Finance, Budget, Audit & Bonding Subcommittee - Regular Meeting

uh this is the February 18th uh special meeting of the finance committee we're having a special meeting on Tuesday although this agenda says Wednesday uh I think we should be fine um because it's the right date um so we should be fine with Freedom of Information and uh so um I guess we'll get started it looks like we have all counselors and committee members present uh except councilor Meritt and Cindy but we do have a quarum so uh old business update on the status of the audit for 2024 uh good evening counselors um as always it's a pleasure to be before you this evening um as the committee chair indicated the first first item is the update on the status of the audit of fiscal 24 um as you have heard me report in Prior month's meetings our work is ongoing um we are making significant progress uh I would estimate at this point we are somewhere between 60 and 70% complete uh by complete I mean ready for the Auditors to come on site um and that is in what I would characterize as a uh traditional sense of the Auditors coming on site uh meaning that we will be ready for them when they get here um with as they like to tell us with a pretty bow on everything um so again I I believe where we are uh today is approaching 70% complete as I've reported uh last month and prior month's

meetings uh is our anticipation uh to complete the audit by the end of next month I believe at last month's meeting I did indicate that it may slide into April uh which would bu still be I believe three months earlier than last year and while not ideal uh the information that the new staff and the finance department is gaining through this exercise is uh Priceless right the things that we're learning about the ins and outs of the town uh going back many years uh is is definitely valuable and as an example one of the things that's been identified in the past week or 10 days uh has to do with a variety of accounts that are reflecting a negative balance um negative balances aren't good um as we think about these each one of these accounts is a research project where we have to go back and look not only at last fiscal year but prior years um of the over 30 accounts that have a negative balance uh some of them go back as far as eight fisal years back to 2017 so when I say that each account has a research project attached to it each in in each individual account will have to drill down and look at all the transactions Crossing multiple fiscal years to ensure that the activity in the account is appropriate as well as how we will adjust to to fix the negative uh is consistent and accurate with what the expenses were in those individual accounts so all of that is to say that our work with the of the audit of fiscal 24 is ongoing um I think next month will be a uh real mover for us uh for a variety of reasons not the least of

which uh we will be on the back side of the manager's proposed budget uh which will allow us to uh not undulate back and forth between the budget and the audit but to focus on the budget if only for a couple weeks uh before we get into the uh budget deliberations in Earnest so um to boil that all down for the committee chairs benefit um our work is ongoing approaching 70% complete that 70% is not to have the Auditors come and go and come and go but to come and for us to be prepared for their arrival um and if I had to pick a time frame I would expect that in the middle of April we'll be done with audit and with that I'm having to answer any questions that the committee may have any questions from members of the committee I see the town manager's hand up Mr manager yes um good evening good evening um Mr chair and Deputy Mayor and and all counselors um coming to you um from home this evening because I was on leave today but um I left the town in the very capable hands of our Deputy Town manager and um and CFO uh who began the day with morning SN with staff but um I just wanted to speak about this matter uh Council McClary because I know uh with uh with good intent uh nothing but intent uh the council has offered time and time again to um assist uh with our review of our our financial accounts so that uh we can get to a point of um uh getting before the Auditors sooner versus later but um as we've been saying

for some time now uh there there is a lot that we're unraveling and the experience that is being gained from this is um is absolutely Priceless um has been mentioned there there are some some of these matters that have been going on for multiple years and and have yet to be captured so I I think our in-house Talent is is able to to put into work uh that is going to uh be most uh prosperous for us to have a strong Foundation to build upon moving forward after after this audit so I just continue to ask for everyone's patience and and just know that um in the decision to not uh graciously accept the um support that the council has offered I just want to say that um the past uh two fiscal years prior to this um Consulting Services was a budget item and um and we spent nearly um $40,000 on this budgeted item to to do the work that um typical finance department should be able to do uh now we have the talent and the capabilities to do it and we're doing that and um and we're still going to be ahead of schedule of um where we were before uh with assistance with us um helping us so um I I know there uh may be some angst or or frustration or or some bewilderment um but uh I can just uh hopefully express to you with confidence that we are taking the best course of action for the future of Bloomfield in terms of understanding exactly what our challenges are and uncovering and and solving answering issues that are are placed before before us through the uh

