Board of Finance Meeting 11-14-18

001[Music] oh okay hey I've been I've been havin a good evening everyone this is Wednesday November 14 2018 I called this meeting of the Board of Finance to order if everyone could please rise and join thank you everyone who is here on the board we have a full complement vice-chair Rooney is on the phone he had some some things to take care of out of town but he is with us so if anyone does have any questions for Glenn tonight and Glenn if you would like to participate in any discussion just holler out and be sure for that and I'll be calling on you to you know to give any commentary obviously in turn but if there's anything you want to call out just please do okay so yes thank you for everyone first order

002of business do we have any members of the public that would like to give comment seeing and hearing none second order of business communication and correspondence this month we received correspondence from Ron Jaffe Christina Zimmerman Howard Lassard great and next I'd like to make a motion to approve the minutes from October 9th at a regular Board of Finance meeting minutes do them separately I don't think everybody it doesn't matter Oh people can people can still vote on it see if they want their okay then I make a motion to approve the minutes from OC's overnights regular meeting and the October 16th special meeting discussion on the minutes okay all those in favor of approving the minutes as distributed indicate by saying aye okay so now that we have minutes approved we can move on to

003our report of the First Selectman okay I won't be too long tonight because I know you've got a project um we have changed some of our processing in Town Hall particularly in a tax collector's office we have a number of delinquent tax payers who haven't paid us for 10 15 20 years so for the largest of our delinquents who are like 3 years and over we've decided to use the services of a marshal and we've been doing that for about six weeks and we've collected about $50,000 so that's good and our thinking on that is pretty simple everyone who loves taxes should pay them we understand people get into difficult situations and we work with people but if you continually ignore your tax bills for ten years we're gonna come after you we're gonna come

004after you so that's good that's one extra $50,000 that we have what's the what's the what's the cut for the marshal we just pay him a fee we're delivering the documentation from us but I believe he gets that percentage from them yes I don't know the number of top my head I think yeah it's $50,000 we never had before um second you know three years ago we had the issue with the high school right we had Steve Harding was kind enough to put a filter we met with Melanie carry the Commissioner of das and she agreed that there was an error in denying our claim for the emergency repair we received notice yesterday we're going that money $264,000 which is good we're making some changes to the minutes in the town clerk's office minutes of

005all the board's we're upgrading them to make sure to make them searchable so you can go into the minutes of the Board of Finance and search Sean and if there's a comment in the minutes by Sean it will show them or you complete the project huckleberry and we'll be able to search so we're gonna start doing that going forward and we're also gonna go back and while the minutes will be scanned and put up on the town website and that will save us some space in our wallets too because in the past a lot of board meetings we simply were taking them piling them in town clerk's office and put it in five so that should help people be able to look at what they're doing we have our Fela meeting our first real face-to-face

006meeting on Friday to kick off our FEMA claim that's about a two-hour meeting we're hoping it will work well we had an initial conference call with them with our department heads and FEMA to go over what's required what's not required it's gonna be a process it's gonna be a process female is an incredibly convoluted organization and many times we've heard then say one thing in for three months and then they say something else they changed their minds so we're documenting it very very carefully we've already started our application to FEMA we are on their website that's how you have to submit your documentation and we're doing that they told us at the first meeting the whole process is for six months I think that's aggressive on their part given the speed at which they're moving

007right now we're already two and a half months in and we're having our first real face-to-face meeting so we have hopes that that will move forward they've also told us now that you know there were categories a through G and they originally told us only a and B will reimburse about now categories a through G they're telling us are reimbursable so that will add 150 to 200 thousand so our claim so I think we're very very good shape from the documentation standpoint it's just going through the the process with FEMA so Steve after after that meeting will you have better clarity on whether the 12-month clock will be met in order to oh one is that yes and yes you know they have a clock but they can move it back right nothing on this

008has been held up by the town right so if they're moving slower than we are there's no doubt in my mind I'm just gonna have to extend the clock because we signed up the day they opened we've already started to put documentation and so I don't see that as a problem I was referring to the accounting standard what we're gonna we're gonna ask and use our best estimate from the answer that we get yeah cuz it makes a big difference you know we have little cabinet Kerma on insurance claims we're in the final meeting tomorrow to wrap that up so we'll know exactly they always stand on that once we have that we're gonna put together another update for the storm damage to give you guys we're still under the 1.7 million there are some

009things we would like to do but we've held off doing them until we get a full accounting and so we're pretty good shape there you know we signed up and we're using the system crisis track to track any future storm that we have it keeps track of every single person that works for town every outside agency that works with the town utilities and we'll track by location GPS location where the work was done when it was done who did it all those sorts of things that's a huge help when you're filing with FEMA because you can take that's their preferred system to track a crisis so you can take all the informations from crisis track and download it into female originally this time what we did we filled out what's called a PDA preliminary damage

010assessment then we have to take all that data and re-enter it manually so crisis track will do two things one it will help us a lot if we ever get even aid again but it'll also help us manage the overall big their interactive map show which streets are closed which streets are being worked on which streets have real danger situations and it's live and it's interactive so we can see streets get cleared as we go along so it'll help a lot in managing over water so we're very happy with that and that's at no expense to us satisfied its contracted for us and we get that system for free we have a couple projects that are in tonight's discussion for the high school project the huckleberry achievement sentencing in my brain the huckleberry project there

011are two more you know we have two projects that are moving forward more comfortable than before and we'll talk about a little bit later but I just want to give you an update unto others a supermarket that we had discussed a few months ago that right now is in a in a hold situation they haven't been able to come through agreement between the partners so we didn't put it in art or ask the minimum future tax revenue and we also have something that's moving along rather quickly these guys are already talking to our fire marshal man juice and building facilities assisted living facility that will go on federal road and we don't have hard numbers somewhere between 50 and 30 30 million dollar building again that's not in our estimates for tonight because we don't

012have any contracts signed or anything that really solid so we didn't include that just see where Marsha is gonna share with you our financials one thing we had we had meetings last week with every single one of our departments we went through their budgets in very great detail to understand where they were what they're doing do they see any problems that they see any issues adversely everybody's right on target except where they need to be with the exception of our fire marshal's office due to the new development in town and what's going on we are going to be over budget on Fire Marshal we have two people that working almost we have a fire marshal whose full time and our assistant Fire Marshal who's a part-timer who's actually working pretty much full-time to do all

013of the inspections remember we also have all of the buildings that damage all of that sort of stuff so we're just giving you a heads up now we're gonna be over budget on that we're already working on where we can find that money in the budget because our goal is in Silius our commitment is to say under budget for the year and I'm very comfortable we're gonna be able to do that also our legal budget remember we cut it last year we may go over that to our tax litigations are up but we got the fifteen thousand so that's covering a little bit of it but these things do happen every time you have these three Vallieres and they keep going and a couple of the bigger commercial entities have decided to fight their tax

014bills and we think we're right and they think they're right so we'll go through them that's it for me hey the UM the reimbursement or the roof project yep 264,000 what's the accounting for that so it has not been on our financial statements with you again there's no good it has not been on our financial statements before that so the question is we could either do a prior period adjustment for it to add it or include it last year's revenue that and I haven't seen the actual paperwork on should it have been there if everyone you know was clairvoyant then it would be a prior period adjustment if it was just something that was new because of the lawsuit or of the legislation and the date of the legislation then would probably pick it up

015as revenue but so at June 30th either way it'll be a receivable and in the fund balance of 18 correct um another topic no no if it's appropriate for a Vanessa anyway and your meeting last week or selectmen talked about and approved extension to the building starting the building for Horner's yeah and I had total five I wanted it I I downloaded listen to my commute so I that's good that's a very good question I probably should about that up a book the villagers come to us and asked us to give them a one-year extension on the time period maybe I should back up a little bit the tax abatement agreement we have with Brookfield village says that within receiving the certificate of occupancy and set at least 75 percent of their commercial space being

016occupied released out whichever date comes first right they have one year to start the next two buildings they asked us for a year's extension on that overriding this is they have three year period at most to start regardless of anything else so they asked for a one-year extension the Board of Selectmen discussed that and we gave them a six month extension to start those two buildings as part of that agreement Brookville village has agreed to knock down subway and mother earth buildings and put grass there when we look at it if they start six months later they still have to get into that three year window so they're really gonna have to move we're not really getting about much but we're getting some blighted properties taken down so it seemed to win-win cause that makes

017sense okay they take care of the cost of where they already was that already part of the yes yes they're already gonna be doing that no we're not we're not okay okay so they let it sit for a while I said you want an extension this is what I want I want those buildings down and they've already started yeah you notice they cleaned up all the overgrowth so there there and they've been a very good partner with Brookfield so I've no doubt they will do what they say okay all right so the revenue and expense report that revenue is on target with a budget that we are working on catching up the revenue and we've reallocated the jobs in the office so that we have someone that's that it's actually her dropped to post the

018revenue and collect it every day so once we get it caught up it should stay caught up but it's on that it's on target with respect to the expenses we met with each of the department heads to review it in the past that they believe that you've only done budget adjustments other than big things at the end of the year and what we'd like to do is do it on a quarterly basis at ten one four and seven or month numbers so October January April and July just so that it's pretty clear what it is that we we want to do so that I in the past not here but other places I've dealt with people that have said well we've had an underage here so we're going to use it there and at the

