HomeMy WebLinkAboutAd Hoc Budget Committee Minutes August 18, 2008_201402060848046442
Town of Nantucket
Ad Hoc Budget Committee Meeting
Minutes – Ad Hoc Budget Committee Meeting August 18th, 2008
Present: Ms. Libby Gibson, Ms. Jenny Garneau, Ms. Susan Genthner, Mr. James Kelly,
Mr. Michael Kopko, Ms. Irene Larivee, Mr. Matthew Mulcahy, Robert Pellicone Ed. D.,
and Ms. Patricia Roggeveen,
Absent: Mr. Glenn Field and Ms. Connie Voges
Also present: Mr. Brian Chadwick, Ms. Robin Harvey, Mr. Malachy Rice, Mr. Whiting
Willauer, and Mr. Craig Abernathy
1. Call to Order:
Mr. Kopko called the meeting to order.
2. Approval of Minutes:
Mr. Kelly made a motion to approve minutes from the meeting of August 1st,
2008. The motion was seconded by Ms. Roggeveen.
3. Fiscal Year 2010 Budget Timeline:
Ms. Gibson began the meeting by highlighting some of the changes in the budget
planning schedule for FY 2010. She stated that on July 16th, 2008, capital request
instructions went out to each department, on August 1st, 2008, the Ad Hoc Budget
Committee held its first meeting, and on August 13th, 2008, Ms. Larivee made a
presentation of the FY 2010 Budget Projection to the Board of Selectmen. Mr. Kopko
commented that Ms. Larivee’s presentation was very well done.
Ms. Gibson continued, stating that each department’s capital request was due to
be submitted to Town Administration before August 15th, 2008. She stated that she will
be working with Diane O’Neil and Malachy Rice to compile the requests and submit
them to the Board of Selectmen. The requests will then be reviewed by the Finance
Committee before going on to the Capital Programs Committee. Ms. Gibson invited
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August 18th, 2008 Page 2 of 8
comments on the budget planning schedule and asked that any requests for
modification be submitted to her office by Friday, August 22nd, 2008. She stated that
she hoped to present the timeline to the Board of Selectmen for endorsement and
approval on August 27th, 2008.
Ms. Gibson stated that the timeline suggested a meeting for Thursday,
September 4th, 2008, for the Ad Hoc Budget Committee to review the budget guidelines.
She said that these guidelines will require careful consideration, and that if possible the
Committee should consider beginning discussions in the current meeting. Ms. Gibson
added that on the following Wednesday, September 10th, 2008, the schedule showed a
public hearing to determine tax allocation by classification. Ms. Larivee informed the
Committee that this item was moved up in the schedule due to a request from the
Finance Director, Connie Voges. Ms. Roggeveen asked if this was the point in the
process where the Town get’s a better sense of revenue. Ms. Gibson answered that it
would not provide new information on revenue. She said this hearing determined the
tax rate for the coming fiscal year.
Continuing with the budget timeline, Ms. Gibson stated that budget instructions
will go out to all departments on September 11th, 2008. She noted that on September
25th, 2008, a meeting of the Ad Hoc Budget Committee was scheduled for the
Committee to consider the status of budget projections. Ms. Gibson highlighted a
presentation to the Board of Selectmen scheduled for October 1st, 2008. She said that
the presentation was in response to suggestions from the Ad Hoc Budget Committee
that the School be more involved in budget development. Mr. Kopko clarified that for
this meeting the Selectmen will be inviting the School Committee and the Finance
Committee to attend the meeting in order to facilitate sharing of information in the
budget planning process.
Ms. Roggeveen stated that she seemed to remember receiving more information
on revenue in December. Ms. Larivee answered that in December the Town receives
information regarding the tax recap that provides a clearer view of revenue. Ms.
Roggeveen asked if the information could be obtained any sooner. Ms. Larivee said that
Barnstable County Retirement reports the Town’s rates in November and Blue Cross and
Blue Shield provide their rate reports in February.
Ms. Gibson returned to the timeline stating that on Friday, October 17th, 2008,
departmental budgets are due to be submitted to the Town Administrators office. Mr.
Kopko asked if that timeline was the same as last year, and Ms. Gibson replied that it
was. She added that she had tried to include a few more meetings at the Board of
Selectmen level. Ms. Gibson said that from mid‐October to November her office will
compile all budget submissions.
