MIDDLEFIELD BOARD OF FINANCE
405 Main Street
Middlefield, Connecticut 06455
Minutes of the January 14, 2016 Regular Meeting
The meeting was called to order at 7:12 pm.
Attendance:
Members:
X / Irish, Jim / A / Bailey, EdX / Lowry, David / X / Geruch, Joe
X / Malcolm, Alice
X / Nick, Joel
X / Wolak, Mary
X / Yamartino, Bob
A=Absent
X=Present
Al Rusilowicz and Mary Ann Zieminski were also present at tonight’s meeting.
The Pledge of Allegiance was recited.
Approval of the Agenda
Bob Yamartino stated that he had spoken to Donna Golub who told him that she had spoken with Tom Hennick and item 8, Selectman’s Update, is not specific enough. Therefore, Mr. Yamartino made to motion to amend item 8 of the agenda, Selectman’s Update, to include a cell tower update, solar update and assessor’s hours for the month of January. The motion was seconded and the agenda was approved, as amended. Motion carried unanimously.
Public Comment
There were no members of the public present who wished to comment.
Auditor Report
Al Rusilowicz distributed copies of the audit to the Board members. He had already sent it electronically to Joe Geruch. Bob Yamartino remarked that Ed Bailey had already taken a look at it as well and will join the meeting later.
Middlefield Board of Finance Minutes
January 14, 2016
Page 8
Al Rusilowicz began to review audit page by page. There were no compliance issues. Pages 3 through 9 are a summary of what had happened through the year. He explained that the Town has three sets of financial statements, one is the government-wide financials on a full accrual basis; the second is the governmental financials which the town operates by; and the third is the budgetary statements which the Board sees month to month.
Mr. Rusilowicz explained that a new accounting standard was adopted in 2015 relative to the disclosure of pension obligations. The Town participates in the municipal employee retirement system which means they are in the same pool as State employees. The contributions that the Town makes are not segregated and retirees receive benefits from all the contributors. The State has decided that all municipalities should share in the liability of this fund which is about $3 billion and Middlefield’s share was about $400,000. Since that liability was never shown before, it has been adjusted to include that. Jim Irish summarized that last year, there would not have been a net pension liability shown on the Town’s sheets and the one shown this year relates to Middlefield retirees only. Al Rusilowicz directed the Board members to the numbers on page 45 to further explain this issue.
Mary Wolak joined the meeting at 7:25 pm and discussion about the pension fund continued.
Mr. Rusilowicz redirected the members to page 12 which is all of the funds that the Town is responsible for, including the general fund, the reserve fund and Lake Beseck. Mr. Rusilowicz reviewed the fund balances and explained that the unassigned general fund balance is just shy of 10 percent of the total general fund expenditures. Ten percent is considered to be a healthy fund balance and Middlefield is just a little bit shy of that. Bob Yamartino commented that the Board was targeting an 8 percent reserve.
Mr. Rusilowicz reviewed page 14, the income statement, and directed the Board members to look at the pages beginning with 36, which is the budget and actual. In every case, the Town was over budget in total on revenue. There was continued discussion regarding how to get fund balances from one set of financial statements to another. Looking at page 44, the revenue and expenses are equal by using money out of the surplus. Mr. Rusilowicz explained that a for-profit entity returns any surplus to shareholders in the way of dividends while a municipality returns surplus by way of a mill rate reduction.
Bob Yamartino asked if they were allowed to transfer money into capital and nonrecurring items during the year and Mr. Rusilowicz explained that they can transfer money in, but cannot spend out of capital reserve. Joe Geruch explained that the Town Charter states that they can only touch the capital fund via town meeting. Mr. Yamartino explained that there is a depreciation schedule for equipment that needs to be replaced and that schedule is funded every year, but he did ask if Mr. Rusilowicz had any suggestions as how to handle the capital fund. Mr. Rusilowicz felt that the Town’s capital fund is substantial.
