MINUTES ADOPTED AS PRESENTED 04/05/2010
ENFIELD TOWN COUNCIL
MINUTES OF A SPECIAL MEETING
MONDAY, MARCH 22, 2010
A Special Meeting of the Enfield Town Council was called to order by Chairman Kaupin in the Enfield Room of the Enfield Town Hall, 820 Enfield Street, Enfield, Connecticut on Monday, March 22, 2010. The meeting was called to order at 6:00 p.m.
ROLL CALL – Present were Councilmen Bosco, Dumont, Edgar, Hall, Kaupin, Keller, Kiner, Lee and Mangini. Councilmen Crowley and Nelson entered at 6:05 p.m. Also present were Town Manager, Matthew Coppler; Assistant Town Manager, Daniel Vindigni; Town Clerk, Suzanne Olechnicki; Director of Finance, Lynn Nenni
PRESENTATION OF THE BUDGET
Mr. Coppler explained the budget process. He noted on April 28, 2010 there will be a Public Hearing on the Manager’s proposed budget at 7:00 p.m. at the Fermi High School auditorium. He went on to note the Council must approve a final budget on May 18, 2010.
He reviewed the following items, which impact the 2010-2011 budget:
- State of Connecticut funding
- Growth of the grand list
- Reduction in the debt service
- Reduction in pension costs
- Increase in health insurance costs
- Not accounting for Excess Cost
Mr. Coppler stated the Governor’s mitigation plan proposes cutting about $45 million dollars from municipal aid to towns. He pointed out the state has already cut $170,000 from the revenue stream for the upcoming year.
He then reviewed the growth of the grand list:
- New Construction - $21,682,060
- Motor Vehicle - $4,459,020
- Personal property - $3,025,852
- Total: $29,166,932
Mr. Coppler stated there was a reduction in debt service. He noted a little over $1.1 million dollars is coming off the books from the previous year. He stated additionally, the Town did a refunding of a number of bonds that resulted in additional savings of $535,000. He stated the amount won’t be as dramatic next year.
He stated 67% of the general fund revenue comes from taxes; 29% comes from intergovernmental, which is state aid that is received; 2% comes from fines and charges for services. He noted the use of Fund Balance is approximately 2%.
Mr. Coppler stated in earlier presentations, he proposed reducing down the use of the Fund Balance from 2.5% to 1.5%. He noted the pie chart before the Council this evening reflects a $2.5 million dollar Fund Balance usage. He pointed out he doesn’t like doing this because in the future, the Town has some substantial obstacles, and having a good Fund Balance will help ease the pain regarding the revenue they’re receiving from the State. He stated they are at a point where any deeper cuts than what’s in the proposed budget would have operational impact.
He then reviewed expenditures proposed for 2010-2011:
- General Fund $112,815,804 (a reduction of $3,293,492)
- EMS Fund $2,630,015 (a reduction of $ 262,748
- WPC Fund $2,662,341 (a reduction of $ 690,197)
- Social Services. Fund $4,751,593 (a reduction of $ 366,721)
- IT Fund $3,221,073 (a reduction of $ 752,875)
Mr. Coppler spoke about the General Fund Expenditures. He reviewed a graph for the years between 2006 and 2011. He noted the two main expenditures in the General Fund are the Board of Education and the Town. He listed those expenditures as follows:
· Town - 2009-10 - $53,398,289 2010-11 - $50,104,797 – 6.2% reduction
- School - 2009-10 - $62,711,007 2010-11 - $62,711,007 – 0% reduction
- An overall decrease of 2.8%
He reviewed a chart entitled, “Town General Fund Expenditures Broken Down” as follows:
- Wages $18,560,878 for 2010-11
- Benefits $ 8,705,203 for 2010-11
- Other Expenditures $22,838,716 for 2010-11
He noted these figures are a little skewed because of transfers that go out. He noted the majority of costs relate to wages and benefits.
Mr. Coppler reviewed a pie chart entitled, “Town General Fund by Function”. He noted the largest single function is Public Works, and they’re budgeted at $15.4 million dollars; Public Safety is budgeted at $11.2 million; Library at $1.5 million; Development Services at $1.1 million dollars; General Government is $20,753,326.
He stated this budget does not increase the mill rate. He noted as the Council reviews this budget and understands what it means to get to this point, the Council can determine whether these cuts are worthwhile or whether they wish to explore another revenue increase. He stated there will be department hearings with Council so it will be understood what the impacts are to programs and what is being lost. The Council can weigh things and determine if this is a path they want to go down, or is there another path in which they’d rather go.
Councilman Dumont questioned why it’s expected there will be an increase in health insurance. Mr. Coppler stated that was a projection based upon what insurance consultants are providing at this time. He noted when this process was started, they were projecting about a 15% increase, and that is what department directors were going with when they submitted their budget. He stated as time went on, it went down to 10%. He noted at this time, based on numbers he has seen, they are trending exactly where they thought they would be for this year. He stated usage of the program is not above what was anticipated.
