Board of Finance Town of Woodbury

281 Main Street South Woodbury, CT 06798

First Land Deed from the Indians April 12th 16.50

MINUTES REGULAR MEETING

WEDNESDAY, SEPTEMBER 14, 2016 — 7:30 PM SHOVE BUILDING CONFERENCE ROOM

Present: Alex DeSorbo, Chairman F. Stan Love, Vice Chairman Bill Monti Mike Cunningham Nancy Grasing Steve Tranguch

Also Present: William Butterly, Jr., First Selectman (later); Muffy Gomes, Fiscal Officer and one resident.

1. Call to Order

Chairman DeSorbo called the regular Board of Finance meeting to order at 7:32 PM in the Shove Building Conference Room.

2. Comment from the Chair

A. DeSorbo requested this item be moved to the end of the meeting. The agenda was modified accordingly without objection.

3. Public Comment

Resident Kathy Doyle asked what other departments/ commissions would be coming before the Board. The Chair noted that Parks and Recreation is scheduled in October.

4. Approval of Minutes

a. Special Meeting August 15, 2016

MOTION: B. Monti moved to accept the special meeting minutes of August 15, 2016 as presented. N. Grasing seconded. M. Cunningham abstained due to absence. VOTE: 5-0 FAVOR. MOTION CARRIED.

5. Treasurer's Report and Requests

a. Accounts through August 2016 review and action if required Fiscal Officer noted in overview there are no material concerns in the monthly reports.

Town Planner opening and budget impact was discussed. B. Butterly, who just joined the meeting, stated it's a work in progress, the position is posted and a regional approach is also being investigated with NVCOG.

IT storage is a concern additional as storage space is needed for information

Board of Finance Regular Meeting September 14, 2016

Page 2

obtained from the Police body cameras. Cloud storage cost is about $1,000 per month, purchasing a back-up drive costs about $4,000 and anticipated to last about 5 years. A State storage retention policy for body cams has been published and retention is to be from 90 days up to 4 years. Sgt. Roden and M Gomes would prefer not to use the Cloud and recommend the more cost efficient local hardware.

As planned the BANS in place for capital projects mature November P t . Additionally, the Reservoir financing and the ESB roof need to be structured. The Board went into a detailed discussion as to what items would be bonded relative to amortization issues. A. DeSorbo was not in favor of rolling all remaining authorization as the Board of Finance then loses some control over the remaining $2.6M authorized. The high school renovation bonding is an issue to be considered as well as the age of the bonds.

The Board noted that all the tax impact of the principal and interest payments for these items has been included in the budget and the corresponding mill rate.

The Board consensus was in favor of bonding $4.37 million for fifteen (15) years, which will save interest costs over the originally planned 20 year projections. Final terms and any prepayment limitations to be determined. Additionally the administration costs planned for the reservoir will be saved by including that financing at this time. A formal resolution is necessary; a special meeting will be scheduled when M. Gomes has the necessary elements for the resolution from counsel.

b. Year end 2016 matters and action if required The 2016 audit is progressing, it is probable that a draft document will be ready in

October.

6. Bills

MOTION: S. Love moved to accept the clerk's bill in the amount of $82.60, for 4.75 hours, and approve for payment. B. Monti seconded. UNANIMOUSLY APPROVED.

7. Unfinished Business

a. Discussion of calendar and activity i. BOF meeting day

MOTION: S. Love moved to schedule the regular Board of Finance meetings to the fourth Wednesday of the month as soon as possible. S. Tranguch seconded. UNANIMOUSLY APPROVED.

ii. Appearance Oct. Park and Rec. Comm.

Parks and Recreation will come to the Board's October meeting. After discussion

Board of Finance Regular Meeting September 14, 2016 Page 3

Elderly Services, the Senior/Community Center, and Public Buildings would be requested as will Region 14.

b. Discussion of 2016 Annual Report N. Grasing and A. DeSorbo reported that a drafts has been put together and only a few

reports are not in.

Update to ECS and Re11 decision The Rell decision was discussed. A. DeSorbo and B. Butterly noted that, with B.

Monti, the 50/100 proposal proposed by Mr. Monti and agreed to by the Board, was presented to NVCOG and a number of member towns expressed thanks for bringing the attention to the issue.

8. New Business

a. Representative to R-14 administrator negotiations A. DeSorbo will be the Board of Finance representative by consensus of the Board.

9. Correspondence

Correspondence from legislators to the First Selectman regarding ECS grant, dated September 7, 2016 was acknowledged and is attached to these minutes.

2. Comment from the Chair

Chairman DeSorbo read a statement to the Board, which is appended to these minutes.

10. Adjournment

MOTION: S. Love moved to adjourn the meeting at 9:30 PM.

