 This program is brought to you by Cable Franchise Vs and generous donations from viewers like you. So I'm going to call the Finance Committee meeting of February 5th, 2021 to order. It is now five minutes after two in the meeting was scheduled for 2pm. Pursuant to Governor Baker's March 12, 2020 order suspending surgeon provisions of the open meeting law general law chapter 30. Section 18 this meeting of the Finance Committee is being conducted by a remote participation. And I just want to go very quickly into explaining what we're going to do. And because the first item of business needs to be the election of officers. But before doing so, I'm going to, as is required by the open meeting law, make sure that all members of the committee who are present at the time, which I think is all but one can hear me and that we can hear them by their hearing in the affirmative. So I'll start with them. Unmute and let us know who can hear you. Present. Okay, Bob Hegner. Here. Here. Dorothy Pam. Unmute Dorothy here. Pat Hazelis. Present. And Bernie Kubiak. Jane's in the attendees. Okay. Can somebody. Do we have a, are you. I will let her in. Jane, you should unmute and Andy will ask if you're here. Jane, you just need to let us know that you're on board and that we so that you're hearing me and that confirms we can hear you. I can hear you. Okay, great. So, then we have all members of the committee present. So the next order of business is goes to Lynn to conduct the first part of the election process. So every time every January the town council forms new memberships on committees actually in this case there was no change on this committee. At this point, we also then vote for chair and vice chair. So the floor is open for nominations for chair of the finance committee. Please unmute. I nominate Andy appease willing to continue. Andy, are you willing to continue. I will continue for another year. If the committee desires. Are there any other nominations at this time. We're going to vote, and I'm going to try to do this alphabetically. I'm going to start with Pat D'Angeles. I, Lynn Griezmer is an eye, Dorothy Pam, I, Kathy Shane, I, Andy Steinberg. Okay. Thank you. Andy is unanimously elected chair of the finance committee. The floor is now open for the election of vice chair are there any nominations, Dorothy Pam you have your hand up. I nominate Kathy Shane. Hey Kathy are you willing to serve in that capacity of elected. Yes. Are there any other nominations from the floor for vice chair. There's none that I'm going to call the election closed and we're going to vote. And we start with in this case. Actually Lynn Griezmer and it's an eye. Dorothy Pam, I, Andy Steinberg. Hi. Pat D'Angeles. Hi. And Kathy Shane. Yes. Thank you. Yes. I would appreciate it if the resident members of the committee, even though they are not voting members. I think they're going to vote the same way, but I think that their voices should be heard as part of the vote. Okay. So I will ask Bob Hegner first. I, I agree with both the chair and the vice chair. Bernie Kubiak. Certainly in agreement with the nominees. Okay. And Jane Schaeffler. I agree wholeheartedly. Great. Yeah, it seems to me we need to remember to include them in things we do. Thank you. Andy, I'm turning it over to you. Okay, thank you. It's allowed me to very quickly turn it over to somebody. I think many members of the committee met last year. And so there are a couple of people who may not have been present. But Tanya Campbell has been with me Lance and he's working with the town of Amherst. For a number of years she can own up if she wants to as to how many years that is, but in conducting the annual audit and then making the presentation to the audit committee. And this is the point in the year where under the revised policy of the council, the finance committee is acting as the audit committee. And that is the purpose of the presentation today. So I'm going to welcome you Tanya and Tanya is going to take over the screen sharing function so that she can show the part of the presentation and help us to walk through the audit is. She determines appropriate. And then, of course. I can follow up with questions and if I see hands coming up during the discussion I will make choose to interrupt and see if I want to address questions as they go but Tanya welcome. Thank you. Yes, I'm getting used to this whole new world of doing these presentations remotely. Nice to see you all again a little bit much better in person. Can you guys see, I'm going to hold on. Can you see my, the presentation screen. Okay, perfect. Can I just can you turn it into slide show because you've just made them smaller if it's slide show I think we'll see better. Are you seeing the. I'm seeing you slides. Hold on a sec. Let me just share my other screen. You see the. Both screen. Okay, perfect. Thanks. No one's ever mentioned that for so whenever I've always done that wrong. So as Andy said I'm here today to present the results of the town's fiscal year 2020 audit. I'm a principal with maliance and he or maliance and now to use to drop we drop the heat. And I've been working on the town's audit for the past 14 years I've been with the firm I've done they audit every year. And I've been the principal in charge of the audit for the past few years there was another principal in charge, prior to myself, Pat Spalante who I'm sure you guys remember doing this part of me. Now, terms of today I want to have a brief conversation about the nature and purpose of the financial statement audit including the roles and responsibilities as us as your independent auditors, as well as management's responsibilities and the finance committees responsibilities when acting in the audit audit committee capacity. And then I want to review a couple of the pages in the town's financial statements and talk about some of the key numbers. And certainly, you know, feel free to stop me at any point in time if you have any questions that I'll do during the during the presentation. Now in terms of our responsibilities as the independent auditor, our ultimate responsibility is to express an opinion on the town's financial statements. And in order to do that we must plan for former audit to provide reasonable assurance not absolute assurance that the financial statements are free of material misstatements. So, as I know I've, you know, mentioned in the past, you know, an audit does not provide 100% assurance we can't come in and pour through every single transaction that passed through the town. During the fiscal year is just, it's just not possible mess up the way that audits are designed to happen. Instead, our audits are conducted under a set of standards notice government auditing standards. And those standards require that we plan and perform our audit procedures using a concept known as materiality. So materiality will vary based on the size of the entity itself and as well as the different components of the town itself. And for instance in fiscal year 2020 the materiality for the town's general fund or your main operating fund was about $150,000. That doesn't mean we don't look at anything below that because we certainly do. It just says that auditing standards say we should focus our testing on the balances at or above that level. Now in terms of management responsibilities as part of the audit process, they are ultimately responsible for the town's financial statements. They're responsible for establishing and maintaining effective internal control and ensuring that the town complies with the various laws and regulations that are applicable