Councilman Dumont questioned whether the Town would have been worse off if they hadn’t changed to self-insurance. Mr. Coppler noted that although he can’t prove that to be the case, he believes that is the case. He went on to note he has heard fully insured towns are budgeting up in the teens.
Councilman Mangini stated there’s currently a bill in Congress called the Local Jobs for America Act, and it was presented to Congress on March 10, 2010. She pointed out Enfield would qualify as a recipient. She explained there’s $75 billion dollars over two years being distributed, and any community that’s a recipient of CDBG funding would be eligible to receive between 30% and 70%. She noted this money could be used for towns to help retain employees, and there’s no local match. She stated she is not in favor of reducing staff because that’s tragic. She noted America needs to go forward, and they need to put people back in the workforce, not the reverse. She passed this information onto the Town Manager. She suggested phone calls and inquiries be made so that perhaps they can salvage some jobs.
Councilman Kiner requested the Town Manager elaborate on how he came up with a zero percent increase for the Board of Education and how the Board can get to that zero percent. He pointed out a lot of parents expressed their concern at the last Council meeting.
Mr. Coppler stated to present a budget that didn’t have a tax increase, they had to cut $3.2 million dollars. He noted there are very few pieces of the Town’s operation that are not being touched. He pointed out that $3.2 million dollar reduction is reducing the Town’s side from $53 million down to $50 million. He stated the school system has the ability to get over $800,000 of revenue from Excess Costs, and $800,000 is part of that $3.2 million dollars that he had to cut out of the Town’s side of the budget.
Councilman Bosco stated his understanding that if the teachers gave a concession, there would be no change in the school system’s budget. He noted the teachers are getting the same thing they received last year, plus an additional $800,000 for the Excess Cost Share.
Chairman Kaupin referred to Excess Cost and noted this current fiscal year, the Town budgeted the Excess Cost dollars as a revenue on the Town side, but last fiscal year the Board went after those dollars, therefore, the Town took a hit. He questioned if the Board is level funded, what is the potential for the Board to go after Excess Cost. Mr. Coppler explained the Board of Education has a budget for special education costs, and once they’ve exceeded what they budgeted, they can then tap into that Excess Cost. He noted historically, they tapped into it at times. He stated if the Board doesn’t tap into it, it falls back into the General Fund. He noted the Board has to specifically ask for that funding and explain why they need it. He stated last year was the first year they did that.
Chairman Kaupin questioned if there’s a ceiling of available funds through Excess Costs, and Mr. Coppler responded it’s generally been around $700,000 to $800,000.
Councilman Nelson questioned whether the Town sees a better value for the dollar by eliminating positions and outsourcing positions. Mr. Coppler stated as an example, they wouldn’t be outsourcing for individuals from the Highway Department, but rather those people remaining will be doing a lot more work to get things done.
Councilman Nelson questioned whether the Town would be able to maintain everything as it is on the Town and Board sides for the next ten years without a tax increase, or would taxes go up every single year just to fund current operations. Mr. Coppler stated it would be very difficult to project that without actually running numbers.
Councilman Nelson stated his belief this budget will help prepare them for what’s going to happen next year. He noted a tax increase at the local and state levels would be difficult for people.
Councilman Dumont stated her impression there will be an impact on overtime costs if they cut a lot of these positions. She questioned whether that was considered. Mr. Coppler stated the highest potential for that would be within the highway department, particularly during snow events.
Councilman Crowley stated his impression they made all the necessary cuts last year, and he feels last year was brutal. He stated his belief this budget is devastating news to the town.
Councilman Crowley questioned what the status quo increase would be, and Mr. Coppler estimated a maximum of a 1.3 mill increase.
Councilman Crowley stated his impression they made all the necessary cuts last year, and he feels last year was brutal. He stated his belief this budget is devastating news to the town.
Councilman Crowley questioned whether it would help to cut back on any projects, i.e., the Town Farm Road project. Mr. Coppler responded the Town Farm Road project is being paid 100% by the State and Federal government. He added $1 million dollars is coming from Roads 2005, and that money can only be spent on Roads 2005 projects because it’s a referendum project.
Councilman Crowley questioned whether there are any referendums coming up, and Mr. Coppler stated there is the refarming issue and that’s a $2.6 million dollars project in the best scenario and $8 million dollars in worst-case scenario. He went on to note they will have to go out to referendum concerning work needed on school buildings.
Councilman Lee questioned if there’s any way they could take the revenue statistics and the percentages and stack them up inside the pie chart so they can see where they lay. He noted he would like to understand how much of these expenditures were CIP each year so they could see the overall operation of the municipality.
