Simsbury, CT - Board of Finance

The Regular Meeting of the Board of Finance was called to order at 6:00 P.M. in Conference Room D-172 at Simsbury High School. The following members were present: Chairman Paul Henault, Peter Askham, Candace Fitzpatrick, Nicholas Mason, and Kevin North. Member Anita Mielert was absent. Also in attendance were: Finance Director/Treasurer Kevin Kane; Town Assessor David Gardner; First Selectman, Thomas Vincent; Director of Administrative Services Brandon Robertson; Recreation Director Gerry Toner; Library Director Susan Bullock, Town Engineer Richard Sawitzke, Chief of Police Peter Ingvertsen; Director of Community Planning Hiram Peck and other interested parties.

Mr. Henault referred to a letter to the Board of Selectmen from the Simsbury Land Trust dated December 4, 2006 (Addendum I). Mr. Kane indicated that the Board of Selectmen had approved the request made in the letter at their February 12^th meeting. He stated that the $100,000 being requested is similar to previous transactions in which the Land Trust has solicited contributions that comprise 87% of the purchase price and are requesting that the Town, as a Section 908(c) contribution, close the 13% gap of the land purchase price.

Mr. Henault recognized Dick Davis of the Simsbury Land Trust, who gave an overview of the proposed land purchase from Masters School, which is approximately 80 acres on the ridge on the west side of town. The land is south of the existing campus, just north of the playing fields. Mr. Davis explained that, in the proposed land purchase, the School retains the driveway, but the purchase includes permanent trail rights across the campus. Mr. Davis noted that the land is a well known trap rock ridge that is regarded by the DEP, Nature Conservancy and the biodiversity group as a statewide important property.

Mr. Henault asked if the closing date was firm and Mr. Davis stated that the School wants money in March and that the closing date is March 15^th. The Land Trust’s intent is to close and take back a purchase money mortgage for a couple of months until the State funds are received.

Mr. Henault asked if any of the acres were buildable and Mr. Davis replied that the School and the Land Trust both engaged consultants that did studies and came up with potentially 7-10 house lots. Mr. Davis stated that the School sold 38 acres to a developer in 1999 in the Hedgehog Lane area.

Mr. Henault confirmed with Mr. Davis that the appraiser used by the Land Trust was Hunter Associates and confirmed with Mr. Vincent that they had been used by the Town in the past. Mr. Henault asked if the Town has reviewed those appraisals and Mr. Davis stated that he would make them available. Mr. Henault thought they would be fairly reasonable considering their involvement with past purchases that the Board has had to review. Mr. Askham thought that it sounds like the School is being reasonable. Mr. Davis noted that the Land Trust also made the argument that the area is tough terrain and that not much can be built on it.

Mr. Mason asked if the School would retain any rights to the land. Mr. Davis stated that they currently own 148 acres and will retain half of that. The Land Trust would own the purchased land, which would be made available to the public, and have had discussions with the School regarding their ability to continue to use their cross country trail.

Mr. Henault asked if action was required by the Board this evening and Mr. Davis responded that the next Board of Finance meeting is only two days before their scheduled closing date and that the Land Trust must make their decision prior to that and would like to know if the Town contribution is an option before making any further decisions. Mr. Henault indicated that he was concerned that the Town had not yet reviewed the appraisals. Mr. North noted that, while he understood Mr. Henault’s concern, Hunter Associates is a credible organization and their client is the Land Trust, whose interest is more acute as their co-investment represents 87% of the proposed cost. Therefore, he did not feel that it was necessary for the Town to see the appraisal as it is not taking title to the property. Mr. North commended the Land Trust for bringing forth a proposal in which they have sought a very effective public/private relationship in that they have brought 87% of the purchase price to the table. Mr. Henault concurred.

Mr. Vincent presented the Board with the approved Board of Selectmen FY 08 Operating Budget and Six-Year Capital Improvement Plan (Addendum II). He noted that the proposed budget represented an increase over the prior year’s budget of $1,017,793, for a total of $17,716,439. He also noted that the Board of Finance allowed the required OPEB funding to be extracted when setting a spending guideline of 4.5%. The proposed budget, after extracting the required OPEB funding, represented an increase over the prior year’s budget of $717,793, for a total of $17,116,439, or a 4.5% increase. Mr. Vincent also noted that approximately 40.66% is attributable to an increase in salaries and wages, which represents an approximately 4.48% increase over the FY 06-07 budget. Relative to employee group insurance, he stated that the Benefits Consultant, Lindberg & Ripple, is projecting a 10% increase in the CIGNA PPO plan and a 10% increase in the Connecticare HMO plan. He noted that the proposed budget also includes a transfer out of $65,666 to the Simsbury Farms Fund, an overall increase in pension funding of 5.24% and an anticipated increase in energy costs of 10.11%.