Middlefield Board of Finance Minutes
January 14, 2016
Page 8
There was then discussion about the Federal Reserve Board raising the interest rate and how often that would happen. There was a general feeling that now is probably a good time to fund any upcoming projects while the interest rate is low. Al Rusilowicz suggested that the Town does not bond for anything less than $5 million because of legal fees, but Mr. Yamartino explained that they would not bond but would go after a municipal bank loan.
Going back to page 37, sale of property was also above budget. Excepting for interest income, the Town received more money than anticipated.
The next three pages were expenses, which had already been approved by the Board of Finance. They continued reviewing the audit, page by page, and found that the Tax Collector’s collection rate was 99.97 percent. Page 50 is the balance sheet for sundry funds and Bob Yamartino asked about specific funds having their own checking accounts. This year, a check was written for $40,000 out of the Old Home Days fund for the sesquicentennial celebration. Mary Ann Zieminski requested to see the bank statements from the Sesquicentennial Committee. Bob Yamartino asked Mr. Rusilowicz if a copy of all statements should go to the Treasurer and he agreed that they should all come to the Treasurer and then be distributed to any of the committees. Mr. Rusilowicz also stated that the Treasurer should be a signatory on every bank account. Mr. Yamartino was concerned that this was taxpayer money and there were no controls. Joe Geruch stated that there was no taxpayer money in the Park & Rec fund as it consists of fees collected. The Commission reiterated that they were not thinking anything wrong was going on, but would like to see the controls put in place.
Joe Geruch explained the history of how the Park & Rec department is funded. Al Rusilowicz mentioned that the Treasurer and the Tax Collector are the only two employees of the Town that are bonded. Anyone else handling cash is covered by an employee dishonesty policy. Mr. Rusilowicz felt that there was not a great deal of overall risk to the Town. Joe Geruch agreed to copy each of the bank statements for Mary Ann Zieminski.
Al Rusilowicz continued reviewing the audit, including the capital fund. Some of the items listed in the capital fund are very old and should be removed from the list.
Mr. Rusilowicz summarized that the Town looks to be in good shape and will send the audit off to the State of Connecticut tomorrow morning. Discussion continued about retirement benefits that the Town funds. Joe Geruch also explained that the Town has been successful in reducing the overall liability through union contract negotiations. The Board continued to review the long-term debt and the debt to equity ratio is approximately 1.2 percent.
Bob Yamartino thanked Al Rusilowicz for his work on the audit. Bob Yamartino made a motion, seconded by Jim Irish, to accept the auditor’s report for fiscal year ended 6/30/15, as presented and dated 1/14/16. Motion carried unanimously. Bob Yamartino and Al Rusilowicz both thanked Joe Geruch for his good work.
Middlefield Board of Finance Minutes
January 14, 2016
Page 8
The Board agreed to table Approval of Minutes and Current Year Spending. Joe Geruch did mention that there will probably be three large tracts of property on the market soon. Mr. Geruch suggested that the Board may want to think about trying to get development rights to keep the properties from going into housing. The Board took a short recess at this point.
Bob Yamartino then called the meeting back to order and reviewed what had transpired for Chris Hurlbert and a discussion ensued about the issue of the various funds and pre-signed checks. It was explained that these changes would only be made to protect the Town, the Treasurer and the chairmen of the various committees. Ed Bailey made comments about the WPCA and how they handle their money.
Alice Malcolm had asked Chris Hurlbert to attend tonight’s meeting to explain the overage on the summer camp amount. Mr. Hurlbert explained that payroll for the summer camp has been moved to the Town’s payroll and is reimbursed from the Park & Rec account. Joe Geruch mentioned that only the Tax Collector is bonded, not the Treasurer.
Mary Wolak made a motion, seconded by Alice Malcolm, to table items 6 and 7 of the agenda, Approval of Minutes and Current Year Spending. Motion carried unanimously.