the diligent efforts of our of our finance team led by Mr Hill so um I I felt the need to uh to speak to this uh because um I I know the council is concerned each of you are very conscientious and um and want a deliberate complete project um and um and I want you to know we're committed to the same um but we're doing it in a way that's going to set up up set us up for Success moving forward and we're also saving our taxpayers dollars um in the process so with that said I I'll turn it back over to Mr Hill for any questions about his opening remarks thank you very much for the opportunity to speak thank you Mr Town manager deputy mayor uh thank you chair uh my question is the audit will be complete or will be prepared for the audit by mid April will that also be inclusive of the Board of Ed because I know there's always been sort of a little um issue with their familiarity with munas um yes that uh my comments about the audit are for the complete audit which includes our component unit the Board of Ed great great thank you thank you so much quick question also so um so we hear that this is simultaneously developing a checklist for making sure we understand historical purposes are we also still preparing for the end of the 25 close out year and so that we're putting press improvements in place so that we're not finding ourselves or whoever is sitting up here next year finding themselves asking the same questions about 25 audit it's an that's an excellent question and thank you for asking it um absolutely um as

we have been for I guess six months now uh working to get up to speed on the the nuances and the intricacies of how bloomfield's Financial operations have been run um we're not only as you've heard me say before completing work that was should have been done in fiscal 24 um we're also doing the 25 work and as we're doing the 25 work we're making adjustments uh to I guess the simplest way I can say it I've I've said before which is to utilize our system of record munus there's a lot of work in the the town's Financial history that for one reason or another starts its life outside munus and then whether it's monthly quarterly or annually Works its way into munus the the brightest thing that Miss Stewart and I have been doing over the past six months is migrating towards our system of record I call it our system of Truth record of truth actually having the information in it in a timely fashion so not waiting a week or two or a month or two or almost a full fiscal year but within say 48 or 72 hours Financial transactions are reflected in munus which gives us a much more accurate and closer to real time view of what the town's finances are that's the biggest challenge that we've faced looking back at fiscal 24 is the information is not there um because it hasn't been entered yet and there is actually still information meaningful information with significant dollars attached to it that needs to be entered into munus from fiscal 24 so does that mean you're doing the Recon ilation monthly or quarterly so that you're not waiting for a whole

year to do the reconation because I think from my knowledge is that that was the big problem with the Board of Education it was duplicated work from them putting the information in it's almost like Gage in garbage out and so are you doing that reconciliation what's the Cadence of when you're doing that reconciliation while I'd like to say that we're doing it monthly what we're doing is preparing ourselves to be able to do it monthly by the end of this fiscal year so as I mentioned uh with budget and audit overlapping it's it's really challenging because it's the strain on our limited resources the C the human capital right um as we get on a more traditional path and get freed up intermittently from budget uh the things that we've been working on with munus with the bank with the Board of Ed will allow us to embrace automation more right less human touching preparing and setting aside waiting to enter IM munus but having the information in munus and pulling a file from the bank so that they can bump up against each other in the technology and then we review and decision that's going to compress the time frame that it takes to complete one month's audit um and again by the end of this year uh we do anticipate being it's nuanced but it's current as we can we won't have June's reconciliation done until July so they won't all be done this and so they will start the process for the 25 audit in July or when do you start that process we will Begin by Distributing our fiscal year and close memo in the April late April time frame uh which will speak to all of the activities necessary before June 30th to prepare to close the fiscal

