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RECEIVED OCTOBER 29, 2009 @10:15 A.M.
Kerry Miserendino, Redding Asst. Town Clerk
4 Pages
REDDING BOARD OF FINANCE
REGULAR MEETING
October 26, 2009
Filed subject to approval
Present: Alvarez (Chairman), DeSalvo, Viscio, Dolan(7:50 pm), Simeonidis
Also present: First Selectman Ketcham, Selectman Takacs, Controller Gniadek, Treasurer O’Donnell, Tax Collector Moisio, and nine members of the public.
APPROVAL OF MINUTES
Motion: move that the Board of Finance accepts the minutes of September 29, 2009 as corrected. DeSalvo, Simeonidis. Approved. Unanimous
Corrections: page 2, para. 1, line 1, Board of Finance is; page 2, para. 2, line 3, no proposal; page 2, under Controller Report, interest rates expected on the BANS is 0.5% to 0.6%.
PUBLIC COMMENT
Steve Martin, Mountainview Drive: questions on the following points:
- Has the State Grant money for the Hanssen property been received? Response from First Selectman Ketcham, a letter of award has been received, but a technicality related to the life estate of 7 acres has caused renegotiation of the grant.
- What is the status of the Levine property? First Selectman Ketcham reported the property is listed with a broker, the prices was reduced, the property is being actively shown, there are interested parties, but nothing definite at this time.
- Highway Trucks, the plan was to sell 2 trucks and use one for parts, did this happen. Mr. Gniadek stated that this is what happened.
- Police Department STEAP Grant status: Mrs. Ketcham stated that the request for plans for the renovation of the current police department building activated the STEAP Grant. She does not anticipate using any Town money on the renovation.
FISCAL YEAR 2009 AUDIT REPORT DRAFT
The Board of Finance members have draft audit reports for review. A representative of Blum Shapiro LLC was not able to be at the meeting to discuss the grant. A special meeting will be scheduled prior to the next regular meeting.
BANS
Treasurer O’Donnell reported that BANS were recently rolled over. The BAN was $5,996,000 for 9 months at a rate of 0.6159%. She suggested the board to discuss at what point the short-term financing should be converted to long-term financing.
Mr. Dolan arrived (7:50 pm)
ARRA EDUCATION FUNDING
Business Manager, Peggy Sullivan, was not able to be at the meeting, but the following information was provided.
The ECS Grant entitlement remains at the 2008-2009 level for the next two years (2009-2010 & 2010-2011). Approximately 14.26% supported by the Federal SFSF funds under ARRA (American Recovery and Reinvestment Act of 2009. The State funded portion of ECS will continue to be paid to the Town’s treasurer in accordance with Section 10-262i of the Connecticut General Statutes.
The SFSF portion will be paid through the ED111 process and the towns are required to pass these SFSF funds directly to the board of education. Mrs. Sullivan recommendation is to have the Town of Redding reduce the education budget by $98,115 and grant revenue by the same amount. She added that, in fiscal 2011-2012, when the funding is not longer available, there will be a corresponding increase in the Board of Education budget.
Motion: move that the Redding Board of Finance, subject to review by Town counsel and for reasons discussed at the meeting, move to reduce the Board of Education budget for fiscal 2009-2010, by the amount funded through federal ARRA monies of $98,115, with a corresponding reduction in ECS grant revenue by $98,115. Simeonidis, DeSalvo. Approved. Unanimous.
TAX COLLECTOR’S REPORT
Tax Collector Moisio reported that, as of October 26, 2009, taxes totaling $21,604,000 were collected, representing 51.7% of the actual amount to be collected. Last year, at the same time, 49.4% of the taxes had been collected.
REPORT FROM CONTROLLER
Mr. Gniadek reported on the following:
- Revenue & Expenditure reports were reviewed. Prior year numbers were added to the worksheets as requested.