to its daily activities. During the audit they're responsible for making all financial records and data available to us in a timely fashion so we can complete our audit in a reasonable timeframe. And at the end of the audit they're responsible for providing us with a letter that confirms the various representations that were made to us during the audit process. Basically stating that you know what they told us what's true and accurate to the best of their ability and what they what they know to be true. Now in FYI an audit does not relieve the management of its responsibilities in regards to the financial statements they are ultimately management responsibilities. Now in terms of the finance committee's responsibilities as part of this audit process. You guys are here to assist the town council in the oversight of the financial statements, as well as you know the oversight over the internal control process and you know to varying degrees the town's risk assessment evaluation. You also help educate the town council members on understanding the financial statements if if they wanted to gain a greater understanding. This is part of the purpose of, you know our presentation to so I can educate you and then you can educate them if they had questions. You're also responsible for reviewing the management letter which we contain recommendations made as part of the other process. If applicable we actually did not issue a formal management letter at fiscal year 2020. So you guys are off the hook on that for this year. Now, in terms of the town's financial statements themselves they're presented under rules established by the government accounting standards board. They're also known as gas but you'll see various references to their different statements in the financial statements themselves. And there are essentially five components to your financial statements. There is the audit opinion management, which management discussion analysis, your two sets of financial statements your government wide statements and your fund basis statements. And then lastly your footnotes and required supplementary information. The audit opinion is the only part of the financial statements that actually belongs to us as your independent auditors. In fiscal year 20. 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. Next comes your management's discussion and analysis, which is a required narrative of the financial statements. And it basically summarizes the information that's included in the financial statements as well as some of the key numbers and results of operations from the past fiscal year. So you have your two sets of financial statements themselves and what we'll look at in pieces of those in just a minute and talk about some of the numbers on those pages. And then lastly you have your footnotes and required supplementary information which provides a great deal of information and disclosures on the actual numbers have ever reported on the financial pages themselves. Does anyone have any questions on that so far. I don't know if people have the PDF document of the financial statements handy or if you have it printed out. We're looking right now at page 17 of the printed document which is also page 20 of the PDF if you want to look at the full, full page itself. The numbers on the right are a snapshot of the town's balance sheet, which is one of your fund basis statements. Now, your fund basis statements are the set of statements that more closely resemble the town's records and the reports you would receive on a monthly basis. They report all the governmental funds and what we're looking at right there is the column that represents the general fund and the includes the town stabilization fund as well. I have boxed one number in towards the bottom there, which is your unassigned fund balance number. That number is essentially made up of two, two balances. The first is a town stabilization fund, which at the end of fiscal year 20 had just over $12 million in that fund. You know, that balance itself represents 22% of the town's annual tax levy for fiscal year 20, which is a very healthy balance. You know, one of the highest I've seen in terms of some of the audits that we do. I know the town has really made a commitment over the years to put money into into that fund and really establish that to what it is today. That's really very impressive. You know, DOR recommends, you know, towns try to achieve 10% of the tax levy in their stabilization fund so the town, the town is doing a very good job setting money aside in that fund. The other portion of that balance is your general fund unreserved fund balance, which is just just over $7 million at the end of 2020. That is essentially this, you know, what's left over at the end of the year after you've set everything aside from where other commitments you've made. And it's essentially the starting point for the town's free cash calculation number. And that balance at the end of 20 represented about 13% of the town's tax levy. Also very healthy balance in that fund. Another number that isn't on this page but I just wanted to mention it the town certified free cash for fiscal year 20 was almost five and a half million dollars, which represents about six and a half percent of the annual operating budget. And DOR recommends, you know, no lower than three to 5% of the operating budget is where your free cash should land so that also is a very healthy number. You know, the town has done a good job over the years in terms of budgeting its revenues and expenses, conservatively in order to turn back and kind of replenish the free cash issues on an annual basis and does a good job in terms of managing free cash and what you're using your free cash for you're not using it for operating items you're using it to to build your reserves, stabilization, OPEB, and for other, you know, capital projects and stuff as needed so. Tonya before you move off of this page to question Dorothy Pam has one. You got me confused when you said unreserved but it's not on this page. Oh, I'm trying to figure out. Okay, what does that mean to have a number that's important but it's not written down. So the number have box, which says unassigned. Yeah, that $19 million number that is made up of $12 million of your stabilization fund and the $7 million of your. It's called unreserved general fund balance but it's, it's what I yeah I know and they've changed the wording over the years to it used to be unreserved. So you said the overall unassigned was great. And then you said something about the $7 million unreserved. You said that was good and that's on the way to free cash is that what you said. Yeah, it's essentially like the starting point for the town's free cash calculation so DOR will start there and then do all their adjustments to back out various things so. That's one way to think of that number. Yep. Any other questions on this page. Okay, so the next page is a snapshot of your statement and that position which is on this one is on page 15 of the financials or 18 of the actual PDF document itself. Now, your statement in that position is one of your government wide statements, which are different than your fund basis statements or your government wide statements they take and consolidate all the various funds of the town, and only distinguish between your governmental activities and your business type activities. Your governmental activities will include things such as your general fund, your special revenue or your grant funds, your capital project funds, those kind of governmental funds, while your business