HomeMy WebLinkAboutAd Hoc Budget Committee Minutes December 3, 2008_201402060848048317
Town of Nantucket
Ad Hoc Budget Committee Meeting
Minutes – Ad Hoc Budget Committee Meeting December 3rd, 2008
Approved January 27, 2009
Present: Ms. Jenny Garneau, Ms. C. Elizabeth Gibson, Mr. James Kelly, Mr. Michael
Kopko, Ms. Irene Larivee, Mr. Matthew Mulcahy, Dr. Robert Pellicone, and Ms. Patricia
Roggeveen.
Absent: Ms. Susan Genthner.
Also present: Mr. Rick Atherton, Mr. Brian Chadwick, Dr. Carlos Colley, Mr. Glenn Field,
Mr. Jason Graziadei, Ms. Robin Harvey, Megan McNeely, Ms. Jane Miller, Mr. Malachy
Rice, Mr. Whiting Willauer, and Mr. Craig Abernathy
Call to Order:
Ms. Roggeveen called the meeting to order at 11:33 AM.
Approval of Minutes 29 October 2008:
Mr. Kopko moved to approve the minutes of October 29, 2008; seconded by Mr.
Mulcahy. So voted unanimously.
December 8, 2008, Special Town Meeting Update:
Town Manager C. Elizabeth Gibson stated that in a recent department head
meeting participants discussed the ramifications of voters choosing not to support
Articles 7 and 8 at the December 8, 2008, Special Town Meeting (STP). She reminded
the Committee that Articles 7 and 8 are critical to the General Fund budget. In addition
to the shortfall, Ms. Gibson noted the additional expense of borrowing to cover
expenses due to the inability of the Town to send tax bills out until the Tax
Recapitulation is certified. Irene Larivee estimated the expense associated with
borrowing at $40,000 per month. Ms. Gibson explained that Article 8 needs to be
approved in order to have the Solid Waste Enterprise Fund budget certified, and that
the certification is necessary before the Department of Revenue (DOR) will approve the
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December 3rd, 2008 Page 2 of 5
Town’s tax rate. She reminded the Committee that none of the articles to be presented
at STM will raise taxes.
In examining the potential consequences of voters not approving finance related
articles, Ms. Gibson pointed out that the Town and School would be responsible for
sharing the burden of reduced expenses. She stated that the Town’s portion of the
shortfall would be sixty percent and the School’s portion would be forty percent. Ms.
Garneau asked if anyone has spoken to the media in order to communicate the
potential fallout for the School. Dr. Pellicone advised that he has spoken with the media
and explained the consequences of voters not approving the money related articles at
STM.
Mr. Kopko spoke to concerns of members of the community attempting to
modify the agenda of the STM during the meeting. Ms. Garneau stated that normally
when such an attempt is to be made there is some discussion in the community prior to
the attempt, and asked if anyone has heard anything to substantiate such fears. Ms.
Gibson referred to a newspaper article published the week before which stated the
School has plans to seek funding from the Stabilization Fund. Ms. Garneau stated that
the School has no plans to attempt to secure funding from the Stabilization Fund. Mr.
Kopko asked if the teachers have any plans to seek alternative funding. Meghan
McNeely, Nantucket Teacher’s Association Co‐President, answered that the teachers
have no plans to introduce a request at STM. She added that the School is looking for
ways to address current financial shortfall internally and has no intention of seeking
funding from the Stabilization Fund.
In regard to difficulty in disseminating information about the STM, Dr. Pellicone
highlighted the importance of finding new methods to communicate with the public. He
stated that the School will send an e‐mail to parents, send a message using the PACE
phone system, place an advertisement in the newspaper, and post information on its
website. Ms. Gibson noted that an article published in the Independent did a good job
of explaining the warrant articles and the consequences should they not be passed by
voters.
Ms. Gibson addressed a question about the Health Insurance Trust (HIT) Fund
Drawdown, explaining that the drawdown will reduce the Town’s expenses related to
the HIT by $1.8 million. She added that there may be an opportunity to utilize
additional funds from the HIT in FY 2010. Glenn Field, Assistant to the Superintendent
for Business, asked if the proposed drawdown will result in an increase in premiums in
FY 2010. Ms. Larivee answered that the drawdown will have no impact on the amount
of projected expense in FY 2010.
Ms. Garneau asked Ms. Gibson to explain the reason for the projected deficit in
the Solid Waste Enterprise Fund (SWEF). Ms. Gibson stated that when the FY 2009
SWEF budget was being prepared revenue numbers from the end of FY 2008 were not
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December 3rd, 2008 Page 3 of 5
available. She added that these numbers would have shown the negative effects of
declining construction and demolition waste revenue and increasing costs related to
permitting of a new lined cell. Ms. Garneau then asked about plans to compensate for
such contingencies in future budgeting. Ms. Gibson answered that a workgroup has
been formed to work with Waste Options to find ways to reduce expenses. She noted
that the Landfill is likely to experience major cuts and see new fees for services. Ms.
