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November 19, 2015, Finance Committee Meeting. Minutes
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Town of Canton Finance Committee Ivtinutes voted on: l/25/l6
Meeting Minutes vote: ~-o-i
Thursday, November 19, 2015
Members Present:
Rob Barker, Jim Casamento, Gerald Dorfman, Nichols Gallagher, Dianne Gustafson, Tim McKenna,
Barbara Saint Andre and Jim Sims.
Ms. Gustafson and Mr. Dorman joined the meeting between 7:15 p.m. and 7:30 p.m.
Members Absent:
Sepp Bergschneider and Stephanie Leach.
Guests Present:
Gene Manning, Chair, Capital Planning Committee(CPC)
Mike Trotta, Superintendent, Department of Public Works(DPW)
Jim Murgia, Finance Director
Ellen Jones, Finance Committee Secretary
Opening: A meeting of the Canton Finance Committee was called to order by Chair Saint Andre at
7:00 p.m. on Thursday, November 19, 2015 in the meeting room of the William Armando Recreation
Center.
A. Approval of Agenda
Chair Saint Andre reviewed the items on the agenda which included a discussion with Gene Manning of
the Capital Planning Committee and Mike Trotta of the DPW.
B. Announcements
There were no announcements made at the meeting.
C. New Business
M r. Manning gave a brief overview of the Capital Planning process which included some of the following
items:
• Mr. Manning has been involved with the CPC as the Chairman for 10 years.
• In the 1970s and 1980s capital spending had been virtually non-existent due to lack of funding and it
has taken millions over the past several years to fulfill the Town's capital needs.
• The CPC works closely with the Finance Committee and the liaisons to the CPC.
• Representatives from the Town (Town Administrator Bill Friel) and the School Committee (Chairman)
are invited to the CPC meetings for involvement in the capital planning process.
• Typically the Town annually sets aside 5-6% of the operating budget for capital spending.
• There is a $5,000 minimum amount for cash capital requests and a $50,000 minimum amount for
debt capital requests.
• After the conclusion of Annual Town Meeting the Finance Department assists the CPC and
department managers with the procurement process.
• At the time of the meeting Mr. Manning had received a summary of the FY17 Municipal capital
requests but had not received the FY17 School Department capital requests.
• With regard to the capital process, the Water Enterprise Fund, Sewer Enterprise Fund and
Ambulance Fund are self-funding funds.
• The new EPA water management requirements will result in additional capital expense. This
expense will be in the general DPW capital requests and not in the water and sewer enterprise funds.
• Periodically CPC is asked to accelerate available allocations from a future fiscal year to an earlier
fiscal year in order to meet unexpected capital request items.
• The Finance Department had received (by November 9'") the capital requests from departments that
exceeded available funds. These requests would be forwarded to the BOS for review with the
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department managers and then forwarded to the CPC by December 31. The CPC would be
submitting their final recommendations to the Finance Committee by March 1.
Mr. Casamento offered the following comments/questions:
• He confirmed that the 5-6% capital spending was both cash capital requests and debt requests inside
the levy.
• Mr. Murgia confirmed that there is currently $50-60 million of outstanding bonds for capital projects.
• The Hansen School addition funding was approved outside the levy.
• Mr. Casamento inquired as to how it was determined how much the Town was going to spend on
capital in a given year. Mr. Murgia referred to the 5-year Plan (2017 thru 2021) for Capital Capacity
Planned Use (see meeting handout).
• In years where state aid decreases the Town may be in the position to reduce money allocated to
cash capital. Mr. Murgia further explained that if the Town receives additional revenue, the Town
could increase the capital allocation but typically does not, instead the allocation is maintained to
keep a "floor to ceiling" consistent range of 5-6%.
• Some large capital projects, such as the Senior Center, was supplemented by free cash bringing the
capital spending over the 6% ceiling. Recurring revenue typically funds the cash capital allocation.
• Because the CPC By-law requires capital requests be submitted by a certain date happens prior to
the Revenue Committee meeting in February, it makes it difficult to determine additional revenue for
the following fiscal year.
• IVIs. Gustafson commented that if recurring revenue were increased, then there would be a
corresponding increase to the 5-6% capital allocation as part of the process.