type activities are your town enterprise funds. So those are the two columns on this statement. The intent of your government wide statements are to take your town operations and essentially report them as if a business would report them so we take your fund basis statements and then we add the town's capital assets and your long term debt and other long term liabilities like your bonds payable your pension liability or pet liability. Well they don't reflect how the town operates on a day to day basis those are more in line with how the fund basis statements are presented. These statements do a good job in terms of showing the true assets and liabilities of the town. Now the two numbers I want to talk about on this page or your net pension liability and your net OPEB liability. That amount represents the town share of the Hampshire County retirement systems unfunded liability. Last year that number was just over $59 million and this year it's just right around $54 million so there was about a $5 million decrease from the prior year. And a couple of things caused that decrease. First of all the town share of the entire systems liability itself decreased slightly between last year and this year so that would cause your share of the liability to go down. And there was also better market results. You know better investment returns for the system in the in the year that's presented in your 2020 financial statements which was pretty consistent across the board for retirement systems they saw good rates of return and good investment returns. In calendar year 2019. So that caused the systems funded percentage to increase up to 64%. When last year it was almost 59%. So that that change decreased the overall liability that's being split by all the different member towns. So your share went down. Those were some of the main reasons for the decrease there. Pause there for a minute and Sean and Paul. Can you explain if there is any relationship here between this and the legislation that Joe and Mindy were so successful in getting past. I can't see if Paul's here. So I can. So my understanding is that this number did at the time include the pension liability for the Hampshire Council of Governments. And now that that is that liability is going to be assumed I would think we would see an impact on this next time around. Tanya I don't know if you heard anything about that. I've heard that the legislation passed. But yes it would. These numbers are based on 1231 19 results. Yeah, yeah, so at that point in time. They were still part of the system. Going forward. They will, they should come off that. I don't know how much of the system, you know, I'm not sure how much that will actually impact everyone else that basically you're just taking out their share so like, I guess it would, it would go your share or your overall share would go down slightly if that portion of the liability went away went away and the assets are staying the same so yeah you should see result from that. Probably. I don't know if next year is going to have any impact because they have a valuation every two years. And they just had one as a one one 20. So the next one would be right to be one one 22 I'm not sure if they're going to pick that up in between, they may, but. I don't know if they're in get back, but eventually that will be a small positive for us. Yeah, I can't imagine it has a big effect because you're removing two pieces you're removing the share of live, you know the amount of the liability but you're also reducing the number of people who are being calculated into the number that's used so yeah it'll help the unfunded so the unfunded portion of their liability will come out and that will be an unfunded portion of somebody else's liability so that'll help. You know these are sort of balance sheet numbers. Another long term planning numbers so again it'll have a real noticeable impact on our annual pension assessment but in terms of the long term costs it might help a little bit. So your variable has to do with the number of employees in each town that participates in the Hampshire retirement system. Right. So, so the cost go away and their share goes away but yeah so your annual assessment probably won't change too much, but it could. Yeah. Any other questions about the net pension liability. Now, the number right below that is the town's net op-ed liability, which represents the town share of your retiree health insurance costs. The prior year liability number was close to $53 million. So the town saw a very large increase this year 14 and a half million dollar increase. And as a result of the change in actuaries from prior years, every actually does calculations and factors things in slightly differently. So this new actuary, you know, had a bunch of different changes in what they call change in assumptions from the prior year based on how they're calculating the liability, which are all kind of listed out in the actual financial statements themselves are on page 61. And that was the main main reason for the, for the increase there. Tanya real quick, we'll we're going to have a separate op-ed agenda at some point future where the actuary will come and explain those changes in more detail. Yeah, that's great Linda's Linda's wonderful. You know, I think we had discussed this a few years ago to when the new accounting standard came into effect and you were required to book this entire liability on the financial statements. The actuary that you use calculated things slightly differently than what we've seen from other actuaries so this was not unexpected per se, but, but it is a big, it is a big increase. Now, there's no requirement to fund this liability at this point in time on like your net pension liability which has an annual funding schedule. But the town has done a really good job in terms of putting money aside into the op-ed trust fund every year. And at the end of fiscal year 20 there was a balance of just over $7 million in that fund, which is one of the highest I've seen in the towns that audit as well and the town, you know, really makes a concerted effort to put good, good size chunks of money into that fund every year so that you know something that the town should, should take pride in and it's also something that the rate setting agencies look very favorably upon, just because you're not required to fund it but everyone else is right now but your town does fund it at a fairly high rate compared to some of the other towns and so they're looking at so. Kathy has a question now. This is a question, am I unmuted, gone for when the actuary comes, if they can show both the liability but also how much we pay each year, because one of the things this is the amount in the fund balance, just to so allay people's fears that we're not covering our annual retiree health costs. Come in with both numbers when they do that presentation. Yeah. When we get to that we need to have a complete presentation because you know that we get back to what is the plan for ultimately the liability and the funding of the trust was an important first step in a plan but it's not the entire plan. Correct. I'll get back to you. Okay. That was it does anyone have any questions on the net help at liability. Those were really the key numbers I was going to touch on in the financial statements, unless anyone else had any other questions on the document. So, as I mentioned before, we didn't issue the town of formal management letter this year. We are in the process of wrapping up the town's federal grant audit. There was large delays this year from the federal government