2019-03-11 TOWN OF BERLIN
BOARD OF FINANCE BUDGET MEETING
REGULAR MEETING
Monday�, March 11, 2019
John "Doc" McIntosh Conference Room
7:00 P.M.
A. CALL TO ORDER
Chairman Lomaglio called the meeting to order at 7:01 p.m.
B. PLEDGE OF ALLEGIANCE
C. ROLL CALL
ATTENDANCE:
Members Present: Sal Bordonaro, Kevin Guite, Sam Lomaglio, Gerald Paradis, John Richards
Members Absent: Mark Holmes
Staff Present:
Jack Healy—To��•n Manager
Kevin Delaney—Finance Director
D. DISCUSSION ON DEPARTMENT BUDGETS:
1. Discuss Fiscal Year 2020 Proposed Budget
VNA
Mr. Paradis stated that he met �vith Finance Director Delaney, To��n Manager Healy, VNA
Administrator Wendy Russo and To�vn Councilor Karen Pagliaro prior to budget submission
to discuss the challenges facing the VNA and the upcoming Medicare changes. The Board
of Finance is pushing to get VNA to a break-even basis. Last year, VNA finished the year
�vith a $750,000 deficit and Fiscal Year 2019/2020 is budgeted for a higher loss. He hoped
Administrator Russo �vould present her take-aways from the meeting, �vhat �vas incorporated
into the budget and �vhat �vas not yet incorporated into the budget.
Administrator Russo stated that much of her first year���ith VNA has been spent bringing it
into compliance �vith State and Federal regulations. In an effort to reduce e�penses,
outsourced functions have been brought in-house and existing employees have been
repurposed. Over the last year, e�penses �vere cut $20,000, revenue increased by $62,000
and census has gro�vn from 30 to 65 patients. Administrator Russo has reviewed the
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previous budget and feels that there are no further areas to cut �ti�hile remaining compliant
and providing quality care. The strategy to increase revenue is to build a steady census
foundation, utilize per-diem Licensed Practical Nurses as much as possible (�vork only w-hen
needed) and increase marketing efforts to expand into surrounding communities.
Administrator Russo plans to coordinate service areas �vhenever possible to minimize travel
time and e�penses in other communities. There is not enough patient volume in Berlin
alone to be profitable ��-hile meeting compliance criteria.
The To���n of Orange has a VNA that operates at break-even, and it services 13 surrounding
communities utilizing higher levels of per-diem stafting. Berlin VNA has modeled its plan
after Orange"s and hopes that increasing patients in surrotmding areas will generate more
re`-enue to offset the o��erall operating elpenses and the additional per-diem LPN espenses
that �ti�ill be incurred for additional patient care.
The Board of Finance appreciated the time and efforts o��er the last year, but expressed
concerns about the current VNA status and the proposed budget, including:
• If the current budget year census is about 60-6�, it appears that the FY19-20
census has not been increased to 80 in the proposed 2019/2020 budget, ���hich has
increased the annual loss? Based on pre�•ious communications. Board of Finance
��as e�pectin� a plan to increase VNA's financial performance (even if
gradually)—not a steeper loss.
• The Board of Finance is imposing fiinding cuts to General Go��ernment services
and Board of Education, ho�v can it tell ta�pa}�ers that it's acceptable for VNA to
continue losinQ $850,000+ each y-ear? (It has lost a total of$�,700,000 o��er the
last nine years.)
• Could VNA pro`�ide more detail on the census to demonstrate net gro���th? (Ho��
many� ne�ti�, elisting, departing patients per month /period of time.)
• Is Berlin legally able to mitigate its financial eyposure by reducing VNA e�pense
budget thereby� reducina its anticipated annual loss?
• Is it possible to transition patient care to other facilities if VNA financial
improvement does not seem likely/ possible?
Corporation Counsel Donofrio cautioned that the VNA is governed by Berlin To�vn Charter
(��-hich requires that VNA operate and offer services to the public), as ��-ell as by State and
Federal healthcare regulations and the Patient Bill of Rights. Whatever the budget may say,
the To�vn is responsible to fully filnd the VNA for patient care. Failure to comply �cith the
many healthcare regulations exposes Berlin to lawsuits, damages and loss of unrelated grant
fimding in the firture. He suggested that an outside consultant might be engaged to perform
an operations audit. The audit ma}� determine �vhether a lot of these questions can be
addressed differently.
Corporation Counsel Donofrio also stated that if Charter revision is pursued, a carefiil
transition �vould be required to properly notify and transition patients while discharging the
To��-n's obligations.
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Cotmcilor Pagliaro stated that VNA is a business that provides care—to provide care, w�e
have to take care of the business. She also stated that she thought the target was a census of
135-140 and���as surprised to see less than 80 in the budget. Administrator Russo stated that
the budgeted census of 80 ���as a stable basis starting point, and she planned to gro�ti�the
census from that point.
