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2019-11-19 � 2019-I1-19 Board of Finance Meeting TOWN OF BERLIN REGULAR BOARD OF FINANCE MEETING November 19, 2019 "Doc" McIntosh laoom 7:00 P.M. A. CALL TO ORDER Chairman Lomaglio called the meeting to order at 7:00 p.m. B. PLEDGE OF ALLEGIANCE C. ROLL CALL ATTENDANCE: Members Present: Sal Bordonaro, Tim Grady, Mark Holmes, Sam Lomaglio, Gerald Paradis, John Richards , Staff Present: � Kevin Delaney—Finance Director Arosha Jayawickrema- Interim Town Manager(arrived 7:30 p.m.) D. BOARD OF FINANCE ORGANIZATIONAL VOTES 1. Selection of Chairman Mr. Bordonaro nominated Mr. Paradis as Chairman. Mr. Holmes nominated Mr. Lomaglio as Chairman. Mr. Grady nominated Mr. Bordonaro as Chairman. There were no further nominations and Mr. Lomaglio closed the nominations. Those voting in favor of Mr. Paradis as Chairman: Mr. Bordonaro, Mr. Grady. Those voting in favor of Mr. Lomaglio as Chairman: Mr. Holmes, Mr. Lomaglio, Mr. Paradis, Mr. Richards. Those voting in favor of Mr. Bordonaro as Chairman: Mr. Bordonaro, Mr. Grady. Vote being: 4-2, Mr. Lomaglio was selected as Chairman. 1 2019-11-19 Board of Finance Meeting 2. Selection of Vice Chairman Mr. Richards nominated Mr. Paradis as Vice Chairman. Mr. Grady nominated Mr. Bordonaro as Vice Chairman. Those voting in favor of Mr. Paradis as Vice Chairman: Mr. Holmes, Mr. Lomaglio, Mr. Paradis, Mr. Richards. Those voting in favor of Mr. Bordonaro as Vice Chairman: Mr. Bordonaro, Mr. Grady. Vote being: 4-2, Mr. Paradis was selected as Vice Chairman. E. PUBLIC COMMENTS None. � F. APPROVAL OF PRIOR MINUTES October 8, 2019 Regular Meeting Mr. Paradis moved to approve the October 8, 2019 minutes. Seconded by Mr. Bordonaro. Those voting in favor: Mr. Bordonaro, Mr. Holmes, Mr. Lomaglio, Mr. Paradis, Mr. Richards. Vote being 5-0-1. (MOTION CARRIED) Mr. Grady abstained, as he was not a member at that time. G. NEW BUSINESS � 1. Discussion of potential loan to Berlin Housing Authority for the construction of senior housing. Joe Bajorsky - Berlin Housing Authority("BHA") Chairman and Maria DeMarco - DeMarco Management Corporation (real estate management/ co-developer on the project) appeared to describe the project timeline and answer questions. Planning for the 50-unit, $17,000,000 senior housing project began several years ago, and over that time the State's funding process/ criteria has changed. The State is now focused on providing affordable housing without age restriction and dedicated senior housing does not receive preferential financing terms. Chairman Bajorsky continues to pursue other financing methods with the Department of Housing, Connecticut Housing Financing Authority and Speaker Aresimowicz. The two-building complex will include resiciential rental units, office space for meetings with tenants and community space. Research indicates that the suggested monthly rents of$1,100 are slightly below market average and will be partially offset by utility allowances and Department of Housing rent subsidies based on income. Berlin(or any other municipality or housing authority) 2 2019-11-19 Board of Finance Meeting may not restrict tenant applicants to current residents, but history suggests that the majority of applicants will be local. Some grant funding has been identified, but there is currently a$3,600,000 gap which Town Council suggested might be bonded by the Town. BHA Chairman Bajorsky stated that he will continue to pursue other funding sources to provide the $3,600,000. If the Town does bond the $3,600,000, BHA plans to refinance the project once the facility is leased/occupied and repay the Town at that time. � BHA Chairman Bajorsky stated that he plans to hire a consultant to begin the grant application process. Grant and fmancing applications are due in March 2020, should be awarded in November 2020 with construction to begin in January 2021. Board of Finance asked about the estimated construction cost of$300,000 per rental unit. BHA Chairman Bajorsky agreed that the cost was high and typically a developer would need to build 300 units (rather than 50) in order for the project to be profitable. Ms. DeMarco added that the utilization of grant funding necessitates prevailing wage labor which increases cost by about 20%. 