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Finance Committee:
Terri Burchfield, Chairman
John Henshaw, Vice-Chairman
Hannah Anderson, Secretary
Jay Simeone
George Martin
Marc Luescher
Location: Town Hall
17 Main Street, P.O. Box 135
Lunenburg, MA 01462-0135
978.582.4139
FAX 978.582.4148
Lunenburg Finance Committee
08-23-18
Present: Terri Burchfield, Jay Simeone, John Henshaw, Hannah Anderson, George Martin, Marc Luescher
Absent:
Guest: Karen Brochu, Town Accountant, Heather Lemieux, TM.
1. Open Meeting:
The Chair called the meeting to order at 7:00 pm. This meeting is being recorded and televised
for re-broadcast on the Lunenburg Public Access cable channel.
2. Communications:
a. Public: Dave Passios, 56 Whiting St. Like to bring attention to the board a section in this
charter, Section 7-8 procedures governing multiple member bodies paragraph F, filling a
vacancy. "Whenever a vacancy shall occur in the membership of an appointed multi
member body, the remaining members shall forthwith give written notice of such
vacancy to its appointing authority. If, at the expiration of 30 days following the delivery
of such notice to the appointing authority said officer or multiple body has not
appointed some person to fill the vacancy, the remaining member of the multi member
body shall fill such vacancy for the remainder of any unexpired term by majority vote of
the remaining members." I interpret this as the Finance Committee appointing
committee has lost their window of opportunity to appoint the replacement for your
board and the charter clearly states that it is now in your hands.
Regarding Mr. Passios public comment, the Chair will have the Town Council check this
procedure through the help of the Town Manager.
Mr. Passios followed up to say he will be emailing the Town Manager to let her be
aware of his comment and assumes to have something decided by the following
Monday.
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to minutes to help the public understand topics and see what the Finance Committee
sees since not all paper handouts are televised.
3. Vote to recommend free cash policy change to the Board of Selectmen:
John made the motion. Marc second. 6-0
4. Discussion around 2020 budget related to property Condition Assessment and Capital needs:
John Henshaw lead. General overview of the forecasted revenues and expenditures for
the next five years including this current Fiscal Year FY19, as laid out by the Town
Manager, Heather Lemieux and then a total for those five years. Underneath that is the
very general overview of the property condition assessment that was given to the town
by Vertex several months ago. Just to hit the highlights, the property condition
assessment dealt with the condition and the mediation required for Town Hall, T. C.
Passios, Turkey Hill Elementary, Brooks House, Eagle House, and the Old Primary School.
The quick overview totals are that the study suggested or recommended would require
about 3.4 million dollars' worth of our remediation to six of the buildings and $400K to
demolish the Old Primary School. Beyond that Capital out lays through the next several
years of 8.6 million dollars for the six remaining buildings. Just as a context John put to
the right of all these figures the Capital improvement request for the next four years,
2020 - 2023 which is 5.3 million dollars or about average of 1.3 million dollars per year.
Just to give you a sub context for FY16 and FY17, the average Capital Expenditures were
about $600K. The whole point is that these are additional expenditures requested or
acquired, probably can be managed, but are still almost certain to be claims on town
revenue. Presenting this for consideration for discussion at Finance Committee meetings
and it may give the Finance Committee some context for when we go into budget season
how we as a committee approach the budget season mindful of fact that these are
probable requirements for future revenue.
Terri questioned, under the Capital improvement request total over the next four years,
is under your other considerations you list increased officers at the police department
and the fire department increased to Paramedic, are those numbers factored in those
four years?
John replied that those numbers are not factored into those four years except for the fire
department ambulance. Which the fire department would need an ambulance to
accommodate the additional paramedic or increase in paramedics. Further into that,
Chief Marino had given us a schedule some months ago regarding increasing the police
force by ten officers, one officer per year for the next ten years. The first officer does not
need an additional cruiser because they have a cruiser that they can let that officer use
during his or her shift, but with increases of police officers/patrol officers this would
require one cruiser for every three increases and that is not factored in the Capital
improvement request.
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rather than just the ones John mentioned. Terri replied that the buildings that were
pulled out where because they were the only buildings with the current property
assessment available for, and that all of these were on top of anything that was in the
Capital improvement request and what she is not sure of is if there is a capital
improvement request that are related to the bulldings George mentioned. George replied
that his concern is that at some point these other buildings would be on the horizon for
needs of repairs. John commented back to George's point that there are very few capital
improvement requests within the 5.3 million dollars that are in fact related to the building
improvement with respect to the new school. The library, DPW, and Primary school are
all around the 15-year mark and they should be in the mix for some care. George
commented back that since we are trying to look into the future and understand what
the impacts of capital projects are.