Administrator Russo felt that a comment made by Chairman Lomaglio suggested that Berlin
VNA could by�pass regulations to obtain better financial performance. Administrator Russo
stated in reply� that the VNA has not and ��ill not bypass any regulations. Chairman
Lomaglio responded that he did not intend the comment in that ���ay and does not suggest
by�passing regulations. His comment �vas meant to con�•ey that the department could be run
on a significantl}� reduced budget ��hile meeting regulations.
To��-n Mana�er Healy added that VNA �vent se��eral months ���ithout a full Board, but no���
has a Chairman and Board.
Mr. Taylor Cope is a VNA Board member and stated that it is difticult to attract patients
��-ith public talk about eliminating the VNA. Mr. Cope stated that the census has gro«n and
he feels that a census of 80 ���ithin Berlin is a reachable goal. He also stated that a census of
140 is a reachable goal including surrounding to�`ns.
Ma}�or Kaczy�nski stated that the VNA is headed in the right direction and needs to be given
some time. He belie`�es there is a model in place to ma�e positi��e movement. Ma}�or
KaczS•ns�i also added that ���e are tall:in� about patients and he hopes that the Board of
Finance puts as much scrutiny on other departments' budgets.
The Board of Finance acl:no���ledged that there are patients im�ol��ed, and it is not claiming
that the patients are not entitled to services. The Board of Finance's job is to esamine the
To��n's finances, and Members ��-onder if other institutions could/ should provide the
services to residents at a lesser cost to ta�payers. Chairman Lomaglio feels that Berlin
should mo��e for���ard ���ith Corporation Counsel's suggestion of an operations audit of the
VNA.
Revenue:
• Add $300,000 Grant revenue—Mr. Paradis thinks $300,000 from the School Security
Grant reimbursement should be added as revenue. He disagrees �vith the concept of
utilizing the reimbursement for a"revol��ing" security fiind.
Mr. Paradis moved to add $300,000 to Other State Grants Re��enue.
Seconded by Mr. Richards.
VOTE BEING 5-0 (MOTION CARRIED)
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• Leave Berlin Public Nursing revenue as-is. .
• Fund Balance designations—revisit at the end of the process.
E�penses
General Government Operations:
Items discussed include:
• Technolog}� Department— ne��� IT Director position - Important to invest in this area,
need direction and consolidation of disjointed IT departments of the Library, Police,
To���n, Finance, Board of Education. Is there enou��h ���ork for the current IT Manaaers
if an IT Director is added?
To���n Manager Healy� feels the ���orkload is there for all current emplo}�ees—the Director
��-ould coordinate all department and staff, centralizing all of the disparate efforts.
Finance Director Delaney added that this approach ���ould leverage the espertise of each
department�s IT staff across the board.
Board of Finance supports the addition of this position.
• Wa�e negotiations reserve—this line is calculated based on the actual salaries, and
projected increase for each emplo}�ee in a tmion bargainin�� unit engaged in negotiation.
When the contract terms are settled, fiinds are transferred into the appropriate salary�
account.
• Cemeter}� Committee—requestin;� another $5,000 this budaet. To��n Manager Healy
e�plained that the pre��ious Cammittee did not meet since there �vere no fiinds. The
Committee no��- has $5,000 from the current budget, a $2,500 grant and a will bequest
(specificall}� for Dunham Cemetery�j and a lot of���ork needs to be done. Three of the
Committee members are ��eterans enthusiastic to begin restoring the neglected
cemeteries.
• High�vay� Truck Rental — Board of Finance questioned��hat this e�pense �vas and �vhy it
doubled from last y�ear. Finance Director Delane}' e�plained that this account pa}�s
outside firms hired to perform cul-de-sac plo�ving. The actual eypense is consistently
o��er-budget, so this figure should be more accurate.
• Parks & Recreation equipment - $17,730 —The requested equipinent (ne��•tables, chairs,
ehercise bic}•cle) ���as previously� located in capital. As these are ongoing operating
costs, the equipment ���as mo��ed out of the capital list and into the operating account.
• Grounds—Is a ne�ti� zero turn mo���er necessar}�? With the amount of tields bein�
mo�ved, the current equipment ages quickly.
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• Public Works Department Head— increase from $58,000 to $88,000. To��-n Manager
Healy e�plained that previousl}', 50% of this position �vas allocated to Berlin Water
Control. He does not feel that the allocation is accurate. Future allocations �vill be
based on actual time spent. There �vill be a corresponding decrease on the Water
Control elpense budget.
• Refiise Disposal — 10% increase? To`�n Manager Healy� e�plained that recycling credits
ha��e been eliminated, and no���recycling is an espense. (This is an issue facing all other
communities in the United States.)
