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January 24, 2024, Finance Committee Meeting. Minutes

Finance Committee · Record date 2024-01-24 · Record a6fd84c687e8c452b8

Saved text from 5 source pages. Transcription and OCR may contain errors; verify figures and wording against the original. Retrieved 2026-10-15.

Canton Finance Committee                     Minutes Voted on: 2/28/24
                                               801 Washington Street                      Vote: 8-0-0
                                                 Canton, MA 02021




                                                    Meeting Minutes
                                                    January 24, 2024


Finance Committee Members Present: Dave Clough, Dan Cole, Karen Foley, Emilio Mauro, Tim McKenna,
Maureen Menconi, Kristin Mirliani, Reuki Schutt and Cindy Thomas.

Finance Committee Members Absent: All members were present.

Guests Present:
Ellen Jones, Finance Committee Recording Secretary
Randy Scollins, Finance Director

Call Meeting to Order: Ms. Thomas called the in-person Finance Committee meeting to order at 7:00 p.m.

Review of the Agenda – Ms. Thomas reviewed the agenda items that included discussion of FY25 Municipal Operating
Budget Requests. She also stated that at their prior meeting on January 10, 2024 the Auditors presented information
that the Committee members had follow-up questions for Mr. Scollins. Follow-up questions would be discussed at the
February 7, 2024 Finance Committee meeting in which the Finance Director, Mr. Scollins, would be in attendance.

Discussion – Summary Review – FY25 Municipal Budget Requests – Randy Scollins

Mr. Scollins presented the first pass of the FY25 Summary Budget Requests with a total incremental increase of $1.94
million over the FY24 base budget. The $1.94 million request does not include Fixed Costs or Enterprise Budgets.
The Budget Summary could be updated once the Revenue Forecast Committee meets on February 6. The School
Committee is supposed to meet on February 1 and will provide information to the Finance Director on February 2. Mr.
Scollins and the Town Administrator have been meeting with many department managers to review their budget
requests. Mr. Scollins stated he would update the Summary after those meetings have been completed.

Mr. Scollins also provided the Milestone Calendar with key dates. He stated that the Governor’s budget was released
earlier, but late in the day and that the Divisions of Local Services (DLS) had not yet released their cherry sheet numbers
which he believes will be available Thursday, January 25, 2024. The Revenue Forecast Committee will meet on
Tuesday, February 6 from 10 to 12 am.

Discussion of the following FY25 Municipal Budget Requests – Mr. Scollins

#133 Director of Finance – The Finance Director is requesting a $1,200 increase from $1,300 to $2,500 due to
contractual life insurance obligations. The Information Technology budget #155 would be discussed and presented by
Louis Jutras at a future Finance Committee meeting.

#135 Town Accountant – The FY25 Town Accountant budget has been reduced by approximately $8,000 due to
salary savings. The former Town Accountant, Kathleen Butters, retired. Allyson Podgurski, has now been promoted
from Assistant Town Accountant to Town Accountant. The Payroll Coordinator, Cody Pratt, has now been promoted
to the Assistant Town Accountant position.

#145 Treasurer/Collector – There is no change in this budget for FY25.

Mr. Scollins stated that there will be four department managers scheduled to discuss their budgets at the January 31 st
meeting.

Overall, the FY25 municipal budget requests total of $1,941,492 represents a 7.18% increase over the FY25 Base
Budget. The FY25 Municipal Department Requests total of $28,964,911 represents an 8.8% increase over the FY24
Voted budget.




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#710 Principal Payments – General Fund Principal Debt Service Payments FY25 – The total principal payments
budget request of $3,258,613 is an 8.4% decrease from the FY24 budgeted amount of $3,557,552. This budget
includes principal payments for new issues anticipated to be borrowed this year as well as $287,900 of principal
payments for new bonds issued in FY24. Mr. Scollins stated that he has not recently seen interest rates above a 4%
rate and that current community borrowings are closer to 3½% on average. The authorized and unissued debt for
which he will go out for borrowing in May 2024 totals $5,919,103. Mr. Scollins is using 4% as the interest rate for
budgeting purposes for the borrowing in May 2024.

#751 Long-Term Interest Payments – General Fund Interest Debt Service Payments FY25 – The total long term
interest payments budget of $1,116,274 is a less than 1% decrease (0.08%) from the FY24 budgeted amount of
$1,106,931. Long term interest payments for new bonds issued in FY24 are being budgeted at $143,860.

