Finance Committee: October 4, 2021

Transcript machine-generated with Whisper speech recognition (the source video has no caption track). No speaker labels; proper names and dollar figures occasionally misheard. Click any timecode to jump to that moment in the source video.

0:01 I’d like to call the meeting of the Board of Selectmen to order. It is October 4th, 2021, and we need a roll call, please. Mr. Grater? Present. Ms. Singer? Present. Ms. Nunnin? Present. Ms. Caulk-Pucker? Present. Thank you. Okay. Great. And I’d like to call to order the Finance Committee meeting October 4th at 7-4 p.m. We don’t typically do a roll call, but we could – well, we don’t typically do it, but call in this meeting to order. Thank you. And, Jackie, if you don’t mind, I’ll just kick off the meeting real quick with our short reorganization. Okay. Since this is the first Finance Committee meeting and typically of the year – of the new year – we will need to reorganize. So I would like to start by nominating Alec Goolsbee for chair. Do I have a second? Second. Second. Great. And now we will need to do a roll call for votes. Let’s see if I can get through it. Steve, do you have a list of all of our new income members? If not, I can go through our list to make sure we get through any. Yeah, I have a list. I do not – I don’t have a list. You do not. Okay. All right. I can do this. Here we go. All right. I’m just going through on my screen. Alec? Yes. Pat?

1:31 Approve. Tara? Yes. Mike? And Cam? Yes. Molly? Yes. Kat? Who? And Tim? Yes. And Emily is a yes. So that is unanimous. I think I go to everybody, right? All nine of us? Congratulations. Congratulations, Alec. Congratulations. Thank you to all the members, especially the new members. It’s been great catching up over the phone with each of you the last few weeks just to introduce myself. As I told everybody, I’ve been on the committee for five years now. It’s an exciting time for the FinCom. We have six new members, which is great because we get six new fresh sets of eyes and ears and ideas. And it’s always good to have new members. And we really appreciate everybody stepping up this year and volunteering. It was a lot of people that showed interest in this. And I think we’re well-equipped entering our next budget season here. So with that, I’d like to nominate Pat Franklin, who’s been on the committee for a long number of years now, as vice chair. Second that. Great.

3:02 Okay, so Emily? Yes. Pat? Sure. Tara? Yes. Mike? Mollie? Yes. Dan? Yes. Kat? And Tim? Tim, was that a yes? I think you’re on mute. That was a yes. Thanks, Tim. Great. Go ahead, Pat. We typically, in the recent past, have had two vice chairmen of the board. And I would like to nominate Emily Beall Becker as the second of the two vice chairmen of the board. Of course. Of the Finance Committee, not of the board of selectments, are they? The Finance Committee, yes. I second that. Do we need to vote on that, Emily? Yes, I think we do, yes.

4:34 Okay. Second. So who, you want me to call the roll? Yeah, I can turn. Okay. Or you can do it, Pat. Go ahead. No, either way. You’re the chairman. Pat? Yes. Emily? Cam? Yes. Kat? Was Kat I remember? Kat? Tara? Yes. Tim? Yes. Mike? Rube. Molly? Yes. I think that’s it. I’d just like to say this is the first year in my five years that we’ve had a full nine person. We’re very excited about that. The more, the merrier. Great. Okay. So we sent around an agenda. Steve posted it to the website. I think we’re going to shift to all of the town finance presentations and the board of selectmen discussion now, and then we’re going to pick it back up after all those agenda items are through. So Jackie, I just turned over to you. Thank you. I just would like to say that congratulations to everyone.

6:06 It’s great to see a nine member board. And we will be on for the town budget overview, the budget process and the financial policies. And then we will adjourn so that you can conduct your business. And my board will be welcome to stay if they like, but we won’t be participating because that would be problematic. We would have a problem with the open meeting law. Okay. Sounds great. All right. So as far as presentations go, do I can start with the financial overview? And then as far as the order goes, I know that the board of selectmen will be here for the proposed budget schedule, the policy. Is there anything else? Would you like me to cover that all at once? Or would you want me to break up the financial overview for discussion and then you guys can pick the order. What’s going on? Basically all agenda items except for the Fincom 101. And then we were going to do new business at the end, as we always do. But all of the other agenda items I thought would be good for you guys to cover as,

7:37 as we will reference our role within those presentations. The presentations will be good to cover first before we kind of walk through our role in the town budgeting process. Okay. Sounds good. So we can see the screen. All right. This is the final overview that we put together. The board of selectmen have seen this or a version of this that mirrors it pretty closely. But it will be new for most everybody else. So the first thing I want to touch on is, you know, kind of going to break down the revenues and expenditures and then kind of touch on some pressure points in the budget as, as we go, as we go through this and then provide a kind of a budget snapshot of FY22 to kind of illustrate

9:08 some of the things that we talked about throughout the presentation. So basically with your revenues, you have three primary revenue sources generally. That’s pretty standard with all the municipalities across the Commonwealth. You’re limited in, in growth and what you can do with those because they’re usually restricted by, you know, the state’s budget or statute limits property tax revenue. And so this is the, this is our largest and most stable revenue source, largest by far. It’s probably about 80% or so total revenues. It’s constrained by proposition two and a half, which is a mass general law that allows communities to grow their tax levy at two and a half percent every year so that you increase. So essentially you can spend two and a half percent more than you spent last year, assuming that you went to your levy, your levy limit. And it also allows for new growth. In addition to that two and a half percent and new growth, you can think about as, you know, a person subdivides their property and builds another house. That new parcel of land in that new home did not exist on the tax rolls in the year prior. So it is new on the tax rolls this year and that something like that would be considered new growth.

10:44 In addition to what was in the tax base in the prior year. Excuse me. Sorry. Steve, do you like us? I’m sorry, Madam Chair, if I may, about questions, if we should hold our questions to the end or? I’m fine with just answering questions as we go. All right. If you’re good with it, I am too. Thank you. Okay. Was there a question on this one? Yeah. How did you know? So you can see from this, you know, the new growth line, you know, that our new growth numbers are substantially down for the last four years versus the prior five or six. Like, do we know why that is and like how we compare to pure towns and? Yeah. Well, I think, you know, if I was to speak in general, generalities, it would be that, you know, Marblehead is a very densely populated community that is practically entirely built out. So you don’t see a lot of where you see the communities that have the larger new growth numbers are generally the communities that have the land and the ability to add square footage really as the driver of new growth. So, you know, I think you can see that. I think Marblehead is basically in a similar situation as other communities that I’ve been a part in that, you know,

12:16 when you get to the point where they’re relatively built out, your new growth is relying upon some small personal property turnover and then just general remodels and rebuilds of existing structures. So essentially you’re picking up the increase in value, not necessarily the added square footage. So, I mean, I think that it’s interesting because I think if you asked us six years ago, we would have thought we were pretty built out. Yeah. You know, contractors can get creative. And I mean, I guess, you know, without having the facts, I can’t really talk specifically to it. But I think that’s why you’re kind of stagnant in new growth numbers. Do you have a sense of, I mean, this is maybe totally premature, but a sense of what the Mariner Project and how that will impact our new growth in the coming year or two? I don’t at this point. I mean, I know there’s been some pretty decent dollar figures talked about. But, you know, one thing I caution with new growth being when you talk about permitting fees that generally they come on larger projects, they come on over a number of years. So it’s not like if you hear, you know, $150,000 in permitting fees and X amount in new growth, that it’s going to be, you know, an injection of that amount in one fiscal year. Generally, it’s over a number of years phases of construction and percentages of completion

13:47 because the growth goes by a snapshot in time on June 30th of every fiscal year. So it’s the status of completion on that June 30th, and then it carries through through the entire fiscal year until the following June 30th. So do you know if we, like, in terms of our declining new growth, does that compare with other peer towns like, you know, Manchester and Hamilton or, I mean, obviously they have more land, but I’m trying to think of like, what would be a comparable situation? Yeah, I mean, well, I can say, you know, I can’t speak to those communities because I haven’t been a part of them. I can speak to Danvers, which is a neighboring community that is also relatively built out. And we were in the same situation. We had a pretty big uptick in growth in the early part of the recovery of the Great Recession, where things were starting to, the real estate market was starting to get hot. Contractors and builders were buying up and getting creative with any available, you know, two families to do the condo conversions and to build any lots and shoehorn anything they could. And then when that inventory was kind of drying up, we saw our new growth numbers kind of drop off a little bit and flatten out. So I can say that we saw a very similar picture to what you’re looking at right here. Okay, thank you so much for that. Yep. Any other questions?

15:18 All right, and this is just a comparison of the property tax revenues with the PR communities. These are like 20-something communities that, through a number of different studies the town has done, have been used as PR communities. So you consolidate them all at one place, and you can look at the amount of revenue, the percentage of total revenue that property taxes make up. You can see that we’re in a similar company. Generally that would be the case because the other large driver of this is going to be state aid. And in communities like Marblehead, I generally have smaller amounts of state aid. And as we were talking about, it’s state aid. So, you know, the bond rating agencies view state aid as volatile, and they basically because, you know, especially considering the current environment that the Commonwealth, Massachusetts is, as far as their budget. And the towns and towns that overly rely on state aid can be can be cut hard because historically the state, when they make a cut knowing that proposition two and a half allows for a very stable and reliable revenue source, they generally will make cuts to state aid.

16:50 You know, we’re looking at this as a forecast and a projection. The town generally is going to continue to rely on, you know, probably about 9% and 9% of net operating revenue and bond rating agencies would not consider this over-reliance. And it’s basically a safe and small enough level of a diversified revenue portfolio. And so, you know, there’s, again, our community comparison relatively, you know, right in the middle. And right in here is just drawing attention to the state aid average, that 22%. That’s drawn up because of the larger gateway communities, like Lynn, Lawrence, Lowell communities like that. They have a very large portion of their budget made up by state aid. Sorry, Steve. So it’s fair to say that state aid has is down for, has been like trending down since 2012 for us. With the exception of, or so from 2013. Yes, well, yeah, it’s been, well, it’s been staying relatively, it’s actually been going up a little bit. But it’s that’s in, you know, it’s not inflationary adjusted dollars. So as the budget grows, the percentage of, you know, the percentage that the state aid makes up is not keeping up with inflation or budget growth.

18:30 So, but yeah, but as a percentage, yes, it has been dropping. But as a numerical figure, it’s been actually going up a little bit. Thank you. All right, so this economic growth. So this is, this is really, this is really local receipts from the year people talking about local receipts. Local receipts would be like permit permits and licenses and fees at the charge that the that the municipality charges, building permits, constipation fees, parking tickets, things like that. And also the price of motor vehicle tax, which marble head is probably it, but in a way it’s largest local receipt. And also an economic growth forecast you put the tax levy from new construction and then these, these generally make up the revenue source that most impacted by economic conditions. Can everyone please mute themselves. Thank you. So if you want to look at the last three years, you can see there’s a clear downward trend and a drop off as a percentage of operating expenditures, like this attributable to the pandemic largely it was reflected in the, in the, the motor vehicle excise tax can actually you can actually see can see the decrease in 2020 and permits and licenses is recovering in 2021. We expect this recovery to continue in.

