BC20110728

APPROVED

TOWN OF PELHAM

BUDGET COMM= ITTEE /= MEETING MINUTES

Thursday - = July 28, 2011

APPROVED &#= 8211; October 3, 2011

CALL TO ORDER – 7:30pm

PRESENT:

Also Present:

Mr. Larry Hall, Mr. Dan= iel Guimond, Mr. Gregory Farris, Mr. Robert Sherman, Mr. David Cate, Selectmen Representative Edmund Gleason, School Board Representative Meghan Larson<= /p>

Town Administrator Tom = Gaydos, SAU 28 Business Administrator Adam Steel, SAU 28 Assistant Business Administrator Sarah Jardim-Lee

ABSENT:

Mr. John Lavallee, Mr. = Dennis Viger, Mr. Joe Puddister, Mr. Ken Dunne

PLEDGE OF ALLEGIANCE

DISCUSSION

Discussion with Town Administrator Tom Gaydos

Mr. Gaydos provided the Board with a document that he received from the New Hampshire Municipal Association. He said the Legislature was to address the Retirement Program and fix it. In doing so they decided not to fu= nd their portion and would instead use a series of components to make up that difference, which would be an increase in the contribution from Support, Police/Fire and Teachers. Additionally, if someone wasn’t grandfathered (10 years in the union) their benefits would be changed.&nb= sp; Between those two components, the Legislature felt it would be sufficient to make up difference. Mr. Gaydos said they also indicated they wanted to change the board = of directors that was comprised of mostly employees. They attributed a lot of the escal= ation in benefits to that fact. The composition of the board was to be changed effective, January 1, 2012. The board of directors indicated t= hey set the rates per law, and put a law suit forth. The Legislature responded by sayin= g the board wouldn’t be replaced January 1, 2012, but would instead be replaced July 1, 2011. Mr. Gaydos said currently there wa= s no quorum of that board, so they would have to meet and appoint people. He didn’t feel that would ha= ppen until (the earliest) September. Prior to the board leaving, they indicated they would change from 9%= to something less the rate of return predicted, possibly as low as 7.5%. He noted if the rate of investments decreased the rate of contribution would increase and be passed on to employers. The Town wouldn= 217;t know the percentage until October, at the earliest. Mr. Gaydos stated it was possible = the Town would see an additional rate increase this year, but it had been indic= ated that the increase would not be retroactive. He believed the Town had adequate funding to make it through the end of the year, even if there was an increa= se in the contribution rate because it would only need to be for a couple of months.

Mr. Sherman commented that the budget being brought forward by the Town would n= eed to have a significant amount that would have to be added for retirement. Mr. Gaydos replied the amount was unknown. He said they had bud= geted conservatively in their estimate for the six months because of the unsurety= of the rates that were given.

Mr. Gleason asked if it was safe to say that by Reconsideration the Town would = have an update. Mr. Gaydos hoped t= hat to be true. Mr. Cate confirmed t= hat the Town wouldn’t have an answer until there was a quorum (new people= are appointed), which may not be until October. Mr. Gaydos felt October would be t= he earliest. He said the Legisla= ture estimated that the changes made in the Retirement System would be enough to cover their share; they could be wrong.&nb= sp; Mr. Cate asked where the (new) people would come from and what their experience was. Mr. Gaydos be= lieved two would be appointed by the Legislature, one was Governor’s Council, possibly Municipal and School Management; in general, the board would be comprised of mostly management.

Mr. Farris asked if the contribution numbers were set by the counsel and the state. Mr. Gaydos said that w= as correct. Mr. Farris questione= d if any future contract negotiations could make a change. Mr. Gaydos stated it was outside a= ny individual contract negotiations. The Town had no choice regarding the numbers.

Mr. Gaydos stated there had been some questions regarding the round-about project. He said the state wa= s preparing for the project and would be holding another meeting in August with the Town.

Mr. Farris questioned the purpose for the smaller/secondary round-about. Mr. Gaydos replied during the hear= ing process the engineers didn’t want to have a block at the round-about = near the Municipal Center. The design was based on traffic st= udies that were conducted.

