In attendance: members Nash, Raymond, Roberts, Vogt.
Chair Vogt called meeting to order 6:55 pm.
Minutes of Previous Meetings
FinCom Budget Items
Ms. Vogt provided copies of the Finance Committee’s budget requests for committee discussion (copy attached). FinCom then proceeded to discuss and vote on recommendations for FY02 lines as follows:
Expenses (Line 9). FY01: $300, FY00: $125
Discussion: FY00 was $125, but last year, Ms. Vogt explained, expenses were raised to take into account annual $115 dues for membership in the Massachusetts Association of Finance Committees and also to accommodate purchase of clerical supplies and possible attendance at training or informational seminars for members. After some discussion about whether to reduce the appropriation since it was not yet clear whether the entire amount will be spent for FY01, it was generally felt level funding would be a good course.
Action: Level fund at $300, unanimous.
Reserve Fund (Line 10). FY01: $30,000; FY00: $20,000
Members Nash, Roberts, and Vogt revisited for Ms. Raymond something of last year’s Reserve Fund discussion, where FinCom had gone into Town Meeting requesting $60,000 to be held in the Reserve Fund. FinCom had felt strongly that the extra money was needed because litigation costs had been high the preceding year and there was no assurance that such unforeseen expenses would not exceed the Reserve Fund again in FY01. However, the line item was reduced on Town Meeting floor to $30,000 in order to fund the ambulance department’s reorganization.
Ms. Vogt directed members to the Finance Committee Handbook guidelines on Reserve Fund, noting that this fund can only pay for unforeseen expenditures. In other words, legal fees for pending litigation cannot be paid out of the fund. Last year’s largest fund transfers included unexpected police expense bills, extra fuel bills caused by spike in oil prices, and unemployment compensation for a former employee.
Ms. Vogt reported that the history of the Fund from FY98 included appropriations of $10,000, $27,000, $20,000, and $30,000.
Discussion turned to what expenses we currently know might be coming out of the Reserve Fund in this year and Ms. Vogt said she was aware the BOS had received quotes on making repairs to the Historical Society building roof which could cost several thousand dollars. Mr. Nash suggested that the complete new roof should come out of next year’s budget requests and that a request for a Reserve Fund transfer would more properly be for just the minimum amount to repair, not replace the roof.
Ms. Vogt said she felt that legal fees should be more appropriately budgeted for and that there should not be extra money in the Reserve Fund to bank on for legal fees. She felt it was good to keep everyone accountable for the limits on expenses and encourage all to manage money better. FinCom generally agreed to stay in the range of last year’s final appropriation of $30,000.
Action: Vote to level fund at $30,000. Unanimous.
Stabilization Fund. (Line 178) FY00 appropriation $82,409; FY01 Appropriation, $120,108—with net proceeds of $53,108 after Town Meeting expenditures
Ms. Roberts reported on Ashby’s Stabilization Fund history and balance (information sheets attached to minutes). She said statute has changed on Stabilization Funds to allow these moneys to be used for any legal purpose. Stabilization is the only reserve fund held by a town which can roll forward into the next fiscal year and can, in effect, be an interest-bearing savings account for future expenses. Ashby can put aside a maximum of approximately $250,000 each year and can hold a total balance of $15,700,000 in the account. At the end of FY01, the account will hold approximately $245,000 after appropriations and expenditures.
She also presented comparison charts from the Department of Local Services web site, which show Stabilization totals for towns of similar economic description (small rural towns) and also near to Ashby’s budget. While the fund balances are difficult to compare, and more recent figures are not yet available from DLS, the charts show Ashby within the average range of savings for these towns, which is 7% of annual budgets in 1998. Ashby’s match of the average is thanks to the progressive savings program instituted by the FinCom from 1998 on.
Ms. Vogt noted that the net average of the past 4 years for Ashby has been $57,000 into Stabilization each year. Last year FinCom instituted a plan of trying to save 5% of the annual budget into Stabilization, or approximately $150,000. She said although this was desirable, the town has also committed to at least an additional $96,000 in recurring budget line items since last year: $32,000 for the transfer station, $30,000 for ambulance service, and $34,000 for an extra police officer. In addition, a second grant-funded police officer will cost the town this year $17,000, growing to the full salary line of $34,000 within the year or two. With these additional expenditures in line items, she felt it was unlikely the town would go for something in the range of the $120,000 that we appropriated last year. Indeed, the town did take back $67,000 of that on the town floor. Ms. Roberts added that holding too much in the fund could actually make the savings vulnerable to raiding by other departments. Ms. Raymond suggested $75,000 as a number above the town’s four-year average, but perhaps more within reason, given anticipated expenditures, than matching last year’s appropriation. Such an appropriation would keep the town well within averages of other similar towns as well.
Ms. Vogt has heard from Town Administrator that the selectmen were looking at proposing a $120,000 appropriation again into Stabilization and Mr. Nash said that perhaps BOS could persuade FinCom to raise their appropriation for a change. Ms. Vogt said she felt something more in range with the $57,000 average would be more fiscally responsible for our town at this time.
Action: Appropriate $75,000 to the Stabilization Fund. Unanimous. Committee agreed that (as with all budget requests, but particularly for reserves) this number would be revisited at a later time in the budget process.
Ms. Vogt will provide FinCom members with a written copy of the oral responses she will make both for pretown meeting and STM, so members can ensure the responses agree with their understanding.
Ms. Vogt also said that the moderator had agreed, at Ms. Vogt’s request, to the town to its earlier procedure of having each article sponsor read the article rather than FinCom chair, as had become practice in recent years. She felt it was more appropriate to have the motion being made by the department head or committee chair who was sponsoring the article, rather than FinCom whose job it is to make recommendations on the article.
Meeting adjourned at 8:45 pm.