20:13 We regained levels previously seen prior to the pandemic. Just to recap on revenue real quick. We have, you know, we said three three primary sources and two and a half to 3% total annual growth so if you take all those that’s you know that’s basically the revenue growth that you can assume to get every year. I think, could I just interrupt you. I’m sorry, Adam shared your mind. Okay. Go ahead. Okay. Lori bar we’re getting a lot of weird background noise from you, if you wouldn’t mind just meeting yourself. Lori. Okay, thank you. Okay, expenditures. Like I said, two and a half to 3%. You know it’s just a general rule of thumb on revenue growth in a community like mild to hell with the with the revenue makeup, and you know it with the. When you’re looking at expenditures you really don’t want to budgeting one on one you don’t want to match reoccurring expenditures with one time revenue sources so generally in an operational budget it’s primarily reoccurring expenditures

21:51 and you want to be able to match those reoccurring revenues and strike some kind of structural balance in the budget and when you have expenditures that are reoccurring that are growing at a rate larger than your revenue growth can can grow then you know you end up with a structural imbalance, and it starts in the money needs to come from somewhere and generally, in this case it’s it’s, you know, you start pulling your reserves to kind of balance the budget every year and every year you’re pulling a little bit more out of the reserves and the expenditures are growing at a rate larger than your revenues can cover. So this, you know, I’m just going to go through a couple of a couple expenditures a few expenditures that are kind of in pressure points over the last few years on the budget, this is a. This is the per people expenditure comparison. This is really the most apples apples to apples accurate way to compare school spending across communities in the Commonwealth. It does include benefits pension opab and also will include per excuse me, a student student population. So, just to preface with that. So, but as you can see model, you know, we have some significant cost per year in in growth for school spending. If you look down at the bottom left you can see 15 to 16, 16 to 17, 17, 18, 18 and 19 you see expenditure growth far exceeding, you know, any of its peer groups and also far exceeding our ability to raise revenue in a year so that those amounts are there either coming from

23:41 reserve funds or coming or being pulled out of other departments of the area as a government where cuts are being made to fund the expenditure, go to the expenditure that’s growing larger than revenue, not saying that spending on schools is a bad thing by any means it’s just something to be aware of that. And it’s not sustainable over the long term and that a plan should be put in place that if that’s the level of expenditures that is desired that a plan is in place on where the revenue will come from. So, Steve may have a question about this. Yep. This is a really interesting slide. What is included is this encompassing all of this is all of their spend I mean from any revenue source because the schools have other revenue sources not just. It’s their total it’s their total spent. Total spent. And it does not include any of the capital expenditures such as the new school or anything like that. No. Okay. This is just operating expenses. Yes. And people, obviously. Yeah, it’s basically everything including like if you, the reason why it gets, it gets difficult to compare schools on just looking at operational expenditures. So that’s why we went with the people expenditures because schools throughout the Commonwealth is really no standard like budgeting or, or reporting to the state, other than like this desi format.

25:16 So that’s why this would include pensions and benefits but then usually when we’re talking about the school’s numbers, you just looking at their operational budget and not necessarily the related costs that also are included with the benefits pension opab and things like that and that’s, you know, that’s part that the pound, the town is also picking up. Steve, can I ask a question. Yep. Yeah, so, um, okay so just to clarify, so this is the y axis is like a, this is a percent change in spending of the schools. Okay, so this isn’t represent like per pupil spending. Well, this is probably other towns. Well this is per pupil expenditures. So I guess if you had, you know, if you a student body cut in half your expenses would double. Do you know what I mean? I’m sorry, say it again. If you had the student body, like I’m just, if everything operated in a vacuum and your student body was cut in half but the staffing and everything else remain the same your per per pupil expenditure would double. Okay, so it’s change in per pupil expenditure change in per pupil expenditures. Okay, so, I mean, because I just, this slide does seem a little like just discordant and my experience, like attending these budget meetings.

26:49 You know, we’re roughly on the average side. In terms of per pupil spending, we’re pretty average with the state. Right, like in terms of like, you know, well yeah well let me know let me let me preface Yeah, right so you guys are currently, they’re at the about at the state average on purpose, right, and it’s yours, but I’m just trying to highlight an expenditure that’s growing outside of our means or ability to raise revenue offset it without making cuts to other parts of the town or draw down reserve funds. Okay. Okay. You know, you know, you have like a right so this does this is this is increase in total you can look at it as entries in total cost per pupil, year over year. Right. You spent to be at a 10% increase on $100 spend. It’s been 100 it’s been, you know, $110 a year after per person. That’s essentially what this is, this is showing. You know, it’s also, it’s really not to say that you’re spending too much or that these increases are disproportionate because you know the schools are important and that’s in whatever the, the, you know, the residents decided to put it all I’m highlighting is just simply that spending at this rate without a plan is not going to be a good thing.

28:23 Without a plan in place is not sustainable. Right. These increases is all year over year increases not level of spending per per pupil. Right. So basically, when I look at this, I say, I see that we’ve had like a run up in the last few years. And what that has done has gotten us to just average spending for people. Yes. Thank you. Can I ask a question of this, Steve before you leave that. So, I know this is a couple year old, the data 1819 is the most recent 8.68 is obviously sort of a standout increase and I’m wondering is that for 1819 is that is that a one off for did we have so what was 1920 or 2021. comparable and that type of an percentage increase or is this. Yeah, I don’t I don’t have the most recent data available because it lags with reporting delays and things like that. And as far as like diving into the schools finances and the calculation of per people spending I just took this as a data extract straight off the Dessy website and I don’t feel qualified to really dig into that on a granular level, as far as what, what changed and what not. What was it. Okay, thank you. Steve if I could ask a follow up question. We know that the town number contribution to the school.

30:00 The budget is about 90% of the spend. What do you think that percent is when you look at it on this basis? So what portion of the town number do you think that would be contributed on a per-student basis? I think we did that calculation a long time ago. If you’re saying 90%, I think the increase would be the same. But without actually having the numbers in front of me, I wouldn’t really want to speculate on something like that. No, that’s fine. The point is that the town is absorbing a lot of that growth. Well, yeah, and that’s really the point of the slide that we do make up. I don’t know the exact percentage of all their revenue sources, but if you just were to say 90%, 90% of A, 90% of B, year over year, you’re still going to have the same increase. It’s just 90% of that. Yeah, but I guess you’re reflecting other expenditures that don’t show up in the town budget. Right. One discussion on this slide? I just say one thing, Mr. Jason. I just want to be clear because I think we all understand that the school is in school spending our priority for the town. This isn’t an indictment on the increase in spending.

31:30 This is just the reality of what our increase has been over the last several years. And we want to, it’s obviously a major budget driver, and we wanted to point it out to say that, as Steve has already said, these increases year over year are just simply not sustainable with the revenues that we’re seeing come in, and the revenue increases we’re seeing come in. So that’s really what this slide is about. It’s not to say, oh, my gosh, look at how much we’re spending on the schools, and we’re spending too much on the schools. We have, there has been clearly an effort, and this is all prior to me, so. But within the town, it was clearly an effort to catch up, I guess, over this time period, and get the schools at a level that is in par with, or on par with, per pupil spending across the state, or at least get it to a point where we’re in the middle. That’s not a bad thing, right? I think we all acknowledge that. It’s a good thing. But it’s taken a lot of resources to get us there.

33:03 Thanks, Jason. I have a question. Tim Schottmacher. At the current rate, how long is this sustainable? That’s a tough question, because it has a lot to do with a lot of other variables as far as what other expenses are doing, and what your revenue sources are doing, and different revenue sources. So it’s hard to, it’s really hard to pinpoint exactly how long is it sustainable. It’s just something that you want to get ahead of before it’s too late. You know what I mean? You want to highlight these expenditures that are growing at rates that are unsustainable and put a plan in place to kind of help manage them. It’s really a goal here. Tim, it’s obviously an important question. We have, every year we go through a process to, during the budget cycle, to forecast our expenses and our revenues. And so we haven’t quite started that process. We’re going to talk about budget calendar a little later on the meeting. But as we prep for that and as we prepare to start that forecasting process, we may be in a little better shape to answer that question.

34:35 But it’s something, you know, not just for the schools, with all town expenses and revenues that we forecast, we go through a forecasting process. We have a five-year forecasting model we use. And, you know, we’ll be coming back to you at some point within the budget year to kind of go through that and to give you a better sense of, hopefully, have a better idea of answering that kind of question. Okay, great. Thank you. Madam Chair. Sure, Lexa, go ahead. Thank you. Just to follow up on Moses’ question and what Jason said, Steve, if you just want to make sure that I am clear that basically what we’re taking away from part of this conversation is those increased expenditures are also impacting other departments as, you know, the town’s working to handle that, you know, increase. Is that a true statement? Yes, that’s a fair statement. That and, well, departments and also the town’s reserves. Right. Okay. Thank you. Another pressure point. As of late, we have the GIC insurance. So that’s health insurance for all the town’s employees.

36:06 The town picks up a portion of that. And these are the average. This chart illustrates the average rate change across all the plans. If you look at, you know, it’s a clear trend upwards. It’s about a 3.25% increase over five years. So it’s certainly an expense that’s growing slightly above our ability to raise revenue. You know, I think of, well, if we got two and a half or 3%, 3.25% isn’t that bad. But, you know, if you look at, if we look at this five or six year period and you take three quarters of a percent of this growth in actual dollars, you’re talking about 250 grand over the five or six year period that has had to come from other areas of government or reserves to offset that growth, which is, you know, which is real money. And this is our pension contribution. We have, this is our unfunded liability for our pension. So it’s all future costs associated with all the employees. And this is set to be paid off in 2039. It’s required by law to be paid off by 2040.

37:43 In order to meet that funding plan to be fully funded, we need to increase our expenses at 7% year over year. So clearly that’s exceeding our ability to raise the revenue at that. And some of these costs are really, there’s not a lot you can do about them, especially when the law requires you to meet certain funding schedules. So here’s expenditures per capita adjusted for constant dollars essentially adjusted for inflation. This is something that the GFOA uses in looking at increasing if you look at the same a trend of increasing per capita expenditures can indicate that the cost of providing services, assuming that the services are level a funded as increasing more rapidly than the town’s ability to pay, which I think is a scenario that we’re experiencing now. The town’s increase in expenditures has largely been related to the things that we just talked about, schools, pension and healthcare benefits. I kind of go into reserves, talked a little bit about reserves and how they’re being drawn down due to expenditures growing at a larger rate than our ability to match them with reoccurring revenue sources.