John asked Karen Brochu for some information that may be helpful for a broader
perspective.
Karen mentioned having a significant increase in free cash certification from the close of
FY17 to the close of FY18. We now have $130k for the asbestos remediation at the
Turkey Hill Elementary School that is now being funded by the state and since we voted
on that at the last Annual Town Meeting to come out of free cash we can now use that
for other things. Then there is the barrowing authorization of $480k for a portion of the
ladder truck, so one of the things she talked to the Town Manager about was to see if
we could eliminate the barrowing and pay for the portion of the ladder truck with free
cash. And if that happened, she believes that there would be close to a million dollars
available for the end of this fiscal year and fiscal year 20. Hannah asked with the million
dollars would some of that money be able to be used for the third stage of the asbestos
remediation of the Turkey Hill Elementary School? Karen replied that would need to be
discussed with the Capital Planning Committee. Karen did mention that reducing the
barrowing on the ladder truck would make it so the town does not need to pay the
interest of that barrowing.
John reminded everyone that free cash can only be used for non-reoccurring
items/expenses which include capital equipment. Karen said that building maintenance is
not a capital expense and that the policy for free cash was most likely made specifically
for this because we never know if we will have that free cash from year to year. John
mentioned that we would not want to rely on free cash for operating expenses
maintenance from year to year not knowing if the town will have it. Terri asked if there
was no expensive debt that the town would want to pay down that may be more than
what the fire truck interest would be? Karen answered that they could definitely speak to
the financial advisor to see what he thinks is the most beneficial, but her suggestion
would be to avoid the barrowing so what in on the books stays on the books. Terri thinks
it would be good to check with the financial advisor. Terri then asked Karen if the million
dollars that Karen mentioned about for next year, if Karen was anticipating that there
would be an additional million dollars in free cash for next year? Karen replied no, that
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why the town is so conservative on the local receipt estimates because that translates
directly to free cash at the end of the year if we have a surplus but on the flip side if the
town estimated the revenues and did not collect them the town would be looking at a
revenue deficit that the town would have to raise. Terri asked if Karen if she was
continuing to see an increase in the excise tax revenue? Karen responded yes over the
last two to three years there has been an increase. Terri asked if it was coming in at
basically $50K a year or significantly more? Karen said it was more than that but the
town has been increasing their estimates by $50K plus in order to get that money into
the pavement management portion of the General Highway Maintenance Budget so the
town could get to the million dollar goal.
John asked with free cash, let's say that the results of expenses not being as high as
planned or revenues being higher? Karen gave a quick summary that the local receipt
estimate was $2,940,817.00. The actual collection was $3,468,170.00 so there was an
increase from budget to actual numbers by $527K, the majority of that increase was
made up of two different things, there was an increase in motor vehicle excise from the
estimated amount of $207,000.00 and there was an increase in penalties and interest on
taxes which was increased $135,000.00 which was mostly due to the collectors office
which pursued the collection of real estate taxes. Some of the tax liens were sold to that
company and there was a mailing to people that were in tax title and there was a very
good response because the town was aggressively pursuing those real estate taxes.
Those were two of the biggest ones. There was also $103,000.00 more in departmental
revenue schools which is money given from the state for the students that were Medicaid
eligible. But you never know what we get from year to year so the estimate was low and
it turned out to be much higher than expected. As far as the taxes go, the town collected
99.4% of the tax levy, the town received $511,000.00 in tax lien revenue in 2018 which
was about $400,000.00 better than the previous year. Tax liens are deferred until
collected which is why there was such a jump in free cash so quickly. On the cherry
sheet there was $119K that was budgeted for the 40S reimbursement which is Tri-Town
money, but the town has not received that yet and the state said the amount the town
will actually get is around $20k because the amount was prorated because of the amount
that actually ended up being funded but that has not come in yet. Karen was going to
accrue that in 2018 but since the year closed on such a positive note, she didn't see a
reason to do that yet. This was all on the revenue side.
On the Expenditure side, the town had some appropriation closeouts but one of the big
things on the expenditure side was the choice and charter tuition assessments for
students that go out of district was $290K less than the amount that was received as an
assessment on the cherry sheet. The town does have $399K in appropriation closeouts
so there is almost $400k and $290K less in state assessments on the expenditure side.
The $290K from the assessments are not guaranteed from year to year because typically
there have been years where they all swung the other way because the state takes the
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received some reimbursement for them from the insurance company but there were
times that there was no full staff for the department so it was back filled with the
reserves but Chief Marino did close out some money in that appropriation. There was
about $130K in our health, liability, and workers comp insurance lines that were probably
comprised of two different things, one being better rates and the other not needing to
budget for some increase for new personnel. The town also lost a few of their retirees so
there was a bit of a surplus in that account as well.