FILED SUBJECT TO BOARD APPROVAL Respectfully subsitted,

CA& Linda Leigh Clerk

RECEIVED & FILED IN WOODBURY, CT

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HARTFORD : CONNECTiC.UT 7

September 7, 7'016

Middlebury First Selectman Edward B. St. John Soutilbury First Selectman Jeffrey A. Manville Woodbury First Selectman William J. Butterly

Dear First Selectmen.

Ca (221-4VTLVE. 0 ? Ca,.0?0 IevrtGiosuift,

o evia.uftATSA Lt. Fok.

\\',2 write to express our support for your effortS in iit ,htintt for state Education Cost Sharim2 (FCS) money.

Each town deserves to receive its fair share of state education dollars, This issue impacts the Quality of education in municipalities. 171sr impacts property taxes. our ltoca economies and our tittality of life.

Nftmieo‘er, municipal leaders like yourselves need to be able to plan your budgets. Each town should recei ,. ,- its allotted fundinos under the ECS formula, but that 1101 pavirFfnt often falls short.

need predictability. We don't have that in Hartford now.

Ple=;se find below the latest ECS numbers for Your towns, compiled by the non-partisan Office Spa

Fiscai Analysis.

Education Cost Sharintz

Ilanizipality/Other Pot:etical Subdiv1sion

FY 16 Est. FY 17 Orig. FY 17 Leg.

Rev.

FY 17 Leg. Rec. - FY 17

Orig.

FY 17 Leg. Rec. - FY 16

Est.

Essentially, Middlebury, Southbury and Woodbury received a _5% reduction to the amount that your towns were due to receive in Fiscal Year 2017. We opposed this reduction.

Overall. ECS funding to towns was reduced by more than S32 million. We opposed this reduction.

We will continue to monitor this issue along with each of you. We thmk you for setting an excellent example by joining forces, and we will let other local chief elected officers in our region know about the positive steps you are taking in your towns.

As you note, every town deserves its fair share of these precious, but limited, state education funds_ Eveiy.town deserves predictability from Hartford. Our mutual goal is to fight for that predictability on behalf of the taxpayers we all represent.

As state officials, we look forward to working closely on this issue with each of you.

Sincerely.

7

Senator Rob Kane q'/Ild District

Representative Eric Berthel 68' District

Representative Arthur O'Neill 69Ih District

OMB

-1.04%

Chairman's Statement to the Board of Finance September 14, 2016 APD

Since the new "sign" went up on Main Street, I have heard, or heard of, comments that the message opposing "wasting taxpayer funds" has some credence. Even when they disagree with the form it took, I have heard, "Well, he may have a point".

While I have nothing to say about the sign or the messenger, the message has no basis in fact. It does a disservice to the men and women on this Board, the BOS, the operational departments in the Town and the majority of voters who approved the town budget and other appropriations.

10-11 actual 11-12 actual 12-13 actual 13-14 actual 14-15 actual 15-16 est 16-17 budget AVG annual Change

GENERAL GOVERNMENT 1,544,598 1520,850 1521,267 1,609,462 1,588,040 1,649,695 1,759,968 2.32%

PUBLIC SAFETY 1,402,090 1,452,305 1,527,083 1,576,296 1,597,777 1,730,578 1,765,252 4.32%

PUBLIC WORKS 1,646,459 1,644,048 1,655,961 1,686,176 1,821,228 1,859,647 1,942,949 3.00%

HEALTH & WELFARE 106,798 105,626 109,359 111,991 115,066 118,688 121,748 2.33%

LIBRARY 605,467 611,703 644,217 628,172 607,594 635,548 638,627 0.91%

PARKS 8 RECREATION 240,619 243,652 I 371,944 364,894 351,321 398,095 405,830 2.28%

BENEFITS- MISC. 1,847,863 1,847,033 2,065,147 1,938,092 2,055,395 2,106,944 2,378,061 4.78% 1

CAPITAL OUTLAYS 500,617 571,064 726,980 420,325 293,871 171,374 98,220 -13.40%

DEBT SERVICE 553,942 339,015 389,053 643,960 528,750 814,250 890,713 10.13%

TOTAL MUNICIPAL 8,448,453 8,335,297 9,111,011 8,979,368 8,959,042 9,484,819 10,001,368 3.06%

3.54% -1.34% 9.31% -1.44% -0.23% 5.63% 5.45%

EDUCATION 19,548,751 20,480,193 20,965,425 22,013,855 22,085,290 22,533,205 22,886,364 2.85%

-0.54% 4.76% 2.37% 5.00% 0.32% 2.36% 1.57%

Education as % of total 69.8% 71.1% 69.7% 71.0% 71.1% 70.4% 69.6%

TOTAL ANNUAL APPROPRIATIONS 27,997,204' 28,815,490 30,076,436 30,993,223 31,044,332 32,018,024 32,887,732 2.91%

current taxes 25,509,139 26,837,172 27,631,461 28,212,535 28,299,953 28,969,000 29,358,329 2.51%