019next meeting they said we're going to use it there and at the next meeting this way it solidifies where we are you can decide to adjust it or not we'd like to bring you adjustments quarterly we set up a formal request form that you have a copy in there so that it can they can put their justification it can come to the boards and if there's an additional appropriation there's nothing on the state statutes that talked about having to do adjustments to the revenue but there's nothing that says you can't do adjustments to the revenue I like adjustments to the revenue because it kind of gives the reader and idea of what you were thinking for example we had I had a client one time a town that had a windfall and they did an

020additional appropriation to spend all the money that and if you're reading them after you'd say oh thank goodness they collected so much in taxes so they could have afforded that well they knew about that in advance and so it kind of just shows a little bit more of your thinking that we can add this to the budget let's say if there's an appropriation which we don't think there's going to be but for for an additional appropriation for a fire marshal and they're going to bring in the same amount of money it could you could see the correlation so that will go to the Board of Selectmen first and then come to you again we'd like to propose the adjustments quarterly you can decide how can you how can you assert that let's say you're three

021months into your tier fiscal year how can you assert that you need to transfer three months in so if you look at something I think it's in the Assessor that there's money in her budget for a part-time person and it really is supposed to be in an overtime position and she'd like to take it out of one and put it into the other because they're not planning on having a part-time person they're planning on having an overtime working overtime so that would be the type of of change or if we know something that it's you know we don't have to spend you know X Y or Z then we could say well we have confidence that we're going to be under budget here and we can move it over there but there are cases like

022your tax appeals we're already over so we know we're going to need to make an adjustment and we think quarterly is a better way to go and we could do it monthly that but we thought that was too much that and if you say oh I really love this quarterly stuff we can always would go at monthly this that as Steve mentioned that we do have concerns in some areas that I also have the the lawsuits I forgot to put in here the fire marshal and what he didn't mention was my department that we had some part-time help we don't have any more part-time help so that's done we do have some we have five people three salaried all three salaried people are working overtime and we have overtime of one of the hourly people

023and so I will come back to you with a justification and the transfer of where we'd like to get the money from for that capital projects we did our bonding we we have the quotes that closes tomorrow that we did tax exempt bonds that we thought we were going out for 18 million 6:15 we got the results back and we were offered a 10% premium that 10% premium there's no certain things you can do with that and one is not save it that so we were unable to use the full 10% premium because we can only pay taxes on it we didn't have that but interest on it we didn't have that much interest so it was a 10% premium there's coupon rates of 5% and 4% the true rate of interest was three point

024two nine percent so we resized it to reduce the principal instead so instead of bonding for eighteen point six million we bonded for seventeen point eight million that that we have taxable bonds the taxable bonds are for four million there's no premium on the taxable bonds their true interest rate was four point one six percent and we have bond anticipation notes of for one year of 1.9 there was a very small premium on those if you want any documentation on any of these bonds you can go to the mo website that I guess for there's one for public throughout the name is Oscar or something for public companies some mails name but Edgar Edgar thank you that Oscar that that I never did any public but the municipal was Emma that and you can see

025it's got our offering statements our um our bond actual bond documents budgets all the continuing disclosure information that is for the current year projects that we talked about if we should roll them into the tax-exempt bonds but they advised us that we should not be doing that that we wouldn't have as much flexibility that we wouldn't be spending them fast enough that it would be best to take them out in anticipation notes and go forward let's say for some reason you decided not to do a project you already borrow for it long term cause this huge problem there was some there was an email about some concerns about the timing of our bonding that that in our budget that how much were we paying off of it and the timeliness of our paying off well

026we have four categories of debt that in the budgets one is greater than 10-year bonding and 91% of our of our bond package was for that the total that we financed this is the total projects was 19 million 817 that that was the approved amount some has been paid down some has been wasn't fully spent we had pay downs that we had to do of 1.9 million so we've already paid that down of the total as principal but that because we had taken out bond anticipation notes for so long and the life of the assets for these this bonds which were bonded for 20 years the life of the assets were 20 to 50 years the some of the sewer projects have a 50-year life we have a second set of bonding that in the

027in two of the years 1781 19 women bonded for that yet that you devote we divided the category into less than 10-year bonding that was 9% of our total bond package that the average payoff on that that the total financed is 2.3 million and we asked to have the debt accelerated so that we're paying off we had done a calculation of how much was in that 10-year category and we asked could we take that amount and financed it over ten years instead of over 20 to try and meet the spirit of the budget that if we so when we take the two million that we finance that way and the payments it's being paid off of SEP over seven point eight four years that the stuff that's less than ten years that there was a

028concern that some of this was so seven point eight years from today but some of it was purchased in advance so we did the calculation that if we had purchased everything on the first day that we could July first of the fiscal year it would be seven point eight four years that and we haven't spent everything so there we just give the breakdown of what was spent for fiscal year 17 we still have a half million that's not spent fiscal year 18 we have fifty five thousand that's not stronger than ninety-nine point eight years yeah thank you so so that's nine point eight four is for the last dollar pencil or not correct so if you were to calculate that if we said well so we were calculating trying to get at less than ten

029years based on tomorrow the date we bonded that two million we bonded we're gonna pay that two million off on seven point eight years from tomorrow that and then the concern was well some of this was bought a few years ago and so that nine point eight four is if all of what we authorized in year in seventeen was bought on July first sixteen and if everything we're authorized for year-end eighteen was bought on July first seventeen and what would be the length of the bond well that wasn't the case it wasn't tallboy but that would be the length of the bond that and then we have a third category short-term debt that we're not bonding at all that there's some police cars and and I thought what else was in short-term debt but that

030we're taking out loans with first I think it was Chase Bank for the first year second year was Union savings and we have one loan out still for Union savings which is a three year loan for the short-term debt then the final category is just cash that we're paying 1.2 million dollars in cash the going forward that we this whole bonding experience we've had to reconcile every number that we've that we authorized with what we've paid we're pulling it into the balance sheet we're pulling in we have a steep ramp that's a receivable we have a school construction that would be receivable at June 30th of last year we have some retain it out there just trying to pull it all in so we can compare here's the fund balance here's the projects that are

031open and then we're setting up each of these projects in munis so that they can just be calculated very easy going forward and the audit update that that we've done a lot of special projects and spent a lot of time on projections and bonding and things like that it would be really great if we if I just focused on accounting for June 30th before we get into a budget season I'd like to have a draft of the financial statements for the auditor to give them in advance so the goal is for December 31st that with financial statements and and notes of the statement so that they are completely done for them that I'd like it to be available for your review for the January meeting they're tentative water dates they'll be here between January 7th

032and the 25th they want to do their internal review self review the week of January 28th have drafts of the audit reports to us the week of February it'll be a little less exciting if you already have the numbers and these are just the audit reports and available for your to review at the edge of February meeting the critical date to me is we want them up on Emma by February 28th and we have we'd like you to consider an extension that for my understanding is that you approve the extensions yeah in the last two years we've approved extensions on a month by month basis we have to do that by law we have to apply for an extension with the state what we're suggesting is that the board of Phineas approved the town to

033extend at twice January February remove once and we can just send it in with because we know where we're gonna be OPM only allows a 30-day extension so every month at the board didn't need to approve the extensions that your office had already to go ahead and do so I would rather not I have no problems all support is comfortable with that and we'll double-check it but yes but we wanted you to be aware if you approve it it's a Brookfield thing because I don't necessary formality in the past okay I had to have special meetings to gather the everyone together just for five minutes which is oh that's what we were saying if you could do a time I have your blessing then we will just file there's two months but that's okay if

034you're comfortable with us doing it we just want to keep you informed I know they'll be informed I'm sorry I'd rather be invoking you know as we go okay the blanket blessing right now all right we're talking to the sisters all right yeah and a bad month I might wear that outfit here any any questions on any of that or anything else I have just as we discussed it's a little bit of a delay from what was previously reported ever really it was gonna be wrapped up in January and just kind of that that was really just talking to the law partner that I didn't pressure him I could pressure him and ask him to have it for December for February January 31st I didn't I know that they have two other partners in that

035firm and one just left to be a finance director someplace else not me there's everyone that so I was feeling his pain but I can I could push to see I just wanted to report to the board last May they came to us and said listen guys we're not going to be able to get to you in July or August and we agreed then in May okay come in December now we finalized yet because I have good days this time okay yeah no it's important to understand why that's it's really not us exactly but in the look we have a budget versus actual did I miss it here did we get a chance to prepare the full balance sheet or the balance sheet that you had wanted to prepare we have said that we are

036still catching up on so you just have the budget of the budget versus actually no revenue that so the goal is to get you revenue get you the balance sheet with that aside from the couple items mentioned in the report are there any notable the only notable one is at the very end the the treatment of the FEMA expenditures that when we give you the final draft and we ask you to make any transfers or other things that need to be made I think we're going to ask you to approve carrying over that carrying over that budget line item that was the sensitive thing on how are we going to do that and we had talked last time but that might be the best you to do it so that's the most notable is is

037those expenses and I had forwarded you because I don't want too much time to go on without us bringing to light and the Board of Education hasn't brought to us a formal request just yet but I want to be prepared just in case if there is a request from the Board of Ed for to establish an on lapsing fund right I'm bringing this up because there are preliminary results that there was going to be an underage right this year course for the year that just closed and I had forwarded youth of Correspondence and and whatnot from the last time the board had discussed it with a previous finance director have you had a chance to look into that and see what the process what the staffs a B and C would be to get that

