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HomeMy WebLinkAbout2011-07-07-AC-min July 7, 2011 Minutes Town of Lexington Appropriation Committee July 7, 2011 Place and time Cary Hall, Ellen Stone Room, 7 30 p.m Members present Glenn Parker, Chair; Joe Pato, Vice Chair; John Bartenstein, Vice Chair and Secretary; Robert Cohen, Mollie Garberg; Alan Levine, Enc Michelson, Richard Neumeier; Rob Addelson (non-voting, ex officio) Also present Micah Niemy, Budget Officer; Jim Goell, Town Meeting Member The meeting was called to order at 7 35 p m 1 FY 2011 Salary Adjustment Account Transfers. Micah Niemy made a presentation on proposed Salary Adjustment Account transfers for FY 2011 The Salary Adjustment Account is a continuing balance account that is used to fund anticipated but as yet indeterminate salary costs, such as the costs to fund unsettled contracts, incremental overtime costs, and vacation and sick leave buy-backs at retirement, to the extent they are not otherwise absorbed by departmental surpluses resulting from unfilled vacancies Transfers from the Salary Adjustment Account are approved by the Board of Selectmen but they have traditionally been submitted for review by the Appropriation Committee as well The proposed transfers for FY 2011, totaling $30,900, are detailed in a spreadsheet that was circulated to the Committee They are needed to cover contract settlements and vacation buybacks for the following departments Board of Selectmen (staff), Finance, Town Manager's Office, and MIS It was noted that the total amount of the transfers required this year is relatively small (last year's transfers totaled $316,500), and questions were raised about the level of annual appropriations made to this account and its current balance Mr Addelson reported that the fund balance coming into FY 2011 was approximately $1,330,000 and that approximately $540,000 was appropnated for FY 2011, bnnging the fund balance as of the end of FY 2011 (after the proposed $30,900 transfer)to approximately $1,840,000 An additional amount of approximately $460,000 was appropnated at this year's annual Town Meeting for FY 2012, bnnging the total fund balance that will be available in FY 2012 to approximately $2,300,000 In hindsight, this year's appropriation may have been larger than necessary, and the significant carryover balance remaining in the account will be taken into consideration in setting the budget for FY 2013 Mr Addelson noted, however, that collective bargaining contracts with the Fire Department employees still remain open for FY 2010 and FY 2011 and that it is prudent to budget the salary adjustment line item conservatively so as not to run the risk of a budget shortfall The Committee endorsed the proposed transfers by a vote of 8-0 1 July 7, 2011 2 FY 2011 3% Rule Transfers. Mr Addelson presented to the committee for its approval a series of year-end transfers under the 3% rule The 3% rule, enacted by the State legislature several years ago, allows cities and towns to balance their budgets administratively at year-end, by transferring appropriated but unexpended amounts of up to 3% of any line item to any other line item These transfers require approval of both the Board of Selectmen and the Appropriation Committee The transfers proposed for FY 2011, as detailed in a spreadsheet that was circulated to the Committee, total $80,415, including: a transfer of$35,415 to Long-Term Debt Principal from Long-Term Debt Interest ($25,000), Temporary Borrowing ($4,344) and Health Insurance ($6,001), a $20,000 Fire Department expense shortfall due to unanticipated apparatus repair costs coming from Health Insurance ($20,000), and a $25,000 Public Facilities Department expense shortfall due to higher than anticipated utility costs (natural gas at Clarke, electricity at LHS and water/sewer costs that were recalculated) coming from Health Insurance ($25,000) The Committee discussed the transfers, budgets and the reasons behind the shortfalls There will be follow up with Pat Goddard after he has completed his utility overage analysis The Committee voted to approve the proposed 3% transfers by a vote of 8-0 3 Reserve Fund Status. Mr Addelson reported that the end-of-year balance in the FY 2011 Reserve Fund is $480,000 It is anticipated that the FY 2011 snow and ice deficit of $652,000 will be closed using available FY12 revenue, including the $300k of unallocated revenue that is set aside each year for this purpose and an additional $352,000 of the $600,000 of free cash that was set aside as a hedge against potential cuts in state aid but which will not be needed (the cuts ended up being modest at $50k, and could be erased altogether in the event of a surplus in the state budget) Accordingly, it is expected that the full $480,000 remaining in the Reserve Fund will close to the General Fund and contribute to the free cash available for appropriation in FY 2013 4 Thanks to Micah Niemy It was noted that this meeting would likely be the last attended by Micah Niemy, who will be leaving his post as Budget Officer in August to pursue a master's degree in public administration. The Committee thanked Micah for his hard work and contributions to the Town and wished him the best of luck in his future endeavors 5 Miscellaneous. • Snow and Ice Eric Michelson reported that he and Dick Neumeier have set up a meeting later in July with Bill Hadley, Director of Public Works This will be a preliminary meeting to better understand snow and ice processes and procedures • Legal Expenditures Rob Addelson circulated a summary of Town and School legal expenditures from 2008-2011 (not including CPA legal expenditures or bond counsel work) in response to a previous request by Committee members There was further discussion of the possibility that savings could be achieved by hiring in-house counsel to take over some of this legal work. Mr Addelson suggested involving the Board of Selectmen in determining whether this is a topic that should be pursued, and it was 2 July 7, 2011 agreed that it would be best to start with an email inquiry to the relevant users of legal services to determine the level of interest. • Minutes. Draft minutes had been circulated of meetings held on September 22, 2010, November 3, 2010 and June 21, 2011 As some members wished to have additional time to review and comment on them, consideration will be deferred until the next meeting. • Salary Issues. The Committee discussed briefly the recent controversy over the School Committee's negotiation of a new contract with the Superintendent, salary levels and teacher morale, and what, if any, involvement it should have in these matters 6 Action Items. • Alan Levine and Mollie Garberg will review and edit minutes for consideration at the next meeting. • The Committee will follow up with Pat Goddard regarding the reasons for utility cost overruns, primarily at the Clarke Middle School • Glenn Parker will email the Town Manager, Board of Selectmen and Superintendent of Schools regarding their level of interest in evaluating the possibility of bringing some legal services in-house • Eric Michelson will speak with School Committee Chair MaryAnn Stewart to get an update on issues relating to the Superintendent's contract. The meeting was adjourned at 9 05 p.m A list of documents and other exhibits used at the meeting is attached. Respectfully submitted, Andrea Yepez Recording Secretary Approved August 18, 2011 3 July 7, 2011 Exhibits Appropriation Committee Meeting February 3, 2011 1 Meeting Agenda posted by Glenn Parker, Chair 2 Spreadsheet summarizing Transfers Related to Overages in General Fund Personal Service Appropriations (Salary Adjustment Account Transfers) and in General Fund Expense Appropriations (3%Rule Transfers), with approval forms, distnbuted by Micah Niemy, Budget Officer 3 Analysis of Legal Expenditures for FY 2008-2011, distnbuted by Rob Addelson, Assistant Town Manager for Finance 4