 This program is brought to you by cable franchise v's and generous donations from viewers like you I'm going to call the finance committee meeting to order today on February 25th 2020 at 2 30 p.m. and All members are present, but one member is present by remote participation so Let the record reflect that finance committee member Lynn Grusmer is attending remotely you I speakerphone on media on February 25th 2020 because physical attendance would be unreasonably difficult under 940 code of mass regulations 2910 Subsection 5 Lynn, can you hear me? Yes, okay. Thank you Can all of those present here Lynn? Okay then let the record reflect that Lynn's attendance via speakerphone can be heard by all present at the meeting and So that enables us with the full participation of the committee to move forward and The first agenda item for today that we're going to take up is the I'm going to skip question of election of chair and let that happen a little bit later since I was elected to be chair through today's meeting and Get straight to the presentation of the fiscal year 19 audit and We have Tanya, yep, Tanya Campbell from Melons and here today and I'm going to turn this over to her and Lynn she has presentation that she's going to be showing us on the screen and Everybody can it will be able to see as she goes along and You have that copy sent to you in advance So Any great. Nice to see everyone. I'm here today to present the results of the town's fiscal year 2019 audit Before we get into the actual statements themselves I wanted to briefly discuss the nature of the audit including some of the roles and responsibilities of the different parties involved so for instance the responsibilities of us as in independent auditor as well as management and The finest committee when ultimately acting in the audit committee fashion as of right now and then we'll look at some of the Pages in the finance statements and discuss the issue in the town's management letter Now in terms of the roles and responsibilities of us as independent auditor Our primary responsibility is to express an opinion on the town's financial statements We're also responsible for Planning and performing the audit to obtain reasonable assurance that the financial statements are free of material misstatement Notice I do not say absolute assurance an Audit does not provide a hundred percent assurance that every single potential issue that is occurring in the town or every Balance will be looked at or transaction will be examined. That is not what an audit does Instead our audit is conducted under a set of standards known as government auditing standards and Those standards require that we plan to perform our audit using a concept known as materiality Now materiality will vary based on the size of the town. It also varies based on the different funds in those in the town In fiscal year 2019 materiality for the town's general fund your main operating fund was about a hundred and forty thousand dollars That doesn't mean we don't look at anything below that amount because we certainly do it just means the standards say we should focus our Testing on balances at or above that level Now something else to keep in mind that having an audit does not relieve management of its responsibilities in terms of the financial statements Managing management and you know in terms of the audit is responsible for the financial statements they're also responsible for establishing and maintaining and effective internal controls over the financial reporting process and Identifying and ensuring that the town complies with all applicable laws and regulations Management is also responsible for making all financial records and other supporting documentation available to us during the audit in a timely fashion And at the end of the audit management is responsible for providing us with a letter that confirms the various Representations that were made to us during the audit So for instance if we're given something they're verifying that it is indeed true copies of what was given or It does accurately reflect Acquired reflects accurate information for instance Now in terms of the finance committee's responsibilities when acting as an audit committee You're responsible for assisting the council and oversight of the integrity of the financial statements themselves and also oversight of the internal controls and the town's risk assessment and evaluation process You're also responsible for educating the other council members in terms of the understanding of the statements themselves You know asking questions here today if there's Things that come up and understanding the financial statements themselves and also reviewing The management letter recommendations that are made by the independent auditors Now in terms of the financial statements themselves, they're presented under rules established by the government accounting standards board also known as GASB There are five components to the financial statements. There's the audit opinion Management's discussion analysis are also known as the MD&A your government-wide statements your fund basis statements and The footnotes and other required supplementary information Now the audit opinion is the only part of the financial statement that actually belongs to us and In fiscal year 2019 we issued the town an unqualified opinion on the financial statements Meaning that based on the results of our testing we found that the town was in compliance with generally accepted accounting principles After that comes the MD&A Which is a required narrative that essentially explains the financial statements as well as some of the key results of operations for the fiscal year There are certain components that are required to be Reported in that section and we typically compile it on behalf of our clients After that comes your two sets of financial statements themselves your government-wide statements and your fund basis statements Which we'll take a look at in just a minute and last comes your footnotes and The required supplementary information which provides additional information and disclosures on the numbers that are actually reported in the government-wide and fund basis statements Now this is an excerpt of the financial statements is page 15 Anyone wants to look along and this is your balance sheet, which is one of your fund basis statements now the fund basis statements are reported similar to how Reports you were to receive from the town on a monthly basis. It's the same basis used to report the fund statements If the first column there Which is labeled general that is the towns general fund and the stabilization fund combined They are required to be reported together for financial statement presentation purposes to the right of that is the ambulance receipt reserve fund which because of the Activity in that fund. It's required to be reported as a major fund. So it is shown separately and To the right of that is your non major governmental funds, which Just the section does Yes, oh No, sorry that those are just my notes off to the left-hand side that Area that's off to the right that kind of all looks column column or sorry. Yes I just put that up there and I added notes for your reference there. I'm sorry Sorry about that And the last column which is a non major governmental funds includes all the towns special revenue funds your capital project funds and your trust funds with exclusion of the OPEP trust fund Now in terms of some of the key numbers I want to talk about on this statement Down towards the bottom left there. You'll see the unassigned fund balance number of just over 17 and a half million dollars That is made up of two components. The first Is the town stabilization fund which has about $9.7 million in it at the end of 2019 and that balance represents about 12 percent of the town's annual operating budget Which is a very healthy balance for a stabilization fund one of the highest You know percentages I've seen in a while The other remaining 7.8 million is the town's general fund unassigned or unreserved fund balance That is essentially like the starting point for the town's free cash calculation And that balance represents about 10 percent of the town's annual operating budget again very healthy balance And that and that in the general fund as of the end of 2019 The other number I wanted to point out on this page just because it was unusual And it probably will be kind of a one-time thing is The intergovernmental receivable in the general fund of about 1.4 million dollars That represents the June state aid that was received On July 3rd, so every city town district in the state received their state aid on July 3rd, which creates a wonderful Receivable you needed to book a receivable for it because it was not in cash as of 630 But you have to record the revenue in the right fiscal year So in order to do that you have to offset it with a receivable So if you were looking back at prior year financial statements, you wouldn't see a number like that And hopefully there won't be that next year either, but So I just wanted to point that out because it's kind of an anomaly this year does anyone have any Other questions about any of the numbers on this page or anything else about the fund basis You said it was received on July 3rd Is it normally received before the beginning of the yeah, yeah, it's the June To that's a 19th state aid payment and it typically is received before June 30th I don't know what happened with their system this year, but everyone got it late. So That anyone else all right Now this next slide is an excerpt from page 13 of the financial statements And it's actually just the top half of the statement because the statement is so big I broke it up into two sections. So when you're looking at it, it's called the statement in that position and it's on page 13 Now the statement in that position is one of the town's government-wide statements which Government-wide statements only they consolidate the funds together and only distinguish between governmental activities and business type activities Now your governmental activities Include all the funds that we were just looking out on the previous page. So your general fund your grant funds your capital project funds plus the The town's housing trust fund Sorry, no health claims trust fund. Excuse me Which although ended as of June 30th 18 There were still some residual activity that flowed through that fund in 2019 and there was also activity related to workers comp in that fund The business type activities column represents the town's enterprise funds So those are all consolidated together and into one column as well Now the intent of the government-wide financial statements is to take your municipal operations and show them like a business which Is okay, but you don't operate like a business. You cannot raise revenue like a business so They're not useful in terms of the day-to-day operations of the town per se But they do do a good job in terms of showing the true assets and liabilities of the town So in order to get between the fund basis statements in these statements there's a bunch of Entries that need to be done including adding your capital assets and your long-term liabilities such as your Long-term debt and your pension and OPEB liabilities for instance. So that's kind of the difference between the two On the far right hand side of the page, you'll see the there's a column for the discreetly presented component unit, which is the housing trust fund Although that was established back in 2014 the the Trust did not really have material activity between 2014 and 2018. So it didn't make sense to perform additional procedures, you know and Charge, you know charge the town extra money in order to audit this when it really did not have material activity So in 2019 it did have material activity. We did perform additional procedures