in terms of issuing the guidance on completing that audit, thanks to all the cobit and cares money that got distributed. So that was the last minute there. So that should be done and wrapped up fairly soon. We did not have any issues with that audit so we expect to issue a clean audit report we're just, we're just working on kind of doing the final final draft to get that to the town so. So that was good as well we did we were not required to audit any of the cares or covered money or FEMA money this year. So we have a chance that we will end up auditing the FEMA money next year as part of the fiscal year 2021 audit just from the timing of the expenditures and when the town was signed a contract with FEMA so there's certain roles I want you to follow when it's reported so it's likely the town will be those possibly audited next year. Kathy has her hand up and I have a. I have a very minor comment it's got nothing to do with numbers but I just noticed on you've been doing it's on page 27 of typed at the bottom or page 30 when it's describing the town. You say that we have an elected town manager and we don't we haven't appointed town manager so it's just, I'm sure someone will catch that at some point but it's purely just a terminology. I want to make sure I heard you correctly, but just wrapping up the audit of federal grants. There does not seem to be a problem. Right, so we've completed all the audit field work as of this point in time I've reviewed everything. I've done CDBG grants this fiscal year, and I'm just working on drafting the reports and getting a few more pieces of information from the town before I issue the draft of those reports but there will be no findings. So we did not know any issues in our testing. Okay. Thank you. Anything else from any other members of the committee at this point. Okay. Were you going to do anything in the footsteps that you wanted to call our attention to in particular. No, I don't think so. Yeah. Yeah. Hi, Tony, I had a question on page 16 of the report. And you list or hear the expenses of the column to the very left left. The expenses are total 111 million, which seems more than we spend. What's in these numbers that I'm missing. So this is your government wide statements which are not reflective of really what the town spends on the annual basis. If you would look at the fund basis statements on page 19. That is more in line with the day to day operations and what the town spends. So when we convert to your government wide statements, we are removing capital asset expenditures and booking those as assets. We remove long term debt expenditures, both those as assets, but also as part of booking your liabilities so your pension and open liabilities changes in those flow through to your expenses so there's a portion of that change that goes through there. So, because there was such a big increase in your OPEB liability this year, some of those changes they get deferred so they get smoothed out over the year so it doesn't all hit those big changes don't hit all at once. They get amortized and booked over like about a five year period so there's a big chunk of that change, your increase in your liability that got booked to expenses this year so that's probably what's driving most of that. Which gets allocated to your different, your different functions you have listed there. So you won't see that in one line itself it's kind of spread out over your general government public safety depending on allocated based on salary so that's that's the majority of that. And is depreciation expense in there as well. Yeah, another big one Bob would be like depreciation of balance sheet expense it's not something we actually pay right. Right. That's not cash this is not cash basis we're converting to follow cruel basis so if you look at the review that shows the reconciliation between the two of them page 20 takes the change in your governmental funds so your net revenues and expenses and then shows what other adjustments were making to revenues and expenses that would flow through and in this case it you know, increase your expenses by a lot and most of that is your open expense. Yeah. Okay, I had one other question and this is on page 19. Okay. So, I'm fine. So so we get to the total of the excess of revenues over expenditures is 3.042 million. If I add the next two columns in. I, you know, add one and subtract the other obviously I wind up with the 1.485 and that 1.557 is doesn't seem to be in there. And I'm curious as to, is that something that's part of something else or am I doing the math wrong? Yeah, I'm sorry. So we have the the excess sufficient revenue revenues over expenses of 3 million 304239. Yeah, and then you would add the add the transfers in and subtract the transfers out, right, which gives you a negative number so 3 million minus the 1.5 million. That gives you 1.485. Correct. Right. But then there's that line above it. And it doesn't appear to be in that equation. So, negative 1.556. Right. That's the few. That's a total of the two lines above so like we subtotal. Okay, the two million. All right. All right. That explains it. Thank you. Sorry about that. No problem. There's a lot of numbers on there. So, yeah. Does anyone have any other questions? See if there are other questions from the committee. I think that just as a general observation, this isn't unrelated to the presentation is, it's difficult. The finance committee or any members of the council to deal with this and that we're so used to looking at the budget in one format or we're looking at the amount of money that is available to us from various sources and the amount that we're proposing to spend and that's really a very different set of numbers from what we're looking at here. And, you know, the audit is done for a different purpose and I don't know how we ever can adequately explain what that difference is. Anything else in the way of questions and comments sort of proposing that we do is ask that the audit be included in the packet for an upcoming council meeting as the president determines the appropriate date. And the finance committee just present a brief report about the discussion that we met with Tanya and what and she explained the numbers and give a very brief summary of what the discussion was about. I think that there really will not be a lot of questions because it gets into the same problem that all of us had but I think that our responsibility to explain the audit to the council we have to do it in an other direction. Dorothy, your hand is up. A small question that I think Sonya has answered before, but I'm on page nine, and on sewer operations, it has a big loss but it does not have it under water and I know that we lost money, because UMass wasn't in session, but I wondered why it was so much under sewer and nothing under water so it was fine under governmental activities. Did you want me to answer that or Sonya? Okay. So, um, part of the difficult difficulty in looking at your enterprise funds is your enterprise funds and the financial statements are presented on the full accrual basis of accounting so like we're talking about before, they're very similar to your government-wide statements in terms of we capitalize their assets and book depreciation and factor in long-term debt payments and stuff like that. So, the sewer fund actually wasn't in deficit in your town records, but when we make all those adjustments, it does end up in a deficit in the financial statements themselves because we're converting everything to accrual basis. So, speak to that. Sonya might be able to speak