2. VNA update. VNA Administrator Wendy Russo appeared to discuss the VNA's status and plans. She stated that it has been challenging to get the census to a baseline of 80 patients, and the VNA is currently at a census of 70 (approximately 60 of which are Berlin residents). Berlin VNA struggles to compete with larger agencies like Hartford Healthcare at Home which is part of a continuum with Hartford Hospital. VNA has made efforts to appeal to possible patients at community centers and senior centers within the service area(providing education re: diabetes, nutrition, seasonal safety, home safety), as well as continuing efforts to network with doctor's offices, skilled nursing facilities, rehabilitation centers and hospitals. Berlin VNA emphasizes its strengths including timely personal service, 5-star patient ratings and its focus on the communities it serves. Medicare will roll out a new payment strt.icture in January 2020 that will greatly impact all home care agencies throughout the country, especially the smaller agencies. The new Medicare reimbursement system is based on patient diagnoses rather than frequency of visits and will move from a 60-day billing cycle to a shorter 30-day billing cycle. The new Medicare system will require VNA to focus on performing comprehensive assessments and diagnoses, as well as carefully managing care and supplies without sacrificing quality of care. The impact to revenue is hard to predict at this time. To date, VNA has lost$290,000 which is about$100,000 more than this time last year. Board of Finance asked if expenses may be decreased by downsizing to serve Berlin residents only and if hiring a marketing consultant could help. Finance Director Delaney replied that VNA's costs are mostly fixed (staffl so reducing expenses means reducing nurses,home health aides and/or administration. The productivity levels of staff are about 90% (seeing about 6-7 patients daily which is industry standard) and they are ethically required to bring the necessary supplies to care for patients. VNA Administrator Russo stated that she typically welcomes any marketing assistance, but in the current situation and with the Medicare change looming she doesn't believe it would help the scenario. She added that VNA will focus on get patients into the groupings with the best reimbursement possible and best utilize services. 3 2019-I1-19 Board of Finance Meeting 3. Review of financial spreadsheet prepared by Mr.Bordonaro. Mr. Bordonaro prepared an analysis of potential risks and gains to be discussed and considered throughout the fiscal year and when beginning preparation of the next fiscal year budget. The Board of Finance discussed trends in revenue and expenses,the FY 2019 surplus and variances against the current budget, including interest income and Police Department staff level. 4. Review and possible vote on 2020 Board of Finance calendar. Mr. Holmes moved to approve the 2020 Board of Finance calendar. Seconded by Mr. Paradis. Vote being 6-0. (MOTION CARRIED) 5. Review and possible vote on fiscal year 2021 Board of Finance budget calendar. Mr. Paradis moved to approve the 2021 Board of Finance budget calendar. Seconded by Mr. Holmes. Vote being 6-0. (MOTION CARRIED) 6. Move to appropriate $444,000 from Assigned Fund Balance to Transfers to Other Funds in the General Fund to repay the outstanding balance of Bond Anticipation Notes at their expiration. Finance Director Delaney explained that paying off the short-term notes will save the Town $26,000 in interest and debt issuance costs. Mr. Paradis moved to appropriate $444,000 from Assigned Fund Balance to Transfers to Other Funds in the General Fund to repay the outstanding balance of Bond Anticipation Notes at their expiration. Seconded by Mr. Holmes. Vote being 6-0. (MOTION CARRIED) 7. Move to appropriate $4,900 from the Sale of Labor,Land & Materials account to the Public Buildings Contractual Services account in the Capital Nonrecurring Funcl to fund continued remodeling work in the Town I�all rotunda. 