1.53% 5.21% 2.96% 2.10% 0.31% 2.68% 1.34%

ECS

funds other than taxes for

751,041 876,018 895,683 919,642 942,926 1,051,361 1,341,249 13.10%

municipal use 1,746,522 1,684,074 2,031,185 2,112,162 2,197,825 2,244,134 2,188,154 4.21%

TOTAL revenue 28,006,702 29,397,264 30,558,329 31,244,339 31,440,704 32,264,495 32,887,732 2.90%

Net Education tax cost to town 18,797,710 19,604,175 20,069,742 21,094,213 21,142,364 21,481,844 21,545,115 2.44%

-0.57% 4.29% 2.37% 5.10% 0.23% 1.84% 0.29%

Mill Rate 21.45 22.46 23 23.4 25.69 26.09 26.29

The history chart above is from budget time. FY 15-16 expenses actually finished (unaudited) at $9,218,196 or about $266,000 less than the budget estimate. This was an increase of 2.9% over 2014-15 but far less than the 5.6% increase anticipated.

Therefore over the last two years (FY 14-15 and 15-16), spending on the town side increased a total of about 2.7% from FY13-14 or an average of 1.3% per year.

I would anticipate we should be under budget at the current year-end.

Page 1 of 5 APD 9-14-16-F

Taxes

Taxes and spending are two different things and need to be addressed separately. Mill rate can be mitigated by other income (such as an increase in ECS monies) or by an increase in the Grand List. And they often are - to the benefit of the local taxpayers.

Over the past three years the mill rate changes resulting from Town operations have been -0.01, -0.02, and +0.15 mills for a three year increase in the mill rate of +0.12 mills or about 1.7% on town operations.

Overall, including Region 14, the mill rate in three years has increased by 2.3%.

2016-17 Approved Budget

TOTAL ANNUAL BUDGET $32,887,732

MILL

Education $22,886,364 RATE

(less) ECS grant $1,341,249

Net tax cost of schools $21,545,115 73.4% 19.29

Municipal operations $10,001,368 (less) funds other than tax $2,188,154

Net tax cost of Town operations $7,813,214 26.6% 7.00

Tax collections required $29,358,329 100.0% 26.29

This year a $353,000 house, assessed at $247k, will pay $1,729 of its $6,505 tax bill to operate all the town services -library, parks, plows, police, roads, fire, senior center, and all town offices/services -everything but the schools. That's about $4.74 a day.

That amount includes the reservoir purchase and the roads/equipment financing.

The total tax increase over the last three years for that household including the Region 14 budgets was $148.

2015 GL Appraised

$$

Assessed $$

2013 Tax (actual)

2014 Tax

2015 Tax

3 year total tax increase

3 year Total

Tax increase

770,000 539,000 13,872 14077 14,179 $307 2.2% 433,000 303,000 7,784 7,899 7,964 $180 2.3% 353,000 247,000 6,357 6,451 6,505 $148 2.3%

312,000 218,000 5,534 5,616 5,664 $130 2.3% 179,000 125,000 3,219 3,266 3,294 $75 2.3%

Page 2 of 5 APD 9-14-16-F

This was all done when the cost to borrow is extraordinarily and historically low - the one upside to the current economic times.

1,400,000

1,200,000

1,000,000

800,000

600,000

400,000

200,000

m Debt Service(P&I) m Capital outlay .vr-

Borrowing, Bonding and Debt

The Board of Finance in 2015 made tremendous progress in working with the departments and the Selectmen to get a picture on capital requirements - equipment and roads - that would be necessary over the next 3-5 years. The result was an authorization for $2,065,000 of capital equipment and $3,605,000 of capital roadwork and the approval to finance those projects.

There is about $4M outstanding in the 2006 ($2.8M) and 2012 ($3.1 M) bonds. The town meeting authorized the Reservoir purchase and borrowing of $1.15M. The Regional School District currently has no debt.

Therefore the total outstanding debt (or authorized borrowing) for the town is about $10M. Projected principal and interest payments for this borrowing are already built into the 16-17 budget and tax rates.

What has yet to impact taxes is the Region 14 NHS renovation. The estimated $29M Woodbury portion (after anticipated state grant) averages about $1.6M per year (about 1.5 mills) in additional taxes for 25 years.

That is almost a 6% increase in taxes that this Board has warned of for several years and I have emphasized in every presentation I have made.

The purpose of the 2015 capital authorization was to have the ability to make the necessary road and equipment purchases. It was done so that those taxpayers who have the use of the road or equipment in the future are also the ones who are paying for it. And it was built with the flexibility for the BOS and BOF to allow for reasonable changes in need and financing.

