TOWN OF GRANBY
BOARD OF FINANCE
SPECIAL MEETING MINUTES
JANUARY 14, 2008
PRESENT: Michael Guarco, Chairman; Gordon Bischoff, Frederick Moffa, OD; and Al Wilke Francis Brady.
Also present: William F. Smith, Jr., Town Manager; Barbarajean Scibelli, Finance Officer; Joseph Kask; Blum, Shapiro & Company, P.C., Certified Public Accountants; J. Cal Heminway, BOE Chairman; Gwen Van Dorp, Superintendent of Schools, and Harry Traver, BOE Business Manager
Chairman Guarco called the meeting to order at 7:35 p.m.
MINUTES
The Board reviewed the minutes for the meeting of December 10, 2007 before taking action.
ON A MOTION by Gordon Bischoff, seconded by Al Wilke, to approve minutes of December 10, 2007, the Board voted unanimously (5-0-0) to approve the minutes as presented.
AUDITORS REPORT – FY 2006 - 2007
Mr. Kask introduced himself and spoke about the merge between the two firms Scully & Wolf, LLP and Blum, Shapiro & Company, P.C. Mr. Kask indicated their firm issued and delivered the Comprehensive Annual Financial Report (CAFR), the Federal Single Audit Report, State Single Audit Report, and Management Letter in accordance with auditing standards.
He read from the report of independent accountants, page one, third paragraph of the CAFR. It stated:
“In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the Town of Granby, as of June 30, 2007, and the respective changes in financial position and cash flows, were applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.”
He presented highlights to Exhibits I, II, III, IV, V, VI, VII, IX and pages 1, 3, 15, 17-25, 37, 48. The Management’s Discussion and Analysis, pages 3-16, gives an overview of Granby’s history He indicated in Exhibit I, the invested capital assets dollar figure of $42 million includes buildings, furniture, fixtures, roads and streets. This figure did increase from last year ($31 million) as a result of the infrastructure reporting of roads and streets being included for June 30, 2007 audit as part of the GASB 34 requirement. Exhibit I shows the net assets of governmental activities as $55M. Mr. Kask indicated in years to come this figure will become more comparable in your town’s activities and surrounding towns. Exhibit II shows the net cost of doing business as approximately $29
million (general revenue - property taxes). Exhibit III shows approximately 10% was unappropriated from the building fund. Exhibit V shows $1.8 million for total assets. Exhibit VI shows an increase in net assets at end of year as $1.6 million. Investments were deemed a fair value. Footnotes within the report show no substantial changes.
It was stated that the town received a Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association (GFOA) for 2006. This year’s audit has again been submitted to GFOA for consideration of continued recognition.
Chairman Guarco inquired about project close outs in the CAFR. Mr. Kask mentioned you could find this type of information on pages 37 and 48. In particular, the close out of the high school project would not be specifically mentioned except in transfer from other funds. The close out money transfers into the General Fund.
A discussion was held about GASB No. 43 and 45. These two Governmental Accounting Standards Board statements will be phased-in in a tiered manner and will impact governmental entities that provide health insurance and other benefits to employees upon retirement. An analysis was done by Milliman for our use in establishing a comprehensive plan to address the various provisions and effects of the new post-employment standard. An update to this report is currently being done in order to plan for meeting guidelines for GASB.
Mr. Kask mentioned because of finding several instances in which there were no signature for request for disbursements of student activity funds, they recommend Board of Education follow written policies and procedures and not disburse funds without obtaining the proper approval signatures.
Mr. Kask commented with the merge of firms this year, the Town of Granby experienced new procedural systems with new templates, worked with new and skilled staff, and kept and used the practical knowledge so that municipal employees had little disruptions during the audit process. This type of service and commitment is good. Their firm handles over 80 governmental agencies. Other matters discussed were fund account liability, bonding, post employment benefits, trust fund, irrevocable trust fund, and pay-as-you-go.
Mr. Kask thanked the town and school finance employees for all their efforts in assisting in this audit process.
Chairman Guarco thanked Joseph Kask, the administration, and staff for a job well done.
STATEMENTS OF ACCOUNTS
Barbarajean Scibelli reported on the December Budget Operations Report. She indicated the chart shows tax collection down at 62% from 64%. However, a large deposit dated December 31, 2007 was not received until January 2, 2008, which would make the account on target. She explained that the last approved State budget reduced the elderly tax relief amount, which left the town short by $12,554. The account MFG Machine Equipment shows an excess of $27,102. Building permits are reported down and should not expect to meet budget revenue this year. However, the Town Clerk fees may make up for it. Short term investments are doing well, but will not be as high as last year because of lower interest rates. The accounts for diesel, gas, fuel oil, and electricity are being watched because of the ongoing
high cost in fuel. Public Works overtime for snow removal is also being monitored because of the number of storms and the costs associated from weekend and holiday.
