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Board of Finance Meeting Minutes-2/18/14

Meeting date: 
Tuesday, February 18, 2014

 

 

BOARD OF FINANCE

REGULAR MEETING - 6:00 PM

MINUTES

FEBRUARY 18, 2014

 

 

CALL TO ORDER

 

Mr. Askham, Chairman, called the Regular Meeting of the Board of Finance to order at 6:00 P.M. on Thursday, February 18, 2014 in the Main Meeting Room of the Simsbury Town Offices located at 933 Hopmeadow Street, Simsbury, CT.  The following members were also present: Nicholas Mason, Barbara Petitjean, Linda Schofield and Jeff Blumenthal.  Also present were Mary Glassman, First Selectman, Sean Kimball, Interim Finance Director, Matthew Curtis, Superintendent of Schools, Burke LeClair, Board of Education Business Manager, Lydia Tedone, Board of Education Chairman and other interested parties.

 

 

1.         Pledge of Allegiance

 

Everyone stood for the Pledge of Allegiance.

 

 

2.         Approval of Minutes – December 17, 2013 and January 23, 2014

 

Ms. Petitjean made a motion to table the minutes to the next Regular Meeting.  Mr. Blumenthal seconded the motion and it was passed unanimously.

 

 

3.         Actuary Presentation on 14/15 Pension/OPEB Valuations

 

Ms. Becky Sielman, Milliman, distributed the Actuary Presentation on 14/15 Pension/OPEB Valuations results illustrating the pension plans for Government Employees, Board of Education and Police to Board members.  She explained and discussed the results of this report which included:  2012 Final; 2013 Projected From 2012; 2013 Prior to Changes; and 2013 with Changes.  Ms. Sielman noted that there have not been any benefit increases to the pension plans in a while.

 

 

4.         Approve the Appointment of Joseph P. Mancini as Director of Finance/Treasurer

 

Mr. Mason made a motion to appoint Joseph P. Mancini as Director of Finance/Treasurer for the Town of Simsbury.  Ms. Petitjean seconded the motion and it was passed unanimously.

 

Mr. Mancini introduced himself and briefly spoke of his prior position with the City of West Haven, CT.  He stated that he will start his new position in March.

 

 

 

 

 

5.         Board of Education Budget Discussion

 

Mr. Matt Curtis distributed the exhibit for the Draft Budget Reductions to Reduce Operating Budget Increase from 1.48% to 1.0%.  The exhibit illustrated the Net Increase, Reduction Amount and Cumulative Reduction Amount.  Mr. Curtis discussed where the Board of Education is in their process to decrease their budget to 1%/0% or potentially to -1% that was requested by the Board of Finance.  Mr. Curtis noted that they have gone to several areas to work on the reduction of their budget but cannot currently show major dollars in a scenario for the upcoming budget.

 

The Board asked about the efficiencies the Board of Education could gain by working more with the Town on outsourcing and how the Board of Education could provide certain services.

 

Mr. Kimball and Board members worked on a budget worksheet illustrating different town budgets and how they can affect the mill rate.

 

The Board voiced their concern on how the Board of Education could create better efficiencies and take more significant steps in collaborating and working with the Town and Boards.  The Board noted that Simsbury is competing with other towns and that the town’s mill rate is something that is a risk to our competitiveness.

 

The Board of Finance asked the Board of Education what a further reduction to a .5% and 1% increase would look like and if it would present too much of a hardship.  Mr. Curtis stated that the Board of Education can put this together for the Board of Finance.

 

 

6.         Finance Director’s Report

 

Mr. Kimball presented the Finance Director’s Report to the Board members which included:  Update on Tax Collection; Update on Grand List; Update on Tax Relief Programs; Agreed-Upon Procedures Update; Snow Removal and Salt Budget Report; Simsbury Farms Fund Deficit, Insurance Fund Reserves and FY 2015 Budget; Calendar for FY 2015 Budget Preparation; and Investment Report by Fiduciary Investment Advisors.

 

 

 

 

 

 

 

 

 

 

 

 

7.         Appoint 2 Board of Finance Members to the Simsbury Farms Subcommittee

 

Mr. Askham explained that there was a meeting with the Board of Selectmen, Culture, Parks and Recreation committee and the Board of Finance members including Mr. Mason, Ms. Schofield and Mr. Askham.  The Culture, Parks and Recreation committee would like to separate the golf course from the Simsbury Farms revenue fund.  It was decided to set up a subcommittee with two members of the Board of Selectmen, Culture, Parks and Recreation committee and the Board of Finance to explore this idea.  Culture, Parks and Recreation committee would also like to do a special assessment to the golfers by increasing the golf fees and have the assessment restricted for golf course use only.

 

Mr. Askham and Mr. Mason volunteered to be on the Simsbury Farms Subcommittee.

 

 

8.         Discussion of FY 2015 Budget Guidelines and Possible Action

 

  • Operating Budget

 

The Board noted that the Operating Budget had been discussed earlier in the meeting.

 

  • Capital Improvement Program

 

Ms. Schofield commented on the Senior Center/Eno Memorial Subcommittee meeting, for which she is the Board of Finance liaison, stating that it would be very helpful if this committee knew how much room there is within the 7% guideline for new capital projects.  The Board noted that the Capital has to be approved for this year first and is not sure if there will there be a capital approval.

 

Ms. Glassman noted that the Town is trying to get state bonding for the Senior Center.

 

  • Capital and Non-Recurring Budget

 

Nothing reported.