- Expense adjustment, actual interest expense on the BANS, budgeted at $105,000 was $55,000, a favorable variance of $49,500
- Road Reconstruction Fund Summary: Of the $1,004,725 appropriated, a total of $850,384 was spent on Deacon Abbott Road, Deacon Abbott Road South & Huckleberry Road, leaving $154,381. That balance will be used for work on Beck Road and Hopewell Woods Road, estimated at $281,000. The difference will come from the Highway Department operating budget for road repair or from TAR (state money) funds.
- Old Town House Roof: the roof is leaking and the need of replacement was elevated to an emergency situation. The low bid for the replacement was $9,958. The existing roof is 20 years old; the new roof has a life expectancy of 35 years. In addition, Mrs. Ketcham has been advised that the chimney needs tuck pointing and the work should be done before the roof is replaced. That work is estimated at $1,000.
Motion: move that the Board of Finance authorizes the expenditure of up to $11,000 to replace the roof on the Old Town House and tuck point the chimney as described by the First Selectman and Controller. Simeonidis, Dolan. Approved. Unanimous.
- Policy/Procedure: Mr. Gniadek is developing financial policies and procedures where needed. The purchasing policy is complete and he asked Board of Finance members to review the policy. He is working on a policy & procedures for contracts.
- Mr. Gniadek reported the Town will shift from ADP to Paychex effective January 1, 2010. Paychex is able to provide enhancements and additional payroll processing benefits at no additional cost.
GENERAL FUND BALANCE DISCUSSION
The current fund balance is almost $1.8 million, or 4.1% of the current operating budget. $600,000 is included in the operating budget for addition to the fund balance. Board members discussed the goal, or desirable percentage for the fund balance. Mr. Gniadek was asked to compile information on what fund balance other towns maintain.
The Treasurer reported that the Town's Financial Advisor, Matt Spoerndle of the Phoenix Group, indicated that the ideal range for our fund balance should be approximately 9%. Since our fund balance is lower than the ideal range, he estimates that possibly our bond rating could reflect a higher cost of debt. Mr. Spoerndle estimated that our cost of debt could increase by 10 to 12 basis points, which is clearly immaterial.
Board members concluded that the amount to be added to the fund balance is a flexible number. The amount that will be included in the next budget was not determined as yet. Mr. Simeonidis reminded the board that the town must be mindful of how and when the fund balance is used.
LONG RANGE FINANCIAL PLANNING COMMITTEE REPORT
Peg O’Donnell reported the preliminary plan has been submitted to the Board of Selectmen for review. The Board of Finance will receive Board of Selectmen recommendations at the December meeting.
BOARD MEMBER REPORTS
Mr. Simeonidis reported a new Superintendent of Schools has been hired. Dr. Michael Cicchetti will begin work after the first of 2010.
Mr. Alvarez reported that he met with GLDC’s Chris Lynch regarding the project. Mr. Lynch indicated they are working on funding.
A special meeting was scheduled for November 9, 2009, for a discussion of the audit draft with a representative of Blum Shapiro LLC.
PUBLIC COMMENT
Mike D’Agostino, Glen Hill Road: made some suggestions regarding the replacement roof at the Old Town House and the tuck pointing of the chimney.
Peter Bonfanti, Umpawaug Road: thanked the board for their discussion of the fund balance and that the Town should not be limited to driving to a bond rating.
James Miller, Middlebrook Pond Road: commented that the philosophy of the use of the fund balance is important. He suggested a workshop, following the election, to discuss the policy on the use of the fund balance.
Steve Martin: commented that now may be the time to convert the short-term financing to long-term financing given the favorable interest rates.
Kim Yonkers, Goodridge Road: hopes the Board of Finance will learn from the past and not base plans on income that might come in.
ADJOURNMENT
Motion: move to adjourn. Simeonidis, DeSalvo. Approved. Unanimous.
The meeting was adjourned at 9:35 pm
Respectfully submitted,
Mary Maday, Recording Secretary
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