Town of Brunswick, Maine

Transcription

1 Town of Brunswick, Maine Finance Committee Meeting & CIP Workshop Thursday, November 9, :00 8:30 PM 85 Union Street Council Chambers Agenda 1. Acknowledgement that meeting was properly noticed 2. Approval of meeting minutes from 10/19/17 3. Adjustments to agenda / Public comment Capital Improvement Program DRAFT 1 a. Review draft b. Replacement/Maintenance Reserve fund schedules c. Landfill closure project 5. Adjourn

2 Town of Brunswick, Maine Joint meeting with School Board and Town Finance Committee Thursday, October 19, :30 PM 85 Union Street Room 206 Meeting Minutes (DRAFT) Elected Officials: Staff: Alison Harris, Jane Millett, Kathy Wilson Teresa Gillis, Mandy Merrill John Eldridge, Julie Henze, Branden Perreault Paul Perzanoski, Kelly Wentworth 1. Acknowledgement that meeting was properly noticed JH confirmed that the meeting was on the Town Calendar, introduced School Dept representatives 2. Adjustments to agenda / Public comment Adjustments: Add item to discuss meeting conflict on November 2, 2017 Public comment: None 3. Approval of meeting minutes from 9/21/17 JM moved, AH seconded, minutes unanimously approved Audit update report from RKO Tim Gill, Manager with Runyon, Kersteen Ouellete, explained that though RKO has been in Town for two weeks and is nearing the end of their field work, the audit is not complete, and he will not be presenting results at this time. The auditors will return to the office to complete several review steps and confirmations. Time described the audit process, which starts in June with a week of onsite pre audit test work. This is when the auditors test the financial processes for accuracy, proper approvals and documentation. Testing includes cash receipts, payroll, cash disbursements. Sample based testing enables the auditors to identify areas which might warrant more attention and testing during the fall audit, and to make recommendations for improvements to the Town/School procedures. Mentioned student activities, compensated absences and journal entry approvals. In October, the auditors do two weeks of field work in which they review the financial reporting and verify all balance sheet items, tying detail listings to amounts listed. This includes reviewing assets such as accounts receivable, capital assets, and liabilities including accrued payroll and debt. Currently reviewing the financial statements for accuracy, completeness of statements, and proper note disclosures. Expressed appreciation for preparation by the finance/business office staff, making the auditors job smoother and easier. Brief discussion of fund balance and the role of the auditor s report in the Town s credit ratings. JH pointed out that, like the credit agencies, auditors like the Town to have financial policies, and more importantly, to follow the policies. 1

3 JH reminded elected officials that the auditors work for them, and Tim encouraged any school board or town council member to contact him directly with any questions or concerns. **Added item: Conflict on November 2, 2017 between CIP workshop and MDOT traffic meeting. Issue of 6pm School Building Committee meeting was raised. Decision to explore other times/different day (Nov 9 th?) for the CIP workshop. JH will follow up by Long term financial planning report on historical trends JH reviewed the financial planning the committee has looked at over the past two months, including the interest to look at historical trends to better predict future results. Also, the FC had asked about the history of the split. JH provided a PowerPoint presentation with numerous graphs: 1. Expenditure trends in $ line graph indicating the customary budget categories of School, Municipal, County, and also breaking out transfers out of the GF which is for capital reserves and projects approved through the CIP. Discussion of breaking out debt service as well in order to show general operating costs more clearly. 2. Expenditure trends in % line graph depicting the same expenditures as percentage of the total. Note that over the nine years graphed, the ratio has been consistently 60% school, 40% everything else (Municipal and County). 3. Tax Rates line graph of tax rates, with the Education, Municipal and County rates detailed. Note the total is included as its own line, and the apparent drop at the end is the tax rate with the revaluation. 4. Tax Rates line graph of share of tax rates, illustrating the ratios between the three portions of the tax rate. JH pointed out that in more recent years, this ratio has been approximately 60% school, 40% everything else, as with the expenditure ratio. Discussion of the change in state aid to education in which shifted the school funding burden to the tax rate. 5. State Aid and Use of Fund Balance line graph of aid to education and revenue sharing, paired with bar graphs of use of school and municipal fund balances in the budget. Discussion with PP of reduction of state aid, federal impact aid and tuition from Durham students, all occurring in the same year. 6. State Aid and Tax Rates line graph with tax rates overlaid with state aid to education and revenue sharing. As education aid dropped, the tax rate to support education increased. KW and PP discussed the challenges of predicting state aid to education. PP announced school department meeting with legislators to discuss this, as well as the proposal for school departments to take over services for disabled 3 5 year olds, and CTE for middle school students. Both would add costs, but it s unclear how that would be managed. 7. Municipal Expenditure categories pie chart indicating the municipal budget expenditures categorized by type of cost personnel, contractual, commodities This is to illustrate the drivers of the expenditure budget, showing that the largest part (57.3%) of the budget is salaries and benefits. 8. Historical trends on municipal salaries and benefits showing increases since (Drop in resulted from lay offs that year.) Discussion of how benefits have increased more than salaries. JE confirmed that recent union negotiations have taken the whole package into consideration, offering changes in health insurance. Retirement increases are included in the calculations as well. Discussion of how teacher retirement costs are partially carried by the State. JE explained normal cost and catch up costs (amortized amount of unfunded liability). Retirement costs have grown faster than health insurance costs. 9. Historical trends of municipal expenditures by category indicating how the categories have changed relative to one another over 10 years. JH commented on how benefits have 2

