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EAST LYME BOARD OF FINANCE
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REGULAR MEETING MINUTES Wednesday, AUGUST 13th, 2008
Members In Attendance: Steve Larcen, Chairman Jeff Langan, Secretary John Birmingham Jill Carini Bob Jones
Also In Attendance: Paul Formica, First Selectman Anna Johnson, Finance Director
Absent: Allan Taylor
A. Call Meeting to OrderChairman Larcen called this Regular Meeting of the East Lyme Board of Finance to order at 7:00 PM. Mr. Jones noted that Mr. Taylor would not be present this evening as he was called away on a family matter.
B. Pledge of AllegianceThe Pledge was observed.
C. Delegations Mr. Larcen called for delegations.
Bob Gadbois, 358 Boston Post Road said that he went to the Board of Education subcommittee meeting on the budget the other night and found it to be very interesting and suggested that they should attend. Dr. Smotas made a comment that ‘maybe they can squirrel away some money this year’. He suggested that they watch them very carefully this year.
D. Approval of Minutes ¨ Wednesday, June 11, 2008 – Regular Meeting Mr. Larcen called for a motion for approval or any changes to the Board of Finance June 11, 2008 Regular Meeting Minutes.
Mr. Larcen asked that on Page 2 in the second paragraph where he is speaking that the word ‘money’ be changed to read: ‘cost’.
**MOTION (1) Mr. Jones moved that the Board of Finance Regular Meeting Minutes of June 11, 2008 be accepted as amended. Mr. Langan seconded the motion. Vote: 5 – 0 – 0. Motion passed.
¨ Wednesday, July 9, 2008 – Regular Meeting Mr. Larcen called for a motion for approval or any changes to the Board of Finance July 9, 2008 Regular Meeting Minutes.
Mr. Larcen asked that on Page 3 in the second paragraph after MOTION (1) where Mr. Taylor is speaking that ‘tow discussion’ be changed to read ‘two engagement’ letters.
**MOTION (2) Mr. Jones moved that the Board of Finance Regular Meeting Minutes of July 9, 2008 be accepted as amended. Mr. Langan seconded the motion. Vote: 5 – 0 – 0. Motion passed.
E. Reports a. First Selectman Mr. Formica said that they are settling in with the day to day operations, staff, the new budget, and the new fiscal year and that he is trying to take an afternoon away from the office each week to get out in the field to the other Town offices, etc. The Capital Improvement Planning Committee is to be convened very soon and they will need a Board of Finance member to participate on this. Mr. Jones has previously done this. There is also a fuel and energy task force made up of six (6) people that will meet very soon. It is hoped that they will be able to come up with some new initiatives for savings in this area. He said that the would like to install GPS systems on all Town vehicles and that he would be working with Mr. Giannattasio on which and how many during this process. They have also been discussing a facilities manager position and he said that he made a presentation on this to the Charter Revision Commission also recently. They are also looking into fuels and the trends and will be trying to tap in at the low point on it for savings to the Town. They are also looking into ways to increase the cash flow on recycling revenues – such as with single stream trash where the facility separates it out rather than the Town. It is thought that single-stream recycling encourages more recycling. The tonnage has been going down which indicates that people are conserving and becoming more aware. He explained the Town water supply system noting that four of the wells are regulated by the DEP based on stream flow height. The bonding package that was recently done has allowed them to work on the two wells that are in progress now and they are also looking at a new piece of property for another supply and – also doing some test wells on State property. It is a multi-pronged approach that is being taken with respect to water. The infrastructure is 35-50 years old and it will need upgrades and they are looking to do leak testing to catch these problems. The Gateway MDP was approved and should this move forward, it will generate some $2M in revenue and some thought should be given to how they would want to allocate those dollars. Water & Sewer also advises all developments that they are to have their own water supply to irrigate the property and that they cannot utilize the Town water supply for that purpose. Lastly, the union negotiations are plodding along and they will have a session the next day and they hope to move forward on them.
Mr. Larcen asked if the leak testing has been started by Water & Sewer. Mr. Formica said that it will start in the fall and run through the spring as the companies who do this like to do it when the roads are not so busy. However; they also want to get the summer ‘turn-ons’ as that is a time when many leaks are noticed. He said that they also want to get the conservation kits out to the users so that they can save on water usage with their showers and toilets and also check for toilet leaks which can easily go on undetected for long periods of time.
Mr. Langan asked who is on the fuel & energy task force. Mr. Formica said that it is a group of citizen volunteers and that he was also able to get a CL&P representative who can explain the available grants to them.
Ms. Carini asked Mr. Formica if he was aware of the Board of Ed bus route changes and if they were done for conservation purposes and if he could speak on that. Mr. Formica said that he could not speak on that although he does know that they change the routes based on the bus ridership. He said that they could ask Mr. Meltabarger to attend their next meeting and speak to them on this.
