January 8, 2015 Strategic Budget Meeting

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January 8, 2015 Strategic Budget Meeting

Postby Mary Wright » Sun Feb 15, 2015 6:54 pm

STRATEGIC BUDGET COMMITTEE MEETING
THURSDAY, JANUARY 8, 2015

A meeting of the Strategic Budget Committee was held on Thursday, January 8, 2015 in the Municipal Center. Ms. Brouillette called the meeting to order at 3:00 PM.

ATTENDANCE
PRESENT: Paula Brouillette (Chair), Dave Cortese (Vice Chair), Pamela Holmes, Cortney Keegan, Melissa Morrison (Arrived 3:09 PM), Michael Guzinski (Town Administrator), Jeanne Lovett (Finance Director), Norm Yvon (School Superintendent)
ABSENT: Kevin Morse (Excused), Scott Yacino (Alternate-Excused)

1. Review Examples of 5 Year Operational Budget Plans from Other Communities
Ms. Brouillette introduced and welcomed Mr. Yvon as the new School Superintendent. Mr. Guzinski has not yet been able to secure additional five year plans from surrounding towns. He will continue to seek them out.
Using the North Andover plan as a guide, Ms. Brouillette would like to put together pro-forma assumptions based on historical information. Ms. Keegan stressed that they will need to add disclaimers.
The following assumptions were made for Revenues for the next five years: assume 2.5% will be the levy limit for the next five years, New Growth will remain at $80,000, and use the existing Debt Schedule for the next five years. Ms. Lovett will look at the last three years of Local Receipts with Mr. Guzinski and have something for the next meeting.
A discussion was held regarding State Aid. This is the largest category with the most volatility. Mr. Guzinski stated that priority has been shifted away from Local Aid and given to other areas in order to survive the recession. The burden has been shifted over the past eight years from state taxes to local property taxes. Ms. Brouillette asked Ms. Lovett and Mr. Guzinski to break Local Aid out into Chapter 70 and its other components. They should assume a minimum of $25/student. Ms. Lovett stated that Chapter 70 is the largest piece of Local Aid (90%) and everything else has been level or dropped. They should assume that this document will be reviewed at the end of six months, mainly due to Chapter 70
Ms. Brouillette would like to add Commercial Property to the document for discussion. She feels Commercial Property is the only opportunity for Douglas to raise its tax base, without being residential. Ms. Holmes suggested adding this topic as a secondary document.
Regarding Expenses for the next five years, Ms. Lovett feels she will have a good idea of Health Insurance expenses by the end of January. Mr. Guzinski will talk with the insurance broker. There is only one year of history with the new program.
The Town just starting funding OPEB two years ago. Review the policies in place for Free Cash and Stabilization.
Regarding Debt Service, there will be no new debt rolling off for approximately 10 years. Ms. Brouillette feels Douglas is missing the Capital Plan piece and would like a line item regarding that missing piece. Douglas does not have a high level maintenance plan. Mr. Guzinski suggested the statement, “Based on current debt schedules, no debt will be falling off allowing additional purchases for capital or otherwise within the five year period.”

Mr. Guzinski will look at the last five years of General Government Spending and come up with an estimate. A discussion was held regarding the difference between continuing on at current service levels or providing services they feel are necessary. It was decided to prepare the estimates based on government where it is now, historically how much it goes up, with a footnote that says where services have been cut and where they should be. Ms. Lovett will use the categories she has and summarize them in the way she understands them.
A discussion was held regarding Free Cash. Ms. Keegan said that many communities are talking about establishing a stabilization fund for Special Education, but few have the money to establish one. Stabilization for Douglas is close to 5%. It is hard to build Stabilization when Free Cash is used for Operating Revenue. Mr. Guzinski stated that they are trying to put a cap on how much Free Cash is used. Ms. Lovett is concerned about Snow & Ice this year. Salt and sand went up 30% this year.
Ms. Brouillette said the Town needs to decide if they want commercial development in Douglas and money needs to be spent in order to attract it. Ms. Keegan and Mr. Guzinski spoke about the costs associated with not having commercial development.
Ms. Brouillette stated that there needs to be a conversation regarding which capital costs should be absorbed by the School Operating Budget vs. paid for by the Town: pay-as-you go or as a debt exclusion. Traditionally, anything $10,000 and under should be paid for from the School Operating Budget, but Ms. Keegan said they have had to take those items out in order to educate the students. Mr. Guzinski suggested that the School Dept. create a list of items for the Capital Committee that they consider to be periodic maintenance items and ones they consider to be special capital items.

2. Minutes: December 14, 2014
Ms. Holmes made a motion to approve the December 14, 2014 meeting minutes of the Strategic Budget Committee meeting as presented. Mr. Cortese seconded the motion. Vote: Unanimous.

3. Old/New Business/Open Session
Old Business: None
New Business: The next meeting will be January 29, 2015 at 3:30 PM.

4. Adjournment
Ms. Holmes made a motion to adjourn the meeting at 4:22 PM. Mr. Cortese seconded the motion. Vote: Unanimous.

Respectfully submitted,

Mary Wright
Recording Secretary
Mary Wright
 
Posts: 481
Joined: Thu Jan 12, 2012 8:56 pm

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