4 increased relative to the other categories. Discussion of contractual and commodities categories. 10. Historical trends of municipal expenditure categories % of total JH noted that as a percentage of total, the salaries are a smaller portion of the total budget than previously. Discussion of how trends can be helpful in looking forward to future years. JH presented the longterm financial projections workbook, with future years graphed. Based on the level assumptions in the model, the lines show a gentle increase, with jumps caused by debt service increases from the CIP. JE clarified that the CIP debt service represents only the projects in the Recommended section not the fire station. JM asked about valuation/tax revenue projections. JE stated that historically 1% growth in value has been on the good side. Plenty of activity, but it takes a lot of building to increase values substantially. Pointed out that service demands increase as well. Discussion of ambulance calls 51 last week, 3108 in , 2300 ten years prior. Discussion of how salaries are budgeted for police, using salary vacancy allowances. Committee would be interested to see actual salaries and benefits. Jean Powers can personnel graphs be provided by the school department? (KW confirmed that she could do that and would have done it already if told this was being discussed.) JH wrapped up with a review of the dynamic long term financial model, explaining how the assumptions change the bottom line. Pointed out the line indicating the surplus/(shortfall) with the stated assumptions, and the year the elementary school debt service is projected to begin. Demonstrated how a 4.5% increase in tax revenues would affect the model. JH reminded that this includes both valuation increase and tax rate increase. Discussion of 1% increase of tax rate = $425,000. JE pointed out that in the year after a revaluation, we don t expect the next year to have growth. During the reval year usually there are abatements, so we may well start next year with a lower valuation. Sue Stableford commented on the June referendum in which only 20% of the voters showed up, and the new school passed by a margin of 261 votes. Town is facing financial difficulties, and should be aware that many in the Town didn t vote for the school. Aware that this is how democracy works. Richard Fisco Building maintenance. Drivers mis use of word. We are the drivers. Reference point 3% annual tax increase maximum. Need to say no on spending Budget planning elected officials discussion AH stated hope that all can come together with a full understanding of the community s needs and commitments. Wants to avoid the bad feeling and crunch at the end of May by setting a schedule that will provide more wiggle room. Draft schedule included in packet. PP stated that we have to consider that many of the elements are out of our control state aid, legislative changes to CDS, CTE, other bills put forward. So the crisis mode is not necessarily of our 3

5 making, it comes from the state s budget timeline. Appreciates the schedule, but may not have all the facts when they are needed. AH hopes that with the long term projections we have been looking at, Council will be able to establish a tax rate increase earlier, and give clear direction to the manager and school board of amount to work with. This means the Council will make itself known earlier in January on what it is willing to raise from taxes. Discussion of budget workshops, and if they should be changed to council meetings. JM feels the department presentations are important to understand the budget. Question about requirement to attend meetings. JE stated that the Council can change its own rules to govern its own meetings. Also mentioned that a Saturday workshop has been done in the past. Discussion of how department presentations are structured, to emphasize information about service levels. Discussion of Library and People Plus. JE pointed out that he hopes that the FC financial planning will include the priority list, and establish a clear message of how the funding will be distributed. It would be helpful to the Library and People Plus to know what they can expect before the end of the calendar year. Jean Powers Agrees that May is too late to come up with a final budget figure. Would like to see school salary increases reduced. Municipal and school should work more closely together and produce a budget earlier in the year. Discussion of poor voter turnout, and low levels of involvement. TG pointed out that it s important to encourage Brunswick citizens to pay attention to who is running for Governor. 7. Adjourn 4