Ms. Gibson pointed out one notable change in the submission of enterprise fund
budgets. For FY 2010, enterprise fund budget submissions have a due date of December
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August 18th, 2008 Page 3 of 8
1st, 2008. Ms. Gibson said that in the past these budgets did not have a specific due
date. Mr. Kopko noted that the Airport’s budget normally came in after this date. Mr.
Mulcahy asked if the Airport was aware of this change. Ms. Gibson said that the Airport
has not been informed of the change, but they will soon receive a budget timeline.
Coming back to the budget timeline, Ms. Gibson stated that on Wednesday,
December 3rd, 2008, Town Administration will present its recommendations for the FY
2010 general fund budget. This timeline allows for discussion of Town Administrations
recommendations on December 10th, and adoption of the budget on December 17th.
She noted that there may be scheduling problems this year, due to the fact that
Christmas Eve falls on a Wednesday, the normal day for Selectmen meetings. Ms.
Gibson said that the Finance Committee would begin addressing the budget at a
meeting on January 6th, 2009. The Finance Committee will work internally on the
budget from that point until the beginning of February.
Ms. Gibson highlighted a new item on the timeline. She stated that in previous
years the Ad Hoc Budget Committee had proposed a televised forum in order to provide
the public with information on the budget. She pointed out that the FY 2010 timeline
has a televised forum scheduled for February 10th, 2009. She proposed that it might be
best for the forum to include the Board of Selectmen and the School Committee rather
than the Ad Hoc Budget Committee. Ms. Gibson completed the timeline noting that the
process begins to wrap up in a meeting at the middle to end of February in which the
Finance Committee, School Committee and the Board of Selectmen discuss the status of
the budget.
Mr. Kopko invited the current and former Finance Committee members to
comment on any items of concern. Mr. Kelly asked if any progress had been made in
determining the type of budget platform to use. Ms. Gibson said that this was a topic
that she hoped to discuss in the meeting. She explained her belief that precise language
is imperative in order to convey the nature of a new budget that will require
departments to maintain a status quo. Mr. Kopko noted that theoretically a “current
level services” budget would leave the Town with a $2 million deficit. Ms. Gibson
agreed, stating that a reduction in services will be necessary without an increase in
revenue. Mr. Kopko asked if everyone understood that the FY 2010 budget will require
the Town to make cuts in order to avoid a deficit. He stated that in the past the Town
had counted upon new growth to cover the increases in expenses. Ms. Gibson
disagreed, asserting that the Town was able to avoid deficits in the past by using various
actions such as attrition of labor, decreasing the reserve fund, health insurance
adjustments, limiting stabilization fund adjustments, and the use of free cash.
Mr. Kelly said that he did not have intimate knowledge of the history of the
Town’s budgeting process, but he feels it is extremely important for the Ad Hoc Budget
Committee to not give false hope to departments. Ms. Gibson stated that all of the
departments have been well informed on this year’s financial situation. She said that
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August 18th, 2008 Page 4 of 8
departments have been told that if there is anything that is crucial or important,
something else must be sacrificed in order to provide finances for the new item. Ms.
Roggeveen proposed that the Committee communicate the need to “rollback” the
budget, pointing out that the status quo would lead to a $2 million shortfall. Mr. Kopko
stated that the message had been very clear from management to department heads.
Dr. Pellicone asked if the shortfall was due to increases in salaries. Ms. Gibson
said that it was due to decreasing revenues and increasing expenses. Ms. Larivee stated
that the salary increases were a portion of the increases in expenses, but that revenues
have also fallen due to reduced receipts by the Town. Mr. Rice added that the increases
in salary in the current year were far lower than increases in previous years. Mr. Kelly
noted that a smaller salary increase would lead to a smaller deficit and a larger increase
would lead to a larger deficit. He also pointed out that salaries make up a substantial
percentage of the budget, seventy‐one percent.
Ms. Roggeveen said that she feels it is very important to go forward with less
discussion of a maintenance budget, as the status quo would probably not be able to be
maintained. She stated that she would prefer to go forward with more conservative
numbers now and not be “caught short” in December. Mr. Kopko said that he believes
it is important to get the nomenclature settled before the Committee is further along in
the budget development process.
Ms. Genthner explained the School Committee’s plan of action to the Ad Hoc
Budget Committee. She said that the timeline was somewhat similar to the timeline
used last year, and noted that it is difficult for the School not to lag behind other
departments in budget development. Ms. Genthner highlighted efforts by Dr. Pellicone
to squeeze the timeline by reminding School Administration of the importance of
keeping to the schedule. She added that School Councils began meeting more often last
year in an effort to adhere to the timeline. For FY 2010, Ms. Genthner proposed that
someone from the Town come to one of the School’s business meetings and present an
abbreviated presentation of where the Town is in the budget planning process. Ms.
