MEMBERS PRESENT:

Council President Higgins, Councilors Mutter, Morris, Lemois, Ackerman, and Kirkpatrick 

School Committee Chairman Crowley, Costa, Beaulieu, Thibodeau, Wagner, and Wood

Also present, School Superintendent Donna Morelle, Business Manager Alex Prignano, Director of Building and Grounds Richard Hilton, Mayor Daniel McKee, Finance Director Tom Bruce, and Augusta Johnson, Deputy Town Clerk

MEMBERS ABSENT:

Councilor Albuquerque was absent due to a death in the family.

COUNCIL WORKSHOP

The meeting opened with Councilor Jeff Mutter moving No. 4 Status of the current fiscal year budget to line item one. He preferred to discuss the status of the current fiscal year budget before getting into any pre-budget consultations and forecasting and future capital improvements.

4.   Status of the current fiscal year budget

At the request of President Higgins, Superintendent of Schools Donna A. Morelle, passed out the Budget Summary Report Fiscal Year 2008.  Business Manager Alex Prignano discussed page one of the seven page report of the revenue source of the school department.  He explained that the total is expected at this point through December to be projected at $82,000, a shortfall in revenue with the largest area being in the Medicaid reimbursement. Last year’s budget at $641,000 were numbers that were estimated when the budget was put together through the last fiscal year, they did less than that so right off the bat the $641,000 is over stated and there continues to be changes in the Medicaid Regulations. At this point the school department is looking at an $82,000 shortfall.

Looking on page six of this report, Mr. Prignano discussed that he is anticipating a shortfall of at least $100,000 due to the price of oil, snow and ice removal, projected on December’s snow storm. At this point it is a conservative estimation.  He clarified that it is not over spent but he anticipates it.

On page 7 of the report is one of the big line items-Health Care Claims. He stated he was told last year to use 9.9 estimated claims which are significantly higher. As of now these figures are based on the first six months of the year. Reviewing the report you can see those are the two biggest areas and without those, the School Department would be positive on the expenditure side and that to a negative $303,000, between the two pages of revenues and expenditures it will be about $385,000. This report does not include reimbursement of salaries and fringe benefits which are charged to grant money which has not been reimbursed. Last year it was $468,000 and quickly looking at it, he predicts this year will be about the same at $466,000, therefore, almost breaking even, given there is no large energy bill or snow storms.

Councilor Lemois states that last year he asked the question, why there was great disparity in salaries from projected to actual and why the changes in the budget from line item to line item. The response was it’s the way it was lined during the budget process. A year later and there is still the same huge swings in salaries. Councilor Lemois does not understand why there is a large swing from school to school. Using BF Norton, Cumberland Hill and Community as an example, Mr. Prignano responded that the raises were not added into the past budget, because they were just paid, and he will add them and make these adjustments. He stated that not all jobs are filled all year long. Dr. Morelle stated that she does not think that there was a budget difference but she will go back and look into it. Councilor Morris agrees with Councilor Bruce that more information is needed in why there is a large projection in salaries from school to school and that she would like a better understanding of how this system works. Councilor Morris asked when they meet again, in a month, if the numbers would be hundred vs. thousands. Mr. Prignano responded that the numbers would be similar to what they see now.

Councilor Mutter asked since the line items are going to be moved, will there be a school committee vote on these line items. Mr. Prignano stated they have discussed this with the school committee but they have been running a month behind due to all the activity of hiring of people and job pools. They will be making budget transfers to keep line items in balance whenever possible.

Mr. Thibodeau stated that the budget was late due to medical changes this year. They previously had an exclusive agreement with Blue Cross Blue Shield and because of that there will be a great savings of $1.2 million over three years and the teachers are pretty much max at their standards.

He asked that every town employee be treated fairly and stated that the school department has been paying co-pays since 1990, and the Rescue Department just started paying co-pays.

Councilor Mutter stated, as the Council we are looking to get a handle on the process on how the school committee goes about making changes and tracking these changes.  Are these changes voted on and advertised? Mr. Wood responds that they did advertise it and it was voted and brought to the Finance Subcommittee.

Tom Bruce, Finance Director, spoke briefly on the Second Budget Ordinance of the year to be presented at the Wednesday, January 16, 2008 Town Council Meeting.  Mr. Bruce stated that if the was ordinance was adopted, it would break even result as of today.