Referring to Fund Balance contribution at 2.5%, Councilman Lee questioned if there’s anything the Town Manager can tell the Council about the current budget and if any mitigation steps are being taken in the current year’s budget that will effect what they end up with at the end of the year for Fund Balance. Mr. Coppler stated they know that in certain areas the budget amount was a lot higher than what it should have been. He noted one of the easy cuts was within Buildings & Ground in utility cuts. He explained the Town took over a large chunk of utility costs from the schools. He noted they’re finding those numbers are nowhere close to what they budgeted for this year, therefore, that reduction will be felt this year.
Ms. Nenni stated the Governor cut the funding to Enfield by about $425,000, but the Town had a savings in the pension contribution because the interest earnings were better than they anticipated last year at this time. She noted this amounted to about a $400,000 savings. She went on to note it’s likely that the Town won’t spend the entire budget during the year, therefore, there might be some savings, however, there could also be some other revenue shortfalls in the future. She noted they may come close to using the entire $2.5 million they budgeted from Fund Balance this year.
Councilman Edgar stated his impression the proposed budget will result in reorganization to departments. He questioned if the Town Manager is now prepared to show the Council that reorganization so they will understand how departments will look and where there will be changes in staff, redirection of staff, or redistribution of manpower. Mr. Coppler stated it was planned to do that as part of the budget meetings with the departments.
Councilman Edgar stated he would like more details as soon as possible so that he has all the facts. Mr. Coppler stated tomorrow he can provide a list of the positions to be eliminated.
Councilman Crowley requested the Town Manager also provide the cost per household for an increase of 1.3% as well as Dr. Gallacher’s proposed budget. Mr. Coppler noted $3,126,000 amounts to a 1.05 mill increase, which would amount to about $157.50 for a home valued at $150,000. He stated for a home valued at $400,000, the increase would be $420.00 per year. He noted he can provide the Council more information regarding the tax impact. Councilman Nelson suggested adding in Enfield’s largest taxpayer and what their current assessed value is and what that tax increase would do to that business.
Councilman Bosco suggested including the top ten businesses, including personal property.
Chairman Kaupin questioned whether they can update the Town’s website tax rate calculator. Mr. Coppler stated the calculator on the website is usually just for the current year, however, he will see what they can do to update that just for the proposed budget.
Mr. Coppler then reviewed revenue projections for taxes, licenses and permits, intergovernmental revenue, charges for services, fines and forfeitures, use of money and property, miscellaneous revenue, intergovernmental transfers and utilization of fund balance.
He spoke about the prior year levy. He noted there has been a lot of discussion internally about how this needs to be handled. He stated the Town budgets on a cash basis, and when the Town does its auditing, it’s on a GAP basis, and the two aren’t the same. He explained cash is how much comes in within a 12-month period. He noted the GAP accounting looks at what happened in previous years and what will happen in the future. He noted Fund Balance is not really a cash basis approach, but rather it’s a GAP approach.
Ms. Nenni further explained GAP stands for generally accepted accounting principals. She noted the Town’s financial and annual reports are GAP-based statements. She noted they’re trying to start their budgeting closer to a GAP basis rather than as a budgetary basis. She noted with this in mind, on a GAP basis, they try to match the revenues and expenses. She noted for real estate taxes, the Town is generally going to get 98% to 99% of the taxes due on real property because there are some teeth in the statutes that allow the Town to foreclose on houses. She went on to note they don’t have as much teeth regarding motor vehicle taxes, therefore, that collection rate is closer to 90%. She stated they have a little more teeth concerning personal property taxes, and that collection rate is at about 96%. She explained when they do the GAP-based statements, they make accruals to record the full amount of the revenue in the year that it’s earned. She stated if they were budgeting closer to GAP, they wouldn’t have any prior year levy. She pointed out they reduced the revenue by about half in an effort to try to budget closer to GAP reporting.
Councilman Dumont questioned if the Town is planning another tax lien sale this year, and Ms. Nenni responded this year she was planning on having a tax collector sale so they’d have more control over the process.
Referring to licenses and permits, Councilman Dumont questioned the figures for dump permits. Ms. Nenni stated they’re having difficulty tracking dump permits and bulky waste fees.
Intergovernmental revenues were briefly highlighted.
Councilman Crowley questioned what revenue Enfield gets from the prisons in Enfield. Mr. Nenni indicated she’d provide that information. Chairman Kaupin stated his belief that if the land housing the Enfield prisons was used like Lego, it would generate a lot more than a million dollars.
Charges for services were reviewed. Mr. Coppler pointed out “Recreational Program Fees’ was moved into its own special revenue fund.
Fines and forfeitures were reviewed and Mr. Coppler stated they’ll be proposing the creation of a special revenue fund which would contain the monies they’re getting from fines for snow removal and blight.
Chairman Kaupin thanked Mr. Coppler for his presentation. He also thanked the Town Manager and all his directors for their hard work on this proposed budget.
ADJOURNMENT
MOTION #802 by Councilman Nelson, seconded by Councilman Kiner to adjourn.
Upon a SHOW-OF-HANDS vote being taken, the Chair declared MOTION #802 adopted 11-0-0, and the meeting stood adjourned at 8:02 p.m. |