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January 15, 2002 MinutesMINUTES /BOARD OF FINANCE MEETING
TUESDAY, JANUARY 15, 2002
A meeting of the Board of Finance was held on Tuesday, January 15, 2002 at the Lower Conference Room at Town Hall at 8:00 p.m.
Members Present: Bernard P. Dzielinski, Chairman
Norman Craig, Martin Heiser, Joseph Savino, and Andrew Bodner
Town Officials: Jay Wahlberg, Controller, John Mannuzza, Assist. Controller
A G E N D A
· Approval of prior meeting’s minutes
· Election of Board Officers
· Tax Collector/Treasurer’s Report
· Discussion on State Funding of Bennett’s Pond
· Auditor Review and Re-Appointment
· Discussion and Suggestions on Future New Board Business
· Controller’s Report
o Financial Review
o Transfers
· East Ridge Middle School, Phase 2
· Cash Flow Management
· Communications & Correspondence
· Adjournment
Chairman Dzielinski called the meeting to order at 8:00 p.m., and turned the meeting over to Mr.Heiser who said he would like to recognize Mr. Dzielinski.
· ELECTION OF BOARD OFFICERS
A motion was made by Mr. Dzielinski and seconded by Mr. Craig to elect Mr. Heiser Chairman of the Board of Finance for 2002, saying that Mr. Heiser has been on the Board of Finance for six years, he is a hard-working person, as were Tim Sullivan and John Scarbrough, all of whom took their Board of Finance jobs seriously which he, Mr. Dzielinski, much appreciated. Voting in favor: Mr. Dzielinski, Mr. Craig and Mr. Heiser. Voting against: Mr. Savino. Abstaining: Mr. Bodner. Motion carries.
A motion was made by Mr. Craig and seconded by Mr. Heiser to elect Mr. Dzielinski as Vice Chairman of the Board of Finance for 2002. Voting in favor: Mr. Craig, Mr. Heiser and Mr. Dzielinski. Voting against: Mr. Savino. Abstaining: Mr. Bodner. Motion carries.
A motion was made by Mr. Bodner and seconded by Mr. Heiser, for discussion purposes, to elect Mr. Savino as Vice Chairman of the Board of Finance for 2002. Voting in favor: Mr. Bodner and Mr. Savino. Opposed: Mr. Dzielinski, Mr. Heiser and Mr. Craig. Motion fails.
Mr. Heiser made a statement saying that one of the things he would like the Board of Finance to focus on is better communications with three primary groups: 1) the public, with a more open agenda and a public sign-up sheet for people who want to address the Board and thru the press, so that the Board of Finance can get its point of view out to the public 2) government groups such as the Fire and Police Departments, Board of Selectmen, the Tax Collector and Town Treasurer. Saying he doesn’t like surprises, he thinks the various groups need to work together to try and avoid mishaps such as the current East Ridge Middle School situation, and 3) the various interest groups in town by having each member of the Board of Finance be responsible for attending meetings of some of the different groups such as ROSA, the various building committees, the Board of Education, etc. so The Board of Finance knows what’s going on in Town to avoid surprises while maintaining our fiscally conservative principals.
Mr. Heiser said he would like better intra-board communication: regarding agendas, correspondence, inspirations, etc.(not discussions or decision making) via email; more timely delivery of meeting packets; respect shown to each member of the board and to people addressing the board. Saying he is generally proud of what the Board has done, Mr. Heiser sees the problems ahead as: controlling the school building projects’ budgets; senior tax credit, managing the Town’s finances through war and recession and the sundry turmoil, improving our image, Bennett’s Pond, finding more revenue, a shrinking grand list, stabilizing the mill rate and the reviewing and revisiting of school needs constantly looking for savings, and taking another look at the new population projections that have come in; as well as dealing with a powerful first selectman. Mr. Heiser said: “my approach is a low pyramid, I have very limited financial credentials, I am not a CPA, so I will be leaning on all of you for financial insights on these issues.”