038done so we don't close the audit and want to do this and it's too late because we've closed the audience we should have correct that it's gone it's not gonna be before we closed the audit and I have to say that I had it on my on my file for the next education finance committee meeting I didn't realize we were closed on Monday but they were not that so they had a meeting but but we can get it done in the December meeting if they see where they stand and the other notable thing is that Board of Education number that you have in the budget to actual is balanced as I think I told you Kevin and Jones spent the whole month of August balancing last year and it is balanced so within fifty eight

039dollars for around 11 million for this year but I don't know the number Saturday more than all that money and I would think but whatever the Board of Ed expenditure is so that's that's a huge thing well you're a $400,000 credit on the pension we received it from the Board of Ed we haven't paid it in yet yeah usually they give it to us and then we pay it into the Wells Fargo but we're switching from Wells Fargo to MassMutual it was supposed to have happened on the 22nd of last month and it didn't that were where we stopped giving the payments to one and so we were hoping to just give it any other questions [Music] okay we have no items of old business to go over this is the first order of new

040business I'll make a motion so we can discuss this one I make a motion that the Board of Finance appropriates a sum not to exceed 1 million three hundred thousand from the general fund for the purpose of funding the cost of the planning design acquisition construction and installation streetscape improvements beginning on federal road and running down old route 7 to and including a portion of Road and related improvements including but not limited to sidewalks lighting signage and relocation of utility lines if necessary and authorizing the town to issue general obligation bonds or notes this project would be called phase three of the streetscape if I may we have applied and I think if you watch the Board of Selectmen meeting or lots of grant in the amount of 1 million forty thousand dollars with a

04120% town match obviously when we do this we have to approve the full amount so the town would be sending two hundred and sixty thousand dollars and the Lots that would cover the 1 million forty thousand dollars this is very similar to what we've done my phase one and phase two we anticipate this project will be the summer after next we'll actually do the construction we have high hopes they have no lot set this year they just didn't have a program so we have high hopes that we can get the money and will be approved on the grant it fits perfectly with what Lots it wants to do so we have a good possibility of getting the money but we have to prove the entire amount so we're really asking a ten-cent 260 thousand which

042is about 22 percent of the total see what's your location the the it was this week but the Board of Selectmen already approved that announcement submitted right now we need to approve the spending of the money this 1 million 3 includes the town portion of 260 thousand so if you can reminds me yeah the guarantee that's if the grant doesn't come through this house not to be been standing that bullet point 3 no no we can't do that we can't do that it's anticipated upon them and Board of Selectmen motion that it includes the 1 million 40 if we can't do it then we're gonna have to come back and say alright where we're gonna find that 1 million 40 and do the project almost fully funded perfect it's just a bench here and a

043bench there no you're right yeah that's a good point to clarify do any of the future construction projects in decreasing Gianna's doing this link was there an agreement that we would extend sidewalks down to Laurel Hill not no no there is not with any of the developers this is just the town is building the infrastructure to bring in good development and so far it's working so they're slower than we thought that it's worth glad there's a motion on the floor right now for the 1.3 million dollar streetscape which the town portion would be 260,000 the materials were sent out ahead of time on that request did you have any questions or comments or concerns for the first selectman okay see you thing else no that's it if I've explained it well enough all right hearing

044no further discussion I call a motion to a vote all those in favor has the motion as put forth indicate by saying aye aye motion carries six thank you sir the next order of business is a discussion only on the school project it's worded specifically by this because I don't have any intention of bringing a motion to the floor this evening on this particular item I feel that it's it's too great of a task to do in one night so at the end of discussion on this going over the data that questions I mean we have you know many people who have a great stake in this project not only residents but so there's some consultants back there and folks that do work for the town in the school everybody's got a big stake in

045this project and it's a big one so there will be no motion put forth today not on my part as well we have some agreement on that so this is a discussion only of the recommendation by the Board of Selectmen and a review nice thorough as long as it takes please don't abridge anything you know any questions that are asked please answer in as much detail as possible so we have information to go on when we leave here and we reconvene either for special meetings or okay so if I can start Marcia's out of prison we've got a presentation that we've been spending many many many hours on Marshall cabinets are fantastic job putting all the numbers together just to remind the public that this project has been going on for two and a half

046years now the board of that is work tirelessly to hire a consultant at that time they've come up and come into the town looked at every single building looked at our Ruhlman figures looked at what we're doing where we're gonna be in five and ten years and they've come up with a plan and the original plan had ten options and the strategic Committee of the Board of Ed narrowed that down to three and then to one option the option we're talking about now is about a sixty seventy eight million dollar total project with twenty one and a half percent reimbursed by the state is our current guess the total cost in a town of just over sixty three million dollars then I want everybody to realize and some people have said to me in the

047bullet why where's this coming from I never heard about this this has been we've been working on this for two and a half years and actually if you look back at a lot of the meetings of the boards this is something we should have been looking at 15 and 20 years ago we have Center School which is 80 some odd years old we have huckleberry which is 57 years old and what I say to people and I got this from Colette and Ike and I ain't collect for this right now not doing anything is not an option it's just not we have to educate our children we have that safe secure buildings that they can learn it and now is the time we've gone too far we've we've retread this tire so many times the

048steel bands are no longer good I think it's time to move on and having made that sales pitch I'm gonna let Marsha go through our presentation all right and I will say that I apologize in advance those of you there at the Board of Selectmen meeting because this is just the same talking points and it is not a sales pitch it is a projection of the best numbers that we think are possible to to come up with that so that we talked at the October meeting that we had given some numbers about the increased costs and the increased costs are very traditional of what you look at in a presentation for a government of what will this add to my time so the taxes but that's just part of a presentation that really to do

049this you need the whole picture of where you're going to be and so one of the best budget best practices is to look at the long term planning with a forecast when you add a big if then that's turns it into a projection just a pimple one thing you know in talking to a lot of first elected mayors about these big projects most of them do not do what we're doing here show the total revenue picture showed a total of spends picture and show the bottom line including capital projects and doing all those things they usually just show here's what the costs this is what they're doing in Bethel they do a great job so be fifty million dollar project this is what it's gonna cost you per year and that's what and they give

050them some more detail nobody goes to the level of detail up we've gone here and I think it's important to recognize that because you make better decisions if you have that information and Dan had asked how many other governments do this and in my experience as an auditor in Connecticut and a technical reviewers some new jersey in new york governments i have never seen a government do it the way this came about was what commercial entities do when they're trying to get a loan from a bank if i were you i wouldn't approve something where I just saw the increment how does that fit into the whole I think you just have to know that it also puts gives it a downside is that some of these other towns that don't get the whole picture

051might just be sitting in ignorant bliss that that oh you know we do nothing and their taxes aren't going up that so so there's two sides to this but and the third the third one is that as important as the finances are that that's not the whole picture there's other things that you have to consider as part of the finances that so the first thing we looked at I don't know if I can make it lighter from my side here we turn lights off yes fine I can't make it lighter ah we just need to watch so the first thing that we looked at was were the expenses that for the expenses for payroll for the town for payroll that generally what the union contracts tried to do is keep up with a cost of

052living and so we had to figure out what do we think the cost of living is going to be and luckily we didn't figure that out we went to the Congressional Budget Office for the United States and they estimated that for the next ten years the cost of living increase is going to be average 2.4 percent per year we compared that to what our contracts say because if if our contracts say that we're going to give 5% increases who cares what the cost of living is that but the they were lower so we went with a higher amount of the 2.4 percent we did the same exercise with the Board of Education we had 2.4 percent but their contracts gave a higher percentage than that for the next 3 years so the average when we

053do a weighted average of the salaries at the different rates it was two point seven three percent so that's what we used was a two point seven three percent and you have that in your packages the the actual calculation can I also jump in there our average increase in the last three contracts was about two point one six percent each year it's outside yeah for all of our union employees for payroll taxes that it's an easy calculation on the town sides seven point six five percent we pay unlike a commercial enterprise we pay reimburse the state for whatever actual unemployment that we have so I put in $10,000 for on potential unemployment costs that we haven't had them but they could be there for the board of education whereas estimating the same percent increase we

054couldn't do the same calculation just because teachers don't pay Social Security so it wouldn't multiply out properly for the payroll ensuring the health insurance that we divided that out because it usually adjusts at a much higher rate we have a consultant that we use for that and the consultant was unable to give us estimate so they don't they don't share estimates of what they think the increase is going to be that I come from a commercial side where the increase is always in the double digits the consultants said that we're on the state plan so the same we get an economy of scale there it's never been in the double digits and so five point one percent is the estimate based on the two years we've been on it's just the average of what it's

055increased over the last two years and I say one of those years it was a decrease that I have never seen that on the commercial side and then we had to look at everything oh that we have to look at the pension that we have it increasing the same as the payroll we've been funding the OPEC for $200,000 a year that education has got some revenues that office offset their expenses that in this we're estimating and again you have the option to change any of these estimates on the Excel version we're estimating that it's not going to increase at all even if the expenses increase that the big the bulk of this is the special education excess cost reimbursement and years ago it was a straight you know you got a hundred percent of the