more to the actual results of operations for fiscal year 20. Yeah, and our budget versus actual statements for the fiscal year 20 year end. So, we have a deficit in water and sewer. So it was 698 and sewer, but this is different reporting than what the audit reports are doing. This is straight general purpose financial statements which are much clearer in my mind. But we did have a pretty big revenue deficit in sewer of 753,000. We returned some expenditures. We didn't spend all of our money, so we ended up about $648,000 deficit. That was all part of the year-end reporting. Loss, not like deficit in the fund at the end of the year. Right. Yeah, hold on. Loss. Yeah. And Sonya, correct me if I'm wrong. I think the reason water did a little better than sewer was, didn't we have some unspent articles and water? Yeah. Yeah. You're able to save this on the expenditure side. Capital that we didn't use in the year it was voted. Yeah, so that. So that helped the water fund do a little better than sewer, but they both struggled. Last year. Yeah. I should say. Paul, I don't know if Paul has any comments or questions. So leave it to him, Bernie. I see your hands up. Bernie. Having lived through this process and other towns. I think we really need to acknowledge the good work that's done by, by, by Sonya and Sean and the, and the staff in general for this, because it's a trial. And it speaks well to integrity and honesty and accuracy of the work that, you know, Malanson he, Malanson is very confident on this. So we need to, we need to say thank you for a lot of good work. I appreciate you bringing that up. And we will include that when we report to the council, because the council as a whole needs to hear about it. And Tanya, is it possible that are you willing to share the PowerPoint slide with us for inclusion in the meeting packet for the meeting today? Absolutely. I would like to just send a PDF version of that. I can email it to. You can email it to Sean. Do whatever is necessary to get it put into the packet. Andy, I think unless you feel there's an urgency, I will wait to bring this to the council on the 22nd. Just because to turn around from. This Friday and to Monday to do a report is really kind of unreasonable. Yeah. I don't think that we sent the audit itself. To the council yet. It's such a big daunting document. No offense Tanya. That. I don't think we want to just give it to the council the day before we discuss it. Right. Let's plan that it will come to the council on the 22nd of February. Okay. Okay. Anything else comments questions because. We have one other thing that. It's some. As you know. And I don't, I assume. I'm not surprised by this discussion that. Charter. Requires that there be a process for. Periodic auditor selection and. We had talked about it last year and had voted. Had proposed to the council and council agreed. That we would wait to do any kind of. Solicitation of bids for audit until. The FY 22 audit, which would require that. That process take place during FY 21. And so. We'll be looking to Sonia and Sean to. Proposed to us. And then we'll discuss it within this committee at that time. But it does need to move forward. I don't know if anybody has any comments or questions that they wanted to. Raise about that. We've discussed it previously, but I just wanted to remind you that we're at that point. I wouldn't just make sure that Tanya. Yeah. This is not a reflection on her, but a standard practice. Yes. No, I understand that. Thank you. And I'm actually going to head out. I just want to interrupt and say goodbye. Yeah. So. It was nice to see you all again. And. I appreciate the opportunity to work for the town. And it's, you know, the town is. Fantastic in terms of, you know, what Bernie was saying in terms of the financial reporting team. I've always put. Fourth of effort to, you know, retain the highest quality staff. And it's really important. It really shows in terms of how well the town. Counts finances are doing. So. I did want to echo that because I wholeheartedly agree. Thank you for saying that. I think all of us make the recommendation of the town manager that. He revoked from Sonya and the privilege to retire. Seriously. Right. She's not allowed. I'm full on board with that. Seriously. Yes. You know, one thing to consider. I don't know when Sonya is planning a retiring though. One kind of, you know, push to retain us for another year. So. Is, you know, changing. Auditors and changing accounting staff in the same year might. Kind of be a disaster, but. You know, we are there. We do know the, you know, how the town operates and how things work. So it is, you know, can be beneficial. To. Retain the consistent auditors over that time, but I'm just. You know, the process needs to happen. And I can appreciate that. I just wanted to throw that out there. Something that might be. Might assist the town during that transition. So. Thank you. So thank you, Tonya. Thank you for the report. You're welcome. Take care, everyone. Stay safe, please. Thanks. So our other major item for the day. Really. Now I'm going to turn it over to. Sean, because what we were going to talk about is the financial projection changes that. For FY 22. And I think that in your packet, and I hope you had a chance to see it. I think you sent it out separately. There was a. FY 22. Amended projection report. And. I've made a couple of suggestions on things. I want to be included by Sean, but turn it over to you. I'm going to go ahead and share my screen. Before I do. So. There is a. FY 22 projection in the packet. Andy had asked about putting a side by side with the. The original projection in November for the, that was used for the budget guidelines. So the version I'm going to show. Which I'll add to the packet after has that comparison. So you can see how we're, you know, you can see more clearly where things changed. Right. Can everybody see that on their screen? Hearing no objections. I will assume that you can. So what you have here is a couple of years of actual, the FY 21 recap, which wasn't done at the time of. The November projection. And then we have. Our current projections right here in the blue. And then that the column I added is this. Peachy color here on the right. That shows what was projected back for the indicators report. So the first big update is here on the revenue side and the property taxes. You'll see back in FY 20, or in the indicators report, we projected 58.7 million. And now we're about 59 million. And the biggest reason for that is the new growth. So. At the time of the indicators report, we were still being conservative on new growth. We hadn't certified it yet. About a month after or so, we had certified new growth. And it came in higher than our budget. So we came in at 747,000 for new growth. Which is a positive point. So we have a lot of new growth. And we're still working on for next year. We want to be conservative given the pandemic on new growth. And so we're working with our assessor's office. To see if this $500,000 number. Is, is the right number for next year. But that made a pretty big impact on our revenues. The next section, local receipts. So the biggest change here is we actually lowered it a little bit. And this was really driven by the Q&A. And this was driven by the Q&A. And we had a little bit of a change here is we actually lowered it a little bit. And this was really driven by the Q2 report that Sonya presented last time. And then this licenses and permits. When we looked at what we brought in through the first two quarters of FY 21, it looked like we were