4 2019-11-19 Board of Finance Meeting Finance Director Delaney stated that the funds will go towards removing the vacant receptionist desk and mail center from the Town Hall rotunda and adding a seating area for visitors. (The receptionist position was previously eliminated and the empty desk serves to confuse and frustrate some visitors. Town staff mail has been relocated to a more secure location within Town Hall.) Mr. Paradis moved to appropriate $4,900 from the Sale of Labor, Land & Materials account to the Public Buildings Contractual Services account in the Capital Nonrecurring Fund to fund continued remodeling work in the Town Hall rotunda. Seconded by Mr. Bordonaro. Vote being 6-0. (MOTION CARRIED) 8. Move to Transfer$4,600.00 from Salary Continuation account and $5,250.00 from Wage Negotiations account for a total of$9,850.00 to the Professional Services account to cover the cost-share for the intern from the UConn MPA Program. Finance Director Delaney stated that the proposed intern has already worked in Economic Development and Director Chris Edge has spoken very highly of him. Finance Director Delaney also stated that he plans to include this expense in the next budget. Mr. Paradis moved to transfer$4,600.00 from Salary Continuation account and $5,250.00 from Wage Negotiations account for a total of$9,850.00 to the Professional Services account to cover the cost-share for the intern from the UConn MPA Program. Seconded by Mr. Bordonaro. Vote being 6-0. (MOTION C�RRIED) 9. Move to transfer$26,585.52 from Contingency to the Transfer to Other Funds account in the General Fund to pay retainage to Michael Baker Engineering and to return remaining STEAP grant funds to DOT. Finance Director Delaney stated that the proposed transfer would return grant funding that was originally awarded to renovate the historic train station (which subsequently burned down)to the DOT. Berlin expects that grant funding to be re-awarded for work at the Boulevard TOD project. Mr. Paradis moved to transfer $26,585.52 from Contingency to the Transfer to Other Funds account in the General Fund to pay retainage to Michael Baker Engineering and to return remaining STEAP grant fiinds to DOT. Seconded by Mr. Bordonaro. Vote being 6-0. (MOTION CARRIED) 5 2019-11-19 Board of Finance Meeting . 10. Financial status update. • Revenue—%to budget flat year-over-year. o State of Connecticut payments: - ■ Received lst ECS payment; ■ Received Municipal Stabilization grant; ■ Received Pilot grant; ■ State legislature might fund the TAR grant. o Tax receipts: strong, but slightly behind year-over-year as percent to budget and levy. • Expenditures—slightly behind budget year-over-year o Town Planner vacancy is a financial benefit, but a strain for the department at this busy time (Newport Realty—TOD, Berlin Turnpike mixed-use projects and Rio Vista P&Z litigation). o Storm related overtime= $0 • Legal: o Action brought by former personnel in court; o Rio Vista Atkins Street/P&Z; o Eversource assessment appeal moving forward in court; o BHS Mediation completed—waiting for change order to pay $125K; o FOI matters. • Insurance Funds—positive fund balance. Claims below average last 2 months. Cash positive, past 700K. o General Insurance fiind—strong. In process of working through potentially significant heart/hypertension claim; o Pension Fund—Liability recommendation has come in from actuaries. Will ask for Town . Meeting for an