HomeMy WebLinkAboutAd Hoc Budget Committee Minutes January 27, 2009_201402060847440034
Town of Nantucket
Ad Hoc Budget Committee Meeting
Minutes – Ad Hoc Budget Committee Meeting January 27th, 2009
Approved February 10th, 2009
Present: Ms. Jenny Garneau, Ms. Susan Genthner, Ms. C. Elizabeth Gibson, Mr. James
Kelly, Mr. Michael Kopko, Ms. Connie Voges, Dr. Robert Pellicone, and Ms. Patricia
Roggeveen.
Absent: Mr. Matthew Mulcahy.
Also present: Mr. Rick Atherton, Mr. Malachy Rice, Mr. Glenn Field, Ms. Irene Larivee,
Mr. Whiting Willauer, and Mr. Craig Abernathy
Call to Order:
Ms. Roggeveen called the meeting to order at 8:30 AM.
Approval of Minutes 18 November 2008 and 3 December 2008:
Mr. Kopko and Mr. Kelly recused themselves from considering approval of the
minutes of November 18th, 2008, due to absence. Ms. Genthner recused herself from
considering approval of the minutes of December 3rd, 2008, due to absence. Ms.
Roggeveen moved to approve the minutes of 18 November 2008 and 3 December 2008;
seconded by Ms. Garneau. So voted unanimously.
Review of Status of FY 2010 Budget:
Town Manager C. Elizabeth Gibson stated that the Town would be presenting its
budget to the Finance Committee later that day, noting that the budget contains the
recommendations of Town Administration presented to the Board of Selectmen on
January 14th, 2009. She added that the Board of Selectmen considered the budget in
workshops on the 20th, 21st, and 22nd of January. Ms. Gibson stated that the Board
agreed to forward the budget to the Finance Committee with the understanding that
some items may require further review.
Minutes – Ad Hoc Budget Committee
January 27th, 2009 Page 2 of 5
In a positive development, Ms. Gibson explained that due to a calculation error
in the budget projection developed on December 10th, 2008, the budget gap was
overstated by between $500,000 and $600,000. Citing items that still remain uncertain,
Ms. Gibson stated that the total deficit in the Solid Waste Enterprise Fund is projected
to be $4.7 million, requiring a General Fund subsidy of $1.9 million to cover the amount
not covered by previous override subsidies of $2.8 million. Ms. Roggeveen stated that
other options for closing the gap between the projected deficit and the override subsidy
include raising fees or re‐negotiating the operating contract with Waste Options, the
contracted operator of the Landfill. Ms. Voges noted that the rationale for funding the
Solid Waste Enterprise Fund from taxes instead of fees is that taxes represent a
deduction for residents on income tax. Continuing with the topic of uncertain items
affecting budget projections, Ms. Gibson pointed out that an amount of $100,000
assigned to post employment benefits may be returned to the General Fund, and that
this amount would be subject to the sixty‐forty split. (The sixty‐forty split refers to a
budgeting tool used for the purpose of assigning deficit amounts to be split between the
Town and the School.)
Mr. Kelly asked if there is any criteria for applying the sixty‐forty split. Ms.
Gibson answered that all tax receipts and local revenues are subject to the split, and
explained that the total municipal budget breaks down as follows: School $21 million,
Town $24 million, and other entities $25 million. (Note: the enterprise funds make up
the remainder of the Town’s total $100 million budget.) Continuing, Ms. Gibson stated
that for the sake of budgeting $25 million for other entities is removed from the total
number and the remainder is subject to the sixty‐forty split. She added that certain
types of local receipts are not subject to the split, such as liquor license fees, residential
parking fees, or “pay to participate” fees. Ms. Voges commented that the issue
becomes somewhat murky when considering specific revenues designed to target a
specific deficit. Mr. Kelly stated that he is still not clear on the use of the split, and Ms.
Gibson explained that there has never been an attempt to explain the sixty‐forty split
with a high degree of detail and proposed that her office work with the Board of
Selectmen to clarify the matter. Ms. Roggeveen asserted her belief that if an
organization receives the negative political effects of implementing a fee the
organization should enjoy the positive effect of enjoying the full monetary benefit of the
fee. Mr. Kelly proposed that in the current year a “Kings X” solution be used, allowing
all parties to keep the fees they collect this year but develop clear and transparent
methods of splitting the fees in coming years.
Presenting another uncertain item, Ms. Gibson stated that some variables in
Medicare Part D indicate that there may be a savings of $350,000 to $400,000. Mr. Kelly
noted that the amount of total savings from the uncertain items cited by Ms. Gibson
totals $1 million. Ms. Voges explained that the total is an aggregate amount that will
affect the General Fund. After some hesitation by membership to rely on current
numeric projections, Mr. Atherton stated his belief that there is no reason to be afraid
Minutes – Ad Hoc Budget Committee
January 27th, 2009 Page 3 of 5
of the numbers as they are projections that will change. Ms. Gibson added that
resolving the method of assessing indirect costs will resolve another uncertain item.
Mr. Kopko agreed, stating his desire to clarify the policy. Ms. Voges noted that she will
be presenting a policy in the near future for the Board to consider endorsing. Ms.
