town should write a letter in order to get relief from construction.
Mr. Henault asked for an update on the Eno air conditioning project. Mr. Wrabel stated that Mr. Sawitzke put out a Request for Proposal. He added that they did interviews and selected a vendor (engineer), and Mr. Sawitzke is negotiating with the vendor. It should take six weeks for a recommendation. They are looking at the possibilities of air conditioning the whole building rather than just the auditorium. Mr. Wrabel stated that it is not known when the $200,000 grant that Brandon Robertson applied for might become available. Once the facility report is issued and it is decided which recommendations to go with, it will take three months to go ahead with a full design to evaluate. There is no way that the air conditioning can be in place for this summer.
Mr. Askham declared his disappointment in that Eno would not be air conditioned by this summer. Mr. North echoed those sentiments. Mr. North added that the Board needs to see all the sources of funds that are available for the Eno project. Mr. Henault said that he would speak to Mr. Kane on that.
BUDGET TRANSFERS
Mr. Askham moved to approve the transfers as specified in the memo dated February 4, 2003 (Addendum IV) as presented. The motion was seconded by Mr. North and carried unanimously.
DISCUSSION ON PLANNING AND ISSUANCE OF HIGH SCHOOL BOND
The Board members had nothing new to discuss for this item.
GASB 34
Mr. Askham stated that Mr. Kane is focusing on it and understands what he has to do within the time frame. He added that Mr. Kane has the system in place to do it but may have to buy a depreciation package.
Mr. North stated that the Town owes Mr. Askham and his firm a debt of gratitude for continuing to make Joe available to help Mr. Kane implement this new accounting standard.
FISCAL YEAR 2003/04 BUDGET
This item was incorporated in the discussions of the previous items.
OTHER BUSINESS
Mr. Henault noted that the BOF calendar of meeting dates, the Operating Budget Calendar and the Capital Projects Approval Time Table were included in the packet.
Ms. Fitzpatrick stated that she forwarded to all BOF members the response from John Loomis, Chairman of the Planning Commission. Mr. Loomis appreciated the BOF's communication and told Ms. Fitzpatrick that if the Commission wanted to meet with the BOF they would let them know.
Mr. Henault invited the other Board members to join him at the BOE meeting at the SHS Amphitheater which started at 7:30. They were to be discussing the budget.
ADJOURNMENT
Ms. Fitzpatrick moved to adjourn the meeting at 7:42 P.M. The motion was seconded by Mr. Askham and carried unanimously.
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Paul W. Henault, Chairman Roxanne Farrell, Clerk
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