Garneau said that, since the meeting will be televised, it might help to inform more
members of the community about the Town’s current financial situation. Ms. Genthner
stated that September 16th, 2008, would probably be the best date to make the
presentation.
Mr. Kopko said he felt Ms. Genthner’s proposal would be a great way to provide
more information to the School and the public. He said that the Town would need to
decide who would be present at that meeting. Ms. Gibson stated her preference to
internally discuss the meeting and determine attendance. Ms. Roggeveen said that in
this process the Committee will have more opportunities to use consistent language.
She indicated her strong preference for everyone to “speak the same language.” Mr.
Kopko said that he felt having the School come to the Selectmen meeting and the
Selectmen go to the School Committee would be a very healthy approach.
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August 18th, 2008 Page 5 of 8
4. Update on the Five‐Year Forecast:
Ms. Larivee introduced the topic, stating that at the last meeting she had
projected a $1.6 million deficit. After reviewing the amount of capital expenditures
required by the Town Charter, Ms. Larivee said it was necessary to increase the
projected deficit to $2.2 million. She said $600,000 must be included in the budget in
case the Town does not ask for a debt override, or voters do not approve a requested
override. Ms. Larivee explained that the Town Charter requires that one percent of
local receipts and one percent of real estate and personal property tax be spent on
capital items. Mr. Mulcahy asked if the stabilization fund could enter into the discussion
as a source of funding for capital items. Ms. Gibson answered that it was possible to use
the funds, subject to a Town Meeting vote, but that Town Administration had worked
very hard to establish a policy of maintaining deposits in the stabilization fund. Ms.
Larivee added that if the Town utilized funds from the stabilization fund, it would be
necessary to replace them the following year.
5. New Business:
Mr. Kopko invited Ms. Gibson to speak about the type of instruction she had
provided to department heads for budget development. Ms. Gibson stated that she had
provided verbal instructions to the effect that without additional revenue the Town will
have to find ways to cut the budget. She said that the terminology for the budget had
been discussed at the staff level, but she would like to discuss that terminology with the
Ad Hoc Budget Committee. She noted that the terms maintenance, current services,
and rollback had been proposed, but asked that whatever terminology is adopted be
used across the board for the sake of consistency.
Mr. Kopko asked representatives from the School to provide insight on what
they felt would be appropriate terminology for the FY 2010 budget. Ms. Genthner said
that the School Committee had been having conversations similar to the ones taking
place in the Ad Hoc Budget Committee. She said that the School has been speaking with
the National Teacher’s Association in discussions of the Town’s deficit situation. Ms.
Genthner added that the School is still in contract negotiations, so it is difficult for the
School to know the exact state of its finances. However, she said the School has
explained that due to budgetary constraints something will have to go; noting that it will
be necessary to make difficult choices. Among the items being considered for cutting
expenses are increasing class size, closing buildings, or eliminating programs. Mr. Kopko
asked if the School had considered an override. Ms. Genthner responded that the
School does not wish to consider an override in the “beginning of the game.” She said
that at the end of the process it is about students, parents and teachers, and that is
where the most difficult choices lie. Ms. Garneau explained that since school was out
for the summer, the School Committee had not had the opportunity to meet with any of
the School Councils. Mr. Kopko said that he believed he knew what the School
Committee would hear from the School Councils. Ms. Larivee said that even if the
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August 18th, 2008 Page 6 of 8
School decides to seek an override it will be necessary to develop two budgets. The two
budgets will have to appear in the Town Meeting Warrant, she said that this would
allow the Town to have an approved budget in the event the override failed.
Mr. Kopko said that he wished to remind everyone about the new realities the
Town was facing. He said that committees had spoken for years about the day when
overrides would not be passed by voters, and he stated that this day had come. Mr.
Kopko explained that he wanted to make sure that everyone was aware of what the
“new baseline” was. Ms. Roggeveen stated that she was concerned that the Town
would receive even less revenue than was being projected. She reiterated her belief
that the Ad Hoc Budget Committee should be as conservative as possible, as she
believes a realistic approach is best.
