Back to Board of Selectmen Meeting Minutes
Regular Session
January 8, 2009 @ 7:00 PM
Mr. Riley, Ms. Burns, Mr. Rabuffo
Mr. Riley announced that this evening the Board will start the budget process and requested Mr. Alexiades, Town Accountant/Finance Director, to give a synopsis of where we are and where we are going. Mr. Alexiades stated that the budget started with a $3 million deficit for FY 2010. This budget was balanced with a $l.5 million cuts to all town services and a request to the School Committee for $1.5 million in cuts to the schools. The cuts on the town side represent a range from a 0% increase over FY to a 5.5% decrease from FY 09. The school budget represents a 1/2% decrease from FY 09. The reality on the revenue side is an expected 10% reduction in state aid. The town might even have to be prepared for greater cuts. We have seen dramatic decreases in our motor vehicle excise tax collection and in our building department activities. Mr. Alexiades felt there would be further erosion in both those areas due to the economic climate. He predicted that we would be in a very difficult financial situation for the next couple of years. Ms. Burns mentioned that the department heads were asked to do a great deal more work in presenting their budgets in a variety of new ways. The department heads were asked to provide a zero based budget looking at each salary and expense, a level services funded budget and a 5% reduction budget. Some department heads were also asked to begin benching marking and measurement performance. Ms. Burns will thank each department head for all the work they have done in preparing their budget and will focus on cuts that we still need to make at the next Department’s Heads meeting. Mr. Riley said there is need to concentrate on budget cuts looking at the essential and non essential items to realize what can and what cannot be done.
Assessor’s Budget - Lane Partridge, Director of Assessing presented his budget in the three requested ways. Mr. Partridge had gone through the zero based budgeting this summer, he thought that was a good exercise as it balanced out some accounts. As a result what is in each line item is what exactly is needed. His level funded budget was based on FY 09 figures. To keep it level funded, payroll expenses were decreased by cutting a few hours of part time personnel. The 5% budget reduction was done the exact same way. Expenses remained the same and additional part time personnel hours were cut. Mr. Partridge advised he would prefer to make reductions from his salary budget and leave the expense items as requested because the greater part of the expenses are fixed items to cover state mandated services. Mr. Partridge presented a zero based budget in the amount of $316,655, a level funded budget of $308,521, and a 5% reduction budget dropping to $293,064. Mr. Alexiades, Finance Director recommended a budget of $307,643, which is very close to the level funded budget and the difference was for gas money which will be handled internally.
Treasurer/Collector - Jean Montgomery requested $43,020 for Scenario 1 budget, and $43,813 for Scenario 2 level funded budget. The Zero based budget was brought in below by $630. The salary showed an increase due to step raises. She explained that she has four employees that have not reached their top step increase. That places a burden in level funding for her staff. Departments that do not face that don’t share that burden. The plus side for her that that she was able to make up the difference by deleting the position of Municipal Lien Clerk. This position has been funded for 7 hours and has been vacant since 2005. The work has been outsourced as needed. Currently due to the sluggish real estate market there is not much demand for lien certificates. Although it is an unfilled position it is not completely unused and Ms. Montgomery advised that when the economy picks up there could be need for more funding. Scenario 2: in order to make up the difference to bring it back to the FY 09 budget, she has to reduce a position. Mr. Alexiades suggested that this position be cut from the Treasurer’s budget which is $7,012. The impact would be that her department would have to absorb 3 hours, which she will manage to do, this will be a test to see how it works out. The Finance Director has recommended a budget of $325,498.
Library – Mr. Alexiades pointed out that the Library was one of the departments that was used as a guide for benchmarking, showing a number of department how to use the benchmarking system. They did an outstanding job. Dennis Corcoran, Library Director spoke to the level services budget first and pointed out that there were no new initiatives or staffing requests and the operation will continue as it is today. Mr. Corcoran said that the requests for adding Sunday hours and a part time technician for cataloguing in the circulation department were shelved. The level salaries budget presented was $1,173,855, built out of using a zero based quote. Included were wage increases programmed for employees covered by collective bargaining. It doesn’t include wage adjustments for non-union staff except that was a step increase and longevity payment. Expense budgets requests were $248,323 which is a little over $1,000 less than the FY 09 budget. Mr. Corcoran said that the process of zero based budgeting was a lot of work, but that it was well worth it, as it gave him a chance to recalibrate some of the line items to better reflect the allocations in this budget.