• VNA Nurse Wages—6% increase—To«n Manager Healy e�plained that this increase
represents the retroacti�•e contract settlement and the }'earl}� increase. He also added that
he has had preliminary discussion about VNA ha�•ing t�vo ��ears to make meaninafiil
tinancial improvements. If the goals can not be met at that time, one }�ear may� be spent
ramping do�ti�n and transferrina care else���here.
• Part time staff positions—To���n Manager Heal}� stated that there are three ne�� part time
positions in budget.
1. Human Resources— 10 hours per ��eel:—This position ���ould handle administrative
�ti�ork (filing, t}'ping, etc.) to allo���the Human Resources Director to focus on��alue-
add items.
?. Communit}• Center— additional staff inember—to minimize the security risk ���hen
only� one person is on dut`�.
3. Senior Center—This position is about 10-15 hours per��-eek and is contingent upon
Ms. Do}�le obtaining grant fiinding.
• Private School Nurses - By statute, the same le��el of nursin� and transportation as public
schools ha��e must be provided to pri��ate schools. The pri�•ate schools do not reimburse
the To�vn for these elpenses.
• School E�penses—frinae benetits #3561 - health insurance up 21% from previous
budget? An increase of 12% �vas discussed pre��iously�—�tihat has changed? The
amount is impacted b}�the mi� of insurance type and emplo}'ee-only ��s family coverage.
• Contracted Services—increase due to operating items that «•ere formerly included in
capital (masonry ���ork, �vater fountain replacement, electrical).
• Mileage / Pool Vehicles— Some departmental budgets ha��e mileage allo�vances, but the
To�vn has pool vehicles. Ho��• is it decided �vhich is utilized? Fleet Manager Simons
elplained that some ��ehicles/ departments ha��e heavier usage (maintenance) ��-hereas
other others have lighter usage (assessor, zoning, health). There is currently no study of
��ehicles, mileage and related costs (including registration, insurance, maintenance and
fuel) but Mr. Simons can put one together.
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To�cn Manager Healy added that mileage is spread over the departments intentionally.
Each department should be thoughtfiil and accountable for its travel and use of mileage
reimbursement.
Board of Education:
The Board of Education pro��ided responses to specific questions Mr. Bordonaro asked after
the budget presentation on March 61n
• Gris���old— $89,000 increase in Certified teacher salaries—This is for the addition of a
Teacher Leader position follo«�ing remo��al of an Assistant Principal position.
• Gris���old '/ person Guidance - $'��,000 increase— Added '/ person, this position ��as
previously shared bet���een three schools.
• Willard— Certitied— $99,000 increase for Certified Reading Support. This position was
pre��iously fimded by a grant.
• Willard—Certified Pre-K $367,000 item ���ith no budaet for prior y�ear—These positions
���ere pre��iousl}� held in the Certitied teaching staff. This }�ear they ���ere broken out
separately. Board of Finance askecl if there ���as a correlating reduction in Teacher
salaries.
• Non-Certified Elementar}�— Paraprofessionals and substihites ���ere added at Hubbard,
Willard, Gris��-old, including Pre-K.
• McGee Special Education - $119,000 increase—This item is for t���o Paraprofessionals
to support Choice students. This item ���ill be billed to Hartford, in keeping ��-ith
Superintendent Beni;�ni's statement that espenses related to Choice students are
reimbursed b5� Hartford. Board of Finance asked if the correlating offset is reflected in
Re��enue/ Grants?
Board of Education performance to current fiscal }-ear budget:
Wh}' are Transportation and Tuition not }�et encumbered? Per discussion in February�, Board of
Finance feels those categories should be encumbered, as the espenses are espected and contracted.
Last y�ear, Board of Education tmder-ran budgeted ���age e�pense. This ��ear appears to be similar,
and the Board of Finance should be able to revie��-the forecast (���ith proper use of the encumbrance
s��stem) to make that determination. Finance Director Delane}� stated that the To��n doesn't
t}�pically encumber for hourly employees, and perhaps the Board of Education ma}� not either.
Board of Finance ���ill reconvene on Wednesday, March 13, 2019 at 7:00 p.m.
2. Possible Vote to Send Budget to Annual Budget Hearing
a. Mo��e to send the Board of Education budget of$ to the
Annual Budget Hearing.
b. Move to send the General Government budget of$ to the
Annual Budget Hearing.
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c. Move to send the Berlin Water Control budget of$ to the
Annual Budget Hearing.
E. ADJOURNMENT
Mr. Paradis moved to adjourn at 9:17 p.m.
Seconded b}' Mr. Bordonaro.
Those ��otin� in fa��or ���ere: Mr. Bordonaro, Mr. Guite, Mr. Lomaglio, Mr. Paradis, Mr.
Richards
Vote bein�� �-0. (MOTION CARRIED)
Submitted by�,
Dana Bor�es
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