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July 30, 2020, Finance Committee Meeting - Virtual Meeting. Minutes
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Minutes Voted on: 12/21/20
Canton Finance Committee Vote: 6-0-1
801 Washington Street
Canton, MA 02021
Meeting Minutes
July 30, 2020
Finance Committee Members Present: David Clough, Dan Cole, Emilio Mauro, Tim McKenna, Reuki Schutt, Cindy
Thomas and Wai Wong.
Finance Committee Members Absent: Rob Barker.
Guests Present:
Ellen Jones, Finance Committee Secretary
Randy Scollins, Finance Director
Opening: Chair McKenna called the virtual meeting via Zoom to order at 7:01 p.m.
Approval of Agenda: Chair McKenna reviewed the agenda.
New Business
Welcome - New Finance Committee Member – Chair McKenna welcomed new member, Reuki Schutt. Ms. Schutt
served for several terms on the School Committee prior to joining the Finance Committee. Ms. Schutt is looking
forward to working with Committee members.
Reorganization of the Finance Committee
A motion made by Ms. Thomas to nominate Mr. McKenna as the Finance Committee Chair for FY21 was
seconded by Mr. Wong.
Roll Call Vote:
Mr. McKenna Aye Mr. Mauro Aye
Ms. Thomas Aye Mr. Wong Aye
Mr. Clough Aye Ms. Schutt Aye
Mr. Cole Aye
The motion passed 7-0-0.
A motion made by Chair McKenna to nominate Ms. Thomas as the Finance Committee Vice Chair for FY21
was seconded by Mr. Wong.
Roll Call Vote:
Mr. McKenna Aye Mr. Mauro Aye
Ms. Thomas Aye Mr. Wong Aye
Mr. Clough Aye Ms. Schutt Aye
Mr. Cole Aye
The motion passed 7-0-0.
The Committee considered but did not elect a Clerk for the Finance Committee.
Chair McKenna announced to the public that there is one vacancy on the Committee and that if any resident with
basic financial knowledge would like to serve on the Committee they should reach out to the current Moderator
Richard Staiti. If there are any questions about the Finance Committee role they should send interest and inquiries to
fincom@town.canton.ma.us.
Approval of Minutes
A motion made by Mr. Mauro that the March 23, 2020 minutes be approved as written was seconded by Ms.
Thomas.
Roll Call Vote:
Mr. McKenna Aye Mr. Mauro Aye
Ms. Thomas Aye Mr. Wong Aye
Mr. Clough Aye Ms. Schutt Abstain
Mr. Cole Aye
The motion passed 6-0-1.
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A motion made by Mr. Mauro that the March 23, 2020 minutes be approved as written was seconded by Ms. Thomas. Roll Call Vote: Mr. McKenna Aye Mr. Mauro Aye Ms. Thomas Aye Mr. Wong Aye Mr. Clough Aye Ms. Schutt Abstain Mr. Cole Aye The motion passed 6-0-1. A motion made by Mr. Mauro that the March 25, 2020 minutes be approved as written was seconded by Ms. Thomas. Roll Call Vote: Mr. McKenna Aye Mr. Mauro Aye Ms. Thomas Aye Mr. Wong Aye Mr. Clough Aye Ms. Schutt Abstain Mr. Cole Aye The motion passed 6-0-1. A motion made by Mr. Mauro that the April 2, 2020 minutes be approved as written was seconded by Ms. Thomas. Roll Call Vote: Mr. McKenna Aye Mr. Mauro Aye Ms. Thomas Aye Mr. Wong Aye Mr. Clough Aye Ms. Schutt Abstain Mr. Cole Aye The motion passed 6-0-1. A motion made by Mr. Mauro that the May 13, 2020 minutes be approved as written was seconded by Ms. Thomas. Roll Call Vote: Mr. McKenna Aye Mr. Mauro Aye Ms. Thomas Aye Mr. Wong Aye Mr. Clough Aye Ms. Schutt Abstain Mr. Cole Aye The motion passed 6-0-1. A motion made by Mr. Mauro that the June 4, 2020 minutes be approved as written was seconded by Ms. Thomas. Roll Call Vote: Mr. McKenna Aye Mr. Mauro Aye Ms. Thomas Aye Mr. Wong Aye Mr. Clough Aye Ms. Schutt Abstain Mr. Cole Aye The motion passed 6-0-1. A motion made by Mr. Mauro that the June 19, 2020 minutes be approved as written was seconded by Ms. Thomas. Roll Call Vote: Mr. McKenna Aye Mr. Mauro Aye Ms. Thomas Aye Mr. Wong Aye Mr. Clough Abstain Ms. Schutt Abstain Mr. Cole Aye The motion passed 5-0-2. FY 2020 Budget Deficits – End of Year Budget Transfer Requests – Mr. Scollins stated there were no budget deficits for FY20. Mr. Scollins explained that the focus on expenses for the last 1/3 of the fiscal year was responding to the impact on expenses for COVID-related expenses. Many of these expenses were allowed by the Department of Revenue to be removed from the budgets and moved to special revenue funds to be covered by COVID and FEMA to be covered by the CARES Act at a later point in time. He reported that there are approximately $400,000 of expenses in FY20 of COVID related expenses, split between FEMA and CARES Act funds. The turnback expenses are estimated to be in the $2 million range but the books are in the process of being closed for the fiscal year. Of this $2 million turnback $700,000 was from the Finance Committee Reserve Fund and $750,000 was from the health insurance budget (as a result of the Town receiving an approximately $894,000 true-up credit received in July which will be applied to FY20). The Town also saw a savings of $350,000 in fixed costs and $220,000 municipal budgets as well as a $46,000 less in state assessments than planned. FINCOM 20200730 Minutes.docx Page 2 of 5
