Board of Finance Meeting

001[Music] good evening I'd like to call to order the regular meeting for the board of finance March 13 2019 let's start by saying the pledge pledge allegiance to the flag of the United States of America to the Republic for which it stands one nation under God indivisible with liberty and justice for all missing today is chairman Sean Hawthorn he will be here in a little bit and take over let's start with public comment if there is any no public comment communications and correspondence so I make a motion to approve I'm sorry we received communication and correspondence from power blaster and heart Jaffe meeting materials discussion all right approval of meeting minutes I'd like to make a motion to approve the minutes from the regular meeting on February 13 and the special meeting starts at sixth

002and seventh second discussion vote all in favor say aye passes since the First Selectman spot here we'll go to the report of Marshall all right if you would take one of these which is revenue and one of these which is expensive so the revenues that if you take a look at the revenues that I give away my happy that amid most of the revenues have been received to know if they work I think that we have those are the expensive expenses the revenues start was saved the revenues start with page one and the expenses start with pages arrow but most most of the revenues have been received as you would expect the big chunks of revenue that we still have to receive so the revenues most of the revenues have been received we're not we've

003been trying to post them daily or weekly so that we don't fall behind that or as we're trying to do next year's budget and last year's order we have fallen behind a little bit on some of the accounting but but it shouldn't be the daily revenues and the daily expenditure some of the interest posting is behind that the big revenues left to receive we have a low set that we have to apply for I believe it's a hundred and ninety three thousand that we should be receiving we have that's what is it called here the budget is 122 the actual I believe will be 193 that solos up is a local Capital Improvement Program and every year in April the state bonds money for it and we ask for a reimbursement and every year we

004spend it on our road paving program so we have to it's it's a really simple program that they give us about a hundred and nine I forgot how much they give us a year maybe it was the 123 but they give us a set amount every year and we many years of them for whatever year and we can draw it down if we don't draw it down in one year we can draw it down the next year and so that's how it's a little more than the annual allotment that we didn't draw it all down last year and we send them an application we can essentially use it for many different capital projects our history is always been to use it for roads that it just takes a form to fill out with them to

005say we've spent it here's the receipts can you send us the money if you don't if you don't use the only get reimbursed so if we don't get reimbursed for it it stays with the steep and then we have to ask for some towns we'll take it and they'll save it up for six years and then BAM they take it all at one time I don't really trust the states always gonna have it there so I think we should take it every year but we not use it all last year because of the background probably they didn't to all the road if we have your marker room I think we just didn't have it on the agenda to get that money as fast as possible the second thing is we should get a second installment

006on the education cost sharing grant in April that it's 25% in September 25 percent in January 50 percent in April we have a second installment due on the town age Road program that's about 150,000 and the grants for municipal projects we found paperwork for that in January that there's nothing that tells us when they're going to give it to us but we're still expecting to receive it that there is an orange orange thing on the paper and what that is is an adjustment that we've asked for tonight that we'll talk about later I think the everything else is coming in on schedule I tried to follow up for Glen on the fire marshal fees that I think we're at $27,000 we had nothing in July nothing in August and for the last three months it

007looks like the average is about fifty fifty five hundred dollars and the woman that does that has been out sick and I tried to see if I could find someone else that could after 4 o'clock that could help me with the receivable thing be the last time we checked their receivables it was about seven seven to seven hundred dollars but I don't know what it is right now and I follow up on that in addition to what's in there correct so we should from that if we add fifty five hundred a month and seventy five hundred for receivables we should be above the fifty thousand but that's just me trying to estimate based on what I see it's not an educated guess enough or get that educated educated guess of where we stand so in

008total we've collected ninety seven and a half percent of our receipt out of our revenue most of our revenue is tax collections and that the second big installment was due in Feb 15 uary so that makes that makes sense just for your ends and amatuer that fiscal year ends in June so that they'll still be paying but anyone that's paying now is paint Li more than expected really games of all do more than expected revenues wait no we should actually right now even the low sip to put us over 70,000 we ended 122 we're getting one night surplus we can very excited for sure poster yeah like prior to her sexism so even it goes so they would it would create a profit in the profit falls into fund balance when you close it don't

009less we spread it awesome correct right and the goal is not to have any additional appropriations so we wouldn't be spending it elsewhere and then we think we can still meet that goal with appropriate budget transfers that pressed on that and we've not and then again we fallen behind on the current year but not the day-to-day postings with the balancing of the balancing with other departments so these we think they're they're pretty good numbers but they're not perfect numbers that the expenditures before we go to end up before you go one more next month is after budget season right so we get through the budget can you do an analysis on where we're going to stand on the revenue where the shortfalls I'm back and look at the numbers here but some of these numbers

010don't mean anything by timing or evidence so we'll do the same thing to this that we're going to do to the expenses and we'll just do a projection to here end right like let us know because some of these are way over right but someone wrong there were some of our timing issues so you can't really you can't really do what 12-month and do four months but can you say hey but based on what we have we can't hold it to a but based on what we have we think we're going to get 200,000 more in revenue you don't want to be 20,000 less expenses no we stand the other one that you have that starts with page zero my copying skills are not that good that is the expenditures and they've made little comments

011off to the right that we have some lines that we know are over we have some night lines that we know that are going to be under we've been meeting with the departments to find out where do they stand where do they think they're going to stand how much money we want to know how much money do they think they might have extra the the as far as the grounds and Public Works which are two of the biggest budgets we won't know where they stand until April they would feel comfortable telling us in April about this hopefully the snow is done by then but for right now we're looking good they've done the variance the final column is the variance yes the some of the things we're going to talk about tonight again are those

012orange highlights that so this gives you an idea of where we are but it but next month we'll go to the Board of Selectmen for budget transfers and then we'll go to you for budget transfers so we're taking the information we have from the department's from the meetings last week and we're working on projections from that nor some of them we've sent them back to to get us some additional information does this relate are those related to some of the discussion we had earlier in earlier meetings about the pen where they're going to become where the source of the adjustments where they are all right so the some tonight the ones tonight are carried over from before that I've moved the sources out of health insurance used up the rest of the WPC a money

013I've used some money from a salary that we've hired someone at a lower level and that's the line I can't remember the third place I used money but but that's the tonight's correct I don't even I'm okay without me there was the postage but I didn't do the postage because at that time when I did these back in February for the Board of Selectmen meeting we hadn't had the budget meetings I didn't know who had had some extra yet that I now have more departments that have some extra those don't have to be approved tonight as long as you know that I'm overspending postage I'm over expending my over time some of those that is that's my error that when I drop this into Excel none of the formulas are there and for some reason

014all the FEMA's stuff went into the building department and I pulled that down to the bottom because it's not building department and I forgot so basically though out your expenditures you're running a 66% and that's where we should be right then we're 66% through and now the payroll the payroll is six we've had 16 pay periods out of 26 we have no parole this year because we ended it right nice date so the 16th fret that's 67 something percent and the rest is 66 percent that so we're running on track and then we're expecting that we're haven't done our final yet but we're expecting we're going to be able to we're not expecting to ask for anything additional that and some of those individual line items what we've noticed as we were trying to analyze

015these is that what's supposed to happen and the way we talked about it in the budget is people work 35 hours a week or 40 hours a week depending on the department and even if they work 35 hours a week if they work extra it goes to overtime even though it's not time and a half that's the way the budget was this year that's the way the budget is next year but that's not why the actual list and so we've got we've got to move around some of that the actual salaries the some of the overtime is going to their regular wages which makes it look like it's over and when we did the details with the departments we don't think any of them are going to be over but we need to adjust them

016and unfortunately that if it's an invoice we can go in and say modify invoice and and do it real quick if it's salaries we have to do it all manually with a journal entry and backup fun that we create ourselves so it's just a real time-consuming thing so we'll be working on that but but if you look at some of the salaries I can think highway that I think one is a 75% and one is and then the recycling might be at 54% or something like that and it's just one person is being posted to highways when he should be in recycling and some of the overtime is in regular salaries when it should be in overtime and so it's it's just fine to fine-tuning munis so that they go to the right spot all

017the time two thirds it like we just talked about what is alarming to you on any of these expenditures is there something that you see this going to creep up in the next few months some of the things that are alarming that we've talked about health insurance we've talked about some things that will be over we also have an equal amount of things that will be under you haven't seen those yet because we haven't asked for an appropriation from them yet but if you look at but the bien interest that I don't know how is calculated that but but it's less than what it should be that so that's a large one but it spawned anticipation little interest that so that one is under what is the dollar amount so you don't have to be