Ms. Saint Andre inquired as to the condition of the streets and the age of the water and sewer pipes in
relation to the capital plan.
• Mr. Trotta explained that in 2010 there was a long term 5-year water plan completed with another
plan ongoing. He also explained that the Town had funded $2.6 mil lion for repairs in the oldest
section of town in the Mechanic Street area. DPW is not as concerned with the age of pipe but the
flow and bacteria within the pipes.
• With regard to roads, Mr. Trotta distributed a handout entitled "Canton Pavement Condition Index
(PCI) by sorted by PCI". Road surveys were conducted in 2006, 2011 and summer of 2015. The
listing represents roads ranging from poor to fair condition that would cost approximately $28.3 million
to bring them up to a good rating.
• Currently the Town is spending about $770,000 per year through Chapter 90 with approximately
$200,000 to $500,000 of additional funding through capital planning and ATM article supplements.
• Mr. Trotta explained the three strategies the DPW uses for maintaining the roads: 1) Poor (PCI of
less than 20) -full depth in which the road is turned back to dirt, regraded, excess dirt is removed and
four inches of pavement is laid down; 2) Fair (PCI of up to 46) — 3-4 inches of top pavement is milled
off with no restructuring of the road, with cracks usually returning in 2-3 years and 3) Good Rating
(PCI of 47-67) —overlay of existing pavement. Mr. Trotta uses a balanced approach in addressing
which streets to maintain — choosing a few from each PCI rating category.
Ms. Gustafson inquired as to the "bigger picture" with regard to some fairly sizable capital planning
projects coming up, such as the Rolling Mill, the Rodman Building, creation of additional classroom space
etc. Mr. Manning referred to the $2 million that is supposed to be designated to the School Department
as part of the Revere project mitigation to modify the Rolling Mill for School Department administration
office use.
M r. Sims inquired about the Rebecca Road water pipe issue. This project had not been on recent
capital plans and he was concerned if there were other unknown projects. Mr. Trotta stated that most
streets have the same cast iron pipes as Rebecca Road, so there could be other projects in the
future. The Rebecca Road problem had been over athree-year period, in which the DPW made
several different attempts at remedying problem, such as flushing the pipes. Communication with the
residents had been some of the issue, because only initially a few residents had been complaining
about the water quality.
M r. Sims expressed his frustration about the changing fiscal balances on the 5-year allocation plan.
M r. Manning works with Mr. Murgia on the available balances and the capital needs that arise.
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Money is shifted from "out years" to meet demand. Mr. Murgia stated that if revenue changed, the
cash capital allocation would be adjusted. Roughly ~2 million of principal debt inside the levy is paid
off per year so approximately $2 million of debt becomes available or is added to the 5t" year of the
allocation schedule. The five-year plan evolves. Mr. Murgia stated that any unused prior
authorizations could be used for other projects with Annual Town Meeting approval.
Chair Saint Andre thanked Mr. Manning and Mr. Trotta for attending the Finance Committee meeting.
Status Update of Current Municipal and School Cash Capital and Debt Capital projects —
• (see meeting handout) Mr. Murgia provided project balances for previously approved municipal and
school department capital projects.
• When balances remain at the end of a fiscal year, the Finance Director contacts the department
managers to see if they would like to encumber the excess funds that are greater than $1,000.
Projects may not yet be completed or have been completed with a leftover balance.
• If there are balances less than $1,000 the remaining balance falls into free cash.
• Mr. Sims called attention to a $7,000 balance for Kennedy School basketball courts. He brought this
to the attention of the Recreation Director.
• Ms. Gustafson suggested that there should be some "sunsetting" date for balances that are
continually carried over from year to year. Either projects should be completed within a certain
amount of time or balances should be cleaned up soon after the project is completed.
• Mr. Murgia indicated that Mr. Trotta had notified him that he would be interested in using some of
these old balances for new DPW capital projects.
M r. Sims suggested that it would be helpful if this listing included the date of the Town Meeting the
project was approved.
Public Comment for Free Full Day Kindergarten - Mr. Steve MacPherson of 19 Paul Street read a
prepared statement.
