CIP Committee Minutes 11.07.18

November 20, 2018 Karen Hambleton CIP Committee, Minutes 0

CIP COMMITTEE MEETING MINUTES

NOVEMBER 7, 2018

Attendees – Marlene Freyler, Karen Hambleton, Carol Troy, Jason Allen, Claire James

Absent – Jim Bibbo, Sheila Jackson

Meeting opened at 12:09pm.

Review and Approval of 10.31.18 Meeting Minutes:

Jason Allen made a motion to accept the 10.31.18 minutes.  Marlene Freyler seconded.  Motion Carried: 4-Yes, 1-Abstain (Carol Troy)

General Items of Review/Discussion:

  1. Capital Reserve v. Expendable Trust Fund – A question arose about the difference between a capital reserve fund and an expendable trust fund.  Claire forwarded a link from the NH Municipal Association (https://www.nhmunicipal.org/TownAndCity/Article/5), which provided a detailed explanation about these and other funds.  A relevant excerpt from this link is below:
    1. “After many years of confusion over the similarities, differences and terminology used in these particular statutes, in 1995 the legislature enacted an amendment to clarify that the same provisions apply to both capital reserve funds and expendable trust funds regardless of what the fund is called or the statutory authority under which it was established. Hence, the term “reserve fund” now commonly refers to both capital reserve funds and expendable trust funds.”
  2. Cemetery Funds – Marlene had a question about the 1905 Cemetery fund, the 1994 Cemetery Maintenance fund, and the 2002 Gravestone Repair fund.  She specifically wanted to confirm the precise purpose/use of each fund. (For example, which maintenance items are specifically covered under the 1994 Cemetery Maintenance fund?)  Karen advised that if the fund’s wording was vague, it could be open to interpretation.  More research will have to be done on this to confirm the parameters of each fund.  Marlene has been in touch with town trustee, Harry Wright, to iron this out.  Marlene also stated that the balances for the cemetery accounts were not accurate.  Claire stated that the cash portion only was included in the account balances, while the value of stock and other funds were not.  The full account balances will be obtained from Harry.
  3. 1960 Highway Reserve Fund – There was some discussion of the possibility of allocating funds into this account for highway equipment expenses, as opposed to creating the proposed 2020 Highway Equipment Expendable Trust.  However, Karen advised the board that while this used to be an active reserve fund, the town voted to close it.
  4. Chipper – Karen advised that per Steve Hall, the current trade-in value for the chipper is 5K.  A used chipper (year 2003) could be purchased for 27K, making the net cost for this item 22K (27K less trade-in value of 5K).  Still no update on the cost to rent this item.
  5. Loader Lease Prepayment – Karen will look into the possibility of prepayments on the loader lease.  If this is feasible, the particulars will not likely be worked into the CIP plan until next year at this point.  This will be a follow-up item for the 2019 CIP update.

Review of Adjustments to CIP Spreadsheet:

  1. Fire Heavy Equipment Fund – The allocation for this fund was reduced slightly from 120K to 110K for year 2019.  Claire advised the committee that she had not accounted for additional funds (a total of 150K) from the 2018 warrant article, which have yet to be deposited into the fund.  Taking this into account results in a higher offsetting amount for the year 2020 (approximately 373K compared to 345K), which reduces the overall tax impact for that year.
  2. Communications Fund – The following was allocated for future anticipated FirstNet based technology upgrades:
    1. 5K – year 2019
    2. 5K – year 2021
    3. 5K – year 2022
    4. 5K – year 2023
    5. 10K – year 2024
  3. New Police Facility – Claire proposed that the allocation for new police facility funding be reduced from 10K to 5K in year 2019, to allow for a 5K contribution in that same year to the Communications fund.  However, the consensus amongst the rest of the committee members was to hold off on any funding allocations for the police facility in year 2019. The spreadsheet will be adjusted to reflect this.
  4. Roads Asphalt/Shimming – Claire added 30K each year for the years 2024-2029, which represents an additional 180K total for this line item through 2029.  Karen and Marlene expressed that this particular line item should be funded per Road Agent Steve Hall’s request of 50K per year, in their opinion.  They expressed concern that 30K would not be enough to cover the required shimming and that the allocation in former years was always 50K.  Jason commented that if an additional 20K was to be added to this line item then 20K needed to be deducted from some other line item in order to balance out the impact to taxes.  Claire commented that based on conversations that Selectman Michael James had with all of the road crew members, the feedback was that they spent the full 50K allocation in past years due to uncertainty about securing future funding if current funds were not fully expended during any given year.  Claire suggested leaving the 30K allocation as is, at least for year 2019, and revisiting this next year to review what was spent in order to determine appropriate funding for 2020 and beyond.  Karen advised the committee to consider whether or not each department head would be surprised to view the CIP as it is now proposed, versus their originally proposed requests.  She stated that for the most part, the CIP reflects what department heads originally asked for, with the Highway dept. being the exception to that. She recommended that the committee give Steve the opportunity to review the adjustments made to his requests, and that an explanation of the overall picture be provided so that he can better understand the adjustments and have the opportunity to weigh in.  Carol stated that she agreed with this approach. Claire commented that the Highway department is somewhat distinct from other departments such as police and fire, whose overall cap expenditure costs are relatively less by comparison.  Additionally, safety mandates for each of these departments can result in some of their projects being given greater priority.  The Police department has equipment costs, as does the Fire department (which also has building maintenance costs), but the Highway department has both of these (equipment and building maintenance) plus road paving and shimming expenses on top of that.  As such, it is the highest cost department in terms of CIP project proposals.  Per Karen’s suggestion, Jason will make an appointment with Steve to go over the adjustments recommended by the committee for his project requests, so that he has the opportunity to see where his department requests stand in terms of the overall CIP.
  5. Salt Shed – Claire advised that if project allocation is reduced from $125K to $85K, the tax impact for year 2025 would be reduced from $2.45 to $2.25.  Jason advised that he would revisit this line item with Steve to confirm final allocation.
  6. Heating System Replacement for BACC – A question arose as to whether or not the savings for this project should be placed into the 1991 Town Building Repair fund or the 1997 Town Facilities fund.  Karen clarified the intents of both of these funds, based on the wording of the warrant articles.  She confirmed that based on its worded intent, the 1997 fund is the one that should be used to save for the BACC heating system replacement.  Jason then recommended moving the annual allocation of $1500 from the 1991 Town Building Repair fund (which is meant strictly to be used for building repairs) into the 1997 Town Facilities fund.  Additionally, he recommended an annual allocation of $1,000 to the 1991 Town Building Repair fund, which previously had no assigned allocations. The committee members agreed unanimously with this recommendation.
  7. Offsetting Related Questions/Notes
    1. Heating System – Claire stated that there was no offsetting revenue designated for this project in 2020.  She added an offset of 20K, to be deducted from the 1997 Town Facilities fund.  The committee members proposed adjusting the offset to 10K instead, so as not to fully deplete the fund.
    2. Salt Shed – Claire asked if there was any offset designated for this project in 2023, as savings did not appear to be allocated to any fund for this.  It was confirmed that there will be no offsetting revenue for this item.
    3. 1991 Town Building Repair – This item was showing an offset of 5K for year 2020, in error.  It was adjusted to $0.
    4. Fire Station Repair Fund – Claire added $9,132 to offset the driveway replacement expense for 2020.  Previously there were no offsetting funds designated for this item.  Jason recommended that no offsetting revenue be designated, so as not to deplete the current fund balance.  Additionally, Marlene commented that the fire station driveway repair project is not a building repair, and that the purpose of the Fire Station Repair fund it to cover actual building related repairs.  Therefore, no offsetting funds from this account should be used for this purpose.
    5. Revaluation – Offset was incorrectly listed as $0.  It was revised to $24,000 to offset this line item expense for 2025.
    6. Communications Equipment – No offsetting amount was designated for this project, as actual expenditure year is uncertain at this point.
    7. Cap Reserve/Expendable Trust Balances – Karen suggested including the approved 2018 warrant article amounts in the “Current Balance Year” under the fund balances section of the spreadsheet, and changing the balance date from 10/2018 to 12/2018 (as these funds are not actually deposited into the accounts until the end of the year).

Meeting adjourned at 1:33pm.  Next meeting date to be announced.