JULY 7, 2003
Chairman Perkins called the meeting to order at 7:08 PM.
Selectman Rogers, Selectman Eayrs, and Selectwoman Brunelle were present.
Selectman Wiksten entered the meeting at 7:10 PM.
Discussion of Budget – FY’04
The Board met with Judy MacDonald, Sandy Bernier, and members of the Finance Committee to discuss the fiscal situation for FY’04.
Chairman Perkins explained that the Board cannot go any further without knowing how much money is available.
Ms. Bernier said all the numbers for June are not in yet.
Ms. MacDonald said one of her girls had worked overtime to give as best an estimate as possible. She said that final receipts from all departments are not due until this Friday, final bills are not due until July 14th and requests for encumbrances are not due until July 18th. Final numbers will not be available until this time.
The local receipts through May 1, 2003 are $4,087,779.94. Ms. Bernier said she estimated receipts for the month of June to be $430,000. This would total $4,517,779.94.
Ms. Bernier said the excess over the estimate is $1,666,892.94. She also said that one time reimbursements should not be included as they won’t be there next year. This totals $227,111.00. The total minus reimbursements is $1,439,781.94.
The difference in Local Receipts from FY02 is $304,743.70. She noted that the estimated amount may increase.
Ms. Bernier said the total amount of Free Cash wouldn’t be known until all expenses are submitted. She said she ran preliminary numbers which estimated the Free Cash at $2,133,000. She said she was comfortable that the Town would make the estimated $2 million in Free Cash and have some excess.
Chairman Perkins asked how much money would be turned back from departments. Ms. Bernier said she had used the "worse case scenario" that all money would be spent. Chairman Perkins asked if that was realistic. Ms. MacDonald said it was not.
Ms. Bernier said there will be some monies returned, but no where near the amount last year. Ms. MacDonald noted that some departments gave back in February.
Ms. Bernier said the tax title revenue numbers will be determined once collections are in. Ms. MacDonald estimated the amount to be $348,000 for the balance in 2003 real estate.
Selectwoman Brunelle asked if there were any properties that are occupied, where rent can be charged. Ms. MacDonald said she believed it was all open space. She noted that the CP Washburn property is included, and the land on Rte. 28.
Selectwoman Brunelle noted that there is an increase of about $1million in Excise Tax. She asked if this was normal. Ms. Bernier said this account is underestimated for the following year. She explained that you cannot predict what will happen with excise.
Ms. Bernier noted that the FAM Account will be short about $17,000.00. The balance in the account is $1,349,200 as of May. The account lasts 20 years.
Selectman Wiksten noted that the monies are for the phase that is being finished now.
Selectwoman Brunelle asked what amount the Town is committed to as opposed to what we have. Ms. Bernier said the schedule was voted on by a previous Board. She said the principal amount $135,750, remains the same each year.
Selectwoman Brunelle said the Board needs to know how much money is spent each year from this account.
Ms. Bernier said the account does not generate enough money to support itself.
It was the consensus of the Board that the newly formed Landfill Study Committee should be given the amount of the authorized debt and the current debt.
Steve Studley, Chairman of the FinCom, said that the Local Receipts have a smooth progression and do not vary substantially year to year. He said the variable is New Growth.
Ms. Bernier noted that New Growth is based on January 1st. Anything that happened in this calendar year will not be reflected. She said that Barbara Erickson has estimated that New Growth for this year will stay around the same as last year, which was $400,000.
Selectwoman Brunelle asked if it would be "safe" to utilize an additional $500,000 for Local Receipts projections going forward.
Ms Bernier said that the Board had asked to eliminate the use of "Free Cash" in figuring the expenditures. She said, based on the most recent Annual Town Meeting, there would be a $1,848,579 deficit.
Ms. Bernier said that the estimate for Local Receipts may not exceed the amount of the actual receipts received from the same source the previous year, except with approval from the Department of Revenue.
Ms. Bernier said adding to the local receipts, and zeroing out the Free Cash would leave a deficit of $549,579 to balance the budget that was voted at the Annual Town Meeting. This does not include restoring any positions.
Ms. MacDonald said $500,000 could be added to Local Receipts, but would be cut from Free Cash.
Selectman Eayrs suggested that the Town needs to be a little less conservative in the estimated numbers to get out of the fiscal crisis that we are in. He noted that fees are being upped which will generate more revenue.
Ms. Bernier said the Board needs to understand that an additional $500,000 in revenues would need to be brought in, or Free Cash would be effected.
Selectwoman Brunelle said she would like to increase the estimated receipts by $500,000 on an ongoing basis.
Ms. MacDonald said, essentially, the Board would be "switching pockets". She said it would not change anything this year.
