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Board of Finance - Special - 04/01/03
BOARD OF FINANCE
APRIL 1, 2003
SPECIAL MEETING
CALL TO ORDER
The Special Meeting of the Board of Finance was called to order at 9:00 P.M. in the Simsbury High School Auditorium. The following members were present: Chairman Paul Henault, Peter Askham, Candace Fitzpatrick, Nicholas Mason, and Kevin North. Also present were Finance Director Kevin Kane, David Holden, Board of Education Business Manager, Dr. Joseph Townsley, Superintendent, Thomas Vincent, First Selectman, Town Clerk Carolyn Keily, and other interested parties.
DISCUSSION AFTER PUBLIC HEARING
Mr. Henault asked the Board if they choose to have this special meeting tonight or if they would rather take in all the comments of the Public Hearing and meet at the regular meeting on Thursday, April 10, 2003.
Mr. Kane handed out a draft of motions and some changes made in the budget. Mr. Henault said the new documents showed changes with respect to bonding and investment income and how that was recorded. The Board could also act on the issue of having only one question on the referendum.
DISCUSSION ON SCHOOL BUILDING
Mr. Askham asked if there was approval on the school building. Mr. Holden said not yet as they are in the process of obtaining sign-offs on the plans. Then the plans go back to the State Department of Education for approval. All of the paperwork should be ready by the end of this week. Mr. Holden said they would be ready for advertising by next week.
Mr. Fitzpatrick asked if the State approval process was separate from the State bonding money, the educational reimbursement money or does this all happen when the State Board of Education acts. Mr. Holden said the State participation in this project is secured now. We have already received reimbursements on the architectural services. The construction part of it is contingent upon State signing off on it authorizing the project to move forward.
Mr. Askham asked if the revenues were going to change based on the numbers seen. He wants to make sure the figures are right the first time so they should all be double checked. He feels there will be a tax decrease over what was presented. Mr. Askham is not sure the people understand the debt of service. Mr. Mason said the debt of service issue was covered over one year ago with reasonable estimates and we are not outside those perimeters.
BOARD OF FINANCE
SPECIAL MEETING
APRIL 1, 2003
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Mr. North said the real issues surrounding the budget is in terms of movement vs. what was presented tonight to the public - we have two revenue impacts and one expense impact that we are dealing with. One revenue side estimates in hand that would indicate that associated with the bond issue we would have a one time investment income of approximately $150,000. In addition, because the State passed a supplemental conveyance tax that we would have a year supplemental conveyance tax that it’s reasonable to assume we would have a marginal revenue increase in the conveyance tax for purposes of one year. He doesn’t feel that the one year conveyance tax increase is in question. Mr. North had a discussion with the Town Treasurer who said the numbers have been presented very
conservatively and that there is little likelihood of a short-fall in those regards to those revenues.
Mr. North stated than on the expense side the process by which we will ultimately get to bonding this project will lead to a situation where bonding will occur in such a manner that the timing will only require one debt service payment in the current fiscal year 2003-04, but one principal reduction payment that presupposes an initial bonding of $27,000,000. He spoke to the Town Treasurer to make sure one debt service payment did not constitute effectively and accounting device whereby in the next year, 2004-2005, we would be exposed to a very painful tax increase. Mr. North feels the Board is moving in the right direction, back to a long term historical average. We are accomplishing the fiscal objectives as set early on.
Mr. North would be willing to move this budget forward to referendum based on revenue changes and a single debt service reduction payment for bond issue of $27,000,000 for the coming year.
Mr. Fitzpatrick feels some members of the Board are ready to move forward and some need more time to review the budget. She asked if the Board could firm-up how to set-up the High School bonding.
Mr. Askham asked Mr. Kane about some open items on the manufacturer’s inventory. Mr. Kane said he was recommending they be taken off.
Mr. Henault asked Mr. Kane about the letter received about backing out bonding costs of $675,000. Mr. Kane said that $800,000 was originally set up for the costs and he feels that it would now be $125,000 - $150,000. This discussion will continue at the Regular Meeting next Thursday.
REFERENDUM QUESTION ISSUE
Mr. Henault asked Ms. Keily to give her opinion on the one referendum question issue. Ms. Keily said she received a letter from the Secretary of the State about Towns now moving to one referendum question. Ms. Keily said the Town of Simsbury’s Charter gives the Board of Finance the right to choose what and how many questions there will be on the referendum. Mr. Henault feels the Town would want to go to one question to avoid a lawsuit.
Mr. North stated he spoke to the Town Counsel about this issue, asking how many towns will change to one question. He felt not many towns have Board of Finance structured the way Simsbury does but feels that all towns will go to one question.
No action was taken at time.
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SPECIAL MEETING
APRIL 1, 2003
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SCHOOL BUS DISCUSSION
Mr. Henault addressed the issue of purchasing school buses on a regular schedule again.
Dr. Townsley said that next year he would like to go back to the format of purchasing three buses each year. Dr. Townsley said there are a few options like the Board of Finance requesting the Board of Education to purchase and pay for one to two buses this year and/or looking at the budget to see if buses can be purchased at the end of the year.
Mr. North asked if they go back to purchasing three buses next year and every year after if Dr. Townsley could foresee any problems with the fleet. Mr. Holden said that some years four buses may have to be purchased. There are other options with the bus company where they have buses available for use in case of service to our buses.
ADJOURNMENT
Mr. Askham moved to adjourn the meeting at 9:20 p.m. The motion was seconded by Ms. Fitzpatrick and carried unanimously.
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Paul W. Henault, Chairman Kathy Radocchio, Clerk
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