projecting a little high. If we want to be conservative and, and. Not over budget our revenues for next year. So we had a little bit of a change here. And then we got down to more in line with what we were seeing in the Q2 report presented last week. Everything else did pretty much the same. There was a small adjustment here in special assessments. And that's because we received our actual PBTA assessment bill. And so we updated this number with actuals. And then, and this side here is this is the money we get back from. UMass and five colleges to offset our, our PBTA assessment. And then we also received a $300,000 increase from the prior year. A small increase in chapter 70. There was a big increase as well in charter. Assessment charter tuition assessment reimbursement, but that usually, and you'll see in the slide. And then we also received a $300,000 increase from the prior year. So we were level funding back during the indicators report. Since then we have received the governor's budget, which called for a three and a half percent increase in unrestricted general government aid, which is this number here. And then we also received a $300,000 increase from the prior year. And then we also received a $300,000 increase from the prior year. And then we also received a new reimbursement, but that usually, and you'll see in a second that usually goes hand in hand with. Charter tuition going up because it's a sort of a one for one reimbursement for new costs. So it's not necessarily a good thing. And so that went up, you know, about. Two and a half, 200,000, 250,000. From where we were for the indicators report. And then we also received a $300,000 increase from the prior year. And then we also received a $300,000 increase from the prior year. But we feel it puts us in a safer position for next year's budget. Is this enterprise fund reimbursement section. So we originally budgeted 920,000, which assumed a full indirect cost payment from the transportation fund. And after we saw the second quarter report. And how poorly sort of transportation revenues have been going up. So that's where we'll be next year. We may want a year where we don't. Get that indirect cost of the transportation fund can rebuild its fund balance because it's fun balance. Might get depleted this year. Because of the pandemic. So we actually pulled out, we lowered this revenue assumption. To assume that we're not going to get the indirect from transportation next year. Just again, to be safe, given everything going on with transportation, that's really our biggest struggle right now. I'm just going to pause for a second. Just ask one question of my fellow council members. Does everybody feel comfortable that they understand the enterprise fund reimbursements? How that's what that's about. How it's calculated. If I don't see any hands raised. I'm going to assume we can just go on. Okay, go ahead. Thank you. And I also didn't know, did you want to stop? I don't know. I don't know. I don't know. I don't know. I don't understand. I want to explain it more. I'd appreciate it. So we, um, We calculate indirect costs for all the enterprise funds. We basically how much, um, the services that. We don't charge directly to the enterprise fund, like accountings time and human resources time and town managers time and a variety of other things. Um, But in the enterprise fund and the enterprise fund, then pays it to the general fund is a sort of compensation for that indirect cost. Um, and in most years, that's not a problem. But if the enterprise fund is struggling. And struggling with its revenues and expenses, that's one area where we look to adjust. Um, if, if we need to reduce the expenses in the enterprise fund. The enterprise fund had not been paying. Any overhead cost because that was, uh, A problematic enterprise fund as far as, uh, Whether it was struggling to break even. Um, so that essentially the town was picking up those administrative expenses and, uh, I assume that that's still true for the, uh, The next year for, for, for, but the. We're at for the current year. So we're adding in just one additional enterprise funds into that category. Yeah. And, um, and one thing Sony and I have talked about, and we haven't sort of settled on whether we want to go forward with it is, um, you know, we're going to keep track of these years where the enterprise funds weren't able to maybe make the full indirect cost payment. And if things rebound in a very positive fashion, then we may try to recoup that in future years. Um, because the enterprise funds should be paying all of their costs, um, when they can. So we're going to keep track of these years where we lowered it. Um, and then if things turn around, we can try to recoup it. Sean, this is Bob. We're still tracking those costs. Aren't we those indirect costs? Yeah. We're still tracking those costs and, you know, actually for, for budgeting in the enterprise fund, we're still going to try to budget that the enterprise fund. We're still going to try to make that payment. We're still going to try to make that payment in the enterprise funds. Assuming revenues turn around and are doing better. Um, you know, we'll see what we can do, but we just didn't want to assume it here, not knowing what, what that transportation funds going to look like. Sure. Understood. Well, yeah, we are tracking it still. Yeah. Okay. Great. Any other revenue questions before I move on to expenses. Again, state aid was a, was a. A nice development. Um, sort of surprising to some extent, um, that state aid came in and where it did, but we're happy to have it. All right. I will keep going. So on the expense side, um, one thing that will help next year is, is being able to increase operating budgets a little bit. So the indicators are poor. We had level funded the operating budget. And now we feel comfortable or at least at this time, uh, we're projecting a 1.5% increased operating budgets. It's still sort of lower than the traditional where we try to get to, which is 2.5%, um, but it'll be better than flat, um, especially for some departments that are struggling a little more with costs going up. Then the next section is capital. So capital, um, we've gotten to 8.5% of the levy. It's actually a little higher than we had projected for during the indicators report. It doesn't look that way. You know, if you look at what was in the indicators report, it was 4.8, but we were only actually assuming 8% of the levy back then we had a placeholder in there for some of the costs that were, um, rolling over from FY 21. When I pulled that out, we, and without these other good positive developments, we were able to get the, it up to 8.5% of the levy. Um, so we're, you know, our ultimate goal is to get to 10% or higher. Um, and so this is good to try to get this back up to where it was. Um, a couple of things that this is a sort of a moving target area because there's still a couple of pieces that we're working on. Um, one thing we're waiting for is the region debt assessment. That changes year to year. And so tomorrow at the four town meeting, we had an initial presentation on what they thought the debt assessment would look like next year. Um, and then tomorrow we'll probably get. A more specific, um, projection of what they think the debt assessment will be and we'll update this number. So this could, I don't think it'll go any higher than this. I think it'll come down a little bit and that'll help out, um, other capital needs. And then also, um, projecting out our temporary borrowings is something that changes a little bit throughout the