We're showing it as a component unit in the town's financial statements And we included additional disclosures in the financial statements related to the housing trust fund Everyone have any questions? Excuse me. Did you just Line item for housing on the far right-hand side. It's called the discreetly presented component unit Okay, and although it's not labeled housing. That's what it is. Yeah, okay. Yeah I I'll have a question about that later, but okay continue. Okay. All right. So the next Next slide is the the bottom half of the statement we're just looking at which shows the long-term liabilities and The net pension which is retained earnings now. I wanted to look at a couple Numbers on this page first the net OPEB liability which at the end of 2019 had a balance or You know was that a balance of about fifty three million dollars? That represents a two million dollar increase from the previous year Now the same valuation was used between in both years the same Actuarial assumptions were used in both years the difference be or the reason it increased two million dollars is based on your actual evaluation they're determining that Retirement health insurance costs are three million dollars and Then between the money that was put into the OPEB trust fund and the interest earned that was approximately one million dollars So the cost minus what you put into the OPEB trust fund that represents your two million dollar increase in the liability Because the town is setting aside money, but it's not fully funding the annual cost of that liability every year So just something to keep in mind And there is you know no requirement to fund that liability at this time But the town does have an OPEB trust fund and at the end of 2019 there was approximately six million dollars in that fund So again a very healthy balance in the OPEB trust fund one of the highest ones we've seen from the city's in towns We audit so So that is that is good Now directly above that is the town's net pension liability Which represents the town share of the Hampshire County retirement systems? unfunded liability That liability at the end of 2019 was about 59 million dollars Which represents a nine million dollar increase from the prior year again, the same valuation was used in both years and Same Actuarial assumptions were used in both years The town Overall represents about 20% of the total system, which also didn't really change Between the two years, but during 2019 the system experienced Investment losses during the year which was consistent with all the other systems we audit we audited as well It was not a good year for systems In calendar year 18, which is what's reported in this the statement. So the system itself was 64% funded in 2018 and it's now 59% funded in 2019. So that change in Funding percentage caused the spike in the town's Net pension liability Yeah, when you're doing the audit the values are of How many people are retiring? How much is there cuz I look backwards? How much is their salary increasing that allows you do the evaluation of what's the pension gonna cost? Those are all given to you. You're not making those decisions. They're coming from actuaries. Is that correct? Yes Yes, so the actuaries and the system deal with that and then the system itself has their own separate auditors Which audit that information and then they provide the audit report to us and we get the valuation as well And we do test it, but not not that we don't test that part of it. Okay. Yeah I've read this several times Can you please explain what the deferred outflows of resources into pensions and the deferred inflows are sure? Yeah now When this we'll just take a net pension liability for an example when the actuary determines what What the liability is they're making certain assumptions So for instance, they're saying that the investment rate of return is going to be seven and a half percent for the year When they go to do the next evaluation they do a look back and say okay We said it was gonna be seven and a half percent, but it was really six and a half percent so instead of Adjusting for that all in one year. They amortize that difference The over period of five years So when they do that they create this deferral and a piece of it each year gets Flows down through into expense here. Not your expense isn't going like this every couple years So that Accumulates over time every time they do a new valuation They do this analysis and we they say okay if it did better then we're gonna book This deferred outflow and amortize it over a period of time if they if it did worse then we thought it was going to We're gonna book a deferred inflow and amortize it so you end up with these sometimes it does better sometimes it does worse and Because of the accounting standard there you can't net them together So you end up with deferred inflows and deferred outflows that get amortized over the Over a period of like five or so years So those change every year along with the net pension liability which is why when you looked at this one of your questions was it looks like the The net pension liability, you know changed by a million dollars No, that's how much actually hit the expense itself And that's because they're smoothing it out over a period of time Is essentially what the deferrals are trying to do? Does that make sense? Kind of yeah, that was that's it's based on the accounting standard that is required Did require you to book these liabilities? They didn't want to have these huge swings and your expenses every year Yeah So Part of me thinks that this is a Way of making things look better than they are Because we're told that we're better off than many other towns, but that doesn't mean that we're good And I know that so many places are not funding their pensions properly and that many places I this was I guess in the last ten years ago when we had the last kind of crash I think a lot of places were a very bad trouble. So I Mean the the audit is telling us something relative to other places But does it tell us in terms of what the gold standard would be? Well from a town perspective with things you can control, you know, you have a very healthy stabilization fund We were very healthy OPEB trust fund. We're very healthy general fund balance now Unfortunately your pension liability is kind of out of your control In a lot of ways, I mean you're part of the discussion with the retirement system but you don't really have a say in terms of How they invest their funds or how things are done from their end You know there there is a funding schedule for pension and it you know Hopefully it'll won't continue to get pushed out They are trying to be In the past five or so years Actuaries are trying to be a little more conservative in their estimates. They used to have Rate of returns up to you know seven eight nine percent, which clearly is not reasonable or going to happen So they have kind of rained that in a little bit But they can't do it Super fast because they make a big change like that. It's going you know with a liability that big a Small change is going to Cause a huge increase in the the liability so they are getting a little bit better about that but But you know you're kind of in a similar situation obviously with all the other towns that are part of The Hampshire County retirement system, but a lot of the other Group systems like that like Hamden County is only 47% funded it's not It's not unusual. Unfortunately at this point in time. It should feel like it should be better than that but I Don't know. I don't know if I answered your question, but Yeah, I'm just to build on Get another question related to Dorothy's concern. Do we? In actuary reports, do we get reports back that of worst-case scenarios, but suppose You know returns tanked, you know, so they were really low How many years worth of retiree benefits have we reserved for so we could live through two really bad years? As opposed to fail to pay, right? Um, is there that kind of analysis and I realize it's a whole system Um, right and I've looked at some of the assumptions even on the flow in so on OPEB For what's happening in Medicare. It's a little on the high side on expenses, which is great You know, you want to be a little high on expenses. So you're lucky if you're coming in at three, right? So those kinds of what ifs I don't think they typically do that What they do do and that is reporting their financial statements in your OPEB and pension notes is they say okay We calculated Health costs, you know trend rates to be this. What if those rates went up one or down one? What would that do to your overall liability? They do the same with the discount rate. So if you increase the discount rate by 1% it does this so That that was done to show like what? Just by changing it 1% how much of effect that can have on the overall liability. So they do do that But they don't do separate calculations Just because I feel like that would take them a lot of time and You could probably have them do that But it would it would cost more money. I would think from the town to have them do that. So Is it not a state statute? Requires that the pension be fully funded by a set here. I think 2026 now Yeah, there is a cutoff I'm not sure what the exact date is off the top of my head But there is a lot that says it's supposed to be funded by a certain date And for the most part my understanding is the actuaries are trying to fund it before then So if they need to continue to push it out a little farther, it's they're not already at that Cutoff date But I don't know. Do you guys know what your schedule goes through at the top of your head? Yeah, yeah, I think it's past 26, but I'm not I think there is a true Cutoff Yeah Yeah, because I know If the number went up then we're further from the goal Right, and I don't know what the consequence is I don't know I mean other than your liability is gonna go up or your your annual funding cost is gonna increase Should be prepared for but yep Are there any other questions about OPEB or pension or anything else on this page? Okay, right wrong button That was all I had for the financial statements themselves unless anyone had any other specific questions I was gonna take a look at the management letter And I wanted to just briefly discuss There's essentially three types of comments that can be reported in a management letter There are material weaknesses, which would be a deficiency in the town's Control structure that is so great That there's a reasonable Possibility that a material misstatement could occur and go undetected The town does not have any of those in in the management letter Then kind of the next level down is a significant deficiency which would Be a deficiency in internal control that's kind of less severe than a material weakness but still would warrant the attention of Management and those charged with governance. There are also none of those in the town's management letter this year Lastly there are just other recommendations for internal control improvements or procedural changes that You know may not be of material concern But they're still worth mentioning and that is the comment that is in the town's management letter this year Now I didn't Think to put it up in the presentation itself, but I Don't know if you guys have copies of it, but I can just talk to it There's only one issue in the town's management letter this year and as part of the audit process we work with management and And in prior years the audit committee To look at a couple different departments in the town and look at the internal controls over The cash receipt cycle so the different departments that take in receipts. What is your process? Where are receipts being stored? When are they being turned over things along that line? So this year we did a review of the council on aging and senior center And we had a couple