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SPECIAL MEETING
FEBRUARY 26, 2007

ATTENDANCE: Carvin Williams, Chairman; Doug Hempstead; Doug Sutton; Kelly Straniti; Gwen Briggs.

STAFF: Tom Hamilton, Finance Director; Fred Gilden, Comptroller.

OTHERS: Council members Rick McQuaid, Joanne Romano, Bill Krummel; Fred Wilms, Chairman, Board of Estimate & Taxation; Laurel Lindstrom; Hal Alvord, Director of Public Works; Diane Ceci.

The meeting was called to order at 6:10 p.m. by the Chairman.

DISCUSSION ON THE FISCAL YEAR 2007-08 OPERATING BUDGET

Mr. Hamilton said his sense from the last meeting was a desire to reduce the cap... They need to remember that in the absence of revaluation, the tax impact would be a 4.64% increase. He suggested that the cap be set with an eye toward deciding what an acceptable tax increase is.

The Chairman said it was his opinion that the cap needs to be lowered, and Mrs. Straniti agreed.

Mr. Hamilton said that the cap before them now is $264,559,310 less intergovernmental grants of approximately $16,192.20, leaving a cap of $248,367,103. The percentage increase on expenditures would be 5.9%.

Mr. Hempstead asked if the Board of Education operating budget would be $325,000 with a 3.8% increase. Mr. Hamilton said it would leave an increase of 3.77% or a reduction of $954,000.

Ms. Briggs asked what the total increase would be if they take the Board of Education budget down by 3.7%. Mr. Hamilton said it would be a 5.5% increase or approximately a 5% total increase for homeowners.

Mr. Hempstead asked what drawing funds down from reserve brings the increase to, and Mr. Hamilton said reserves don’t affect the cap. He proposes using $3,000,000 of fund balance plus anticipates using another $1,000,000 to fund the 2008 revaluation. The expectation is that they will need to draw down on fund balance in 2008-09 to mitigate the expenses. After that, expenditure growth should level off.

The Chairman asked what they wanted to recommend. Mrs. Straniti said she would be comfortable with 4%; Ms. Briggs said that was too low. She would be comfortable with something in the area of 5%.

Mr. Hamilton said with Mr. Hempstead’s recommendation, they would be at 5.5%. To get to 5%, another $1,000,000 would have to be cut. A $2,000,000 decrease in the budget would be aggressive. He was concerned that would be difficult to achieve.

Mr. Hempstead said he was comfortable with a $2,000,000 decrease. This sends the right message to the taxpayer and a recommendation to the Board of Estimate that they have to sharpen their pencils. It is also a message that 3.8% should be a maximum for the Board of Education, with declining enrollment and infrastructure work being done. His only concern is that further consideration be given to drainage work. They also need to look at the mason position.

Mrs. Straniti asked about the percentage increase with a cut of $2,000,000. The percentage increase would be 5% on the total budget and the tax increase for the 4th district would be 4.58%, according to Mr. Hamilton. Almost 1% is revaluation. Mrs. Straniti said she could live with that.

Mr. Hamilton said that $954,000 would come from the Board of Education and the rest from the City. The Board of Estimate would decide how it is divvied up.

Mr. Hempstead said $1,100,000 is all new proposals from the Board of Education. $320,000 is for textbooks and ten new teacher positions.

The Chairman said that at the last meeting, the committee noted that the Board of Education has received increases each year, but now they need to put money into the infrastructure.

RECOMMEND OPERATING BUDGET CAP FOR FISCAL YEAR 2007-08 OPERATING BUDGET TO THE COMMON COUNCIL

** MR. HEMPSTEAD MOVED EXPENDITURES OF $262,559,310 LESS INTERGOVERNMENTAL GRANTS OF $16,192,207 FOR A CAP OF $246,367,103.
** MOTION PASSED WITH ONE ABSTENTION (SUTTON).

** MS. BRIGGS MOVED TO ADJOURN.
** MOTION PASSED UNANIMOUSLY.

The meeting was adjourned at 6:40 p.m.

Respectfully submitted,

Cheryl Telesco
Telesco Secretarial Services