Simsbury, CT - July 18, 2006

The regular meeting of the Board of Finance was called to order to 6:36 p.m. in the Media Center at Simsbury High School. The following members were present: Chairman Paul Henault, Peter Askham, Candace Fitzpatrick, Nicholas Mason, Anita Mielert and Kevin North. Also in attendance were John Hampton, Board of Selectmen, Greg Piecuch of the Planning Commission and other interested parties.

Mr. Henault noted that an Executive Session would not be held as indicated on the agenda because the Town Attorney was unavailable due to illness. He hopes to schedule a separate session for those discussion items that were to be included in the Executive Session.

Mr. Mason pointed out that there were several action items noted in the minutes and suggested that an action list again be produced to address these open issues. Mr. Henault pointed out that the Board has previously decided to do away the action list.

Mr. North made a motion to favorably consider the extension of the appropriation to update the Town Plan of Conservation and Development. Mr. Mason seconded the motion. He noted that there had been previous discussion at December’s Board of Finance meeting regarding CNR appropriations, but the items had been tabled and not reconsidered. It is his opinion that the re-instatement of the action list may have helped in this instance. Mr. Mason reiterated the need for an action list.

Mr. Henault asked if there was any discussion on the motion on the table. Ms. Mielert inquired about the authorization of the extension because CNR appropriations are valid for 2 years. Mr. Henault replied that approval would extend the appropriation beyond the 2 year limit.

Greg Piecuch of the Planning Commission stated that he expected the Town Plan to be completed by the fall, and that graphics and printing might continue to March, 2007, but certainly not beyond that. The Board of Selectmen retained a consultant to assist with the Plan of Development, but the possible conflict of interest of the consultant has delayed the work. Mr. Piecuch hopes the Plan of Development will be completed by the end of the calendar year.

Mr. Henault referred to the memo from Kevin Kane provided to Board members and said that its distribution was informational only as a demonstration of possible debt service scenarios if the Town purchased the development rights to the Ethel Walker property and that discussion could reserved for a later meeting.

Mr. Mason suggested that a subcommittee be formed to look at possible ways to provide financing for the purchase of the development rights. Mr. Henault responded that the Board was a small enough to discuss the topic as a group and that there was a relatively tight time schedule if the project is to be put to a public vote on the November ballot. Mr. North noted that bond language would have to be prepared before the project was put before the voters. Ms. Mielert said that it might not be necessary to bond the entire amount in that reserves would grow over the next 6 months and presently the Town has more funds in reserves than the rating agencies require. Mr. Henault responded that even with monies from the reserves, bonding would still be necessary. The memo from the Town Treasurer assumes bonding in its analysis.

Mr. Henault asked the Board members to consider how the purchase of the development rights to Ethel Walker property would fit into the 6 Year Capital Plan, saying it would impact all other capital projects until 2010 including the expansion of Latimer Lane School, the Tootin’ Hills roof/HVAC project and Simsbury Meadows. He suggested scheduling a joint meeting with the Board of Selectmen in the near future to discuss the issue.

Ms. Fitzpatrick reminded the Board that there has not been full discussion of this issue as yet, and all information has not been received. She requested that the Board abide by the process put into place to consider its options. Mr. Mason said that part of that process would be a discussion of the Town’s reserves policy and its debt policy. Mr. Henault stated that Mr. Kane’s analysis shows a reasonable surplus to maintain the Town’s bond rating and further, no purchase and sale agreement exists as yet.

Ms. Mielert asked how the fund could be terminated if it became necessary. Mr. Askam replied that the establishment of the fund was an intermediate step only. Ms. Fitzpatrick stated that there were legal implications to the Town setting up the fund and requested an opinion from the auditors on the timing of the setting up the fund now. Mr. North responded that the establishment of the fund was only to get the dollars invested until the Trust could be formally set-up. Mr. Askam clarified the issue, saying the Trust Fund is the trigger mechanism for the timing issue and he would confirm this with the auditors. Mr. Mason said that it would be helpful to have a meeting with all three Boards (Selectmen, Education and Finance) to discuss future steps that will be necessary.

Ms. Mielert asked about the impact this fund will have on union negotiations. Mr. Henault replied that this was a required action, not an elective one. He said that Simsbury is ahead of most towns on this issue. He felt the unions would view this correctly as a huge liability for the towns to address and that towns will have to compensate by trimming expenditures or raising taxes. Mr. North reiterated that failure to set up this fund would result in a large liability on the Town’s balance sheet. Mr. Mason said towns can “pay as you go,” but all will eventually pay.

A revised memo from Kevin Kane dated July 17, 2006 requesting budget transfers for fiscal year 2005-06 was distributed to Board members with changes from the July 13, 2006 memo on the same topic shown in bold (Addendum I). These transfers are requested to eliminate deficits in individual department budgets. Mr. Kane has also projected that the Board of Selectmen would end the year with a $25,000 surplus on the expense side.

Mr. Mason noted that the $801,278 transfer request was double the previous year’s amount and asked if the budget process was skewed. He felt that the Town had over-budgeted in compensation areas, allowing for the vacancy of the Town Planner and Public Works Director positions, and under-budgeted on other issues such as Meadowood. Mr. Henault responded that the increase in transfer amount was largely to due to a workmen’s compensation lawsuit against the Town which was lost. He said that while the Board of Education does not have to detail budget transfers, the Board of Selectmen is required to do so. If the Board of Finance is not able to move money in the operating budget at the end of the fiscal year, then the funds would need to come from reserves.

Ms. Mielert inquired about the status of the Simsbury Farms/Special Programs Fund. Mr. Kane said that the Special Revenue Fund was very tight and could finish the year with either a deficit or a surplus on the revenue side. Mr. Henault stated that the poor weather in June had impacted revenues at the Farms.

Mr. Mason stated that updated reports have not been received on Meadowood, Eno Farms and Simsbury Farms. Mr. Henault stated that the Board of Finance does not have impact on the Eno Farms issue; this is in the realm of the First Selectmen. The fiscal year books are closing at Simsbury Farms and more information is expected.