Mr. Dzielinski said we was pleased with what Mr. Heiser had outlined as an objective for the Board, and that his reduced responsibilities will give him a chance to do some long-range thinking and analysis as to where this Town is going in terms of economic viability and to provide some kind of guidance for the Town in the future.
Mr. Craig told Mr. Heiser that he would be willing to help him in anyway possible.
Mr. Heiser said he was going to have name plates made for each Board member as a gift and asked how they would like their names to read. The responses were: Andrew Bodner, Joseph Savino, Norman Craig and Bernard Dzielinski.
APPROVAL OF PRIOR MEETING’S MINUTES
The Board asked Mr. Wahlberg to get the meeting packets out so they are received by the Friday before the meeting at the latest. Mr. Mannuzza suggested that the Agenda be posted on the Town’s website.
The Board discussed the November 20, 2001 Minutes and Mr. Bodner said that he has attended several Board of Selectmen meetings where members of the public have cast the Board of Finance as being anti spending additional funds on the East Ridge Middle School and the Board of Selectmen have remained quiet rather than coming forward with their position and stating that they, too, are opposed to spending beyond the originally-agreed-upon $8.2M. Mr. Bodner felt that Mr. Marconi had come to the Board of Finance’s November 20, 2001 meeting to get that Board’s position on additional spending on East Ridge Middle School and that he (Mr. Marconi) agreed with the Board of Finance that spending should be held to the $8.2M. Mr. Bodner wanted this expressed clearly in the Board of Finance’s minutes of the November 20, 2001 meeting.
A motion was made by Mr. Savino and seconded by Mr. Dzielinski to table approval of the Minutes of the Board of Finance November 20, 2001 meeting until members of the Board of Finance have an opportunity to review the tapes of the meeting. Vote, all in favor, unanimous. Motion carries.
A motion was made by Mr. Savino and seconded by Mr. Dzielinski to approve the Minutes of the Board of Finance December 18, 2001 meeting with the deletion of the second paragraph on page five under “Communications and Correspondence”. Vote, all in favor, unanimous.
· TREASURER’S REPORT – December 31, 2001
Investments as of 12/31/01:
Fleet Bank 25,230,013.25 2.65%
MBIA- BOND FUND 15,110,096.19 1.99
MBIA- GEN’L FUND 2,482,119.54 1.99
Ridgefield Bank 12,623,899.34 2.45
STIF 283,801.28 2.22
Union Savings Bank 6,326,913.25 2.31
Union Savings CD 3,079,392.32 4.34
$65,136,235.17
Year-to-Date Interest Earned:
Fleet Bank 230,013.25
First Union 21,689.14
MBIA-CLASS 164,175.77
Ridgefield Bank 249,774.78
STIF 2,220.89
Union Savings Bank 163,991.25
$831,865.08
*** Union Savings has enhanced their Municipal Money
Market Account rate to 10 basis points above the pre-
vious week’s average rate for STIF.
Maureen M. Kiernan
Treasurer
· TAX COLLECTOR’S REPORT
FISCAL YEAR ENDING JUNE 30, 2002
ACTUAL % COLLECTED
CATEGORY BUDGET COLLECTED VS BUDGETED
Current Taxes $65,615,512 $39,383,601 60.0%
Supplemental Motor Veh. 600,000 261,706 43.6%
Prior Year Collections 725,000 381,404 52.6%
Interest & Lien Fees 350,000 156,999 44.9%
AS OF 12/31/01 $40,183,710
· DISCUSSION ON STATE FUNDING OF BENNETT’S POND
The Board discussed the desirability of obtaining a second appraisal on the Bennett’s Pond property in order to satisfy DEP’s requirement of two appraisals to determine the value of the property and the amount of the State’s contribution toward its purchase. Mr. Bodner said it is costing the Town $10,000.00 to $15,000.00 a month every month we delay on this; “if $15,000.00 per month is meaningful money, why are we three months into this and not applying for the money?” Mr. Heiser responded that it’s the Board of Selectmen’s job to apply for the money and Mr. Wahlberg felt that the Board of Selectmen is taking advise from the attorneys handling the court case as to when to apply for the State money.
