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EAST LYME BOARD OF FINANCE REGULAR MEETING MINUTES Wednesday, JULY 9th, 2008
Members In Attendance: Jeff Langan, Acting Chairman John Birmingham Jill Carini Bob Jones Allan Taylor
Also In Attendance: Steve Larcen, Chairman (by telephone for Appointment of Auditor ONLY) Scott Bassett, of McGladrey, Pullen LLP Andrew McKirdy, Deputy First Selectman Anna Johnson, Finance Director
Absent: Steve Larcen
A. Call Meeting to OrderActing Chairman Langan called this Regular Meeting of the East Lyme Board of Finance to order at 7:00 PM. He noted that Steve Larcen, Chairman was on vacation however; he would be joining them by telephone when they addressed the Appointment of an Auditor under New Business.
B. Pledge of AllegianceThe Pledge was observed.
C. Delegations Mr. Langan called for delegations.
Bob Gadbois, 358 Boston Post Road said ‘here we go again’ the Board of Ed ‘found’ $600,000. He asked just where Dr. Smotas thinks that he gets his money because it comes from the taxpayers. He wants to take the money that they will be short from the Doyle Property and the taxpayers will end up having to pay more. He said that on a ‘blog’ that someone said that they should take the money from the senior citizens and close the senior center for two (2 ) days and not let them have a van to make up for the money that they need for the schools. Well, it is the senior citizens of this Town who have paid for and built the schools and without them – you would not have any schools and nothing should be taken from them – they have paid enough. All of this has got to stop.
Mr. Taylor said that he wanted to comment on the fact that Mr. Larcen would be joining them by telephone for the appointment of the auditor. The Town Charter does not authorize tele-conferencing and neither does Roberts Rules of Order and this Board voted to follow Roberts Rules of Order. He said that he does not think that they should be changing what they have agreed to follow and that if they are going to do so then they should be voting on it as a Board. He said that he does not have any problem with Mr. Larcen listening to the discussion however he does not think that he should be allowed to vote.
D. Approval of Minutes ¨ Wednesday, June 11, 2008 – Regular Meeting Mr. Langan asked that they table discussion on these as he did not bring a copy with him and had not had the chance to review them thoroughly. He asked how everyone else felt about this. Mr. Jones said that he was ready to vote on them but would agree to table them if the rest of the Board chose to do so.
Discussion on the minutes was tabled until the next meeting of the Board. E. Reports a. Financial Report Ms. Johnson said that she had provided them with draft reports on revenues and expenditures in their packets this month as they had requested and said that she would answer any questions that they had.
Mr. Langan asked how they had ended up for the year and if it was as they had expected. Ms. Johnson said that they were pretty much on target.
Mr. Taylor said that they had projected a $700,000 revenue deficit but ended up with a minus $300,000 instead; which would appear that they had $400,000 more than anticipated. Ms. Johnson said that was correct.
Mr. Taylor noted that he had found about ten areas under revenues that appeared to have some significant differences from projections. He asked about Transportation, Tax Relief-Machinery and the Pequot Grant. Ms. Johnson said that for Transportation that the projection was greater than what they were actually sent; Tax Relief is due to a decrease in the grant amount and the Pequot Grant was also a State issue where they sent less.
Mr. Jones asked about the Civil Preparedness Grant and how they had come up with the $33,000. Ms. Johnson said that it came from Emergency Management and that in the end they will not receive the full amount but rather an amount in the high $20,000. She also explained that with respect to the Town Clerk Fees that the activity has dropped and regarding the Conservation fees that the figure has corresponding expenditures. The Landfill deposits are booked as they are received. For the Commercial tipping fees, they may still have June to book.
Ms. Johnson reported that the bonding note sale for $3.9M ($2.9M for Water & Sewer and $1M for the Town-wide radio upgrade) went well and that it was awarded t o Commerce Capital Markets – 1.6349%. She also reported that Mr. Formica has indicated that a new insurance agent agreement for liability and worker’s comp premiums will be formalized at the Board of Selectmen meeting next week.
Ms. Johnson also said that they hired a part-time accountant who is semi-retired, on a temporary basis to do the bank reconciliations. This person will get all of the reconciliations up to date and fill-in until they can get someone who understands the type of accounting that they utilize.