018be exact one hundred thousand fifty thousand twenty thousand eight to fourteen everybody so that's the piece of I both we need you to look at the support to forty page and so I that's after we've made that be a PCA paper there so this is some of the things that we're going into into now to look at them short-term financing is going to be under that we hadn't done the short-term financing at the time and I believe that was done in July of this year so it I don't know if we didn't finance as much as we thought we were going to but we're saving money they're saving money or did we budget wrong because let's get it right I'm sorry hey there's certain things in that we've budgeted it wrong we budgeted a good

019assumption and something change in that assumption so I think that I don't know that we've budgeted wrong and probably we're not even saving money or probably spent more money on the things for some book which I do know is that that happened that we paid for more things in cash than we had anticipated is what I believe happened when I was doing all that bonding stuff but we can't just we're actually having issues we can't just believe or guess or do this if I have a difference from this amount of money we should have a paper trail like rookies always thought it should be I'll say we're here but we paid cash for these five items these five items total $277,000 and then also should be a close number in addition I think I can

020go back and look to see if I have anything on how that was calculated originally you got a better idea but there should be a storyline no you're up in and absolutely there should be a storyline and and that's what we're doing trying to analyze each of these to get the storyline because that's a bitter where do we stand the next year's budget this one we're currently looking at how do we know that one's right or Howie or how can we change that one the way this one changed if we had money in the budget to pick up bonding that we paid cash for then what could we pay the next year's budget I mean am I missing something here again are there there's a storyline so this year's numbers we have the the bond

021interest this year isn't right or is it wrong or are we going to deter from the road map in this Judas budget we're just deliberating on so the budget that we're delivering in Chania is what the way we calculate the interest was we took the coupon rate times the total and that was the budget and hopefully we did that prior year as well so weird we roadmap it wrong how advanced we're also looking at the amortization schedules for me I'm talking about bond anticipation notes are you read that they were doing the amortization talking about ones from dead I'm talking about principle is your honor this year for this current budget that we're deliberating we don't have any man's anymore all right we do we do that we have one point eight million one point

022nine million the current year capital expend the expenditures iron beans we did not okay so the bands are one year that well offense 364 days and what's happened in the past is they've been rolled over each year usually they a government would might roll them over for rum two years maybe three before they bond them with permanent financing these were rolled over for maybe four years that five years there were a longest I've ever seen - I think these would get axe keep getting rolled over because they're waiting for certain some wave multiple projects - yeah complete committee their final all-in cost maybe that would be comfortable to use the interest collect so the bonds the bands it's one when you pay it off after one year you pay them the interest in arrears and

023and the way that this accounting works the modified accrual basis it is a similar to a cash basis we we on the budget we wouldn't accrue or anything like that the bonds themselves the Permanent Fund financing we pay principal once a year and interest twice a year I'm gonna go back to we paid at the end of whatever your bond here it is not the the fiscal year I'm gonna go back to every meeting we come to there's a drop of four hundred thousand three hundred thousand dollars and I'm in favor in our laps oh this isn't all gonna be in our favor I mean what are we running the bond the bond interest is not in our favor you're supposed to have I'm gonna I'll take a look at I don't have a lot

024of details on how last year's budget was calculated it's not a baby but I'll see what I can find it's positive we were supposed to have an expenditure of 1.2 we're currently at seven four five right at the bond the bond anticipation of a transitory Martinson the bond interest just looking quickly that note in the comments of 504 looking quickly I think that's what we have left to spend for this year that so I don't I think that's gonna be sure is and then that not it's not a big difference but we wouldn't have known the interest rates and things not something some of this is because rates went up over the course of the year it did have you missed by that much no no there so we have support that we tied to

025the opponent presenting some time just looking marshal doesn't happen right because you were here watch you came through sir thank you so but what will different for the next meeting is we wanted to projections so that you can see where we think we're going to be on every line item and we'll well if there's a big difference with the budget we'll see what we can find on how the budget was calculated so we can try and explain some of them percentage that's correct and this year with the budgets we started to try and say could you tell us what month you think you're going to spend it because Glennon asked if maybe we could divide this budget of monthly we didn't have a lot of a lot of help in bad compliance with that request

026but that would be our goal is to to try and do a month by month budget so we could say here it is the year-to-date budget and the year to date actuals on quarterly basis look at numbers are like the ECS grant it comes at 50% 25 and 25 so you can't do a true projection if you don't know the background even if some of those numbers you know like the ECS you always get it in that that layout that if you have a permanent comment that's held over but you can add instead of having to run it at the budget but like yeah I looked at the dog license if it's a small number but the end of June is when places are do so you'll see that at the end of the year

027which explains a 27% now but if you can even just have a perfect comment between those line items and then you can look at it but if we give it a month let's just talk about then you can look at oil like over four months you can look at salt over four months you can look at it what you're anticipating yes bigger items that you burn in certain seasons so that then you could do eight plus four is nine plus three when you see where you stand by these projections and then reckon it would be I could do that is they easily nerdy laughing so yeah all right we all that think around the same page that way so anything else that was all that you had there I've got some more slides when we

028get to financial statements and I have some slides on the capital budget okay Steve doesn't show but I'm ready expenditures so I think you're up all right so I'm going to start and then I'm gonna hand it back from our shouldn't it so the capper which is the audit is almost ready to go we had a long quality yesterday with Michael V what a partner Mahoney stable I was on a line Marcia and John's booster also on the line and some of us were in the car but it was still a very productive call Spence it spent a good hour going through this presentation as well as his thoughts I'm not gonna spend an hour today but I'm going to go through some of some of the highlights and then I will turn it back

029over to Marsha and John if he has any comments I didn't email out this presentation to the team but that was sweeping the day today so so I'm going to start on page three and that is the status of people on it so do the actual itself tonight plus so Marsha and her team delivered the financial statements and the notes to Michael and they went through the process is finished them up last week and as our end of the day yesterday they were substantially complete they will sign off tomorrow and then issue the official capper on all the proper channels by the end of the day off right so that's that's the step the plan does not anticipate any changes other than formatting and typos from the quality control review if there's anything other than

030that you will certainly like not only Marsha but myself as chair of the Audit Committee know exactly the table but not a dissipated so should be in which in good shape moving on to page 4 the finding on the audit is a unmodified opinion essentially a clean opinion that the statements as presented provide reasonable assurance that they've been prepared in accordance with generally accepted principles and that they are free from the material misstatement whether due to error or fraud so important to note I stated this last year stated to get me sure they're not tested they're not checking every single entry on every single journal entry they're doing sampling other than what it is and providing reasonable assurance of both accuracy a lot of times that a government a lot of the audit boards like

031to my oddities that boards like to think of an audit as a report card and auditors don't like to think of it as that because it's not what the audit should be is there's a level of materiality and sometimes it's as high as three to five percent of the revenues in the fund and so what the audit really is is should you invest in our bonds or not so that's why the level of the the boards would like it like this and the reality is like this the level of materiality and in the past or its a problem in this town and they have been we've had to bring in to go down to from 10,000 feet down to very low to dig through some issues in them and that's no longer you did so

032I appreciate that on the next page page five when one thing that we will have to address today and this is this is important or we are going to have to look at making prior period adjustments to certain fund balances Marshall will go into this in more detail but essentially in the past there were mistakes in terms of what the fund balances should have been entering into the past auditors which then carried through because if your balance is wrong senior zero then that error varies through so those were those were uncovered they were rectified there are different ways to handle how to how to rectify that I spent a good deal of time with Marsha and with Michael on the accounting treatment and determined that the best way is to go back to the original

033period be if 2016 2015 whatever make an adjustment to those balances and then assume that those balances were that carried through going forward so that as a end of the year fiscal 18 were accurate so that does result in some changes to general fund in and out but with these there were several different ones of Arthur yeah well people get paid six last year the auditors did identify so so in addition to looking at financial statement presentation and accuracy they also looked at accounting department controls and proper controls proper procedures which is a really important aspect of an audit and last year they did find several weaknesses and deficiencies that rose to the level of required citation either in terms of material weakness or significant deficiency both of which have to be reported this year

034happy to report that all of those deficiencies and weaknesses have been rectified by Marsha and the staff in the finance department so I say congratulations extremely well done at least one year ahead of the schedule that I had in my head tick tick to reach that goal so Marsha Kevin everybody good good job there even on to page page 9 I'm just going to try and put it on the oh sorry again that because I did meet with a citizen this week who said it's really hard when you say look the lady didn't like they think of that okay so on page 9 the the timing of the audit is still what was a bit later than we anticipated it's supposed to be within the same calendar year we knew that was not going to

035be the case the goal was to have all the audit field work done in January and have the report completed in February the field work was done in January but there were some delays in terms of Marcia getting some outside third-party information as well as needing to do all the work needed to maintain compliance and do all the budget work the first year so there was a couple big delays so that's why we're very March that will be a recommendation to for improvement for this coming fiscal year and have full confidence that and that that by fiscal year 1908 when we don't tell me you're 19 hopefully time to spare next few pages are just are required communications it's a lot of official you know requirements but nothing material to discuss on the next couple