A motion was made by Mr. Savino and seconded by Mr. Heiser that the Board of Finance support the Town of Ridgefield securing the State of Connecticut money for the Bennett’s Farm property taken by eminent domain for open space by obtaining a second appraisal and submitting it to the DEP as soon as possible. Vote, all in favor, unanimous. Motion carries.
A motion was made by Mr. Savino and seconded by Mr. Heiser to ask the First Selectman to expedite the second appraisal of the Bennett’s Pond property so the Town can get access to State funds, estimated at $4.25M, available for the purchase of open space. Vote, all in favor, unanimous. Motion carries.
Mr. Heiser cautioned that much of the discussion regarding Bennett’s Pond has been done in executive session by the Board of Selectmen and there might be more to expediting access to State Funding than the Board of Finance is currently aware of. Mr. Dzielinski suggested if the Board of Finance wanted to get into an in-depth discussion of Bennett’s Pond, it was better done in executive session.
· AUDITOR REVIEW AND RE-APPOINTMENT
Mr. Bodner asked how the auditor’s hours compared, this year to last year, and was the outstanding job done by Mr. Wahlberg’s department the reason for the lack of comments by the auditors? Mr. Bodner said he thought it would be entirely reasonable for the auditors to be reducing their fee, if in fact fewer hours were spent. Kostin Ruffkess originally came in through the bidding process in 1994. Mr. Wahlberg, while acknowledging it was a hefty fee, said that, from his knowledge of other towns, Kostin Ruffkess’ fee is reasonable and customary. Normally, towns go out to bid every five to ten years for new auditors. (a new set of eyes) Mr. Dzielinksi noted that there was nothing in their proposal about GASBY 34, and what it would entail.
A motion was made by Mr. Savino and seconded by Mr. Craig to table the re-appointment of the auditors until the next meeting in February. Vote, all in favor, unanimous. Motion Carries.
· DISCUSSION AND SUGGESTIONS ON FUTURE NEW BOARD BUSINESS
Mr. Heiser wanted to review the new meeting agenda outline discussed at the December 18, 2001 Board of Finance meeting and insert “ten days” after the words “sufficient advance notice” in the first sentence. Given it isn’t possible to change what occurred in the December 18, 2001 meeting, Mr. Heiser asked to bring the change up at the February meeting.
Mr. Bodner suggested that they add to tonight’s agenda continuation of the discussion from the last meeting as to whether or not the Board of Finance should be giving some direction to the Town and the Board of Education about the magnitude of the budget that the Board of Finance should adopt this year. The Board of Education is already deep into budget discussions and if the magnitude of what they propose is way out of whack with what the Board of Finance is prepared to endorse, the Board of Education will have done a lot of work needlessly. In the face of all the bonding, Bennett’s Pond, tax increases and the seniors’ tax credit, Mr. Bodner said he would like to see the Board of Finance out ahead of it all saying that the Town is a balancing of different interests and that the schools are just part of the picture. He would like to make the budget process more meaningful for the various town agencies and departments by providing some guidance now.
Mr. Bodner said he has heard First Selectman Rudi Marconi say that he will take money out of his capital program and put it toward the schools.
Mr. Heiser noted that the debt service alone translates into a 10% tax increase. Mr. Bodner said: “The debt service is an insignificant portion of the Town budget, it’s over 10% but it’s not the prime mover of where the costs go.” Mr. Savino noted that there is currently a negative CPI and the grand list is slowing down, it isn’t going up 3 ½ % this year. Mr. Garzi thought the increase would be more like $1M to $1.5M. Mr. Dzielinkski said that some modifications to assumptions in the 2003 budget figures, which were based on a 2 ½ % increase in the grand list, could be made and new projections made. “You can use this and look at the underlying assumptions and make some recommendations as the result of our analysis.” Mr. Heiser asked what form they thought the recommendations should take.