process. In miscellaneous. So we, we were able to update the expenses with the actual debt assessment. Um, which came, came in really close to what we were projecting. You can see it was, you know, almost right on for a $6.6 million number. So that was, that was nice. Um, we did increase OPEB a little bit from the 250. We, we were at 500 and we cut that down to 2.2, 150,000 for FY 21. Um, with the increases in revenues, we thought it would be a good idea not to lose sight of trying to return to where we were. Um, especially as you heard from our auditor, you know, the, the importance of funding OPEB and, and our percentage that we've done a good job on. So we did bring that back up to 300,000 was still more room to go to get back to where we were. And then the, um, Last piece is this unappropriated uses. So we haven't heard the big change here was the state assessments. Um, so that came down a little bit too. And actually it was the charter tuition. Um, the original. So what we budgeted for FY 21. Dropped a lot to what we actually received for FY 21. And then it did come up a little bit for, we are projecting a little bit of an increase for FY 22, but it's still well below what we had budgeted for FY 21. And charters again, not one of those numbers that's a moving target. You know, we won't know exactly what next year's tuition costs are until next December. Um, but the revenues and the expenses track in parallel. So, um, they usually can cover each other. And so we had back when we did the indicates report, we had about a $200,000 positive. Value of budget. And our budget. So, you know, I think we're going to have a really good, variable at that point. And right now we're about even. And we'll keep updating this. This is, you know, we're still relatively early in the budget process. So we keep updating these with our, you know, what we're seeing for actuals. And if we hear things, anything that might affect one of our state revenue numbers or anything like that. So this, this will keep being updated throughout the process. Any questions on the expense side? And can you go to the last line of revenues compared to a piece. And so when I wrote down, compared to what we had before, we're now saying we have roughly, I'm just really rounding not quite right $300,000 more than we thought we had. So I'm just 83953 compared to 84299. And then in expenses, we've got 760,000 more in expenses than we had before. Again, I'm comparing when I get down to expenses. So I'm just, and part of that I think is you had budgeted 200,000 surplus. So if you put that back in, we're not that much higher. So if I put 200 back in, I get to 500,000. So it's just, you know, because it's, we don't have that much more revenue, but we're now saying we can do one and a half percent increases. So I'm just trying to reconcile those two numbers. And it's, I think the explanation is some of the other expenses went down just enough to shift things into operating budgets. And go through compared to again, compared to that extra column Andy had you add in, because I couldn't do it from what you'd sent it. Is in my right that enough things went down in expenses from what we were projecting that we got more money, even though we only got, you're only projecting about a net of $300,000 more in revenue so it's not a lot more money it's just a little bit more money. Yeah, I mean the number that the big one that I'm looking at right now is the state assessment number came down. Right. You are, you are calculating in a shortfall of 200,000 for 66 that for 65 and you had zero it was balanced last time. They had a surplus, they had a surplus handy of 200 is the way. Yeah, so that's what I'm doing is I said if there were no surplus our expenses would have been 83, 83. It wasn't enough, the 200,000 wasn't you know we're still early on so we didn't want to go we were trying to be conservative and we didn't want to sort of tell departments they had an increase before we saw what the state was doing and and we time we still thought we might have to use reserves for state aid. So, but now that we've heard more about that that's why we feel comfortable going this direction. And that was questionable one just to make sure I'm reading it right and then when I go back up to where you're suggesting the newfound money can go. You have everyone getting one and a half percent elementary schools why you know we just don't like the elementary schools as much. If you remember the long time ago when I first started at the school's charter and choice tuition used to be in the school's budget. And the decision was made after I think it was actually after an audit opinion was that the school, the school shouldn't have the charter and choice tuition in their schools budget because the town actually is the one that has to pay that and so we ended up pulling the choice and charter tuition out of the school budget, but the agreement at the time was that we would still adjust the allocation to the schools on a year to year basis for the net change and charter and choice tuition. So if the net cost of charter and choice tuition went up, then the allocation that was given to the schools that year would be adjusted by however much it went up. So if there's a little note here that you might not be able to see, but the net charter tuition had gone up by about $80,000 and that's again when we look at charter and choice tuition, it had gone up so that gets adjusted out of the increase to the schools. And we do it looking back at actual so it's not like the year like the exact, it's not this current year because we don't have the actuals for this year so we do a look back at actuals to make that adjustment. Yeah. And can I add to that. That was an attempt a long time ago to show true education costs. So, one of the finance directors and very long time ago decided to put those costs into the school operating budget. So the COR that finally put the foot down and said we can't adjust it like we've been doing it so we had to go back and book the full chair sheet, the way it comes in on the recap instead of adjusting it like we were doing it. So then we had to figure out another way to show the true education costs so we didn't, we did a net of what gets budgeted for them. It always causes a complicated explanation. So, it always this this adjustment always causes a question and a complicated explanation so you know it's something we can talk about if there's a more clear way to do it in the future. Yeah, but it came down from the door just everyone knows. Yeah, it just, you know, it visually you see it right away and you're you're cute. It, you know, we certainly don't want to say we're hurrying them and the other confusing thing is why I've focused on the, I only see 300,000 more in revenues but suddenly for operating budgets we've got 900,000 more to spend, you know, just trying to, when we explain this explain it in ways that people can understand without going through all these lines. Yeah. And then and then one thing I'll point out on the elementary schools is I believe last year they were on the positive side of this where their increase actually came in higher. And there were questions about why their increase was coming in higher than everybody else's. And it was for the same reason that their net charter and choice tuition costs actually went down so they got a bigger increase than others so it has worked both ways over the years. Yep. Thank you. No questions. So, seeing none, I could suggest though this is obviously open for discussion that we just forward this under the council with an