Mr. Kelly stated that it might be helpful to ask departments to cut their budgets
by a dollar amount or a percentage. Mr. Kopko said that this might help provide early
notification to departments the efforts that will be required to produce a balanced
budget. Mr. Kelly added that it might be helpful in determining priorities, as
departments could be asked to state the consequences of a percentage based budget
cut. Ms. Gibson stated that she and Mr. Rice had talked about this concept in the form
of a reduced services budget. She said that this would be helpful in identifying the
services that might be able to be reduced or eliminated. Additionally, she said that it
would provide guidance to departments that require clear directives.
Mr. Kopko pointed out that some areas might require more funding. He said
extreme need in the areas of Human Services and Island infrastructure has
demonstrated a need for increased funding. Ms. Garneau said the community will have
to decide which services are most important. Mr. Atherton stated that he believed this
was the real reason to get the information out early, as this would allow all parties to
begin addressing the issues of priorities. He said he believed it would be best to call the
budget a “reality or re‐prioritizing budget.” Ms. Roggeveen asserted her belief that any
language should include the prospect of service cuts. She continued, stating that if the
Town was not receiving adequate fees the Town should not offer the associated service.
Mr. Kopko said that if there were to be serious and early discussions on priorities it
would need to involve a public hearing or some sort of serious public interaction about
what the community wants to see happen with budgeting priorities.
Ms. Garneau said that she believed the discussion had come to an important
crossroads. She asked that all parties try to find different ways to reach out to the
community and involve them in the process. She noted that a survey for the “master
plan” received a response from a good percentage of registered voters contacted. Ms.
Garneau said that all parties must be willing to put in the time to develop resources for
increasing community awareness and involvement.
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August 18th, 2008 Page 7 of 8
Mr. Chadwick proposed the terms reduced, current and expanded budget be
used. He said that he believes the public will easily understand the terminology in this
form, and that a reduced budget is necessary considering the Town’s financial situation.
Mr. Willauer said that last year the Town had built in a five percent goal for growth of
salary expenses. He said that in the next year the Town would probably try to limit that
growth to three percent. Because of this situation, Mr. Willauer said that he believed
the correct budget terminology would be a low growth budget. He pointed out that
both revenue and expenses were growing, as revenue increased by two and a half
percent and expenses increase by five percent. Ms. Roggeveen stated that a drop in
fees had been the cause of reductions in revenue. Ms. Garneau asked what percentage
of revenues were local fees. Ms. Larivee replied that local fees make up fifteen percent
of revenue.
Mr. Mulcahy asked if it would be feasible to ask departments to created budgets
that realized a three percent decrease. Ms. Roggeveen stated that in the past there had
been problems with departmental expectations and percentages. Mr. Kopko said that
in his opinion the percentage got out to the public and helped to create realistic
expectations for the process. Ms. Larivee said that she believed the percentage added
to confusion because some people thought the number applied only to their budget and
not the total municipal budget. Mr. Kopko said that he believed that was why it was
very important to make that distinction when talking about the bottom line.
Ms. Roggeveen said that she hoped that in this meeting all parties could agree
on budget terminology in order to communicate that the current budget process will
require difficult choices. She stated that the fundamentals of percentages or specific
directives could be ironed out going forward. Ms. Gibson proposed that the budget use
the term priority services. Mr. Kopko said that putting the priority in front indicated
positive action. Ms. Roggeveen said that she liked the term as well, since it took into
account the necessity of all funding requests and funded the ones with the highest
priorities. Mr. Kopko said that this approach will allow everyone to look at all of the
options. Ms. Gibson noted that this plan will also have to allow for some areas where
expenses will increase, i.e. electricity and fuel. Ms. Larivee said that under
Massachusetts General Law there are four types of budget platforms approved for use
in budget planning: level‐funded budget, zero‐based budget, maintenance budget, and
program based budget. She stated that a priority budget would probably be best
matched with a program or zero‐based budget platform, as this platform starts from
zero to build a budget. Ms. Gibson said that she would meet with Mr. Rice and Ms.
Larivee in order to determine the best platform prior to the next meeting.
6. Old Business:
Ms. Larivee provided Committee members with a glossary of terms with budget
development definitions from the Massachusetts Department of Revenue. She said that
she would also provide an electronic copy via e‐mail.
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August 18th, 2008 Page 8 of 8
7. Date of Next Meeting:
Mr. Kopko noted that the next meeting was included in the timeline. The next
meeting was scheduled for Thursday, September 4th, 2008, at 8:30 AM.
8. Adjournment:
Mr. Kopko asked for a motion to adjourn that was “so moved” by Mr. Mulcahy.
Prepared by Craig Abernathy