Mr. Jones asked if they have personnel in Town Hall or in Ms. Johnson’s office that can do this. Ms. Johnson said that it is being done on a temporary, part-time basis. Mr. Jones said that was not what he had asked and asked if there was someone within the Town’s employ at present that could do this. Ms. Johnson said that they do not have anyone at this time that could do this in-house and that they need the additional staff such as what they have temporarily now.
Mr. Langan asked Mr. McKirdy if he had anything to report. Mr. McKirdy said that he thought that everything had been covered.
F. New Businessa. Appointment of Auditor for Fiscal Year ending June 30, 2008 Note: Mr. Langan phoned Mr. Larcen so that he could join this discussion by telephone (speaker phone).
Mr. Larcen said that Mr. Jones and he were on the committee for the auditor and that they interviewed three (3) candidates and that McGladrey & Pullen, LLP received the unanimous recommendation of the committee. The members of the committee were: Mr. Formica, Mr. Jones, Mr. Larcen, Ms. Johnson and Mr. Meltabarger, Business Manager for the Board of Ed.
Mr. Jones elaborated that they had interviewed three (3) candidates and asked specific questions of all three of them so that they would have a basis of comparison and also asked individual questions of each of them. They felt that the last interview that they had; with Scott Bassett of McGladrey & Pullen, LL indicated the vast experience that they have and a vast experience with what the Town does. He said that while he knows that it is more money for the services that they have also proposed to do more and to work more in depth.
**MOTION (1) Mr. Jones moved to approve the Selection Committee’s recommendation in the appointment of the auditor McGladrey & Pullen, LLP for the year ending 2008. Mr. Larcen and Mr. Taylor seconded the motion. (Note: Mr. Taylor seconded the motion in the event that Mr. Larcen’s second by phone was invalid.)
Mr. Langan noted that Mr. Bassett is present to answer any questions that they might have.
Mr. Taylor said that he received tow discussion letters – one of three (3) pages and one of 10 pages in length with both of them ending basically the same. Mr. Larcen said that he thought that one was meant to be for the Board of Ed. Mr. Bassett explained that they were done under professional standards and that both of them were addressed to Mr. Larcen as it was specified that way in the RFP that they put out.
Mr. Larcen suggested that the second and shorter letter would more properly be executed by the Board of Ed. Mr. Bassett said perhaps but reiterated that it is part of the RFP process that they specified; however they could send it to the Board of Ed and have them sign it. The fee quote is included in the RFP process.
Mr. Taylor said that the 10 page document is more detailed than the three page one. Mr. Bassett explained that the 10 page document is more for the Town and that the three page document is as required for the Board of Ed; the ED001 report requires procedures as dictated by the State of CT.
Ms. Carini asked if they are engaging for two (2) separate services. Mr. Bassett said yes and recalled that is the way that it was specified in the RFP.
Mr. Taylor asked about being billed for the use of their name. Mr. Bassett explained that every time they go to bond that as long as they do not have to give a consent letter, they will not be billed. If they are asked to give a consent letter – then they will be billed. Ms. Johnson said that they do not require a consent letter to go to bond. Mr. Taylor added that they then would to be billed.
Mr. Larcen said that it was discussed during the meeting of the committee that the Board of Finance wants to be kept abreast of the schedule and apprised of the audit progress.
Mr. Jones said that they had discussed having an audit committee from amongst the Board of Finance members for Mr. Bassett to contact or have him come directly to the Board of Finance with a report particularly with respect to schedules and keeping on track.
Mr. Taylor asked that changes that they had discussed be made to the documents. Mr. Bassett said that he would title both of the documents and that the ED001 is fine and he would also reference the Board of finance in a letter as the auditing committee.
Mr. Larcen asked that they approve the engagement subject to the modifications as agreed. Mr. Bassett said that he would get the corrected documents to Ms. Johnson in the morning as they cannot start anything without the signing of the documents. Mr. Larcen said that he could come in to Town Hall and sign them this coming Friday morning.
Mr. Jones said that he spoke with Mr. Bassett regarding the bank reconciliations and if they would be held up with the audit because of this and it is something that they will have to look at.
Mr. Jones amended his MOTION (1) to read: **MOTION (1) Mr. Jones moved to approve the Selection Committee’s recommendation in the appointment of the auditor McGladrey & Pullen, LLP for the year ending 2008 subject to the changes discussed and contingent on the verification that the attachments I, II & III are all-inclusive and complete. Mr. Larcen and Mr. Taylor seconded the amended motion. Note: Mr. Taylor seconded the motion in the event that Mr. Larcen’s second by phone was invalid.