Jeff notes that there was a significant deficit last year and they are not looking to do that again and they will do anything they can and will need the assistance of the School Department and School Committee to make sure that this will not happen again.

2.  Pre-Budget Consultations and three year forecasting pursuant to the requirements of

     RIGL 16-2-21 through 16-2-21.3

Dr. Morelle gave a frame work of the Projected FY 2009 and FY 2010 Budgets –Revenues. According to the reports provided by Mr. Prignano this current year, there will be no gains and no losses, Dr. Morelle states. If coming to an agreement with the 2009 assumption, the school department is projecting a $2.3 million shortage.  Mr. Prignano projects the salary positions will stay the same. He stated that there was a 4.99 percent increase in raises because not everyone is at a top step (step increase).  

Councilor Mutter asked Tom Bruce to discuss the debt service bond because they will be making their first payment the 08 and 09Budget Cycle. Tom states that the total dept for 2009 is $5,091,824 thousand. He also states the 08-09 Budget-Dept Service line will increase $1.3 million depending on the bond market.

Councilor Mutter states that within the next two years the School Department needs to get by and if they can accomplish that the debt service line will go down and once you survive the climb, they will be there and will not have to increase it.  He asks how bad would the school system get hurt in that climb. I don’t want to go through the budget process and it fails.

Council President Higgins asks the question, have we looked into opening the contract and getting some concessions.  Mr. Thibodeau responded that the contract is ending and we would have to renegotiate a new three year contract. Higgins comments I hate to do it, because I’ve been through it, but where are you getting $3 million? This has to be a joint effort by everyone. You have 500 employees that could be out of work. Mr. Wood stated that’s about the only place you can go to get that kind of money.

Council President Higgins comments that we have $9,500 per student, the lowest in the state. This is already the most efficient operation of the state. 

Dr. Morelle commented on the disadvantage this town has because of the tax cap. She stated this tax cap does not put Cumberland in a level playing field, that the difference would create more money in revenue.

Councilor Mutter stated we’re not solving problems today, we’re just admitting them. What are we going to do about it? We need to work together. At this meeting do you believe this school department has been forthcoming?, asked Crowley.

3.   The School Department’s plans and/or projections for capital improvement projects for the next five years and what effect these needs will have on the Town's debt service and the Town's ability to seek additional bond approval.

Mr. Wood discuses fire code issues. Last year we were issued some citations and we have been working on fire code updates. BF Norton has pretty much completed the fire code updates. South Cumberland is our biggest question mark, some issues with Cumberland Hill, those will be costly items but right now there are no numbers. Completions that have been done have been done through the school committee. The biggest debt will be probably be the McCourt Middle School fire code update. They will be reporting to the State Fire Marshal.

What other solutions are out there, Councilor Mutter asks. Mr. Thibodeau comments on the Blue Cross. Councilor Mutter doesn’t think the teachers get the respect they deserve and they’re always political targets. Dr. Morelle acknowledged the need for fiscal responsibility, but expressed reservations about last-minute cuts. She said such reductions make the affected programs, often including music, arts and sports, appear to be low priority.

Mayor McKee responded that he thinks the state aid is the wild card that no one’s playing right now and we should not let up or give in at this point. He is not concerned if the state is in the hole. The state is obligated to maintain aid to local schools at a certain standard. The General Assembly cannot just ignore their responsibility.  Mayor McKee states it is unacceptable that Cumberland and other communities should suffer for the fiscal irresponsibility of state officials. He's calling on local leaders to take lawmakers to task for it. Mayor McKee states, we’ve gotten the short end of the stick more often than not. And that they didn’t cap their state budget. Mayor McKee comments that the legislature has never been particularly generous with aid to Cumberland, and it shows no sign of changing its ways given the state’s current budget crisis.

No votes were taken at Wednesday’s meeting. Town Council and School Committee members agreed that it would be a good idea for their finance committees to hold a similar joint meeting in the coming weeks.

ADJOURNMENT

MOTION BY COUNCIL KIRKPATRICK, SECONDED BY COUNCILOR ACKERMAN AND IT IS UNANIMOUSLY VOTED TO ADJOURN AT 9:36 P.M.  VOTE 6/0.

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Augusta Johnson, Deputy Town Clerk