Finance and Warrant Advisory Committee Meeting
November 24, 2008
Chairman Bob Recore called the meeting to order at 7:00 p.m. Also in attendance were vice-chair David Hall, William Connor, Amy Valletta, Douglas Reid, Patti Weagle, Helder Machado, and Patricia Nedoroscik.
James Smith, Town Administrator, was also in attendance.
On a motion made by Amy Valletta and seconded by David Hall the minutes of the meeting of September 29, 2008 were approved.
Town Administrator Update:
Town Administrator James Smith distributed a packet of information relating to the current and upcoming budgets.
Timetable and capital budget: a calendar listing the pertinent dates and time frame for the fiscal 2010 budget was reviewed. The capital budget has been in the hands of department heads since early November. Interest on borrowing for the capital budget had been estimated at $ 14,000.00; due to a favorable interest rate the amount was closer to $ 7,000.00. A few items in the 2008 capital plan have not yet been completed including painting the exterior of town hall.
Budget issues: Concern was expressed over the upcoming budget due to the nationwide economic downturn. It is assumed that the Governor will address the budget at the MMA meeting on January 23rd and 24th. It may be necessary to hold two spring sessions of the annual town meeting, the second in June to address financial issues if state aid and other revenue projections are delayed.
Free Cash and Retained Earnings: Retained earnings of the Sewer Department have been certified at a “healthy” amount of $ 503,157.00. An amount of approximately $ 75,000.00 was voted at the October town meeting for fiberglass covers for the tanks.
Retained earnings of the Transfer Station are negative $ 31,305.00, due primarily to DOR requirements for accounting of the trash bag inventory. Previously the bags were stored at the vendor’s factory with no control by the town; bags are now being stored at town facilities that will allow for better inventory control. The DOR required that the bag inventory be counted on the town’s balance sheet. It was discussed that while the transfer station account took a “hit” this year with the inventory amount, it may fair better next year because that amount has already been factored in. Mr. Smith also pointed out that about 1000 households in town use the transfer station, that the town is still trying to promote its use, and that the town may go out to bid for the bags in the future. He also noted
that the recycling market has dropped considerably.
General Fund Free Cash has been certified at $ 810,539.00, due primarily to an increase over estimation in the amount of excise tax and property tax revenue received, the receipts from the sale of surplus property, and the legal settlement for the elementary school. Mr. Smith will, at this point, recommend using the free cash as follows:
$ 86, 764.00—the amount left over from the elementary school settlement not used for debt service would be allocated to a short term solution for the water quality issues at the school;
$ 544,674.00—the amount of free cash used in the 2009 budget would be allocated for use in the 2010 budget;
$ 60,000.00—would be allocated to replace the overlay amount used in the 2009 budget for the 2010 budget;
$ 119,101.00—would be allocated for use in the 2011 budget.
Mr. Smith explained that he does not anticipate having free cash certified next year equal to the $ 810,539.00 and would like to set aside approximately $ 120,000.00 from this year’s amount to offset any decrease for 2011.
He also noted that changing the health insurance system for the town had generated substantial savings in that account.
Potential Revenue Concerns: State aid and lottery aid for 2010 are of concern because state sales tax revenue, capital gains revenue, and lottery revenue are all down.
There are concerns about local receipts as well because people are not buying as many new vehicles and construction starts are down. The town changed its fee structure last year in order to bring fees in line and Atlas Box is proceeding. Lowe’s started to clear the land for their project and has now stopped and the Stop and Shop project is not moving ahead at all.
New growth is estimated to be no more than $ 200,000.00 for next year; the increase this year was due to anything picked up during the revaluation.
Potential Debt Exclusion Overrides: Those listed for 2010 were the Early Learning Center Roof for 2010 because the roof is leaking and the replacement of Engine 4 for the Fire Department with a combination engine pumper truck/ladder truck at an approximate cost of $ 800,000.00.
Subsequent override questions in 2011 and on could include the middle school/high school complex and a comprehensive plan for the Shaw property. The only current use of the Shaw property is for the cross country track team practices and the house has been closed up for the winter.
Calendar for upcoming meetings: The committee decided on the following dates for budget meetings:
December 22nd if needed
January 12 if needed
January 26 regular monthly meeting
February 9 if needed
February 23 regular monthly meeting
Tri-Board Meeting: Mr. Smith assumes that the Board of Selectmen will open the meeting and that there will be presentations by Mr. Smith, Mr. Harrison, and Ms. Rothermich. Mr. Recore will contact Mr. Chizy of the Board of Selectmen to talk about procedures during the meeting such as topics, time limits, etc. This meeting is scheduled for December 1st at 7:00 p.m. Mr. Smith noted that there are some positive financial indicators including continued development off Route 146 in the South Sutton Industrial Park and the roll-off of some of the town’s debt in 2010 and more in 2011.
New business: Mr. Recore has received a letter from Dr. Fitzpatrick of the Blackstone Valley Regional School noting that the number of Sutton students has increased from 77 in 2007 to 99 in 2008 and that there will be a corresponding increase in Sutton’s school assessment for 2010.
On a motion made by Mr. Connor and seconded by Mr. Hall, the meeting was adjourned at 8:30 p.m.