056calculation now you get four and a half percent or four point five times and then it's prorated for how much money the state has and so it's it's not going to go up that but that's the bulk of what is in here I think that's almost 800,000 of this and then everything else everything else we assumed would increase by the by the cost-of-living adjustment after that we have the annual capital expenditures that every year we have expenditures that are for replacing trucks and replacing equipment that it does not this does not include big purchases over a million dollars such as radios for the police and a police station in a library and four corners that and in working with this that we have funded this year we funded 1.2 million dollars of expenditures there over

057the last five years we've averaged 3.9 million of these expenditures the balance we have funded with debt it's it just it seems that we are always struggling with the capital expenditures and we don't think that we've been we've been funding enough of them two things the total isn't enough and the amount that we're paying in cash isn't enough and so as part of this whole process we want to resolve those two issues that so what we have said is that we have set a target of funding five million dollars a year that there was a question that a statement that that seems high that it does seem high but if we're honest of compared to where we've been but we're honest with ourselves it's not high that that we've got the board of it has

058hired Tecton to come in and give them a real assessment of where they stand and what it would cost and that's going up significantly that I had a the last capital plan is February of and in that budget the we had a ten-year plan for the schools when we subtract out a new school the thought was that there were going to be capital expenditures there of approximately eleven million dollars when we have it professionally done the expenditures are going would be estimated closer to 50 million dollars that they went through each school they went through each system the board of it can talk more to this to try and find out what is a real number that we could think of so we don't think the five million is too high that we have asked

059each of the department heads to update their budgets at their their ten-year plans yes I just don't think he walks here you know Marsha hasn't been here about four months and we've talked about this at some length but I don't think there's anyone on this board or on previous boards or residents who would disagree with the fact that Brook Hill has consistently underfunded our capital budget for maintenance for maintaining buildings for doing things and this is an attempt to recognize that problem and we kind of have a backlog you know you guys get a capital budget request every year that we just have to slash well we're trying to address that with this it's not gonna be perfect but it's gonna get a long way there and our goal is to pay cash for everything

060except for huge huge projects so we're not constantly adding debt so what we've done in the past is we've taken that we've paid and this the 19 we're paying 1.2 million in cash and took out debt for the rest so we need to increase what we're paying in cash and so in this projection we're trying to increase it by five hundred thousand dollars a year and again that's just a number that we came up with in the Excel version you can play with you can make that number any number that you want that that we're also trying to how do we get there faster we've got some new development specific projects that will be adding a lot of money to the grand list and we'd like to dedicate that money to funding capital projects the

061the recurring capital projects that we have three companies that we were watching as we went along and paperwork has been signed for company a and Company B Company C there has not been paperwork science so we took it out that so you can see that the the debt if we were to do this we would have had to fund we would have to fund 3.2 million next year in debt but that just keeps decreasing year after year until we get to year 2025 and in that year that we're not taking out any debt that and that's really what our goal is is to take out debt for the major capital projects and not all the small ones it would be similar to company 20 21 through 23 have a tax abatement on company a agreement

062in place that we finalized today and for Company B there is no tax incentive okay so that's just partial completion and a focal patient thank you and then so we have to look at the debt service without the new schools on this page that we have current obligations for debt and that's just taking each of our obligations adding up what we're what we need to spend an interest in principal we did subtract out the water debt because that's paid out by the users that we have bond anticipation notes that are turning into a permanent financing tomorrow that and so we'll have debt service there that we have this these capital projects that we just talked about that we generally have been doing bond anticipation notes for three years and then moving it into permanent financing

063so that's the the interest in principle the negative amounts our premiums that I believe we're using a 3% premium we just received a 10% premium but but municipal bonds generally do have premiums on them how does the 2019 forecast a debt that four point zero two zero million how does that correspond to what we have in the budget four point 1 1 3 million for debt service I'm just over budget based on that that does tie out to the budget I think I took one of the expenses and moved it someplace else but the whole 19 ties out in total that I'm trying to remember where I if I move to the financing expense why it's a little bit different but the 19 ties out to the bottom line to the 5 is the then

064we have specific projects that that police radios police buildings library building and screen streetscape that would generally be accounted for separately that with a separate bond package and not part of the the recurring debt so those are in here and again the model you can change it so that you can have it say yes to it no to it have it start whatever your year you want we tried to put in our best guess of when we would do that that we do have an advantage that the current debt that we have drops that the debt service for the current debt is 3.2 million in the year 2020 and it drops to just eight hundred thousand and 2027 so it's a that's a huge benefit in trying to fit other debt in when we looked

065at this we we look at the debt service compared to the budget and we had about 6% we know right now without a new school compared to the energy senator house 20 pounds it's 66% is their current and for all understand just as an average that the new school that we will save on their recurring of announce that we have for repairs that that when we talked in October we used the tech on numbers and we said 10 years so that service of spreading that out for 15 years the feedback we received was so assuming that we're gonna spend a year to do that what we would have saved that we have got the energy saves we talked about last time that and there as we started that and we added and then here as

066a goal was to have it tended as 12 percent in February PowerPoint that that is no war that intended to go out first and we do have is we we we worry about that we never really adjusted to the [Applause] is the state there's anything I just did a decrease in the city money there's a tax revenue that the same way and we have a variable here is the brand listen grow without those new developments in the past 1.5 percent how much we've grown in the last five years in a year the average is 29 percent that and not having anything that sways using we're about us so the impact on the taxpayers without them that we've got in the middle rates that you can see an increase in here that it is very you

067can see that how much they the one the line increases and increases each year in dollars to give you everything that to help you understand the impact that we the session is house of taxes increase every year we can't compare five years down the road to what we're paying today so we assumed it's done an increase like possible living and then we did a cumulative impact of how much increase would it be over and then we can compare it to the DRC but right now we're 148,000 and lower than the average tasks for that group we can continue even with the news tool to be lower every year when you understand I was hired today oh wow that that this list of the bounces of the dead at the end be needed in the years

068and an economy parents total debt with the general fund budget and then what percentage of the budget would need to pay off the debt at the end of 2019 is 60% it does fighting I used to do I'm here because I think five years is over [Music] getting rid of that person for three years and then that and we just see the energy the energy group and how we came up with the the averages and and there were some outliers that it's tough to for example Greenwich and one of them their mo rate is 11 that maybe we shouldn't use that in our averages that and then this is again that the bottom line is the summary of the taxes that it would be for a new school that this is isolating the school just

069isolate the school's not including 2.4 percent everything else and correct - what have you for salary and whatever correct so this is just a comparison of the new school and these are per year and then that so we can talk about the finances and just want to recognize that finances aren't aren't the be-all and end-all that there's a lot of other things that you have to consider the market value of of the homes in Brookfield that the impact on if we can use this to get better commercial and residential development that the education of the students and hiring and retaining quality teachers administrators and staff I know that coming from public accounting I never had a client come to the office but we had really nice offices because we wanted to get good staff that

070does it does make a difference any questions on any of that hey Glen did you have do you have anything on the phone I know it's kind of tough from there good oh yeah I was just wondering we talked about the the economies in terms of the energy and that the older buildings are grossly energy inefficient Steve you mentioned that yes so I just wanted to maybe I just wondered are we going to the layin natural gas lines for the school or what source of our I don't think that's in the budget and just naming position if you don't mind Derrick Brad with consulting and hearing services working with Tecton on the study for their school we've been in contact with the gas utility there is a natural gas line approximately a mile away that's

071gonna have to be assessed as you get closer to the actual construction or the design of the project but it's it's a possibility to bring natural gas that would have a tremendous energy savings to the school we're trying to get that at them right now they have not given us any good estimates you need to do they need to do their economic analysis in order to give that cost to the town of what it's going to be I'm sorry could you speak up a little bit does the town bear the full cost of laying those gas lines no typically I think when they do that that put the gas line in if we want to bring it in just our building where I understand we'd have to pay for it but then anyone who hooked

072up along the line would then pay us back that's a way to do it so you might get some sup revenue back on it oh absolutely if people would I think people would very much like to hook up the natural gas because I think you guys would agree that to be reliant on oil delivery and and everything else cuz we just had a very severe storm I'm thinking the delivery of a power source that is not as vulnerable to weather crisis no you are correct natural gas a very reliable source so great I just wanted to see what that might cost and if that weighs it thank you thank you uh you should know Marsha just said to me the the $250,000 that's in this budget as savings does not include natural gas so if

073we brought that line up we'd have the cost of the line but then we would achieve some significant savings on the price of the gas so yeah for sure that it's cheaper than the oil mr. Ramos yeah what have you next you next alright so I have several first I want to say you know I spend all day every day looking at projections and business models that the works you put together your schedules just absolutely fabulous it compares I compared to any Harvard Business School CFO report that I that I say so thank you that was the open education it was this is important yeah I also spend all day underwriting and challenging these business plan itself ready the first question I have and I laid these out the premium to the bang for the

074dance and the nine hundred twenty two thousand dollar positive impact to the upcoming budget year can you explain how that's calculated and whatever business don't wait we tried to use the exact same numbers that we used originally which were from our bond Advisors hilltop advisors they had estimated because we didn't want to think that we knew more than they did and the change there's that they we had estimated what if we did half of it in year one which is approximately thirty million and a three percent premium so that's where we get the 9:22 that was the premium estimated nine three percent of the of the debt that we would be financing that and that was we would do thirty million in the year one and sixty million and year the full sixty million in