036of pages on page 12 so while there are no like I said no material deficiencies no significant weaknesses there war there are recommendations which were discussed that I'd like to bring up and that I've discussed with Marshall already the first one as I just mentioned is the timeliness of the financial reporting again first year putting in lots of new closing process these cleaning up a lot of things that I've gotten improved the recommendation is to to be more timely and we're not that's going to happen the next one is implementation of additional procedures to shore the expenditures recognized in the throughout the period I'm not really quite sure with that said that one is when they were doing their audit testing we found one invoice that so in you have to remember the whole Finance

037Department quit in May and there was a storm on May 15 and so there was a big workload before I came in that Kevin and Lorraine were handling in June and they were trying to get the the year closed down trying to get the invoices to the right amount there was one invoice for a four corners project that was posted to June because the invoice said June but the supporting documentation said it was the work was done in July my own who invoices early you know where the wrong date on it but but we missed it and it's also a waived adjustment because when they found it we had already had all the statements bounced all the thing money moved around and we said you know we'd like to just it it doesn't affect a

038budget to actual it it was posted to June it should have been posted in July I don't wanna say we just don't care that but it wasn't big enough in our opinion to redo all the financial statements and prior period adjustments and things so recommendation hopefully that shouldn't repeat itself consider developing a policy over in conferences for budgetary purposes that was explained on a conference call and will need to be explained again so inin cumference gap generally accepted accounting principles you put something as an expense when the goods or services are received in municipal accounting and some other accounting that you use encumbrances and so let's say and I always use the same examples that let's say we were going to redo the gym floor in June and then lo and behold there were so

039many snow days the kids didn't get out of school till June 27th and we couldn't get that done you can have an encumbrance to say if we sign the contract with them even though it's not a gap expenditure we're gonna put it against the budget to where it belongs that instead of saying up too bad that we're gonna have to go through again additional appropriation if the budget the general fund budget ends June 30th so that would be an encumbrance so let's say it was $50,000 you sign a contract and that 50,000 goes to last year that we had one income go to the expense to the expense last year dora boji correct well I'll show you where it is later on she's cool that so we had one encumbrance this year at the Board

040of Ed for 23,000 he wasn't fighting an error and he was just saying it's good practice I totally agree with them that my 35 years of auditing governments I saw a lot of abuses here and the definition says that not in this town but a lot of abuses in this area encumbrance area that and the most egregious example was a town that said well we signed our contract with our attorney our retainer agreement in June we want to put it against last year and it was for the next year's services now none of us really think that that fits but the definition is such that it says a signed agreement it's an encumbrance so there's no teeth that an auditor could use or the finance director could use to say you know that's not what

041we mean that and so he's and so it's good practice it's a good recommendation that we should have something that says this is what we intend for an encumbrance to being in the approval process of any that we wanted so we're going to get that worked out that written up before June thank you from a budget point of view to chop as I you know inexpensive quotes around it for the period when it wasn't really intended to be made or is it a liability for the following budget so we're going to look at that in a few minutes that but so it depends on the report that you're using that if you look at the Board of Ed reports they've got expenditures and then they've got a column for encumbrances and it would show up

042separately they're pretty on the same time allocated to the same time to the time that that that yes that so like that like that gym floor that 50,000 would have been shown at that June 30th as an expenditure and the budget it shows up at you can't tell the difference on the budget to actual than the audit but there's a reconciliation down below and you move - yeah I'll show you that turn it all right the next recommendation is in this one is is an important one to me and I know to other people on the book to the whole board is better procedures for their touring additions and subtractions to the capital assets and what's been spent what hasn't expense with the budget to make sure that we're bonding appropriately that we're following all

043the requirements of what was approved in what was spent so there has been improvement on that over the year and there's some theories and you sent me some some information today which I need to go through but that's still and then I think it's twofold in the financial statements we live in a minute that there is we keep track of capital assets and it's always been done at least as far back as we can tell from the last three audit terms audit rotations between the Mahoney stable now RSM Mahoney sample before it's been done by the auditors and it's not accurate when it's done by the auditors I'm not sure I know I didn't check it this year to say that we have that card do we have this this car on there but that

044is something that we also need to do for next year is to get make sure that's all cleaned up and we just didn't have a capital asset is something lives last more than a year that and we have a definition of all for $5,000 when when we had talked to the auditors about it about increasing that because you could fill a pothole for $5,000 where we really don't want it on our list that we don't have to have the same amount for every class of asset so maybe office equipment it's 5,000 but roads and infrastructure which we're never going to sell and nobody really cares about and we have a hundred thousand that the goal is to get it so that at a level the perfect level you have 80% of the value of your

045assets are included there but it's only 20% of the number of items that there's some that's the the perfect amount but none of it really don't know who is listening but none of it really matters I mean we could do depreciation or we're not making decisions based on depreciation we're not reporting to the IRS so it would be great to to get this cleaned up so we have capital assets for the financial statements but then a separate list of inventory for controls that we don't lose things and that if there was a fire we knew what we had so that would be the goal for rum for next year and we have a fire marshal that has a background in doing a lot of this stuff and he is chomping at the bit to help

046us get this look together okay that's time alright and the last one of this page is most likely going to be to go away if we believed that it was the result of the report of the owners asking for report and the person pulled report just pulled the wrong thing and so that led to confusion but but she said that'll probably rectify so no no go away so what we have to do this over the kaffir the audit is like I said in good shape in clean shape but it does assume those prior period adjustments were in place which have not yet been approved by us as it were clients so in order for the tapper to be correct we now have to go through and approve those adjustments which Marcia is going to discuss

047right now so there on the screen we've talked about they haven't changed from the last time other than that one pension numbers change slightly they haven't you have benefits changed because this year we started allocating penchant to the WPC a that they are in our pension you don't have the printout of the site that so the first line here shows the fund balance as originally reported each column is a separate fund the final column is the government-wide means nothing's here right now but hopefully when we're done looking at the audience so much so as originally reported Susan's last year as this so this is the June 30th 2017 equity and so we're trying to bridge the gap to say the top line is where you saw it on last year's audit and the bottom line

048is where you see the beginning numbers on this years old it so we implemented Gatsby 75 that is an accounting rule that that last year could have been perfect everyone has to do this it's a new rule and we did it a few years ago with the pensions essentially we used to calculate pensions I think fast be the the for-profit businesses still do this we used to base it on the payments we would be given the the arc the annual required contribution if they said to pay in a million we paid in nine hundred thousand we'd have a liability on the balance sheet of a hundred thousand and then a real calculation in the footnotes it was a different number much higher usually and a few years ago someone said hey you know what we

049should do we should say how much money do we eat to pay all these people and our best estimate from the weary how much money do we have what's the difference it's like rocket science but so so we've switched the the format and the rule just went into effect this year so that it went down we're adding to equity it's a positive number that our liability went down that and that is for open the other post-employment benefits that health insurance after people retire there's a low sat liability that low staff is the volunteer firefighters service awards that we've never had that on our financial statements before that but if you're a firefighter and if you mean all the requirements you earn ten dollars a year for when you retire that you're not paid as a

050firefighter but you could be getting two hundred and fifty dollars a month when you retire this is he has been in there for years and years and years but we've never had a liability there we had an argument when I first came in whether it be material I thought it was gonna be about $750,000 that's one point nine million dollars that it is the estimate from the actuary of how much that we would have to put aside it's both in total that if we wanted to have all the money there to say we're there's going to sit it will stop the program and it's going to fund itself that's what we would mean it's a lot higher than what you might expect if you were to compare the sort of pension our pension we've got

051money there so we can use an interest rate of what we're earning that we have no money set aside for this in a trust so we have to use a bond rate so it's about three and a half I think it's three point six seven was the discount rate that we had to use so that makes it a lot higher that we have a sewer assessment that's never been recorded on the books before the this whole sewer assessment thing that we said well where's the liability for the sewer assessments not it wouldn't affect fund balance this whole column of the only fund balances at first column we recorded the sewer assessments on the books we took some money out to allocate pension to the WPC a the the pension had been reported on a December

05231st basis that's the way it should be but the actuary is reporting it on a June 30th basis just to make them equivalent we moved them both to June 30th there's some accounts receivable in the were not reported in the general fund and then one of the other funds that we recorded the general fund was a state payment the other funds I think it was also a small grant payment there's loans receivable that we have a small city's program that that you could have a rehabilitation loan if your salaries the love if your income is low enough and you can't get money from a bank that there's a federal grant program that will long get the money that for free that you have to pay it back if you die refinance or or sell the