Ms. Bernier asked Chairman Perkins if there was any news from the State regarding the budget.
Chairman Perkins said that there is nothing definite. He said Local Receipts are an area that is being looked at. He also noted that the Town may receive less funding from the State that we are anticipating.
Mr. Studley asked how re-estimating Local Receipts might effect the reserves and the bond rating.
Ms. MacDonald said it would look very bad if the Town ran a deficit in Free Cash. She said increasing Local Receipts by $500,000 was not unreasonable, but Free Cash should be saved to offset the amount.
Mr. Studley questioned if there was the discipline not to spend the Free Cash.
Mr. Bernier said that, on the recap sheet, actual receipts is what you will use in the following fiscal year. She said there is a formula that applies a portion to the receipts of the School Department.
Mr. Studley said he wanted to noted that the Town has the lowest "per pupil" expenditure, but is above average on the per capita spending.
Ms. MacDonald said the figures will be closed for the Board’s next budget meeting, July 21st.
Ms. Bernier said there would be about $350,000 in turn-backs. She said there would also be $133,000 above the estimated Free Cash.
Selectwoman Brunelle said this can’t be saved for this year. She said some could be utilize, but she did not want to do this unless we have to.
Selectwoman Brunelle asked if it was possible to increase the COA Trust Fund. Ms. Bernier said there would not be a lot, noting that the balance at the end of May is $262,430.
Ms. Bernier noted that there is excess in the Planning Board Fund. There is currently $70,000 but she said this may be encumbered for projected that need to be done. She said they are only allowed to retain $20,000.
Discussion ensued on how charges are assessed to developers. The Board felt that there should be an "administrative fee" for handling the accounts. Ms. MacDonald said she was not sure this could be done.
Selectwoman Brunelle said an "indirect cost" could be assessed to the Planning Board.
Mr. Studley noted that there is a problem managing accounts. He noted that there are 35 – 50. He said this was more of an accounting function rather than engineering. He suggested this should be consolidated.
Chairman Perkins warned that the Board does not want to micromanage departments. He said if it’s a problem, it needs to be looked at.
Ms. MacDonald gave the Board information regarding Health Insurance costs. A 5% increase for General Government would generate $98,168.03. Town-wide it would be $333,203.45. Co-pays are currently 75% for PPOs and 90% for HMOs.
Selectwoman Brunelle said this is a considerable savings.
Ms. MacDonald noted that the FinCom had already reduced the Health Insurance budget by $88,000 for pending layoffs. Ms. Bernier said unemployment was increased.
It was noted that new contracts will be negotiated in 2004.
Selectwoman Brunelle noted an additional $75,000 in the Health Insurance budget. Ms. MacDonald said she always "cushions in" an additional amount because it is not known how much the School Department will need.
Chairman Perkins asked Mr. Studley how the FinCom had derived some of the cuts that were made, such as postage.
Mr. Studley said the FinCom had the latest figures at the end of April or May. He noted that some departments had not expended any of the funds at that point. He said that the FinCom was more than willing to sit down with departments who had concerns.
Chairman Perkins asked if it was the FinCom’s opinion that there is adequate money in the overall budgets to get through FY04 with the lines that were cut. Mr. Studley said departments will have to. He said the FinCom was trying to eliminate personnel cuts.
Discussion ensued on capital planning items. Mr. Studley said you can only put off so long the capital expenditures.
Selectwoman Brunelle noted that some maintenance items had been tabled.
Mr. Studley said that there is a Capital Plan and the idea is to go forward and fund these items.
Selectwoman Brunelle said lots of departments have annual renewals that are due in May or June. She said some of these line items were significantly cut.
Mr. Studley said that the FinCom was available to hear any concerns from departments.
Selectwoman Brunelle asked if the requested figures from the departments were the original figures or 25% reductions.
Mr. Studley said it was based on the original requests: Level services including contractual increases.
Mr. Studley suggested looking at companies to purchase capital expenditures as part of the TIF Agreements.
Chairman Perkins said the Board is always open to creative and new ideas.
Ms. Bernier noted that departments had been instructed to keep personnel that would’ve been laid off as of July 1st, until the end of July. She asked if a decision regarding these positions would be made soon.
Chairman Perkins said there would be. He said the Board is looking at revenue generating ideas.
Chairman Perkins asked if the Board should approach the Unions regarding the potential of concessions.
Upon motion by Selectman Rogers and seconded by Selectman Eayrs, the Board
VOTED: To send a letter to the School Committee, to join the Board of Selectmen, in meeting with Union and Non-Union personnel to discuss potential givebacks from existing contracts.