#752 Short Term Interest Payments – Mr. Scollins does not anticipate any short term borrowing. Mr. Scollins stated
that there will most likely be a Special Town Meeting in the fall of 2024 before the tax rate is set. With regard to the
Galvin Middle School project he stated that once the Massachusetts School Building Authority (MSBA) approves the
project it will require a debt exclusion vote. A Special Town Meeting will have to first approve the project by a 2/3 vote
for the full amount/cost of the project. The project would then have to pass on a ballot vote. Regardless of other
funding sources from the Town for the project, MSBA requires that the Town vote the debt exclusion for the entire
amount of the project. Mr. Scollins would not borrow for the full amount at the start of the project. He has prepared
estimates of cash flow over three years which he will share with the Finance Committee at a future meeting. The best
practice for large projects is to not do long-term borrowing at the outset, but borrow for short-term amounts. At the end
of the third year the Town will do a long-term borrowing. Short-term interest is anticipated to be paid from funds the
Town is putting aside in a capital stabilization account. The approximate interest could be paid out of the Capital
Stabilization Fund for which the Town has been annually contributing $1 million to this fund. There will be short-term
interest payments starting around FY26 or FY27. Special Town Meeting will have to take place before Thanksgiving.
The MSBA needs to “green light” the project hopefully in June 2024. Within ~120 days of the vote at STM there would
have to be an election for the ballot vote. Mr. Scollins explained that a debt exclusion borrowing ends when the bonds
are paid off. A general override is a permanent increase to the taxes. Canton’s only override was in 2014.

#911 Retirement Benefits – Norfolk County Retirement System Assessment – The Town receives an annual
assessment from the Norfolk County Retirement System (NCRS) for the non-educator pensions. The FY25
assessment is $7,565,945 if paid in full on July 1st. The Town will save $140,000 if paid in full versus paid in 2 payments
(July 1, 2024 and January 1, 2025). The pension has an unfunded liability. NCRS is working toward fully funding the
unfunded liability by the end of FY29. The estimated savings for the Town of Canton is ~$7 million. Mr. Scollins
previously spoke in support of redirecting this savings towards the Other Post Employment Benefits (OPEB) liability.
However, this could be a great resource to take some of the burden off the taxpayers for excluded debt related to the
Galvin Middle School project.

By law the Town has to fully fund the pension. Currently there are no funding requirements in place for funding OPEB.
The auditor’s suggestion is to fund 110% of the pension but it is up to NCRS. The auditors recommend best practice
for fully funding OPEB.

#914 Employer Share – Health Insurance – Mr. Scollins is recommending a 3.8% increase to the budget for employer
share health insurance. He stated that this is only driven by the increase in subscribers. The Town has not increased
premiums for employees for fourth year in a row. The Health Claims Trust Fund has a current balance of $9.2 million
as of FYE23 as compared to a $3.6 million balance in FY17. Premiums have been flat due to a reduction in health
care service utilization during COVID. The Town also has reinsurance for claims greater than $200,000. Mr. Scollins
stated that in his opinion it would be unfair to employees to raise premiums given the current circumstances. Mr.
Scollins suggested that at some point the Town could contribute to OPEB using some of the Health Claims Trust Fund.
The Town’s health plan subscribers are up by 21.

#915 Employer share – Life Insurance – Mr. Scollins is recommending no increase for the Employer Share-Life
Insurance FY25 budget. The number of subscribers and the premiums have both been static.

#993 OPEB Transfers – Other Post-Employment Benefits – Mr. Scollins is recommending a $100,000 increase for
the FY25 OPEB budget from $1,250,000 to $1,350,000. The Town has typically been increasing this contribution by
$100,000 each year at Annual Town Meeting.

#610 Water Enterprise Principal and Interest Payments – Water Debt Service Payments FY25 – The FY25 budget
request for Water Enterprise principal and interest payments is $3,527,251 down $227,910 from $3,755,170 for FY24.
This is the result of amortization of water debt. There is $129,600 being budgeted for new interest and principal
payments for FY25. Mr. Scollins will be going out for borrowing in may for $1,440,000 for water main replacements in
the Elm/Greenlodge/Dedham Street areas.




