BOARD OF FINANCE
AUGUST 19, 2003
REGULAR MEETING
CALL TO ORDER
The Regular Meeting of the Board of Finance was called to order at 6:00 P.M. in the Main Meeting Room at the Simsbury Town Hall. The following members were present: Chairman Paul Henault, Peter Askham, Candace Fitzpatrick, Nicholas Mason and Kevin North. Also present were Board of Education Business Manager David Holden and other interested parties.
APPROVE MINUTES
July 22, 2003 Special Meeting
Ms. Fitzpatrick moved to approve the minutes from the July 22, 2003, Regular meeting. The motion was seconded by Mr. Mason and passed with four (4) Yes votes and with Mr. Henault abstaining.
UPDATE ON SELF-INSURANCE FUND
The Board members discussed Kevin Kane's 8/12/03 memo, "Self-Insurance Fund - Fiscal Year 2002/03 Financial Results". In it, Mr. Kane suggested that the BOF consider approving a transfer in an amount up to $576,383 from RESERVES from fiscal year 2002/03.
Mr. Askham commented that it is good news that there is a positive balance (Net Income of $83,413.54) for the year. Mr. North asked if reductions in the contributions were taken in previous years with positive balances. Mr. Holden answered that yes, there were premium holidays given in those years. Mr. North suggested not taking premium holidays so that the Reserves, over time, are adequate to compensate for negative years. He suggested that, to build up Reserves, they be funded out of the Operating Budgets, not out of special transfers. Ms. Fitzpatrick suggested that the BOF take a careful look in the future before authorizing premium holidays.
Mr. Henault asked Mr. Holden about the move of employees into different plans. Mr. Holden answered that when new contracts are negotiated, they are either eliminating the CIGNA Indemnity plan or stating that any new employee hired by the BOE would have the option of only the CIGNA PPO or the Connecticare HMO. He added that significant changes have been made in the prescription plans associated with all three plans.
BUDGET TRANSFER FROM RESERVES FOR FISCAL YEAR 2002/03
SELF-INSURANCE FUND
Mr. Henault recommended not approving the transfer at this point. He added that if Mr. Kane feels it is critical, the Board can revisit it. Mr. Mason stated that he felt it doesn't make any difference whether or not they take action at this time. Mr. North asked, in future budgeting years, is it within the BOF's discretion to impose upon the BOE and BOS respectively a contribution, some kind of special surcharge, for some period of time, to rebuild Reserves. Mr. Mason noted that another alternative would be to increase the premium levels to the employees.
The Board members' consensus was that they did not need to take action on this transfer tonight.
Ms. Fitzpatrick moved to address agenda item #5 next. The motion was seconded by Mr. Mason and carried unanimously.
RESULTS ON THE PRICING OF THE HIGH SCHOOL BOND ISSUE
The Board discussed Mr. Kane's 8/12/03 memo, "Results on the Pricing of the High School Bond Issue" (Addendum I). Mr. Henault summarized that the bond was issued and they got a very good interest rate on it, 3.74%. He added that they went with UBS Financial Services, Inc., a very good, reputable firm.
HIGH SCHOOL PROJECT UPDATE
Mr. Holden stated that although construction is underway, they are ready for the opening of school. He added that the work is on schedule with what had been planned. He outlined areas of construction, their purpose and their status. He noted that they are pleased so far with the management of the project. He also stated that periodic progress payment requests are going in regularly to the State Dept. of Ed and that they received six reimbursements so far.
Mr. Mason asked if there had been any change orders yet. Mr. Holden answered that there have been some relatively minor change orders.
Mr. Henault asked Mr. North to comment since he and Mr. Mason have been sitting in on the Public Building Committee meetings. He agreed with Mr. Holden that the O&G team is very impressive in their apparent comprehensive knowledge and oversight of the project. As of the last PBC meeting, they reported that all contracts had been signed.
Mr. Holden stated that once school begins, they are not anticipating any construction workers in the building itself. All of their work will be exterior to the operations of the school. He added that there will be no construction contract activity in the areas of student transportation during times when students will be arriving or departing.
Mr. North offered unrelated information from his dealings with the PBC. He noted that the design consultant for the Eno A/C project gave a very comprehensive informational report. He added that they seem to be a very good choice in that their work is very comprehensive and they are very sensitive to the historic nature of the building and therefore sensitive to the practicality of how the project will be accomplished. Mr. North stated that they are very much in the design stages. He added that there seems to be a bias in doing it in stages. Mr. Henault agreed that since it is pretty much through the cooling season already, it doesn't make sense to do it that way. Mr. North concurred.
