Meeting Minutes

 

Title:               Budget Committee Meeting

Date:               Tuesday, November 01, 2011

Location:        Westport Island Town Office Conference Room, 4:00 pm

Subjects:         Recap of Expenditures from Completed Fiscal Year, Summary of Commitment for FY 11-12, Focus Area Status Reports for Summer Break Period.

 

Objective:       Improve Budget Committee Processes and Initiate Planning for Fiscal 2012-13

 

 

Proposed Agenda:

 

Topic

 

Type

Responsibility

Time

 

Review agenda and time durations and approve any changes.

Discussion

Consensus

All

4 :00

5 Min.

Action Item Review

Discussion

Consensus

All

4 :05

5 min

6 July Meeting Minutes Review

Discussion

Consensus

All

4 :10

5 min

Review Appropriations  Approved for FY 11-12

Discussion

Consensus

All

4 :15

5 min

Review Five Year Cost History and Mill Rate Impacts

Discussion

Dunbar

4 :20

5 min

Review Other Revenue used to reduce Commitment

Discussion

Partelow

4 :25

5 min

Review Cost Growth Areas from FY 08-09 to FY 11-12

Discussion

Consensus

Dunbar

4 :30

5 min

Review Summer Study Project Status Reports

  • Education Spending and Options
  • Depreciation Account Allocation & Options
  • Town Bidding and Contracting Policy Options

Discussion

 

Dunbar

Hopkins

Downer

4 :35

25 min

Public Comment

Discussion

Public

5 :00

5 min

Wrap up

Discussion

Consensus

Secretary

5 :05

5 min

 

Attendees:       Wayne Cooper, Curt Downer, Dennis Dunbar, Bill Hopkins, Stan Lane, Mort Mendes, Susan Partelow         

Facilitator:       Susan Partelow

Secretary:        Dennis Dunbar

 

 


 

 

Minutes from the November 1st, 2011

Meeting of the Budget Committee

 

The meeting was called to order by Chairman, Dennis Dunbar at 4:03 PM.  The following members/alternates were present: Wayne Cooper, Curt Downer, Dennis Dunbar, Bill Hopkins, Stan Lane (arrived late), Mort Mendes and Susan Partelow (part of time due to office obligations). 

 

We briefly reviewed proposed agenda and approved the minutes from our July 6th meeting.

 

The FY 2011-12 Commitment was reviewed along with the calculation for determining the mill rate.

As shown on the “Certificate of Assessment” handed out in the meeting, our net assessment was $1,851,695.97 with a taxable valuation of $264,527,996.  Page 6 of these minutes breaks down the appropriated cost into the major categories.  Details of the costs appropriated at the June Town Meeting were reviewed (Page 4).

 

A worksheet was discussed showing our 5-year cost history with space for a new 5-year cost projection.  This will be part of the Budget Committee task during the fiscal year ahead.  The goal of maintaining a smooth mill rate was discussed.

 

Other Revenue was an offset to cost growth last year, and Susan Partelow discussed the sources of that unexpected revenue.  She advised that interest income, liens, licenses and sweep funds amounted to about $22K at the time of Commitment and, when extrapolated, were forecast to be $44K.  In addition, $140K of “undesignated funds” resulting largely from the “catch-up loan”, were judged to be appropriate to allocate to reduce property taxes this year.  This brought the mill rate down from 7.81, projected by the Budget Committee to 7.00 committed by the Board of Selectmen.  Susan indicated that this allocation of funds would need to be approved by the legislative body at the 2012 Town Meeting retroactively.  At the time of commitment, approximately $450K remained in “undesignated reserves”.  Looking ahead to FY 2012-13, a decision on how much, if any, further funds can be drawn from “undesignated reserves” will need to be made.  Susan indicated that the auditor’s guidance was to hold at least three months of costs in reserve to account for the natural delay in collection of tax revenue at the start of the fiscal year.  This is because the fiscal year begins on 1 July, but tax receipts do not come in until September.

