BC20120126

APPROVED

TOWN OF PELHAM

BUDGET COMM= ITTEE - MEETING MINUTES

Thursday January 26, 2012

APPROVED &#= 8211; September 10, 2012

CALL TO ORDER – approximately 7:10pm

PRESENT:

Also Present:

Mr. Larry Hall, Mr. Gre= gory Farris, Mr. Robert Sherman, Mr. Joe Puddister, Mr. David Cate, Mr. Ken Du= nne, Selectmen Representative Edmund Gleason, School Board Representative Megan Larson

Town Administrator Tom = Gaydos, School Business Administrator Adam Steel, School Board members Deb Ryan and Brian Carton.

ABSENT:

Mr. Daniel Guimond, Mr.= John Lavallee, Mr. Dennis Viger

PLEDGE OF ALLEGIANCE

MINUTES REVIEW

January 12= , 2012

MOTION:

(Farris/Gleaso= n)To approve the Ja= nuary 12, 2012 meeting minutes as written.

VOTE:

The motion carried.

Discussion of the 2012 Petition Warrant Articles regarding the Budget Committee (for discussion and informational purposes only)

There was one Petition Wa= rrant Article submitted. That artic= le reads:

“Shall we adopt the provisions of RSA 40:14-b to delegate the determination of the town default budget to the municipal budget committee which has been adopted under RSA 32:14?”

Mr. Gaydos prepared a pac= kage for the Board; document summarizing two conversations he had with two attorneys, and a document containing the statute explaining the process. He reviewed these documents.

Mr. Hall asked Mr. Gaydos= if he was aware of any other communities putting a similar article on the ballot. Mr. Gaydos was not aw= are of any. Mr. Puddister stated tha= t the law was changed in 2004; he was also not sure if there were any other communities that had a similar article.&nb= sp; Mr. Hall understood that the Town would provide the Budget Committee= the same information they had been providing, which was to include the default budget with the proposed operating budget.= Mr. Gaydos felt it would be easy for the Budget Committee to handle = the default at the same time they were reviewing the operating budget.

Mr. Gleason perceived tha= t there would be no change from what the Town was currently doing because the back = up information listed the previous year’s budget, the default budget and= a proposed budget. He stated he= was opposed to the proposed warrant article because he felt it eliminated a lit= tle discretion. He said the Selec= tmen had to make their decisions based on the input from the department head and their own best experiences. He assured the Board that under the default budget it had always been the Selectmen’s procedure to eliminate major items that were ‘one time’ items. He said it wouldn’t be a problem for the Selectmen until getting down to some of= the lower value items.

Mr. Puddister said Mr. Gl= eason was correct in that the Selectmen provided the default budget, line item by line item. The benefit he saw= in passing the warrant article was open transparent budgeting and it would also eliminate the fear that ‘on-time’ items would remain in the bud= get because it would be known upfront which items would be included in the defa= ult.

Mr. Sherman questioned if= the Board would need to vote on the default budget line-by-line as they did with the operational budgets. Mr. = Gaydos said the procedure adopted by the Board would be whatever they decided; eit= her by reviewing once, or they could ask questions as they were conducting review. He believed the major= topic of discussion would be regarding the operating budget, but the Board would = need to finalize and vote regarding the default budget. Mr. Gleason believed the default w= ould have to be voted on separately (two independent votes). He suggested following the same re= view procedure for the default budget as was conducted for the operational budge= ts. Mr. Puddister envisioned the Board conducting the same review process (department by department) for the opera= ting budget and for the default budget. He said it would be a new experience to = see how the process worked on the School side, since the Board didn’t rec= eive the default budget. Ms. Larson commented that from the School the Board didn’t receive the default budget line-by-line, but they had received what was required by law.

Mr. Farris stated that th= e Board didn’t receive the school’s default budget until after the Board had voted. He said it would b= e nice procedurally (whether or not the article passed) if the school presented th= eir default lines similar to how the Town did so the Board could see it items remained. He didn’t fee= l that the petition warrant proposal was meant to be adversarial towards either the group (Town or School). It wa= s more like having checks and balances.

Mr. Steel said there was a misunderstanding on his part; when the Board asked for the default budget, = he provided the form that was sent to the state not the detail because that’s what he thought was being requested. He discussed the process used to determine the default; they took every account number and put last yearR= 17;s budget number next to it and then any account that needs to be altered (eit= her up or down) a notation is made as to why.&= nbsp; He stated that the School Board receives the form that was provided = to the Budget Committee, they didn’t review the detail. Moving forward, he indicated he wo= uld have no issue providing detail and wanted to achieve full transparency.

Ms. Larson said the Schoo= l Board would have a discussion regarding the article. She didn’t see why the Board couldn’t have the item-by-item detail going forward. She believed there was miscommunic= ation.

Mr. Hall said it seemed h= ighly unlikely if someone looked at the summary of the default that they would tr= y to take the School Board to court, however if the petition article passed, the Budget Committee would look for a legal budget to defend possible instances= . It was noted that in the past the = Budget Committee had received a detailed (line-by-line) default budget; when Mr. S= teel took over his position the Board stopped receiving that type of detail. Mr. Gaydos said as a practical mat= ter someone couldn’t just walk into court without some kind of evidence w= hich meant they would have to meet with either Mr. Steel or him. He asked Mr. Steel when in the bud= get process the spreadsheet was put together.&= nbsp; Mr. Steel said the spread sheet was put together in late November. Mr. Gaydos questioned if it could = be put together earlier. Mr. Steel answered yes.

