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BUDGET COMMITTEE MINUTES

June 11, 2007

APPROVED:

7-9-07 jrl_______

AGENDA: Presentation by DRA Bob Anderson

2007 Budget Review

ATTENDING: Archie Auger (Chairman), Dorcas Gordon (Vice Chairman), Albert “Skip” Bowie, Dave Carr, Andrew Hemmingway, Darla Jaquith, Ron Preble, Paul Simard, Jon Thouin, Richie Walenda, Tom Winn.

ABSENT: Joe Denning (Sel. Rep. – conflict), Catherine Pitari

OTHERS: Elizabeth Corrow (Town Manager), Bob Anderson (DRA)

The meeting opened at 7:09 p.m. Mr. Auger introduced Mr. Anderson and determined to hold his presentation first.

DRA PRESENTATION ON RSA 32 AND 37:

A slide presentation was given by Mr. Anderson along with a packet that covered what was shown. Mr. Anderson encouraged questions as we went along and stated that he has had 5 years experience with the State. Last year, he handled 1300 warrant articles in which 65% was for schools and the rest for village districts.

Mr. Carr asked, if a truck is approved under a warrant article for $50,000. and is purchased for $45,000, what happens to the balance? Mr. Anderson stated that it can be transferred to a budget line unless it is under a Special Warrant article.

Mr. Auger asked about a zeroed line and Mr. Anderson answered that no money can be transferred into a zeroed line. Ms. Corrow added that it could go to a similar zeroed line such as if it was for maintenance for a truck in the warrant, it can be used for a maintenance line. Mr. Simard referred to the slide which had “No means No” and added that there must be $1.00 in the line to use it. Mr. Anderson stated that it is possible that they might do as Ms. Corrow said but they must be very careful. Mr. Auger asked who makes the final decision and Mr. Anderson answered that this is done in Superior Court. Ms. Corrow said that someone would have to challenge it, in that case. Mr. Simard pointed out that, in RSA32:11, there must be Budget Committee approval. Ms. Corrow stated that the Budget Committee can zero a line and the Legislative body can vote it back in, which brings in the 10% override (RSA 32.2,VI).

Under “Reasons to disallow”, Mr. Thouin asked about “sum certain”. Mr. Anderson stated that this is only for school budgets. The town estimate should be within $1.00 - $2.00.

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DRA PRESENTATION continued:

Mr. Simard asked if the DRA revues town audit reports. Mr. Anderson stated that they do according to the MS-5. They only look at the audit lightly. When Mr. Simard questioned an audit referring to not being GASB 34 compliant, Mr. Anderson stated that GASB 34 is for bigger towns and is used for private industry figures. He added that it is not a problem for small towns. Mr. Simard asked how the audit would protect the town and Mr. Anderson stated that the town gets the same protection through a CPA audit. GASB 34 is a forensic audit. Ms. Corrow stated that she is striving for GASB 34. It does not protect more but has additional benefits. What protects a town, she added, is strong internal control and people who know what they are doing. Mr. Winn stated that when Ashland had its’ problem, you had to be pointed in the right direction in order to see where the problem was.

Mr. Auger asked if, when they review warrant articles, they only review the money ones. Mr. Anderson stated that DRA does but he sometimes does the others (for instance, something on the elderly). Mr. Auger asked if DRA gives opinions on non-money warrants and was told that Mr. Anderson only does on the side.

Ms. Gordon asked if Mr. Anderson does Bristol. Mr. Anderson said that he does. He also has Manchester and Nashua (for large cities), as well as Franklin, Laconia, and Grafton & Sullivan Counties. It was suggested that he look closely at Grafton.

Mr. Auger asked how they determine the tax rate. Mr. Anderson stated that he looks at the minutes of the town meeting, the warrants and budget in order to get an initial review. He sets up a spread sheet and then compares his figure to that of the MS-2. These must be the same. He also includes local or regional schools in this, as well. In Sept., he gets an MS-4 (which is the revised version of the MS-7 estimated revenues), and MS-1 and MS-5. If there is a CPA involved, he goes over this casually, if not he looks deeper. In Oct. or Nov., he comes up with the new tax rate based on these. Grant figures are also included. Mr. Anderson invited any of the Budget Committee members to come in and see the process when he does this (usually with Ms. Corrow). He must consider four parts: the School, State School, County, and Town. Once he sets it, he takes it to his boss for final signature.

Mr. Auger asked about how they handle any surplus. Mr. Anderson stated that the surplus on the MS-4 is verified or he asked the Board of Selectmen (BOS) if they want it to go up or down instead. The Town Manager can do this, also.

Mr. Simard mentioned real estate and the down-turn and how it affects the approving of TAN notes. Mr. Anderson stated that towns that only have one billing typically need TAN. Those towns that bill twice may need a TAN due to under funding. There should be a figure of 5%-10% of the gross along with the school’s net and the county net to be safe. Ms. Corrow mentioned the difference may be between a calendar year and a fiscal year town, as well. Mr. Auger asked Ms. Corrow if she is heading for an 18 month year and she said that she is. Mr. Anderson stated that this requires an additional budget to cover the following January to July. You can only count State revenues once and must figure these other 6 months as being almost half of the budget. Mr. Anderson recommends that this should be looked at two years in advance and some put away in a Capital Reserve fund to get you through. Ms. Corrow added that you

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DRA PRESENTATION continued:

could do it with a bond, also. Mr. Anderson stated that the problem is budgeting 18 months out. If you have good people like Ms. Corrow and the Budget Committee, there is no problem.