Mr. Gleason said there had been a question of what would happen to the historic site (old foundation). He sai= d it would be retained.

Mr. Sherman wanted to know which round-about would be constructed first. It was Mr. Gaydos’ understan= ding that the southern round-about would begin first. Mr. Sherman questioned if there wa= s a possibility, prior to construction beginning, to have something on the ball= ot to address the fire station situation.&nbs= p; Mr. Gaydos stated there was a good opportunity for the entire proces= s to be avoided.

Mr. Gaydos briefly discussed changes that had occurred at the Senior Center regarding the food program and the purpose for such changes.

Mr. Farris asked if the Senio= r Center had a full kitchen. Mr. Gaydos answered yes. Mr. Farris questioned if= it would still be maintained. Mr. Gaydos believed the center would be providing breakfast. He believed the new director would= like to expand the services by offering things such as a breakfast twice a month. This would provide the opportunity to have a broader variety of people coming into the facility.

Mr. Hall questioned if there were contracts being reviewed. Mr. Gaydos answered yes. He said they were reviewing the Po= lice and Support contracts. Mr. Ca= te asked if retirement percentages would be discussed during contract negotiations. Mr. Gaydos said= it would go into part of it because it would be within the Town’s cost.<= span style=3D'mso-spacerun:yes'> It would be recognized in the compensation package. Mr. She= rman noted that the employees cost had increased by 2%. Mr. Gaydos noted that Group 1 empl= oyees and teachers had always been self-sustaining. When they got into Group 2 the composition of the board was very liberal with subsidies etc.

Mr. Hall thanked Mr. Gaydos for meeting with the Board.

Discussion with SAU28 Business Administrator Adam Steel

Mr. Steel came forward to address the Board.&n= bsp; He began by introducing SAU28 Assistant Business Administrator Sarah Jardim-Lee. He then told the = Board with regard to the retirement issue, the school side was complicated only by the fact that in the past in addition to employers providing a subsidy for retirement, the state also had. The biggest change for the school was that the state was no longer subsidizing teacher retirement and that local communities would be responsible for the entire obligation. The additi= onal liability for Pelham (this year) was at no less than $474,000. Mr. Steel said the timing of the announcement came right after the Town Deliberative session leaving no time= for the school to remedy the situation. The District has two choices, to either request a special meeting to raise money from the taxpayers, or to make reductions in the current budget. It was not anticipate= d to have a special meeting. The s= chool had prepared cuts they had to make that would make up the difference. The Board was provided with a list= of items that had been cut or were committed to be reduced from the current budget; the second list contained items they planned to cut, but had gone b= ack and been able to restore them. Mr. Steel reviewed the list of items cut and identified for the coming year. He discussed text books, which wou= ld not be purchased because of possible curriculum changes. The Board didn’t understand = why text books had been requested if they were not going to be needed. Mr. Steel said the situation was realized and would like to think the Board wouldn’t be presented with= a similar situation moving forward. He then discussed instructional assistants and the fact that there h= ad been a review of what instructional assistants were needed and vital. There were a number of positions t= hat were identified as being not needed, and were not filled this school year.<= span style=3D'mso-spacerun:yes'> It was noted that three positions = were left in place in the budget in the event they were needed during the year.<= span style=3D'mso-spacerun:yes'> Mr. Steel stated moving forward th= ey would have a much tighter control over instructional assistants and how they were assigned and how their job slot was needed with IEP’s. He believed they had taken a posit= ive step to identify what positions were required and would continue to do so e= ach year.

Mr. Cate questioned how the determination was made for which instructional assi= stants would not be hired. Mr. Steel replied there were no instructional assistants that lost their job. It was his understanding the proce= ss was done through attrition and turn over.

Mr. Sherman asked what the average cost was for an instructional assistant. Mr. Steel said the reduction figur= es showed actual costs of employees who left, resigned or were terminated.

Mr. Cate questioned if the instructional assistants moved with students when th= ey moved from one school to another. Mr. Steel said typically it was a flexible process; some instructional assistan= ts were tied to particular buildings. <= /span>

Mr. Steel told the Board that mentor money was cut because there weren’t a large number of new teachers.