issues that we noted and recommendations that we were going to make so the senior center takes in a couple different types of receipts and for each type of receipt that they bring in they have a log that tracks what's being received now Funds are not turned over to the town on a daily basis, which is fine But when the funds are turned over they're not Totaling what they have on the receipt log and making sure what is on the receipt log Agrees to what is being turned over to the treasurer and they account So we just recommend that going forward that that be done in order to reconcile the two next receipts are Being stored in a locked us drawer during the day and overnight However, the key is just kind of left on the desk. So kind of defeats the purpose of having a locked drawer Going forward we either recommend that The key be kept elsewhere or that the receipts or the receipts be kept in a different location A more secure location Next one of the Employees is responsible for kind of all Parts of the receipt collection process. So they collect receipts they record they prepare the turnovers And they record information on the receipt logs. So You know for segregation of duties issues, you know, it is a small department So we realize, you know, can't have one person kind of doing everything But there needs to be more oversight and that oversight needs to be documented During that part of that whole process Sorry, I just want to confirm that we still have Lynn. It sounded like we lost her Lynn. Can you hear us? I'm just gonna reconnect Can you hear us I can hear you. Yes. Okay. Thank you Yep, no problem Every month the accounting department sends a monthly revenue report to each of the departments that collect receipts and it is the department's responsibility to reconcile their records to the The revenue report so the amounts of report in the general ledger to make sure that What they turned over got posted in the correct account things along that nature So that's currently not being done. So we recommend that, you know, that that process be done on a monthly basis in order to reconcile between the department's records and the town's general ledger and Lastly one of the employees of the department also does some administrative duties for the friends of the senior center and We recommend that those kind of tasks for the town and the friends be kept separate So either that someone else take care of the Responsibilities for the friends of the senior center or that they'd be done kind of at a different a different time of the day Because those two activities should not really Be done together. So that was it When we were talking about the management letter, I don't know when you got lost connection for a moment I I lost connection about the time you started going into the issues, but I've read the management letters. So I'm fine Yes, I Don't want to back you up to the number you had but on the housing trust the question I had is I was at a How how we account for the fact that the housing trust has cash available to us because it's been awarded a grant From the Community Preservation Act that hasn't spent it. So I don't think it actually Sits and earns interest in that account. It's managed by so I don't know where those Money stay up because it's considerably more than what you show as the cash assets So it may be something that you know, so I just wondered my consider was like a half a million dollars So it wasn't just a little bit more. So I just was wanting Where that shows up? When was that award was that before 6 30 19 or did that happen in the fiscal year in now? It's it was already awarded the previous year, you know, so it's it's on the books but not spent for a whole bunch of reasons Okay, no, no, this was toward potential use for Working with the East Street development if they needed it to it so it wasn't for borrowing It was something they could draw down. You know, so I just wasn't you know So they haven't they were asked how much do you already have and maybe it's So they got $200,000 last year, but they already had a balance. So I just my question is where I Know the CPA funds are a different stream of revenue than general taxes So I just was wondering where all of this shows up So when CPA votes funds to go into the health into the housing trust We do a transfer directly into the housing trust, but we have financials that show the balance and they're what's expended What's put in there? So that's available if you want to see that. So they would have just had to ask us for the balance Remember that this is an Fy 19 audit But I can go back and check my facts, but I believe the most recent Round gave them an additional $200,000 in CPAC money and they already had some so together they have this Equivalent of a reserve waiting for but it's it's earmarked for particular kind of use But it's not alone, you know, and it's just not spent It's a question, you know because I you know the Yes, so it's so we so in general you're I think you're saying is CPAC shows up somewhere if the town is still holding those monies Okay, okay that that I think that answers my question It's not just want to clarify. It's not turned over to them It is in the town's treasury any expenditures would have to come through the town So they'd have to go through all the processes in the town does it doesn't get sent to them It's not in a bank account that they hold it's still in the town treasure right in the treasure Right, so there was a hundred ninety thousand dollars that was transferred into the housing trust fund and fiscal year 19 And that money is moved in the bank in the bank account So it goes between the town's bank account to the housing trust bank account. They earn their own interest It is set aside so there could have been additional funds that happened after 630 19 that would be that explains it So you're you're just saying that would be in addition to the 222,000 you're showing. Yes I have a question on page 43, and it could be that I just don't understand it But it's it's receivables, which I believe means it's owed, but you didn't get it and My question is how long are things kept on the books? Is that hand up for yeah Back again. Sorry about that It's okay So so I just was curious to know how long it's a lot of money that's on the books that May never be received and the question is what is the If something is owed and it doesn't get paid in five years. Do you drop it or does it stay in there forever? No, well, it depends on what type of receivable it is, but the real estate taxes that balance majority of that balance is fiscal year 2019 Receivables or 18 there is some you know hanging you're out there But for the most part the town if if taxes aren't paid they go through a leaning process and they become Tax leans, which is down here It's a large balance, but it really in the grand scheme of things your property tax outstanding balance is less than one and a half percent of your Net levy so it's a very small percentage Your tax leans balance again is very small as well So for a town that had you know, $80 million budget. It's Seems like a big number, but it's it's Very respectable in terms of what's outstanding, but there is a process for real estate receivables if they're not paid they get leaned and The treasurer attempts to collect those personal property taxes are you know Lynn has a question I Think you're actually answering it so just continue okay personal property taxes You know cannot go through the leaning process, but the balance is outstanding and those are you know very small so Those you know do eventually need to get written off, which is why the town has Allowance for uncollectible receivables the overlay that they vote or that gets established every year and that Takes care of those balances Okay, I have a question on page 22 at the enterprise funds And Bob had early asked about what showed up As a net difference between revenues and expenses and my question is that it looks like where there's a net negative change in position it gets made a hole by Pulling down the net position at the beginning year the bottom two lines are those in effect reserves that each of the enterprise funds hold That is essentially like the retained earnings. That's in the funds at the end of the year so And as I tried did you see the responses that I yeah, yeah, so it's a little confusing. These are full accrual basis, so we do Typically when the town bills out receivables it gets deferred You don't recognize it as revenue until you actually receive the funds But these statements are full accrual, so you recognize all the revenue and you recognize all the expenses, so The main thing that's driving these losses This year would be your change in your that pension liability and your net OPEB liability because both of those one up It's gonna cause a bigger expense In fiscal year 19, so but yes, if you look at the bottom there your net position that is That's a positive number and means you have that balance available. I guess Again that is kind of inflated because these financial statements similar to your government-wide statements you book the assets as Well, so it's that is not if you looked at the towns Internal records. That's not what's in your sewer enterprise funds at the end of the year But they do all have With the exception of landfill have a positive balance at the end of the year Again just to follow up on that if we looked over time we were probably see annually pluses and minuses correct just based on the flows of of revenues in and out Yeah, and the changes in those those big liabilities cause a big swing in that as well, but yeah some years if you're Water and sewer, you know rates go up or usage is really high because it's a dry year You know, you'll see those those kind of trends over time too Yeah, I have a general question and again, I've read this several times and I would like a little elaboration But you state several times that you considered internal control over financial reporting as a basis for designing audit procedures But not for the purpose of essentially evaluating the effectiveness of those controls and I'd like If you can kind of elaborate on the distinction between those two Sure, so we during the audit process we Evaluate the town's internal controls Over the major transaction cycles So your cash receipt cycle the cash coming in the door your cash dispersant cycle your payroll cycle for instance, and then we Test those controls throughout the year to make sure they're operating effectively So we do a couple different types of tests depending on what we're looking at so we'll do random Look at 40 random vendor selections and make sure that invoices are signed That the warrants are signed everything's going through the right approval process. It's charged to an expense account that makes sense Things along that line. We also do that with payroll So we do evaluate the controls To make sure that there's no underlying issues that we would need to then increase our testing during the audit However, we don't give an opinion on the town's internal controls. That's not part of the audit process We're giving an opinion on whether or not the town is compliant with generally accepted accounting principles So any issues that would have come up in the internal control We do report in the management letter, but it doesn't affect our audit opinion Does that kind of answer? Not really. I mean it seems to me if you find a problem with internal controls and you report it You're sort of evaluating whether that's adequate, correct? Yes now if we found Underlying issue with your internal control process. We would have to do additional testing Because from our perspective we have to make sure that our audit risk is low enough that We can give an opinion on the financial statements I mean there is there are instances where we come in and there's no controls