In resetting this budget, $12,000 was removed from the computer maintenance budget by transferring it to the Internet Technician’s budget. Also he used the town’s energy formula to calculate the natural gas costs which resulted in quite an increase of what was currently budgeted. It made sense because it was not a practical move since the library spent closer to the higher figure which was $29,000.
Mr. Corcoran pointed out that the level funded services budget is the only one that meets the State’s municipal appropriation requirement for state aid, at least, at this point. All other versions of the budget will fail and the town would have to apply for a waiver. He felt that they will be literally available for budget language that will pass in the State budget. State aid amounts to $33,000. The number of waivers by statute is very limited. Failing the certification will lead to a loss of state aid and disqualification for special grant funding. Loss of this funding would result in a loss of their book budget. Concern was also expressed that if neighboring towns due to budget cuts lost their certification, the Hingham Library could be overwhelmed with non-residents. Mr. Corcoran said there is also concern over the aging boilers.
Sewer Commission – Michael Salerno, Chairman, advised that the Commission is requesting a total of $2,099,441. Mr. Salerno pointed out that this budget is funded by the rate payers. The Sewer Commission is looking for other revenues such as being consistent with some of the other boards with respect to increasing connection fees and fees for projects that are going on. Also the practice implemented last year not to idle town vehicles while parked, resulted in gas costs savings, will continue. Mr. Riley asked if the Commission compared project and connection fees to surrounding towns. Mr. Salerno replied not as yet as they felt raising the license and connection fees would be the easier way to implement increasing revenues.
Country Club Management Committee – Total budget request is $1,811,001. Jay McGrail, Interim Director of Operations reported the challenge was looking at the revenue and figuring out what would happen in the next year. Basically they sat down and revised the FY 09 budget to make it more accurate to what they anticipate happening in FY 10. They have yet to collect the fees for this winter. The Committee plans to increase permit fees by 5%. Mr. McGrail said the number of rounds and cart revenue has increased dramatically this year. The golf course will remain open through the winter and more tee times will be arranged. Also the Rowing Club is now practicing there. The Committee is really studying hard to increase value without incurring additional expenses. Mr. McGrail advised their overall goal is to have a level funded budget this year, build up their revenues, and grow the Enterprise Fund. The Country Club Management Committee feels they are going in the right direction and will see the light at the end of the tunnel. The Board thanked Mr. McGrail and the Committee for all their hard work in getting the Country Club back on track.
2008 Financial Statement and Management Letter – Mr. Alexiades, Finance Director and Kevin Carnes, Auditor from O’Connor & Drew. Ted passed out a copy of the Comprehensive Annual Financial Report which includes the Financial Statement signed by O’Connor & Drew and also the Management Letter from O’Connor & Drew. Mr. Alexiades requested the Board to vote to accept them. Mr. Alexiades requested Mr. Carnes to give an overview of just exactly what the management letter is. Mr. Carnes reviewed some of the comments in the management letter with the Board.
The Selectmen requested that a memo be sent out to the department heads to see how they will correct any issues noted by the Auditors.
Voted, to authorize O’Connor & Drew to issue the Management Letter and accept
the Financial Statement as issued.
Accounting Budget –Mr. Alexiades presented a level service budget with an additional request for IT salaries to expand that function from 20 to 28 hours, due to the endless demands of the IT staff. Also, he recommended a reduction of $25,000 in payroll expenses. The Accounting Department has always funded the full salary for the IT, however, 35% of this budget is for work he does for the school department. Every year pretty much of that 35% is turned back to the Town. He noted that this reduction will remove that flexibility from his budget but if an emergency should arise he would apply for a reserve fund transfer. The other reduction was $2500 in the annual holiday party line which could be replaced by a buffet or low cost function.