He then reviewed the restoration list and explained that the items on this list were prioritized in the manner in which the school would bring them back should = they find other money in their budget.

Mr. Farris said there had been much discussion regarding moving a position into= the budget that had been Federally funded because of the fear that Federal money would go away. He asked if th= at Federal money had gone away. = Ms. Jardim-Lee stated that applications for Federal allocations had been submit= ted, but not yet received for the current school year. Mr. Steel was unsure what position= was being questioned. Mr. Farris = said there had been a position that was moved into the budget because the school didn’t know if they would receive Federal money for it. He wanted to know in the event the= school received Federal money, if that position would be funded by that money to create a bigger offset. Mr. S= teel answered yes, if the School Board elected to do so. Mr. Hall believed the position was= the Title 1 teacher. Mr. Farris s= aid if the grant money was received, there was no reason why the Federal money couldn’t continue to fund salaries; the offset could be used to repla= ce items taken out of the budget.

Mr. Guimond asked for the year-end surplus amount. Mr. Steel stated they were current= ly projecting it at approximately $157,000; the final number will be known aft= er their audit (3^rd week in September).

Mr. Gleason wanted to know the magnitude of the problem (for FY2011/2012) and h= ow it was effected after the proposed remedies. Mr. Steel said the amount was $474= ,000. He said they had identified the cu= ts they needed to make in order to not have a deficit during the coming school year.

Mr. Steel said questions had been raised regarding the driver’s education program at the high school, namely that the District was providing a vehicl= e, insurance and gas while out-sourcing the instruction to a third party. The District has since put out an = RFP for driver education services and received a number of responses and select= ed a vendor. It is now a fully out-sourced solution with zero cost to the District. There is no longer a need to have a vehicle; the School Board has voted to allow Mr. Steel to sell the vehicle = with the revenue going to offset taxes in the fall. Students will now have a lower cos= t for driver education. The savings= to the school is approximately $15,000 each year.

Mr. Steel told the Board that the State reduced their commitment to kindergarten funding by saying that the statute that supports the kindergarten building = aid will sunset June= 30, 2013. This means any town that does not = have permanent kindergarten facilities will have two more chances to pass an initiative. If a town doesn&#= 8217;t pass an initiative by June 30, 2013, they will not be eligible for aid any longer. It was noted that the aid amount w= as capped at one million dollars.

Mr. Steel stated that the sprinkler system that was budgeted and passed last ye= ar was well under way at Mem= orial School. The installers were moving through= the building at a fast pace. The = Board was invited to see the work. =

Mr. Steel said the voters at Deliberative Session added money to the budget for= a library at Memorial School; the School = Board moved forward with that and put in a library with two classrooms that was anticipated to be ready after the school year begins.

Mr. Hall asked for the status of the funding for the modular classrooms. Mr. Steel replied the funding for = the kindergarten modular was in its final year. The state will reimburse the schoo= l to remove them at the end of the present fiscal year. If the District chooses to keep the modulars they will be responsible for paying the balance ($562,000). The School Board will have to dete= rmine in their upcoming budget whether or not to keep the modulars as part of the= FY13 budget.

Mr. Sherman asked how many students were expected to be enrolled in kindergarte= n in the fall. Mr. Steel believed = it was approximately 84 students.

Mr. Cate questioned if a study had been done to determine the cost effectivenes= s of leasing the modulars versus building a structure. Mr. Steel was unsure if a permanent facility could be constructed for $562,000. Mr. Cate asked if that amount was = for an outright purchase, or if it was part of the lease. Mr. Steel explained that the modul= ars were leased for three years and at the end of the lease (August, 2012) the balan= ce owed is $562,000. Mr. Cate as= ked if there was a lease option to buy. Mr. Steel answered yes.

Mr. Farris wanted to know if there had been any discussion by the School Board = on a restructured, or different kindergarten plan from what was presented. Mr. Steel said there hadn’t = been a discussion. Ms. Larson said d= uring the next two months that topic would be at the forefront of the School̵= 7;s agenda. At this point there w= as no plan for any big budget items. Mr. Farris noted that the School basically had two more opportunities. He asked if there was any discussi= on about the high school. Ms. La= rson replied that the School Board would discuss ideas at their next workshop me= eting and understood that 2013 would be a crucial year.

