Simsbury, CT - Board of Finance

The Regular Meeting of the Board of Finance was called to order at 8:32 P.M. in the Henry James Junior High School cafeteria. The following members were present: Chairman Paul Henault, Peter Askham, Candace Fitzpatrick, Nicholas Mason, Kevin North and Michael Wade. Also present were Finance Director/Treasurer Kevin Kane, Board of Education Business Manager David Holden and other interested parties

Mr. Henault referred to Mr. Kane's May 18, 2004 memo, "General Assembly Adopted Budget". In that the General Assembly adopted budget is higher than the Town of Simsbury's adopted revenue budget by $510,105, this fact can be taken into consideration when deciding whether or not to use Surplus in setting the mill rate. Mr. Mason noted that this was money the Town hadn't counted on.

Mr. North moved that the Board of Finance adopt a mill rate of 34 mills for the 04/05 fiscal year in anticipation of the positive revenue variance of $510,105 which has been reported to us by State action. The motion was seconded by Ms. Fitzpatrick

Mr. Mason questioned whether some of the additional revenue might be used to "ease the pain" of the BOE budget. Mr. Kane stated that any discussion of that would have to wait until they are into the next fiscal year. He added that the BOE would have to come before the BOS after 6/30/04 and ask for a budget transfer from Reserves.

Mr. Mason commented on the difficult budget process and wondered if it could be changed to work better in the future. Mr. Henault commented that the difficulty may not be from the budget process but from the current economic factors driving it. He mused that the economic factors will still be here even if the process is streamlined. Ms. Fitzpatrick stated that she thinks they address the process as efficiently as anybody can but that it's hard that we can't do as much as we'd like to do because we don't have the revenue.

Mr. Mason stated that he attended parts of the last two Public Building Committee meetings. They looked at the various bids for the Eno contract, and there was some question about the capacity of the low bidder to perform, so they wanted to go back and take a look at that.

Mr. North reminded the Board that this project was bid with two phases: the base phase was to air condition the auditorium and an additional phase, approaching $900,000, for air conditioning the rest of the building. At this point, only the first phase has been awarded, and the price for the second phase is good for another six months. Mr. North summarized that if there is any predisposition for ever completing the second phase, it should be done while the building is busted open for the first phase. He stated that he thinks there is a threshold decision to do the entire project now or not ever do the entire project. That's the practical question.

Mr. Mason stated that for the police dept. renovation they had seven bids, and, as with the Eno project, there were some concerns about the qualifications, the references, the capacity of the low bidder to perform. He added that he learned from Mr. Holden that the PBC has accepted the two low bidders for these two projects.

Mr. Mason stated that the PBC has been trying to deal with all the change orders and the problem they're having with one of the contractors, Ferguson, in terms of his ability to perform under contract. He added that he sensed a fair amount of dissention on the PBC about whether they're fulfilling their fiduciary responsibility. Several people on the committee feel that they should be holding either O&G or Fletcher-Thompson responsible for some of the problems that they are having. There is some question as to whether there is enough contingency left in the budget to take care of the project or whether there will be a need to add something more. Mr. Mason thinks that the PBC is going to have a sub-committee who will look at the long list of change orders and prioritize.

Mr. Henault wondered why O&G, as manager of this project, would come to Simsbury to look for additional funding to take care of the problem with Ferguson. Mr. Mason stated that the PBC is trying to take a hard line in terms of where the responsibilities lie on the way some of the change orders are being managed. He added that there are a number of things that were not bid in the contract or are outside of the contract that need to be done now and, therefore, there is need for more money. Mr. Holden commented on categorizing the list of change orders, one of which is the errors and omissions for what the architect missed. Mr. Henault stated that he thinks, based on the contract signed with the architect which is more than generous, the architect can fund this. If not, the Town might want to go out and fund an attorney. He added that he would rather spend money for that than deal with people who missed certain things in the project that should be obvious to anybody.

Mr. North stated that a $360,000 claim for drains in the science labs is the largest change order on the job. He added that the Town needs to steel itself for a very difficult negotiation or litigation on this claim. Mr. North stated that members of the PBC are very concerned because we haven't yet gotten to the difficult part of the project. New construction is always less difficult and less likely to have surprises than renovations.

Mr. Henault asked how Fletcher-Thompson can come with a straight face to the PBC and say we need you to fund this for Ferguson because we forgot to add drains to the science floor. Mr. Askham recalled that that piece of the drawing held up the bidding. He added that obviously something was hastily done.

Mr. Holden handed out a corrected 2003-04 budget analysis through March 31, 2004, which reflected a projected deficit of $216,384. He stated that assuming favorable action relative to the excess cost grant for Special Education on the part of the BOF, it would leave roughly an $8,000 surplus. He added that the driving factor remains tuition, other than public schools.

Mr. Kane stated that expenses and revenues are both down for the Simsbury Farms Special Revenue Fund, and he felt that it will be a pretty much break-even year. He noted that play is down at Simsbury Farms and other golf courses as well.

