2020-08-20-AC-min - Laserfiche WebLink

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08/20/2020 AC Minutes • It is projected that there will be a $1.2 million revenue reduction as compared to the revenue projection used to prepare the approved FY2021 budget, but that is offset by the decision at the ATM to postpone previously-planned appropriations of$2.9 million into the OPEB trust fund and the Capital Stabilization Fund. • The result is a projected $1.7 million in revenue less expenses, which means the Town can avoid cutting operating expenses or making program cuts. • Assuming the Town continues to tax to the levy limit, it must be determined how the net revenue will be used; options include, but are not limited to, offsetting the Town's Other Post-retirement Employee Benefits obligations and/or adding to the Capital Stabilization Fund. Other FY2021 Funds: • The Visitors' Center and Liberty Ride experienced revenue losses but their expenses were also reduced, which avoided significant deficits. • The Recreation Enterprise Fund experienced significant losses in FY2020 and a significant portion of its $699,000 in retained earnings has been used. The Fund needs a cash infusion to remain solvent in FY2021, which indicates the need for some policy decisions. Some of the FY2021 $1.7 million in net revenue could be used. Ultimately, it may also be advisable to restructure the way the Recreation Enterprise Fund operates because the Recreation Department incurs many expenses, such as maintenance of recreation facilities, even when programs at those facilities are cancelled. This requires a lot more discussion. General discussion about the FY2021 budget included: • Current plans do not include: ➢ Incorporating COVID impacts on a line-by-line basis in the budget; ➢ Layoffs in FY2021; ➢ Tapping into the approximately $10 million that is in the reserve fund. • There are many uncertainties, particularly as related to the schools. The situation needs continuous monitoring. Pension Fund Updated Projections Ms. Kosnoff reported that the Town's budget has been including approximately $6.7 million for short- and long-term pension liabilities. Preliminary analyses of the pension's long-term liability by the Town's actuary, indicate that the unfunded liability has increased significantly due to recent increases in staffing and increases in actuarial life expectancy as well as for several other reasons, but not from changes in the assumed discount rate. If the schedule for annual appropriations to the Fund are not changed, full funding would be delayed from 2024 to 2030. It is anticipated that the 2024 target for a fully funded system will have to be pushed out to avoid a major burden on the operating budget, but probably not as far forward as 2030. The impact has not yet been incorporated into five-year projections, but it is expected to create an additional demand on the projected FY2021 $1.7 million revenue surplus. Future Dates for Financial Summits and Special Town Meeting (STM) Ms. Kosnoff identified the following schedule: • August 24 SB meeting: A draft warrant for a fall STM is being submitted to the SB tomorrow in preparation for their meeting. Articles include many that were postponed during the 2020 ATM, some"housekeeping" items, an adjusted FY2021 budget, and a 3