Mr. Vincent also presented the debt service budget, four special revenue budgets (Sewer Use, Residential Rental Properties, Animal Control and Simsbury Farms), and appropriations for the Capital Non-Recurring Expenditures Fund. He noted that three of the special revenue funds adhere to the Board of Finance spending guideline of 4.5%; the Residential Rental Property fund has an increase of $4,695, or 8.18%. The Capital and Nonrecurring Fund included a $524,420 appropriation, with $365,000 of this expected to be charged back against the appropriate operating fund. CNR expense items included a copier, a technology needs assessment report, portable radios, sidewalk and storm drainage repairs, a van, an air handling system, a Simsbury Farms study and a greens aerator. There are no proposed capital projects for fiscal 07-08.

Mr. North asked if the study regarding Simsbury Farms would include evaluating the feasibility of privatizing some or all of the golf course so that it could be run on a for-profit basis and Mr. Vincent indicated that such an evaluation would be part of its mission, noting that the golf course does actually have revenue in excess of expenses. Mr. North also questioned why the technology needs assessment study was included in CNR and Mr. Kane responded that similar studies have been included in CNR in the past.

Mr. North asked about the status of the pension funding and Mr. Kane replied that the percentage funding is going down somewhat, and, although the funding requirement keeps going up, it is the smallest in years. Mr. Mason stated that the key issue is that 100% of the required contribution is being made.

Mr. North asked if the $40,000 expenditure relative to the zoning regulations revision is part of an ongoing project and Mr. Kane replied that it was and that $25,000 are included in the current budget for zoning regulation revisions. Mr. Henault asked when it was anticipated that the project would be completed and Mr. Peck stated that it is hoped the project will be completed by the end of the calendar year. Mr. Mason asked if the dollar amount represented dollars bid under a contract or estimates; Mr. Peck replied that the project was started prior to his employment and these numbers are not estimates and that he is comfortable proceeding within the previously allocated amount. Mr. Mason confirmed with Mr. Kane that the dollar amount associated with the Simsbury Farms study is an estimate.

Mr. North asked what kind of consulting services were provided by the Metro Hartford Alliance. Mr. Vincent responded that the Alliance will be making additional visitations and will be making presentations to the Chamber of Commerce and the Main Street Partnership regarding funding for small businesses and bringing in potential businesses to the community. The monies requested are to continue an existing relationship for the period July 2007-June 2008. Mr. Henault asked how one measures the success of such a program. Mr. Vincent replied that the end result would be to promote additional programs for small businesses and attracting businesses to new or existing office buildings.

Mr. North asked about the inclusion of two new positions in the Land Use area and if there was a glaring need due to violations not being enforced. Mr. Peck indicated that the Land Use Enforcement Officer position would enable them to provide services and respond more quickly to people coming in to the department and would be involved in both enforcement relative to both new and existing projects as well as assist in-house with office projects. Mr. Peck also indicated that the Building Clerk position is needed to prevent workload issues from causing backlogs so as to allow the inspectors to be in the field more efficiently. Mr. North asked if these positions are being required because of the absence of good technology in the area and Mr. Peck responded that certainly technology can speed things up and can be looked at in the future, but that the positions would still be required.

Ms. Fitzpatrick asked if the temporary space rental for the Library should not be included in the capital expense. Mr. Mason stated that he had discussed this issue with a CPA and it was not clear if the expense could be capitalized or not. He asked if the amount was sufficient. Mr. Kane indicated that the Library has some flexibility within its budget to offset any surplus expense that might be incurred.

Mr. Askham asked if the Eno Fund could be used for the front walk repair and Mr. Kane stated that there is money set aside in the Eno Trust Fund, but that there are many needs, such as Fire Marshal code compliance, that already exceed the balance of the fund. The front walk repair is to correct a hazardous issue. Mr. Vincent indicated that in the next few months the Board would be receiving requests to approve funding relative to code compliance projects.

Mr. Askham asked about the timing and type of the upcoming revaluation and Mr. Kane stated that it would be on the October 2007 grand list and would be a statistical revaluation. Mr. Askham asked if the project had been bid and Mr. Gardner stated that it had not and that the estimated amount was based on other towns’ costs.

Mr. Askham asked about the scope of the technology needs assessment. Mr. Robertson stated that the intent is to first take a thorough inventory of existing technology currently in place and do a best practices study. Issues to be addressed would include connectivity between departments, a website services analysis and possible reconfiguration, potential WIFI applications and data backup.

