BOARD OF FINANCE
JULY 22, 2003
SPECIAL MEETING
1. CALL TO ORDER
The Special Meeting of the Board of Finance was called to order at 5:30 P.M. in the Lower Conference Room at the Simsbury Town Hall. The following members were present: Peter Askham, Nicholas Mason, Kevin North, Michael Wade, and Candace Fitzpatrick. Also present were Director of Finance, Kevin Kane, Michael Wrabel, and Richard Sawitzke and other interested parties.
2. APPROVAL OF MINUTES
Ms. Fitzpatrick made motion to approve the minutes of June 17, 2003. The motion was seconded by Michael Wade.
Mr. North corrected the minutes by stating he mentioned the investigation of buying street lights in town. After some discussion, this item should be put on the Open Action Items list on the June 17th minutes. This will be the responsibility of Kevin Kane and Mike Wrabel for the next months meeting.
All were in favor of accepting the minutes with the change and carried unanimously.
Kevin North made motion to approve the minutes of July 14, 2003. The motion was seconded by Michael Wade.
The addition of street light investigation should also be placed on the Open Action Items list in these minutes. Mr. North also noted that on page 2, the second paragraph from the bottom, talking about the 15- 20 year bond issue option, he noted there was virtually no difference between the net present values of the cash flows associated with the bad debt service. He would like the sentence of “There was negligible net present value difference between the debt service cash flows for the two alternatives”.
All were in favor, one abstained, for the minutes to be approved as amended.
3. BUDGET TRANSFERS
Mr. Kane stated that this report is really a category transfer. Mr. North stated he read an article that another town was granted a FEMA reimbursement on snow removal. Mr. Wrabel said they applied and received reimbursement, which is in the general fund.
Mr. Askham asked about the refuse disposal of $41,000.00. Mr. Wrabel said there was an operational problems generating more sludge and we had to pay more to dispose of sludge.
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Mr. Kane noted that the Board of Education purchased two new buses out of the combination of funds they had available. The Board said this was a good thing as they were getting behind on purchasing buses.
Ms. Fitzpatrick would like an update of end of year accounting from Mr. Holden on the Board of Education.
Ms. Fitzpatrick made motion to accept the budget transfers as presented in Kevin Kane’s letter of July 17, 2003 (Addendum I). Mr. Mason seconded.
There was some discussion on the Meadow Wood project.
The motion carried unanimously.
4. PRELIMINARY FISCAL YEAR 2002/03 FINANCIAL RESULTS
Mr. Kane said the only item he did not cover in his report was health insurance. Mr. Askham asked about pending grants. Mr. Kane said that the Stoddard Reservoir grant came in and the Hall property needs to be amended before coming in. That could take another 6-12 months to come in. The investment income went down, licenses and permits also. After some discussion, Mr. Askham asked Mr. Kane to provide the Board with a range of where they have been with the revenues/expenditures for the last few years. Mr. Kane will come back with the self-insurance fund for the next meeting.
The Board said there needs to be a workshop with the insurance companies to compare different towns and processes used on pension funding with the Board of Selectmen, Board of Finance and Pension Committee. Mr. Kane will set up the workshop.
5. HIGH SCHOOL BONDING UPDATE
Mr. Kane said he has two presentations on Thursday. He said the rates are going up and bonding issues are going out at a premium structure for $26,000,000. The bond auction is August 11th in Hartford with electronic bidding. Mr. Kane said he changed the maturity dates to January 15th and July 15th.
6. TAX PAYMENT PROPOSAL
Mr. Kane said there was a citizen who raised the issue of paying taxes with a credit card. He said they have been looking into this idea. Mr. Kane said a committee should be formed, along with Board of Finance
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the tax collector, to understand this issue.
After further discussion, a sub-committee will be formed with Ms. Fitzpatrick, Mr. Mason, Mr. Kane, and Kathy Hayes to discuss this issue, meet with a vendor, and report back to the Board of Finance in September. Ms. Fitzpatrick would like this item placed on the Open Action Items list.
7. ENO AIR CONDITIONING PROJECT UPDATE
Mr. Sawitzke stated there was an agreement with ATA Consulting Engineers and the Public Building Committee. Right now they are in the design development stage, which they expect to have completed by the end of August. The system should then be operational by April 15, 2004. They are still looking into the air handler stage. The overall cost should be approximately $484,000. There are two different methods of air - the auditorium is with air and the rest of the building is chilled water. The Committee will have firm numbers by the end of August.
Mr. Askham asked that there be a recap of funds for this project for the next Board of Finance meeting by Mr. Kane.
8. ENO MEMORIAL HALL SPECIAL REVENUE FUND POLICIES AND PROCEDURES
Mr. Kane said there is an differential fund set up for this project. Mr. Mason asked if the town has a policy for other funds similar to this. Mr. Kane said no, it is a Board of Selectman and Board of Finance decision when projects are needed. There was some discussion n whether or not the town has moved to using a total return concept.
Mr. North said he didn’t think this policy was tied to construction activities and a good financial decision needs to be made with regards to the monies and projects. There are a couple of refinements that need to be made to the policy; 1) if you spend all the interest income in any year from a special fund, as the years go by the fund becomes less and less valuable as it looses it’s purchasing power; 2) in the proposed policy, a suggestion was made that none of the principal could be used for either operating or capital purposes and he thinks that is unduly restrictive. Mr. North would support this policy as regards to operating, but he doesn’t think that principal should every be invaded for purposes of paying the bills. At the balance sheet level, there is no problem swapping one kind
of asset for another. Mr. Mason feels there should be a standard policy as to how to treat projects like this.
Mr. Askham said he feels a sub-committee is needed to figure out what we get, how we do the accounting, and how do you define income and what it is to be spent on. Ms. Fitzpatrick said
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this Board should make suggestions to the Board of Selectman and sub-committee.
Mr. Askham went through some of the items on the Policies and Procedures to Govern the “Eno Memorial Hall Fund” memo. After further discussion, Mr. North and Mr. Mason agreed to be on the sub-committee and will contact the First Selectman to get members of that Board to join the sub-committee. This sub-committee will report back to the Board of Finance in two months.
9. SEWER TREATMENT PLANT PROJECT UPDATE
Mr. Wrabel said the plans and specifications were sent to the D.E.P. on June 30th. He said the State Bond Commission has not met yet. A letter was drafted and going to the town attorney that will be sent to the Commissioner of the D.E.P. requesting a four month extension because our consent order said we should be under construction by November 30th and we don’t have the money to do that. Mr. Wrabel said $1,350,000 was already spent out of the reserve fund. The total cost estimate is $25,000,000 - $26,000,000.
Mr. Askham asked what is needed next. Mr. Wrabel said they need approval from the State Bond Commission and D.E.P. plan and specifications approval. Mr. Wrabel said the system is 27 years old and that is part of the sludge problem we are having now.
Mr. Wrabel said if the State Bonding Commission approves this, we will get reimbursed the money for this project and they will approve the construction at the same time. Then there is a 2% loan for the balance. Then we will go out to bid on this project. Mr. Kane said there are always capital projects out there that aren’t financed.
This project will be discussed at the next Board of Finance meeting.
10. ADJOURNMENT
Mr. Wade made motion to adjourn at 6:45 P.M. The motion was seconded by Mr. North and carried unanimously.
______________________________ _____________________________
Peter Askham, Acting Chairman Kathy Radocchio, Clerk
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