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HomeMy WebLinkAboutFinance Comm 03/16/2017Finance Committee Meeting Minutes March 16, 2017 RECONED �c Present: Walter Wilk, Chairman; Scott Feely, Vice Chairman; Liz Christo, Clerk; Mer��lriafii%F��e O'Brien; Yogen Chemburkar; and Michael DeSantis; ,('11 11M'YA A It Ob 1. Call the Finance Committee meeting to order and review Chairman Wilk called the meeting of the Finance Committee to order at 7:04PM on MarclT166;,29 1X -m was t. � present.•: ',.� l 2. Southeastern Regional Vocational Technical School Budget Presentation — Mark Morris, Business Manager of Southeastern Regional Chairman Wilk stated that the Town supports Southeastern Regional and it is based on Chapter 70, and that the state calculates what the number will be. Mr. Mark Morris presented information to the Committee and stated the budget was approved on February 28, 2017 for FY18. He brought the Committees attention to the transportation cost, which should be covered by the state at 100% but Mr. Morris stated that it never is. Southeastern enrollment has increased by forty students and Mansfield has seventy students who attend, making up 4.6% of the student population. Chairman Wilk asked if the teachers are unionized and Mr. Morris answered that they are. Chairman Wilk commented that every year he struggles with this because Southeastern come in well below what Town of Mansfield schools budget. Mr. Feely asked about the graduation rate and Mr. Morris answered that over 98% graduate, 75% go to two or four year college programs and the numbers are increasing year after year. Mr. Chemburkar asked if mandates are causing extra costs. Mr. Morris answered that Southeastern has the same mandates that are unfunded and do the best that they can; the priority is to keep the students they have and make them better members of the community. Mr. Eagle asked if the budget includes new technology and Mr. Morris answered they have an initiative and all incoming students have an iPad. Mr. Morris commented that students built a tiny house and it brings all trades into one shop, simulating a project in the real world. The students are proud of what they have done. 3. Audit Committee Update (Committee Progress, Interface Points, Bylaw Concerns/input) Mr. Ragazzo stated he came here to the Finance Committee to make sure there was a rapport between the Finance Committee and the Audit Committee. He wanted to share what the Audit Committee is working on. He wanted to ask the Finance Committee questions and get the Committee's input. Mr. Ragazzo stated that the mission of the Audit Committee is looking at their duties and making sure they are doing what the bylaws say. Mr. Ragazzo noted that the Audit Committee has brought in the firm Powers and Sullivan as an outside auditor. They did go out to bid but Mr. Stanbrook noted it was not necessary to do so, auditing is the exception in state law requiring bids. Mr. Ragazzo noted the Audit Committee made the recommendation to the Board of Selectmen who then unanimously agreed to go with Powers and Sullivan, who has extensive knowledge working with large and small municipalities. Chairman Wilk noted that everyone was happy with the decision to switch and noted the last auditing firm was with the Town for over twenty years. Mr. Ragazzo moved the discussion to the management letters and the Audit Committee is looking at what management is doing to remedy or rectify the points that are made within the management letter. He noted that these are on the website for anyone interested in reviewing them. Mr. DeSantis asked if having clean reports and management reports is helpful in getting bonds. Mr. Stanbrook answered that it is helpful despite the upfront work involved. Mr. Ragazzo further explained that when management has responded to what they are doing, and what their planned action is, Mr. Stanbrook updates that information to the spreadsheet. There are areas where there is no clear solid answer as corrective action plan. An example is that the Town Accountant is overworked and understaffed and the external auditors said to increase one full time employee; however that is up to the budget not the Town Accountant to add an employee. Mr. Ragazzo noted that the Audit Committee met on March 9th, and is behind the points that he is stating. Mr. Ragazzo stated that the Audit committee does not have a say in the budget like the Finance Committee, but does support adding a full time employee to the business office. He also noted that the School Department has seven full time employees in their business office and Mr. Stanbrook has only two. Mr. Ragazzo stated that the committee had challenges this year and were "held hostage" by the Bristol County Retirement Board and their audit was incomplete. He noted it was impossible to provide statements if they did not have audited financial statements to provide to the ISO Power Group. Many towns were also affected and the Town was allowed to send regular quarterly statements and this issue was out of the Audit Committee's control. The committee had every intention of meeting, but had nothing to meet about. Mr. Ragazzo then commented that the Audit Committee consensus is to work on creating a fraud hotline for the town. The committee will be working on a recommendation to provide to the Board of Selectmen as to how to accomplish creating one. Lastly Mr. Ragazzo wanted to discuss which reports the Finance Committees reviews regularly so that there is not duplicated effort. He noted that the Town needs to have an internal control framework and work with the Town Accountant. He stated that the Audit Committee is relying on the Finance Committee to review actual versus budget. Mr. Ragazzo then asked what does the Finance Committee do to compare budget versus actual for the school. Chairman Wilk answered that the committee receives reports sometimes, but are not privy to the information. Mr. Ragazzo stated that from his perspective someone needs to look at the school numbers, he noted that the budget for the school is over half the town budget at $52,000,000. Mr. Ragazzo stated that he is meeting with the business manager of the school and is going to ask for reports to review. Chairman Wilk noted that if both the school and Town were using the same accounting platform it would be very efficient. Ms. Christo stated the level of detail in the school reports is different than what Mr. Stanbrook provides, but Mr. Vozzella has provided any information to her when asked. Mr. Feely commented that the Finance Committee does not have the same role to the school, but they do make recommendations at Town Meeting on both budgets. Chairman Wilk commented that the School does come in during budget season periodically to the Finance Committee meetings. Mr. Feely asked Mr. Ragazzo if he was feeling good about the progress of the Audit Committee. Mr. Ragazzo answered that he was and that the committee is working to complete the internal control framework, get more reports and institute fraud hotline and then the Audit Committee will have full compliance with the bylaws. 4. Update FY17/FY18 budget, revenue and forecast - William Ross and John Stanbrook Mr. Stanbrook referred the committee to the Town Meeting Funding Sources handout. Chairman Wilk asked to combine this with agenda item number seven. Mr. Stanbrook stated the deficit is at $1,435,163 and the second shows where the Town is today. In FY17 related articles and they are additions, transfers or capital projects that need to be started right after town meeting instead of waiting until July 1st. Mr. Stanbrook noted these are typically water and road projects because there is only so much good weather to do those projects in. Mr. Stanbrook stated the budget transfers that he knows of are $145,000 for snow and ice, which does not include the most recent storm. There will be unpaid bills, which are bills that are from prior fiscal years which can only be paid by vote at Town Meeting, for example if there is an FY12 bill it cannot be paid in FY17. Chairman Wilk stated that items that don't get paid are typically medical bills or maintenance bills and usually get approved. Mr. Stanbrook provided a list that is a current list of unpaid bills on the third page of the handout. Mr. Stanbrook referred the committee to the handout Revenue Summary Using Moderate Assumptions. This shows a comparison side by side of the FY17 and FY18 as of today. Mr. Eagle commented that the assumption made by using the Governors number or Federal numbers get cut would there be a trickle-down effect. Mr. Stanbrook answered that it is a concern and that final numbers will not be known until July or August, but it is a useful estimate. Chairman Wilk stated that the Governors number is conservative and has been very close for the past few years and he does not see the Federal cuts affecting the budget until FY19. Mr. Feely stated that the Governor's budget is probably the most conservative. Ms. Christo commented that it is a best guess, but this year it is a very different political climate than the past four to five years. Mr. Stanbrook commented that if the number was lower, the budget has to be balanced and cuts would have to be made. Chairman Wilk asked Mr. Stanbrook what was his accuracy in budget forecasting. Mr. Stanbrook answered that the budget has been 99.79% accurate and this has been