 

 

9.         Goal Setting Discussion

 

Ms. Petitjean and Ms. Schofield categorized the following goals and decisions for the Board of Finance.  The Board needs to put some time in prioritizing which issues the Board of Finance wants to tackle and when.  There was a discussion of putting together some subcommittees to work on some of these issues.

 

Mr. Askham noted that the town is in the budget cycle and suggested looking at the Desired Budget outcomes first and then the Board could decide what is important to address first.     The Board also discussed the possibility of lowering the Reserves for the Town in the coming year.

 

 

 

 

  1.  Things the Board of Finance must address in the process of doing the budget

 

1.  Budget Activities

  • Explore options for Board of Education and Board of Selectmen to share services and staff to gain economies of scale and eliminate duplication of costs
  • Agree on collection rate
  • Agree on pension and OPEB funding
  • Agree on debt service level for next year and, if possible, agree to new policy (see item 1 in Long Range Planning below)
  • Insure that the Final 5-year capital plan fits into debt service policy and is realistic and affordable
  • Define capital needs versus wants
  • Analysis of budget road funding verses long term level needs (see item 3 in Long Range Planning below)

 

2.  Desired Budget Outcomes

  • Low/flat mill rate
  • Hold mill rate the same or decrease – improve compared to other towns
  • Maintain AAA bond rating
  • Make Simsbury Farms break even
  • Maintain quality of town critical services
  • Maintain best place to live
  • Maintain excellent school system
  • Keep debt service under 7%
  • Realistic/affordable 5-year capital improvement plan

 

 

  1.  Long Range Planning Issues for Board of Finance to address

 

  1.  Reserve Policy
  • Review and establish an appropriate policy on the level of reserves to maintain flexibility to pay cash for unpredicted or emergency expenses
  • Consider whether reserves should be increased to 12-15%
  • Do not over-reserve
  • Establish a plan for what to do with excess reserves above agreed upon level.

 

  1.  Bonding/borrowing Policy
  • Re-affirm or revise policy guidelines regarding the town’s bond rating
  • Evaluate other borrowing opportunities for inclusion in the policy
  • Reconsider (re-affirm or change) what should be the debt service guideline or Capp
  • Create a plan to lower the debt service to 5% and pay cash for capital 2%

 

 

 

 

  1.  Road funding policy
  • Look at road funding – operating, CNR & capital to create a level annual funding plan for roads

 

  1. Simsbury Farms
  • Explore whether Simsbury Farms should operate separately from town budget

 

  1.  Pension policy
  • Review pension and OPEB funding and establish policy guidelines
  • Establish appropriate funded ratio of pension and OPEB (80%? 100%?) and time table for getting there

 

  1.  Board of Finance Communications
  • Create and implement a better plan for communicating with taxpayers about town finances and to solicit their input regarding price elasticity of demand for town and school services
  • Improve policy for reserves

 

  1.  Investment policy for reserves

 

 

  1.  Board of Finance tasks not part of the annual budget process, but should be done soon

 

  1.  Evaluation of tax abatements
  2. Determine the future impact of the Affordable Health Care Act on the budget
  3. Explore options for higher investment returns on reserves (item 7 in Long Range above)
  4. Explore establishing a line of credit from a bank to avoid bonding costs (item 2 in Long Range above)

 

  1.  Process/procedure oriented Board of Finance tasks

 

  1. Adopt best practices for policies, controls, reporting and documenting them
  2. Adopt and implement new GASB accounting practices and policies
  3. Create rules for elections and operations
  4. Meet with financial advisors – actuary, pension & OPEB investments, medical insurance and bond
  5. Money in budget for policy and process improvements – approximately $15,000

 

 

 

 

 

 

 

 

 

  1.  Long Range Planning Issues for a Board of Finance, Board of Education, Board of Selectmen sub-committee to address

 

  1.  Create a multi-board planning team to establish long range expectations Simsbury budget goals and financial management and a plan to cut costs and to improve the mill rate relative to competitor towns
  2. Establish a plan for addressing declining school enrollment
  3. Continue to pursue efficiencies through sharing resources and expertise between Board of Selectmen and Board of Education
  4. Discuss a DC plan versus a DB plan
  5. Create a plan for the impact of the Hartford closure on future budgets
  6. Explore ways to lower operating costs through capital investments
  7. Create a dashboard of metrics to compare Simsbury to benchmark towns in the area
  8. Identify drivers of budget:  revenue, Board of Education and Board of Selectmen

 

 

  1.  Parking Lot

 

  • Grand list growth
  • Senior tax relief
  • Re-visit senior tax relief and add money to the program
  • Adopt results based on accountability
  • Define town critical services
  • Zero based budgeting
  • Create a plan for impact of change in auto tax (may need to move up based on state actions)

 

 

10.       Other Business

 

  • Items for Next Meeting

 

Mr. Askham noted that the auditors will be attending the next meeting.  He also stated that the Board will need to make some decisions on reserves and the collection rate.   He would like someone on the Board to work with the Finance Director and give some recommendations on the reserves and collection rate. 

 

The Board requested information and the need for further discussion regarding:

 

  • Future transfers out of the reserves
  • Potential ways to invest reserves so as to increase revenue
  • Does the reserve level need to remain at 12% in order to maintain bond ratings

 

 

 

 

  • Follow-up List

 

Nothing reported.

 

 

Adjournment

 

Ms. Petitjean made a motion to adjourn the meeting at 9:10 p.m. The motion was seconded by Mr. Blumenthal and was unanimously approved.

 

 

 

Respectfully submitted,

 

___________________                        ______________________

Peter Askham                                        Leslie Brigham
Chairman                                               Commissions Clerk