Mr. Auger asked about default budgets. Mr. Anderson stated that it should consist of the previous years’ budget with certain adjustments (which are vague, he added). All of the one-time items should be taken out and contracts should be placed back. DRA only designs the form used.

Mr. Auger asked if it is reasonable to have a default budget that is higher than the proposed budget. Mr. Anderson stated that sometimes this happens in SB2; he only sees one or two. Many do not have much difference between them. He added that some towns do include some figures that are questionable.

Mr. Auger asked if the DRA has any suggestions about slush fund money. He used Health Insurance as an example in which extra is set aside to cover changes in personnel which may require additional funds. Mr. Anderson stated that you really shouldn’t do slushing but some cases may require some. Mr. Auger asked what is reasonable. Ms. Corrow stated that she budgets exactly (using the Health issue again). The problem is turn-over. We used to have Health all in one line but now it is separate in the different Departments so she can over-expend the line. Mr. Simard stated that he has no problem with that. However, he wanted her to know that there was a time when the budgets were manipulated, which made the Budget Committee wary. Mr. Anderson stated that this does cause a Budget Committee to scrutinize more.

Ms. Gordon referred back to when it was pointed out that our town is not typical in that we speak with the Department Heads. The presentation shows that the Town Manager presents her budget and then we may ask for further explanation from a Dept. Head. She questioned how this is done. Mr. Anderson stated that the Town Manager presents the budget first and then the Committee can ask for any further explanations as they wish. They can ask the Department Heads in. He added that it is not wrong to do it as we have been but it is awkward for Ms. Corrow. Previously, Bristol had a Town Administrator, which was different. A Town Manager has more authority. Ms. Gordon felt that the more input we get would be helpful. Ms. Jaquith stated that the Town Administrator was a different process. She added that the Budget Committee got criticized from the town for not meeting as much previously. Mr. Simard felt that what we do now is better. He felt that the Dept. Heads might be uncomfortable saying something opposed to Ms. Corrow. Ms. Gordon felt that the Town Manager and Dept. Heads would have come to an agreement already. Ms. Corrow said that she knows what the Department’s are looking for.

Mr. Auger asked about Chapter 37 and the time line as the Town Manager does not have to present her budget to the BOS until January 15^th. That is too late for the Budget Committee. Mr. Anderson stated that the Committee can ask a different time line based on Chapter 32. Ms. Corrow stated that it goes to the BOS to be sure they see what they want but she agrees that it is too late. Mr. Auger felt that we could ask town counsel about this. Ms. Corrow stated that 1 committee member or 1 BOS has no power. The Dept. Head must come to the Budget Committee as a whole. There are issues between what is budget versus policy. Mr. Anderson and Mr. Auger agreed. Mr. Thouin felt that the committee must see where the money is spent.

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DRA PRESENTATION continued:

Mr. Anderson stated that the committee’s concern is only to see how much is spent by what time of the year. Ms. Jaquith asked if the committee isn’t supposed to see where the money appropriated is being spent on what it is supposed to be. Mr. Anderson stated that we are to look at the total appropriations – to be sure the totals are not exceeded. Mr. Simard felt that any transfer of funds must be reported. Mr. Anderson and Mr. Auger stated that it must be recorded. Mr. Anderson added that it should fall in the correct line, where one is exceeded and another has not been spent, so that you get a better idea of the true budgeting. Ms. Jaquith asked what recourse there is if money is not spent appropriately. Mr. Anderson stated that they should go to the BOS or talk about it at town meeting. Otherwise, they can be removed by the court. Mr. Auger stated that a zero line must remain a zero unless voted otherwise at town meeting. Mr. Anderson agreed and added that only a special warrant article cannot be spent for anything else but what it was appropriated for.

At this time, Mr. Anderson was thanked.

(A 3-minute break was called).

BUDGET MINUTES OF MAY 14, 2007: D. Jaquith made a motion, second by P. Simard, to accept the minutes as read. The motion carried.

CORRESPONDENCE: Mr. Auger passed around the correspondence which consisted of an ad for the 2007 edition of “Knowing the Territory” and a catalogue on ID tags.

CIP STATUS: Mr. Auger asked the status of the CIP committee. Ms. Corrow stated that the amendment came under question. The town attorney got up and said that it would not be legally binding but it passed anyway. The BOS interpretation from town counsel sends this back to the Planning Board. By State statute, it can only be by the Planning Board or the Town can vote to have the BOS appoint a committee. The Planning Board wanted to stay as close to the amendment as possible and are looking to form an advisory committee who will come back to the Board with their recommendations. Mr. Auger asked if the BOS has made any recommendation for a BOS member and Ms. Corrow stated that they have not yet but they do intend to.