053house but if you need basic installation and things like that we have half a million dollars and loans out there and we want to we want to put them on we need to put them on the books that there are some adjustments and accounts payable just when we're trying to work through things we found heart and hypertension that we had some things that were again auditor driven that we had other funds that kind of mush together at the end of the year to say it was all the general fund and we've stopped doing that we've set up its own fund for heart and hypertension and then there was a liability for heart and hypertension that an estimate of how much were going to owe for claims going forward the library that the library last you

054had there was some committed fund balance and the general fund committed means that we have said we can't spend it when we did some research on what that was it was restricted meaning that someone else in their will told us we can't spend the principal and so we have taken that money out of the general fund and moved it to a what's called permanent fund we'll look at in a minute the library revenue we used to be accounting for this kind of like a separate little fun that we mushed together at the end of the year into the general fund and we've just cleaned it up so that the library is in three places the endowment fund the general fund we should spend about seven hundred thousand a year nine hundred thousand depending on which

055budget you're looking at and then they have their own money that comes in through donations and grants and user fees and that's just moving all that of their own little affairs as you call it for the Parks and Rec you call it self-sustaining fund and then when we're looking at the different funds we've made commitments the biggest one here is the capital non-recurring fund for some reason two years ago with the auditors not these auditors but prior auditors took at that and just zero the fund out and said it had no equity but we have reserves and other things that we had made commitments for and there we can't zero and out that and so what we did was we calculated all the commitments that we've made them you know we said you could spend

056a hundred thousand on this you said you spent 75 7 - 25 left and so we've we calculated all those project by project is and these three funds are grant by grant and these three funds to say how much should be in that fund and so this is to properly fund them so that that when they need the money it's in fund that or the equity is in the fund so those are the the adjustments okay so the net result is a decrease in the beginning balance on the general front from six point three two million dollars to five point one one million dollars as of 6:30 seventeen so the beginning balance was 1.2 million dollars less than we thought it was at the time during the fiscal year of 18 we actually have a

057surplus that adds one point four seven million dollars into the general fund so we are as of six thirty eighteen the general fund balance is six point five eight million dollars or ten point three six percent of the annual budget which is a good number you want to point out that if that 1.2 million dollars were correct there would have been more like twelve point three six percent which would be a great number but but that twelve would have had the library down but where we probably were yeah right but that's not including any issue that's just moving right picture of his library exactly exactly so it's not like a Miss hell no no it was just a Miss no that's vacation that's correct but when you look at Jeff I mean general fund and

058general fund percentages is one of the key statistics already yes Glen's point it didn't for the most part it didn't leave the town write it down you just put it in the right pocket right that's correct yes you put it the right bucket and we replenished it with surplus this year to get get us back to a very comfortable position for bonding and for projects so these chicks so then what do we need to do to rectify that right now so make a motion to right I would say we want to make a motion to acknowledge that these changes to the fund financial statement said the prior period adjustments to the financial statements that you've seen them and you don't disagree edit it on after daiquiri I wouldn't three I'd say I don't disagree and

059that mostly that there's no statue or anything that goes along with this but heaters just want to make sure that you see them you know they're there and you don't sell no idea they don't right so yeah so so Mike line I talked about that I don't think we need an actual motion but I am stating as chaired the Audit Committee that I every viewed these with goes to town controller as well as the auditor and feel comfortable recommending to the board that we accept these James so they just exactly so let me make a motion to approve we can do that that that that might as well might as well so I'm fine so I'll move that we approve these prior period adjustments as stated that we yes I think that's all you do

060second anybody second in discussion second first second anyway second very discussion no discussion of a boat we just did something similar a couple months ago this you've just been seeing the same schedule for months okay it's just been yeah okay all those in favor say aye my motion passes unanimously so with that we accept the the capital work did then thank you for everything you've done thank you is there anything in the calf for a patient we should look at it really consultation their sons one page in here that's really tells a good story I've got the full story here if you wanted Cornyn I get a summary story that's a summary story I'm gonna go fast I love it it's tough but finally acknowledged you might not but less like Dan said could you

061just do something sorry it was on the cards they Parkman this is important I mean one of our one of our key charges as board of mine answer and I think that it'll help you going forward to understand the statements that so if we look at the and so I just want to do it a little map we've got three basis of accounting in these financial statements so they get really messy that so you might say well education says on this page it's this much and this page it's this much yeah they're all different that but exhibit 1 and 2 and the way that's laid out is laid out for the auditor and not for the ease of our understanding that's the required way that it's laid out so exhibit 1 and 2 are called

062government-wide financial statements it's everything rolled up together and it's on the cruel basis like a business would do and we'll talk about that quick quickly 3 and exhibit 3 and 4 what's called the governmental funds and it gets confusing because every word we use begins with a G we've got governmental activity we've got governmental funds we've got general fund with that gap we've got GFO a that we just those genes and governments exhibit at five six and seven are the business type funds primarily WPC a seven eight and nine our fiduciary type funds our pension trust funds and the custody that we're holding for the students and in their activity funds and the other exciting one is RSI required supplementary information one which is your budget to actual for the general fund usually exhibit three

063an RSI RSI one are the only ones that anyone ever looks at that this is the budget to actual in a summary format that the first column we budgeted for um a loss our final budget was a loss of 1 million seven hundred twenty-five thousand dollars the 25 thousand I forgot exactly what that was but I think it was a police additional appropriation the 1.7 was the FEMA that are actual our revenues that we had more revenues than anticipated by two hundred and fifteen thousand and that is a net figure the big revenue that came in extra was self insurance we closed that out some went to net with the Board of Ed some went into the general fund and then we had a bond premium that is included here which which wasn't budgeted for

064it we've never budgeted for that and then there's a big under variance that we didn't get enough money in intergovernmental revenue and that's because we did our budget in the spring and the state did their budget the file info and then so we didn't spend a lot of the money the biggest amount was FEMA the way we worked if the FEMA is just the dominating these financial statements but the way we did and we did an additional appropriation and then we picked up a receivable for FEMA that the receivable offset all the costs that we spent so it's like we didn't spend anything on this budget to actual plus we didn't spend a contingency so we had we added 1.4 million to our fund balance on a budgetary basis that our budget is a little

065bit different than our modified accrual basis that we're fund balance is calculated and a lot of it is just ins and outs for example on our exhibit three and four is on a modified accrual basis and we're measuring the working capital we're required to pick up revenue and expense for something benefits that someone else pays on our behalf and the state pays our Teachers Retirement and the teachers health insurance so that's those first two items that are showing that if you go from here to that page you'll see there's more money in revenue by four point seven more money for expenses the next set there's some things the revenues that the board of it Nets with their expenditures they get grossed up on the next schedule they totally 153,000 the storm expenses that we net

066those in the our expenses they told a seven to twenty five and there was a transfer in from the other fund the self-insurance fund so they got grossed up later on and then finally the encumbrances we talked about the encumbrance as our separate they're an expenditure for the budget but they're not an expenditure for gas so that's where the twenty two thousand was the one in the conference that they had so just and then that's this is all at the front row right from the financial statements if we look at exhibit three that's these are the major governmental funds a major fund is a big fund that there's a calculation that's done we'll probably have to add will ask the suit the the selectmen to approve a new fund probably good idea for you also

067to get in on that approval for the school construction fund that should show up in the front of the major funds the audit opinions there's an opinion on each one of these columns that we have the general fund that's the one that has the budget we all talked about that we have the bonded capital projects funds money that we're going to bond that the expenditures go in here and and the bonds come out water assessment fund that some people got waterlines they're paying for them this is where the receivables go and the debt for that goes in here and then everything else will look at everything else in a minute the general fund that first column the important night items numbers down here are the numbers right here our funds balance at the end of

068the year it's divided into different categories we have unassigned and we have assigned that that assigned find balance is the million dollars that's left on the on the FEMA expenditures that and then the 23,000 was that encumbrance that if we look at our fund balance over time our unassigned fund balance over time we the blue line so the light blue lines here show that our total general fund revenue on a budget basis and the dark blue lines show our unassigned fund balance in 18 I did add that FEMA money because I we're going to get Brisbane returned it would otherwise distort it that so here's you can you can see that the the general thought of fund balances we divide the unassigned fund balance and what percent of the revenue is it so if you

069had one month's working capital so think of fund balances working capital if you had one month's working capital if I have eight percent that that we have been an increase in we weigh on 6% a few years ago and now we're over over so that's great that years to know that the rule of the thumb was it should be fine I could be percent and as very old that Moody's when the city start lending but this is a minimum of a year maybe years ago they said we'd like to see at least 10% and then if you asked Association they 60% of Florida have enough so it just keeps growing and growing the way it grows the the the role of he's drawing but the way they final throes to just make profit that's like