075years premium is typically calculated and it's part of their offer to us and what they what what the bond the people who buy the bonds the eastern banks etc they want to be able to sell to their clients at a four and five percent interest rate right so in this bond issue we're putting out tomorrow the interest rate is five or four percent but our true cost is three point two nine percent because they give us a premium back so what it does is it lowers our actual costs but it allows them to sell those bonds saying you're gonna get a 5% return for the next 20 years that's why they do it and they make that decision as to how much of a premium a ten percent premium which we received this time it's

076almost unheard err but it can happen it did happen and in looking at what we did with this bonding for tomorrow that we might challenge them a little bit to say okay you said three percent and but that was on bond anticipation notes we got very little on bond anticipation notes so maybe we should reduce it in year one and year two and increase it in year three however in just talking all of this out that 10% was hugely unexpected appearance as well because we didn't quite know what to do with it and talking it out will be putting something in future bonding packages so that the premium is less and and the we would just reduce resize it like we did this time I questioned the modeling impact of that one-year huge benefit and

077how short it is I mean it's coming out if it's real we're gonna be talking about it in detail in March right because it's for this coming budget so is that something that we should rely upon we've never put the premiums in the budget that because we can only use them really on interest that I would think we would be better off taking our experience now and and seeing if we can go back we can don't ask if we can and going back to hilltop and saying hey this is what happened here on for these premiums we would like to see these estimates similar that what if we limited the premium and we didn't have much of a premium on the bond anticipation no should we rework those and see what their what they call

078their desk which is apparently the people that that do the estimates what their desk thinks now you don't have enough lies well please do my next question was the assumption that we're going to be going 30 years on a level payment schedule do other are there any other towns in Connecticut that have that type of borrowing no no and the reason is that 30 years is brand-new that it was a public act in 2017 so there's possibly some that with their financial statements at June 30th so this is the the first time it's available to Connecticut to do 30 years that we did talk to SNP in our rating call to say that we're thinking of maybe doing this for 30 years what would that how would that affect us and it was like why

079are you asking me this that apparently he didn't know that in Connecticut we had a cap on 20 years that and you've got does yeah you know if you look at the output the analysis that they did in their very final statement on outlook for the future SP said you know we've discussed with the town the possibility of building a new school we called 20 years 30 years right they said it's not necessarily true that we would lower our bond rating because unless three things happen one you have poor fiscal management to your debt mix changed drastically and three you're eating into your reserves to pay for the debt well two of those three we're not going to do I think we've got pretty strong management Washington is a perfect example of that we're not

080going to eat into our reserves we'd never have in Brookfield except in emergencies so two of those three things are not going to happen so that would lead me to believe that SP you say listen Brookfield you're strong enough you as year in 2018 we're gonna have unaudited ten point five four percent general fund balances which we plan to grow so if we don't do two of those three things they would look at it as okay we know you're getting a big jump in your total debt and your debt load but you're managing it and you've got a plan to manage it and that's what's critical that it does that your question there's a few more pieces to your question as far as the the flat debt service that that is not common in Connecticut

081that it does happen but then this was me again asking hilltop advisors that it's common in Rhode Island I don't know why but in Connecticut it's not common and the reason it's not common is it it's costs more money because you're not paying the principal as fast so there's a greater cost we used it in here because we don't think we can afford the paying the principal faster under a flat principal payment that but that would be a decision that would still be open that would happen to be made with respect to the bond rating I have to elaborate a little bit of what I said at the selectmen meeting because again I you had given us the questions and I talked to hilltop advisors today to say okay tell me some of these answers

082because he's asking me about this January presentation and could you send me that presentation that in September they had said that this would not affect our bond rating however we after we what I should have remembered in September we had a Moody's bond rating that and they don't see in their forecasting that it would have affected the Moody's to bring it down we would be really close to the next level down but but we would not be down so it wouldn't affect the Moody's bond rating since we met with them in September we hired SP to give us a bond rating because they were cheaper that and S&P they didn't didn't expect it affect that bond rating but they didn't expect us to get triple-a is what we got so she said that because what

083they would have expected was the next level down they wouldn't wouldn't have affected it but now that we went up it probably would affect it with the quest next follow-up question is how much would that have cost us in the bond rate the bonds that we just did and in the bonds that we just did they went back and looked on the same day and what the difference was between the r rating and the next level down and it was 3.9 basis points it would have affected us by $54,000 usually when you borrow money you don't want it to be for the so that's a borrowing to last longer than the lifespan of the building and I know we don't want to end up in 25 or 30 years in the position that we're kind

084of funding ourselves and now where we have unrenovated skilled schools that we want to do stuff and I believe in one of the meetings that we had with the strategic steering that kind of the expected lifespan before it is more around 25 years sorry we did look for that eight year borrowing capacities to match our lifespan belly did Jeff was in ski principle of Tecton architects yes we didn't speak to that and by state we have to certify a 2025 year building systems this building proposed will last 30 30 35 for 50 years and then between the 30 and 50 year range the expected useful life of the complete building is in 40 to 50 year range but you will have to replace systems in the 25 to 30 year right click buying a car

085it gives a certain point you say it's not worth putting any more money in it but we anticipate this building would it's just that last 40 or 50 years it's interesting that a 30th at 30 years is common on a three one thousand dollar house but it was until recently I'm not allowed on a 50 million oh that doesn't mean yes it's kind of hard Yeah right and I think the state has recognized that these buildings last a long time because we are maintaining them every year by law we have to maintain for a lot of the system's emergency so I think using a 30-year balling is reasonable that's what necessarily against that it's just the big first is never never find for a tiny little town people and we appreciate the questions up front

086so no this is this is not meant this is meant to information-gathering so yeah absolutely I think the next one was the detail on the new development projects I think we cover that next set of questions is in the category of trust to verify and there's been some statements of fact or assumptions in terms of what cost savings would be realized in some of this so I'm looking for as much detail or documentation to verify the assumptions on the energy on the operations well I think you got the Excel spreadsheet that showed the energy savings right from the Board of Ed and Colette would you like to come up and speak to the administrative savings I know that's an issue that operation cities let's turn for chair you're looking for the operational savings I was

087looking for as much yeah I know that we yeah there's anything you fellas yeah it's estimated an approximately two hundred thousand each year and that is a combination of consolidation of staff and then a redundancy of operations and maintenance that you would have we can't at this point have a breakdown in the consolidation of staff there's there's unions and contracts that we're dealing with and we're talking about something that would happen four years down the road if it passes through record if you know if it's approved by the Board of Finance and passes referendum so it's not really appropriate for us to exactly put someone on notice for years in advance but we are confident in estimating that to me about 135 145,000 that's including on the salary and benefits with it the other savings

088is achieved through furniture savings that we have and less maintenance we're not we're not having to maintain older buildings so we have definite consolidation with that as well we're not looking at this point at a savings and busing because I know there was a question asked that why you know is busing included in there we figure there's too many variables at this point to put that in there we are going to have fifth graders in that school so there might be more bus runs because there is an extra grade going to the school at the same time they're all going to one school so we will have one additional school off line so that may be offset but there are just too many variables that that is not included in there if we do have

089for cost savings that would be on top of the 200,000 in estimate I understand both the sensitivities of of what we're talking about as well as the difficulty of mains assumptions and estimates for years out so I'm just curious how examples not even examples up at you but I just want to what I want and in your work in at the board and then your executive sessions are there specific more specifics that you have that you okay that's all it's not just an estimate that we did there there's actual specifics with staffing that's very helpful thank you anything else for the chair so some of them will be one-time savings Colet and then some will be ongoing savings no no the 200,000 is in the annual savings soaping so as is the energy that you

090had thousand energy savings is annual and then the operational staffing would gain additional two hundred thousand okay and and Marsha did build that into the to the objection thank you I just had thought John maybe John can answer this if we do go out 30 years John for the long-term debt portion of this a change in ratings during that time period doesn't have it effect on existing debt right it would just mean that we might pay more for our newer financings right right so what Marsha was saying so the difference between a triple a municipality versus a double a or even a single a doesn't really seem to be that many basis points so additional interest expense yes but the only thing that like 54 basis points you mentioned 50 not $55,000 difference and the

091a traditional interest expense is relatively minimal I was there for Mason's difference right thing for 30 years versus let's say 20 right so you are gonna pay you are going to be interest over a longer period I said we go with fixed-rate we don't take variable rate so once we said in the mock in that's it that was as of the day we locked in these rates that they gave us that those differences that back in that January presentation from hilltop they did have a graph that that changes day by day that what the fluctuation between the ratings would be okay so if you could just clarify for me than the $54,000 debt service difference from one rating to another is on what balance it's on 17 million dollars over 20 years that the the

092one for some reason they don't we tried to get an estimate and they only like to estimate based on very specific well they could only give it to us as of the day the that we closed last week okay and what was outstanding as of that day 17 million okay gotcha triple 8 the double a would have cost us $54,000 more on that over 20 years on that day got it thank you John so I was just just point out to me that you've already answered so the next one is maybe my first controversial one and that is assumptions for what's gonna happen to Center School and I I feel that not including any expense for that in a 10-year projection is understanding the expenses that we expect to incur on a material basis I