Mr. Bodner noted that the student population projections have apparently been overstated. 70% of the Town’s budget is schools and 80% of that is salaries, and that should be reflecting the number of students. Mr. Savino suggested the Board of Finance be more proactive, noting that the warning signs of trouble are appearing, and the sooner The Board of Finance identifies the problems facing the Town, the sooner it can find remedies. He further suggested that The Board of Finance ask Mr.Wahlberg to get the model to accurately reflect the grand list (by getting the grand list information from Mr. Garzi) to assess several scenarios relative to the current debt and then The Board of Finance coule figure out what it thinks it can live with taking to the taxpayers. Mr. Savino further asked Mr. Wahlberg for his latest intelligence as to what the debt load will be and interest rate projections and then to put an item on the agenda for the next meeting for The Board of Finance to review this information with an eye to see what it can do to slow the increases down.
Mr. Heiser reminded the Board that when Ridgefield voters approved the $134M bundling package, the tax consequences were spelled out clearly, the taxpayers knew they were signing up for a hefty tax increase. “I don’t know how this board is going to make that disappear.” Mr. Dzielinski noted the debt service is increasing from $9.8M to $14.2M and said he had an intellectual problem with giving the various boards and agencies guidance now, telling them to shave as much as they can to make sure that the mill rate is nice and smooth.
· CONTROLLER’S REPORT
o Financial Review
Mr. Savino asked about anticipated revenue from investments; the amount of anticipated shortfall of interest on invested funds due to the drop in interest rates. Mr. Wahlberg indicated the Town has twice the size of investable funds as last year but, with interest rates substantially lower, he anticipates a shortfall of approximately $100K to $150K.
Mr. Bodner asked about the income from the invested bond money and was told it goes into the capital reserve fund (a separate fund within capital projects) which becomes one of three funding sources for capital future projects and can be used for Town or school projects, whatever the Board of Finance decides. The revenue from investing the bond money is not netted into the construction, neither are the interest costs. Mr. Wahlberg said the Town currently has a 2% negative arbitrage. Mr. Wahlberg said, the debt service (or interest costs) is handled thru the general fund, the revenue side goes into a revenue fund that is not part of the general fund. Mr. Dzielinski noted that 2/3rds of the year’s anticipated revenue on the golf course has already been realized; they had a great December.
Mr. Bodner asked about 44900 and was told that most of it came in from bond premiums and any bond premium we get has to be applied to debt service so it goes into miscellaneous revenue and theoretically counteracts the expenditure side of the debt service so the Town accomplishes what the government wants it to do.
Mr. Dzielinski asked Mr. Wahlberg to invite Paul Roach and the Chairman of Parks & Rec to the February meeting to discuss revenue.
Mr. Savino drew the Board’s attention to approximately $20,000.00 of unexpended funds under salaries (for an assistant planner position which has just been filled) in P & Z’s budget and suggested that the money be earmarked for P & Z’s legal expenditures. Rather than take the money out of Contingency, if they are going to underrun their plan, for the first $20K of the $51K in Transfer #200207
Mr. Bodner asked about fuel oil expenditures and Mr. Wahlberg said they had just received bids at 71.7 cents per gallon for the coming year.
Transfers - About $35,000.00 has been expended on the P&Z v. ZBA and Sweet Pea lawsuit to date. P & Z now wants to appeal the verdict.
Transfer # 200207
WHEREAS, the Town legal budget is reaching its appropriation level and requires additional funds to defend the various pending lawsuits.
WHEREAS, the funding for remaining retainer to Cohen & Wolf will require 6 more payments.
THEREFORE, the Town is currently estimating to expend an additional $50,000 to June 30th of this fiscal year.