070really nice for that so that that's been adduced asked well that the surest ton of any when my name product and then a million was because if you look at all this is a 13 and 14 that means Tiffany dukedom so this balls isn't inflated so that's what I guess I didn't happen it is the so what that back here we talked about this is Tom and then they said of other men until the phones and that's this whole below with these other high because among the separate final reporting of bounds Parsons interacting their selves to sustaining fund this shows that the revenue and expenditures that went through there this is all sitting here and I'm going to talk a little bit about that's where it has the most receivable that's all the stolen through

071there it's a process that the grocery properly my that's more than the curse seats and industry or those but that's the conservation my idea this is restricted for that Social Services fund has there an emergency fund and they get donations to that but the town grant fund is grants it to come in they come in and out throughout the year you'll see that in the because it's the word of simon has to approve them all but the only kind of set it out the education the little asterisk another statement is there's an allocation to see all the detail of what what branson and now that that's not a requires general but that education grants the same thing that is the day that brands that come in and out but they're not love being the general

072fund the cafeteria funds and the last education ability to use an iPad finds those closed down on October of this issue shouts women to the gear and those are old funds to different names we're not a program last year like pay to play but anymore the second page of the police I'd have to funds that kind of attracted to services fund for they go to door look at the parade and then the parade organizers meeting in the back for their time and overhead asset forfeiture fund think it is stating fed up before were determining in there the library talked about their funds they've either seen their their revenue fund the deep fire our choice is a name of the person and that money that they've had five point five million five hundred dollars in there

073about three hundred thousand is not settle into two hundred thousand is the capital project is fun that it's open space funds that not gonna happen here and there they can't help I Milani recurrent any fun to look at a product by product it didn't from here we take those we put them together yeah can we prefer an accrual basis we're going on between now and then extra audit that has a fire trucks trucks buildings are equipment that and appreciating that every year and the weird thing that it has in it an infrastructure that that is the road said we cannot pick out the road never used to count as an asset but the equipment Alice she Jenna so we wouldn't have we would skew the input statement and that's just right and we take it

074out on a long-term dedicate is that it's a depreciated cost that we might have some land and Canada would like that we might have gotten for you know to the cow and that my the long-term debt is these sort of the the top half are the categories of long-term debt we've got the permanent fine but the funding is twenty six million and that's the truth area that's changed in November we buy the patient notes that we refinanced and there's a surer rule in government and said if you really planning some before we go out to go to how did you call long-term debts at bottom anticipations that's a madness there's premium sodomize those are the extra Cubana that we get when you sell them and they ain't my style with other like the bond we

075have some alone stable at the end the year to you say miss bank we have the assessment panel in the media promise it's kind of potato to a physicists our vacation time static time the people will be paid for women and Eve we don't know if it's just a comment on the town side primarily the world I percent and then at the bottom half are just there do not include a long-term debt those of the bond anticipation of the tune of 30s and again they were some of your mom's is that so the moment that we had it in November we're going to happen two or twenty years and they always go straight so you guys so that's our long-term debt and I did a little scale it away down the of the long-term deficits

076let the play go over the years so this is the long-term debt and we blew this is the red and the dark blue and the ratio between them and in the last three years it's been going down that yes in a few years that will drive before this one kicks in trying to manipulate me antigen but the others that we don't talk about we should have talked about anywhere initiative we have this sort of tension and this is fantastic if you look at the punishment of my ability that I honestly hadn't found it it's but it's a half million dollars what we hadn't been funded in anything Senate finally that's about 100 a student estate we had a 400 is that a we didn't find the - yeah that we have opened that okay we

077have two types of old kind of other post-employment benefits we used to missile maybe 50 years no bother people that we paid out the determines when they retire that that some people are grandfathered in and then we owe them they're healthy they retire that is about two-thirds of this liability down here in in I understand you have to understand at first that we've only had a government for me the last 10 years that a thesis is an enemy again I would say that for the doctor that I would say that it's we never had followed the 20 years but if you talk but oh does this mean minute maybe 10 years so and so and there's no requirement to find it we have about a 90 million dollar valuation that two-thirds of that is money

078that we are these people tired we're finally going to this page to go basis one third of that is it's called implicit remake set up city that we're requiring to have other retired teachers on our health insurance plan they pull it up at the premium for everybody else and I think incredible to me that it could be that as much that every single town about one-third of the vitality is our inflated of an ounce or that we're paying because it looks tired teachers are on a plan and so we can't ever see that money didn't pay off and at the end of the year and and very few places starting to find anything okay very good house this isn't a new one the volunteer service of words it shows up a little bit different because

079we don't have a trust fund where we're funding it so it's just the lighted roast liability instead of the net liability the total liability that and what we've had every year on that is thirty six thousand dollars that last year's overpay on that and there are some other ones that we have to be aware of out there that the state of Connecticut the teachers are under the state pays for the Teachers Retirement and the state has not been really good at funding it they funded fifty fifty six percent fifty five percent so the town of Brookfield's liability that if they said you know what we want you to pay that is sixty three million dollars that the concern that that we have about starting to pay a percentage of the of the payments is this

080is a cost-sharing plan if they make us pay it as this is our share of the cost we have to pick up our share of the liability so if they said you have to pick up the draft pay twenty five percent we would have to pick up twenty five percent of those liability the way it's structured now we're just giving them a contribution towards it and we're not actually legally liable to pay that percentage about this year so the way that structure is that it's not it's not an actual class share it's just we want you to reimburse us this but not in actual class show what I understand from CCM that that the pension bonds that they took out to bring us up to fifty five percent about ten years ago won't allow it

081to be set up as a true cost share so it's just a payment to the state and that's how they happen I mentioned this a shot at one point but during one of our slower means I think be good to get a true education on all the pension issues I think that'd be a helpful yeah I'm so CCM has got people that are out that and they'll they'll come to meetings think good ideas and this is a big that'd be great and Pokemon customers are actuary then and then starting this year we had that also with us Gatsby 75 that the Teachers Retirement that the state pays they have haven't funded that as well that our portion of the OPEC for the teachers at the state level is sixteen thousand sixteen million dollars alright so

082we take all that that we just looked at we mush it all together and that's the full of cruel financial statements that's the government-wide financial statement and exhibit one this is a full accrual basis these are the assets there's no rules of thumb there's there's no comparing to other towns because everyone has separate depreciation separate thresholds that and the we work so so hard to create this statement and up until the last time I heard was maybe 18 months ago the all the bonding companies say they don't ever look at it but this is really financially this is the most important statement in here those are the assets those are the liabilities again it doesn't tell us anything except that if we're getting if they're going up or down we can look at the government-wide

083and there's governmental activities that's all those separate funds we've talked about business city's WPC a that when we look at the income statement of all these numbers on these two pages that one that's circled is the important number that our long-term financial health went up by about 1.5 million dollars during last year that I'm on a full accrual basis but this is kind of an exciting schedule because you show your expenses over here it really is you show your expenses over there and then you show the direct revenues for each one so your net expenses and again if you look at one of the other towns in eastern Connecticut that they have their education expenses and their what they have to cover up the education expenses is half that because they get so much of

084the education cost-sharing money that but here's the net cost of each of those programs we cover that by property taxes essentially and so that is our long-term fact that increase in our long term financial health and we should always be conscious of that that and really pay more attention to the schedule then then most any government pays should you get a number in that cold water Tori um so this column is is us and this this column is w PCA we should watch W PCA as well we're required to UM we sign off on their part of art of the town that part of the audit we sign off on a management rep letter about them as well so we need to pay attention to them as well and what happens there changing that position

085that stays with them any questions any suggestion especially of heads of each to the ones in years maybe right lying there [Music] than to say here the new business we approved the I propose importance we approve the campus so now we're on to the state grant that we have a package I think there were two other adjustments that group that you were supposed to approve one is the ins and outs between departments the the JD had sent that I have a copy of it here someplace that that Jimmy had sensed this and we looked at last month when we didn't have a forum please but it was the Board of Selectmen were able to approve within the departments of the budget transfers rate for 2018 and there were some that were insured apartment that the

086Board of Finance has to approve I can make copies of what I have if I can use that machine but you should have received that from Jenny and then the second thing the second thing was I can pull it up to that the second thing was to carry over the appropriation for FEMA that there was about a million dollars left at the end of last year that we want to approve to carry over to this year so both of those to finalize the financial statements yeah thank you I'm thinking try to squeeze into so we have to amend the agenda so how's the agenda yeah man it's a regular meeting so there can be other things that [Music] in the context of its in the packets of the other [Music] damn you know Diana's making

087happy something all right so then while we're making copies why can't we go on to the emotion of grief [Music] so we have a forest the packet that was given to us by Steve in regards to the freeway extension fool the recommendations Board of Selectmen the time use 100% of grant funds in the amount of 270,000 $355 approved by the state on commission for the town's application community connectivity grant program administered by the CG Department of Transportation for the construction of the 2500 foot trail extension of the store evergreen way to connect to the campus of municipal center and parking I second the discussion there's nothing for me all those in favor by saying aye motion passes do you need a formal approval for the other keys that's over kids hold it up and then