39:28 I don’t know how much really in Massachusetts free cash. I’m sure a lot of you guys have heard about free cash. I’m not sure. Exactly what you know about it other than basically it’s really just as simple as after you’re done with town meeting and you’ve appropriated everything you’re going to spend money on all the warrants, you’ve appropriated your free cash to offset the tax rate, which is something Marblehead does every year. And that at the end of that is your free cash of appropriation and that would essentially be your reserve balance, but in a situation where you don’t have a formally set up stabilization fund. So those are your reserves. I’m actually going to jump to this slide here to kind of show that point a little bit more. So if you’re looking at, so this is not the blue, the blue columns are what we call the nominal free cash as a percentage of budget. That’s your total free cash generation in a given year. So free cash is really, it’s that free cash net of appropriation plus your total budget turnbacks plus see when your estimated receipts come in over what you estimated them at. So when all your books are closed, that’s kind of the sum of cash that you have available to you that you can appropriate at the next town meeting.

41:06 So then you have here you can see the green is this net free cash as a percentage of budget. So that’d be net free cash after appropriation. So you can see over the last several years, you can see the trend of it going downwards. And here in these, the orange, red, and yellow lines indicate target levels for reserve balances, where it’s generally acceptable reserve balances and targets where you want to try to maintain a level of reserve for a budget the size of ours. And you can see that, you know, we’re really, you really don’t want to fall below that 5% level and really a triple A community would probably should be like the six, seven, maybe even 8% being on the lower end. And we’ve, you know, over a year as you’re constantly drawing from the reserve drawing from the reserve falling down to, you know, below the free cash target low balance, which is that’s that’s that’s a number set by the state as guideline. 3%, but they’re also assuming that you have a stabilization fund that’s all that’s contributing to your total your total reserve fund balance. But in this case, Marvel doesn’t have a reserve fund, although we did appropriate $250,000 this year for the first time for a stabilization fund this year. So now going back. Could you go back to that slide for one minute.

42:38 Thank you. So you can, on this slide it. If you’re looking at that green bar. I got that color green. Starting in, I’m colorblind sorry, starting in 17, apply 17 you do, you start to see the step off each year. And it’s pretty, it’s been pretty fairly consistent. That’s when from 17 to 18 is when we started. And because the reasons we’ve already reviewed, which is continually continually seeing. So, Steve said, we don’t. This number here and 22 is, is one that we that we really don’t want to see go much lower than it is now. You know, to bring back to Tim’s question, you know, when, how long is it sustainable and it’s, you know, although I don’t really have an exact timeframe because there’s a bunch of variables but you know it’s really as long as this. It’s no longer it’s just when this goes to zero. You know, there is no, there’s no more reserves so then it becomes, you know, removal of services and things of that nature. Steve this is Pat, can you give some perspective on how this trend could potentially.

44:12 I would presume it will potentially adversely affect our, our, our potential bond rating, is that reasonable to project or is that, is it pretty. I think, I think, I think that that’s that I think that that’s a reasonable assumption that it could eventually affect our AAA bond rating. I would think, I would think we would want to have a minimum be at the, the free cash target low of 5% and we’re clearly not heading in the right direction. And again, when you look at your limited growth opportunities. Well, it’s, it’s a difficult situation to be to be trying to, trying to work through in the near term here. Thanks. Yeah, no, no problem. If I may. Yep. So, if we don’t. So just looking at this, if, if we do not achieve any additional revenue sources and we’re kind of just stagnant with our revenue stream. Like I hate to like bump, I’m trying to like bump out this chart until and seeing where this is going like, and how quickly. So, I mean, would we like, would it be a couple years if we didn’t if there wasn’t an additional some fun source of revenue.

45:51 Would it be, you know, a year or two years and we’re really like, down to like drawing from that free cash to zero. I mean, you know, it’s hard to really put a number on it but I mean it probably depends on how you set up the model and your assumptions, your assumptions you use but it looks like, you know, just looking at this you know you drop them by like a percent and a half each year you’re at 3% so you get a couple, you know, a couple more years at this rate before it’s, it’s getting pretty close to zero. Yeah, but, but you never want to, this is Pat again you never want to get even close to that. So, no, no, I think that’s yeah no I’m not I’m not I’m not advocating for I just, and again that’s just looking at this chart with the takeaway you know it wouldn’t. There’s there’s other mechanisms within two and a half that you know allow for certain operational overrides and things like that when you look at communities. You know, some of our peer communities pretty routinely will vote through operational overrides who combat this because they acknowledge that some expenditures are out of the out of your control at that growth rate and there’s you know certain level of services and quality of schools that they want and that they you know the, the, the taxpayers want to want that level and they vote overrides and things of that nature so certainly, you know, the slides really just to get some discussions going.

47:25 So, this slide is a direct remember it’s important to remember all of us that the slide is a direct resolve of spending. So, there, it’s a direct relationship here so our decisions that we’re making on spending just translate right back into this so what if we continue on the same path that we’re on now, you know, I think that time period that time period is probably close, but, but as a community as or just finance committee. There are other decisions that that could be made in order to change the trajectory. New revenues, reduce budgets, and I’m not advocating for one or the other, but those are really at the end of the day. Those are the type of decisions that we have in front of us. We asked the question with the slide actually have two questions. I know this is before your time with us, Steve, but, and we don’t really, I mean, this slide, it only goes back to 2016 we don’t have anything prior to that. But clearly something switched in 2017. And, you know, our free cash amount has dropped off to me, do we have any insight into what that is that kind of flip the switch on us there. But now it’s this time I really tried to speculate back then, but I really don’t have a good answer.

49:04 And just one more question about the total reserve target low. Is that just sort of a standard that’s used or is it based on sort of a minimum for triple A bond rating. No, I mean, let me take it now it’s definitely not like a minimum for triple A bond rating because they’ll take other things into account, such as the thing that really works. My favorite is the fact that the town has a history of overriding all major debt projects major capital projects. So that weighs heavily in favor. You know, like a community that didn’t do that but had a similar, you know that this snapshot was a different community that, you know, that absorbed all their major capital projects within the tax levy. You know, they may have already been stepped down from a triple A, you know, to a lower to a lower rating so they definitely look at a number of things and not they’re not just going to take this one. This one, one piece and, you know, mabbah is a relatively absolute community with an ability to pay and they’ve shown a willingness to pay through debt override so that’s working in your favor but it’s definitely it’s this is definitely a warning. And if the warning indicator that, you know, we really need to turn this turn this around or could become that that issue that that that degrades the bond rating. Madam chair. Go ahead and let’s see. I just want to clarify something you said it just to make sure I understand it correctly that if you can tell me the total reserve target low line of and the pre cash target low that one of those numbers was also in relation to having a stabilization reserve fund that that’s where that figure was coming from.

51:00 I understand that we don’t have that stabilization reserve fund, you know, that it just is something we have recently started. Can you speak to that. If I understand the question, it’s to referring to the, put the pointer on theory, right of this line here. Yeah, when you gave the definition. Yes. Yeah, so the total right to the free cash low. Right. So that’s, that’s net of a that’s that would be free cash net of appropriation after town meetings that’s just starting fund balance of the prior year. So that’s that’s a general threshold that they give for that. But they are also assuming that you have some level of reserves also built up. So if you were to do a bar graph and stack the two, it’d be the total would be somewhere above this 5% here. Right. So that pre cash low low line is also set up to be in combination with also having a reserve as well. So those two would be functioning together. That’s right. Yes, that’s correct. That’s fair. So I just want to understand what those numbers are coming from. So we’re actually below that because we don’t have the other. That’s correct. If you’re going from the technical definition of what you’re saying, we’re actually would be lower than that. Okay, thank you.

52:36 You know, again, these are just want to stress that it’s not going to use the nation when they say 3%. This, you know, if you had a large stabilization balance, I see I know communities that are also AAA that will only carry over 1% of slightly less 1% free cash net of appropriation, but they have 10% of their budget in a stabilization fund. So it’s situational and it’s, you know, these are just general guidelines for healthy, healthy finances. So depending on each individual community circumstances, they can vary up or down. Okay, no, thank you so much. I just know some of the things that you pointed out were set expenditures and percentages that they were continuously rising and, you know, not some kind of we could control. So that’s obviously factoring into this problem. So thank you so much. Could I say one thing to go back to Emily’s question. These benchmark data lines were actually, we were assisted by the Collins Center when we were putting up new model for forecasting model, and they assisted us with these benchmark, this benchmark data so that so that was in large part its best practices based on based on that. I think that was one of your, one of your questions.

54:07 And we’re still, your other question has been asked before and we’re still trying to get to the bottom of it, but it’s a very good one. What was the trigger here. And, you know, a lot of the when you look at seems driven by, I mean, I think you can relate this, this graph with the school increase that we that we were looking at a little earlier before I think that might have something to do with it. And I think, you know, what else Oh, the, I think there were, we saw a decent increase in in salaries for I don’t know if they were at a lot of additional staff in that turn over. There was, there’s a, I don’t think that was a contract here. Jason it’s, if I can jump in without reference to numbers directly I hesitate to say there was also some pretty significant growth in benefits that are the salaries in that in that 2000. Well, that 2018 collective bargaining cycle. Okay, thank you. But I doubt that. Yeah, I think that’s, that’s what I seem to remember. That’s all. Thank you. Move on to the next slide. Alright, so, you know, we touched this is just kind of this is looking, this is like looking at that other slide just a little bit different way, you know, just, I basically wanted to add this in to highlight the growing of the newly, newly created stabilization fund.

55:56 So you can see here, you know, we kind of stacking the idea here is to, you know, generally you probably will always want to have that two or 3%, at least in the short term, as the free cash net of appropriation. But the, the, the goal here is to grow this over time, up to that, you know, 810% range. Steve is there and yes Aaron. Thanks. So, given the down, like given that we’re, you know, using free cash, and we’re declining in that bucket you know what, like ideally we have the stabilization fund what would be an intermediate goal I guess, in terms of, you know, a place to get for projecting, like, what percentage you would put into a stabilization fund, given the present, given the prior slide, I guess I’m just trying to. Well, I don’t think there’s really any right or wrong way other than you know you want to create the stabilization fund with Jason Jason did funded it, you know, which he did. And, you know, we’re proposing we’re talking about a little bit later, some financial policies and within those policies that you know it’s written policy that suggests that we should fund it at the $250,000 plus a minimum of $20,000 $25,000 each year, so increase it by a minimum of the $25,000.