Further it was anticipated that tax spikes for capital needs would have come just as the tax impact of the NHS would have hit. The chart below already reflects the stability of this approach.

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 -A i -A -A -A -A -A -A EST BUDGET

Capital outlay 751,033 518,510 500,617 544,156 770,894 420,325 293,871 171,374 98,220

Debt Service(P&I) 351,330 341,068 553,942 339,015 389,053 643,960 528,750 814,250 890,713

Page 3 of 5 APD 9-14-16-F

Surplus

The FY 15-16 surplus has also been the source of some confused conversations in the past couple months. When reported in Voices in August, the Fiscal Officer had discussed an $820,000 number - a very preliminary number, subject to further adjustment, in which several expenses as was noted in the story had not been included (specifically $300k reserved for new debt service).

Let's explain.

The Board had conservatively anticipated a $246,000 minimum surplus at budget time.

So... working backwards from August's $820k less $546k ($246 + $300 above) equals about $274k of surplus which was not foreseen in April when the budget went to PH - a full 3 months before year end.

Expense side savings of about $200k from police ($53k), Fire ($11k), R14 ($55k), Sanitation ($35k), P&R ($23k), Legal ($24k) along with Department Revenue ending higher than expected by about $90k accounted for the major factors in the difference in the projections from budget time.

As can be seen from the chart below, the use of UFB/surplus has been a methodology of the Board for many years to clip spikes in the mill rate.

The surplus is not overly surprising as the bulk comes from operational accounts which, like the use of police overtime/operations, is an estimated amount "reserved" to be used as needed (or not used, like this year). Others - like the Region-14's $55k underpayment - are unexpected (and not even supposed to happen).

Subject to final audited numbers, the net result will be about a $354k increase to the UFB - far from unprecedented historically and well within good fiscal policy and practice.

FISCAL YEAR

ENDING

GF Budget Capital

Appropriation $ ,000

Amount transferred to GF from

UFB $ ,000

Original Municipal Budget

Unassigned Fund

Balance

% ratio to total

operating expenditures inc Education

change in UFB

2008 480 350 8,563,126 2,378,474 8.6%

2009 751 542 8,736,560 2,187,243 7.6% -191,231

2010 519 840 8,500,474 1,903,827 6.7% -283,416

2011 500 400 8,796,532 2,237,785 7.7% 333,958

2012 511 {60} 8,651,121 2,921,326 10.1% 683,541

2013 773 350 9,463,255 3,039,501 10.1% 118,175

2014 439 396 9,463,255 3,088,107 9.9% 48,606

2015 296 225 9,276,799 3,378,697 10.5% 290,590

2016e 156 300 . 9,601,290 3,732,697 11.3% 354,000

2017b 98 325 10,001,368

Page 4 of 5 APD 9-14-16-F

To summarize:

(1) Spending over the past two years has increased about 1.3% per year on average, broadly consistent with the inflation rate.

(2) Taxes have increased 2.3% in total over the past three years with the median homeowner today paying a total increase of about $148 from three years ago - including the Region 14 budget.

(3) The mill rate impact of town operations has been negative two of three years and totals just 0.12 mills over the three years, including the impact of the Reservoir purchase.

(4) The town has approved the financing of planned major capital replacement projects, anticipating future needs of the town in a collaborative process never before undertaken by the Selectmen and the Board of Finance.

(5) A net surplus for FY 15-16 of $354,000 will increase the Unassigned Fund Balance to about 11% - well within bond rating agency recommendation, Board policy and accepted good fiscal practice. An additional $325,000 was used as revenue in the 16-17 budget as approved by the voters to mitigate about 0.3 mills.

(6) We must anticipate the significant impact of the NHS renovation, which alone will likely increase property taxes by more than 6% per year. The Region BOE is working on a building project plan, which should include a financing approach which we hope to see in the next several weeks.

(7) As the State of Connecticut works to build a new budget it is inevitable that pushing costs and taxes to the towns by eliminating grants and municipal aid will be part of the process. That could increase property taxes with no changes in Town operations.

Some people will always disagree with some element of a town's budget and spending - and that's good. During the year where and when budgets are considered, they can and should make their feelings known, discuss and contribute - at budget development meetings, at BOS and BOF meetings, and at Town Meetings.

I want to thank this Board for its critical work - as well as the First Selectman and the Board of Selectmen for their efforts on behalf of the community over the past three years. The work will be even more difficult in the next few years but we can continue to work together to achieve real results.

And no obscenity disguised as a platitude can detract from that work.

I told one of our members that I would like to make these comments - and I was told that I likely would not influence those who equate criticism with contribution.

Ever the optimist, I try anyway. Thank you for your patience.

Page 5 of 5 APD 9- 14- 16-F