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Mr. Scollins reported that the Town will not hit the targeted budget for revenue. The Town will be short by an estimated $550,000 across the General Fund. Most of the $550,000 is tax-related revenue as tax collections came in at about 98% of budget. The Town was ahead of budget with regard to local receipts and state aid. The reserve replenishment scenario is optimistic. Mr. Scollins is confident that the Town will recharge its free cash by approximately $750,000 to $1,000,000. State Aid and Revenue Projections – FY21 – Mr. Scollins stated that it could be September or October before the State would have a budget set for cities and town, however, the Town received initial word from the Secretary of Administration and Finance that the Governor and state legislature are committed to maintaining state aid for Ch. 70 at levels provided in FY20 and that the state was committed to slight up ticks for inflation. The Town had reduced the state aid budget by $1 million going into Annual Town Meeting expecting $8.7 million in state aid hoping the Town would achieve that, but with numbers committed by the state for Ch. 70 and Unrestricted General Government Aid the Town is $90,000 better than the $8.7 million. In summary the Town will be approximately $90,00-$875,000 better than planned for in state aid. Mr. Scollins reported that the state is still waiting to hear from Congress with regard to the latest legislation regarding the CARES Act. Expenses incurred (not accrued or encumbered) under the CARES Act need to be spent by December 30, 2020. Mr. Scollins had inquired about the extension of the spending deadline due to school spending occurring well beyond the December 30, 2020 deadline. Mr. McKenna inquired as to how the State was able to make a commitment with regard to state aid with state revenues down. Mr. Scollins believes it is a combination of the state’s reserves such as the $3.5 billion rainy day fund as well as their expectations as to the aid the state will be receiving from the federal government, thus making it possible to pass it along to the Commonwealth’s cities and towns. At the time of the Finance Committee meeting there was no definitive information or decision with regard to the Town holding a fall 2020 special town meeting. School Department Budget & School Structure for Fall – Update from Mr. Scollins From a funding perspective the Town as allotted $1,388,676 to the School Department from the Town’s total CARES Act allotment of $2,838,000. This $1.4 million with help address costs associated with the reopening the schools. In addition to the $1,388,676 the School Department has received, the School Department has also received other CARES Act grants – a grant of $130,000 as well as an ESSER grant of $225.00 per student, although it was unclear if the wealth model was going to be used in the distribution of those funds. The School Business Administrator confirmed that they were indeed going to receive $225.00 per student or a total of $775,000. All totaled the School Department will have approximately $2,760,000 to address reopening. In response to Chair McKenna’s inquiry as to how much had been spent to date by the School Department, Mr. Scollins reported that the School Department has spent $1.2 million on cleaning supplies and PPE. Transportation costs and food services remain a wild cards. A Committee member inquired about potential costs if a teacher’s strike were to occur. These costs remain unknown at the time of the meeting. Water & Sewer Rates – Update Regarding Recent Rate Hearing – Mr. Scollins reported that a Water & Sewer Rate Hearing was scheduled with the Select Board for Tuesday, August 4, 2020. The Water & Sewer Rate Policy Committee had met twice in the past month. Both Mr. Scollins and Committee Member Dan Cole serve on the W&S Rate Committee. The Water & Sewer Rate Policy Committee recommended rate increases of 7% for water and 4% for sewer. A rate consultant, Raftelis, was engaged by the Town to study the rates. Raftelis is a subconsultant to Kleinfelder. Based on the capital plans for the next five years and the current limited reserve levels for the water and sewer enterprise funds, the W&S Rate Committee is recommending a financial strategy which includes a mix of cash and debt for projects instead of 100% debt. The Committee is also recommending that the Town get to a 180-day reserve level to avoid rate shock to the taxpayers. Mr. Scollins also stated that the Town had raised the water rates only once in the past six years. Mr. Mauro inquired about the impact of remote learning to the Special Education (SPED) budget. Mr. Scollins was unfamiliar with the nuances of the SPED budget but stated the School Department asked the Select Board to release $400,000 from the $700,000 Special Education Reserve Account to resolve FY20 budget issues. The Town did add another $500,000 to the SPED Reserve Account at the ATM 2020. Mr. Mauro also inquired if additional space would be needed if the students were to return to hybrid learning or to the classroom. The need for additional space has not come up in discussions between the Finance Director and the School Business Administrator. Mr. Mauro also inquired about the need for additional outside cleaning contractors to clean the schools. Mr. Scollins’ understanding is that in order to do a thorough cleaning on one day each week the school buildings would definitely need incremental help, whether that is temporary staff or contractors. Mr. Mauro inquired as to how far along the Town is FINCOM 20200730 Minutes.docx Page 3 of 5