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#600 Sewer Enterprise Principal and Interest Payments – Sewer Debt Service Payments FY25 – The FY25 budget
request for Sewer Enterprise principal and interest payments is $589,263 which is an approximately $40,000 increase
from the $549,611 budgeted for FY24. There are three issues that Mr. Scollins will be borrowing for in May: Inflow &
Infiltration borrowings for $402,603 and $400,000 respectively and a SCADA upgrade project (final phase) of $80,000,
There is $123,564 in interest and principal payments for sewer debt in the pipeline.


Rink Enterprise principal payment is $55,000 and $51,201 for interest payments. These are for payments associated
with borrowing issued on 5/20/20 for rink repairs.

#433 Trash Collection – Mr. Scollins is recommending an FY25 budget of $2,676,652 which represents a 3.57%
increase from the FY24 budget. The current contract with Republic is due to expire at the end of June 2024. The Town
went out to bid with an RFP (Request for Proposals) even though this procurement is not subject to Ch. 30B
procurement. The two proposals received were from Republic and Waste Management. The Waste Management
proposal had a better price. The Town has not yet signed a contract with a vendor. For budgeting purposes Mr.
Scollins went with the best price which was Waste Management for a five-year contract.

#116 DIF (fka #990) Plymouth Rubber DIF – Mr. Scollins provided detailed information with regard to the Plymouth
Rubber District Improvement Financing (DIF) Plan and the collection of taxes for this fund. (From MassDevelopment
website: DIF is a locally enacted tool that enables a municipality to identify and capture incremental tax revenues from
new private investment in a specific area and direct them toward public improvement and economic development
projects. DIF is not a new tax or special assessment and it does not increase a municipality’s tax rate.)

The DIF fund is a fund whereby funds set aside from an amount of taxes collected from the Paul Revere site as per the
2015 agreement on how the Town will pay for the infrastructure that the developer put into the site ($6.2 million).

Once the Town had a “run rate” of new tax revenues from the site, per the formula the Town would put those funds
aside to pay the debt service on the bond that was issued two years ago to pay the developer (7 years, or 2022, after
the agreement was entered into, to pay them for all of the work they did at the site). The “sinking fund” is to put funds
into the fund until the fund is “filled up” and all of the funds needed to pay for the debt service until the cumulative
amount of $9.3 for bond payments has been reached. FY 2017 was the base year of the DIF in which the net tax
revenues collected, as per the formula in the agreement, was -$427,207.

Mr. Scollins referred to a spreadsheet schedule with DIF estimates from 2017 through 2029 as well as up to 2036. (see
meeting documents and the budget documents online for budget #116.) The spreadsheet detailed the following:

For FY24, the Real Estate Taxes Collected ($1,295,182) less School Costs ($361,881) and less Town Costs ($289,020)
equals the Net Tax Revenues Collected in FY24 or $644,281.

The Net Increased Tax Revenues is the amount the Town contributes to the DIF Fund (or $1,017,488 which is the
FY25 budgeted amount to be set aside to contribute to the DIF Fund). The $1,017,488 is the amount of Net Tax
Revenues collected in FY17 or $427,207 (which was negative in the base year of 2017) plus the $644,281 (Net Tax
Revenues) equals $1,071,488 or the amount budgeted for FY25 (the $1,071,488 does not go into the General Fund).
This is based on a set formula as per the agreement. The $1,017,488 is within $200,000 of the Gross Taxes collected
of $1,295,182 which has a significant impact on the Fixed Costs. This is about a $500,000 increase to the Fixed Costs
budget.

It is estimated that by FY29 some of these funds will drop to the General Fund. Cumulative estimated DIF funds
collected are estimated to reach $9,723,845 less the total bond payment amounts to be accumulated of $9,305,815
from the formula for the tax revenues from that site get to go 100% to the Town’s General Fund (FY29).

The Real Estate taxes collected in this DIF exhibit for FY25 through 2036 are estimates because it is hard to predict
when new units are going to come “on-line”, get an occupancy permit and be taxable. There are certain deadlines
(June 30th) that have to be met in order for the units to be considered new tax revenue, or it would be considered as
new revenue for the next fiscal year. Mr. Scollins asked the developer (Mr. Bernie Plante) to take the schedule and
review it with his team and partners to give Mr. Scollins their best estimate of when he believes the properties that the
Town is currently not taxing will come on line so he can refine the estimates in the Real Estate Taxes collected DIF
Schedule.