Harry Traver, BOE Business Manager, highlighted the BOE November Statement of Accounts. Mr. Traver indicated that the electricity and fuel budget is showing a favorable projection. This could change if winter conditions plummet downward from the recent above normal weather temperatures. He restated the revenue from Regular Tuition from other Towns is forecasted to be approximately $52,000 less than budgeted. This loss of revenue is for five less students. It was noted that approximately 50% of current anticipated revenue from regular tuition from other towns was received in December and therefore not reflected in the November Statement of Accounts. Lastly, he indicated no significant new items to report from the December Statement of Accounts, which will be available after Board of Education review.
PLUS ONE BUDGET (January 2008)
Board of Education
Gwen Van Dorp, Superintendent of Schools, presented a summary of the Plus One Budget for the Board of Education. Some of the highlights were:
Overall increase for the FY 08 operating budget is approximately 7.1%. Assumptions are:
General 4.0% increase; 6% increase in educational supplies
Seven certified employees (retirement benefits; cost of replacement)
Thirteen percent increase in health benefits for medical and 7% for dental in FY09; 10% increase in subsequent years
Transportation contract; no new buses; adjusted for fuel costs
Negotiated salaries adjusted for anticipated retirements; 4% for remaining employees
Utilities: oil at $2.75 per gallon; adjusted for usage. Electricity level funded pending review of usage
District enrollment is projected to decrease with a large class graduating and smaller classes in primary grades.
This year class sizes in most elementary grade will be comparable to DRG and state averages.
Addition of 3.7 Teachers
Instructional Coach (1.0 FTE)
Intermediate/MS music (.2 FTE)
World Language Teacher (Spanish .8 FTE)
High School Teachers (1.2 FTE)
School Psychologist (.5 FTE)
Support Staff
Secretaries: Three positions have been expanded. (Kearns School secretary to 40 hours, Central Office receptionist 32 hours, and athletic department secretary to 32 hours per week.)
Teaching Assistants (3.5 FTE)
Software ($81,500)
Athletics ($10,043)
Other (approximately $75,000+) (texts, curriculum development, Mandarin Chinese, substitute pay increase, and new equipment)
A discussion was held on the health savings account program. The Superintendent indicated that the health benefits combined contribution will be in the range of 10%. She also indicated an approximate 4-5% budget guideline may meet most of the school’s needs.
CONTINUED DISCUSSION ON OVERVIEW OF REVALUATION
Town Manager Smith reported that revaluation is on schedule. Revaluation information is available on the website. An article will be printed in the Drummer.
The motor vehicle and appeal process numbers have not been computed yet, too early in the process now. The appeal process ends at the end of February 2008. It is estimated that 27.9% would be the average increase in real estate value before exemptions of properties. There was discussion about value adjustment, grand list growth, and three ranges of the revaluation for real estate property (high, middle, and low).
PRELIMINARY DISCUSSION OF BUDGET GUIDELINES FOR 2008-09
Chairman Guarco commented the Board will be striving for a 1% mill rate increase to the 2008-09 budget. After a lengthy discussion, the Board’s opinion for a preliminary guideline would be to use a 4% increase to the operating budgets for the Board of Education and Board of Selectmen. Some of the comments regarding the guideline increase were:
The grand list growth is slowing down.
The revaluation calculation will most likely effect low income families the hardest.
A 4 % operating budget increase would be a challenge for both the town and school.
Disappointed that the mill rate increase cannot be zero.
A continued flat enrollment at school may help reduce the mill rate increases for budgets in the future.
The school and town are very limited in finding ways to reduce their budget since it is made up mostly of personnel payroll.
A significant draw down from reserves has assisted in recent years, however, this practice should not be a routine request.
CONFIRM DATE OF NEXT MEETING
The next regular meeting of the Board of Finance will be February 11, 2008, at the Police Department Community Room.
ADJOURNMENT
ON A MOTION by Al Wilke, seconded by Francis Brady, the Board voted unanimously (5-0-0) to adjourn the meeting at 9:50 p.m.
Respectfully submitted,
Patricia I. Chieski
Recording Secretary
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