He reported that, on the revenue side, he is expecting a surplus of around $900,000. He noted one concern: the self-insurance fund is tracking toward a $200,000 deficit. Mr. Henault suggested covering the shortfall on a pro-rata basis - the BOE would pay more since the bulk of the shortfall is theirs. Mr. Holden stressed that it shouldn't be targeted at the BOE, that this is a combined plan with combined claims. Mr. Henault stated that the employees' premium contributions need to be higher.

Ms. Fitzpatrick moved that the Board of Finance authorize the establishment of the "Board of Education Program Fund" as outlined in the April 28, 2004, memo from Rich Hogan, Chairman of the Board of Education (Addendum II). The motion was seconded by Mr. Wade.

In response to questioning, Mr. Holden answered that revenue coming in would be controlled at the individual building level while the expenditures will be out of his office. Mr. Henault asked how much money is anticipated to be running through this during the year. Mr. Holden answered that it would be no more than $50,000. He added that this could expand.

Mr. North moved that the Board of Finance approve the Board of Education's request for a supplemental appropriation to the 2003-04 Board of Education operating budget in the amount of $269,785 to be funded wholly by a State special education excess cost grant per Section 908(a) of the Town of Simsbury Charter. The motion was seconded by Mr. Askham and carried unanimously.

Mr. Henault introduced the next request for a supplemental appropriation with respect to Simsbury Land Trust. Ms. Fitzpatrick offered to give informational background but excused herself from any objective discussion because of her involvement in this project. She explained that the Land Trust is requesting $100,000 from the Town for the 177.6 acre phase one of the Tulmeadow Farm acquisition. Mr. Askham confirmed with Ms. Fitzpatrick that the Land Trust wants to raise $1 million in pledges and that the Town's $100,000 would be a piece of that. Ms. Fitzpatrick further explained that they have applied for a grant from the USDA for a little over $1 million for phase one.

Mr. North suggested that the Town contribution be contingent on successful fundraising and not be considered just as a contribution to the Land Trust. Ms. Fitzpatrick stressed that the Land Trust needs a firm commitment as soon as possible so that the USDA sees that they are almost to their $1 million. She added that the money will not be required until closing, however, what is required is affirmative action by the BOF to show the USDA that those funds are in place when needed. She stated that she thinks the USDA is going to tell them by June 1^st whether they have approved their request for the grant.

Mr. Wade made a motion: Be it hereby resolved that the Board of Finance, pursuant to Section 908 (c) of the Charter of the Town of Simsbury, approve a supplemental appropriation from undesignated general fund, fund balance in the amount of $100,000 to be granted to the Simsbury Land Trust contingent upon the Land Trust obtaining sufficient funding to acquire the development rights to the Tulmeadow Property. The motion was seconded by Mr. North and passed with five (5) yes votes and with Ms. Fitzpatrick abstaining.

Mr. Henault stated that it looks like some members of the public are moving forward with a petition for putting a field, track and possible lights at the high school. It is focusing primarily on overruling the negative referral from Planning.

Mr. Henault stated that the Library Board want an idea of how to write their request for a grant. He stated that the library project would blow the 7% Debt Policy by about $7 million. Mr. Kane handed out copies of his memo, "Affordability On New Capital Projects", and the attached spreadsheets which were discussed.

Mr. North stated that he feels it is up to the BOS and BOE to present their projects with their priorities and that the BOF shouldn't be entering into discussions about specific projects until all of them are presented and presented with priorities assigned. Mr. Henault asked what guidance they should give the Library about writing their grant, and Mr. North answered that they are asking the wrong Board. Mr. Kane disagreed.

Ms. Fitzpatrick summarized that the consensus is that they are not going to speak to individual projects, the capital that is available by projection is $7.3 million and the Library has to go through the BOS and the Land Use Board. Mr. Kane reiterated that the Library needs guidance. He added that there will be a real log jam next year if the BOF doesn't get involved now.

After much discussion, Mr. Mason stated the Library Board need to get their ducks in order, to get the approvals of various Boards and appraise everybody of what their desires are. It was suggested by two members of two different commissions that they put together a joint meeting (which he believes is what's going to happen Friday) to lay out what they want to do and see if they have a consensus from the Board Chairmen as to whether they should go ahead.

In response to Mr. Henault's question, Mr. Holden stated that the BOE will be starting their teacher contract negotiations in August but are required to meet with the BOF 30 days prior to the start of negotiations. Mr. Henault asked if there could be a member of the BOF on the negotiating committee, and Mr. Holden cautioned that a BOF member can be an observer only and not a member of the committee. Mr. Henault stated that he would like a member of the BOF to be an observer for the entire process.

Mr. Holden asked if the BOF's June 15^th meeting would be a convenient time to go into executive session with the BOE. Mr. Henault suggested having a Special meeting in June with only that one item on the agenda. Mr. Holden stated that he would get back to Mr. Henault with some potential dates.

Mr. Askham noted that the BOF set a cap the last two years and that it's worthwhile considering a cap again. Mr. North stated that he would echo Mr. Askham's sentiments and wondered if they would want to consider a multi-year cap. Mr. Askham asked if the BOE is attempting to hire a professional negotiator. Mr. Holden stated that that will be part of their agenda at their Thursday meeting.