Larivee reminded the Committee that the subsidy paid to the SWEF is a General Fund
subsidy, as not only Town but also School funds pay the subsidy. Jason Graziadei,
Inquirer and Mirror Senior Writer, asked why reduced volumes at the Landfill did not
result in lower expenses. Ms. Gibson replied that as a general rule revenues are used to
subsidize expenses and offset costs in other areas. Ms. McNeely asked about the
impact of a deficit in the SWEF on the School. Ms. Gibson explained that an increased
subsidy for the SWEF would come from the General Fund and therefore directly impact
both Town and School finances.
Net School Spending:
Ms. Larivee presented documentation on net School spending through FY 2008
which demonstrated the Town’s contribution of double the amount of funding required
by State law. Highlighting the perception that the Town does not provide enough
support for the School, she noted that part of the tax levy is required but the Town has
traditionally exceeded the required amount. Ms. Garneau stated her opinion that most
School Committee members believe the Town is very generous in its support of the
School. In light of projections of major budget cuts in the future, there was some
discussion of reducing salary expenses. Dr. Pellicone stated that preparing a balanced
budget for FY 2010 may require him to cut staff by ten percent. Mr. Kopko commented
that the Town is experiencing a similar scenario in its budget planning process. Dr.
Carlos Colley, Assistant Superintendent for Curriculum and Instruction, noted that
adjustments to staffing are accomplished much more easily with advance knowledge.
FY 2009 & 2010 Budget Projection:
Ms. Larivee stated that original projections of a projected deficit of $2.2 million
for the FY 2010 budget have changed, resulting in an increase of the deficit to $3.8
million. She pointed to a decline in new growth and excise tax revenues as contributing
factors in the deficit increase. Ms. Larivee added that the current budget projections
include a ten percent cut in operating costs but they do not include expense increase
requests, stating that if a request is added to the Town’s budget the Town will need to
cut expenses elsewhere in order to accommodate the increase and that the School will
follow the same guidelines. She noted that under the traditional method of sharing the
deficit, the current deficit of $3.8 million would require the School to make cuts of $1.7
million and the Town to make cuts of $2.1 million.
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Referring to his beliefs about the best approach to achieving budget goals, Mr.
Kelly noted that the School came in above projected goals while the Town came in
below projected goals. He stated his belief that one side coming in above goals while
the other side comes in below goals does not lead to the most equitable budgeting
situation. Mr. Rice asserted his belief that conservative fiscal practice implies a
philosophy of delivering budgets that exceed benchmarks for performance. Mr. Kelly
agreed, but again stated his belief that the situation is not “even handed.” Ms. Gibson
noted that even if both the Town and School come in under guidelines the total budget
will still be in a deficit situation. Mr. Kelly acknowledged the budgeting challenges, but
added his belief that when an organization enters into budgeting negotiations with a
lower starting point it will finish with a lower ending point.
In an effort to address challenges in the budgeting process, Ms. Gibson stated
that she will recommend that the Board of Selectmen endorse an Ad Hoc Finance Work
Group to look at the structure of the deficit and help define essential Town government
function. She added that the goals of the group would be focused and that the group
would meet in the short term before issuing a report. Mr. Kelly asked about the Town’s
progress towards making a final revenue projection for FY 2010. Ms. Larivee answered
that projections are about two‐thirds complete, and that they will continue to be
refined until 2009 Annual Town Meeting.
Ideas for Public Engagement in the FY 2010 Budget Process:
Ms. Gibson highlighted efforts to increase public engagement in the budget
process that included:
• “Piggybacking” on meetings of different civic groups.
• Meeting with employee groups.
• Televising budget forums.
She added her belief that it is important to educate the public on the challenges facing
the Town’s finances and communicate with the public in a manner that uses clear,
consistent terminology. Ms. Garneau agreed, noting that proposals that involve going to
the public enjoy much more success. She stated that a School special advisory group is
working hard on budgeting issues.
New Business:
Ms. Gibson stated that in the process of attempting to balance the budget many
new fee ideas have surfaced. She commented that she feels it will be best to apply new
fees to overall revenue before appropriation of funding. Mr. Field noted that most
School fees generate negative revenues, and as such could not make a contribution to
the General Fund. He added that the fees benefit the General Fund by reducing the
amount of subsidy required from the General Fund. Ms. Roggeveen added her belief
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December 3rd, 2008 Page 5 of 5
that decisions will need to be made regarding raising taxes or fees to address future
budget problems.
Old Business:
Date of Next Meeting:
The date of the next meeting is to be determined.
Adjournment:
Ms. Roggeveen asked for a motion to adjourn that was “so moved” by Mr. Kelly.
The meeting was adjourned at 12:58 PM.
Prepared by Craig Abernathy