093think you make a very fair point in this presentation we did put in the full amount of the library as was proposed in the last referendum ten years out it's it's back ended it's at ten years out there's no doubt in my mind that we're probably here's what I would like to do if center school is closed we can immediately use it for a lot of activities you know for sports activities so Parks and Rec the gyms are great they work just fine or you turn to eat up on the weekends whenever you need it some of the rooms can be used as is just fine groups and presentations but we really need to as a town center it's very very important to a lot of people in town see all this wouldn't school still

094in use in Connecticut that is a lot of history and a lot of tradition that we want to maintain and put our arms around so I would say we would form an ad hoc committee to look at the possible uses of center elementary school right including the library because that's in a lot of people's minds and if we've got a partial building for a library I think it would be something less a lot less than fourteen point seven million dollars come up with those uses those four or five main uses and I think sports community activities would be one of them and then we'd have to hire someone who say okay hire Tecton or another architect to say what would it cost to do this in this building so we don't want center school to

095sit empty for ten years that's a total waste of time and I don't think from day one we'll be using part of that building but in order to get the most effective use out of the building we really have to do some so you raise a fair point then that we would have possibly spending before the end of ten years let's say five years from now we want a new library well we'll have a much better idea exactly where we are in this projection and know whether we can do it or not you know it's very hard you can throw numbers around and play with them you know you can you've got the spreadsheets you can play with it but that would be our answer I agree with you leaving a building empty for ten

096years it's not a viable solution and I don't think we should do that no expense on center school you're you have in there we have fifty thousand dollars you know just you know eat it do basic maintenance for relic now now if we started using it for other purposes yeah those those expenses were going yeah that's I mean that's incremental that you can finish yeah it's the big you know we're ready that you're already in 2022 to spend three million dollars right that and that I I know I struggle with how to model something like that without stating you know tie your hands cuz he put it the model but without putting the model then then how much is the model really worth if there's a major expense that's gonna drive taxes up two percent

097in given year and close this out yeah it's a tough one but I think what we should do is we I mean you guys can look at this and play with the numbers play the interest rates and do that and do various scenarios but go ahead and pick where you would want to say spend five million dollars on enhancements at Center school and see what it does to the numbers right but as we get closer to that we'll have much better actual numbers what has been our rate of increase in taxes what has been rate of growth in the Grand list what are we actually paying in interest rates right on these borrowings so does that answer your question as best as I think it's possible very much the superintendence points out was there a

098text here that that the school does charge people for the use of the school that they used to go in that pay-to-play fund that that for custodial fees when they use that so they're so it's not a hundred percent of the costs that we would have to pay but obviously you know like yeah if you had a sports group come in and using the gym for eight hours on a Saturday I think the schools would charge them for that it would cover the custodial costs the eating and then something towards maintenance and improvement of the building I think that's a very reasonable thing to do it I think there are groups who would jump on that especially in the winter where they need practice space I think we'd have that place rented out every night

099of the week and the weekends I can see that covering at least the incremental yeah at least I think that's fair yeah keep fun you going sure all right the next one about the five million dollar annual capital expense in the increases I think you covered that pretty well other presentations of anybody else's aim just start thinking that we have to get away from borrowing every year for capital yeah we just do or we're gonna eat up our entire borrowing capacity and who knows in 15 years we may need another school it might we just can't do it my biggest point there is the discipline is going to take to to dedicate the incremental taxes to this purpose and not throw to it there's a risk of spending incremental taxes three or four times yep

100it is saying to Marsha's point earlier where the town spent the same money three times right I don't want to do that I think you raise a very good point there dude is that as policy if we're going to do that we set it as policy at both the Board of Selectmen and the Board of Finance and it cannot be changed without changing the policy so what is this project in addition to the bonding that's still going on for several years what does that do to our capacity my borrowing capacity is it eat it up for a couple of years all right I would not want to take on any debt if we could possibly avoid it but we can't avoid it though I know it was a few thing so over the next three

101or four years that's like was it seven eight or ten million in small projects so I think we could absorb that if you look at what the state allows you to borrow ours is some like I'm talking about no we're gonna we gonna price people out of town because we still have to do small things plus a school right plus 2.4 percent other you know increases and whatnot so we we want to be very careful than very smart about what we do and get away from the borrower use more cash and one of the things that we looked at and when we're talking about what we can do and what we can't do it's all self-imposed we did go through and the state has a debt limitations that of what you can spend and we

102were going to incorporate them into our projection until we saw that we still could borrow two hundred million dollars more that those limitations are not very limiting so I think when when hilltop did their study that January presentation I think it capped at around at ninety million right and that was for all the projects and everything and we had to pull out of them you know hey what what does this number mean and that was really it was that was it wasn't just the project that was it you know it was a bit of an appeasement to say sure if there's everything there you know you can do it sure you could do it you could do it but is it a smart thing is this 63 million on the books for debt going to

103make it so we can't do anything reasonably yeah I would make two comments in that and one I've already said earlier we can't afford to do nothing here and the question becomes do we do the right thing the absolute right thing or the other is renovate and you know if we renovate us new for fifty three million dollars it's not gonna end up at fifty three million dollars they never do and you're only gonna get about John eighty percent of what we would get with the new school right Jeff so for an incremental twenty percent more and you're not gonna have your kids in construction for three years a whole grade if we renovate his new will spend their entire Elementary School in construction and if you find asbestos all bets are off all bets

104are off so and in the second point there is there have been towns and you can go around look at it Bethel's doing it now richfield's done it where they have when they build a new school project they go well over 100% I told you the Richfield was one hundred and forty five millions in debt on about an 80 million dollar budget that's about a hundred and sixty percent so it does happen and the rating agencies understand this and our discussions with standard inverts and Poor's they understood it that you occasionally have a huge blip and it's always a school because that's the only way you can do it you can't build part of a school can't build half the school and then five years later build the other half of the school rating agencies

105are important but not they're not weight this I equate radiating season and put them in financial plan for the radiating diseases and teaching to the test in that you you know you're solving a particular problem you're not taking okay I get your so but towns have done this many many times and unfortunately is just some way we are you know if we were really really well to put ten million dollars a year away for a new school and build a new one every year to your question will it affect us on other things absolutely we're not we don't have an unlimited supply of money that so if there are other things we need to do we need to know about them now so that that the school was asked can we wait to build a

106new middle schooler or do huge improvements to the middle school for tenth the next ten years can we wait and to do big improvements other than what's in there that to the high school for the next ten years and and yes that both of those are further than ten years out an emergency which case unless you need to need financial flexibility or a 10 year capital plan we've looked at that before we have our you know we get the capital budgets and we can see how one that's the main reason we are proposing to get up to five million dollars a year in capital spending to to start taking care of all those things so we're not an emergency situation well a sudden I got a two million dollar hit or a three million dollar

107hit and we believe you know I'd prefer if I had my druthers I'd like six or seven million dollars a year for capital we don't think that's reasonable at this point in time but to build it up to five million dollars a year is really gonna take a lot of the pressure off of the backlog of capital projects that we haven't done and turned down I mean come on it's kind of crazy to have a 22 year old truck who the frame is rusting out and we have to put that off for a year include the roads issues and you had asked about the 89 or 98 million dollar in the january presentation when I asked cuz I talked to hilltop today with Dan's questions most of them they put off and someone else has

108to answer for the that she had forward them them on but I would like to understand that a little bit more because from what I can see that they took our debt at that time our bonded debt plus these projects that were in there and added it together to get 89 or 98 million whatever that was super Mo's but it didn't include the 20 million that we're bonding tomorrow that I know that so it but the conclusion then was that the night was was a decent calf and now were blowing through that so my question my question is what metrics should I have my own my ideas but but I'd like to hear from others what metrics should we look at to say these dead numbers are now even though they're thirty million dollars more

109than what we were looking at in January why are these now appropriate and what number would not be appropriate if what related this model we're saying to if you're telling us and we're agreeing is a good number and we're gonna tell the public it's a good number what number wouldn't be appropriate why I think if you started getting up to a debt load you know that is a percentage of your total and this is all subject to opinion sometimes have a fifteen to eighteen percent debt load these give you start service debt service if you start pushing up that high we every time you're tightening a little tighter as a handcuffs around your hands on projects you can do if you're fiscally prudent so 10 to 12 percent which is where we are with this

110seems reasonable we'd have a couple years here where we would not want to take on any other big projects but then it starts to come down you can see it comes down pretty significantly and gives us a little more room at the same time we're going to try to be very very careful to manage to our budgets so that we're able to come in under budget every single year like we have for the last three years and put money in the general fund and I'd love to have a 15% general fund because then you have a cushion for a big project for a big problem that's where I'd like to see us get so I theory two key numbers are general fund percent and debt service and it sounds like that maybe what we should

111do is for your next meeting bringing draft policies for for a fund balance policy and a debt the debt policy theater look at yeah III I'd started somewhere in a debt policy the fact in the spring I'd be happy to I think that's a good idea don't buy me a damn hand the day you guys have to look at the P no yep yeah don't don't worry about that now is she really great well I think so I really if you're trying to determine affordability you got to look at impact so what number is too high that's when we start going beyond that 12 percent cap on the debt service so I think that part of the problem is that that we're thinking like a business would think that and I shared this with you

