BOARD OF FINANCE
MAY 15, 2007
REGULAR MEETING
1. CALL TO ORDER
The Regular meeting of the Board of Finance was called to order at 8:31 P.M. in the Henry James Junior High School cafeteria. The following members were present: Chairman Paul Henault, Peter Askham, Nicholas Mason, and Anita Mielert. Members Candace Fitzpatrick and Kevin North were absent. Also present were Board of Education Business Manager David Holden, Finance Director/Treasurer Kevin Kane, Deputy Selectman Joel Mandell and other interested parties.
2. APPROVE MINUTES
Ms. Mielert made a motion to approve the minutes of the March 13, 2007 Regular Meeting, the April 3, 2007 Public Hearing and the April 3, 2007 Special Meeting. Mr. Askham seconded the motion. Mr. Mason requested an edit to page 6 of the March 13, 2007 minutes and Mr. Askham asked that the April 3, 2007 Special Meeting meetings be corrected on page 5. The motion to approve the minutes as amended passed 4-0.
3. SUSPENSE LIST
Mr. Henault referred to the Suspense List supplied by Tax Collector, Colleen O'Connor, in which she asked the BOF for approval to write off $56,058.10 of uncollected taxes.
Mr. Kane indicated that this amount consists primarily of motor vehicles and personal property of people who have moved out of town. Mr. Askham asked for clarification from the Tax Collector as to why people who have moved out of state appear on multiple years' lists. Mr. Henault verified with Mr. Kane that internet searches are being done by the Tax Department to try and locate these individuals.
Mr. Mason asked Mr. Kane to ascertain what the collection rate is for the next meeting. Ms. Mielert asked that the Board be provided with a report listing all delinquent taxes at fiscal year-end as well as the procedures being used to try and collect them. She noted that the suspense list is not a complete listing as total outstanding taxes approximate $250,000-$500,000.
Mr. Mason made a motion to approve the amount of $56,068.10 in the annual suspense list as submitted by Colleen O'Connor, Tax Collector. The motion was seconded by Mr. Askham. The motion passed 4-0.
4. FINANCIAL REPORTS
Board of Education
Mr. Holden provided the Board with a "Financial Report/Third Quarter Analysis" dated April 10, 2007 (Addendum I) which showed a projected surplus of $17,063 with an additional $31,486 in tuition revenues due to three more tuition paying students than were originally projected. Mr. Henault asked about fuel projections and Mr. Holden indicated that they have locked in a rate of $2.07 per gallon for next year. Ms. Mielert commented on the favorable results for the electricity budget line item and Mr. Holden stated that savings have been realized due to the purchase of electricity generation at a fixed price via a consortium of 70 towns, a program in conjunction with CL&P in which schools were re-lamped to have more energy efficient bulbs, ballasts and fixtures, as well as the utilization of a software program that
runs in the background and shuts off computers after hours.
Mr. Henault asked about the current enrollment and Mr. Holden stated that it is currently 4,956. Mr. Henault noted that the Board of Education subcommittee that is involved with contract discussions wants to meet with Board of Finance volunteers and stated that Mr. North and Mr. Askham had indicated a willingness to do so based on time availability. Mr. Henault stated that such a meeting could happen whenever the Board of Education feels that they are ready.
Board of Selectmen
Mr. Kane provided the Board with a "Projected Fiscal Year 2006/007 Financial Results" dated May 14, 2007 (Addendum II). He noted that the only grant revenue missing from the projection is ECS. Mr. Kane stated that he anticipated that the Simsbury Farms fund would end the fiscal year with a deficit of $50,000-$100,000 as he could not see how it could break even if expenses continue to go up and golf revenue is consistently decreasing. He told the Board that he will most likely be recommending that a transfer be made later in the year to cover the deficit.