year and then we will cross over into next fiscal year um where purchase orders munus will be closed locked in the 13th period we'll start our audit work that audit work will be very different for 25 than it is this year because as we look back at 25 the entries are there the work has been done so it will truly be preparing uh the working papers our internal working papers for the auditor review uh which will be done timely through July and August maybe into September then October November Auditors are on site and that's how we meet the December 31st deadline oh that would be beautiful beautiful just beautiful hopefully it works hopefully the corrective action up Donna you have to come to the microphone state your name and title for the record sorry I just wanted you to know that also name and title I'm sorry my name is to Deputy Finance director um and I just wanted to let you know that as I work through and work with different people uh preparing for this fy2 24 audit um we're also beginning to talk about fy2 audit and we're letting people know I'm letting people know that you know it's not going to be this late next year so they're kind of prepared I'm basically saying okay thanks for preparing for the 24 because in another month or so you're going to be preparing for 25 so I figured I'd just throw that in there that you know we are definitely kind of working all these years at once well I thank you all for your your work um I know as the chair and to the committee I know one of the main priorities for me uh as this committee chair was to make sure that we get back on track um and I think this is going to be like the third

year as the finance committee chair and I see huge improvements and hopeful well this is going to be the yeah fourth year excuse me um of the finance committee chair and we see improvements each year um and it's getting better because of process improvements and I know it's kind of tough for the staff because I keep nagging but I think the audit and the financial uh the CFA well the annual Financial yeah CFA AFA ala annual Financial comprehensive report um is the signal to the public of transparency ult ultimate transparency of where their tax dollars are going the liabilities of this community um and it helps this body plan for the future for budgets because we know what the actuals are uh and so hopefully whoever is so luy from the public to be selected as Council and as the chair of the finance committee um don't know if I'm going to be here but um hopefully um you would be in a good position to know that because of the work that this this body has done to put it on the agenda every meeting whether it's an update or not it's on the agenda every meeting and we're tracking it and so I want to thank you Donna I want to thank you Daryl Mr Town manager and team for um the diligence and the foresight to do the corrective action and I know we've been pressing get the consultants in get the consultants in get the consultants in but I think um we're on track um it's late but I think we're on track and then next year hopefully we will be on Track by December 31st uh to make sure that um the audit is on time we are on a sustainable path perfect yes with that uh any other questions nope don't see any hands Council mayor asked for this item to be on the agenda and I just text to see if

he was coming um but hopefully he will watch the recording oh you wanted to no I thought you say I to it's out there on public and so I think it's I think it's worthwhile to continue to present it and then hopefully he will review the uh the recording of this meeting and then if he has any questions he can direct them to the town manager who then will probably forward it to you for a response so Mr Hill I will turn it over to you and I see our phenomenal tax assessor here yes she is the Assessor yeah she's the tax that's the assessor yes sir it is tax assessor Town assessor um here in the room too so I'll just turn it over to you for your presentation I'm g go in the back and try to get Council Mir on the line thank you counselor um I'm gonna uh uh Miss Rogers we're on the PowerPoint um I apologize in advance for uh the pages later on in the presentation that have lots of numbers and they're small um but unfortunately to do this topic any justice um it did not lend itself to a graphic representation um but I'm hopeful that with it being shown as a PowerPoint which is a little bit larger uh those watching on TV can view uh of course uh after uh the meeting is posted you'll be able to zoom in and do things like that um start tonight's presentation by thanking our town assessor uh miss m Mrs madzi uh for her leadership in the assessor's office and the the work of her staff uh that completed the 2024 revaluation process Mr Mr director uh could we just stand at ease for five

minutes till councilor Mera get gets on the line he's trying to locate the link sure so I just because I think it's important he asked for this and I wanted him to be here to be able to ask questions and don't want you to have to repeat yourself so um just for the interest till Council Meritt logs on we'll stand at EAS for about 5 minutes sure thank you thank you e e

e e my apologies I'm here Council chamber is on mute I'll start by uh thanking Mrs madzi and her staff for completing the town's 2024 revaluation that completion is uh identified by the filing of reports to the office of policy and management uh at the state um the first few slides I've added uh as an update to Prior presentation I can't remember if it was November or December I think it was November uh the numbers are slightly different as of course we've gotten through the completion of the process um on slide two the page numbers at the bottom right uh you'll see that with all three components of our assessed value or grand list uh shown real estate