MOODY'S RATING
Mr. Mason stated that he found the Moody's report (Addendum II) very interesting. Mr. Henault commented that the Moody's analysts were quite pleased with the Town's adopted Debt Policy.
ENO MEMORIAL FUND
Mr. Henault referred to Mr. Kane's 8/8/03 memo, "Funding Sources Available for Air-Conditioning for Eno Memorial Hall" (Addendum III). He referred to the footnote and asked if any of the members have had a meeting with the First Selectman to agree on a policy for expending funds. Mr. Mason stated that he had met with Mr. North. Mr. North added that they had agreed on the questions that they wanted to have come up in the sub-committee meeting. Mr. North also contacted the First Selectman and indicated that they wanted two members from their Board with a goal of coming together in agreement on a policy that they can go back and recommend to their respective Boards. He also got a copy of the State Statute regarding the investment of funds. He noted that the State Statute
essentially says that these are "Money Market Funds", and that speaks all the more to having a thoughtful policy. He added that he is waiting to hear whom the First Selectman appoints to be on the sub-committee.
INVESTMENT RETURNS ON GOVERNMENTAL PENSION PLANS
Mr. Henault referred to the list of investment return assumptions included in the members' packets. The list contained 25 communities and their investment assumptions ranging from a low of 6.40% up to a high of 8.50%. Mr. North stated that he appreciates having the list, but it doesn't change his opinion that anything higher than 7.5% is imprudent. Ms. Fitzpatrick asked if they should ask the Insurance and Pension Advisory Committee to set up a small group to meet with somebody from the BOF. Mr. Henault suggested having a workshop. He stated that he would work with Mr. Kane to get some dates and get it set up and that this is already on the Open Action Items list.
OTHER BUSINESS
Mr. Henault introduced Sarah Floroski, the new Executive Director of the Main Street Partnership. She reviewed her marketing and public relations background. She stated that the MSP Board is represented by a variety of residents throughout Simsbury including some business owners. The MSP is a non-profit organization that is looking to revitalize downtown. They are working with the BOS and will be doing a zip code analysis survey in September to find out where people who shop in Simsbury live. This will enable them to do some market analysis and target the areas that are missing. The MSP are organizing the "Our Town" tent at Septemberfest again. They also have a downtown universal gift certificate program to encourage people to shop
locally. It's one gift certificate that currently is good in over 30 restaurants and stores and is being sold at Simsbury Bank. Ms. Floroski added that, due to their budget crisis, they are doing a fund-raising auction on November 15th at Simsbury Bank. The MSP will be doing a community calendar update on the Town website eventually. They are also doing an inventory of available commercial retail space which will be posted on the Town website.
Ms. Fitzpatrick asked Mr. Holden to give an update on the year-end budget regarding the purchase of school buses. Mr. Holden answered that the BOE purchased two school buses with a combination of Capital Non-Recurring funds that had been unexpended from previous school bus purchases plus funds within the BOE Operating Budget. Ms. Fitzpatrick stated that the BOF was very glad that that's where the unexpended funds went.
Mr. Askham commended Mr. Holden on controlling the BOE expenditures quite well. They were able to solve some capital problems and still had a surplus.
Mr. Mason asked Mr. Holden the status of staffing for the start of the school year. Mr. Holden stated that they are still working on filling some positions but that the bulk of the staffing is complete. In response to Mr. Askham's question, Mr. Holden stated that they had more employees retire than they had planned and that this was a major plus for the BOE.
Mr. Henault stated that they still haven't heard from the State authorizing the Sewer Treatment Plant Project. The Town has asked for an extension since the State is not providing the funds to start.
There was discussion as to whether the September 16th meeting could be changed since Mr. Henault has to be out of town on business. Everyone else would be able to make a meeting on September 23rd, and that would be preferred by Ms. Fitzpatrick. Mr. Henault, however, will be out of town on that day as well. The meeting date was kept as 9/16, but the clerk was asked to call Mr. Wade the next day to confirm he will be available on 9/16. If not, ask if he would be able to make a meeting on 9/23. If he would be available on 9/23 but not 9/16, then Mr. Henault will consider changing the meeting date to 9/23.
Mr. North reminded the members of the Open Action Item concerning the street lights. He thought that either the Town Engineer or Public Works Director would be at this meeting to report on it. He requested that this be an agenda item for the next BOF meeting.
ADJOURNMENT
Mr. North moved to adjourn the meeting at 6:56 P.M. The motion was seconded by Ms. Fitzpatrick and carried unanimously.
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Paul W. Henault, Chairman Roxanne Farrell, Clerk
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