Mr. Jones asked about Darrow Pond and if they are doing anything with securing water there. Mr. Formica said that they are working on it.
Mr. Langan asked if there was any fallout from the DEP on running the two wells on the weekend when they were to be off-line. Mr. Formica said that the DEP regularly advises him that they are a regulatory body first and an advisory body second. He said that the Town notified them immediately that they had turned on the wells on an emergency order and that by the time they met with them the stream flows had been raised due to the rains. They plan on meeting with the DEP in the fall and have also given them a list of 10 things that they are doing to try to alleviate this yearly problem.
b. Finance Director Ms. Johnson said that she had included the 7/31/08 reports in their packets and reviewed the larger revenue items and the first month expenditures for the Board.
Mr. Larcen asked if the Board of Ed offsets are grants. Ms. Johnson said yes.
Mr. Langan asked about interest income. Ms. Johnson said that the statements are just coming in now and will be posted. She additionally noted the encumbrances report that she was asked to provide them with and asked that they review it and come back with any questions that they might have. She noted that it will probably be less next month and that she would update them at that time.
Mr. Jones asked where they are on the bank reconciliations. Ms. Johnson said that just today the individual who is doing them has finished July 2007. They were looking to do two months per week however the interim person feels that she would be more comfortable with one month per week. At the time that they hired the individual that is doing them now, she was hired as a temporary person. Mr. Formica has suggested having more than one person working on this but this individual felt that another person might get in the way – however; there is behind the scenes work that another person could do to assist this process and they are looking into that.
Mr. Jones asked if they had discussed this schedule with the auditors and if it goes along with their work schedule. Ms. Johnson said that she contacted Scott Bassett and that they said that they would come out on November 1, 2008 to do this part of the audit process. She said that she also spoke with Scott about coming to their September meeting and that he has a conflict for that evening. Mr. Larcen suggested that they have him come to their October meeting.
Ms. Johnson said that she had also included the signed final engagement letters in their packets as had been requested.
F. New Businessa. Approve various transfers to several departments in the amount of $113,330.48 from other departments for fiscal year ended June 30, 2008. Mr. Larcen called for a motion.
**MOTION (3) Mr. Jones moved to approve various transfers to several departments in the amount of $113,330.48 from other departments for fiscal year ended June 30, 2008. Mr. Langan seconded the motion.
Ms. Johnson explained that these transfers were from one department to another department within the budget. Mr. Larcen asked if vacation is an accrued liability or just paid out. Ms. Johnson said that they just pay it out.
Mr. Larcen called for a vote on the motion. Vote: 5 – 0 – 0. Motion passed.
b. Ratify departmental transfers in the amount of $51,959.48 processed for fiscal year ended June 30, 2008. Mr. Larcen called for a motion.
**MOTION (4) Mr. Jones moved to ratify departmental transfers in the amount of $51,959.48 processed for fiscal year ended June 30, 2008. Mr. Langan seconded the motion.
Mr. Jones commented that inter-departmental transfers are pretty normal and that they do them at the end of the year and that he does not think that they need to go over what the attached documents say.
Vote: 5 – 0 – 0. Motion passed.
c. Approve various transfers to several departments in the amount of $52,479.54 from other departments for fiscal year ended June 30, 2008. Mr. Larcen called for a motion.
**MOTION (5) Mr. Jones moved to approve various transfers to several departments in the amount of $52,479.54 from other departments for fiscal year ended June 30, 2008. Mr. Langan seconded the motion.
Ms. Johnson noted that these are from one department to another. Mr. Larcen asked about the transfer for Parks & Recreation. Ms. Johnson said that more duties were delegated to this department and that they knew that they would not be able to work within the confines of the budget that they had.
Vote: 5 – 0 – 0. Motion passed.
d. Ratify departmental transfers in the amount of $58,079.58 processed for fiscal year ended June 30, 2008. Mr. Larcen called for a motion.
**MOTION (6) Mr. Jones moved to ratify departmental transfers in the amount of $58,079.58 processed for fiscal year ended June 30, 2008. Mr. Langan seconded the motion. Vote: 5 – 0 – 0. Motion passed.
e. Approve various transfers to several departments in the amount of $4,417 from account 9-01-01-114-144-127 (Health/Dental Care) for the 2008/09 fiscal year. Mr. Larcen called for a motion.
**MOTION (7) Mr. Jones moved to approve various transfers to several departments in the amount of $4,417 from account 9-01-01-114-144-127 (Health/Dental Care) for the 2008/09 fiscal year. Mr. Langan seconded the motion.
Mr. Larcen asked Ms. Johnson to explain this. Ms. Johnson said that when they reviewed the budget that they saw some of the salary accounts were a bit higher due to those who elect payments in lieu of the Town insurance plan. The opt out allows for a $1,000 waiver payment and this is what covers that.