112before the meeting that I was on the committee we would have we had this big new reporting framework for governments where we have a full accrual balance sheet and a full of pearl income statement that came in with gatsby 64 in 2004 so it's been 14 15 years and as auditors we spent a lot of time making those statements up not making them up but but so we would we had twice now sent in the last 14 years as earlier latest three years ago when we had panels of rating agencies and we said what is it that you use on those the full of cruel financial statements how do they you incorporate those into your bond ratings and the answer is scary they don't look at them that and that is exactly opposite of what

113should happen that they should look at those from a corporate standpoint yeah and which is where I company you know the the debt service is the annual that's you that's your annual number but the leverage on the balance sheet is pointing to your is overall long-term health and are you squeezing too much out of your assets you have to show someone exactly exactly and so the the the debt to budget and the debt per capita is a bit there's a pretty interesting metric that is fun comes into play though if that all helps with our liquidity that would tie our hands with other projects were you thinking about the police station when you mentioned that all right police station there's all sorts of fire apparatus air land sea and that stuff is not factored in

114their years in their radios are in their potential there have this new school you're absolutely right I have a question for Tecna if the conclusion of the Board of Finance was yeah we we absolutely needed to build a new school but the number that is presented at least 15% too high when you do that 15% I'm just throwing a number out there and just asking hypothetically how would that impact the design what would be removed if you had to take ten million dollars 15 whatever whatever the number what what's the order of program elements would have to be cut the square footage of the building would have to be reduced you could also discuss elimination or reduction of site amenities right now the current conceptual plan showed basically the replacement of two new fields and

115a potential kind of soccer field overlay so you could talk about reductions on the site and reduction to the building which would mean a reduction of the square footage which would mean a reduction and program elements and most likely that those would come from specialized teaching areas because you need general classrooms to house the number of students so things like specialized labs and innovation labs or maker spaces and art studios those kinds of spaces would have to be looked at in addition to there's probably some efficiencies that you could find within the building itself but you wouldn't find all of it and just inefficient buildings so and dance at that point I think two considers that there are maximum allowable square footages veteran state mandated so it's not like they're building something that's overgrown it's

116it's too a there's a limit what the state will allow to be built without having additional costs sued by the town yes yeah I think this grandiose building it's really meant for a based on the number of students in grades and any things in even in doing that I think Collette said at the presentation we're not building a Cadillac here we're building a nice middle-of-the-road school that is gonna meet all of our needs right but there's I don't think there's any extra frills here nothing so I would be very concerned based on what we did with a high school project of cutting and cutting and cutting because you're not going to get what you want you're gonna regret it for the next 20 years and then you're gonna fix it by spending another ten million

117dollars that's my opinion what measures are gonna be taken to deal with potential budget overruns there's something you know well what are we gonna have in place to make sure that does everything is kind of kept on track um these guys get I've been discussing this and here's my opinion we're gonna hire an architect we're gonna hire a general contractor we're gonna hire an owner's agent who will only look for our interests and manages under the auspices of the municipal building committee um the municipal building committee you know we have two architects on it it's just too much work this is a full-time job and we didn't do that in high school we had six chefs and no regular workers so we've been very very careful and I think Colette and Jeff and guys can

118talk about this a little bit more but we have to be very disciplined about how we do this and watch this like a hawk day today today and hiring an odorous agent really does protect us because they're gonna be overseeing our interest that's only do they work for us general contractor is there to make a profit the owners agent is there to make sure we get everything we pay for at a reasonable price and then we're also gonna have I think somebody internal just to keep track of all the records so we don't have the tenure fight with the state on the reimbursement to your point Steve I just wanted to ask the architects then so built into your cost scenario do you have a percentage for overruns yes yes there's in the total project

119costs there's about an 18 and a quarter percent of that number that you see the total numbers associated with soft cussin in that our contingencies for our construction contingencies typically it's in about a five percent range of the overall for unforeseen conditions if you run into unexpected conditions on the site so there are the budget that's proposed has allocations for not only contingencies but for owners project managers representation pre-construction from cm to be involved early on so the best way to have predictability is to have a team oriented approach early on so that every every meeting every discussion is based on scope budget and schedule and that would be the approach that we would recommend and have built into this this project and that's what you have built into the 18% in soft cost yes

120okay thank you for clarifying thank you thank you thanks a lot Steve do you remember what the New Milford High School cost when they yes New Milford High School cost forty five million dollars including the land they built that about the same time we redid the high school for 34 million and they got a whole new building so that was like 10 years ago 15 2 times 6 2001 we did the high school okay I think the next thing that we want to move to the last page the accountability section [Music] so alright so we're three boards lots of found employee has different departments all signing on to to a plane right and it shouldn't just be on the Board of Finance to make sure that the budgets are being dealt with in the parameters

121that are being set forth here I hope that there's buy-in from all departments all boards to attempt as this.what as strongly as possible to live within the numbers that are here I understand that you know five six seven eight nine ten years out is tough to predict but one two years out shouldn't be hard to predict so so I would hope that there was an agreement among the three boards and the various departments that the numbers presenting presented here in four generally in the three percent total increase than expected in an expense range for the next three years three let's all buy this card budget for a first I mean 60 days for now we'll be getting a budget is it gonna be in these ranges or is he gonna be blowing out of water

122we're gonna have you forced to cut it back to this I don't see anything that would blow this out of the water unless the state cut their grants to us under spite of time you know those are outliers I think I am comfortable that the budgets we put together are real and can be achieved I'm very confident of that I know sue Slater is also confident of that I haven't discussed it with Harry Slater but I think he would be also the Board of Finance has to look at these numbers and look at these proposals and projections and say do you believe these numbers are real right we think we've been very conservative we're using high interest rates we're using you know across the living a 2.4 percent all these things that you see none

123of them are you know trying to skin the banana and to get it down to three percent by using on crazy numbers so I'm comfortable with what we put together and I would commit as a First Selectman to stay within these numbers personally unless there's an outline because things sometimes change I think you have to talk to board Eric if we could have a similar conversation with we can't I don't think as a town or community or three boards I don't think we can run the same exercise that we did earlier this year it's just I don't I as in our the the chair of this board will not entertain such a such an increase like that and I wouldn't advocate for it either on any really on any stage or platform so like Dan

124just mentioned we need some sort of buying or commitment that there's got to be a damn good reason and he'll have frozen over to entertain the same rigmarole that we did before because with this coming up that just can't happen I understand that and and as I had responded down to your question and this was actually I haven't wasn't able to consult with the whole board of course because I you just had about but I did consult with our Finance Committee before I did it and I had taken your question to be ridden commitment to you all and to the public and that would be disingenuous for us because as much as as painful as this last year was there was no way we could have controlled the increase in the special education cost and

125if four years down the road we get an unfunded mandate to start universal pre-k there's no way we can do that within the 3% either so that was one part of it that it's like it I I can't control any of the contingencies that will come you know will we try yes the second part of your question was your you had asked that for a commitment for the superintendent to propose budgets that are under that and that's not the superintendent's job the superintendent's job is to relay to the Board of Education the needs you know not the once but the needs of the district in order to achieve excellence and promote achievement and then it's the Board of Education responsibility to weigh that with with what can actually happen so I can't I I can't

126give you a blanket statement on that aspect either I agree that's a blue the second part absolutely absolutely did you want to education increases by two million dollars a year I don't think it's an either/or I mean cleansing that every single amount that that is you know we have an increase that we're going to be passionate about and that's not exactly what I'm saying at all I'm just saying that I cannot give you a written commitment that we will stay within that you know what if the state decides to take away it isn't a blanket statement something crops up like a million dollars that we can't control we have 42 million other dollars on the backside that we may have control over and is the board of and willing to make some hard decisions to

127control that number it or is it just going to get passed on as special education as an extra million we got to deal with it did I jump in here absolutely the total cost of special labs was 12 students was 1.8 million dollars the Board of Ed didn't come and ask the town for 1.8 million dollars they dug deep and found seven hundred eighty five thousand is that right how much did the Board of Ed save on your own significant amount yes exhibit amount is the number but then only has to town for four hundred eighty five thousand which we did approved so I think there is a commitment on the part of the Board of Ed and its members to recognize that you know you just can't to the town and when they can

128they will try to absorb it within there thank you asking I think it's yeah he's it's a rhetorical statement I think come in such uncertain times in terms of what the state is going to be able to continue to do to afford to do and what types of things may fall on the individual towns in this environment I can see why it's a concern because we can't count on too much when the state is staring down a historical deficit yeah so that's that's what I guess I'm assuming that's what Shaun was thinking in and Dan and and Glen in terms of if our backs are to the wall and we're looking at that type of an increase on the school budget because of the lack of state funds how do we how do we deal

129with that how do we address it do we make those hard choices when they become necessary as opposed to putting the burden back on the taxpayers I understand the statement and I think it's being made in a rhetorical way and not looking for an immediate answer but just how do we deal with it and do we understand that we have to be very cautious especially after putting this expense on the taxpayers and I recognize and if that weighs your I do because you had said does the board acknowledge we do acknowledge it we very much acknowledge the fact that this isn't you know this don't go through no expense to the town and we do need to be very careful with the budgets with the board yes we do know what is seriously I have