explanation is Kathy's actually suggested the key points to include an explanation. And leave it at that I don't think that other action is required. It's not a large enough change. To really affect most of what prior work has been done and I don't think it's worth revisiting the guidelines either in the committee level of the council level. And we just reported along and you know the guidelines are sort of with. This is a conservative approach, but we're still at a conservative approaches with better numbers. Kathy has her hand up. So, um, am I unmuted yet so tomorrow, the regional school meeting, or are we going to be saying that Amherst now has this one and a half percent, as opposed to a complete flat is that going to be fed into that discussion or are we going to hold that news. We've already communicated to the library into the regional schools, the one and a half percent. Mainly because we wanted them to have it before their region actually presented on Tuesday. And so we wanted them to have that information before they presented the budget. So they didn't present the budget and then change it two days later. So the read the region Jones library are aware. They didn't have it when on my was talking about cutting 14 positions so that they didn't have this information then. I think they they had it for the presentation Tuesday night so I think I'm not sure the exact number of position reductions but okay so that was already he already had that information from this past Tuesday night then you're saying. Again, we wanted to give we wanted to get this information to them as soon as possible so they develop their initial budget with it, as opposed to that was just changing it. Yeah. Okay, thank you. So, I want to just make sure that we've communicated this spreadsheet to the full council, so that they understand that tomorrow at the four towns meeting that this is common knowledge. I believe, Paul, you've already sent an email like that. Yes, so that's what I think the last earlier this week we sent out and I sent out an email to alert the council. Prior to the school committee's budget being presented. And I just want to point out that this is a working document. You know, Sonia and Sean changed this daily weekly I mean it's always been adjusted based on new information and if they're and we bring it to you when there's significant enough development of it that it makes sense to keep sharing it with you. So but it's something that we will continue to refine over the next two months, as we as we build our budget. Okay. Kathy you still have your hand up. No I meant to take it down sorry. So. Okay, anyone else. I don't see anything else. I think that we know we're right. I just want to remind everybody since it's already come up as a topic that tomorrow is a four towns meeting resident members of this committee or course. Welcome to participate in the four towns meeting. I think it really is two separate meetings as a technological basis because the schools have arranged a four town meeting and if I had sent out notice that if you wanted to link to it, so that you could actually have the have a direct link to staff knows that they could make that arrangement. The other meeting is that traditionally what had happened when we met physically at the middle school or high school is that there was a presentation and there was a time for each time to have a breakout session and then we get back together now you have to do that technologically so there's a separate meeting. And that's to be arranged to with so that each town can recess their participation as appropriate in the fort. All four towns being together to if there's a desire to have a breakout session for each town specifically and so that's why there's two meetings posted. And we will continue to be there as they always are of budget and the assessment method being two sheets that are out there for consideration. Which is that this has already been factored in and the tensions will continue to be there as they always are of budget and the assessment method being two sheets that are out there for consideration. Anything else that anyone wants to add. I do have one audience member that might just. Yeah, so I was going to do that next. We always at some point during the meeting. I'm going to allow for public comment public comment is posted as a item on the agenda so I will be looking for raised hands from the on the attendee side to see if there's any request for opportunity to make public comment and pause to give you a chance to do that seeing none. It does not appear that there's request for public comment at today's meeting and will let the minutes reflect that there was no request for public comment. As far as the issues that were not anticipated or other items I mean I think that the major thing that we are at now is that I don't have a specific schedule of meetings I've had some discussions with Sean about what's anticipated for coming meetings. That are next meeting. And we're now, I think by plan is to go into the first and third Tuesdays and this anomaly of having this one meeting late in the week is really done and we're getting we're getting back to Tuesdays after this meeting and next meeting then is on February 16 and I think that we have an agenda that is filling up pretty well for that particular meeting. Sean can help me with it. Dorothy you actually your hand was briefly there and disappeared. Little confused. On February the 16th. I. Okay, so we're okay. We've all we've got that set so it's not going to conflict with CRC CRC is going to be the next week. Right. Okay, that's great. I just had to I'm so used to getting confused on the two meetings. Yeah, this was all in an effort to try and make sure that we were not conflicting with CRC any further. Okay, thank you so much. So, so the Andy the thing, the big thing we talked about presenting on the 16th was sort of the initial presentation of the four building projects plan. And then I don't know if we had anything else scheduled after that. Yes, at the council meeting on Monday CPA will be making a presentation of their recommendations and that's an automatic referral to the finance committee. And so the other agenda item on the 16th will be surfacing our questions about those recommendations. For those of you that are on the finance committee as but not on the council. So voting members, you can either attend the council meeting on Monday night. My guess is this will be some time around seven on the agenda. That's praying a lot. And then, but we will also make sure you have the video tape of the presentations. So we're not going to ask for another round of presentations at the finance committee meeting but there will be staff and possibly the chair of the CPA who is in the audience right now. She may be there as well as staff to answer questions on the 16. So I think those are the two major items that will be on that next agenda and Sean is preparing with Paul a presentation that of his latest analysis on the four building projects. And how they, you know, the financing option. The staff is going to suggest. So if there's nothing else to look to the committee to see if you have anything else please. I look forward to seeing anybody who's able to attend tomorrow for the four towns meeting. And that's our next step in the budget process. And it is going to be an important one because how that comes out is going to affect our budget down the line. So if there's nothing else, then I think that you can treat ourselves as adjourned. I would love to think that we did well today and adjourned at 3.30.