57:38 And, you know, with like any policy it’s a you know living breathing entity said, you know, should should should be evolved as a community evolve so you know as long as you’re doing something now. And then a few years you know you think you can do more you can adjust it. I think that this is a good step. Certainly a lot better than than not make not making any contribution at all, especially in year one. Yeah, I’m just wondering like if revenues are stagnant, how do we contribute to this stabilization fund. Well, I mean, I, I, one way to do it is, is, thank you. One way to do it is rather than allowing revenue to fall or savings to fall free cash. Actually, identify and identify at least a portion of those and put them into stabilization. So that is protected in stabilization fund rather than, rather than free cash balance. Now, that only can go so far as well. I understand that. But it’s a good practice to say, like I’ve seen in other communities that I’ve been involved in that there’s been a free cash distribution policy that says, you know, upon upon certification of free cash, a certain percent is going to stabilization a certain percent is going to OPEB a certain percent is going to, you know, in some communities

59:19 that have capital improvement funds. And so there’s a, there’s a very clear cut distribution policy upon once free cash certified that dictates how you distribute it so that also may be something that we consider down the road. But I think isolating our reserves in a stabilization, rather than a free cash is a good first step. So that’s, that’s how I, that’s how I view it. So if you have like a structural deficit you can still fund the stabilization. How much of a fund is that? Only so far. I mean, that’s a… I mean, it is a tough situation to be in because if you’re in a structural deficit, right? So you finally… the stabilization funds are there to kind of offset a structural deficit in the years when it’s needed. So it definitely becomes a challenge. And as Jason said, it’s really just a function of spending. Is it going to be cuts other places, or is it going to be more constraints on allowable increases for some of the departments? If you have a department that’s growing at larger than the 2 or 2 1 by 2%, there might be a policy that kind of flattens that growth.

1:00:52 So that you can continue to say if it’s really… it would be a decision for the policy makers. And there are legitimate reasons to spend free cash too. So, you know, certified free cash is a one-time revenue stream. It can and should be used on one-time expenses. So there are a lot of communities that utilize their free cash for one-time investments in capital. And other things. So, you know, we fund capital projects, we fund building improvements, we fund vehicle purchases. Is it proper to use free cash for those type of purchases? I think so. But again, all of these expenditure pressures that are being put really on free cash at the moment is what the problem is. But all of the spending that… I’d say this. All spending that free cash is supporting is not… it’s not inappropriate. It’s a very appropriate use of free cash. But the certification number is not keeping up with our need to expend funds. Right. That’s… yeah. And that’s just kind of where I just needed clarification just because it was my first time through this whole process.

1:02:24 And so I just wanted to kind of make sure I was understanding. Thank you. Madam Chair. Oh, I just want to address Jason. Jason, just to clarify what you were saying about taking… identifying that savings and then putting it into a stabilization fund versus a free cash situation. I just wanted to follow up with that because you still would need to maintain that percentage of free cash that the state is recommending. So without that additional revenue, I’m confused on how that would happen. No, it’s a very good point. My only point was if you give me an option to have a reserves in a stabilization funder or free cash balance, I’d prefer to have the money in a stabilization fund. But it’s a fair point. We absolutely have a revenue. We have a revenue issue. There’s no way of getting around that. Well, based on what Steve pointed out and the opportunities that that was what my concern was that if you still need to have that 5% base and that minimum, I understand the need to put that in the stabilization fund. But if you’re still funding that other sector, then that was my concern. Okay. Thank you. Jason, could I ask you a follow-up question about… I think I heard you say there

1:04:01 are some items in that we spend free cash on that could be capitalized. Is that an area for us to look at that there may be an opportunity to capitalize some of those expenditures and not allocate free cash for them? Yeah, Steve, you might be able to talk to this too, but we don’t… Yeah, our only debt service is debt-excluded. So it’s the only money we borrow is based on the debt exclusion post. We don’t have any debt on the levy, so to speak. So it is something… I think it probably is something that we could look at. We haven’t historically… I’m not sure that’s ever been done here, but it’s a discussion that we’ve had informally, I think, with the FinCom maybe last year, two years ago. Actually, I think it was two years ago when COVID got in the way. But I think it’s something we can have a discussion about. Steve, do you have any further comments on that? Yeah, I mean, I guess it’s just it becomes how being able to plan a debt curve that can be afforded. It might be advantageous in the early years, but you may get to a point where you’re in the same situation you were a couple of years ago when, as all the

1:05:32 debt starts to come online with projects, some communities to address this will also come up with their capital plan is also funded through debt exclusions. And that would alleviate the pressure on your tax-supported side, just as another thought. Right, and I wasn’t referring to funding anything in the operating side, just legitimate capital projects that you could consider. But yeah, just curious if that’s an area for us to look at. There’s a number of communities that will fund their whole capital improvement plan through an operate through a debt override. The necessarily issued debt just has to be projects that qualify to borrow on. Right, okay. Thank you. Another question. Are there any departments that are following the revenue growth or contracting? I’m sorry, it was all jumbled, broken up. Are there any departments where the revenue growth or revenue, the expenditure growth is slower than revenue growth or contracting?

1:07:00 Yes, but generally it’s pretty close to revenue growth just with the contractually obligated the cost of the labor agreements. So they’re pretty a lot, you know, we’re a service organization, so a large percentage of our overall expenditures, our salary, and benefits related, ingest those pieces alone, even if their operational expenditures were decreased a little bit year over year, it’s pretty close to the, our ability to raise the recurring revenue. Jason, if perhaps we can recollect, there were actually some departments that took cuts in fiscal year 2019, I think, on the town side. Yeah, there were departments that took cuts in that year, and then during COVID, there were departments who took cuts as well. And Steve will get to a slide for a quick budget overview for this year. You’ll see probably a larger increase than you anticipate in large part, in some part, because we will make enough for those cuts for the COVID year. But yeah, there were two years since I’ve been here that there were, there have been, there have been departments that have absorbed staffing reductions and other reductions based on the financial situation of the year.

1:08:36 That’s right. Madam Chair, just a question for Jason. Sure. Jason, just based on what you were just saying, with those staffing cuts, and as Moses was just saying that the departments that took those cuts, can you confirm that those cuts that were made in the staffing reductions were not brought back up to the level they were before the cut? For 19 or the last? Yeah, for 19 and 20. Yeah, the 19 have not been reinstated. I’d have to go back and kind of go, you know, run through the checklist. But most of those have not been reinstated. The COVID cuts most have been. Okay. What happened was we planned for COVID year, we plan for dramatic, not a dramatic, but a decrease in revenue based on the last recession, we just went back and looked at the last recession. We brought those percentages forward and use that as a basis for our revenue projections. And, and so that caused certain budgetary decisions that needed to be made. After looking at the revenue impacts COVID, there were certain revenue impacts for sure,

1:10:07 but they weren’t at the level that we planned. So we were able to, to add back last year. Actually, last budget year, this fiscal year, that’s what is the process. Thank you. Thank you for clarifying.

1:10:29 All right. And this is, this is a chart that we talked about stabilization funds. And this is kind of a snapshot of that the same pair of communities that we’ve been using throughout the rest of the slide. And kind of to give you an idea on where, you know, we fall in comparison to our pair of communities. And this is just stabilization fund. You can assume that they all probably have that two, 3% of free cash on top of that. So Marvel head will, you know, this, this was FY 20, but this was an FY 20 too, it would have, you know, there’ll be a little bit in the Marvel head. So just to recap a little bit on the, you know, the revenue, revenue growth is limited, you know, the, you want to, do you want to try to stay within your means? Part of the, we talked about spending down reserves and a part of that is, you know, is, is the expenditures growing at a pace that we can’t maintain? When reoccurring revenues are less than reoccurring expenditures, creates the need for one time revenue. And that’s, you know, that’s your free cash and that’s your reserves. And this is, this is a FY 22 budget overview

1:12:11 to kind of point out up here, you have your revenue sources. So here’s really the, the three that we talked about, local receipts, state aid and property tax. And this is our free cash, which is, as Jason said, it’s really earmarked for one time expenditures. And these are, these are the changes here in this column. Watch Ray Donovan season four, episode two. So what this column here is, is this is the, this is the impact on total revenue. So as you can see here, you have some, some relatively large fluctuations in euro per year change on the 21 to 22 budgeted amounts. But the property tax is, you know, far and away the largest impact, even with the smaller, the smaller changes. Now this Jerry school sale, this is a one time revenue. This year we use that, that one time revenue source to fund our capital improvement plan. This year at town meeting, that was been, remember it was contingent upon the, the sale being finalized and us receiving the proceeds. And then moving down to the expenditures side, you can really see these are all the, the general areas of government and their, the related increases. And also I wanted to just include again, the impact on total expenditures where, you know, a 3.25%

1:13:46 increase in education makes up, you know, a percent and a half of the total increase where, you know, the 7% increase in general government impacts the total expenditures by, you know, 32 basis points. And I just want to, you know, draw to that large increase that it was a, you know, we had two unique circumstances. We have a number of key managers retiring this year or last year, and it is, so we funded the, the salary reserve so that we could, to, to fund their retirement and for giving the 12 months notice and also finance. We had our town accountant was on maternity leave so that we brought in an interim town accountant for a couple months, couple days a week to offset that and pull those costs won’t be, we’re just a one-time cost and we’ll fall off next year. And here we have, you know, as we, we mentioned before pension OPEB stabilization is 22% increase. 9% is the pension we didn’t fund OPEB last year due to the pandemic. We wanted to be conservative and also the new creation of the stabilization fund, $250,000 each, $500,000 together. GIC raised by, you know, 5.2% year over year, the average rate increase. You can see the corresponding impacts of the overall expenditures

1:15:21 with a total increase of 5.16% year over year. And here’s just, you know, a little side note here that if you, you know, if you remove your OPEB stabilization pension and healthcare increases, which are the ones that, you know, we kind of talked about as being outpacing our revenue growth, we fall down into that 2.3, 2.4% range, which is in line with our reoccurring revenue sources. Farce Ray-Davling, season four, episode two.

1:16:06 If I could interrupt for a minute. He just muted himself. He just muted him. Oh, okay. Thanks. I said I have the, I have that screen off while I’m doing the presentation, but it’s, I’m jealous. He’s watching right down at the end. I know. Good show. So any questions on this clarification? So that really concludes the kind of the budget overview, financial recap, whatever you want to call it. And now, do you want me to move on to the GFOA? Do you want me to just keep going or do you want to pause in between? I’m good with moving forward with the GFOA. I am too. Okay. All right. This year, full FY22 for the first time in history, my head will submit for the GFOA budget award. So the slide says the highest form of recognition in governmental budgeting. Really wants to promote transparency and understanding of the budget. I really see it as a tool to really, it ties, you know, your message and the services

1:17:39 that you get to the numbers. So you’re not just looking at a spreadsheet. You’re, you should be able to pick up the budget and be able to read it and really understand where your taxpayer, where your taxpayer dollars go and really understand it, the services, what the services you receive and what, you know, what they cost to provide. And this is just a, this is essentially the table of contents for the GFOA budget. These are all, these, this is off the checklist of required sections. We had the Collins Center help us put together, but it’s a, it’s a template that the GFOA puts out and they have budget reviewers who from all over the country that volunteer their time to, you know, you submit your budget for the award. They, they review it and create it and kind of give you feedback on areas to improve upon. You can see it’s extremely comprehensive and detailed. I just want to show you just a couple examples of the departmental. I said it really helps you tie your services to, to the, to your tax dollars. I just want to bring up a couple of, a couple examples. We use the assessors as one.

