FINANCE COMMITTEE MEETING
May 4, 2015
VOTES ON ITEMS:
• No vote was taken on Item 3 as an aggregate item 0-0-0
• Motion to adopt the BOC Byram Pool and Park Motion 6-5-0
There were 11 delegates and 4 alternates present. District 1 was absent.
Chairman Mike Warner (D3) started the meeting at 7:30 PM.
The finance committee reviewed the following topics: Byram Pool Budget Request, the Board of Education Budget Request and the Finance committee report on the town’s Finance Department.
Byram Pool Sue Rogers (Junior League), Joe Siciliano (Director, Parks and Recreation) and Al Monelli (Superintendent, DPW Building Construction and Maintenance) presented information and answered specific questions regarding the Byram Pool Project.
• Ms. Rogers explained that the Junior League’s interests are in funding the swimming pool portion of the project, via a Capital Campaign that is expected to raise $2.5M. To date the Junior League has provided $250K towards the project and has funded other capital campaigns for a similar amount (either brick and mortar projects or programs). She further stated that if the RTM does not approve the BET’s conditional budget recommendation, the Junior League could not commit to raising the $2.5 M and their membership would evaluate whether their fundraising efforts should be applied to other projects in their pipeline.
• The cost to operate the new pool and surrounding area is projected to increase from $113.3K to 185.3K. Joe Siciliano believes that revenue-generating programs (with a net profit) can be put in place to offset these additional costs, including a $1.00 increase in the annual beach pass fee.
• There is precedent to restrict access to town residents and the official “use” policy would come from the Board of Selectmen. Currently about 1% of Tod’s Point access is from people with day passes and 25% of our Island Beach ferryboat use is from day-passes. People going to the Islands do so as a daylong destination, which may not apply to the new pool. Other than year one, it is not expected that use of the pool will cannibalize use of the other beaches.
• There was concern expressed that once bids were obtained at the $7.9M (amount that does not represent the soil remediation and demolition) that it would be a challenge to scale back the project to a lesser number such as $6M. The Junior League is also interested in making sure the pool portion is an appropriate improvement / upgrade.
• There was concern expressed that because the A&E drawings are not yet to the level for bid specifications, costs could rise. Although the soil contamination is different than found at Greenwich High School (naturally occurring arsenic versus dumped PCBs), there were concerns that remediation could also cause a cost increase.
• There was discussion on how approval for initial costs and a later appropriation for the more accurate costs would affect borrowing and a bond resolution. A second appropriation would need to be approved by the RTM in time for the Finance Department to go to market for debt in January. Mr. Mynarski indicated that splitting the pool funding would not necessarily delay the financing for the pool or the pool schedule.
• Several members expressed concerns of the lack of the RTMs role in vetting larger requests, not from a micro-management standpoint but from a better financial analysis standpoint.
• Several members expressed concerns on how the delay could eliminate funding from the Junior League.
Rob Perelli-Minetti (D12) made a motion to adopt the BOC motion on the project. Specifically, to reduce, DPW, 345 department, Building and Construction & Maintenance, item 983, Byram Beach/Pool Master Plan, Account Code 345-59830 from $9,500,000 to $1,894,055 due to the lack of design, scope, and costs of the construction project and ongoing pool operating plan describing revenue, expenses, and the Town policy on non-resident access and usage. The reduced $1,894,055 funds will cover the completion of the A&E drawings and written operating plan at $40,000, the cost of soil remediation at $1,267,004, remediation oversight at $40,000, demolition at $300,000, 15% contingency at $247,051. Second Dennis Arrouet (D8)
The vote taken on the motion passed 6-5-0 (Districts 2, 3, 4, 9 and 11 voting No). Note, a Yes vote did not specifically mean lack of support for the pool project.
BOE Budget Barbara O’Neill (BOE Chairman), William McKersie (Superintendent of Schools) and Benjamin Branyan (Managing Director of Operations) presented information and answered specific questions regarding the Board of Education Budget. The FY16 budget represents an operating increase of 2% that is within the BET guidelines. This comes at a time when we are seeing an increased enrollment in our schools as well as an increase in educating students with special needs. The budget still contains money for STEM (Science, Technology, Engineering and Math), funds, it accommodates racial imbalance as well as a reduction in staff headcount. STEM is the magnet theme at Hamilton Avenue School, which is run by one of the best principals for a STEM school in the State of Connecticut. Hamilton Avenue also has a dedicated STEM coach and affiliation with an external Science Center. There has been an uptick in students coming to this magnet school. Digital Learning is in the capital budget and includes funding to roll out devices to all students. The district has introduced a strong LMS (Learning Management System) to formalize and organize the use of the digital devices and the cost per year has been declining. The RTM will have the opportunity to vote on the New Lebanon School Building committee during our June meeting. Scheme C is the current path for the new school and it should be noted that the Feasibility Committee did not support movement to another location. Neighborhood schools continue to be an important offering in our town.
Finance Department Review Rebecca Steinfeld (D11) and Dennis Arrouet (D8) reviewed this department and presented their findings in the form of a written report. What follows is the executive summary.
• The RTM should monitor Town of Greenwich fund accounts regularly. The Town’s Fund Accounting System places the majority of expenditures in the General Fund which is reviewed annually in the RTM budget review in May. However, the Town also maintains others funds such as sewer funds, the Parking Fund, and the Retirement Fund that are not always reviewed by the RTM. These funds can have a significant effect on the Town’s budget, both as place for the Town to allocate costs and as potential long-term obligations.
• The Town insures for risks using specialized insurance policies. But, Greenwich cannot insure for preexisting conditions such as environmental hazards. The costs of environmental remediation are recognized when the damages are remediated.
• The Town’s Internal Auditor is currently reviewing the Town’s operations for best practices. Audit results are reported to the BET monthly.
• The Town Treasurer’s monthly report should be modified to included encumbered funds. The Treasurer’s monthly cash report varies seasonally and reports nominally high cash balances. However, much of these cash is encumbered by obligation created by the BET. Knowing the amount of available cash would facilitate effective cash management.
• The RTM should take an active role in the BET’s current revision of the Town’s Debt Policies. Since the introduction of long term financing in 2008, Greenwich debt outstanding has increased rapidly and has now reached the current debt policy limit. Moreover, the anticipated approval of new projects (Byram Pool and New Lebanon School) will significantly increase this debt. Assuming the continuance of the Town’s 5 year debt amortization policies, the Town’s debt payments will likely exceed the current Tax Levy by very substantial amounts in the near future and significantly strain the Town’s future budgets.
We concluded the evening with thoughts on how to follow/shadow the BET and BOC during meetings in order to more regularly report back to our committees, as well as create a repository of information/reports for future committee members.
The Finance Committee meeting was adjourned at 9:40 PM.