no Reconciliation done we we've had those audits before and we cannot give an opinion on the financial statements because we don't have There's just not enough there and So we're not giving an opinion on the internal controls We're just saying that because of the lack of internal controls. We we can't even audit this And we've never had that kind of an issue here obviously So they're related, but they They drive how we do the audit and what procedures we need to do and if we need to do additional procedures during the audit In order to give that opinion on the financial statements that answer Okay, sorry, maybe we can talk after some or what yeah, okay Lynn has a comment Yeah, it's really along these issues and that is Having seen many many audits and three different organizations and no actually four Which what the auditors do is they come as close to saying you need to fix this but they don't cross the line and That's because of the nature of what an audit does so the fact that You've been very clear in the management letter that there would be areas for additional controls and I know the I Know that the town manager is addressing this along with the new director of the senior center Basically, you sent up a flag of warning and the town's addressing it other questions Is I really appreciate your presentation again this year? You raised a lot of questions to think about particularly around the interplay between pension and OPEB I think that we as a finance committee need to give some consideration to But I don't think there Questions that are gonna be resolved today. No, she figured out though a lot of other towns would like to know the answer to so Yeah, no, it's a question of a balance plan. I think what had happened because of Since my years of service on the finance committee in the select board Was that when Sandy pooler was here. We've moved towards plan of trying to get the Hampshire retirement system paid down and then With the idea that that money would then become available to work on OPEB in a larger way. Yeah It still seems to be a viable plan. It's just getting stretched out a little farther. Yeah Yeah, and that does certainly make sense I know a lot of places have taken that tact, you know Once we pay down this this other big liability, then we're gonna use those funds to to fund the OPEB liability But you guys are you know doing a good job with the OPEB liability in terms of putting a decent amount in there every year that really The release impacting how your OPEB liability is being calculated. So Anything else because I think that the Next things will do is to finish out our work is not a committee, but you know It's an open meeting you're welcome to stay Nice to see you guys to have a great day So I'm gonna go back to the agenda for today's meeting What are you looking for on SharePoint I Think Sonya just emailed it to us. I'm not sure it was ever loaded up on SharePoint It was an email that came in a few days ago with all the pieces attached I'm gonna Can you switch it so that we can put things from I I can see if I can sign on And Get my computer up would take us In the meantime While I'm doing it. I think that the next questions that we had were related to audit and I sent a memo some weeks ago I'm sorry I'd said an audit memo some weeks ago on three audit years and needing to pay attention to all three years and of course the next year is the year that We're in now and we need to be able to have a Plan for what we're doing for the next year's audit and then the I think that you know let You're willing to speak to it Pat talk about what the former audit committee had suggested which I think was the same direction that we were talking about which was to authorize the continuation Without going to the bidding process for one more year with our current audit firm who's been with us for some time and then work on Setting up a process so that we can look at the Benefits and the Risks of a change after we've gone through some kind of appropriate process Yes So Is there anything else that you want to tell us about that? Basically the committee was going to meet with Sonya to talk about an RFP for FY 21 And that didn't happen yet. So that's something that this committee will need to do so but Yeah, go ahead I'm trying to get a set up on Are we required by law to audit every year? In previous years that was that was not the case, right? It's driven by how much federal a federal money we get okay, but I can't recall a year that we didn't As long as I've been here, it's been an audit every year. Yeah So Yeah, go ahead Are we I guess here from the town manager on What area you think for the next or maybe in the next two years? The would have looked at so so we have not really discussed that and sort of depends what the council wants to do in terms of next year's audit So last year we chose the senior senator because there's a change of leadership there And I thought it was important to have a Clear audit during the change of leadership, you know So the new person coming in can have sort of a clean look at everything and that's why we had them do Do the senior senator this year? Usually what we focus on are areas that where there's cash involved because that's the thing that Concerns me the most and that can be school lunch It can be LSSE it can be the transfer station any place that handles cash is the areas that we try to look at how we handle things Because the general audit handles a lot of our sort of reporting requirements. It's our procedures that we like to have them examine which they did a really good job of on the senior center and identified some things that were problematic that That we will fix So do you have you Son you come up with recommendation for this coming year Is there anything that the committee has identified that you want to ask to be considered? parking revenue Have we done parking revenue in recent years? We could certainly do parking It's an internal operation, but usually we look at other outside departments, but parking is certainly one we could look at We look at all the turnover policies and Procedures from the police department. We've had them audited the fire department all the external departments that turn over money On a regular basis it has to its financial Processes that we look at No, it's been a pretty Rotation it's been going for a while usually when there's a change in how we Do collections we also had them audit the second floor this year Again When they first switched over to some to the different permitting tracking system We had them audit that just to help us to come up with better procedures for in there We kind of look at the last departments we've done and just If we are if we know there's a problem or if we want we know something we'll send them to a certain department Have you have you done? Targeted audits of the schools the elementary school or regional fairly recently, you know So that's one you've or you have a I imagine you have a list of and then The region school we don't audit that's a separate entity But for elementary our auditors go out there every year as part of auditing their Accounts payable all that stuff as well school lunch program comes up quite often Yeah Maybe maybe I miss this inspections were licenses and Rental permits and all that we've done that they were done this year as well Let's turn back to the question Is there agreement that we are recommending to the council that an Agreement be entered into for plants and heat for the neck for the fiscal year that we're currently in So that son you can go ahead and take care of finalizing that arrangement right it's done to sign a commitment letter since They have to schedule us in and we're usually in October So if we could get that vote today, we could sign Paul could sign a commitment letter for that an engagement letter and We have an RFP draft It's been taken a while to pull it together We haven't done an RFP for not in a while So we've had to take a lot of pieces together and stuff But we do have a good start a good draft and we were thinking To probably put that out April May, June time frame Per 21 yeah, I think it's a good idea, but I just have a question as to whether there are any restrictions on sole sourcing contracts or any maximum amounts or anything like that It's not a sole source The auditing contracts are exempt from 30 B So there are no restrictions on that. It's up to us whether we do an RFP on that I Do want to say that this company has been pretty reasonable in price We haven't really gone up in ten years Until we added the a few what a few like we added the housing trust so that's additional But it really hasn't gone up at all Question could be for pattern for anyone who can answer it but last year when there was a separate audit committee I Was trying to get a recollection of whether the audit committee made the decision to go ahead or whether that was referred back to the council so I think that what we would be looking for then is a somebody to propose a motion that We recommend to the town council pursuant to section 5.8 of the charter which I have placed up on the screen that Molanson Heath be The we retained with Molanson Heath for the audit for FY 20 and asked the Staff to go ahead and complete the commitment letter and Asked that we put on the agenda for the next council meeting He'll move For I just want to get a second and then okay, so there's a motion that's been made in seconded Yes Could you tell us how much the FY 19 audit cost? 52 5 Yes, can you clarify 52 5 52,500 Sharon you're in the wrong business Any discussion on the motion additional to what we've already had If not, I think we're ready to proceed. We will have to do a roll call because we have somebody here by remote participation and under The open meeting lines required that there be a roll call members as usual, I always ask the Not voting members first whether they have anything that they would like to say to the rest of the committee On the motion on the floor before we go to the boat so I just think it makes sense given the timing so let's Just go for a quick Yes Yes Yes, and I'll vote. Yes, so it's five to zero and the unanimous vote we will report that to the To the council So then going back to the agenda the other thing that was under the Gender food for this was the auditor selection process for FY 21 and you indicated that there is a Letter underway, and I think that the question is In addition to what Bob had record reference before is whether it is good practice to periodically at least look to see if there's another auditor because of just the benefit of having a fresh set of eyes looking at books We do know that there are cost challenges that we're going to have to deal with because There are only two qualified firms in Western with offices in Western Massachusetts to do government accounting and if we go outside of Western Massachusetts we Likely to drive up the cost Yes, I just want to mention that as far as fresh set of eyes We actually have that quite a bit with this company. They send out their Field team and that's always new people. There's at least two new people every year on that So it is a fresh set of eyes and it They do pick up a lot of other things that The other auditors, I mean that the other ones did I still think it's a good idea to change auditors now and then just because different companies may have different Things that they look at in a certain way just for some change I think we can talk about that as we go through the process if we're going to enter into a process a lot of the Audit is done based upon accountants Gatsby requirements and the all audit firms are having have to do the same thing which is ultimately audit to one set of standards that is Prescribed and that's not a choice so Yes, Mary Lou. I'm not sure how you work the audit Agreement for this year and they've done it