Debt Service Budget. – The amount requested is $4,870, 089. Mr. Alexiades said he takes all of our debt and spreads it out to where it goes. All of the debt listed doesn’t
belong to the General Fund. Some belongs to the Sewer Department, Enterprise Fund, Country Club, some belongs to the General Fund and it is all broken down. Right now, we are under our policy guidelines but in FY 10 we will cross over our guidelines quite substantially and then we will begin the process of returning back to our policy guideline. Mr. Alexiades felt this was consistent with what we reported to the community last year when we requested the debt exclusion for the school. This is also very consistent with the last school project we had ten years ago
Employee Benefits – Mr. Alexiades said he has forecasted the amount of $4,345,000 for Contributory Group Insurance for all active and retired employees. This amount represents a 10% increase. The town really won’t know the exact rate for next year until the beginning of March.
Contributory Retirement – The amount of $2,850,254 is the recommended budget figure, determined by the actuaries, for the Hingham Retirement System Funding Schedule. The town is fully invested in PRIM, along with a lot of other communities. Mr. Alexiades said he has supreme confidence in the level of PRIM and the quality of that investment product and how it delivers its performance, and despite this year’s losses he thought we did very well, versus the alternative. He pointed out that the town has to fully fund this system by 2020.
Non Contributory Retirement - The amount requested is $14,897.
Worker’s Compensation – Mr. Alexiades is requesting $300,000. At the end of the year, this budget was in the negative by $161,000. Worker’s Compensation is self insured and this budget was under-funded for the last two years when there were significant claims. He pointed out he is requesting an increase as he is looking to achieve balances in this budget crunch. There is some good news, as a couple of big cases have been cleared up. Mr. Alexiades felt that the town has done well being self insured.
Unemployment Compensation - Mr. Alexiades presented a budget recommendation of $92,000. $70,000 is due to budget reductions anticipating unemployment claims for personnel that can’t be placed in other positions. Ms. Burns pointed out that this does not include school personnel. Mr. Alexiades didn’t figure in the schools as he didn’t yet have the ability to look into their budget. He had recommended that school department reduce their budget by one million five dollars. However, this would require their budget to be reduced even more and that is why he is encouraging everybody not to hire personnel at this point in time. Assuming there are no more cuts in personnel and if everything turned out OK in 2011, this budget could be reduced back to $25,000.
Employee Medicare – $559,020 was requested representing an increase of $50,000.
Unclassified – Mr. Alexiades requested $441,000 but reduced it to $422,500. He was able to cut it $19,000, because there was a slight balance that was built up, in the Municipal Buildings Trust Insurance Fund. Due to high liability costs to insure vacant buildings, the town stopped appropriating money in this line item. The accumulated money was used to tear down the buildings as it was more cost productive versus insurance.
Ms. Burns announced that she realizes an enormous amount of work has gone into all of the background for the budgets. However, the Board does not have time to discuss everything that was produced tonight but they are looking forward to doing just that further along in the budget review process to get into the benchmarking.
The Selectmen acknowledged Ted Alexiades and Betty Foley for their role in the budget process in the absence of a Town Administrator.
Voted - to renew the following Used Car Dealer Licenses – Class II, expiring
January 1, 2010:Leon Arbeene, Bay State Car Locators, 63 Kimball Beach Road
Wayne F. Chevrier, Wayco Sales, 40 Sharp StreetVoted - to renew the following Weekday Entertainment Licenses:
Asian Fusion, Inc. d/b/a Asian C, small combos, Thursday, Friday, and Saturday evenings, from 8:00 PM to midnight.Eat Well Inc., d/b/a Tosca, one or two entertainers, guitar/base players two/three nights per week, from 8:00 PM to midnight.
Kay’s Harborside Corp. d/b/a Stars on Hingham Harbor – Guitar/Base Player, 2 weeknights, from 8:00 PM to midnight.
B&E Inc d/b/a The Snug–Mondays thru Saturdays, Juke Box – Solo Artist and/or trio playing Irish music, from 8:00 PM to midnight.
Voted - to grant a temporary liquor license to Hingham Nursery School for a fundraiser to be held at Old Derby Academy, on January 31, 2009.
Voted - to grant the request of the Conservation Commission to consult counsel as submitted.
Voted – by roll call vote to go into Executive Session to discuss Collective Bargaining
and not return to Open Session.
Ms. Burns, yes
Mr. Rabuffo, yes
Mr. Riley, yes
Adjourned: Regular Session at 10:30 PM
Marilyn A. Harrington
Clerk pro tem