Canton, Massachusetts · Saved source text

September 28, 2015, Finance Committee Meeting. Minutes

Finance Committee · Record date 2015-09-28 · Record 4900ef0ea5d20c664d

Saved text from 6 source pages. Transcription and OCR may contain errors; verify figures and wording against the original. Retrieved 2026-10-15.

Town of Canton Finance Committee                    Minutes Voted on: 10-13-15
                                           Meeting Minutes                            Vote: 7-0-1
                                     Monday, September 28, 2015


Members Present:
Rob Barker, Jim Casamento, Jerry Dorfman, Dianne Gustafson, Stephanie Leach, Tim McKenna,
Barbara Saint André and Jim Sims.

Members Absent:
Sepp Bergschneider and Nichola Gallagher.

Guests Present:
John Connolly, Chair, Board of Selectmen
Mark Porter, Member, Board of Selectmen
Jody Middleton, Human Resource Director
Jim Murgia, Finance Director

Opening: A meeting of the Canton Finance Committee was called to order by Chair Saint André at
7:00 p.m. on Monday, September 28, 2015 in the Salah Meeting Room of Town Hall.

A.       Approval of Agenda

Chair Saint André reviewed the items on the agenda which included a Reserve Fund Transfer request to
the Water Enterprise Fund, a discussion with the Human Resources Director, Jody Middleton, regarding
employee benefits and other miscellaneous items.

B.       Announcements

The Association of Town Finance Committees’ (ATFC) annual meeting will be held on Saturday, October
17th in Sturbridge. Members should respond via email to the Finance Committee secretary by Friday,
October 2nd if they are interested in attending.


         New Business

Vote to Approve a Reserve Fund Transfer Request of $350,000 to the Water Enterprise Fund for
the purpose of replacing a water main on Rebecca Road (see meeting handouts)

Board of Selectmen Chair, John Connolly, and BOS member Mark Porter presented to the Finance
Committee a Reserve Fund Transfer Request for $350,000 to be transferred to the Water Enterprise
Fund. This transfer was being requested for emergency repairs for a water main replacement in the
Rebecca Road area of Town. The Reserve Fund would then be replenished by a transfer at the Annual
Town Meeting in May 2016 from the Water Enterprise Fund retained earnings (free cash).

The following was discussed:

    Mr. Connolly stated that the cast iron pipes in the Rebecca Road area were approximately 50-60
     years old. Neighbors have been complaining about the quality of the water for several months.
    Efforts at an approximate cost of $7,000 had been done to try and remedy the problem. Hydrants
     had been flushed to clean out sediment, valves and gates on the Town’s property had been replaced
     and two valves on owner’s properties were replaced. Mr. Connolly provided samples of water from
     the area.
    A Special Town Meeting would be required in order to access the current $2.5 million in the Water
     Enterprise Fund retained earnings (free cash).
    DPW Superintendent Mike Trotta had confirmed that replacing the pipe at an approximate cost of
     $350,000 would solve the problem.
    Ms. Gustafson suggested that it would useful for capital planning purposes to have an idea from the
     DPW Superintendent of the upcoming water and sewer replacements. Mr. Murgia stated that the

2015.09.28 FINCOM MINUTES                   Page 1 of 6                                 10/03/2016

$2.6 million Mechanic Street main replacement was one of the last of the largest replacements that
    needed to be done according to Mr. Trotta’s replacement plan.
   Mr. Casamento inquired as to why the Water Enterprise Fund couldn’t pay for the Rebecca water line
    repairs even if it meant that the fund could fall into a deficit as the fiscal year progressed. Mr.
    Casamento used as an example the Executive Area Legal expenses budget which ended fiscal 2015
    in a deficit. The Reserve Fund was used to cover a $90,000 deficit.
   Mr. Murgia stated that the Water Enterprise had upcoming expenses such as MWRA expenses,
    indirect charges to the General Fund and debt service payments that would be due around March of
    2016. If the Water Enterprise Fund started to run in a deficit and the ordering of chemicals and other
    supplies could not be ordered for the water treatment plants, it could mean that these plants would not
    be able to continue operating.
   Town Meeting would have to vote to authorize the transfer of $350,000 from the $2.5 million in Water
    Enterprise retained earnings (free cash) back into the Reserve Fund. The only risk would be a low
    balance in the Reserve Fund until Town Meeting approves the transfer.
   Chair Saint André stated that the Town is not allowed to deficit spend. She recalled that with regard
    to the prior Reserve Fund Transfer for the Executive Area legal services, that budget had not run into
    a deficit and that legal invoices had been held for payment until the Reserve Fund Transfer had been
    approved.
   Chair Saint André also stated that contracts for public works construction have to be certified by the
    Town Accountant that funds are available and that a fund source has been identified for the project.
    Without this certification there would be no construction.