before but is there such a thing as putting out RFP for the two years With a reduction in cost for the second year because it's the same company So we can't dictate what the prices that they promote We can do a two-year or three-year engagement and they can put price points wherever they feel they need to they might Want to make it go higher or lower is up to the company submitting the bid But the concept would be if you put it out that bid it for one year or two You were three you might see whether if you were willing to secure a contract for two years The average rate is lower for each of the years I think is what you're looking for, you know, so whether it's discount in year one or discount across the two years, right? Yeah, I mean we need to have this discussion when we get farther into the process But I think we could go ahead and get into other matters Now yes, do you have Lynn has a comment? Okay? Cole Lynn in just a second then The point that I was going to just make is that my experience in being executive director and treasurer of non-profit organizations that when we've gone out and looked for auditors in those circumstances that First-year bids sometimes come in as a lower amount to lure the Non-profit into the Contract and then they raise it in future years and that it's a something to be careful of Lynn There yeah, there's two comments first of all in the issue of pricing. I've never seen one go down in price I've seen auditors come back with very similar pricing from one year to the next and the It's a definitely that the other thing and and I I would prefer that we You know plan on going out for a bid. I do think that we should probably you know for FY 21 I do think we should Do it for at least three years because of the learning curve and There are some organizations And particularly public ones that require that you change auditors at least every ten years So I'm I it's a lot of work and I you know from Sonia's position I just have to say adding a new auditor in is a dreaded moment But if we haven't had a new one the real issue and Sonia you've spoken to this so several times before It's frankly whether we can find another one that we can afford and is because and they're in Western mass So I think a lot of it's let's go through the process and see what happens Yes, another thing to consider and I've seen this in the contracts that I work on is that you might have like a Two-year period with an option year or an option year or two that the town could exercise so that if you wind up with somebody and you're really dissatisfied with them you can just Reissue the RFP. You don't have to worry about the the out years as much so that's something to consider as well Anything else on audit on Those items two three and four on the agenda because if not, then I want to go ahead and Go to agenda item five, which is the second quarter report and Turn that then over to This version for talking or if you have anything that you want to add Okay Okay, so hopefully everybody has seen this had time to review it has it in front of them or something But this report is also available on the town's website on our accounting page This is the second quarter report and obviously we're halfway through the fiscal year and as expected in a perfect world We'd like to see everything right around 50% Our total revenues are currently revenues received to date through December 31st are currently at 52.4% and our expenditures are currently at 52.7% of our approved FY 20 budget projections again, this report just compares how we're doing Compared to our current budget You will see most of our percentages are around that 50% mark, but I will point out a few things with some variances Then they're mostly related to timing issues not everything happens spread out nicely across a 12 month period Some of our functions happen heavy at the beginning of a fiscal year or heavy at the end of a fiscal year So it can throw off these numbers, but it doesn't necessarily mean that there's a problem We're not concerned about any of the activities shown here at this time. They're all explainable and due to timing issues So I'm just going to talk about a couple of them on the revenue side our investment income is currently at 77% approximately and This depends on the timing of our investments and when see these mature and become Mature so this is also as as The town does our revenues are Budgeted conservatively and with interest rates have been low for a very long time and we haven't really quite felt comfortable with bumping those estimates up yet Our cherry hill revenues for the second half of last season the golf season runs over two fiscal years So our revenues are approximately 30% higher than they were at this time last year But again, it's going to be very dependent how we end the year on what happens with the weather this spring and how good the golfing season Is this spring to round out that? Motor vehicle excise tax it shows up very very low on the revenue side That's because the vast majority of our bills are billed in February Approximately 85% of the billing is in February and those bills will be going out as a matter of fact later this week So you will see that change dramatically over the next couple of months On the expense side Employee benefits. It's currently at looks like we've spent 73.5% of that budget, but again, that's due to a timing issue We several years back the retirement system offered a 2% discount if you pay your assessment in full on July 1st Versus making quarterly payments like we used to do so that gets paid up on July 1st of each fiscal year In the information technology department, it also shows about 72% And that's due to the timing of service contracts and annual software licensing agreements Some of them are many of them are due at the beginning of the fiscal year We also set aside funds for the entire year to pay some of their invoices And those will show up into the encumbrance column Under the miscellaneous and insurance section or Category of the report it shows that that is currently over spent but that is again due to a timing issue We have to do a very complex set of Allocations to take the insurance costs and spread them out to the schools the elementary schools the library and the enterprise funds And that just has not been done yet to get that money back into there Snow and ice it's currently it's beautiful day out. So hopefully we won't need much of that money anymore But it also shows as being over spent because of contracts and purchase orders Which again show up under that encumbrance column that we set aside enough money to cover sand salt chemicals for an entire year and We are only going to spend what we need obviously and then that would be adjusted once the winter season is over Outdoor pools again is one of those ones that is due to timing issues The pools typically open at the end of June or early July and they run through the summer months end of August So the majority of their expenses are all in July and August and they're going to have Very little activity for the remainder of this fiscal year until the pools open back up So those are just a few of the highlights of some of the things that are farther off the 50% mark The there's a lot more information in the letter it explains many of the variances and the spreadsheets as well So if you have any specific questions, we're happy to take them I Had a couple I don't know whether they're questions or comments on cannabis We are getting $98,000 in revenue from that. Is this the first time we've had a full six months have been able to look at since the Couple places opened up or does this have less than six months? I'm just looking at that as you know, so I know the one up in North Amherst rise opened up And you know it was open for July just after the students left, you know, but yeah, right? I believe it is just six months at this point We've received two quarterly payments from and it's we have nothing really to compare it to it, right? And this is our this is what six months yielded not yet, right with students around for at least the fall So if we can address that they they it actually opened in May, but they didn't start relaying payments to us until this fiscal year Yeah, I noticed that the elementary education is only 38 percent spent which seems kind of odd since it's kind of like a You know kind of there isn't much Month-to-month variation I wouldn't think unless there's some other issues, you know Some other expenses in there that are one-time expenses or something like that I'm not sure, but I mean they're September October November, so they're only four months of the actual school being in session, so I would sort of expect it to be that way because July and August they have very little expenses some of the teachers take lump sum payments and get paid out in the prior Fiscal year they don't have a lot in their payroll for the first two months So I would guess it would be in relation to that, but I can I can check Yeah, I would expect most of the salaries or 12 month salaries That's typically what people know they're given the option some of them can they can take a nine Is it nine or ten a nine month payment or a 12 month payment? They can When they take a nine month payment that are they eligible for the Unemployment for the three months in the summer or has that been resolved that was an issue several years ago Maybe not in Amherst, but other places where they say they're only employed for the 180 days Do we have that issue here? I don't know the answers to that question We would have to go back and look at that. That's would be handled on the school side So it's usually not teachers. You're we're talking about paraprofessionals and cafeteria workers typically in that situation and This didn't happen in Amherst, but it was teachers in another area another district So I'm just curious if that's something that's been resolved statewide or if indeed people can do that That's a retired teacher We are we have a contract for 180 days We are not paid in the summer So if we take a 12 month option, we're being we're just getting a lump sum each month Well, I know you understand that but there is no It new income for the three months that were not employed Or the two and a half months that were not employed. So you can claim on unemployment insurance So I had questions about two different departments. One was back in snow and ice I think that was struck me about the snow and ice question was that We spent a hundred and twenty 1.4% because we set aside the encumbrance for sands and salt But a lot of that fund also has to be used on an as needed basis for overtime when snow falls at the wrong time to get it done just during regular work hours and It's just sort of struck me that It was sort of Almost to guarantee that we could be over the way it was if it's handled that way So we did talk about this this morning with DPW There has not been a big major snow falls But there have been a lot of small events that where they would be coming in at midnight or 4 a.m. To Pre-treat the roads in anticipation of light snow and just so there were we had a lot of little things that hardly Registered on our radar. There haven't been the big snows that we all remember But they have been out a lot to some this winter oddly enough So we would expect that This could be a deficit year for snow and ice Which is something we'll talk about in a later date I Had a completely different line One of the things that keeps getting mentioned every year is that the demand for Golf is decreased nationally, but it is not just an Amherst phenomenon So we hope that the loss of one course Is there any indication that we need to revisit our projections for golf course revenue So we don't know the impact so Hickory Ridge was open much of last year almost all of last year We don't know the impact of Hickory