1:19:15 It really spells out the department, the mission statement and the department description. You have your org chart and then it has, you know, you get a list. You’re, you’re looking back in time where this is an FY22 budget. Looking back at, you know, snapshot in time, their FY, you know, two years ago, the FY20 accomplishments and then your FY21 goals and status. So when this is created, when the FY22 is in the FY23, you’ll see the FY22 goals here, but then fall into this category here so that you would know what the results were of those goals and the measurements that were used to track them. So, you know, for example, goal one, continue the 10-year sickler re-inspection program, the objective, how they’re going to measure it, you know, when they plan to, when they plan to complete it. Something you can follow along year over year, you always can have those three years of history of rolling goals, measurements. And it also, you know, so here you have the money portion, so you’re able to read, you know, what they do, what their mission is, type of work they’re performing, the different workloads. You have the departmental trends, so these would be performance metrics that, you know, you’re looking at, you know, how many times are they going out? Looking at a property each year,

1:20:47 how many bills are they processing? You know, what are they doing in their day-to-day that’s costing the taxpayers dollars? Another department I want to bring up was the, you know, council on aging. Again, same layout here, but what I really thought was great about this one is, well, obviously the detail that they put into all the programming that they did and the grants that they successfully secured. And then, you know, if you don’t really know what the council on aging does, you can pull up and really with just, you see the, you know, the amount of attendance and the participants they have in each program, how many programs they have, how many people they’re picking up and giving transportation to every year. And you can also see trends as, you know, programs are getting added and falling off. So, you know, it’s really a great tool to be able to visualize where the money’s going and communicate your goals and strategies that you’re working towards. And just, Steve, real quick, I just want to say this is amazing. This just represents so much work in your part and Jason and the finance department and all the department heads their supporting committees. I mean, when the finance committee had our department meetings last year, you know, it was sort of in the beginning stages of pulling this together. And, you know, we knew this

1:22:21 was going to be a huge asset and just seeing the final product, it looks amazing. And I know this was an enormous amount of work on a lot of people’s parts. So it looks great. Yeah, really all the departments, you know, were great. So there was a lot of work on, you know, a lot of people, especially because it’s just new. So a lot of this information had to be created, not from scratch, because it did exist in record keeping, but to actually pull it out and put it in a format that was readable. I think it’s going to be a great tool. Yeah, Steve, I second what Emily said. I was just about to speak up as well. This, just for the newer FinCom members, this was new last year. And it was a great tool. All the town departments were very supportive of it and they were willing to do it. And what I liked, one thing that I liked was he showed the assessors, I was going to use that as my example. So I won’t use it again later during my presentation, but it covered a lot of things that, you know, the budget expenses is generally what we’re reviewing with departments. Obviously we can ask them about revenues and things like that, but this document kind of covered things outside the budget expenses as well. So it’s always good to, you know, get that read before we go into our liaison meetings, which I’ll explain in a few minutes here. Thank you. Mike, could I say one thing about that? Good. And Jason, if I could just jump in really quickly. Oh, yeah, sure. I’d just like to say

1:23:51 that, you know, Jason, this has been kind of, I don’t want to say it’s been a while in the coming and Jason really spearheaded it, you know, two years ago. And Steven, you’ve really picked up the ball on this and we’re just absolutely delighted that we’ve got this tool in place because I think a lot of the information is in the town. I think the town, you know, has run their resources, you know, quite well, but to be able to communicate it explicitly is really valuable, I think, going forward. So, you know, really, really great kudos there to everybody. Jason? I just want to say the, this was a real collection of energy and effort to pull together. And, you know, from the board of selectmen to the oversight boards, from Fincom to department heads, to staff level, frontline staff level employees. It was all of us needed to come together and make this happen. It would not have happened without everyone’s cooperation. It was a big lift from where we were to where we are now. And so we’re excited about the final product. It’s important not to just be happy with one year doing so though it’s really the key is now to make the process

1:25:21 in this line of thinking the way that we conduct business and the way that we do, that we pull the budget together each and every year. And so excited to get to year two of the GFOA process. We just wrapped up one, but to get to year two with it, just appreciate everybody’s support and pulling it all together. It really was a pretty heavy lift for a lot of people. Right. So, you know, talking about it as, you know, the GFOA budget and formalizing the budget process and things like that, I know. I’ve talked about policy before and we’ve had, we’ve distributed the financial policies around and, you know, I just, to me really to have a formal policy, it’s just really to institutionalize good financial practices. And, you know, I think what’s paramount is that it, you know, they will outlive the, you know, the creator, so to speak, you use, you know, use best practice, best industry practices and come up with budget guidelines about decisions that the community wants to make and wants to stick to. And then, you know,

1:26:54 regardless of who comes in or out, it, you know, will help guide those those principles, you know, forever, really. You know, there’s, you know, as long as, you know, even with the fact that it supports a good bond rating and, you know, reduced borrowing costs and it looks favorable upon credit raters and, you know what I mean? There’s a lot of good things about it, but I really think that it’s really good to have it written down and help guide your processes going forward. I don’t know if there’s any questions specifically to any of the policies you wanted to talk about or leave that for another meeting. Madam Chair? Erin? So, I think this is great. I mean, I think this adds a lot of clarity to the whole process. I think this is something that adds, you know, just consistency and clarity and just a grounding document for any board that come, you know, that goes through this process. And I think in terms of just like, were you asking like about certain, like within the policies

1:28:27 that the document itself, like. Yeah, I mean, I really, you know, because some of the things that were, it’s, I just, you know, I guess kind of in the interest and time, I wasn’t going to go through every policy one by one unless, unless everybody wants me to, I will. But I, and that’s why I kind of wanted to get it out before the weekend. So if there was any specific questions on individual policies, I’d be more than happy to talk through it. So I did just have like a couple things. I think that under position control and, oh, no, sorry. That’s not the right one. Under submission of budget and budget message, the policy guideline. What’s the number? So it’s page four. Okay. So as it just as it currently reads, the board submits the proposals to the finance committee, but I think we sort of do that backwards. And we do that differently. So maybe we work that that that policy guideline. And then. Just highlighting this as we keep going. Let me see. And then there was another one. Okay. And then in monthly reporting, I was curious if they had, you know, if they had, you know, in the community compact.

1:30:00 Talked about updating to the Board of the Select Board on like a basis because it you know the County Department produces and distributed to the department heads monthly. But I guess I’m wondering if there we should have a call. I mean this is maybe a conversation but like a policy about you know the Finance Department updating the Select Board on a schedule. Yeah yeah no definitely I think there is a policy in there I’m just finding it about um it’s it’s gonna be kind it’s not it’s not something that happens currently but it will become the Treasury Collector will come and report on the town’s investments and fund balances and performance it’s in their different investment accounts something that I think the town should be aware of and things of that nature and it’s certainly open to if there’s something you would like to be reported on monthly, a quarterly, whatever it is be more than happy to accompany that. So I guess so I mean I think it’s I think all I really looked through and I think that all of this is I mean it’s great and would it be helpful if you know we we vote to adopt this draft and then with the understanding that you and Jason would come back with some you know additions or revisions or is this just like a draft

1:31:34 for us to consider? Yeah I guess yeah I could have probably guess I’d defer to Jason on that how he would want to play that out but I really just wanted to get this initial draft in front of everybody’s eyes to start thinking about start thinking about it. Like it’s kind of where we are and there’s obviously there’s other things that can be added or changed. I know Jason do you have a thought on how you’d like the board to proceed on that? So I had I think from the from the versions that you all have I had some very minor modest amendments to it it probably makes sense. It probably makes sense to give people some time to look at it offer feedback maybe through through Steve and then coming back at a at a future meeting just to just to approve it in its final form. I think that’s probably the best course if that’s all right. Yeah that’s right I mean fine thank you. Are there any other questions from the board?

1:33:01 This is Pat. I just had a question. How would you like us to submit comments because I’ve got I’ve got several questions slash comments about this too but it’s I agree that this that this is probably not the right forum yet because it’s working on a draft is one thing and that’s why it’s a draft. I’m happy to just submit comments to Steve. Is that what you’re suggesting Jason? Yeah yeah that would be great. Yep. Thank you. Any other comments on the the policies for now or do you want to move on to the budget proposed budget schedule? Sure. This is our proposed budget schedule acknowledging that you know as we get get into it you know some some things can probably change if certain departments need a little bit more time or whatnot but

1:34:38 you know based on our first run through my first run through the budget process last year and my experience in other communities it just seemed very rushed and was kind of a race to the finish right up to town meeting with you know with meetings on the town meeting meetings right on the town meeting floor making last-minute changes and you know I don’t necessarily think it needs to be that way but generally the communities I’ve been involved with have the budget mostly squared away by the by the beginning of the year and then that point you have leave yourself a lot of time to go through capital improvement plans and coming up with any holes that are in the budget looking for revenue sources fixing any issues because there always is something that needs needs to be fixed instead of you know being right right up against the deadline. So we’re proposing setting up I mean you can read what I have on the screen but you know essentially starting the budget process in a couple weeks so Friday October 15th would send out the budget message and essentially would include their budgetary information that the departments get every year as long with their GFOA goals and objectives template that you saw on the screen earlier where they could fill out an update what was done last year kind of move the you know the goals to accomplishments and give us give the readers some background to that and then basically

1:36:10 moving the whole process up by really a couple months if not a little bit more working to you know to kind of be hopefully be wrapping up at least a majority of the departments by before Christmas with the understanding that you know maybe some of the larger ones may have to fall into January especially when we have a little bit better idea as to some of our revenue assumptions you know obviously we operate on estimates but where free cash is such a big piece of the marvel head budget generally you know we probably won’t have our free cash number till around then we’ll probably have a better idea of what it will be but we won’t have an actual certified free cash number we’ll also have a better idea of what state aid is going to be in things of that nature I don’t know if anyone has any thoughts or comments as to utilizing this budget process this year yes quick question um I think this is great I agree with you about the run-up to town meeting is always a bit fancy um so I like how this kind of pushes everything back and gives everybody a little bit more breathing room you know especially as as um as the year progresses you know and I imagine us you know probably meeting to revisit a couple of budgets that we’ve maybe already approved earlier in the

1:37:44 year if things change um I just have two questions um I think my only concern and I’m curious for this is that you know obviously the state of the town presentation wouldn’t be until January would you have enough information to be able to communicate to departments what kind of budgets they should be putting together in November um even though you’re not going to have the state of the town kind of pulled together till January yeah I mean generally assumptions would probably be pretty close to what they would be in January I mean I think in historically it would be a you know level service budget or level funded budget um I don’t you know see I’m sure we’d talk the finance committee would speak more to that a specifics on the uh the message that they’d like to go out but I’m thinking it’s probably something going to be something like that have few spoken with department heads are they on board with this celebrated schedule yeah the couple I’ve mentioned too they they seemed uh they seemed willing and I know Jason had brought it up in our last staff our last staff meeting and everyone um you know seemed you know pretty happy about it they thought it was a good idea I think everyone kind of feels a little rushed at the end so I think some