The Board had questions on the timing of Licenses and Permits revenue (which Mr. Kane noted was down from the previous year) in connection with all the large projects currently under discussion in Town. Mr. Kane replied that their questions need to be directed to the Building Department. Ms. Mielert noted that the Moody's report discussed these applications. Mr. Henault asked if the Moody's report could be placed on the Town's website along with the annual report.
Mr. Kane noted that additional upcoming expenditures include revaluation, the Simsbury Farms deficit, the effects of recently settled bargaining unit contracts, and approximately $50,000 of soft dollar costs (bond counsel, filing fees, and legal fees) associated with the Ethel Walker land purchase which were not included in the purchase amount.
Mr. Mason asked what the projected Undesignated Fund Balance would be at fiscal year-end and Mr. Kane said he thought it would be between $6.9 million and $7.2 conservatively. Mr. Mason asked when the next bonding would happen and Mr. Kane stated that there would most likely be a small bond issue in the spring of 2008, depending on how the Tariffville School project progresses.
Ms. Mielert asked why the Undesignated Fund Balance in the Sewer Use Fund was so high and Mr. Kane explained that the treatment plant renovation project will officially close around October 2007. One year from then, the first payment will become due and will include accrued interest. The initial payment will be in the range of $1.2-$1.3 million and the expenditures budget thereafter will show a huge increase. Mr. Kane stated that the balance is where it should be and will be needed for future obligations.
5. OPEB UPDATE
Mr. Kane said that the Board of Selectmen approved the ordinance and trust document. He also stated that Mr. North, Ms. Fitzpatrick and Mr. Mason will be interviewing two firms on
May 25, 2007 that responded to the Request for Proposal for investment consultants.
Mr. Kane noted he has received many calls recently from other communities, some of which are in Massachusetts and Rhode Island, who were referred to him by Milliman; since Simsbury is so far ahead in the process, other communities are interested in getting input. Mr. Askham noted that the bond report make positive references to Simsbury's progress in this area.
6. REFERENDUM RESULTS
Mr. Henault stated that there were 976 total votes, which represents only 6% of registered voters, and that all budgets passed. He thought perhaps there was no big controversy to bring people out.
Mr. Henault referred to the mill rate worksheet which showed a proposed 2.79% increase in the mill rate and recognized an estimated $1 million of funding from the State, although that amount is uncertain at this time. He also noted that the Fire District approved an increase from 1.15% to 1.3%, which would yield a new mill rate of 38.2.
Mr. Askham reiterated that $627,000 in technology improvements in the Board of Education's budget is contingent on the actual receipt of $1 million and that, if $1 million is ultimately not received, then the amount actually spent will be adjusted downward. Mr. Mason concurred that Dr. Ullman had indicated that the Board of Education would work with the Board of Finance relative to ECS funding received. Ms. Mielert commented that the amount to be received will be known before it is spent.
7. MILL RATE CONSIDERATION
Mr. Mason made a motion to set the mill rate at 36.9 mils for the budget year 2007/08. Mr. Askham seconded the motion and it passed 4-0.
8. OTHER BUSINESS
Mr. Henault noted that copies of the new annual report are available and confirmed that all Board members present had their copies.
Ms. Mielert shared information she got from State Representative Linda Schofield relative to the budgets in flux. She said that computations indicated that the Governor's budget, which is based on an across-the- board 5.5% income tax as opposed to a 5% flat tax, would extract more from Simsbury residents as they have a lower per capita income than one might expect. The Democrats' budget is a graduated income tax ranging from 3% to almost 7%. Also, there is a proposal being considered to increase the property tax credit from $500 to $1,000.
Mr. Askham noted that there is a bill pending that could potentially exempt the State of Connecticut from complying with GASB accounting standards relative to the funding of OPEB obligations.
9. AJOURNMENT
Mr. Askham made a motion to adjourn the meeting at 9:35 PM. Mr. Mason seconded the motion and it passed 4-0.
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Paul Henault, Chairman Debra L. Sweeney, Clerk
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