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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 1 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. 2 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) 3 • 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. � • 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. 5 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. 6 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 ::'�e��I�dL�� FD�� �t�CORD 6E��_��: ��?s°�,., , _�FE4 ?G I 9 ���� i� P� 3� ST ,=,,��� s{�� p � �1�+. t✓�ii#_�i'ia�!. 7