INVITATION TO DEPARTMENT HEADS: Mr. Auger stated that Ms. Jaquith has written the usual letter to invite Dept. Heads in. It is an open invitation for July, August and September and has been given to Ms. Corrow. Mr. Auger then asked if this is still the wish of the committee after hearing the presentation. Ms. Gordon feels that the more information we get, the better. Mr. Simard feels it is a good idea. Mr. Carr asked what the earliest date is that Ms. Corrow can present her budget. Ms. Corrow stated that she would like to meet with Mr. Auger and start with the final Budget Committee date is and back into the date. Mr. Auger asked if she wished to change to what Mr. Anderson stated tonight. Ms. Corrow feels that this is intended. She will

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INVITATION TO DEPT. HEADS continued:

meet with the Dept. Heads and set her budget and then present to the Budget Committee, having the Dept. Heads in attendance for questions. She would like to do one preliminary presentation, knowing that changes could come along as time passes. Ms. Gordon suggested that Ms. Corrow spend one night with the overall budget proposal and then we could schedule the Departments after. Ms. Jaquith stated that our budgets were relatively close last year, to Ms. Corrow’s credit. Ms. Jaquith would prefer that Ms. Corrow present the proposed budget and then give us a couple of weeks to look at it and then bring people in for any questions we have. Mr. Carr added that, otherwise, we could be given the budget 2 weeks ahead of when Ms. Corrow plans to present it. Ms. Jaquith wanted to hear what Ms. Corrow thinks. Ms. Corrow stated that she feels good about having all of the Dept. Heads in attendance when she presents her budget. She would like to set a time line with Mr. Auger. Mr. Simard felt that the whole process should build slowly so that we are all on the same page.

Mr. Auger stated that, if the Budget Committee is willing, he is willing to sit with Ms. Corrow to set up a time line. He feels the first step is to design the process and bring it to the committee in July. Ms. Jaquith stated that, out of respect for Ms. Corrow, we should let her do the process. Ms. Corrow stated that she would like to have the process set up for our meeting in July and present the budget all in one night. She is not against bringing in the Dept. Heads to update the committee. Mr. Carr asked if a change in process would reduce the Budget Committee efforts. Mr. Auger felt that it would. Ms. Jaquith suggested they go around the table for a consensus.

Ms. Jaquith felt that they should get a plan in place and then have the Dept. Heads and BOS all in at the same time. She would like just Ms. Corrow to come in when she presents the budget. Mr. Carr asked if they change the process, where does the BOS come in. Ms. Corrow stated that she can tell us in July when they have worked things out. Mr. Simard suggested that the BOS meet with us before so that they can list their priorities. Mr. Winn had no problem with the Town Manager and the Dept. Heads; the lady is the boss, he said. He is not sure about having the BOS. Mr. Thouin felt that the change is not that much different. The Town Manager will give the proposed budget, we’ll have time to digest it and then she can re-appear with the Dept. Heads depending on who we need to question further (so as not to have one Dept. Head sit all night while we talk with another). Mr. Preble feels that it used to be the BOS budget and now it is the Town Manager’s. Ms. Gordon feels that more information is a good thing.

Mr. Auger stated that they will bring the new schedule to the committee in July. Ms. Corrow stated that she is not a dictator and the Dept. Heads will give honest answers. She will not censor anything that they have to say. Mr. Winn felt that the Dept. Heads will probably be satisfied with Ms. Corrow’s budget. Ms. Jaquith said that there has been some tension between the BOS and the Budget Committee. A schedule should help with communication. Ms. Corrow stated that the BOS has been trying to communicate more with the various Boards.

OTHER:

Mr. Auger stated that Ms. Gordon did well running the meeting last time. He asked that the members look at the revenues and the budget.

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OTHER continued:

Ms. Corrow mentioned that the new Police Chief is to start June 18^th and they will hold a time for everyone to meet him at 5:30p.m. Vacancies are waiting for the Chief to fill. They are looking to new part time people. In the meantime, the overtime has a big spike in it.

Ms. Corrow stated that there has been a Cash Flow issue. The tax bills have gone out and we are waiting to see if this will ease the situation. We have not gotten a TAN as yet and have been trying to hold off on expenditures.

Ms. Corrow reported that the new Fire Dept. Secretary has been hired (Cheryl Montique). She shall work almost full time for the summer. When asked about becoming full time with benefits, Ms. Corrow stated that, as long as she does not work full time year round (35 hours or more a week), she is still considered part time. It would require year round, not seasonal year round.

Ms. Corrow said that she has started the Life Insurance plan but not the disability yet due to a few things that she must work out first.

As to a new policy for part time, year-round employees, Ms. Corrow explained that the BOS has adopted a pro-rated plan, based on average hours worked, for holiday and vacation pay.

Revenues are doing okay though some are slow, Ms. Corrow continued. We are to get another $20,000 for flood damage for road repairs done this year. We are still working with Freudenberg NOK with last years flood damage.

With no other business, P. Simard made a motion to adjourn at 9:25p.m.

Respectfully submitted,

Jan Laferriere, secretary