130other questions yeah any guidance on what we can expect to see from you in January if it were for this first year budget I don't even know yet okay so I can't tell you okay any guides on your goal is Board of Ed chairman what you would expect to to see and um in again as I will tell you we do not we do not give guidelines to the superintendent we want to know the needs and then from there it's our responsibility to go forward with it Thanks I'm sorry I think I just I I can't tell you what I don't know thank you thanks appreciate it I'm done I peppered in my questions anything else Glen oh I did have one other sorry I pointed it out to Marsha earlier that the debt service

131numbers in the model are hard-coded so we can't play with the size of the school and see the impact on the expenses so I would like that to be updated every cent down possible so I have follow-up items of a draft at policy a fund balance policy the projection make that service on the new school flexible and may cost of the new school flexible to reduce it by a percentage in a random percentage on the making the debt service flexible do all four models flexible 20-year 30-year fixed principal fixed payment I could do that wouldn't you do want the rest it's just work okay thank you and there's an on lapsing to discuss that with the Finance Committee at the Board of Education I think this was good anything else [Music] we're running perfect world

132scenarios [Music] the model with it and on the town side I think I actually think the five million dollar growing annual capital budget is its provide some you know we're looking at think we did this for a 6% rate 6% rate which even a hilltop set is 100 basis points higher than they expect now if you think about a 6% rate tax-free is the equivalent in the highest tax bracket of a ten and a half percent return on an investment dan would you buy a bond that pays ten and a half percent guaranteed for the next 20 years my stock dividend yield is how eleven zone okay all right right but that's a fantastic yield that shows you we are being very very concerned they're in the half a percent on sixty three million dollars

133is about three hundred and sixty thousand dollars in savings per year okay model the reason we built it Glenn you can put different numbers in and play with it yourself and pick numbers that you think are reasonable or unreasonable stress test [Music] okay how's everyone feel about a meeting that's it the last week of the month is that enough time to digest Marsha for you let's say to turn some of those things around I'm not talking about the debt policy or that of a non-life thing but specifically there was a handful of follow-ups for this particular discussion you have time let's say in the next seven days well Marsha is gonna be out of the office in Hong Kong for she knows I'm sorry but the first week that December would be fine that I

134I'm going next week but I'll be back Tuesday after Thanksgiving which is the last week of November so but the first week of December yeah we just want to be cognizant if we want to get to you know we have that June 30th cutoff to get this to the state and for that we have got the full plans and designs and things so we really need that referendum done in March and we need 45 days before that to have the town meeting so just if we keep that in mind for your meetings that's why yes that's exactly what we're so first week of December is awful first we have any month is awful so can we just include it in the regular twosome so do you want me to just get you the new projection

135yeah yeah but I should be able if I'm not trying to get something we can advance of the meeting or anything if I'm just trying to get you a new projection for the last week of November so like that Wednesday or Thursday that Marsh will be back here for a couple days so then Thursday [Music] does anyone walk to if they need to is 20 check their calendar how's the 29th November 29th should be good Oh okay Glenn how can you - you okay the 28th looks good will you be on the phone you need to keep came to the 28th can you do the 28th on the phone okay then we will reconvene for this matter if we go the first week of March too late because they have to do the entire design

136of the buildings and there's a lot of documentation and supporting materials that have to go to the state that we have to be able to hire an architect to do that before and I thought you can't do it in four weeks June 30 is the hard deadline to have it all to the say yes otherwise you gotta wait a whole year a specific agenda her special agenda and time would be determined okay this was a fantastic discussion does everyone have I was right now the answers they were looking for there's some follow-ups and whatnot if there's any more questions send up to us we want to get them down and we're gonna get them in writing feel the motion to the next discussion to be had so I want to make sure that the public

137okay great all those in favor of moving public comment to the next item I hi all right perfect okay members of the public that like to give comments okay [Music] so other items to come before the board I understand that this might not look completely transparent that's because these documents were ready seconds before the meeting and preparing another agenda would have been against the law so we do have two meeting calendars that were prepared and presented the first meeting calendar that we have in front of us is the and Glen I can read these off to you I apologize you won't have this in front of you the 2019 meeting calendar and if we need to push this to a special meeting item that's perfectly fine if we need to coordinate schedules we have in

138front of us Wednesday January 9th Wednesday February 13th March 13th April 10th May 8th June 12th July 10th again this is the second Tuesday the second Wednesday of every month August 14 September 11 is in the forecast define October 9 November 13 December 11 are there any immediate conflicts that we know of with these dates and the time are we okay with the regular meetings at 7:00 are you for the regular meetings I can do seven [Music] oh all right ah yes I would I propose that we keep the meetings here at the high school Media Center I'm all except for the telephony I think this meeting space works well to entertain you know but I do like this set up a lot better I think it's it's it's better it's more professional so I

139move that the Board of Finance adopt a 2019 meeting calendar as presented for regular meetings at the high school media center to take place at 7:00 p.m. okay any further discussion and now in a much better way than I've ever done this is fantastic thank you Eileen has assembled the the budget meeting calendar for the 1920 budget now I would like to pitch this over to our first selectmen as I think the department's need to be notified and the schedules need to be coordinated [Music] however perhaps we can settle on right I think I think we'd settle on these dates and then different do you want 15-20 minutes we're changing we're changing the budget process on our side we're gonna use some units much more we're gonna give that a try and we're also going

140to streamline you know you saw last year we have one person give us age ages for $4,500 budget so we're going to streamline that and put a little more thought into it so that when we come to the board selectmen board finance here you guys need everybody saying okay I'm sorry we already decided we're less deep we're done so that we can come to the board and you guys have been through this already you know you know our standard budget things like that you know we've parsed this back and forth 600 times I'm not sure you're gonna need as much time to get into that detail but if the department's especially the capital crushed things like that we want them to give those good descriptions well keep in mind at any changes that a number

141of the board members you know save to this will only do their second budgets he's going through it yeah yeah we'll have we'll have full information like last yeah I just wanted a little better format little cleaner similar more similar PowerPoint template to use that just has more specific on our agenda [Music] oops worse if you don't have enough time for wonderful Department so the calendar we have presented before us some of the dates got a little reject right compared to last year we had some weekend days so guidance per council was to move them up so you'll notice that some things might be a little pushed up as opposed to have I think I see on here that I would like to chat about more would be the deliberation days I think three plus

142one is consistent with what we had before does anyone feel that we need not certainly not less on the calendar but more deliberation days or three plus one should be okay last year one was sidetracked by that's a snowstorm others right so yeah yes tillage I'm gonna build it we still got it done back then and I think if we start off like we did last year we have the the round table with or define and support instruction and a Board of Education I think that was a really good starting up point for the biggest part again I move that the Board of Finance adopt the 2019 2020 budget calendar for the dates as set forth here not only in the summary but also the detail for meetings to start at 7:30 here at the

143high school Media Center get a second always second thank you any further discussion on the calendar couldn't we just condense sorry and March the board of the regular Board of Finance meeting with one of the presentations or is it just inappropriate to just prefer that you come separating we can I mean we don't know exactly that these particular departments are gonna be on those days so we can shuffle those around sure so we just leave it for wiggle room but if we leave them okay we date it's just you know support let's see let's see a couple maybe early March how the business of the March meeting I don't have to talk about audit you know that will be a different story or stuff like that but yeah okay further discussion okay hearing none all

144those in favor of approving the calendar as set forth at 7:30 at the high school on these dates indicate by saying aye aye perfect motion carries six oh great - any other board members have anything else they would like to bring before the board so yes I am I wanted to regretfully say that I'm going to be resigning my position on the board I have had a change in commitments recently and due to time constraints I feel that it won't be you know I won't be able to keep up with the meetings the volume of meetings that you guys are going to need with all these major projects on the horizon so I've been in discussion with Sean and I absolutely want to support the school vote and if if I'm needed for that meeting

145or if you guys already have a quorum for that meeting I absolutely want to vote to support bringing the school project to referendum so I'm in discussions with Sean and the exact date for my resignation he and I will determine but I just want to say that it has been a privilege and an honor to represent the good people in this town it's a wonderful town and I think you guys are working on some tremendous advancements thank you to Steve and everyone else on the Board of Finance it's just been like incredible what you guys have done in such a short amount of time to you know develop the town and to increase our participation in the community it's just a great thing so I'm very pleased to have been a part of it this

146past year and regretful that I will have to to let go of the seat but I have every confidence that you guys will find a person of Merit to step in and and I hope that you do find someone in good time in good order but I'm prepared to serve for as many days or for whatever timing you need thank you thank you for your service thank you thank you yeah we'll chat about that okay great as soon as determined what the what the date is then shortly after that we will post the that there's a position open and applicants may apply and will go through that process and full transparency so we'll do that thank you thank you yeah so I did mention that there were some other things that did come up and

147Haley before the min so I would like to move the board into executive session to discuss the legal matter okay I would like to invite our finance director and a treasure and Colette's term sheriff before jet into this executive session gonna be hi son the man [Music] [Applause] [Music] [Applause] [Music] [Applause] [Music] [Applause] [Music] [Applause] [Music] [Applause] [Music] [Applause] [Music] [Applause] [Music] [Applause] [Music] [Applause] [Music] [Applause] [Music] [Applause] [Music] [Applause] [Music] [Applause] [Music] [Applause] [Music] second both proud of itself [Music]