Selectman’s Update
$ Cell Tower Update
Ed Bailey reported that there seems to have been some miscommunication and they are still in the process of engaging the consultant. No proposal has been received as of yet. In a phone conversation, the consultant did state that he thought it would take about 10 hours to review the current documents at a billing rate of $150/hour, plus expenses, plus transportation. Bob Yamartino asked Mr. Bailey to forward the proposal to the Board of Finance and, if Mr. Bailey would like, they can call a special meeting. There is no specific line item for this consultant. Mr. Bailey did state that Professional Services are under the purview of the executives of the Town and he would like the Board to allocate up to $3,000 to get the project rolling.
Jim Irish made a motion, seconded by Joel Nick, to fund Cell Tower Consultant Services not to exceed $3,000, from line item 9000, Operation Contingency, into a new line item to be established. Motion carried unanimously.
Middlefield Board of Finance Minutes
January 14, 2016
Page 8
Ed Bailey stated that there is a town meeting being held next Tuesday to approve a resolution to endorse an inter-town grant program to be able to get funding for inter-town emergency communications. The program will be managed by Valley Shore and is being initiated by the Town of Essex. The total brought in would be over $1 million over three years to fund inter-town emergency communications. Valley Shore will provide matching funding required by the grant which may, in turn, cause a small increase in Valley Shore’s cost.
$ Solar Power Proposal
Ed Bailey had spoken to Jim Irish about meeting with a representative from Direct Solar in Meriden to try to get a primer on solar energy. Hopefully, they will meet within the next few weeks to build a knowledge base. Mr. Bailey explained that he just wants to find out all of the possibilities before looking at proposals. Mr. Bailey also mentioned that he has been to three different seminars with regard to solar and municipalities.
$ Assessor Hours
Ed Bailey reported that the Assessor works five hours a day, five days a week, 52 weeks a year with vacation, personal and sick time. As part of the union contract, his vacation time is prorated because he is part-time. During the months of January and July, he works hours that more or less mirror the Tax Collector hours. Total hours are approximately 1,300 a year, plus approximately 100 additional hours in July and January for which he is given compensatory time off.
Mr. Bailey explained that there is an issue of nobody being in the Tax Assessor’s office during this compensatory time. He also commented that the Tax Assessor is not happy with the compensatory arrangement. Another comment was made that the Tax Assessor has been trying to up his hours since he was hired. Since being in office for two months and looking into this issue, Mr. Bailey feels that upping the hours and eliminating the compensatory time of the Tax Assessor is justified. Mr. Bailey went through the history of going from a full-time assessor to a part-time assessor and how the comp time came into being.
Ed Bailey reviewed that the Assessor knew that he would be expected to work extra hours in January and July, and was paid for the extra hours in January because there was money in the budget. This past July, the money was not budgeted, he did not get paid and was told he had to take comp time. The Assessor feels that he does not have enough time to leave his job for two weeks in addition to his vacation and personal time. Mr. Bailey has noticed that there are people in the Assessor’s office all day long throughout the week. The Assessor has also prepared the RFP for the reval that will go out at the end of this month and the bids will be due back by the end of February with the job starting on April 1st.
The Board had a lengthy discussion and agreed to add 50 hours to the Assessor’s time for January of this year and will be sure to look at the hours during the budget process. A part-time position is anything under 1,800 hours and adding these hours will keep this position as part-time.
Middlefield Board of Finance Minutes
January 14, 2016
Page 8
Joel Nick made a motion, seconded by Jim Irish, to transfer $1,600 from line item 9000, Operational Contingency, to line item 7100, Assessor, to pay for an additional 50 hours of labor worked in January of 2016. Mary Wolak mentioned that she is concerned that the hours will keep increasing for this position and she did not want to see that happen. Motion carried unanimously.
Ed Bailey also stated that a personal property declaration was received from Powder Ridge and the Tax Assessor went up there and reviewed the declaration with them. This has resulted in no need to hire the consultant which had been budgeted for $1,000. The assessed value for personal property at Powder Ridge is approximately $1.3 million and, adding in the value of the actual property, the total property taxes will be approximately $90,000.