088Marsha who's doing it have known that you've been um I have not been authorized but I am ready to do it looks like we can a discussion on that I want to get any information that we can before we deliver very excited yes of course we don't need to supposed to like me to necessarily do that Marshalls comfortable doing that I'll see I don't know what he would want to say it or not you've said in the past but on the agenda said something right Billy I mean I'll bring this up say POTUS did today was uh for the schools there was there was no security cameras in that nature it's all be okay I mean I was gonna bring up more in deliberations but since we're yeah particularly the ones are all the Verisign

089yeah I mean and then again yet why are we fighting 20 years for every year get fake notes on that go through tonight and make changes when they actually deliberate next week yeah I think there's a there's a bit of a sense of urgency and improving capital yeah before based on what gene sent over yes there is a memo he received shown that they want to have the top red ready for the tummy so we have to probably do that how many paste the pants Tommy it easy people who work [Music] 14 days [Music] we should talk about it anyway and then we'll get some some advice some sound advice it's two weeks we have so get some sound advice very good all right let's go back to the corporation so I'm Serena the memo

090that that were to the transfers between the departments and the carryover of the FEMA appropriation that the transfers between the department following this screen [Music] illegal fees these money finance departments or purchase professional services the non union wages for land use the economic development needs $93 just a lot of little things that and it's coming out of contingency talk it's all right here so so so this is week was coming out the trend so this year what we're trying to do going forward is we're trying to come to you every quarter and say hey it looks like we need more money here and we can take it from this this other department so it's not adding anything to the budget but we're trying to do it quarterly and but your practice in the past has

091been after the audit is in draft then you approve all the transfers and and the Board of Selectmen can approve them within the department's and so these are just transfers that go from department to department that nothing adds to the bottom line it's just that they can't approve inter-department transect contingency numbers wrong it should be 35,000 lower which we show the columns it's it's less than a $50,000 we improved that's personnel so no that's personnel contingency in Nashik sure thank you this year take care of thinking this year it was 50,000 and you took out there's 15,000 remaining at me but that's the next 80 90 this is something is that after he read these transpose yes yes and the audit is done as if you have approved by all these transfers so John basically

092the prior you weren't sure what the state was given us for my so the contingency fund was quite large fund yeah so that's why there's that much left in it short because we had pushing it to cover but I'm still confusing the among the ax dollars removed because I heard 93 27 so those are all events those are all in the total that we're moving is a hundred and eleven and it gets interspersed out and most of it goes to legal fees [Music] unexpected event so 1718 so this is the reason this is 1718 I can't tell you too much about that year but I think so that's part of it that there are last year was a revalue and so there were a lot of lawsuits that are winding down this year taksim lawsuits

093that that is the extent of my knowledge just those know their position arey no make a motion to approve the final transfers for a year and 18 but I'm at NASA so I move that we approve the intro interdepartmental transfers as from contingency to the various departments that described for fiscal year 17 a for fiscal year ending 6:30 18 I'll second raise the okay if I say I had passed the six zeroes [Music] and the second one is to carry over the storm appropriation to dis formalize that that it was an appropriation in the general fund last year and the general fund budget ended June 30th but the work that the costs did not in June 30th so we want to carry over keep that appropriation open into this year one yep so I move

094that we carry over 1 million 1978 cents from the original 1.7 million dollar storm appropriation into the 10,000 1819 general fund budget [Music] discussion in Reverse a 9-iron at zero we have one more of the one of these ones here there's some 19 things but I think you're waiting they we've discussed around their addition we're going to wait till next month [Music] sibling back ceiling we should do duration of capital just try to hit capitulation delivery on Monday without a major and and or approval Indyk or we should try to approve the 19th of the latest ourselves trying to get it on both 22nd this is a deep or dead Monday oh yeah sillier oh yeah yes yeah still operations all right so we should try to smooth it in before Tuesday so there's time

095forever flow back before the council approved the right percentage in addition to whatever you know they'll give lower hall a bunch of time to were always our backs against the wall at this one okay I have yeah I mean otherwise it's just so many deliberations anyway since I necessarily specified but just have familiar with you put everything we could possibly delivery up okay so we can all right so then let's circle back to the bunch of discussions l70 talked about the capital insecurities you know that they are longing asses there are some way affecting just for exceeding it reserve if there's room in the budget this year if we can at any point on it earlier so it's added the next year so just some way that increase the cash that were additional at sheer

096if there's anything extra no just keep at the back door if it's possible I don't know what the protocol is for being able to do something like that to say hey let's just funds you know there's an extra $50,000 on it rather than throw it to general fund can be over that's the protocol right there and you know something and have a discussion I mean I think it's a better discussion during them kind of look at the budget probably squeeze in this year and that's part of what we discussed well you weren't here Shauna's Marsh is gonna give us a better forward-looking view of the revenues and the expenditures next after we got a budget season for our next meeting she's gonna bring us some protect we're not gonna be able to hold each I

097know that but best guess projections of revenue versus to see if we do have some you know some money left over at that point maybe we can tackle some of these items I break you said see them on the brick you know the fire house for twenty thousand dollars so that it doesn't crop up and the next year's budget discussion and we're already going to put because of the theme storm we talked about a good chunk towards the general funds so we're not like I'm building the general fund as Ben and Marsha present point three percent now so identities got it right I get that we look at some of the things that take the burden off next year's taxes yeah we talked about apparatus research everything that's something you can't avoid and miss cook

098giveth engineering plans yeah so I think that puts the onus on you unfortunately Marsha to give us some numbers that we can somebody yeah yeah don't want to be magic just give us enough practice they're smart and I spend it there's covert op kappa Hyundai sure and again I don't know which talk about I don't know did you participate in the discussion with the departments and why as though yet some of these things are the I know that the goals that the selectmen used were from the department's requested over 12 million dollars and they were trying to get it to five million which is an increased spending over prior years they also wanted to increase the current year how much was spent with cash and then financing the projects of long-term and midterm debt that

099so the Board of Selectmen budget has come in with 5.3 million in projects of that almost 1.6 million would be current year debt that primarily all the assets over 55,000 which is up from 45,000 last year and then the security that they put in they really wanted to do that but but at that time they didn't feel comfortable putting it in as a cash payment and then one of the considerations as far as the the midterm spending is maybe just changing the mindset that we have to replace some of these big servers some of these things every five years instead of putting it in capital every five years maybe it would be better to just go for a leasing that that equipment that's we can get a lot better leasing rates than you and I

100individually that and just keep it as a just a continuing expense for one-fifth of it every year instead of five years so I want to point out and for the sake of consistency across all deliberations last night me and then we're going to talk about the port of education budget in terms of the model the ten-year model and I think that capital expenditures are as important even more important because of the bonding aspect of it so the model that we approved that we proved though that we acknowledged in this studied showed five million dollars of capital projects for this coming year with three point two five million bonded this budget is five point three million dollars of capital projects was $300,000 greater than model and with three point seven million dollars bonded so if you

101carry it forward and you you use the same assumptions of the model and you use this number we're talking about two or three million dollars of additional bonding over a three or four year period for a five year period and that's exactly what we need trying to avoid so I I would challenge the board to have the same discipline in this piece of the budget as we're having in others in hold-hold the capital budget to the model that was it so that's where I'm gonna we're got this there's many hard choices that need to be made because we can't we can't be over burdening the town with two and three million dollars of bonding every year and still do what we need to do with the school and everything else so I think it works

102I think that the model the current expenditures were about a hundred and sixty thousand dollars higher higher than this that they're blessed one 1 9 750 well so we're shifting it's about my pointer for shipping the ovaries to bonding which is exactly what we shouldn't be we should be burdening the cash and not on it when the Board of Selectmen look at this mean all they do they have the model in mind or is it relevant to their deliberations and they just go on other they didn't discussed it in the deliberations that I think Steve had it in mind when he did his that and then I think the other board members were looking just from listening to the conversations were looking at some of the things that really needed to be done and that

103would have been on here for for a lot of years so the just going through each of the different items that goal was to keep pushing up pushing the limits of what was paid currently that they had already taken out everything that's under $5,000 had to go into their their operating budgets that every department the the general government is a number of different departments but then later after that we get into department by department that they had asked for their rum they had asked for their priorities that finance we talked about was the the time reporting system the Sasser that we're putting money aside for a rebound that will happen in a few years she's asking for sixty two thousand every year and last year in this year and we last year we bumped it