1:39:16 breathing room would be um would be appreciated but also acknowledging that you know this is a lot earlier than anyone has been asked to provide the information before now and the other half of it is is we’re going to you need more with this gfo budget process in the document you know you need you’re going to need that time also once the budgets are solidified to really to format and to get the goals and objectives in just the way you want it to look things like that as you’re working up to town meeting to have a somewhat finished product to share you know might not be the whole document but certain excerpts of it to go into like the my envision of being part of the you know the finance committee letter or notice that they do before town meeting you know kind of to work off one document instead of having you know three or four different budget formats that are created based on you know what you’re doing uh in the certain process to have you know to create this just make this your core document and make this you know change this to kind of fit our process so that we can you know I mean we’re always just working off this one document and there is a number of documents that live in different places with different budgets amounts based on when they were changed and where in the process. Madam Chair go ahead Erin. I just wanted to make the comment

1:41:00 you know I just from an outsider’s perspective having you know kind of watched the process I think that this seems like a really good idea I think it feels like sometimes it’s very back loaded and kind of comes together like really up to town meeting and this you know this schedule allows for more kind of creative solutions and you know community talking to residents and and I just I thank you for bringing it up and you know I think even especially this year given our situation is presented earlier we could especially use that extra time this year so thank you. Any other questions or comments from the board? I guess I’ll just say one thing I’ve spoken with Emily and Pat about this it’s a pretty significant change and the three of us are fully on board with this and we like the idea as well. Just wanted to open up the floor to any of the new members of the FinCom. I sent this out on Friday for draft schedule so I don’t know I’ve spoken to you all in the last few weeks and I kind of relayed a different message so just wanted to give you a chance if there were any concerns on your end about this newer schedule.

1:42:34 Sounds like there’s no concerns. All right with that that is that’s all I have as far as presentations go. Thank you so much Steve. Yeah, thanks Steve. Very well done. Can anybody tell us please? No, no everyone’s still waiting. Helpful, very helpful. Really, good job. Thank you very much. So at this point I need a motion to adjourn so that the FinCom can proceed with with the business specific to FinCom that we’re waiting to hear about. We can stay on the Zoom but we really shouldn’t be asking questions because we can have a quorum. So may I have a motion to adjourn? So moved Madam Chair. Thank you. Second. Mr. Grater. In favor. Ms. Noonan. In favor. Ms. Singer. In favor. Ms. Belfbecker. In favor. Thanks everybody. Thank you. Thank you. Turn it over to you Alec. Thanks Jackie. Thanks

1:44:08 the board. Appreciate it. Okay so moving on with our piece of the agenda specifically. First off, thanks again Steve. That was amazing. When I spoke with Emily and Pat about organizing this kind of what we’ve been calling FinCom 101 which is a pretty basic overview of our budget season and our main responsibilities. I didn’t imagine that we’d have such a great kind of lead-off presentation ahead of us to kind of reference within our presentation. So thanks again. That was really helpful and it really makes my presentation a lot quicker but certainly can reference a lot of what you just spoke about with respect to the town budget process and goals and things like that. So thanks again. Appreciate it. I’m going to share my screen here and just so everybody knows I’ll share with the full FinCom the materials that I’m going to present after the call which is basically going to be our agenda and then a number of examples from prior year budget seasons just to give you guys a sense of what budget season looks like and really what we’ve been appointed to do as a finance committee. Our main true core objectives and what we were appointed by the selectmen to do. So I’m going to share my screen. Can you guys all see

1:45:40 my screen? Yes. Yes, looks good. Okay, great. Emily, you wanted me to mention one thing before I start. Remind me. Are you there? Yeah, I’m just trying to remember myself but I’m just trying to remind you. Sorry. Maybe it will come back to me but yeah, I’ll let you all interrupt. Okay, great. All right, no worries. So these are our primary responsibilities. Again, like I said in my intro there, we’ve been appointed by the selectmen and we really want to focus on these first primary responsibilities first. There’s other areas that we’ll get involved in which I’ll reference with respect to various town finances and other items with financial implications but these are the main items and probably I’d say 85 to 90 percent of what we’ve been appointed to do is really review the town budgets and make recommendations to town meeting on the town budget as a whole with all the various departments that roll up into it and any other areas or for example, other warrant articles with financial implications. So what does that really mean? That’s kind of a broad statement. Sorry, I’m gonna I just remembered I’m sorry to interrupt you. Do you want me to remind you right now or do you want me to hold this? Yeah, it’s kind of a different. Okay, I was going to

1:47:13 remind you to remind the finance committee that they can feel free to ask any questions throughout your presentation. Yes, but if there are any questions, you can finish. Sorry. No, no, no, that’s a good point. So this is supposed to be an open forum. FinCom 101, please stop me at any time. Anybody, please feel free to just speak up and interrupt if you have questions or comments or anything at all really. It’s supposed to be a really laid back and high level overview of what we do. So thanks for that reminder Emily. So anyways, so what does review and analyze you know all the budgets and other areas with financial implications mean? So FinCom liaison meetings is really where we begin and what is a FinCom liaison meeting? So let me just pull up our schedule from last year. You guys see this? So down the left side and granted this is subject to review each year, you know which departments we break out and you know which deserves a full review and whatnot. But this is just an example and I don’t even know if it was the final one from last year but it’ll provide a good example for you guys to understand. So these are the various town departments that we create what are called FinCom liaison groups. And what FinCom liaison groups do is it gives us a chance to kind of break up our nine person committee into smaller groups that really get to dig into you know as you can see each member is a member of three or four or five budgets depending upon the size of the budgets and whatnot. And really dig in with

1:48:49 the department heads whether they have boards or other committees that work with them on their individual budgets. So as you can see as an example Emily was a chair of the library FinCom liaison group last year and a member of health and waste, rec and park and schools. And what that means is Emily as the chair. I just want to correct that. I just have to say for the record I was not on the health and waste this is an incorrect chart test because there is a conflict of interest there and I was just for the record I was not on the health and waste. Yeah that’s correct. Our prior FinCom chair must have had that one wrong when we sent that out so apologize for that. So anyways each liaison chair so what is the responsibility of a liaison chair? So liaison chair the way I see it is responsible for organizing the liaison FinCom review meetings and then prior to each meeting the liaison chair should request from department heads their draft budgets and GFOA goals document that Steve had mentioned. So before you kind of organize the meeting but before you actually meet it’s always good to get that draft budget document as well as the GFOA goals document even if in draft format always good to kind of review before the meeting so you can start thinking about any questions you may have recommendations advisory type things like that. So again I just

1:50:20 wanted to show a couple of examples. So this was you know a really simple budget and I use the assessors because it’s pretty small as you can see but better better to explain an easier budget before we really dive into one of the larger ones right. So this is an example of the type of documents that you would be receiving in draft format before your liaison meeting and it’s a really good tool because it shows you know the prior three fiscal years what’s been expended or budgeted and then also on a year-to-date basis historically we always did our meetings after January 1st so we always got that good data points of six months but then what’s the balance available. So it’s just a good you know intro as to the main document that we’re working with the various department chairs. I use it as an example oftentimes I’m looking at this line like I said a good data point. Let’s say there’s a line item just for example purposes that was you know budgeted for you know $500,000 but they’ve only spent 10,000 year-to-date that’s obviously a great question to ask you know why is it that $490,000 is going to be spent or is it going to be spent and things like that. So this is a really good tool and as you can see there’s various tabs which just roll up into the finer details so this is really where we start. Let’s switch back. So again I’m not going to go through this one. This was like I said before when I when I spoke up

1:51:58 Steve showed this already but again this was new last year the GFOA budget document and and it’s the standard format that is required for each department to fill out and it provides just additional information that you know the first three or four years I was on the committee we never got something like this so it’s any additional information is always good and we’re really supportive and really thankful that you know this is a new tool as well. So those are the two items that we kind of request beforehand and then during the meeting obviously the the FinCon liaison chair and the multiple members of the liaison committee walk through the budgets, ask questions, develop strategies, figure out if there’s reasons why items are being budgeted for each year that aren’t being spent. Why is that or why are we budgeting for repairs and maintenance for something that’s you know only $20,000 a year but the last three years it seems like you’ve been spending $50,000 on it. Just examples of types of questions to ask and to really get a good feel for what the budget is and I’ve found as you move along with the different departments throughout the years if you stay on different liaison groups you really develop that rapport with the department heads and really get a good understanding and just you know each year and year I’ve learned more and more so it’s a really great process and we like to kind of establish it that way. And then the other thing that is really good common practice is after

1:53:34 the liaison committee meetings is to share a kind of liaison meeting minutes document. So this is an example from last year again there’s no standard to this at all it’s more just meeting minutes and what as the finance committee member or the chair liaison for the assessors last year this is what I sent around to the committee after you know working with Mike and team to to finalize the minutes and just as a key review point this key points discussed review as to to share with the entire committee before we meet as a full committee with Mike to review the budget and actually vote on it for approval. So it kind of gives in my mind both the um fincom liaison uh chair as well as the other members a good a good view of the discussion especially those that weren’t in attendance at those liaison meetings. So the way I always like to do it again this is not you develop your own style but the way I like to do is kind of fiscal year 21 recap and what did we talk about about the prior year budget and and how things coming along with that. Just as an example fiscal year 21 for the assessors department was a Massachusetts Department of Revenue certification year so their annual appraisers line of their expense budget was thirty thousand dollars higher than what they were asking for in fiscal year 22. So I just like to you know review why that was I mentioned this in the year before why it went

1:55:06 up this is why it’s coming back down and then it’ll follow up about you know this actually ended up in an increasing revenue as a result of getting these you know specialty appraisals so things like that and then fiscal year 22 budget review anything you know that you’re seeing changes year over year things like that um any concerns and then any other discussion items which as you can see here we talked about the gfoa goals last year and and assessor’s department was excited about it and things like that. So again that’s probably one of our smaller budgets that we review so just thought that would be a good one to review and I sent this around to the committee through email last year after the liaison meeting. I guess I’ll pause there is anybody have any questions about kind of the fincom liaison meetings because I think it’s probably the most important step of our process where we as a fincom are doing our most you know in-depth work. I don’t know if Emily or Pat anybody else has any comments. I would agree absolutely the the liaison meetings with the department heads are are where the the real work gets done and then the communication follow on to the full committee that you know you did a great job. Okay great okay so so what is it where do we go from there and I’m going to get into the sample timeline that kind of has been updated her Steve’s timeline that he showed earlier but

1:56:38 the next step after the liaison meetings are over you shared your meeting minutes. We’ve gone through all of them there’s generally three to four nights. I think initially we always plan for three but I’ve seen certain years where we’ve had to have a fourth night for whatever reason if a certain department needs additional time or whatnot but we actually have you know full fincom hearings with individual department heads members of their board might might join as well or other committees that are associated with them. These are all open to the public and we discuss the proposed budgets and actually vote on them individually as a full committee. So generally at these meetings again there’s there’s no kind of set agenda to them other than which departments we’re going to review first but there will be representation from each department as well as kind of the fincom liaison chair and and you know members fincom liaison members generally the chair liaison kind of works with the town department head to to summarize the budget but oftentimes it’s the town department head really presenting the budget themselves to our full fincom but the liaison is there to to liaise and kind of provide more perspective since they were in those in-depth meetings. Any questions on kind of the next step there? Okay other thing we wanted to mention these aren’t this isn’t kind of a standard thing for us but oftentimes happens so there’s

1:58:11 oftentimes other special projects outside of your typical town department budgets with financial implications which we need to make recommendations on at town meetings so what happens I use the fiscal year 22 library warrant article as an example. I don’t know about you Emily or Pat but I believe we probably saw 10 presentations on that over a three-year period now granted there was some delay I believe due to COVID but that’s just an example of we met with the engineers that were showing you know the plan for whether it was a renovation or a complete redo of the library. We met with the finance team and what it meant we met with the committee that was created for the library project and it gives us a good chance to really ask a lot of questions about you know what their plans are and make sure it’s a really sound financial plan before they go to town meeting and before we make a recommendation to town taxpayers whether we support the article or not so that’s something that and Emily feel free to chime in here but at time some of those kind of committees that are created will have finance committee representation is that fair? I don’t know that the library had a specific assigned finance committee member but again we probably saw 10 different presentations so we were very well informed so we did want to mention that outside of kind of our bread and butter review of typical town budgets we also do review other special projects and things like that if there are financial implications.