Ridge being closed whether that will increase Cherry Hill revenue or not Whether golfers who used Hickory Ridge will stay local or if they'll just choose a different golf course out of town So I think it's something that we're monitoring and I think you're right Andy is that Nationwide golf revenue is going down. It's called the Tiger wood effect is has vanished And you know, we've talked to professionals who've been running Hickory Ridge for a long time now and they that's one of the reasons that they are closing Hickory Ridge is that business wasn't there and what they the operator of that course said is that the town of Amherst has two golf courses too many and I think that's one of the things that we're keeping an eye out on in terms of the future for Cherry Hill And just answer your question on the revenue and we're looking at the revenue side. We have historically budgeted Cherry Hill Because it used to be an enterprise fund back a few years ago We historically budget the revenues to cover all expenses including benefits. So that's what we're still doing So there's really two separate questions because that's one question, but the other is that regardless of whether you're Counting the revenue towards an enterprise fund as we used to do it towards Just the town department as we're doing now. We still want to have a reasonable number Staying on the golf course briefly. I know there's probably nothing we can do about this But some UMass students came to an LSS meeting around the golf course because Their team would have come to practice at Cherry Hill and paid a fee, but there was no food You know, so there was no, you know because so they instead I think are traveling by bus over to North Hampton or something It was an interesting like it was and they had you they used to play at Hickory Ridge You know, it was like they would have rather stayed local. So I Have no idea if as we say if we want to keep it going or is there You know potential for revenues if something, you know, I don't know what the if might be I had just a Question on water fund not because anything's unusual about it But if I look at the revenues and then look at the expenses, they're both running a little under 50% But the net is about $100,000 In terms of positive in a in a good direction When you look at a half-year of an enterprise fund that way does that can you start to say this is going to Generate as much of it as a $200,000 extra Coming in or does December be is it too early and you know revenue one is at 45% Of what it should be and the others at 48 expenses are at 48 and revenues at 45 and and There was some discussion in one document probably the audit that what are uses down a bit So whatever the rates are, but it was just a question. Can you kind of look at those enterprise funds and get an early insight on? That the net and the funds Do I completely forgot to even mention the enterprise funds that was going to be one of my closing remarks too And I kind of forgot it everything there was around 50% as well Do you want to answer that or do you want me to make a snap at it? So the enterprise funds are similar to some of our other funds as well where there are some large Enconvrances there for the year as well chemicals to treat the water Chemicals to treat the wastewater where we'll put in a very large Encumbrance at the beginning of the year to cover those contracts and they will be adjusted at the end of the year as well So it is a good indication that we have a positive right now But it's it's may not be the best indicator because some of those Enconvrances won't be spent some of those contracts won't be spent in full and they'll be adjusted at year end as well There's anything you want to add. So I do want to mention that I've talked with the council president about having sort of an information session or That's open to the counselors and finance committee to talk about Water and sewer rates because it's a complex topic It's you know, you're seeing in the headlines and all the papers now about how all the water and sewer rates in our neighboring communities are jumping up And we want to bring our consultant in to address Some of the block rate questions that have been raised and where we think water and sewer rates are going So we're looking at a Friday morning Just that people are able to come or we'll record it so people who can't be here Can watch it as well. That's great because we we got a partial answer when we were talking about the new plant But Sonya said I'm not going to back up You know asking like what does the 10-year rate projection look like when we bring the new plant online and have incurred those expenses so I I think having a sense of What's in store particularly as we're looking at other kinds of rates going up for residents would be useful for the council to know Now I was looking at this solid waste fund of course because Large amount of the revenue is permits sold at the beginning of the year. That's always going to run at it Higher rate Beginning of the year when those permits are sold It's interesting that the Percentage on the expense side is 38.5 percent and And But I think that we're all kind of aware that some of their Expenses are going to increase because of the problem of removing Getting rid of the recycled material where we might actually have to be paying as opposed to receiving And that will affect both sides So I think the other thing that we might need to have some time with at some point is The discussion of the fund I don't know if we wait you want to wait until You do your budget presentation because it will be in the budget presentation or if you decide That would be helpful to do it earlier. You have one thing out of the way we could do that too, and I'll leave that is Because you're not required to do it until after May 1st Is there anything else on the second quarter report? because otherwise what I would propose that we do Sonny's I don't know how long signing can be with us is that we also had a new version of the draft report Our projections for FY 21 If there was anything you wanted to highlight from that other than the fact that the deficit So there's really not a lot to report on this I just put it in there because I haven't sent it in for a while but We're at the I don't know if I've got the right one in front of me So if the numbers off a little bit, I apologize We're about 300 and 317,000 in the deficit right now and the only thing to change is we plugged in the governor's numbers for that so in some of the other numbers of Retirement we know what the retirement is assessment is now. So that's in there. They're still Also the region budget is down a little less than two and a half percent Which brings us to the 316 but Is there any specific questions anybody would ask about this? There's not this now has the health insurance rates in or it did you adjust them? Okay, health insurance rates don't affect this because it affects the individual operating budget So we pay we all budget for health insurance Appropriation within each of our budgets So the two and a half percent is there what that gives us this gives us more flexibility Within the town budget and the school budget. Everybody's good If I were to Say what I conclude looking at this as you're putting together the budget that's due to us on May 1st You have to close a $317,000 deficit right now. Yes, which is a lot better than closing a million dollar deficit But it's not as good as zero Okay Looking at Right that I'll most likely go up a little bit one of the biggest changes why we went from $900,000 deficit to $300,000 deficit is when I did the projections for the October I assumed no increase in state revenue But I did increase two and a half percent on the assessment side because that always goes up I think this is the first time I've ever seen it go down so We went down First the two and a half percent went away, and then there was the percentage of them it went down So that was the big positive whether it stays that way. We'll see Okay What if we are going to go into a period of economic contraction I mean right now things are very unstable They could get back up. I mean I've heard the news has everything that you can think of it's gonna stay it's gonna get worse It's gonna be just come back soon How how are we what would that mean for us? so our operations are pretty stable, and it's driven by real estate is If real if the economy tanks usually are big sources of revenue or people stop buying cars And if our if revenue from real estate goes down of the values go down and we people start to contract on things like that They stop our meals tax goes down and things like that So the economy you know fluctuations in the stock market don't really impact us that that dramatically Low Interest rates and bond rates are helpful to us when we're borrowing funds. We're going out to borrow in Pretty soon to read some bonds so We look at the long-term and our long-term advice our financial advisor thinks that things will be pretty stable for the next year or so You know my fear has always been if we got to a period of large inflation and the pressures that large inflation would Create for us, but Haven't gotten there so That's very main stable That's why we don't want to spend all our reserves Yeah, even though I didn't want to say anything when the auditor was here, but some of the fact that we built up the reserve level we did was so that we could plan for the major in that capital investments and be able to Do bonding in a way that would have a smoothing effect on other So that we didn't have to sacrifice all of the capital needs and we didn't have to go for more override authorization for debt exclusion then we absolutely had to so that there has been a strategy that's in place and we just Need to say hey, we did a good job did Anything else on that because the the other major discussion and the only other thing that I Anticipate us talking about today is the revised finance committee charge that was submitted to us for consideration by the governance organization and legislation committee and Other than that As I have said before Major capital investment process. I've been I've started placing that on every agenda as a placeholder So that we have an opportunity to discuss it if anything is happening at this point I don't think of anything that would be Needed under that particular item at this meeting With somebody else including the manager thinks that there's something to talk about I think we can just go on to the final agenda item. Okay, Andy. Do you want to just skip over electional of officers and move that to next time? Actually, thank you for bringing my attention Luna used to layer I am Do you can you I Take over for a minute even though you're not sharing the meeting you're just Make our I'm trying to think how to do this so that we can not Or maybe I can ask I can designate somebody or you can just ask somebody there to elect an chair to I Need to relinquish the chair for a few minutes so that we can do Don't me to just do it. Yeah Yeah So the floor is open for nominations for the chair of the finance committee. Do I hear any nominations? I will nominate Andy Okay, and Andy yes Andy do you accept that nomination? I will accept I had indicated that I would cheer only one committee This next year, but that If asked to chair this committee, this is the one I would choose Okay, are there any other nominations? Hearing none Could I have a motion? Andy? Is there anything you'd like to say more than you've just said? No, I think that it's been a honor to be chosen Um I hope that we have gotten through the first year of operations of the finance committee in its new format in good stead and that We can continue on that path for the next year Okay, then hearing none, uh, could I have a motion to elect Andy? Steinberg as chair of the finance committee. So