Mr. Puddister discussed t= he comments that had been offered. He said currently when the Board was provided with the Selectmen’s defau= lt budget mistakes were found and corrected quickly. Mr. Gleason discussed the process = used to develop the default budget; first they establish the current budget base= d on the approved operating budget (including warrant articles), second the defa= ult is created and third the following year’s budget is created. Mr. Puddister noted that the Town = had the Finance Director and the Selectmen reviewing the default; on the School side, the only one reviewing the default line-by-line is the Business Administrator. He said the ar= ticle would provide the opportunity on the School side to have a lot more people conducting review. He said if people’s recourse was to go to court, the Town/School would be better= off having more people reviewing the default.&= nbsp;

Mr. Dunne commented that = some people felt the article was more of a power struggle; in that power was bei= ng taken from the Town and School Board. He wanted to know if the default budget would now be reviewed line-by-line such as was done with the operating budget. Mr. Gaydos was suggesting the meth= od of using a spread sheet to show what adjustments were being made. Mr. Puddister commented that he wa= s the only Budget Committee member that signed the petition, or knew it was coming forward, so he couldn’t answer to the question about it being a power struggle. He commented furthe= r that he wasn’t seeking re-election so he wouldn’t be on the Board if= the article passed.

Mr. Sherman said bottom l= ine if the article passed, the Budget Committee would have to vote on a default nu= mber for both the School and the Town. He felt that process should occur when the Board considered the warrant articles. He asked for clarification of who the Board would depend on for legal counsel if a suit = came up on the School side. There = was no answer provided.

Mr. Farris didn’t f= eel there would be law suits. He = said if the article passed and spread sheets lining out the new default budget (= with footnote comments) were provided, the Board could vote on the default at the same time the current budget was being voted on. He said drastic cuts/additions couldn’t be made; the Board could ask questions regarding why an item became part of the default.

Mr. Sherman asked if the = School would be able to provide default budget information by October. Mr. Steel said the only reason he prepared the information in November (this year) was because the review pro= cess for default was shorter than the rest of the budget. He said it wasn’t a problem = to do the process earlier.

Mr. Cate questioned how l= ines, such as Special Education, would be affected in the event someone came into= the district. Mr. Steel replied t= hat the default budget could be amended up to the time that the warrant was posted. He said it could not = be amended at Deliberative Session. The default number could be amended during reconsideration.

Mr. Carton came forward a= nd commented that the present conversation would have been useful back in June/July. He said it seemed that expectations weren’t set or met and if expectations were set, he believed they cou= ld meet them. He noted that Mr. = Steel had provided the Board with over 700 pages of detail to address the budget. He felt the process w= as a matter of setting expectations and communicating in a timely manner. He was in favor of transparency and ensuring everyone was in agreement that the right thing was being done. Mr. Carton stated he didn’t = plan to support the petition warrant article.&n= bsp; He felt the School Board was the governing body and they had all of = the responsibility; along with that he planned to keep as much authority as possible. He believed it was = in their best interest to keep the default budget. He fully trusted that Mr. Steel was doing exactly what he stated in putting together a default budget that met = the letter of the law and could justify such to anybody including the Budget Committee. He felt this proce= ss would have occurred in real time if the expectations would have been clear before starting the process. =

Mr. Puddister noted that currently one time expenditures are supposed to be defined by the Governing Body, and pointed out if Mr. Steel is the one setting the default budget line-by-line, then he is the one currently determining what one time expenditures are. He hoped, w= hether the article passed or not, that the School Board would begin themselves reviewing the default budget line by line.= He was concerned that this process wasn’t currently occurring.

Mr. Dunne wanted to know = what the negative points were to the proposed article. Mr. Carton said the School Board h= ad all the responsibility to run the schools and the bottom line was that the defa= ult budget was a ‘fire wall’ to make sure they could do so. He noted that the RSA states that = the default budget can change up to the point of the ballots being printed.

Mr. Sherman questioned if= the Board would need to meet in the event that there was a last minute change.<= span style=3D'mso-spacerun:yes'> Mr. Puddister said a meeting could= be planned ahead of time in anticipation of needing to meet.

Mr. Farris said the defau= lt could be changed only if an expenditure was missed that belonged in the default number. It could not be chang= ed because a department thought a line item would cost more than what was budg= eted for. Mr. Gaydos said a public meeting would also need to be held.

Mr. Gleason discussed the= type of discretion the Selectmen currently had; he didn’t want to lose the authority they currently had. Mr. Puddister used the example of a vehicle lease scenario; a proposal may come forward for a 3 year lease (which would have the expense showing up in the default budget the following year) and the committee may make the decision = to put the vehicle in the budget as a one-year expense so it wouldn’t sh= ow up in the default budget the following year. Mr. Hall said there were things th= at the Board modified how they were purchased to fit into the budget program. Mr. Farris said it wasn’t so= much the large expenditures that had caused the discussion, it was the smaller items. He said in the case of vehicle leases, the question was at the end of the lease period if the amou= nt would then come out of the default. He said there were similar instances on the school side as well.

Mr. Gaydos said the board= s should know the expectations so a determination could be made regarding items so t= hey wouldn’t be in the default budget.&n= bsp; Mr. Gleason pointed out that the RSA defined very well what went int= o a default budget; it was simply a matter of applying the RSA provisions.

ADJOURNMENT

MOTION:

(Gleason/Sherm= an)To adjourn the meeting.

VOTE:

( ) The motion carried.

The meeting was adjourned at approximately 8:02pm.

= &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