Mr. Mason asked if connectivity between departments and remote sites would be part of the scope of the study and Mr. Robertson indicated that would be one of the things that would be looked at. Mr. Mason asked if connectivity could include the Farmington Valley Health District and Mr. Robertson replied that FVHD poses an interesting problem as it is not a Town facility and, therefore, is truly off-site. Mr. Mason stated that, as a customer applying for building permits, he has been sent running literally all over town obtaining approvals and information and that other towns have solved this problem and Simsbury has not. Mr. Mason also noted that there are some holes in the ability to obtain assessment data online. Mr. Robertson said the study will encompass questions regarding e-government applications and GIS.

Mr. North asked if the development of GIS is still in the capital budget or has it been abandoned or accomplished as a project. Mr. Henault stated that it is still in the six-year plan, but has been pushed out a number of years. Mr. Sawitzke stated that GIS involves the development of a good backbone of engineering, land use and planning functions. The next step is whether to put the information out on a server at Town Hall or actually put it out on the Internet. Having no connectivity is an issue. Future costs would involve making the backbone information an enterprise function. Mr. Sawitzke stated that he is cautious and has certain reservations about having all information being computer-based and that many residents’ questions need to be answered in a face-to-face environment.

Mr. Askham stated that for the past decade capital projects have been focused two-thirds on Board of Education projects and one-third for the Town and he thought that the focus would be shifting now more towards Town projects. Mr. Kane stated that members of the Board of Selectmen have stated that they wish to hold the Board of Education “harmless” relative to the Ethel Walker land acquisition and that the Board of Selectman’s six-year plan has had the Ethel Walker purchase plugged into it, thus moving many of their projects that were on their six-year plan farther out.

Mr. Askham stated that the Board members had received a letter from the Planning Commission reminding the Board to do some budgeting for land acquisition (Addendum III) and thought that perhaps the Planning Commission should be sent a letter providing a recap of how much money has been committed to land acquisition over the past 5-7 years. Mr. Kane stated that he would provide the Board with this analysis so that the Board could draft a letter of response.

Mr. Mason asked about the two people changes in Central Administration. Mr. Kane stated that basically the Receptionist position, that previously reported directly to him, has been changed to report to the First Selectman’s office, but will continue to provide support to his area.

Mr. Henault asked about the budget item for an increase in reference materials at the Library, given that they are moving to temporary quarters soon. Ms. Bullock responded that in the past few years there have been no increases in that line item and that they have lost ground. Also, this it the budget year in which they will be moving back into the new library and they want to have a good Opening Day collection. Mr. Henault asked about the status of bids for the Library project. Mr. Sawitzke responded that bids have come approximately $100,000 under the estimate for the basic project, plus two add-ons for temperature controls and fire alarm systems. The third add-on is for bay windows, which will be paid for by the Friends of Simsbury Public Library.

Mr. Henault stated that his only comment about the addition of two new positions is that, once you add staff, you “own” them and it is very difficult to remove the positions. If they can generate additional funds to help pay for the additional salary expense, it would be beneficial. Also, other approaches could be considered, such as holding out for technology improvements as opposed to increasing staff. He commended Mr. Vincent for holding staffing levels and even reducing them and cautioned that the Board would probably have some concerns and questions should staffing increases become a trend.

Mr. Henault asked what the ¾-ton van would be used for and Mr. Sawitzke stated that it would be used by Buildings and Grounds Service Dept. In the past, certain personnel had been assigned to specific Town buildings, but due to personnel cut-backs, a contract style of service is now used whereby personnel travel from building to building. Mr. Henault asked if the new snow plow was an addition or a replacement. Mr. Vincent indicated that it is a replacement truck. Mr. Henault asked what happens to the old trucks and Mr. Vincent stated that they are either used for trade-in value or transferred to another department, such as Recreation.

Mr. Henault confirmed with Mr. Toner that the golf course as an isolated function is making a profit, which is used to offset other expenses at Simsbury Farms. Mr. Kane stated that the profit at the golf course is decreasing as the revenues are holding at the same rate, whereas expenses are continually increasing.

Mr. North noted that, relative to the budgets for the Farms or other facilities, none of the cost of capital is reflected in these studies, nor are there any replacement reserves on the operating sides of these budgets. Therefore, there is a very real question when any major unit replacement or renovation project comes up as to how that gets recaptured.