• Mr. MacPherson does not represent the School Committee but represents a group of residents that
support free full day kindergarten. Some of these members recently attended the October 15'h
School Committee meeting to express interest in beginning the dialog for this program.
• Mr. MacPherson is optimistic that the School Committee wil l support this program as he has been
receiving positive feedback.
o Mr. Sims commented that the Finance Committee does not have a great amount of discretion about
the School Committee budget due to the School's bottom line authority.
The program would be a recurring expense in the School Committee budget but the challenge
remains in identifying this recurring revenue to support the increase to the operating budget.
• Mr. Casamento made a comparison to the fees that parents have been paying for students to play
sports. To suddenly not charge a fee for a program such as the kindergarten program would cause a
significant impact to the School budget if the School Department were to suddenly have to absorb this
expense in their operating budget.
• Mr. Murgia stated that this new program would have to be a policy change of the School Committee.
M r. Murgia spoke against this at last year's Annual Town Meeting, not because he is against full day
kindergarten but because the article sponsor (Mr. Tony Braconi) had proposed adding $400,000 to
the School Department FY15 budget.
• Mr. Murgia further stated that last year the School Committee had been given a 5% budget increase,
but that it is up to the School Committee to decide on how they want to use the increase.
Vote — FY17 Finance Committee Budget Request — Mr. Murgia indicated that he thought the FY17
budget request of $5,675 for the printing and mailing of the warrant would be sufficient enough to cover
the costs. The FY15 actual expense of $6,164 was higher due to a Special Town Meeting warrant being
i ncluded. He had made the recommendation with regard to the timeline that the mailing be moved up one
week to allow the Post Office sufficient time to deliver the warrant, since last year's warrant had not been
delivered to residents directly affected by the Plymouth Rubber project.
A motion made by Mr. Barker to recommend to Town Meeting $11,500 for the Finance Committee
FY17 operating budget #131 was seconded by Mr. Sims. Vote: 8-0-0.
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Vote — FY17 Reserve Fund Budget Request —The Finance Committee had previously approved a
Reserve Fund Transfer of $350,000 to the Rebecca Road project. The reason why this transfer was not
showing on the budget worksheet was because it was a budget transfer to the Water Enterprise expense
budget. The Reserve Fund does not pay for expenses but only transfers its budget.
A motion made by Mr. Barker to recommend to Town Meeting $500,000 for the Reserve Fund FY17
operating budget #132 was seconded by Mr. Sims. Vote: 8-0-0.
FY17 Municipal Departments' Operating Budgets — FY17 Base Budgets — (see meeting handout)
• Mr. Murgia reported that all of the budget worksheets had been sent out to the School and Municipal
departments and were due back to the Finance Department by January 4, 2016.
• The spreadsheet Mr. Murgia provided compares the FY16 voted budget to the FY17 base budget.
The base budget for the municipal departments includes salary projections with COLAs and step
increases.
• The AFSCME and Superior Officers unions have not yet settled for FY16, FY17 or FY18. For those
two unions a contract provision estimate has been included for FY16 and FY17 in a department's
budget. There is approximately $305,000 of COLAs and step increases for FY17.
• Included in the base budget numbers are the increases for Administrative Employees Association
(AEA) AEA employees from 35 hours to 40 hours per week.
• FY17 base budget also includes two rink employees that had been splitting their time between Parks
and Recreation and the Rink have been totally budgeted for FY17 in the Recreation budget.
• Department #910 decreased $237,728 because at last year's town meeting money had been set
aside for FY16 contract costs for all municipal contract costs. These are now being included within
the departments' budgets.
• Detailed budget sheets have been posted to the Finance Committee's website.
Annual Town Meeting Timeline —The timeline is set by the Board of Selectmen. March 1 S` is the
deadline by which the Capital Planning Committee must submit their capital recommendations to the
Finance Committee. Mr. Sims pointed out that the School Committee's timeline posted on their website
includes dates for budget discussions well beyond the date that the Finance Committee has sent the town
meeting information to the printer. Town By-laws state that municipal and school budget requests must
be submitted to the Finance Committee by January 19th. A Revenue Forecast Committee meeting wil l be
set once the Governor has released some preliminary state budget numbers.