Mr. Scollins also provided a Summary Sheet of all the map and parcels (Property IDs) information and the billed taxes
for FY24 as to the real estate taxes associated with the Plymouth Rubber Development Site (totaling $1,295,183). As
backup to the summary information, included is information with all the sub-parcels on the Detailed Sheets for the
property IDs and the amounts bill for 2024 that totals up to the $1,295,183.




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Mr. Scollins explained that the color-coding on the Summary sheets refer to the Totals on the Detailed Sheets. The
LLC Inactive units refer to the Canton Development Prop. LLC’s still under development and not billed for yet.

Previously the Select Board had approved part of the Revere Site would be used for commercial purposes but the
agreement was revised and the intended commercial use has been switched to residential. These residential units
mean more residential taxes to the Town. Mr. Scollins will be watching the timing of these units and the impact on the
taxes collected.

Mr. Mauro questioned if the School and Town Costs are in line with the agreement and “net the formula”. Mr. Scollins
stated there was an assumption that there would be an increase in school enrollments from the significant number of
new housing units (condos and apartments). The developer asked for school enrollment figures but to date the impact
has not been dramatic and has been less than 10 students. With regard to various variable costs and their impacts to
the Town Mr. Scollins could not speak to that. However, he did state that when the fiscal year was closed he had the
pleasant surprise that the water and sewer revenue came in a lot stronger than anticipated, which could have a
downward impact on the water and sewer rates. The impact on other types services would be best answered by other
departments, such as public safety officials.

#131 Finance Committee – The budget request for FY25 is to level fund the budget for $12,500.

#132 Reserve Fund – Mr. Scollins supports the Reserve Fund FY25 budget request of $600,000 for FY25. The
Reserve Fund is controlled by the Finance Committee. So far, Snow and Ice expenses have not depleted the Reserve
Fund Budget.

Annual Town Meeting Warrant Articles – With regard to the Galvin Middle School borrowing article, Mr. Scollins
would defer to Town Counsel. Attorney Derensis is currently reviewing all Town Meeting warrant articles and is
reviewing the two articles submitted by the Finance Committee. The Select Board is scheduled to finalize the warrant
at their February 6, 2024 meeting and will distribute the warrant to the Finance Committee as per the by-law.

Approval of Minutes

The minutes for January 10, 2024 were not ready for approval.

Other Business – The Finance Committee Recording Secretary asked Ms. Thomas, in light of an upswing in COVID
and flu illnesses, if she would consider a switch from in-person meetings to virtual Zoom meetings. While no official
vote was taken, Ms. Thomas concluded that the members agreed to returning to Zoom meetings with the understanding
that they would address this decision mid-February.

Next Meeting Date: The next meeting would take place on January 31, 2024, virtual via Zoom. Mr. McKenna asked
to have the Police Study Committee placed on the February 7th Finance Committee agenda.

Meeting Adjournment - A motion made by Mr. Mauro to adjourn the meeting at 8:50 p.m. was seconded by
Mr. Cole.

Vote: 9-0-0.

Minutes reviewed by: Karen Foley

Respectfully submitted,




Cindy Thomas
Chair, Canton Finance Committee and
Sub-Committee to Review Compensation of Elected Officials




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Finance Committee
                                             Meeting Documents
                                              January 24, 2024

Please note: Some meeting documents may be found on the Town’s website under the Posted Minutes
section (Laser Fiche).


Agenda for January 24, 2024.

FY25 Municipal Operating Budgets Summary dated January 21, 2024, provided by Randy Scollins (4 pages).

Fixed Costs and State and County Assessments dated January 21, 2024, provided by Randy Scollins (1 page).

Water Sewer Rink Enterprise Fund Operating Budgets dated January 21, 2024 provided by Randy Scollins (1 page).

FY 2025 Budget Milestone Calendar for the Town of Canton dated January 24, 2024 provided by Randy Scollins
(1 page).

FY 2025 Budget Request for Budget #116 Plymouth Rubber DIF, prepared by Randy Scollins, dated 1/3/24 (9
pages).

Budget documents discussed at the meeting may be found on the Town’s Website under the Finance Committee
section. The budget documents are subject to change as the budget process progresses. The documents may also
be found at the below links.

https://town.canton.ma.us/DocumentCenter/View/10987/FY25-Municipal-Budget---Dept-Requests---Jan-2024---Part-
1-of-2

https://town.canton.ma.us/DocumentCenter/View/10988/FY25-Municipal-Budget---Dept-Requests---Jan-2024---Part-
2-of-2




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