2017-09-14-AC-min - Laserfiche WebLink

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09/14/2017 AC Minutes Although both the water and sewer funds had positive operating results, there was a cash deficit of approximately $200,000 in the sewer fund because approximately $700,000 in FY2017 payments were not received until early July. This will result available for appropriation in the coming fiscal year, which must be calculated on a cash basis as of the end of the fiscal year, even though the cash is now in hand. In the water fund, on the other hand, there was a cash operating surplus of approximately $1.5 million due primarily to record irrigation water usage. The operating surplus is even higher if payments made after the close of the fiscal year, as noted above, are considered. The surplus will substantially as of the end of FY2017 to an amount approaching $3 million. Mr. Bartenstein made two suggestions for future consideration: o For purposes of reporting to the Selectmen, accrual accounting, which is permitted in an Enterprise Fund for financial reporting, would show year- to-year operating results more accurately even if retained earnings must be calculated on a cash basis; o Combining the water and sewer enterprise funds, which the Department of Revenue has indicated is permissible, could help to even out variations in cash results between the two funds and allow periodic irrigation-driven water fund surpluses to support the entire system. Mr. Bartenstein has asked Ms. Kosnoff whether there are any outstanding, callable bonds on which the Town is paying an interest rate higher than the approximately 1.0% interest earned on funds in the Capital Stabilization Fund (CSF). If so, it might be cost-effective to use the CSF to pay off some of those bonds. Ms. Kosnoff said that she would ask First Southwest, bond advisor, to research this question. The Town has approximately $200 million in outstanding debt. 3. September 13, 2017 Capital Summit Issues: Debt Exclusion Questions Several issues relating to the proposed fall 2017 debt exclusion referendum were discussed, in particularly whether the appropriation requested at the upcoming Special Town Meeting (STM) for the Hastings School replacement project should be made contingent on the successful passage of a debt exclusion referendum vote on this item. Mr. Bartenstein noted that the BoS is still debating this issue and may be interested in input from the finance committees as early as its next scheduled meeting on Monday, September 18. To frame the discussion, Mr. Bartenstein observed that, by the very nature of a debt exclusion referendum, which seeks voter approval of an increase in taxes beyond the Proposition 2 ½ levy limit in order to fund the debt service costs incurred for a capital project, something must be at risk if the vote fails. Traditionally, it is the project itself which is placed at risk: if the voters agree to fund the project outside of the limits of Proposition 2 ½, the project will go forward; however, if the vote is negative, the project 2