D. Other Business/Open Issues
Liaison Report —Fire Department — Mr. Dorfman presented his liaison report regarding the Fire
Department.
• The Fire Department will be at a full complement July 1 with two new hires. Because a firefighter is
being deployed to Afghanistan for 12 months the Chief would like to hire one full time firefighter
floater to save on overtime costs. The cost for one firefighter may be $54,000 as compared to
$90,000 overtime costs.
• The Holbrook Regional Dispatch Center has resurfaced again. The annual fee to be a member of this
regional dispatch is $225,000. The Fire Chief conveyed to Mr. Dorfman that some of the Ambulance
Fund receipts could help defray the dispatch annual fee. A $90,000 software grant from the state
may also help defray some of the costs for upgrading the Fire Department's dispatch.
• Holbrook is scheduled to go partially on line July 1, 2016 and then fully on line around January 1,
2017.
• The Fire Chief is looking for a new fire engine for FY17. Mr. Murgia stated that there is a $700,000
debt request to replace Engine E-7. This request had been moved up to FY17 from FY18 because of
the Fire Chief's necessity to get this apparatus replaced. This originally was a $615,000 request.
The Fire Chief is also looking to replace his vehicle for $45,000 which had been replaced in 2011.
The 2011 car has high mileage.
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• Holbrook had originally thought it was unable to implement the regional dispatch system, but Mr.
Dorfman has been told that Canton could be on-line with the new system sometime near January
2017.
Liaison Report —Parks and Recreation Department and Rink Enterprise Fund — Mr. Sims gave a
liaison report regarding the Parks and Recreation Department as well as the Rink Enterprise Fund.
• Mr. Sims reviewed the FY15 results for the Parks and Recreation Department. Mr. Sims expressed
concern about $10,000 in overtime expenses as compared to $2,000 budgeted.
• Building Repairs/Maintenance had been budgeted at $5,000 but $16,200 had been spent.
• Painting supplies for approximately $1,000 had been charged to the Revolving Fund (program fees)
instead of to the budget that is established for the Armando Center. Also association fees and
conference expenses had also been charged to the Revolving Fund. Although these expenses are
minor in amount, Mr. Sims did not agree with expenses of this type being charged to the Revolving
Fund which is supposed to be for programs.
• The Recreation's printing budget was within budget but $10,000 for program booklets, mailing
expenses and logo redesign had been charged to the Revolving Fund.
• There was approximately $24,000 of expenses charged to the budget line item entitled Other
Charges and Expenditures.
• Mr. Sims had inquired of Ms. Maguire about potential budget problems for FY16, especially because
the Recreation Department has had to absorb the salaries for two employees from the Rink.
• The Recreation Director had indicated to Mr. Sims that they may be coming to the Finance
Committee for a Reserve Fund Transfer request or accessing free cash at Town Meeting.
• There is approximately $28,000 in the Rink Enterprise Fund for which $8,000 to $9,000 in debt
payments will be charged against this fund.
• The $8,300 stipend for the Parks and Recreation Director as well as longevity for the two rink
employees are being paid out of the Rink Enterprise Fund as well.
• Mr. Sims also noticed that there had been no $5,000 payment received by the Rink Enterprise Fund
for the use of the concession stand.
• Mr. Sims suggested that the Finance Committee meet with the Board of Selectmen, Parks and
Recreation and Representative Galvin to get a status regarding budget for the Rink and its
employees. Chair Saint Andre did not agree that it was the role of the Finance Committee to meet
with these parties.
• Mr. Murgia confirmed that for FY17 $8,000 to $9,000 would have to be budgeted for debt service
payments.
• Ms. Gustafson requested the name of the insurer for the Rink and if there was a business interruption
clause for any lost revenue to the Town. The Chair will send an email to the Town Administrator
requesting this information.
• Unrelated to Parks and Recreation and the Rink, Mr. Sims expressed interest if janitorial/cleaning
services was being budgeted in the Council on Aging budget or if a full time person was being
designated to the new Senior Center.
School New Hires List — (see meeting handout) The Finance Committee did not discuss the list.