John commented that this again was to frame the projected revenues and expenditures
relative to additional revenues or additional expenditures that we will come face as well
and to also move the scope from behind the current couple of fiscal years to see a five-
year window. Incidentally just in the five-year window one of the things the department
of revenue cautions against is doing anything more than five years because the
accumulative annual changes in revenue and expenses anytime over a five-year window
rendered the annual numbers increase to less reliable so this is as far as it can go.
5. 2020 Budget Dashboard discussion.
George Martin lead. George has been working with Karen Brochu and recently received
the debt financial forecast and the Town Managers financial forecast. He has been able
to analyze and learn about the debt forecast model and he is just starting to understand
the financial forecasting. He met with John at the library and John helped George better
understand the town debt policies. He can now connect to the data Karen is providing in
a better way. He is chasing other data points to get a real holistic view at everything and
bring it together to simplify it to a basic picture of what is going on. George has asked
Hannah to get the student enrollments of K-12 from last year and what the expecting
numbers are for this coming year because part of looking that data point is because the
Kindergarten numbers have grown this year more than anticipated so he isn't sure what
that means for all the budgets across the town but expects more increases based on
higher enrollments. George plans to continue his population study to see how that works
and he is working with the town clerk to collect that date and put it into a nice format to
take a look at and get an idea of what is going on in town as general. Terri asked if this
is all going to come together and then be put into a google doc? George responded that
he is putting it into an access data base that will have a user interface on top of it but
that will be able to be used to be spun into some google docs that is shareable for
everybody. He is going to be asking for some guidance from the committee, town
account, town manager and his biggest concern is making sure the data is accurate
before putting it out to be shareable.
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cavily burges anu are escare plans be agent so we l talk about it every
meeting with any updates. For the last several years in Terri's reports she kept the data
of what the budget was and what percentage of the town budget was. She has offered it
to Marc who accepted to have a copy of that for his data research. Terri went on to say
debt services is 13% of our towns budget so that's one of the reasons she keeps it due
to it coming down again to go back up for other priorities coming forward. Her
assumption is that once we go into budget season, what the Town Manger is presenting
for the budget represents the priorities of the town as identified through the
departments, the department heads, and Board of Selectman. She asked the Town
Manager if there was anything specific that we should be paying any close attention too?
Or should she just continue to assume what the Town Manager is presenting reflects
what the Board of Selectman is identifying through the course of the year as priorities.
Heather, Town Manager, said yes. Terri replied if there comes to a point of making a
decision of where money should go which sometimes comes up in the budget
presentation process she feels much less confident about that.
7. Review Minutes:
7.26.18 minutes for review, John motioned to approve minutes, Marc second. 6-0
8. Town Manager/Financial Officers reports:
No reports
9. Public Comment:
Dave Passios 56 Whiting Street, reported that he heard of a radio station that a financial
analyst said the condition of the economy is fairly good but he also warned that the U.s.
economy is sick lick and that we should be expecting a down turn in the economy within
the next 2-5 years, maybe 8 years and the comment for that was to take advantage of
your opportunities, pay down your debt, and be ready for it.
Committee/Department
Update
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Fire Dept - George
qualied paramedics aue to the town's salary scales are not
competitive enough for paramedics to want to come to Lunenburg.
He has promoted two internal resources from the towns fire
department, so they are now the two new full-time firefighter
EMTs. The chief authorized some of his department funding to
cover the training for one EMT due to budgeting reasons. Including
in this training program is required seat time for this person to
become a licensed paramedic. The chiefs current staffing of new
hires also includes per diem parametric. The fire house for the most
time now is being staffed 24/7 with mix of full-timers and per
diems. Chief is finalizing his new specs for the towns new fire truck
and the purchase will not exceed the towns approved budget. Chief
is actually leveraging the acquisition through the states bidding
process that will bring those numbers in line. It has not been
need to give the committee a heads up that the town ambulance
is going on 11 years old.
Meeting coming up with Superintendent Dr. Burnham on September
5, 2018. She just doesn't want to share any updates with us unti
the school committee knows about it first.
Schools - Hannah
Monty Tech - Hannah
Green Comm Task Force-
Jay
Sewer Commission -Jay
Charter Review Comm-
Terri
10. Next Meeting:
September 13, 2018
11. Adjournment:
John made a motion to adjourn. Hannah seconded the motion. The committee approved the
motion 6-0 at 8:00 pm
Submitted by: Hannah Anderson
Attachments: (0)
RECEIVED & FILED
SEP 25 2018
LUNENBURG TOWN
CLERK OFFICE