A motion made by Mr. Barker to approve a Reserve Fund Transfer request for $350,000 to the
Water Enterprise Fund for the water main replacement in the Rebecca Road area was seconded by
Mr. McKenna. No vote was taken.

   Mr. Sims spoke about the lack of transparency of this project, meaning no disrespect to the Board of
    Selectmen, and that the Finance Committee was hearing about this for the first time, even though this
    issue has been going on since April.
   Mr. Connolly stated that the Town has tried to take less costly solutions for remedying this water
    problem such as flushing the system, changing gates and valves and that the BOS has had
    discussions on this issue and apologized that the Finance Committee had not been informed until
    now.
   Mr. Sims is concerned about other water and sewer lines that may be at risk. Mr. Sims suggested
    that perhaps the sewer lines should be considered for replacement at the same time the water lines
    are replaced.
   Mr. Casamento spoke in support of the necessity of this project but preferred to make the decision on
    this transfer at a later point in time.

A motion made by Mr. Casamento to table the vote for the Reserve Fund Transfer request of
$350,000 to the Water Enterprise Fund to a later date was seconded by Mr. Sims.

   Ms. Saint Andre stated she was not in support of tabling the motion and that postponing the vote on
    this issue would not change anything.
   Mr. Casamento stated that there were two pieces of information that were unknown at this time: the
    bid results due in on Friday, October 2 and how the Water Enterprise Fund budget would be running
    later in the fiscal year.
   Mr. Murgia explained that if the Finance Committee did not approve the Reserve Fund Transfer
    request and the Town proceeded with the project anyway, this would place the Finance Department
    in a difficult position having to approve availability of funds once the contracts come in on Friday.
   With regard to the order of voting on the motions for the transfer, Chair Saint Andre explained that the
    Finance Committee is not governed by Robert’s Rules of Order.

The motion to table the transfer was voted on. Vote: 2-6-0. Mr. Sims and Mr. Casamento voted in
support of tabling the transfer vote. The motion to table the vote did not pass.

An amended motion was made by Mr. Barker to approve a reserve fund transfer request up to an
amount of $350,000 to the Water Enterprise Fund was seconded by Mr. McKenna. Vote: 8-0-0.

2015.09.28 FINCOM MINUTES                    Page 2 of 6                                   10/03/2016

(The final transfer amount would be determined once the final bids were received on Friday, October 2.)

The discussion with Mr. Connolly and Mr. Porter ended at approximately 7:45 p.m.

Discussion with Jody Middleton, Human Resource Director – Employee Benefits (see meeting
handouts)

The following items were discussed:

   Ms. Middleton explained the standards that must be met in order to participate in the Town’s
    employee benefits.
   The Town does apply for seasonal exemptions through Unemployment.
   Part-time employees who are eligible for insurances contribute the same percentage as full-time
    employees.
   The Town pays Blue Cross/Blue Shield and Delta Dental for administrative fees and claims for the
    medical and dental insurances.
   The Town also has Stop Loss Insurance to cover claims in excess of $150,000 per employee.
   Because the Town is self-insured, the Town establishes the rates for the insurances with advice from
    their health care advisor (Cook and Company).
   The Town and the health care advisor monitor the claims that are paid out of the Health Insurance
    Trust Fund.
   Rates are established for the PPO, HMO and dental plans based on claims experience.
   Each plan is tracked on the amount the employees and Town are contributing to the Trust Fund and
    the claims paid out of the Trust Fund.
   The union contracts contain language about the 75%/25% contribution rates. Per Ch. 32B benefit
    changes can be negotiated outside the scope of the union contracts through the PEC (Public
    Employees Committee comprised of members from each of the unions).
   The Health Claims Trust Fund (Fund #861) is managed internally by the Town. This fund is invested
    with other trust funds of the Town through an investment firm. Any interest income earned is credited
    back to the trust fund.
   Mr. Sims stated his concern at the cost for extra benefits provided to personal service contracts. He
    also inquired about the Town’s liability if an accident were to occur during the personal use of
    vehicles by employees. Ms. Middleton stated that she was not familiar with the liability insurance
    because it was not under her purview.
   Ms. Middleton stated the Personnel Policies have not been updated since 2002. The Town tries to
    “mirror” these personnel policies after the AFSCME contract.
   Mr. Sims stated his concern that employee benefits are amounting to approximately $1.25 million of
    the total $17 million municipal budget.
   Mr. Casamento stated that if a new employee were hired at an annual rate of $50,000 the following
    budget line items would be affected: health insurance, dental insurance, life insurance, pension
    expense, workers compensation expense, unemployment expense, longevity bonuses, tuition
    reimbursement, good attendance bonuses, physical fitness reimbursement and out of grade/overtime.
    Mr. Casamento requested information from Mr. Murgia and Ms. Middleton on the average cost of
    benefits for a new employee with an annual salary of $50,000.
   Ms. Gustafson spoke in support of monitoring position control in particular with the School
    Department. Because benefit costs are not charged back to the individual departments it is difficult to
    measure the benefit costs in relationship to the number of positions within a department or when new
    positions are added.
   Mr. Murgia clarified for the Committee members that when a new teacher is hired by the Town, the
    pension costs are paid by the state and not the Town. The Town would still be affected by insurance
    costs for this new employee but not by pension costs.
   Not only do new positions affect the health insurance budget but also retirements and their
    subsequent replacements affect the health insurance budget.
   Ms. Middleton has provided updated contracts which Mr. Sims will be posting to the Town website.
   Ms. Middleton reported that the job descriptions survey was proceeding along as planned, employees
    have filled out their 6-page job questionnaires and are in the process of scheduling their interview
    times. Questionnaires will soon be mailed out to communities for feedback.

The discussion with Ms. Middleton concluded at approximately 8:30 p.m.
2015.09.28 FINCOM MINUTES                   Page 3 of 6                                   10/03/2016

D.       Other Business/Open Issues

Free Cash Certification – (meeting handout) Mr. Murgia provided the following information:

    Since the last time the Finance Committee met in August the Town had closed the books for FY15
     and based on information submitted to the state the Town’s free cash was certified at $3.8 million.
    The reserves for the General Fund has gone up to approximately 15% of budget. This percentage is
     favorable with the bond rating agencies.
    Reserves consists of $3.8 million in free cash, $3 million in the Assessors Overlay and $5.6 in the
     Stabilization Funds for a total of $12.5 million which represents 15% of budget.
    Fiscal 2015 was a favorable year with approximately $4.1 million in auto excise taxes collected and
     an increase of $600,000 over the budgeted amount for building permits. With the increase in local
     receipts being so favorable, this caused the cash reserves to increase by approximately $2 million
     over the prior year.
    The Water Enterprise Fund retained earnings (free cash) was certified at $2.5 million or 39% of
     budget. There were no water rate increases for the year.
    The Sewer Enterprise Fund retained earnings (free cash) was certified at $1.6 million or 28% of
     budget.
    The Rink Enterprise Fund retained earnings (free cash) was certified at $32,000 or 8.6% of budget.
    Mr. Murgia stated that the reserves for the Enterprise Funds should be higher than 15% because of
     the volatility of the funds. The lowest that he would recommend enterprise reserves be at would be
     20% of budget.

Mr. Murgia will be attending a meeting with Norfolk County Retirement System at which meeting their
actuary will be speaking about the actuarial studies and how Canton’s assessment may be affected by
the study.