FY16 Budgets —Municipal %versus School %versus Fixed Costs % — (see meeting handout)
Responding to a previous inquiry from a Finance Committee member at a prior meeting if the School's
portion of the overall budget was low, Mr. Murgia explained that Canton is within the averages for 11
comparable communities. Mr. Murgia also stated that the fixed costs budget has grown over the past few
years because it now includes an OPEB budget as well as increases to budgets for health insurance and
Norfolk County.
School Top Line Report as of 9-3-2015 — (see meeting handout) There was no discussion about the
School Top Line Report.
ATFC —Association of Town Finance Committee Handbooks —These are available for members as
well as the public.
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MMA Trade Show in Boston —January 22 & 23, 2016 — Mr. Sims expressed interest in attending this
annual meeting at a cost of $160.00 per member.
Inspector General's Boards &Commissions Course — Mr. McKenna, Ms. Gallagher and Ms. Leach as
well as Chief Doody attended the meeting. Mr. McKenna spoke in support of this course which covered
such topics as fiduciary duties for board members, ethics laws, public records and open meeting laws as
well as preventing fraud.
Annual Town Meeting Timeline —Some key deadlines include:
February 10, 2016 — BOS releases the warrant to the Finance Committee.
The Finance Committee will have until March 18'h to take their final positions, which is only about five
weeks. Mr. McKenna will reach out to the Planning Board.
Planning Board will have to move up their March 18'h deadline if the Finance Committee has to take their
positions by this date
Ms. Gustafson suggested getting the BOS's votes earlier than last year's timeframe.
E. Approval of Minutes
A motion made by Ms. Gallagher to approve the minutes for Tuesday, October 13, 2015 as written
was seconded by Ms. Gustafson. Vote: 6-0-2. Mr. Barker and Mr. Dorfman abstained from the vote.
F. Next Meeting Date: The next Finance Committee meeting was not determined at the time of the
meeting. There would be no meeting for December unless an issue came up that the Finance Committee
had to address.
Adjournment: A motion made by Mr. Casamento to adjourn the meeting at 9:37 p.m. was
seconded by Ms. Gusafson. Vote: 8-0-0.
Minutes reviewed by: Jim Casamento
Respectfully submitted,
1 ,y
t ~_ _
J
Barba a aint Andre
Chair, Canton Finance Committee
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Town of Canton
Finance Committee Meeting —Thursday, November 19, 2015
List of Meeting Handouts
Please note: These meeting handouts may also be found on the Town's website under the Posted
Minutes section (Laser Fiche).
Agenda (1 page).
M unicipal Cash Capital Budget Status as of 11/10/15, (1 page).
School Cash Capital Budget Status as of 11/6/15 (1 page).
M unicipal Debt Capital Budget Status as of 11/10/15 (1 page).
School Debt Capital Budget Status as of 11/10/15 (1 page).
Enterprise Funds' Cash Capital Budget Status (1 page).
Enterprise Funds' Debt Capital Budget Status (1 page).
M unicipal Capital Requests for Fiscal 2016 thru 2020, 11/12/15 (2 pages).
School Capital Requests for Fiscal 2016 thru 2020, 4/6/15 (2 pages).
M unicipal Departments' Operating Budgets, FY16 Voted Budgets vs. FY17 Base Budget, 11/10/15
(1 page).
M unicipal Capital Requests for Fiscal 2017, 11/16/15(2 pages).
Vote - FY17 Budget Worksheet - #132 Reserve Fund, 11/9/15 (1 page).
Vote - FY17 Budget Worksheet - #131 Finance Committee, 11/9/15 (1 page).
School New Hires List 2015-2016, provided by Jody Middleton (2 pages).
Fiscal 2016 Budgets for 12 Communities —Municipal %versus School % (including fixed costs),
1 1/12/15 (1 page).
FY16 Budget Status —School Department (also known as Top Line Report) — as of 9/30/15, provided by
Barry Nectow, School Business Administrator (12 pages).
M MA 2016 Annual Meeting and Trade Show on January 22 & 23 in Boston (5 pages).
Annual Town Meeting Timeline 2016(3 pages).
Draft Minutes for October 13, 2015.
Email from Stephen MacPherson to Jim Murgia dated 11/19/15 regarding Full Day Kindergarten
(2 pages).
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