INCREASE:
10030-52400 PROFESSIONAL SERVICE $50,000
DECREASE:
108980-59101 GENERAL CONTINGENCY $50,000
A motion was made by Mr. Dzielinski and seconded by Mr. Savino to take the Planning & Zoning total budget figure of $219,324.00 and subtract one half of the salary figured for the Assistant Planner’s position, which has only just been filled, from that $219,324.00 and increase Contingency by that amount. Vote, all in favor, unanimous.
A motion was made by Mr. Craig and seconded by Mr. Savino to table Transfer #200207. Vote, all in favor, unanimous. Motion carries.
Mr. Bodner asked if the Board of Finance has the authority to tell P&Z that they will not pay the bills for P&Z to appeal. Mr. Heiser reran the origins of the intra-department case when P & Z came to the Board of Finance for $7,500.00 and was turned down flat. The Board of Selectmen then found $3,500 for P & Z to initiate the lawsuit and told P & Z that there would be no more money forthcoming.
Transfer #200208
WHEREAS, the Town legal budget is reaching its appropriation level and requires additional funds to defend the various pending lawsuits.
WHEREAS, all bonding costs for professional services were deducted from the bond premium on the issue of 2001; there, since there are no further costs anticipated for this fiscal year – that appropriation is available for transfer.
THEREFORE, a transfer of appropriation is requested for $90,000 to cover the anticipated expenditures.
INCREASE:
10030-52400 PROFESSIONAL SERVICE $90,000
DECREASE:
10030-52400 SERVICE FEES $90.000
This transfer is for informational purposes only. No vote required. Mr. Wahlberg explained that these were bonding fees that were not needed and were transferred into the legal line which is what brought that line up to $79,000.00.
Mr. Savino noted an open capital appropriation of $7,500 from the Community Facility Study that was funded about two or three years ago, and the Board asked Mr. Wahlberg to close it out and then use that money to help fund the lawsuit.
EAST RIDGE MIDDLE SCHOOL, PHASE 2
Mr. Bodner suggested that the Board of Finance ascertain the Selectmen’s position on the ERMS issue so the Board of Finance is not being painted as being out there by itself. Mr. Bodner attended a BOE meeting last night where they discussed looking at the other school projects in the bundle to make cuts in them to cover the overrun in the ERMS project. Mr. Bodner thinks this is a good idea and that the BOF should endorse this approach. Mr. Wahlberg explained that funds could not be transferred from the new middle school project because that was a separate bond issue, but that funds could be transferred within one bonding issue from one project to another with BOS and BOF approval. Mr. Craig thinks there are firewalls between the projects, Mr. Wahlberg said only firewalls that the BOF put in place.
Nancy Fogarty, who had been in the audience, joined the discussion at the table on ERMS. After lengthy discussion, Mr. Heiser agreed to draft a letter to Mr. Berg, Mr. Anderson and the BOE asking them to keep The Board of Finance posted and encouraging them to work towards finding the money in other budgets and not having to come up with new money.
· CASH FLOW MANAGEMENT
Mr. Savino and Mr. Wahlberg discussed the merits of cutting checks on Friday after 3 p.m. to take advantage of the weekend float which allows the Town to keep the interest in its account rather than the vendors account for three more days. Mr. Savino would like to see the department and agency heads give The Board of Finance twelve-month outflow projections to assist Town Treasurer, Maureen Kiernan to formulate an exact plan and know how much money she can invest for a longer term thus realizing more yield
Mr. Bodner asked about the monthly building reports the BOF had requested, and Mr. Wahlberg said he was still working on this.
· COMMUNICATIONS & CORRESPONDENCE - none
· ADJOURNMENT
A motion was made by Mr. Craig and seconded by Mr. Savino to adjourn the meeting at 10:40 p.m. Vote, all in favor, unanimous. Motion carries.
Respectfully submitted,
Karen Rodgers
Recording Secretary
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