1:59:46 Right Alec it’s really the discretion of the committee that’s forming whatever subcommittee is going to be in charge of in this case this is the library on renovation we don’t have any We have a lot of community representation on that, but an example of some projects that we did, the Brown School, had Finance Committee representation, Abbot Hall renovation, and just other special projects. If it’s requested, we will represent. Yeah, and that’s something that, you know, depending, I don’t know that there’s a set rule. It’s not like I, as the chair, will need to, beyond that, or if Emily is Vice Chair or Pat is Vice Chair. If somebody is really interested in representing the Finance Committee, please speak up for any special projects that come up and things like that, and we’ll certainly discuss it. Okay, so from there, now, presumably in our little outline here, we’ve approved all the individual budgets as a Finance Committee, which will be much earlier in the process this year, it sounds like. December, maybe some into January, as Steve and Jason said, but the next is our kind of biggest night as a Finance Committee in terms of us presenting things to the town taxpayers. And we kind of, we hold a public hearing on the town meeting warrants article voting as a committee on each article with financial implications. So, if any of you guys have been to town meeting, there’s a number of articles each year that have no financial implications, in which case we’ll vote no recommendation.

2:01:25 But for all those that do, we generally vote as a committee in favor, in opposition, indefinitely postponed, or I don’t know that I’ve seen this yet, but I think we can possibly make a recommendation at town meeting and that’s in case whoever’s presenting to us their article is not ready. But generally the Fincom chair and vice chairs, well, when it was in person, it was at Abbott Hall, and we kind of hold that public hearing and do most of the talking, but we’re all sitting around the table and we go through each warrant article and generally a representative from either town department or whoever’s sponsoring each warrant article comes up and kind of presents it. And then as a full committee, we get a chance to ask our questions, and we will be briefed on all warrant articles, at least with financial implications that are outside of the, you know, the overall town budget before that meeting. So it’s not going to be new information to you guys the night of, but did want to go through that process as well. Can I just add one more thing about that, as far as the warrant articles goes. So we will vote on all warrant articles that have any financial implication, whether it’s sponsored by the town or whether it’s sponsored by a citizen. Very often, citizens will submit articles to for town meeting, and if it has any financial implication at all, we will review it. And oftentimes, there will be a citizen presence at the warrant hearing that will speak to it, sometimes not, but we have to make some sort of recommendation at town meeting.

2:03:07 Right. And that’s a really good point. And it’s pretty obvious here as we walk through this, but I do like to give the example I mentioned this to a few of you when we met that, you know, that’s really our duty is to make recommendations to the town taxpayers on these various articles. Obviously, the town budget is the largest of the yearly kind of reviews that we do and make the recommendation on that. But we make the recommendation to our to the town citizens and and it’s up to them and us as town citizens to vote on that. There have been one example where very small numbers, but we were in opposition of something and and it ended up getting past. So I just wanted to give that example as as you know what our role is as a finance committee is really to make recommendations and, you know, defend our recommendations and then, you know, give it to the towns to vote. And then ultimately, after, you know, the town warrant meeting article or town meeting or an article presentation, usually town meetings right around the corner within a few weeks. So at town meeting, we all attend town meeting like most citizens. And typically I’ve seen, you know, the chair vice chairs at times get up to speak in support of a warrant article. But as new members of the committee, you won’t necessarily be required to to speak at town meeting or anything like that. But, you know, if you really want to let us know and we’ll talk about whether we think it’s appropriate.

2:04:40 So that kind of covers what again, what I would say is probably 85 to 90 percent of what we do. And I don’t know if you guys have any questions or comments at this time. Or if it was anything unclear as to kind of our role and, you know, the different steps into how we get to town meeting and kind of present a balanced budget. Or anything to add for many other members. Another kind of it’s not too material of a number, but another duty of the finance committee is to administer the town’s reserve fund. I think last year was approximately one hundred forty four thousand to have that number right, Pat. Yeah, that’s correct. One one forty four. So that’s a reserve fund that is set up for the various town departments if they need to come to us to request additional funds for a certain line item in their budget that they did not have enough funds appropriated for, for whatever reason. They would submit a reserve fund request and we would vote on that and, you know, have a chance to ask questions. So oftentimes at various meetings throughout the year, whether it’s during budget season, during one of the nights that we’re reviewing all the different departments or if it’s just other other meetings throughout there.

2:06:15 We could have had one tonight. We’ll have budget reserve fund requests. And then last year was the first time I actually saw one where in addition to requesting from this reserve fund that’s set up, we had to approve a transfer between different departments. Due to over under budgeting, I believe that’s what it was due to. But that’s another responsibility, the finance committee to to actually approve those and ask questions and make sure we understand what’s happening. Yeah. Yeah. Alec, this is Pat. Just wanted to comment on that. And this is these are requests that are come up because of some unusual circumstance or other the, you know, unanticipated expenditures that the standard budget wasn’t addressed in the standard budget that we’d previously approved. So this is that’s just kind of the vehicle. These are all unanticipated. And in terms of the transferring between two departments, that just shows the cooperation that exists among different departments in the town. So, yeah, this is but yes, this is infrequent but important pieces to keep the to keep the accounts correct. Right. Thanks, Pat. Any questions on the reserve fund?

2:07:49 So that’s kind of the bread and butter of what we do as a committee. Certainly, some things fall outside that box, but, you know, that’s what we’ve been appointed to do. And I think that should always, you know, be our main focus. You know, really dig in and your liaison meetings and come prepared and go from there. The liaison chairs sample timeline. I kind of used a broader range of dates than Steve and adjusted this to to be in line with his schedule. But looks like we have budget season right around the corner this year. So exciting times ahead. Essentially, the way I see this is October 15 to 31. Prior to that date, we will send around the liaison assignments and please reach out new members. If you have, you know, a very high interest in being on any of the various town departments, I’ll share the different departments in that sample that I showed before prior to October 15. Please let us know if you have interest and we’ll consider that when we’re making our assignments. But so you’ll get your chair liaisons and member liaison assignments in an email from me. And then the chair liaisons of each department budget will reach out to department heads in this timeframe to schedule your FinCom liaison budget review meeting.

2:09:22 November 8, I believe Steve was the day that all town budgets will be due to be submitted to finance, which is the town budget draft documents that I showed you the example of the assessors as well as the GFOA document. And that’s kind of the target range where you should be proposing dates working with if you’re the chair liaison working with member liaisons to coordinate what availability you may have. And then reaching out to town department heads whoever the whoever the contact is, which we can provide to you who it was last year if you’re a chair liaison and organizing that meeting to be held between the 8th and 26th. So oftentimes I’ve had those meetings early in the morning. I’ve had them after work later at night. Occasionally we’ve had them during the day during due to certain circumstances. It’s really up to the chair liaison and the other member liaisons and departments whenever whenever they have availability to have those. Generally the smaller budgets, you only need to have one liaison meeting but the larger budgets certainly have multiple as Emily has spoken to me about the schools have had a number over the years. So that’s kind of the target range to get through your budget liaison meetings if possible. Next step I’d say after the budget liaison leaders are had coordinate with the other members of the liaison group coordinate with town department if you want them to review meeting minutes, but try to provide liaison meeting minutes to the full FinCUMB email.

2:11:02 Again, that’s not necessarily a requirement, but something that we found is very helpful for for members of the finance committee that aren’t in those signs liaison groups to at least have some notes to reference prior to the full review. And then December 6 to 20. So that’s kind of the draft dates right now that Steve showed so those are we usually do our department meeting on Monday nights just like tonight Monday night 7pm if in person will be in Mary alley or on zoom, depending upon how things are going at that point. So that’s our goal right now and they’ll usually be three to five budgets per night. Obviously, we can get five done in a night if if the assessors is on the agenda because that one will take you know for as an example that one only takes a few minutes generally because oftentimes it’s pretty similar year over year and very kind of immaterial to the overall budget. But that’s not to say that we wouldn’t need to do more than three nights if you know certain things come up and certainly some of the larger budgets like the school which was referenced is I think 90% of our budget around somewhere around that that that one might take a little bit longer. So we like to only only review a few budgets on that night, if not just the school itself on the night on one night. And then state of the town. It looks like that’ll come out sometime in early January, which that used to kick off our budget season, but it’ll be a little bit different since we’re doing kind of our initial reviews in December.

2:12:34 And then Steve budget overview meeting with Fincom and board of selection. I don’t know if you have anything on if that’s an additional meeting that we haven’t had in the past or because we’ll have already kind of voted on everything, presumably, right? Yeah, I think we just put that in there is, you know, now that the budget has kind of been somewhat finalized, we can come we can come back to you guys with a more complete picture of what’s going on and we’ll have better revenue estimates at that point. So kind of really to tie everything together. Okay, so that yes, so since we’ve kind of shifted our meetings and then kind of our what I’ll call our budget review season up, it’ll be good touch point to check back in and close any gaps that there’s been any updates or things like that. Other thing I’ll say is I was going to say it earlier, but I just held off, you know, this is this is a completely new schedule for us as a Fincom, as well as for the town department. So, you know, in order to adopt a new policy or move up schedule, there could be a learning curve in this first year so not predicting anything but I think we need to be open to the fact that, you know, some budgets, you know, we may not be able to be done by the 20th. But that’s okay, at least we’ve started the process. And if we need to get into January or February and have a few additional meetings for some of the larger budgets or, or, or anything, any budgets really, if there needs to be follow up, we just need to be open to that.