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with water and sewer infrastructure projects and if the Town would be able progress with these projects without rate increases. Mr. Scollins stated that through borrowing the Town could continue with these infrastructure improvements. The financing strategy that the W&S Rate Committee is recommending is that the Town not rely 100% on borrowing but that the Town move forward with a hybrid or cash/debt scenario. All water and sewer debt projects are funded through the water and sewer rates. These enterprise projects are not restricted by the overall debt ceiling or debt capacity for a Town. Other Business Metroplis Rink Financial Update – The budget for the Rink was increased from $10.5 million to $11 million at the recent Annual Town Meeting 2020. The Town bonded $2 million in May 2020. The Town received $965,000 in hold- back insurance funds. The Town also received a $2 million in a state grant. The code upgrade insurance check of approximately $565,000 will be received shortly, however, this is approximately $435,000 less than anticipated in 2018 due to a technicality on how the insurance company classified aspects of the building completion. Although the Town is receiving the $435,000 less than anticipated in 2018, the Town will be able to borrow for the $435,000 difference if necessary because of how the Annual Town Meeting article was written. All of the COVID-19 impact expenses will be charged off to CARES Act fund. To date the COVID-related expenses for the rink total approximately $57,000. With regard to $2 million of FEMA reimbursement Mr. Scollins stated there is a new outside consultant that FEMA has hired to start from the beginning on reevaluating the project from a FEMA perspective. Completion date of this reevaluation and how much the Town will receive are both unknown. FEMA has hired this consultant to address the Town’s appeal at the denial of any FEMA reimbursement for this project. The target date of completion for the Rink is the beginning of September 2020. Aquatic/Pool Financial Update – The primary funding for the pool is $5.9 million of excluded debt which was borrowed in May 2020. The only other revenues for the pool project was $540,000 of mitigation funds, CPA and the Finance Committee’s Reserve Fund. There is no anticipation that the project will run out of funds that have been allocated for the project. The COVID impact on the pool project was related to construction delays which will be allowed for reimbursement under the CARES Act. Annual Town Meeting and Special Town Meeting – Follow-up Mr. Mauro suggested that if the informational zoom session held regarding articles was indeed informative, the Committee may want to consider conducting future informational sessions for getting information about the Town Meeting articles out to the public. Mr. Scollins thanked the Finance Committee in that the Committee completed the budget process essentially three times in one budget cycle with all of the various budget scenarios completed. Mr. Scollins stated that he held off having any communication with the retired Finance Director during the budget process so as to allow Mr. Murgia a peaceful first year of retirement. Mr. Scollins also thanked his staff. Finance Committee Vacancy – Interested citizens should send an email to fincom@town.canton.ma.us. Ms. Thomas suggested that a letter be sent to the Editor of the Canton Citizen soliciting interested citizens. Next Meeting Date – To be determined. Adjournment - A motion made by Ms. Thomas to adjourn the meeting at 8:14 p.m. was seconded by Mr. Wong. Roll Call Vote: Ms. Thomas Aye Ms. Schutt Aye Mr. Clough Aye Mr. Wong Aye Mr. Cole Aye Mr. McKenna Aye Mr. Mauro Aye The motion to adjourn at 8:14 p.m. passed 7-0-0. Minutes reviewed by: Mr. McKenna and Mr. Scollins Respectfully submitted, Timothy McKenna Chair, Canton Finance Committee FINCOM 20200730 Minutes.docx Page 4 of 5
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Canton Finance Committee Meeting
July 30, 2020
Please note: Some meeting documents may be found on the Town’s website under the Posted Minutes
section (Laser Fiche).
Agenda for July 30, 2020 (1 page).
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