VOTE 3 – 0 – 2 (Selectwoman Brunelle and Selectman Wiksten abstained)
Selectman Eayrs noted that if Unions are approached for concessions, they will want something back, in the future or now. He said this would have to be pursued on a Union by Union basis.
Selectwoman Brunelle said the Board needs to decide what areas to discuss.
Chairman Perkins noted that any Health Insurance concessions will have to be made by all Town employees.
Selectman Eayrs suggested the same sub-groups who negotiated the original Agreements meet with the Unions.
Selectman Rogers suggested that the Planning Board consider not hiring a Town employee, as was approved at the Annual Town Meeting, but instead consider making the position a contract employee to come in and do inspections.
Selectman Wiksten noted that some departments can not generate fees, and cannot argue that they can "fund a position". He said this was unfair to a lot of departments.
Mr. Studley said that, originally, Ruth Geoffroy was going to hire a consultant until the Fall Town Meeting. He said the FinCom plays "catch-up" and takes their word that it’s a necessary position. He said fees for services provided should not be undercharged.
Mr. Studley said he was frustrated with the lack of resources that are available to the FinCom, noting it has not representation on the TIF or Landfill Committee.
Selectwoman Brunelle noted that the FinCom cannot have representatives on Committees, unless they are formed by Town Meeting.
Selectwoman Brunelle suggested General Government do a 10% reduction from the FY’03 appropriations. She said this would save $1,115,000. She also suggested not utilizing the $2 million in Free Cash, and eliminating $115,000 in buyback sickleave until the Fall. She said this did not mean there would not be layoffs.
Chairman Perkins asked why the Board would do this. He said they had already gone through the budget process, and the FinCom has met with departments. He said a cut "across the board" won’t work.
Selectwoman Brunelle said that with what the FinCom approved, the Board will be let with a deficit of $1.2 million. If done as she suggested, it would be $994,000.
Selectman Wiksten said the Board must come up with new revenue sources. He said he has received a lot of feedback about trash fees, and that everyone he has spoken to would be willing to pay something for this service.
Selectman Wiksten said the Debt Exclusion had its own reasons why it didn’t pass. He said it was not a clear cut case that everyone was against all new fees. He said a concession could be made for the elderly.
Selectwoman Brunelle said if $50/household was charged, it would generate $335,000. Selectman Wiksten said this is less than $1.00 per week.
Selectman Rogers said charging $100 will allow the Town to break even.
Chairman Perkins said that the people he has spoken to have said "no" to trash fees. He said that the tax bill includes the trash fee for pick up.
Selectman Eayrs said the problem with charging a fee was that it could be increased each year. He agreed with Chairman Perkins.
Selectman Eayrs said fees may be necessary at some point, but he said the Board hasn’t proved to the townspeople that we’re "up against the wall". He said everything in the Board’s power needs to be done, including lay offs.
Chairman Perkins said it was premature to talk about trash fees. Selectman Wiksten disagreed, noting the situation with the State could be worse than first thought.
Alice Elwell asked if the Board could impose trash fees, or if it would have to go to Town Meeting.
Chairman Perkins said the Board has the ability to impose the fees.
Selectman Eayrs said the bottom line is that the Board needs to find $700,000. He asked what the likely sources would be.
Chairman Perkins said that Free Cash is up by $133,000. There will also be paybacks from departments. With an estimated $400,000 in returns from departments, there would be $533,000. He said there is another possible $250,000 coming from the Simeone family.
Ms. Bernier said the DOR has to resolve whether or not that money can be applied to the General Government.
Selectman Wiksten questioned if the money was actually a PILOT (Payment In Lieu of Taxes). He suggested Town Counsel be asked.
Selectwoman Brunelle suggested the question to DOR be posed both ways: As PILOT money, and as all associated costs with the extension of the water line.
Ms. Bernier said she will work with Mr. Healey to draft a letter to the DOR.
Mr. Studley noted that, by increasing Local Receipts, the Board is taking a chance that there might be a shortage in Free Cash next year. He also noted that positions that might be reinstated will be subject to raises.
Selectwoman Brunelle noted that the Cherry Sheet is a large part of the puzzle.
Upon motion by Selectman Eayrs and seconded by Selectman Rogers, the Board
VOTED: To ask their Secretary to contact all Union Representatives to indicate the need and desire to discuss proposals to ask for reductions in the amount that the Town pays in Health Benefits and other mutual concessions.
VOTE 3 – 0 – 2 (Selectwoman Brunelle and Selectman Wiksten abstained)
Selectman Wiksten suggested Union Reps be asked to meet with the Board to present any ideas they may have.
Upon motion by Selectman Eayrs and seconded by Selectman Rogers, the Board
VOTED: To adjourn at 9:35 PM.
Diane Henault, Secretary
BOARD OF SELECTMEN