104down to 50 this year we did the same thing she said upgrade her computers so that they continue to work with the software IT is a windows server upgrade the town clerk is map storage cabinets she's run out of space right now she's found some used ones that she's trying to negotiate they want to sell all of them just trying to negotiate to get just one and maybe fitted in her operating budget as a used map storage cabinet for the police they'll talk more about theirs on Thursday night but they were asked to prioritize we normally buy them three cars and when they prioritize they they put the third part at a lower priority that so that was kind of different that on some of that meant the stuff that's the other financing that's stuff

105that we talked about leasing instead of buying but they're getting to the end of their their fiscal year they're useful like when I second you determine the these verses are that it should be determined it so so we're looking at midterm findings if you change this is that you want paid currently I think that Steve and John have the option for from how to finance the midterm that but first we'd have to solve the numbers solving the numbers so at the budget solves the numbers that the the budget says yeah you can have your data center and I was thinking that you saw the the board said how they wanted to fund it looked like that was the way that the budgets were presented in the past that it's either cash this year or as

106finance right I am and we were at least favorably sort of it is but I think that tonight so some of the other ones on the financing it was your beef rough yeah but I'm getting been perverse about leasing versus buying this event way making that where do we get that calculation from where do we get who's the girl that says jitta these things makes more sense than the bottom then these verses loan yeah that I think that from what I understand again from the coupon council is the first selectmen and the treasurer made that decision right we really this way the Charter is written it's really up to the treasurer and the first 11 to determine the tenor and the method of financing right this is kind of a gray area when you talk

107about leasing versus paying for something of a different a different way thank you to me it would be something comfortable to the short-term financing but if I the least means operating budget not a passive thing the pants on the lease so one of the things that look into this one of the things that we did in next year's budget we tried to take all the lease payments and put them down into debt just those they are after that so we put the lease payments in that service whereas previously they're all in the IT budget so it wasn't any type of control that the department's had as they weren't in the department budgets anyway so let's get down to basics - what's that cost analysis these forces by who's doing the cost analysis okay the way

108we're paying for it if we're paying more for a lease it doesn't make much sense at least if we're paying I mean who's doing the actual operational analysis right down to where somebody attacks me we'll do it I don't make the decision but I would have to do the analysis are you also talking about the I mean if you look at the goods and generally printers often a leasing option is makes more sense than buying them out because the mean is that said no self-control discipline the data center hardware that could be the same type of excuse me but how repeat it could be that releasing is the best option for that type of we don't want to be bonded because they're not they're not like don't last the 20 years so we want some

109shorter term option and in this last bonding what we did was we asked that we gave a dollar amount of the of the other financing and we bonded that for a ten-year period instead of a twenty year period you can't really tell from the bonding but they can from the immunizations but see how I agree with I mean on this with a we're in the budget even though when it's the decision gonna be made because it changes but I think that's something we just need to ask the police about find out we're ready determine if it's leasing the equipment so that mean but from there what do you mean well but leasing suddenly stop years ago work yeah damn that's nice and yeah so we were thought all right right right but it could but

110I'm just thinking my husband's idea so but I mean you look at the length it may be that these thing is the way that you purchased the data hardware so it's not an outright payment and therefore that might be why it's considered other financing versus it's a few thousand dollars well plus it could be a cap release we end up buying it for a dollar it's under the that's yours yeah you still own it so let's go back to the basics in real simple what's that number up there that 58,000 what does that number buy or lease and that is a customer that's uh buy so that number if we lease go change obviously right I'm not actually looking at one of the documents of our short-term financing so the services data storage backup and

111recovery that's part of the agreement contract with a technology group that we are short-term financing so paid for out of debt service imagine this me something similar so what you've done in the past this is the last two years is anything that you've put in the cost as in the budget you haven't liked none of those 20-year bond things include the interest payments either so I guess I'm a little confused that we've had an interest to the approved modernize its 5% I thought that was supposed to cost us closing costs instead but not interest until the until then in the budget itself that there's debt service payments and we've kind of estimated what the debt service payments would be which would be interest in principal and they said 5% interest assuming that we buy these

112things mid-year over a five-year period so I think that might answer your question don't repeat them if we just know what the annual lease payments are with the length of the leases versus what the cost them how do you spread shake essentially submit operate so that was actually already [Music] so so to answer your question cleanse we haven't sent Robert but we do have debt service but that's in the in the budget right but we're just reading on the notes is if we go to Lee sickles the operating budget basically doesn't go to finance again you have these notes says that if we remove it from the capital and we go to Lisa becomes opera tangible eventually I don't want it to be operating as if it that it shouldn't be in the operating budget

113because we've gotta divide these out for debt service payments we've got that doesn't fit the chart of accounts if we put it in the operating budget it should be in debt service whether it's a lease whether it's alone okay yeah next so next we have the the center fire company that the Canada wood fire company that one thing that has to be purchased is the pumper truck that tickets there's an 18-month lead time that they've given us every year they give us their capital schedules and they so the four hundred and fifty thousand dollars is the money that they need from us there would be another two hundred and fifty thousand that they would put in of their money for this truck that that is the biggest item on on these schedules versus their apparatus

114reserve does a will usually have a separate private reserve they have an apparatus reserve and they want to bolt with it yeah we don't want to replenish it not the year that they're buying the token when they first put in there so I don't know what your original paperwork looks like they first put it in as an apperance reserve but then when we calculate at the time the lead time they would need it can't be a reserve it has to be a down pay that the the payments on the truck so they can order it and get it in time this I know it can be again after budget season get a list of where there are different reserves are decided upon it today but I know that we've been putting money has been put

115in the reserves hope so there is one in your financial statements that I think that's said would but that won't include will be appropriate about this should be one it doesn't do this again with money this year yes the other one should be pretty much okay that's the most significant of of the payments for the fire companies the second one is roof replacement as it at the truck B's they also put theirs in order of priority that the one that was was let into was they want the emergency responders vehicles to have AED devices in them so that if they're driving personally and something happens and I have to drive to the fire company if they've got stuff there they asked for 15 of those and that were selectmen cut out ten and thought to

116five a year the other thing the incident command vehicle they both asked for incident communica 'ls that both are going to put money towards it the Candlewood fire companies is more expensive because they don't already have an incident command vehicle Center company has one and has the equipment that they can just move from their current vehicle into the new vehicle Public Works they have their this is their budget for vehicles one through four you saw the pictures of their fledgling Franklin's that and then this is a bowl numbers are pretty going further we gotta talk to him but they present to us next a great tomorrow because we did have a you know Shawn to we proved it and then they did a flop or something so why are they in there because the computer

117have last year's right we approved their incident vehicles in the first go-round he gave them both an incident and then I know who your since we found the vehicle or we did something but then that would make no sense them they have a lesser a year yeah there's a new command vehicle for handle of fire [Music] because they had a tool or something like that so they didn't need the full outfit but why would we do that for one year and then have it come back next year that makes yeah we need to get a better storyline how's that Janice on it over here yeah do you know what but last year's but we already figured it out me at least kind of approved money to buy it so we approved two new vehicles last

118year so we need to know what happens and if we spend any money from Westar on that or yeah I mean it's it's classified five ultimate quest currently the important again against their religion so they requested fifty five thousand dollars this is Jen look for the new command vehicle in it it was placed under 10-year bond financing but important finance the notice is currently can with fire department only has one vehicle capable of towing their boat if it is not on service that boat becomes unavailable this will fund a vehicle capable of towing a boat and necessary equipment fifty-five thousand for the vehicle and can outfit equipment and operating budgets moved from postponed to under ten year financing past assistance we'll talk about tomorrow again and that Center actually brought their requests down to 27,000

119because they hadn't taken a statement as we approved 35 last year that they brought their sounds they were gonna pay part of it will be approved 55 last year so okay yeah yes there should be a surplus that summer we have the top half of the page is highways that the equipment that are non vehicle equipment that the one that is split that looks on is the library windows the library badly needs windows but it was four hundred and seventy four hundred and twenty five thousand but the cupola at the top is leaking and so the five thousand dollars is to fix that to the wrong table yeah we talked about that maybe making catchment so this right so the lawsuit portion isn't it so that's not typically included in assets sorry Steve and I

120went through this that that and and I don't know where I'm not catching on to what he's talking about that that we have we want to pay one point five million more twelve in total um and we have revenue coming in from Llosa of a hundred thousand and so has concern is were not paying 1.5 million early paying 1.4 million and of our own money yes that's true and so we went round and round about about how to do this so it would be very clear so that's why we ended up with this showing 105 is coming out a little which has always come out we've always used our loss of money for the funding what you had asked at the last meeting or one meeting where we talked about this is to take that

121instead of reducing the nine hundred and fifty thousand to 844 you asked to keep it at nine fifty and reduce the 552 for 45 I want one six and get a reimbursement of one and once I do that was supposed to shine us there so if we do spend one six and get one back and then back to what we totally understand fine unless we were always including 100,000 of those images with a show in which case we ready position hold it I agree with dance logic right true I went back I got that that the paperwork directly from the state see what we spent it on we've spent it on roads that we have it in the revenue that and we've had it in the revenue every year that correct but the finance part

