Simsbury, CT - June 20, 2006

The Regular meeting of the Board of Finance was called to order at 6:33 P.M. in the Conference Room D-172 at Simsbury High School. The following members were present: Chairman Paul Henault, Peter Askham, Candace Fitzpatrick, Nicholas Mason, Anita Mielert and Kevin North. Finance Director/Treasurer Kevin Kane joined the meeting at 8:30 PM..

Mr. Mason questioned the 24.8% national average for reserves figure used in the Moody’s Investors memo. Mr. Askham stated that, although it does seem out of line, perhaps Mr. Kane could elaborate, but that it was the factual number that the Board had been given.

Mr. Mason also asked if Mr. Henault had addressed with Mr. Herlihy and Mr. Heagney the issue of recovering past monies lost due to the calculation error in the ECS grant that was recently discovered, as indicated on page 23 of the minutes. Mr. Henault replied that he had and that he will allow Mr. Heagney to address that issue at the appropriate time.

Ms. Fitzpatrick made a motion to go into Executive Session to discuss settlement of a pending claim and the selection and purchase of a site by political subdivision and Mr. North seconded the motion. The motion passed unanimously.

Mr. Kane indicated that this amount consists primarily of motor vehicles and personal property of people who have moved out of town. Mr. Henault noted that not much can be done about defunct businesses, but asked what action, if any, was being taken to locate these individuals, such as internet search. Mr. Kane replied that there is a system in the State in which a search can be done for a nominal fee. If forwarding information is obtained, then Ms. O’Connor does follow up.

Ms. Fitzpatrick made a motion to approve the amount of $44,407.98 in the annual suspense list as submitted by Colleen O’Connor, Tax Collector. The motion was seconded by Mr. North. The motion passed unanimously.

Mr. Mason noted that these were projections and not actual vs. budget statements. He stated that he was hoping to see the actual vs. quarterly statements on a quarterly basis, as had been discussed at previous meetings. He noted that the last statement he had seen like that was for the month of December. Mr. Kane indicated that detailed statements had not been presented in the interest of time, given that the Board has been involved with the budget process of late.

Mr. Henault stated that he felt the statements as submitted are sufficient and that more detailed reports could be expected at fiscal year end. Mr. Kane stated that the reports were intended to give an overall review to show that there are no funds that are in trouble, although the Simsbury Farms fund will be close and may show a deficit.

Mr. Henault referred to the memo from the Assistant Treasurer/Assistant Finance Director (Addendum III) dated June 16, 2006 requesting the establishment of a new special revenue fund for tracking funds retained by the Town in connection with land record document recording fees collected by the Town Clerk under the Public Act #05-228, Farm Land Preservation Act.

Mr. Kane indicated that, although not a material amount, the amount is supposed to be set aside for Town of Simsbury projects that qualify for Local Capital Improvement Program (LOCIP) grants and that feasibly $20,000 annually could be generated and that these funds could accumulate over time and, ultimately, be spent on capital projects.

Mr. Askham asked if there were restrictions on the use of the funds and if it was specifically for land preservation . Mr. North stated that the LOCIP Act specifies that the funds can only be spent on certain things. Ms. Mielert stated that the $26 (of the $30 total fee) that is retained by the State is for land preservation. She also noted that statewide this act is now being referred to as the “Community Investment Act” and that the term “Farmland Preservation Act” is no longer being used. The Act states four purposes, of which farmland preservation is the first.

Mr. Henault indicated that Mr. Askham, Mr. Mason and Mr. Kane had all attended a meeting regarding GASB 43/45 and referred to Mr. Mason’s memo dated June 12, 2006 (Addendum IV). Mr. Askham stated that Mr. Mason’s memo is basically an action list of what is to happen next now that some things have been clarified. He noted that the $2.460 million figure that was being focused on as the amount needed to fund an OPEB trust can be reduced by the $1.310 projected benefit amount, resulting in a net impact of $1.150 on the Town budget..

Mr. Henault wanted to know if the most up-to-date mortality table was being used as he believed there is one more recent that the 1994 table being used by the actuaries in their calculations. The newer table pushes the mortality age out, which extends the liability.

Mr. Mason noted that changing any of the actuarial assumptions being used can make the accrued liability number go all over the place, but that the key number for the Board’s purposes at this time are $2.46 million less the $1.310 million projected pay out, as it is a good deal less than what had been previously discussed. Mr. Askham also noted that timing and the interest factor can also heavily impact the number.

Mr. Askham stated that what is most important at this point is “the process” and who has to do what. First, there is now legislation in place that gives the authority to set up a trust and that the actuary is looking into lining the Town of Simsbury up with a few other towns in connection with developing prototype trust documents. Mr. Askham stated that there should be a trust set up by January 2007 or at least by the end of the fiscal year. Then the funds need to be transferred and a decision needs to be made as to who is going to control the trust. Mr. Mason suggested that there needs to be a joint meeting with the Board of Education, the Board of Finance and the Board of Selectmen. Mr. Henault thought that the heads of the unions should be made aware of what is going on.

Mr. Askham stated that there needs to be an oversight committee established, similar to the Pension Committee. He also wants to verify with the auditors that the adoption of GASB 43 will not result in a negative footnote due to an unfunded liability, such as could result with the adoption of GASB 45.

Mr. Henault commend the efforts of Mr. Askham, Mr. Mason and Mr. Kane for helping to clarify this issue. Mr. Mason asked that Mr. Hogan and Mr. Vincent be contacted to schedule a joint board meeting. Mr. Askham asked that Mr. Kane set up a timeline of tasks to be performed. Ms. Fitzpatrick confirmed with Mr. Askham that he would check on the mortality table question.