moved Is there a second? And we have to do roll call Athena Pat Lynn Yes, Dorothy. Yes, Kathy. Yes, Andy Then let's move on to the issue of first of all, let me add also that as President of the council, I have to just say having Andy's experience As we've gone through this first year of the council and beyond has been just Absolutely critical to Uh, the smooth running of the financial side of our lives And I and I say that also to the entire committee As well. This has been a very, uh, thoughtful committee and a very well run committee and I appreciate that um So any nominations for your nominations for the position of vice president and he can take back charge Ah, there you go. Andy. Go ahead So is there a nomination for vice chair? You have the path And I second it Yes, I'm definitely willing to accept it and I I guess one comment I want to make is how Generously Andy's given up his time to Explain things to me. So I can be a partner rather than an underling for growing to be a partner rather than an underling So I'm deeply appreciative of that And you have been a great partner Which is why I'm pleased that you've accepted you've been nominated and um, you've indicated a willingness Are there any other? nominations That's another emotion I move that Kathy Shane be elected as the vice chair of the finance committee Okay, it's been moved and seconded You can do a roll call vote now Lynn Yes Pat Dorothy Yes And I vote yes and Kathy Okay, so we have that taken care of Which then brings us back to the item that We still have for us, which is the Additional Charge So we've been suggested a charge and The it is before us. I think that Maybe I should See what other people have to say I had one section that I was wanting to Highlight if nobody else did but I want to see what other people have to suggest Yes, Kathy I Sandy knows I didn't want to send it to people in advance, but I took the time to actually Sit down and really read this So beyond the charge that we have with a couple changes. I've Drafted some new language That I'd like to suggest we add to it So I don't know how best to go through that. I can read it or I could Yeah, so if you can put it up on the screen that would be great because everyone can see it I'm happy to also email it to everyone, but I didn't want to do it in advance of the meeting I'll try You want me I can't send it to you right because you don't have a computer there, right? You want to come look at mine? Are you sending it to me? Kathy Yes, I'm sending it to you Lynn. Thank you. I ask the under purpose What does that added sentence do that we need? It just get it to just to Lynn And I'll read it out. Added sentence that I put into purpose and I'll read it out You need your mic. Okay. So in the charter There's a global statement that the finance committee shall consider any and all questions that it deems appropriate for the purpose of considering the budget So I think there's been a I think General and strong statements of purpose in a way Make it less necessary to have lots of details underneath it even though we have it So I thought that that's literally a copy and paste from the charter So it's not just advice but to extent we Want to do an investigation or we want to think about revenues So it's it's a broad opening up. So I just found it a useful sentence to put into the purpose minor correction I'm channeling mandi joe. It should say any or all questions. So that question needs to I I probably mistyped because I can't imagine that the charter has an error in it I think you're right pat I didn't copy me So I like your your explanation. It's clear to me. I think it's a good statement. It's More inclusive of what needs to what the finance committee needs to do Yeah, I would agree So should I continue um, I I tried to flag them in yellow so people could see it in the little header It said but but budgets and appropriations and I just put the word finances in And the reason I did that is later on I've added Um I'll just skip down to the second to last bullet Consider all other financial matters related to the financial health of amherst including sources and potential sources of revenue So I think you know, it's not that I have a specific idea in mind But to the extent we had a if we did the following revenues would be higher Giving us permission to take a look at potential Sources of revenue not just this year's budget. So I just added Budgets finances and appropriations because I wasn't sure it said that um, that's It's probably budgets and appropriations would have been fine The next yellow down Is the first part was in the existing It's just that the town council is officially the water and sewer commission by the charter. So I just added that But um, we need to review and hold hearings um, so And then make a recommendation to the council So I just thought it was a fuller statement over holding hearings and then coming back Unless my misunderstanding of of how we would do this So it's not just hold a hearing but also make a recommendation is what I added Let me pause on that one Because I think this last year The hearing was before the council as a whole And the hearing is required to be noticed to the public In case any members of the public have comments about their water and sewer rates And information is presented through the hearing the public hearing And uh in previous years the select board has always been the Convening public hearings for the same purpose I think that there's a Question of whether hearings for water and sewer rates really belong before the council on that the committee As you see I didn't change that worry and that was what we got but um uh I don't know how we phrase That finance is driving it, but we're doing it as a committee of the whole the way we've done a few of these things So the original wording just set upon referral from the council review and hold hearings on water and sewer That was the wording that was in before I added the yellow So and I I I agree, you know on the um Is the council holding the hearings or is the finance committee with the is the committee of the whole and we've We found a nice way to do that on the budget that we didn't have to hold Do something with finance and then something with council, but I'm fine with any It's just I thought if we were holding the hearings then we'd have to make a recommendation to the council So if the council's holding the hearing this doesn't need to happen I believe the council needs to hold the hearing because we are the we are the water commissioners We need to fix the wording that was in this charge This is bob. I would suggest we just make this language to be similar to um The other bullets so that we're reviewing rates and making recommendations to the council Not that we're holding. This is the only place where we talk about hearings. Okay So you would just have the bullet begin review and hold review water and sewer And other municipal we don't really have other municipal utility rates at this point Unless we want to consider the solid waste the fees charged at the solid waste run, but And then it's simple because it says we review the rates and make recommendations to the council So it takes all of the rest of it out. Yeah If we just take the hearings out, I think it's parallel with the others Isn't solar something that has a rate? Yes, well, it's part of it Yeah, so it's a suggestion to remove the words Upon referral from the town council in capacity of water and sewer commissioners And then end hold hearings Do we really need to do it upon referral? No, I don't think so because I think You'd want to bring it to the full council with Something about the rates and recommendation You know unless Lynn, do you think it needs to be upon a referral? From the council I if we if you are suggesting that we do the these hearings Versus the council then I think you're going against the charter No, we weren't we're changing it to review water and sewer The rates and make recommendations of council. We took hearings completely out That works by the way, I I still haven't received it, but that could be because Where I am they're just you know, everything's so the question was do we have to have the referral from the council to review the rates? Or would we go ahead and do it and then get it to the council? Consistent with all the conversation last night, I'd say if referred It just says upon referral from the council review water and sewer rights and make recommendations Okay, what was meant up here where you had review and you was that just in there? Probably, I don't know whether you've got a tie. I had a typhoon so we know that that needs to go back in And going down to the next bullet the original one we Received that now in this version says make recommendations on proposed bylaws had upon referral And I think our broad authority Says that we could take a look at proposed bylaws in terms of Any possible effect the measure will have on town revenues and expenses that What we're supposed to do is worry about this. So I just took out upon referral out of this one from the original draft So let me explain why how that got in there and because this was actually the bullet that I said that I had some concerns about and I think that what was The concern expressed by members of the tol committee was that in the prior form of government at times The finance committee was making Recommendations regarding zoning provisions and when it saw that there were financial consequences At times it did not it was a judgment call that the finance committee was making each time and So I think that that was their thinking about this because they wanted to make sure that The concern wasn't that The finance committee was looking at it, but It was actually in in in the discussion more along the lines of a concern That we did what we Did in that both the housing policy and In percent for art and that is the focus on financial consequences in that Policy that's beyond financial consequences So that was why they I think added that provision in And If that's the concern then alternate language would be something like Consider the financial Consequences of Proposed by-laws policies or other measures But something of that nature, but I think that that's where the cragmire was coming up So I don't know if there are any comments on that. I'm looking to see Because I actually had in my version of it had written something out Trying to look where I put it. Oh, I might have been actually done Oh, here it was Upon referral by the council provide information on proposed by-laws including and just leave it at that Was another approach that I thought could be taken Andy I'm going to suggest that we Get copies of this and think about it and discuss it at our next meeting The problem is is that gel is very anxious for feedback And they wanted to take it before the council when they were dealing with all of the other committees yesterday and The request was is that we give them feedback for their meeting tomorrow Yes We may have talked about this before And I think it's really critical That the voting members Have three-year terms Finance committee is really critical And people need You learn you may think you know a lot when you come on but there is a lot to learn There's historical knowledge that comes with that as you learn And to have one-year Terms for voting members just For me, it's not acceptable And I think the council really needs to consider this As as an important committee just as the planning committee is and I believe I was just told they have three-year terms, correct? If that is so Finance committee members from the council should have three-year terms and you can stagger them to begin So that you're not all coming and going at the same time But I really think that's essential and people in town who know anything about the finance committee Will say that is a very