Mr. Sherman questioned if there were any contracts that would need to be negoti= ated this year. Mr. Steel answered= yes; PESPA (Instructional Assistants, Title 1 Tutors) contract would be in negot= iations in the fall. Mr. Hall asked if there was any information regarding a bus contract. Mr. Steel said they had a bus cont= ract with the current provider through next June 30^th. He proposed to the SAU and School = Boards the hiring of a consultant to help review a 10-year plan for bussing. He provided an explanation of the history behind the bus contract and the Town and the purpose for working wi= th a consultant.

Additional Discussion

Mr. Gleason told the Board that the Selectmen had put pressure on the Planning Board to reinstitute the CIP because of the need to do an analysis of all infrastructure needs. He said someone from the Budget Committee would be asked to participate. He asked the Board for their consideration of when the Town was faced with replacing equipment (i.e. hig= hway trucks) that it be placed in the operating budget as opposed to having a warrant. The consensus of mos= t of the Select Board was they weren’t buying something new, but rather we= re replacing something that had started to deteriorate. Mr. Gleason understood the Budget Committee’s current policy, and asked for their consideration to place vehicles in the operating budget that were replacements.

Mr. Farris was concerned with putting large amounts of money into the operating budget, because once the funds were spent, that amount wouldn’t necessarily go away. Mr. Glea= son said the amount should go away as they set the default budgets up. Mr. Farris understood the needs, b= ut was concerned about “one-time” expenses not going away and budgets increasing. Mr. Gleason said = he was simply asking for the Board’s consideration.

Mr. Guimond asked if the Selectmen had decided what would happen with the poten= tial fire station. Mr. Gleason sai= d the Selectmen had authorized Trident to start putting together the costs. The problem they now faced was how funding would be approached (warrant article versus placing in the operating budget).

Mr. Sherman questioned the process of how ambulances were purchased in the past. Mr. Gleason said they h= ad the ambulance revolving fund (money from usage is placed into the fund), and th= ere was also a capital reserve fund. It was the Selectmen’s expectation that between those two funds that the ambulance could be paid for without tax impact. Mr. Sherman asked if a similar sce= nario could be set up for the Highway Department. Mr. Gleason was unsure if the RSA&= #8217;s would allow them to do so. Th= ere was a discussion regarding what was allowed by law for the replacement of vehicles. Mr. Hall felt it wo= uld be helpful for the Highway Department to create a schedule for replacing vehicles. Mr. Gleason replied= that the Highway Department had done just that, and presented such to the Select= men.

Mr. Farris asked if the Highway Department could provide a list of all the roads they had repaired in the past few years.&n= bsp; Mr. Gleason said the information was available and would submit a copy to the Board.

Mr. Sherman asked if the Main= Street Bridge would be redone during the round-about project. Mr. Gleason stated that the round-= about project didn’t affect the Main Street Bridge. He said the state had indicated the state would be replacing that bridge; it was on their list for 2012. He noted they had a brief meeting = with the state. He said there was = a lot of concern regarding flooding in Town, but there was no easy solution. It was Mr. Gleason’s underst= anding that the state would be replacing the bridge as-is and would not mitigate a= ny flooding. Mr. Sherman questio= ned if there would be any cost to the Town for the work on the bridge. Mr. Gleason answered no; it was a = state bridge.

ADJOURNMENT

MOTION:

(Farris/Guimon= d) To adjourn the meeting.

VOTE:

(7-0-0) The motion carried.

The meeting was adjourned at approximately 8:30 pm.

= &nb= sp; = &nb= sp; = &nb= sp; = Respectfully submitted,

= &nb= sp; = &nb= sp; = &nb= sp; = Charity A. Landry Willis

= &nb= sp; = &nb= sp; = &nb= sp; = Recording Secretary

ACTION ITEMS

Highway Department to submit a vehicle replacement schedule;
Highway Department to submit a listing of= all roads repaired in the past two years;