 

The growth in costs from FY 08-09 to FY 11-12 was reviewed to consider and focus on the most significant areas (cost drivers) of growth. The following were the top three (page 6):

 

  1.             Education – Appropriation went from $854,834 to $1,172,367 for an increase of $327,533.
  2.             Catch-up Loan- Added cost of $267,997 per year for 5 years
  3.             General Government- Appropriation went from $311,743 to $383,727 for an increase of $72K.

 

This assessment led to formation of three Summer Study Project Teams that reported.

 

Dennis Dunbar reported on the Education Summer Study.  Attached to these minutes is a summary briefing on the results of that study.  Although the RSU-19 Finance Committee is working to develop a more equitable cost sharing formula, no decision by the Board was expected before year end.  The data presented by Dunbar showed that our current cost is about 20% higher than it was in the five years before joining the RSU while our student population is now about 30% smaller.  The result is a cost increase per pupil of over 60%.  It is not clear if any new formula will return our costs to the levels we had as an independent school district.

 

It was decided to invite our School Board Finance Committee member, Richard DeVries, to the next Budget Committee meeting to provide an update and assessment of the new cost sharing arrangement and its likelihood of being adopted.  After that review, the Budget Committee will offer to brief the Board of Selectmen on their findings.  Any initiative to initiate a withdrawal petition, as is being considered in Wiscasset, would be a citizen initiative, not an action of the Budget Committee.

 

Bill Hopkins reported on the meeting with the auditor and his inquiry on GASB 34 as it related to our practice of funding maintenance projects of town owned property versus the need for holding a depreciation account for that purpose.  It was noted that our practice is in compliance with GASB 34 and is a reasonable approach.  The need to hold separate depreciation account funds is not required.  Consequently, the action recommended by the Budget Committee and taken by the Treasurer and Board of Selectmen to draw down funds from “undesignated surplus” was both appropriate and beneficial to the taxpayers.  The need to hold some reserves, however, to account for the receipt of taxes after the start of the fiscal year was also discussed with agreement that a minimum of three months of reserves was prudent.  Further, funds for unanticipated repairs and for unpaid taxes should be set aside.

 

Curt Downer presented a draft document outlining the pros and cons of competitive bidding by municipalities like Westport Island.  Curt suggested that an Ordinance would be too restrictive for the town and suggested that a town policy might be the more prudent course of action.  The intent of the policy is to prevent unintended misunderstandings as was experienced in the new snow removal contract.  According to the draft document:

 

            “The principals driving the creation of a written procurement policy should be to standardize        procedures, save taxpayer’s money, increase public confidence in the integrity and transparency of      municipal procurement, promote fair and equitable treatment of all suppliers and define the duties and       responsibilities of those involved.”

           

Curt agreed to continue to investigate the practices of other towns and the recommendations of MMA.

 

No members of the public were in attendance at this meeting, hence no public comment was recorded.

 

The next meeting of the Budget Committee was scheduled for December 7th at 4:00 pm at the Town Office.

 

There being no further business for the committee, the meeting was adjourned at 5:15 pm.

 

Respectfully Submitted,

 

Dennis Dunbar

Committee Chair

 

 


Westport Island Appropriations 5-Year Look Ahead

 For Property Tax Commitment

 

Commitment

 Items \ Fiscal Year

FY-2007

7/1/06-6/30/07

FY-2008

7/1/07-6/30/08

FY-2009

7/1/08-

6/30/09

FY-2010

7/01/09-

6/30/10

FY-2011

7/01/10-

6/30/11

FY-2012

7/01/11-

6/30/12

FY-2013

7/01/12-

6/30/13

FY-2014

7/01/13-

6/30/14

FY-2015

7/01/14-

6/30/15

FY-2016

7/01/15-

6/30/16

Notes on Forecast

Methodology and Assumptions

General Government

$246,748

 $291,997

$311,743

$304,749

$300,314

$383,727

 