Gibson continued with another uncertain item, stating that the Septic System Inspection
Revenue Fund balance of $277,402 may be used to fund a position within the Health
Department. She also added that the Stabilization Fund may be considered for a one
time source for a capital expenditure.
Dr. Pellicone asked if an increase in the percentage of health insurance premium
paid by employees is under consideration. Ms. Gibson answered that this proposal is
being considered as one option, but for the proposal to work all unions would need to
agree. Dr. Pellicone then asked how the Town is approaching the cuts it needs to make
in order to close its portion of the budget gap. Ms. Gibson stated that Town
Administration is looking at ways to increase revenues, and reduce or eliminate
programs to bring the amount down to about $933,000. She added that the remainder
would need to come from either increasing the amounts employees pay in health care
premiums or by laying‐off seventeen positions. Dr. Pellicone pointed out that he would
be sending out forty pink slips that week. Mr. Kopko commented that the number cited
by Dr. Pellicone is somewhat theoretical, as the issuance of pink slips is a normal part of
personnel action on the part of the School. Dr. Pellicone responded, stating that the
pink slips are not normally made until April and that this year he issued the slips for the
purpose of allowing staff the time to make appropriate arrangements. Mr. Kopko stated
that the School has a choice, and that the School has chosen to cut people instead of
programs or pay. Dr. Pellicone disagreed and pointed to previous cuts to programs and
pay, adding that pay has been cut at all levels, including administration. Mr. Rice
reminded the Committee that the Town has made cuts that include Adult Community
Day Care, Mosquito Control, and cuts to staffing through attrition, a hiring freeze and
lay‐offs.
Ms. Genthner stated that the School accepted the challenge to create a balanced
budget and explored every option in its efforts to cut costs. She added that in the end it
was necessary to put the needs of the students before the need to create a balanced
budget, and as such the School will be presenting a budget that includes an override.
Ms. Garneau pointed out that in the current budget process the School has added new
levels of discussion to determine the priorities for an override. As a part of this process,
Ms. Garneau stated that the High School and the Middle School made no requests for
additional funding. She explained that instead the Middle School and the High School
proposed that any additional funds be reserved for the Elementary School in order to
address corrective action issues mandated by the State. Ms. Roggeveen reminded
membership that other boards and committees have clearly indicated a belief that an
override is not the best course of action at this time. Mr. Kopko agreed and pointed out
that additional fees can be used to balance a budget. He commented that if the School
Minutes – Ad Hoc Budget Committee
January 27th, 2009 Page 4 of 5
chose to implement sports participation fees it could raise an amount commensurate
with the pay of a teacher. Mr. Kelly questioned the Schools rationale in choosing an
override instead of the implementing or increasing fees. Ms. Genthner asserted that it
is important to let the voters decide whether or not they can afford to appropriate more
money for the School. Mr. Kelly spoke of the importance of honoring the responsibility
placed upon members by the voters, stating that they trust each municipal entity to
develop a balanced budget. Referencing his role as Chairman of the Finance
Committee, Mr. Kelly added that the Finance Committee can’t tell the School what to do
but also asked the School to revisit its attempts to achieve a balanced budget rather
than resorting to an override. Ms. Genthner commented that as numbers change it may
be able to reduce the amount of funding in excess of a balanced budget, and as the
amount shrinks it may be possible to close the gap to a level where adequate funding
can be found to deliver a balanced budget. Mr. Kelly reiterated his belief in
demonstrating responsibility to voters by delivering a balanced budget, stating that the
mindset of an override creates an atmosphere in which it is difficult to achieve fiscal
goals. Ms. Roggeveen noted that in the previous year voters overwhelmingly denied an
override attempt and pointed out that economic conditions have deteriorated since
that time. She also stated that override attempts hurt the Town’s overall ability to
achieve its goals. Mr. Kopko agreed, cautioning School representatives to look at the
long term effects of an override.
Ms. Gibson noted that on the School level override proposals receive a positive
response, but on the Town level such news adds to the perception of future financial
difficulties. She added that she believes reliance on an override to fund the School’s
needs is a mistake. Looking forward, Ms. Gibson pointed to efforts to develop an Ad
Hoc Municipal Finance Review Work Group to develop strategies for handling financial
difficulties in FY 2011 and later years. Mr. Kopko asked School representatives to
consider other factors affecting taxpayers, such as sewer rate increases, when
considering an override. He encouraged the School to have contingency plans in place
should the Board of Selectmen and the Finance Committee make negative
recommendations on its budget. Mr. Kelly voiced hope that the School will reconsider
its options and put forward a balanced budget.
New Business:
None.
Old Business:
None.
Minutes – Ad Hoc Budget Committee
January 27th, 2009 Page 5 of 5
Date of Next Meeting:
The date of the next meeting is Tuesday, February 10th, 2009, at 8:30 AM in the
Town Hall Conference Room.
Adjournment:
Ms. Roggeveen asked for a motion to adjourn that was “so moved” by Mr. Kelly.
The meeting was adjourned at 9:58 AM.
Prepared by Craig Abernathy