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HomeMy WebLinkAboutFINCOM MIN 05072009 Town of Mansfield Finance Committee Minutes of May 7, 2009 . f:;:=:I'/EO . ., .- '-'. It 0 n f- C- Ie E - ',~. ... "-- , ,-.. :}- .. ~ '\ "0 ',,) ~..); i t Attending: zoni JU:J - 5 I~ q: 0 5 Andy Gazzolo Jack Goldberg James Lazzara Charlene Lavin Karl Chambers Tommy Ratliff Greg Arnold .. , " Motion: To Open at 7:30p.m. (Lavin - Arnold) 7 - 0 Passes Review with Brenda Hodges I Schools Emergency Funding request. Key issues to be discussed include a couple of emergency projects, unfunded liability impact on schools, and the status of the granUfederal funds to be distributed. There are 2 projects that need to be addressed; the first is the Robinson School's exits. Due to an unscheduled fire drill a parent who was in the building at the time noticed that the children's exit path seemed to be constricted. This person brought the situation to the attention of the State Fire Marshall who investigated and concluded that 2 additional exits need to be provided at the Robinson; one from the back hallway and one from the gym. The hallway exit will require additional work on the interior stairwell as well. Estimated cost is $30,000. The work can be completed during the summer vacation but will need the funding from the emergency budget. The State Fire Marshall has set a September deadline so this must be done for the children's safety and to conform to the order from the Fire Marshall. Jim Lazzara will follow up on the specifications for the construction costs and report back to the Fincom next week. Jack Goldberg asked where that would put the emergency fund level and Mr Gazzola said he would look into that question and report back to the committee. The second item requiring immediate attention is the steamer in the food service area of the Qualters Middle School. It is "on its last legs" and will not be operational for much longer. The staff is working around the problems to insure food safety for the children. The estimated cost for replacement is $18,000. The estimated time to install is 3 weeks from date of purchase. Mr Gazzola noted there are only 6 weeks remaining in the school year and is not impacting negatively on safety or the operation of the food service. Discussion among the committee concluded that the Robinson school exit construction must be the priority. Unfunded Liability A discussion on the unfunded liability issue followed with Ms. Hodges, relative to the potential impact on the school department's budgets looking forward. A motion regarding this matter is detailed later in the minutes, below. ~ Stimulus Funds Brenda Hodges explained the results of a seminar session she attended on May 4, 2009 with other school administrators hosted by the state to try and clarify the status of the stimulus money. The money won't be distributed before July 1, 2009. Grant money for IDEA is now available; estimated to be $613,000. This will increase the expense side of the budget for 2010. The estimated $2M promised by the governor will require submission of an application by the Mansfield School Dept by June 1, 2009. However, the forms are not available at this time. They indicated that this money could be split between salaries for existing programs and professional development funding for school improvement programs. The next day Ms. Hodges received an email reply from Jeff Wolfson (state) stating that his interpretation of the distribution rules for this money were that" ... you probably can use most of the money to address personnel issues." Obviously, this conflicts with the state representative's presentation the previous day so there remains much confusion on the strings that will be attached to the stimulus money. Conclusion The school department has proceeded with 78 layoff notices under the assumption that no stimulus funds will be used to retain positions. They need to know the bottom line on this money as soon as possible to get a clearer picture on staffing. She is conducting a conference call on Monday, May 11, 2009 with the state to attempt to get this clarified. Andy Gazzolo thanked Ms Hodges for attending the meeting and updating the Fincom on the situation. Andy then initiated a brief discussion on the situation relative to the 2010 budget if no stimulus funding is received or if received, what is the impact on the Foundation Budget looking forward. He noted the latest update from the State regarding a deteriorating situation with reduced revenues; even less than anticipated. There followed a brief discussion on CIP issues following Charlene's update of the CIP committee's meeting. They have notated approximately $ 800,000 of projects requiring CIP approval but noted that there is no money available. The largest component of this amount is the estimate for repair of the Canoe River Dam ($400,000). Discussion with George Dentino about the severity of the situation continued with the overriding issue of a State mandate to repair or be fined. The was a tacit agreement that the DPW can handle the situation for now and we'll not budget to fund a major repair project under the current economic conditions. Update with Town Accountant Eric Hart provided an update on the status of the Town's budget vs the Fincom budget for 2010 through 2014. He is not including the $2M stimulus money (... or the town's estimated share) in his numbers now. He will be involved with the School Superintendent's conference call on May 11,2009. He further noted that his budget now reflects a reduction in estimated Property Tax Revenue for 2010 from the original $750,000 down to $500,000, He then projects approximately 5 -10% increase in this revenue beyond 2010. Eric noted changes in his budget in the areas of the stabilization fund, expenditure for police vehicles being revised for 2010, 2011, 2012, and the additional line item for the unfunded liability starting in 2011 through 2015. Andy Gazzolo reminded everyone that we should assume that there will be no free cash in 2010. Tom Ratliff reminded the committee and Eric that the most critical item impacting the amount of the unfunded liability is Health Care costs. Eric emphasized that he will speak with the Town Manager on this issue. ,.. Reserve Fund Status 2009 It was noted that the fund is currently at $95,000 - $100,000 but that there is a proposal to use $70,000 of this money for balancing the snow and ice budget. Jim Lazzara asked if there is any concern with the school department receiving their reimbursements for the balance of 2009. Greg Arnold indicated that for the 2010 budget, the town's benefits and unemployment is based on 27 positions being removed. He said the schools will meet the Fincom's budget for healthcare for 2010. Andy Gazzolo thanked Eric Hart for his updates. Unfunded Liability Program Tom Ratliff and Jack Goldberg initiated discussion on the Unfunded Liability issue; they updated the committee on their findings and recommendation. Tom had spoken at length with the actuary who provided the financial impact of the unfunded benefits. Tommie and Jack recommended that we start funding the program in 2011 with $640,000 placed in a Trust Fund (TBD). Each year subsequent to 2011, we increase the deposit by 20%. This plan will achieve $3.2M funding by 2015 which represents our current costs, annually. As they pointed out, this plan will provide for earning interest on the Fund's amount and actually reduce the accrued liability. The next actuarial study is planned for the summer of 2010 and we'll have a revised view of this liability. The final comment from them was that the town will need to determine a formula to split up the responsibility for the annual amount to be funded, between the town, schools and enterprise accounts. The conclusion and recommendation is that we need to have an article for Town Meeting to create the Trust (now state approved) for this purpose. Then the town can begin funding the Trust in 2011. Jack Goldberg made the motion as follows: That the Finance Committee recommend to the Board of Selectmen that they adopt a funding strategy by creating a Trust, to commit money annually, for the purpose of meeting the Town's obligation for the unfunded retirement benefits, other than pensions. The funding should begin with $640,000 in 2011 and increase by 20% of the normal cost per year until we are funding our normal cost in 2015. Such amounts are subject to change as new actuarial information becomes available. The motion passed 7-0 Jim Lazzara motion to close Greg Arnold second ~?~ :Jz0f ~