consistent for the last few years. Chairman Wilk stated that the Town's numbers are solid. Chairman Wilk stated that next week after the Budget Subcommittee there will be a better sense. Mr. Stanbrook referred the committee to the last handout titled Summary of the General Fund Budgeted Revenues and Expenditures Departmental Summaries. The discussion focused on free cash and how much to use. Chairman Wilk stated that the budget can be balanced year over year at level services, but it would be difficult and unpleasant. This year the health insurance costs are manageable, but next year it will be a challenge if a twenty percent increase occurs. The Town will have to switch to a higher deductible plan with higher copays. Chairman Wilk referenced that the State couldn't absorb healthcare increase this year and they gave everyone one choice and didn't have to go through labor negotiations. Ms. Christo asked if the Finance Committee should give their opinions on the budget before going to Budget Subcommittee meeting. Mr. Feely suggested that if the Town were to consider an override that the Town would have to look at a three to five year plan for and vote once and have a plan to fix the long term problems. Chairman Wilk stated he Is comfortable with an override as long as people understand what it is for and the impact it has and a last resort would be to increase free cash. Chairman Wilk stated that a few years ago the committee predicted where the Town would be today and the Town is there except there is not additional revenue from the re -zoning of the Industrial park. Mr. Chemburkar stated that it is a revenue problem and that he does not want to see free cash going up when there is not a plan on the revenue. Mr. DeSantis asked if healthcare is the Town greatest risk and Mr. Stanbrook answered it as. Ms. Christo commented that the greatest risks are snow, special education placement and healthcare. The Committee agreed that healthcare can try to be controllable and needs to be addressed. 5. Tax Project Update - Brian Eagle Mr. Eagle stated that Mr. Schoonveld originally wanted to do for Town Meeting this year, but now this will be stated after Town Meeting. Mr. Eagle stated they talked about expectations and will work on this over the summer. 6. Annual Town Meeting Timeline and Finance Committee Responsibilities Chairman Wilk scheduled the next Finance Committee meetings for March 30, 2017, April 6, 2017, April 13, 2017 and April 27, 2017. (Please note after this meeting the dates were changed to March 30, 2017, April 13, 2017, April 20, 2017 and April 27, 2017 based on room availability.) 7. Discussion of next steps on Municipal and School budgets Refer to agenda item number four. 8. Approve Meeting Minutes Motion: To approve the meeting minutes from January 22, 2017. (Christo/Feely) Passes 6:0 9. Board Updates I CIP: Mr. Feely stated there was nothing new to report. Audit Committee: Mr. Ragazzo presented as an earlier agenda item. Budget Subcommittee: Chairman Wilk stated there has not been a recent meeting. School Committee: Ms. Christo commented that the schools have been giving their school improvement plans for next two years with budget numbers. Chairman Wilk commented that Mr. Ahern submitted a grant for the roof. DPW/Public Safety Complex: Chairman Wilk noted that the footings and utilities are in. Downtown Strategy Committee: Chairman Wilk stated the Downtown Committee met with the Board of Selectmen and approved banners and signage for the downtown area. 10. items not known within 48 hours There were no items. 11. Audience Q&A There were no questions. 12. Committee member comments Mr. Chemburkar commented that the Downtown Committee has been getting things done. Chairman Wilk commented that it took a lot to get there, but the signs were fading anyways so it made sense to replace them, but the committee got traction. 13. Adjourn Motion: To adjourn the March 16, 2017 meeting of the Finance Committee at 9:07PM. (Feely/DeSantis) Passes 6:0 f4a" (" 6 ZZ -17 Signa re Date Documents Used in this Meeting: Town of Mansfield Audit Committee Webpage printout Southeastern Regional School District FY18 Budget FY18 Town of Mansfield Annual Town Meeting Funding Sources Town of Mansfield FY18 Annual Town Meeting FY17-Related Articles Funding Sources Town of Mansfield List of Unpaid Bills in Article 8 Town of Mansfield FY18 General Fund Budgeted Revenues & Expenditures Departmental Summaries Town of Mansfield FY18 General Fund Revenue Summary Using Moderate Assumptions as of 3/16/17 Town of Mansfield FY18 Calculations as of 3/16/17 Town of Mansfield FY18 Annual Town Meeting Article List as of 3/16/17 Town of Mansfield Warrant for Annual Town Meeting