unbudgeted appropriation. The fimd had 13 active members on July 1, 2019, two have retired since then. There are indications that 2 more retirements may occur in 2020/2021. • Capital proj ects— o Burnham Street bridge complete o Jail cells—old cells removed, HVAC being worked through. December 2019 completion date estimated. , o Vestibules—in place. o Scalise Field—work is complete. o Railroad Pond dam—largely complete. Now working on fishway, when that portion is complete Town will request$250K reimbursement. • 1% account fund: o Blast classroom—mostly complete,punch list items remain. o Gym painting—bid is out—work may occur over winter break/2nd shift. o Willard gym floor—was originally planned to occur over winter break—now planned over summer break. o Security guard—buying uniforms, weapons, etc. 6 2019-11-19 Board of Finance Meeting 11. Comments from Board of Finance members. None. H. ADJOURNMENT Mr. Holmes moved to adjourn at 8:50 p.m. Seconded by Mr. Paradis. Vote being 6-0. (MOTION CARRIED) , Submitted by, Dana Borges ���C������ r�3'� �?Et:,��;fl �. �twr G>, -:-�, � �� ���s' ���'t::. _ _��;'��� 2�1I ,.-�§� 2� r; 3= ��e 9 ���,� , ;°'���v�:;��; ..�'`_�'`��.���- ����. n F�'F�I..16i= . 7 N O ti b ti ti ti b � 9J10/2019 FY'i9 and FY'2p Revenue Comparison � $(000) � � � FY'19 Budget Performance FY'20 Potential Gains ,� Favorable FY'20 �• Amended Budget Adopted Revenue � Budget FY'19 Actuals Variance eudget Increase Comments � CurrentLevy $ 73,924 $ 74,368 $ 444 $ 77,160 $ 467 99.7%vs99.1%CollectionRate � Collection Rate 99.1% 99.7% 0.6% 99.1%. � �'G Motor Vehicle $ 650 $ 850 $ 200 $ 650 $ 200 Same as FY'19 Back Taxes $ 475 $ 1,135 $ 6fi0 $ 475 $ 200 Interest on Investments 275 919 $ 644 $ 300 $ 483 75%of FY'19 Gain � Total $ 1,948 Total $ 2,350 � . W ti 0 � � � � 9/10/2019 Fiscal Year 2019 Surplus-General Fund Expenses `" b b BudgeY Comparison � � FY'19 Favorable � Budget Variance Amended Adopted FY'20 ti, Dept# Description $(000) FY'19 FY'20 Increase Comments � 3560 BOE $ 552 $ 43,581 $ 44,978 $ 1,397 � FY`19 Capital 374; FY'20 � 3561 School Expenses $ 402 $ 3,585 $ 3,608 $ 23 Capital$95 1532 Police Dept $ 266 $ 7,986 $ 8,056 $ 70 � 2036 Public Works $ 234 $ 2,427 $ 2,578 $ 151 � 2038 Public Buildings $ 219 $ 2,4b2 $ 2,608 $ 146 � FY`20 Pension Assignment 0507 Townwide Expenses $ 202 $ 2,217 $ 1,390 $ (827) of$1384 Removed 3053 Berlin VNA $ 160 $ 1,822 $ 1,857 $ 35 1531 Fire Depts, $ 139 $ 758 $ 759 $ 1 �o FY'19 Dump Truck Lease 2q37 Highway Department $ 119 $ 2,250 $ 2,152 $ (98} Payment$200 2545 PublicGrounds $ 88 $ 1,460 $ 1,401 $ (59) FY'19Lawnmower$105 2a35 Municipal Garage $ 76 $ 1,130 $ 1,166 $ 36 2544 Library $ 57 $ 1,073 $ 1,114 $ 41 Youth Services;Community 3054&3055 Services $ 56 $ 667 $ 674 $ 7 0504 Coliector of Revenue $ 46 $ 429 $ 454 $ 25 2543 Golf Course $ 44 $ 1,122 $ 1,184 $ 62 0509 Assessors Office $ 43 $ 463 $ 483 $ 20 3559 Private Schools $ 40 $ 126 $ 122 $ (4) Various AllOther $ 168 $ 14,371 $ 15,608 $ 1,237 Total Favorable Budget Variance $ 2,911 $ 88,175 $ 90,192 $ 2,017 � L1J N O ti b ti ti 9/10/2019 Fiscal Year 2019 Surpfus-General Fund Expenses ~ b $(000) b� O � � � Dept.# 356Q 3561 1532 2036 2038 0507 3�53 1531 2037 2545 Z035 � School Police Public Public Townwide Berlin Highway Public Municipal ,� Department BOE Expenses Dept. Works Buidlings Expsenses VNA Fire Depts. Dept. Grounds Garage �• � � Tota]Favorable Variances 552 $ 402 $ 266 $ 234 $ 219 $ 202 $ 160 $ 139 $ 119 $ 88 $ 76 � Predominant Favoreble � Accounts � Wages&Salaries ✓ ✓ � � � f f � � � � Overtime � � Social Security ✓ � � � � � Pension � � � � Workmen's Comp. ✓ ✓ � `� � `� '� � o Health Insurance � � � Electricity � � Contractual Services ✓ ✓ � � Transporation ✓ Refusc Disposal � Street Lighting � Flood Control Projects '� Recycling Center Improvments ✓ Postage&Elec.Transm. ✓ Contingency � Catch Basin Cleaining � Capital � Vehicie Fuel � Material/Repairs ✓ �',` W