Discussion of Questions for the October 13th Meeting with the School Committee

The Finance Committee will be meeting with the Chairman of the School Committee (Bob Golledge).
Chair Saint André requested members to send her via email any questions they may have for the School
Committee.

Mr. Sims requested information regarding the possible $13,000 increase requested for the School
Department budget to cover the cost of renting ice time. He also requested information regarding the
additional six buses being provided by Connelly.

Mr. Murgia mentioned that the recent OPEB study had identified a $63,000 OPEB cost for food service
employees (10-15 employees). Mr. Murgia would like to see for FY17 not only the usual transfer of
$130,000 for health insurance costs for food service employees but also a transfer of $60,000 for OPEB
costs. Mr. Murgia has proposed to the School Business Administrator, Barry Nectow, that the $60,000
cost be phased in over three years.

The Enterprise Funds currently transfers a portion of their budget to the General Fund for OPEB costs.
The Town’s actuary has identified for several years the OPEB costs for the Enterprise Funds. This year
is the first time the actuary has broken out the OPEB costs for the food service employees.


Other Topics for Discussion at Future Finance Committee Meetings –

    Mr. Sims suggested having Parks & Recreation attend a future Finance Committee meeting to
     discuss their budget as well as the Rink budget.
    Mr. McKenna suggested inviting the Department of Public Works Superintendent to a meeting to
     discuss the recent merging of the Buildings & Property Maintenance Department into the DPW and a
     road repair list.


2015.09.28 FINCOM MINUTES                   Page 4 of 6                                  10/03/2016

    Ms. Gustafson inquired about a long term capital plan. Perhaps capital planning could attend on the
     same night as DPW.
    A suggestion was made to discuss overtime costs for the Fire Department and Police Department to
     an agenda.


Public Comment – There were no public comments made at the meeting.


Liaisons – There were no liaison reports given at the meeting.


E.       Approval of Minutes

A motion made by Mr. Barker to approve the minutes for August 11, 2015 as written was seconded
by Ms. Leach. Vote: 8-0-0.


F.      Next Meeting Date: The next Finance Committee meeting will be on Tuesday, October 13, 2015
at 7:00 p.m. in the Salah Meeting Room of Town Hall.


Adjournment: A motion made by Mr. Barker to adjourn the meeting at 9:00 p.m. was seconded by
Ms. Leach. Vote: 8-0-0.

Minutes reviewed by: Tim McKenna

Respectfully submitted,



Barbara Saint André
Chair, Canton Finance Committee




2015.09.28 FINCOM MINUTES                    Page 5 of 6                                 10/03/2016

Town of Canton
                     Finance Committee Meeting – Monday, September 28, 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).

Reserve Fund Transfer Request for Fiscal Year 2016 for $350,000 to Water Enterprise for water main
replacement in Rebecca Road area. (3 pages).

Copy of email from Jim Murgia to Jim Casamento dated September 23, 2015 regarding use of Water
Enterprise retained earnings (free cash) to reimburse Reserve Fund (2 pages).

Memorandum from Jody Middleton to Finance Committee dated September 2015 regarding Town of
Canton Employee Benefits (7 pages).

Copy of email from Jim Sims to the Finance Committee, dated September 26, 2015 regarding Other
Benefits, Other Charges, Cell phone Costs by Departments (5 pages).

Contract Benefits Analysis prepared by Jim Sims, September 2015 (11 pages).

Copy of email from Barbara Saint Andre to Bob Golledge dated August 27, 2015 regarding meeting
with the Finance Committee – List of items/questions for discussion (1 page).

ATFC (Associations of Town Finance Committees) Annual Meeting information to be held on
Saturday, October 17, 2015 in Sturbridge information (5 pages).

Draft minutes for Finance Committee meeting of August 11, 2015 (4 pages).

Copy of email from Barbara Saint Andre to Jim Murgia, dated September 28, 2015, regarding Jim
Casamento’s Questions for October Meeting with School Committee (2 pages)




2015.09.28 FINCOM MINUTES                 Page 6 of 6                               10/03/2016