Vote: 5 – 0 – 0. Motion passed.
G. Old Business ¨ Financial Policies – Sub Committee Mr. Langan reported that they (he, Ms. Carini, Mr. Formica and Ms. Johnson) had met last month and that they identified three policies that they would be working on: (1) Fund balance, (2) debt management and; (3) investments. They have started with fund balance and Ms. Johnson has gathered together some policies form other Towns and CCM and they will compile a draft to present at the September meeting of the Board. He said that they would also provide copies of these policies, once developed and finalized, to the auditors. A concern of theirs was what weight these policies would carry once developed – if they would be general guidelines or regulations and how they would be applied.
Mr. Jones asked what form the policy would be in for their September meeting. Mr. Langan said that it would be in draft form for them to review first.
Mr. Jones asked if they thought that they should get some feedback from the Board of Selectmen. Ms. Carini said that she thinks that these should stay in the Board of Finance court and that they should not muddy the waters going out for other opinions on what should be their policies.
Mr. Jones said that he would like to get their input as well as input from the auditors and Town Counsel so that there is communication and so that they know that they are on a correct path. He noted that the issues of communication has been on-going and said that he wants this to be upfront so that everyone in the Town can follow it. Mr. Formica said that they would keep the people up to date as they go along and that they would seek a ‘final blessing’ from the Town Attorney.
Mr. Larcen said that he does not see this as a regulation but more as a policy as it is something that they intend to follow however they can make an exception to it or a case by case adjustment if it is found to be necessary.
Mr. Langan said that they also discussed the budget process and ways to possibly restructure it – perhaps by attempting to anticipate grand list growth and revenues and coming up with a total of some type for the Town and the Board of Ed and utilizing them as targets that they could support. Mr. Jones said that they used to do that in a different format years back by a letter to the department heads and selectmen on where they should be. This was sent in December in time for preparation of the new budget.
Ms. Carini said that they could have a meeting on this however she would not want it to be something that would have any intent to micro-manage the departments.
H. Public Discussion Mr. Larcen called for Public Discussion.
Mike Schulz, Lovers Lane said that he had a few things to discuss this evening. First, through his own experience, he said that when you bring up a percentage for a budget increase to the department heads – say 3% for example – that is what they will go for – and they will use all of it even if they do not need it. He said that a budget guideline is a good idea and that might help. He noted that at the Board of Ed subcommittee meeting that they were given some of the information that was being discussed and it was helpful. Next, the Board of Finance agenda is not on-line; he said that he looked for it and could not find it and that the last one there is for July. He requested that they be on line so that people can get to them. Also, regarding the action on Item e. under New Business on the agenda – he said that the Town provides insurance to its’ employees and whether they take advantage of it or not is up to the individual. The fact that someone does not want to use it is an individual decision and that person should not be getting money for that choice. In the Education area, they get up to 50% of the actual cost of the contract and that is just not right. The taxpayers’ costs seem to be driven by current and future contracts and it is the cart pulling the horse and this is wrong. People cannot afford that and they will stand up and say it. During contract renewals they have the opportunity to make changes and he said that he knows that it is a tough road but it has to be done. They cannot have 3%, 3.5% increases on top of step increases and then payments that balloon at the end to build up the retirement numbers. There are things that are being done behind the scenes and they need to be controlled. The Board of Finance should also be watching this as he and other members of the public cannot be the only ones reading these contracts – they have to keep on top of it. The Board of Ed won’t save any money – as if they do – they will institute programs to use that money that was supposed to be saved. The problem in the Town is that we are not giving to the needy – we are giving to the greedy and it is not right. It is time that they helped with this.
I. Board Comments Mr. Jones said that as far as contracts go that the Board of Finance has nothing to do with them. He said that he sat in on some of the Board of Ed contracts and that their biggest concern is that it is the ability of the Town to pay and not anything else. He agreed that things need to change.
Mr. Larcen said that while they have no control on this that he feels that it is incumbent of them to stress that all of these things need to remain affordable to the Town. He also noted that the insurance payback works out to be a lot cheaper than if those people took the insurance and that he feels that it is a profitable thing for the Town to do.
Mr. Formica commented that the 50% payback would need to be looked at. He additionally noted that they are conducting Planning interviews and moving forward with that. And, lastly he invited everyone this week Friday at 4PM at Cini Park to a formal dedication of Cini Park to Mr. Cini and his family for all of the work that he had done to bring this park to the property that it is now. He said that they had found that this park was never properly or formally dedicated to Mr. Cini.
J. Adjournment **MOTION (8) Mr. Jones moved to adjourn this Regular Meeting of the East Lyme Board of Finance at 8:25 PM. Ms. Carini seconded the motion. Vote: 5 – 0 – 0. Motion passed.
Respectfully submitted,
Karen Zmitruk, Recording Secretary
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