important committee and just to have people come in and go out Isn't really acceptable I I'd like to speak Of the terms for any counselors with regard to standing committees or Um president vice president or all or all one-year terms according to the charter It's only rules for the president the vice president There is also another group of thought on the council that everybody should serve on finance at some time Well, that's a little difficult And I well, I'm hearing what you're saying Uh, I don't see that as a viable option for the council. First of all people like to switch around We had one of those situations this year and while we could Appoint all of us for three years. Uh, the reality is we don't know if all of us will be there in three years Yeah Is it am I incorrect? I I think there are only two-year terms going forward So the first set of counselors were elected for three years but going forward. There's only two-year terms So if if you're thinking about making a change, perhaps you should We should consider it too I think that's a problem with standing committees Yeah Counselors only serve for two-year terms Correct, but some people will run again And people who don't their term is up and somebody else will be appointed I don't see these people all of them staying for three whole years There there will be people leaving the council coming on and I think there'll be a natural turnover But in that turnover Hopefully there will be somebody who will continue with the historical knowledge as you have provided this year Andy And you and you came off of the old finance committee I think you're doomed if you don't have people who have some historical knowledge know what's been done And and and work with town staff on those kinds of things. So I'm pretty passionate about that And I I hear what you're saying Lynn, but You know plant we think the planning board is important And so we give them three-year terms and the same thing is going to happen. Some will not run again And so you'll have to put new people on I think that the other Factor here is that it's more like a legislative state legislature and that you have Or a congress that each time there's an election Even if you have some carryover because people get reelected each council is a different council So it's a question of whether one council can appoint members to serve on the standing committee for the next council And uh That becomes a I think a barrier There is a question that you've raised however, which is whether there would be a benefit in the future to make it two-year terms Just so that there's not Unnecessary turnover doesn't stop somebody from saying they would like to resign from a committee. I don't think we can ever Stop that from happening Which case it would need to be a new selection But uh It would it would be different from other standing committees and you've stated the reasons why very clearly What's the thought on that as far as including that in the recommendation and then I want to get back to the other Bullet we never finished I think you can go ahead and recommend it to gol. I think we are going to um I think it'll create quite a discussion we could uh We could include it as a Discussion item that happened But that we did not vote a recommendation on it Um If that's what the committee wishes Um andy. Yes I I think that's a good way. Um, I think we should include it as a recommendation for two-year terms Because most of us know that the first year is an extraordinarily heavy learning curve and um, I think two year is good but we can't enforce that but I think that the fact that we've discussed it and um Thought it had some virtue to let gol do what it does Well the council's going to be the ones that decide but gol can come back or whatever they're going to do. Um, I just want to be very clear that I I think I think your recommendation that it just be part of our minutes is the right one Uh, yeah, I can I can concur that Having served on this committee for less than a year the learning curve is rather steep And it would be very helpful to have continuity for more than a year Yes I'm off of that one. Uh under uh composition Where it says the non-voting members I would insert after municipal In parentheses town and schools the biggest costs In town are the schools So I think that there needs to be it could be town or schools But I think the schools have to be in there when we say Municipal people think only in terms of the town and it is schools also I guess uh, uh, why is that different because in Massachusetts municipalities they always schools are included In public finance as part of I guess It's under composition So it So the So let me go back We're jumping around a little bit I'm a little bit concerned about that because it's making it more difficult actually because we'd ever concluded Um This bullet So let me get back. Yeah, we did. Um Now it's up here municipal That was where you were talking about Didn't help clean it up. Won't you? Uh Yeah, I'm just doing it as we're going a lot. Um So let's get back to this one That we had had consider all financial matters related I I now have I just got it All in the delay was the I couldn't connect with the town the internet. I had to reboot All right, so what do you want me to look at? Um, this there's second to last bullet under the, um Budget and appropriations is a new bullet consider all other financial measures related to the financial health of amers Comma including sources or potential sources of revenue and the town debt capacity Yes, I guess again, I think we should have parallel construction here to say consider and make recommendations or something. Okay. Yeah Yeah, I also by the way should say the health of the town of amherst. I really don't want to be in charge of the whole All of Amherst just the town of Amherst. Okay um And and parallel structures is very important. There's The cath is usually very Considerate about that. All right. So I just want to make sure that So the alternate language that I had said would come up with to address some of the concern that was coming out of gl was, um That did not be make recommendations but provide information That way this fear that we might come in and recommend Against a bylaw in count that another committee has recommended for Is as opposed to just providing information on financial consequences. That's what you're going to get the pushback from But I Andy I have no problem if two committees don't agree Uh, in fact, that's what's a good check and balance system And if somebody comes forward with a bylaw And then we look at it from a standpoint of finance and and point out The issues around it and therefore vote a certain way then I think that's our responsibility So you it's in fab your time was to start with make recommendations. Yeah Consider you could say consider And make recommendations or something like that. Yeah, or just make recommendations is fine Take recommendations in theory you'd like us to analyze and make recommendations But we don't have to get that wonky about it, right? In this piece who is there a reason that you had taken out measures I sent you a second one, but it didn't go through. I just Somehow Clipped the whole ending so it was supposed to be exactly. They're wording with just that initial upon referral Out so I didn't try to change any of the rest of the word wording So make recommendations on proposed bylaws including revisions policies or other measures under council consideration With regard to the effect of the measure will happen on town revenues expenses or finances So I didn't try to change that but one the first version I Did to Andy and tried to print it out for all of you truncated an entire sentence so That I failed to print because there was no printer toner left in my printer Okay, so it maybe we don't need this but we were holding public hearings related to public as as To be held with the panel as a committee of the whole so maybe We just don't need to add that bullet, but that was the practice we adopted during the past year And so I just Which which may be held right So you know we So when when for example when we did the temporary bridge Andy you ran the meeting But it was a hearing of the the whole so I don't know how we maybe we just don't need that bullet So you mean will be will be held So it means will you want will be held is I think Okay, so maybe we don't need it before we jump out of this one We have to get back to the right section of the I'd be happy looking at the charter. I think it's I'd be happy removing it. It's just we with the temporary bridge We held the hearing, you know, so I don't think it has to be here I think it's going to raise all kinds of okay. Delete it. I I rescind this sentence altogether gone I think it's fine to delete it, you know We figured it out for each of these hearings the exact format how we were going to do it So I mean it was always the everyone from the council was invited I mean was has to be there Yeah, I just want to say I'm personally uncomfortable with the finance committee holding public hearings I think the council should be the one that holds public hearings. It's gone. I did I elated The finance committee shall hold a public hearing. This is under 5.5 a The finance committee shall hold a public hearing on the proposed budget Providing no less than 10 days notice of such hearing the finance committee will thoroughly review the budget So there is a provision in the charter That's why I thought that's the way we did it Okay, whatever is consistent with the charter Um How about uh Hold all public hearings relating to the budget is required by Charter section 5.5 a Yeah, I like that and it's tied back to the charter. Yes Kathy got that one Okay, I because I didn't uh enter it is there let's see now whether there was anything else It is 5.5 a Yes, and I apologize to all of you for not being even faster with the computer than I am But What I typed on mine is hold public hearing related to the budget as required by charter section 5.5 a Okay, that's clear. Uh ladies and gentlemen, I have to go I think we're just about done. Actually. Is there anything else that you had Kathy on yours and then I think we're no that was it so, um Do we Want to take have a motion to just uh forward these recommendations to the GOL for their consideration tomorrow and That we will not change the one on terms, but we will put in a An explanatory section that we think that it should be considered because of the reasons that Mary Lou has indicated I Moved to do what you just said so Send this revised version. I've got it in track changes and a motion made in seconded real quickly then So we can get to about to be done Um Lynn Yes But Yes Kathy Yes And Were there any comments? I should have asked you if you had additional comments You'd like to can you just you're I assume you're just going to send around the revised one to all Yes, I'll send it and and the one I've got I'm going to send it what I call clean But also the track changes so you can see if you want to look at the mass Um Then um, Kathy and I'll work it out. So there's no public to public comment There's no other business that we needed to consider that was not previously on the agenda I think we're ready to adjourn Yes At what point will we be able to talk about the major capital investment? Process before everything gets rolling along I mean, do you have that as a time certain? No, I don't have a time certain but I will be I'm I'm working towards a time certain. How's that? I think that's the best thing I can do. Uh, I should be able to provide an update about the library fairly soon Yeah, I mean, there's too many moving pieces right now. And it's just why we keep Putting it on the agenda but not getting there. Okay, so I think we had a motion on that's been made just to adjourn and I think I'm just going to declare us adjourned