122should stay true regardless when we find it so it's just whether we spent the cash on the cash outside of it right does your financing there's a lesser number and I'd rather do suffice I agree about the same from pest but right the finance numbers of finance network which were decreasing 500 on a fishing by 100 yes and so if we decrease the finance number by the loafs of this year it would be kind of fight 200,000 we're decreasing it because we've always reduced the current expenditures by receiving loss that's a lot cause we're taking I'd almost rather heywhere wallrun 83 make a note talk when we talk about the town capital for versus school capital for paving Center they talk to the town side and get like the bulk thing or they just go

123out give up quotes on their own I mean we coordinate that or ask that question like if we can do 100 miles at one point five million dollars why are we going to cost us two hundred thirty thousand dollars into a quarter mile [Music] but are we talking to the town we Ralph it this way they're gonna look at new avenues it's a school gonna look at what how to do the person that we know has the monitor yes drinks that's everything else gonna use are we gonna use expertise are we using our expertise I guess is the question so we'll make sure that the two of them court naked on the parks and grounds again that's that is there's that the as far as 1 to 13 are their priorities that there was some

124thought that based on Steve and Mary talking about getting some of these little things and knocking them off but then so Steve had left them in the budget then he talked to Mary again and she would have preferred the Bobcat utility vehicle over some of those little things so then they the Board of Selectmen made that adjustment I think she talked to you about all of these and I don't think there was anything strange it other than she had asked for the tennis court replacement and the turf replacement and the selectmen had changed or reserved instead of their replacement library not anything to do with what they asked for in there so as I understand that the operating budget was three hundred thousand to look at their current building and this one is sixty five

125thousand to look at plans for other buildings and the selectmen didn't figure this first leg but didn't think that it made sense to do both it should be going through this now that the school is and he did ask them to take it out of their budget before it came to them but they didn't ask them to take both out because she felt as though it was more appropriate for us to go through the process see if the school is going to be approved and now that the school is approved to set up a committee to figure out what to do with center school after it's not a school and that would be a town-wide committee and a town-wide approach instead of it just being the library that's doing so he said please wait and

126see and if we're going to make plans it would then come out of that committee instead [Music] and then the slide is education that the high school the first two and he pretty much stayed that their order is on the left their overall order between all of the different projects he pretty much seen with their order and but included all of the different security upgrades both of those social mobi delivery we're going to go to Livi last year my lion oh yeah dad take away do you want to make sure that knee is called pulse here also to insert a character yeah yeah I mean the education folks are planning with some of them are finally pneumonia don't you'd like to add Marshall um he's dead thank you the dead budget that the bond principal

127and bond interest was based on amortization schedules they had done an initial one for the budget and then I did a really much more thorough one for the audit and so I used the what it figures ties down to the audit and I think I forwarded that you at some point that but do it again the band interest is based on the total amount of the bands times three percent which is the interest rate unless advantageous on you're not 490,000 because what we were just this is next year four hundred and now I'm looking at the previous year so I think that's the budget and the budget was 240 it can actually see those tiny little numbers right so so this number right here to 59 60 because that's the budget as it stands today

128okay which we discussed was not correct we think that Johnson a theater ESquared over there are some movie parts from last year's death service because me estimated the interest on the new issuance that we were going to do in November of last year so go back to your time we were looking forward to November sangra issue dead we have to project the interest on that debt there was some back-and-forth who the short-term financing member so we may have overestimated the short-term financing number and underestimated the band interest because I said all this to marshal kept me since they were actually not here so they'll be able to decipher exactly so but we'd that's what we talked about earlier tonight okay a differential one is over in one round this already brought before 50 yeah the

129short-term that we have a loan right now where we took out for the with the Union Savings Bank that's our payment per month we have 8700 because we want to move the lease payments to debt instead of having them in people's operating budget and we have a figure in their short-term financing we assumed we would do it halfway through the year at five percent over five years but as we adjust the capital budget we have to remember to adjust that budget and then one thing we've never had in our budget before is financing costs if you look at your budget notebooks you'll see that we paid it just keeps growing that that we still have a bill that we just got in this month for November's debt and then the Laurie hall is not billing

130us everything that she's saving some too tell for the photo fellas that so just the finance and costs we're trying to allocate it out that there's some if we looks like we're gonna take bonds of bond anticipation notes out every year we shove something in our operating budget to pay for those that to pay for the the costs of that that we have a lot of other costs that we pay for that we have a an intermediary that uploads our stuff to the EMA system and follows up with that maybe as we get more comfortable with what we're doing we can drop them and do it ourselves but right now if they got enough why are these costs in there now I don't know them you know they cost us a cost is a knowledge

131oversight - yeah so we're referring to the cost of issuance for body anticipation notes well your what I'm trying to what I tried to do in the in this debt budget here and then you can see all the cost I knew about at the time that we did the the other budget I'm trying to put what looks like annual costs in this budget and what looks like costs for when we do permanent by in the capital projects budget that and then there is a no-brainer for capital projects my saga cut that down and we'll parent so if we will wait until we do permanent financing before we but that number in the budget was a theory from the selectmen what was that 215 that code that was the one I was trying to put the

132one trying to put in an amount for for an allocation each year for the long-term financing and the theory was that we won't put it in this year but next year if we do permanent financing we'll put it all in then and say so what would the 215 this year have accounted for [Music] this one is 73,000 Oh we had some costs paid at closing that and so I tried to prorate those also underwriting costs we have death digital assurance certifications that there's an annual cost that's in the 73 we have printing of the offering statements and we have that every year with the bands as well source of media that every one of them that came in I thought this kind of spam because they I'll email them to me that but I checked

133with our council on each one of them and yeah that's legit and she was the one that told us what it was for that's advertising the bonds she says we don't want to cut that for them from the budget or we would get a higher rates hilltop securities that I've prorated their advice or fees between the two she she gave us some portion of an allocation that the Hawkins Delafield is Laurie Hall that she gave us an allocation of her budget her fees and this is the one that she gave us at the time I said well we don't want to have your holding bills for us that one we're thinking of going out to bid for these services we don't want to be surprised going forward and so she's wanting to get me their

134full potential occasions for each and and then some consulting work that she had done that we're trying to Alex that's all over 73 so that's prorated between the 73 and the partisan it's a 73 + a 212 as we were paying almost 300,000 for the 212 was the 212 is so if we've got cut how am I gonna pay that to 12-bits 212 is permanent financing and so it's we're not expecting that next year we'll go out to bid the next year that will do permanent financing finding fun permanent financing we're not expecting that we'll do permanent financing next year so I was thinking maybe we cut 50% and kind of ease it in but the whole thing was cut and so that next year when we do it we'll have to put that back

135in in the past you have been adding 5% for these costs but it doesn't show up anyplace and I just thought it should show up so that it reconciles so so this is your 5% that shown that you've been at your reality that make sense so the worst worst we've had a little bit more in finance and costs since this time that on permit now permanent financing prior talking $20,000 questions so we're expecting five point two five point two three versus and I it's versus but if you look at the model I think wherever that 15,000 all right I'm I'm just I understand playing the drum again but but and say that one third of the entire requested budget increases because of paying for debt service increases for pest capital projects we sure some are

136needed to be done but we need discipline to keep that in Jacklyn forward or else we're not going to be able to do the town we do yeah and then the big one was that we went to a huge amount of the permanent financing this year that the 26 million that right it's about a million thousand there as advertised so this 12 months ago that's correct it's just what we have to keep behind yeah I agree with you all right any other questions all right before other items to come before the board I don't think we have any for the next the next regular meeting after the Board of Ed Finance Committee meets they're going to put together a list of bullet items to accompany their March financials and that will be included as a

137pilot for a beta in our April meeting when we review the March financials so it'll be it'll be a nice try out of what our expectations are of that knowing all we know about how much governance oversight in actual Collett and I want to see if there's any value to it there is you know going forward with it if there isn't then those a nice try but I think we owe it to everyone to at least think about taking a look at that because we've always been in a position where the books never reconciled it was kind of a black bag and what the hell it's not anymore so well the other shot and see what happens anything else since we're your team anything else you know get out there that's it I'll send a

138note out to Colette bobbed and a mouth and see if we really need to wrangle the troops or if we can get them but there has a very good answer resources oh yeah all the favorites a budget like unity one capital project and just goes from here to here there somebody's probably on the way yeah I'll send it no doubt just in case we don't need them to be here for two minutes I know we need you mr. Caldwell I'll sure up the there Monday Tuesday the questions any public comment no public comment make a motion to adjourn [Music]