Vote: 6 – 0 – 0. Motion passed as amended.
Mr. Larcen thanked Ms. Johnson for her RFP efforts.
Mr. Taylor said to Mr. Larcen that he felt that he should explain that he does not feel that they as a Board of Finance voted on what they were doing as being in compliance with the Town Charter or Roberts Rules of Order which they agreed to follow.
Mr. Larcen said that he had checked back in March with FOI and that this was done before in this Town and unless the Charter excluded it – then it is allowed. He said that it was done when Mr. Cini was the First Selectman and that they can ask Mr. Formica to get the Town Attorney to give an opinion. He said the only stipulation is that they have to have a quorum.
Mr. Langan said that he supports Mr. Larcen and that he feels that they are covered from a legal standpoint.
Ms. Carini asked if they would want to set up an audit subcommittee this evening. Mr. Larcen said that they could put that on their August meeting agenda. (Note: Mr. Larcen then ended his tele-conferencing and participation in the meeting.)
b. Special Appropriation of $25,000 for Animal Control Vehicle Mr. Langan recused himself from discussion and voting on this item noting that he works for Dominion.
It was noted that there was a memo from Mr. Weekley of Dominion in their packets explaining the money for the van.
**MOTION (2) Mr. Taylor moved that the $25,000 grant from Dominion – Millstone Power Station be approved to purchase a vehicle for the Animal Control Officer (Law Enforcement) and put to CNRE Fund 32 to an account to be established titled, “Animal Control (ACO) Vehicle, subject to Town Meeting approval. Mr. Jones seconded the motion. Vote: 4 – 0 – 0. Motion passed.
Note: Mr. Langan rejoined the meeting.
c. Authorize change of use of $30,000 Appropriation for Parking Lot Lights to Roof Repairs/replacements at Niantic Fire Station #1 and #2. Mr. Langan noted that there was a memo on this in their packets.
**MOTION (3) Mr. Taylor moved to authorize the $30,000 in the adopted 2008/09 budget line item 9-01-70-724-700-403 (Town – CIP) allocated for Parking Lot Lights at the Community Center be re-allocated to use for roof repairs/replacements at Niantic Fire Station #2 and Station #1. Mr. Jones seconded the motion. Vote: 5 – 0 – 0. Motion passed.
G. Old Business ¨ Financial Policies – Sub Committee Mr. Langan reported that he and Ms. Carini met and are collecting information and will then lay out a possible approach to this and present it to them for discussion and action.
H. Public Discussion Mr. Langan called for Public Discussion.
Mike Schulz, 14 Lovers Lane said that he strongly supports the audit idea and asked if they would want any outside interested people with auditing experience participating on their committee as that would bring in more people. He said that he was interested in the 2008-2009 budget shortfalls with the Board of Ed as there are contracts being signed and some of them are available to be seen and others are now. The commitments being made on benefits are showing increases of some 20% and wages and salaries of 7% to 15% and non-union personnel with 3% to 4%. There were also annuity increases to salary of some $13,000. There is a lot going on at the Board of Ed that is under the table that they are not aware of and there will be a shortfall next year. They are using money for shortfalls and then making this up will fall on the taxpayers and all of this has to stop. However, it will not stop unless the Board of Finance and the taxpayers say NO! He said that they have to say no and that he will say no as they are driving people out of this Town with the unnecessary fees and salaries that are totally unrealistic. It is tourniquet time and it has to be done now as all of this has to stop as it is out of control.
I. Board Comments Mr. Langan said to Mr. McKirdy that the Town is a better place from his steady hand with the Board of Ed and the Board of Selectmen. The service that he has provided to this Town has made it a much better place. He wished him well.
Ms. Carini said that she also personally wished to thank Mr. McKirdy for all of his hard work on behalf of the Town and said that he would be sorely missed. The members agreed with the sentiments of Mr. Langan and Ms. Carini.
J. Adjournment **MOTION (4) Mr. Jones moved to adjourn this Regular Meeting of the East Lyme Board of Finance at 8:30 PM. Mr. Taylor seconded the motion. Vote: 5 – 0 – 0. Motion passed.
Respectfully submitted,
Karen Zmitruk, Recording Secretary
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