Mr. Askham noted that sewer revenues are going up and considerable reserves are being budgeted. He asked when debt service would begin and if the reserves are needed. Mr. Kane stated that the debt service payments would commence in October 2008 and that the first payment would be very large (approximately $1.2 million); therefore, debt service in the first year would be just over $2 million and would decrease thereafter. Mr. Askham asked if the revenues are in line for this and Mr. Kane stated that they are close and that the reserves are needed.

Mr. Askham asked if certain items that are currently under discussion in Executive Session and could impact this budget should be added to the budget. Mr. Henault indicated that those items would need to be taken up under Executive Session and that perhaps a meeting should be scheduled next week.

Mr. Mason asked for an update on investment income. Mr. Kane estimates that this year should end with approximately $1,250,000 in revenues from investments. Mr. Kane also indicated that he had factored in lower reserves in his budget amount for investment income. Mr. Mason asked for an update at the next meeting reflecting the current rates.

Mr. Gardner provided the Board with a handout proposing a revision to the Elderly Tax Credit Ordinance that was approved by the Board at its last meeting. The intent of the revision was to clarify the apportionment of the tax credit amongst multiple owners when one qualifies for the credit and one does not or in two-family home situations, a question that was posed by Ms. Mielert at the Board’s last meeting.

Mr. Henault asked how critical it was that the revision be made and Ms. Fitzpatrick pointed out that the Town Attorney was advising that it be made. Mr. Mason also noted that several members of the Board of Selectmen had issues with the proposed ordinance that was passed back to them by the Board of Finance. Ms. Fitzpatrick asked what effect making a change to the document that was sent forward to the Board of Selectmen would have on the Public Hearing. Mr. Vincent stated that it would be a very tight time constraint, given the May 15^th referendum.

Mr. Henault referred to the Planning Commission’s letter and reiterated that the Board should send a letter of response outlining the funds that have been already been committed to land acquisition. Ms. Fitzpatrick stated that she would like to include a statement encouraging the Planning Commission to incorporate into their work ways that the Planning Commission can assist the Town in developing sources of revenue to pay for land acquisitions.

Ms. Fitzpatrick noted that the Connecticut Chapter of the American Society for Public Administration is hosting a breakfast roundtable on Wednesday, March 21, 2007 to discuss “Paying for Pension Benefits – Where Are We and What is Next?”. Ms. Fitzpatrick provided the Board with a meeting notice and encouraged other Board members to attend. The Clerk will mail a copy to Ms. Mielert.

Mr. North noted that all three boards have signed on to the initiatives of the Connecticut Consortium on Municipal Finance. He wanted to bring to the attention of all members House Bill 6640, which is moving forward, which addresses the issue of raising the threshold for prevailing wage restrictions from $400,000 to $1,000,000 for both new and renovation-type construction. This bill would allow towns to participate in a much more cost competitive environment. He encouraged the Board to send letters of support individually or as a board to elected representatives. Mr. Vincent noted that the Board of Selectmen had already done so. Mr. North noted that research has been done that quantifies the impact of this change on projects as being minimally 20%. The Board reached a consensus that they will send a letter of support.

Mr. North also noted another bill that is currently moving forward, House Bill 6697, which prevents the practice of prohibiting professional firefighters from volunteering in the town in which they live. If the bill does not pass, Simsbury will stand to lose seven firefighters who are currently professionals in other towns. Mr. North stated that it is important to do anything possible to maintain a volunteer fire department in Simsbury so as to not have to face the cost of maintaining a professional department. Mr. North again asked all the Board members to send letters supporting the passage of this bill.

Mr. Kane provided the Board with a proposed amendment to the Ordinances of the Town of Simsbury to establish a Trust Fund for retiree health benefits (Addendum IV), recommending that the language be changed so the Town Treasurer is named as Trustee and the Board of Finance is named as Plan Administrator, asking that they approve it and move it forward to the Board of Selectmen. Mr. North suggested that the verbiage of Section A be modified to read “The Board of Selectmen shall appoint the Town Treasurer, initially, as the trustee under the Trust.” This wording would allow the Board of Selectmen to change the appointment at a later date.

Mr. Kane provided the Board with a draft of a Request for Proposal for the selection of an Investment Consultant for the Retiree Health Care Trust. Mr. North stated that he felt that the Scope of Services should include an Item #8 that states the consultant “shall consult with the actuary for the affected plans so as to thoroughly understand the liabilities and incorporate that understanding into developing an investment policy.” Mr. Kane stated that he did not require a motion from the Board and that he was going to change the proposal submission deadline to Friday, March 23, 2007 and would try to get something in the newspaper this week. The Board reached a consensus that this was acceptable.