2:14:10 So I’m very excited. I know Emily and Pat are as well about getting kicked off in the fall because I think we can do a lot of good work in the fall and probably get there on most of the budgets. And it gives us a lot of time again, town meeting, as you can see here isn’t until, you know, early April. So if there needs to be adjustments, if we need to scrub certain areas. Obviously, we have a lot of time between when we initially look at them now. And then last thing I’ll say is, you know, these sending out the, the meeting minutes, I think just the importance of documenting you know what you discussed, just, you know, from a personal level, I think it will be a very helpful to do that. Certainly, if we’re reviewing budgets in the fall and then, you know, not, you know, having our town warrant meeting article until, until March or good, good to have minutes and notes to look back on. So that’s kind of the timeline again, I shared the draft Excel document that that Steve had sent out, and I’ll share this agenda as well. Emily, did you want to speak just a very briefly on kind of open meeting law. Sure. Just, first of all, that was great. Thank you so much. We’ve never done an intro to FinCon meeting. And I think it was super helpful, especially considering that we have, I think, well, definitely since I’ve ever been on the committee, we have a majority committee who are new members, which is awesome because it’s a great, you know, fresh blood, fresh head of eyes, a lot of energy.

2:15:46 So it’s really exciting. So thank you, Alec, for, for, for pulling all this together. So along those lines, since we do have so many new members on the finance committee, I just wanted to give just a short, maybe reminder for some of you or just a quick mention about open meeting law. Oftentimes, you will receive emails from Steve or Alec sent to the entire finance committee that shares information, just pure information sharing about a meeting, maybe sending meeting documents prior to a meeting. This is be very mindful that the entire finance committee is on that email. The reply all button is your enemy. It’s, it is a very thick line when it comes to open meeting law. So we are able to share information between ourselves, but keeping it pure purely sharing information. There’s going to be no deliberation over email text. If there could be any potential quorum, that would be an open meeting all violation. If you were discussing or deliberating any finance committee specific topic. And also, it’s important to note that all of our liaison meetings are public posted meetings.

2:17:17 So discussions between members of the liaison groups can only happen in person in public open meetings. So not in person, over Zoom. There should be no deliberating or discussion of anything of any sort over email text, anything of that sort. So just really be mindful of the information that you share. And when in doubt, don’t hit reply all. And if there are any questions, I think actually Lisa Mead had a really fantastic presentation. I don’t remember how long ago it was that really gave a really strong overview of what is appropriate and what’s not appropriate, what’s okay, what’s not okay. If there are any further questions about it, but it’s, it’s, it’s a pretty straightforward thing. Only sharing information between members. That’s all I wanted to say. Thanks Emily. And I just wanted to highlight this line item that I’ve referenced and kind of my, my agenda here is, you know, the liaison meeting minutes, I think are a great tool but that’s a great example of the open meeting law dangers so providing meeting minutes is just information in a recap of what happens in the meeting. So I think it’s a really good tool, but be careful of, you know, responding to that via email and having open discussion things and doing advisory type things that, you know, may not be allowed under open meeting law, especially if we had a quorum of a number of people talking about it.

2:19:00 So I just wanted to, you know, say that this is something that I’m proud of as a group I think we’ve done over the past few years, a much better job of providing color to what happened in the liaison meeting minutes before the nights that as a full committee we actually need to vote and especially the members that aren’t in those liaison groups, but at the same time, just be careful with it and try to keep them, you know, fairly high level and if we need to discuss them in an open meeting we can do so. Well, that’s really a point. Just about the liaison minutes, it’s, in any minutes, there should be no opinions. You know, there should have, you know, I think written anywhere it should be just purely information sharing, you know, X budget is spending, you know, X number of minutes. There are dollars for XYZ, just pure information sharing. Yeah, and this is Pat, I’d like to just add that we, the liaison subcommittees, because they are, our meetings are public and posted open meeting law specific, we’ll have, there’s always a potential for discussion, like, on a one-day basis. You know, one-on-one, but you’ve got to be careful because the, on the, of creating a quorum and that’s where, like, in a discussion via email or text and that’s what Emily is trying to focus on. We need to, on the liaison subcommittees there may be three people, in which case discussion with two creates a, creates a quorum and is, would be in violation.

2:20:50 So, it gets, it gets really dicey, particularly when you drill down to the liaison subcommittee meetings. Did I get that right, Emily? Yeah, there should just be no discussion outside of any of our public posted meetings, just, you know, discussion. Great. So again, we, we had a number of different kind of topics to discuss tonight, but our friend Steve covered a lot of them. So thank you again, Steve. Anybody have any questions or comments, any new members, anything at all? How do you guys, go ahead. Sorry, just on the, on the open meeting law, when you are putting together your, you know, review of the liaison meeting to send out, is that a group effort, like one person works on it and then other people edit it, but that’s not, you can discuss that, I guess, because you’re just reviewing the, the events of the meeting? Is that? Yeah, so typically the meeting minutes are really just, you know, sharing information, which is not an open meeting law violation. So it’s, it’s, it’s just capturing what was discussed in the meeting. You know, Parks and Rec is spending X number of dollars on, on this, it’s more than they spent last year.

2:22:25 Typically what we’ll do for the liaison meeting minutes is the chair liaison will draft the minutes, send it to the department head and the committee that they met with, as well as any of the member liaisons from the finance committee, and they can edit and review if there was something that was missed or captured incorrectly. And once those are complete, then it’s typically sent around to the entire finance committee. But again, it’s, it’s not a deliberation. It’s not a discussion about, you know, whether this is an appropriate budget. It’s not a discussion about whether, you know, somebody thinks that they’re spending too much on this or too little on this. It’s more of just, this is the facts. This is why their budget’s different from last year. And then any further discussion will happen in our public finance committee meetings, and we can discuss, you know, people can share opinions at that point. You know, is this appropriate? I think this is. I think this isn’t. So there’s a distinction there. Is that answer your question, Pertiff? Great. Thanks, Emily. Looks like we have a question in the chat. Sorry, I was sharing my screen so I couldn’t see this. Can you see that too, Emily? Just read through it.

2:23:56 Yeah, I think if, you know, if there are no more questions from the finance committee, you could open it up to questions or comments from the public and people could raise their hand if you so choose. Okay, yeah. Does anybody else in the finance committee have questions? Or comments or what do you guys think of kind of the newer schedule from when I spoke with you all? Are you guys okay with it? So, sorry about that. I think the schedule looks good. You know, that one date that is the Monday, December 20th. I’m actually going to be out of town that day. But that’s the only date that was questionable to me. And I think because it’s close to the holidays, that might also be one to think about. But that’s a very minor comment. Agreed. We’ll work with the departments and Steve and Jason and figure out if that becomes more of an issue with various town departments and whether people can make it that week. Obviously, that’s a very common week for people to do some traveling. Okay, if nobody from the Fincom has any questions, we can open it up to public comment questions. It’s like I have one in the chat, so I’ll start with that. It’s pretty long. Just read through it. I’m not sure.

2:25:29 Jocelyn still appears to be in the meeting. Yeah. Jocelyn, would you prefer to ask your question? Yeah, I’m hi. Thank you so much. Yes, it is long because I was I couldn’t find the information I was looking for. And so it’s it’s vague because I was trying to pull it together. But basically, I was just looking for clarity to make sure I understood what was said or what I heard in tonight’s meeting because I believe I remember back at the 2018 meeting. Allison had made a comment at the meeting about the dwindling cash reserve for the town and how it really needed kind of dire attention. And I believe I remember Mr. Silva standing up at the podium and kind of alluding that this type of fund was coming. And then after the meeting, I asked him to help me understand why annually or almost annually we vote to approve this free cash and particular money from the electric department go back to the taxpayers or to reduce the tax rate and why we can’t look at some of that because it’s a sizable amount. And in 2018, it’s recorded as being over eight million dollars. So I was just trying to get a little bit of clarity around I feel like anytime a prop two and a half or override is talked about it shuts down quite quickly.

2:27:04 And if this free cash is there, as Mr. Silva alluded to tonight, is this a great place we could turn to from the start to say, you know, maybe we could look at some of this and at a much greater sum than an investment of $25,000 a year to start funding this money that we need. Jason, I don’t know if Jason’s still on the call. Is he? He’s not on the call. Do you want to answer it? It’s not really a question I can answer. Yeah, and it’s okay. I totally understand how how like this really isn’t intended to be a dialogue. I know how open comment works. So it was more of a just like, if I can answer, you can follow up. I mean, I get it’s a real quick just touch a moment. Just just just to clarify it’s $250,000 plus $25,000. What was proposed as a policy so it’s a minimum of 275 for fiscal 23, $275,000 not just a $25,000. It also the $330,000 pilot payment and lieu of tax that the electric light plant based of the town is, you know, it’s, it’s been revenue.

2:28:35 It doesn’t it’s not really additional revenue because it’s built into the revenue estimates, year over year. So it’s not really we can’t just move it from one into the other because it’s relied upon for operations. So it’s really trying to create. We’re looking for alternative revenue sources are creating additional revenue sources is what we’re looking for that help Jocelyn. I apologize on zoom it’s so weird I’m like I’m not sure if I’m supposed to say thank you back. Oh, no, we’re not. This is an interesting meeting because we had a joint for to select them. Yeah, which isn’t too common. But because of the great presentations if you were listening earlier that yeah, Steve was doing it was good for both groups to be in the audience so I apologize that I couldn’t kind of weigh in a little bit more on that but we can certainly share your question with Jason. If you know Steve and answered as well to maybe get a follow up if you want. Okay, yeah, I just I. Yes, I mean, obviously I just I love our town and I think that we have to. I think that I worry that if the conversation at town meeting or otherwise leads with an override or something, that won’t get us to the point where people will entertain the thought.

2:30:19 And so just simply saying if the money is already there, ensure it may be there because it was budgeted and already anticipated that it wouldn’t be used and then is otherwise used creatively. You know, that maybe some of that starts to be looked at as, you know, a different type of redirect.

2:30:45 Thank you. So I think. Does anybody else have any comments, questions outside of the Finance Committee group? I just have one more thing to add before everybody breaks. I just want to introduce Ronan McCall. He’s our new financial analyst and he will be clerking the full Finance Committee meetings. So he basically will be filling Emma’s spot, the role that she filled last year. So I just want to introduce them. He’s on the meeting here tonight, taking notes. Good. I really appreciate you on board. Thank you. It’s good to be here. Awesome. All right. Well, that was a long meeting for our first meeting as a FinCom, but certainly good informative. I hope it was helpful. The FinCom 101 is kind of the first time we’ve done that in a format like this. So hopefully any feedback you have for future years would be great. Any members of the FinCom or outside comments from the public, feel free to reach out. I guess we can call our meeting or adjourn our meeting. Yeah, great job, Alec. Yeah, this is Pat. I’ll motion to adjourn if we have to be official. Sounds good. Second. Anyone opposed?

2:32:18 Great. Great job. Thank you.