 

 

 

 

County Tax

 

$184,855

$213,634

$232,125

None-Catch-up Year

$245,874

$250,388

 

 

 

 

 

Catch-up Loan (2)

-

-

-

-

$154,598

$267,997

 

 

 

 

 

Education

 

$940,694 (1)

$768,728 (1)

$854,834 (1)

$1,035,664 (1)

$979,773 (1)

$1,172,367

 

 

 

 

 

Overlay

 

$35,000

$61,394

$63,359

$15,727

$26,986

$1,650.76

 

 

 

 

 

Deductions

(rev share etc)

 

 

 

 

_-27,967

-$29,639 &

-$194,750

 

 

 

 

 

Total Assessment

$ 1,407,296

$1,335,753

$1,462,061

$1,335,727

$1,679,578

$1,851,696

 

 

 

 

 

Assessed Valuation

$271,747,912

$261,662,579

$262,258,474

$264,500,462

$264,500,462

$264,527,996

$267,500,000

 

$269,000,000

$271,000,000

$273,000,000

Increase $1.5M in FY12-14 then $2M

Mill Rate

 

5.30

4.94

5.42

5.05

6.35 (+26%)

7.00 (+10%)

 

 

 

 

 

 

Notes:

 

(1) Actual spending for education was higher in each of these years because part of our cost was transferred from “Education Reserves”.  In FY-07, $40,000 was paid from reserves and in FY-08, $404,664 was drawn down and in FY-09, $228,784 was drawn down.  For FY-10, Total Local Contribution was $1,224,716 and FY-11 is $1,155,581 with $364,860 carry forward from actual tuition costs from FY-09 (as tuition town) covering the difference.

 

(2) Loan amount is $1,335,000 with a monthly payment of $22,083.08.  First payment was planned for June, 2010.  Unexpended fund balance will be invested in an interest bearing account.

 

(3) Other revenue of $194,750 was not expected in July estimate.  Sources of this revenue to be outlined by Treasurer.

 

 

 

October 24 ,2011

 

October 24, 2011

 

 

 

Comparison of FY-2009 with FY-2012 Showing Spending Growth Areas

 

 

Commitment

 Items \ Fiscal Year

FY-2009

7/1/08-

6/30/09

FY-2012

7/01/11-

6/30/12 

(July Est.)

FY-2012

7/01/11-6/30/12 (Commit.)

Spending Increase

 

(Commit.)

Notes on Spending Growth

General Government

$311,743

$383,727

$383,727

$71,984

#3 Driver  (Roads and Bridges Loss of Competition & Reassessment Reserve)

County Tax

 

$232,125

$250,388

$250,388

$18,263

 

Catch-up Loan

-

$267,997

$267,997

$267,997

#2 Driver (Corrected Fiscal Year – Excess Funds?)

Education

 

$854,834

$1,172,367

$1,172,367

$317,553

#1 Driver (Cost Sharing Formula with RSU 12)

Note: Actual Cost for FY 08-09 was $820,973

Overlay

 

$63,359

$30,000 (est)

$1,650.76

-$61,708

 

Deductions

(rev share etc)

-$31,390

-$27,967 (est)

-$29,639 &

-$194,750

-$192,299

 

Total Assessment

$1,430,67 1

$2,076,512

 

$1,851,696

 

 

Assessed Valuation

$262,258,474

$266,000,000

$264,527,996

 

 

Mill Rate

 

5.42

7.81

7.00

+29%

July Est of 44% excluded new revenue source

 

Proposed Focus Areas for Summer Study:

 

          1. Form Independent Citizens Group to Review Options for Education – D. Dunbar

          2. Review GATSB 34 and Determine Need for Depreciation Account Amount and if Excess Funds Can be Drawn From –         B.  Hopkins

          3. Evaluate Need for a Town Bidding and Contracting Policy – C. Downer