across the top while this is comparing the 2023 Grand list to the 2024 Rev Grand list of note here is the percentage change from November you will recall that the res uh the real estate grew commercial and residential combined by 43% that's down to 39.6% uh that decline is a result of exemptions that have come through uh and I think there were just a few uh informal hearings that resulted in modifications to assessed values primarily on the residential side um personal property you'll see is up 6.5% and motor vehicle that negative 6.9% shown in red or just under $15.8 million that decline is a result of a change at the state level in how Motor Vehicles are assessed and in turn taxed uh the simplest way to say the change is that they've gone from the Blue Book value to the MSRP the manufacturer suggested retail price so that MSRP is the starting point and then based on the year there's a percentage that the state has provided to localities that we apply to that MSRP depending on how old the vehicle is the result in Bloomfield is that roughly 15.8 million Decline and assessed value for Motor Vehicles question sorry to interrupt have we sent um from the town manager any documentation to our state delegations talking about the impact that that's going to have on our budget and for them to help support more Municipal Aid in their their budget for Bloomfield or for municipalities that have been impacted um by the from switching from the Kelly Blue

Book to the MRP pricing I'm not aware of any communication being sent to our delegation and I know one before she starts um with the real estate I know there's going to be an update uh because they were talking about it in the Appropriations Committee uh to the veterans exemption corre clarify that have that been has that been included in real estate number of 39.6 correct my name is V I'm the assessor for the town of blumfield yes to answer your first question we just we had an email last week from croc from uh uh requesting all towns to report to them about the um um impact the impact thank you for the right word the impact of uh the methodology change in motor vehicle and So I responded to that email that went to crog last Friday darl that 15 million from the assess equates to what negative percentage in our actual Revenue intake from the net revenue that we get from you know the a it's a very good question it's actually two-pronged I don't have an answer for you um not as of yet because as you'll see in a slide or two I update the equalization with the updated Equalization and where our fiscal 26 budget development ends our mill rate may be below the state's cap on Motor Vehicle which has a negative impact on our Revenue yeah that's compared to this year and then there's the methodology change right that would result in the assessed values being lower coupled with the mill rate being lower right so I need to Crunch those numbers to get

to isolating one isolating the other and then looking at them together before I'd be comfortable giving you what that impact will be but I'll have that by the end end of the week because essentially what they're doing is this unfunded mandate right if if if I look at the proposed budget right now in the governor's budget you can check with CCM kog cost when you check when you see the governor's proposed budget literally there is no additional funding for that motor vehicle that's going to municipalities and then there's no more pilot more money put in the budget for pilot if they didn't want to give it to you for the motor vehicle exemption I think we get somewhere near $600,000 from the state I'm not mistaken um for the that exemption somewhere around that somewhere 648 or 647 somewhere near 600 plus plus or minus for that and that's it right um and so there's no increase in that and essentially they're giving us a very tough budget year a unfunded mandate and so I think it's worthwhile whether it's from this body as a whole making a statement and or the town manager sending a letter to our full delegation talking about the real impact because that's going to equal a tax increase in a very tough tough year so yeah yeah and I I think that I think it's a great point and you know I'm sensitive to speaking about the state's motives but what we do know is that as the state looks down at its political subdivisions particularly municipalities with taxing power we have the ability to raise revenue from all three sources so while they may do something with one or do something with the other they look at it as though we have three sources to raise the revenue that we need and they've lowered one which in turn means we may need to raise another um but I I uh I definitely agree

I think that the process that the general assembly went through before this change was signed into law um is the real time that uh the conversation could be had what we'd be looking at now is uh some passage of time before or any anything is done to adjust this this was just implemented this year um so I think that uh the state will likely be looking for I don't know how many but more than one or two years of actuals to see what the impact is and if local government's negative response persist before they would well I just want us to be I just want us to be a voice at the table when it happens and so maybe we lead the charge in this like wait a minute State this is $15 million off of our off our grand list that it's going to go ultimately to real people and the pack real people because either personal property or real estate has to go up or tax real estate because you can't really do too much with personal property um and we know we have a regressive tax system in Connecticut um and it's not sustainable long term and so I think talking to our delegation is the best way to go sure and having those uh the revenues that result from the Motor Vehicle Tax change uh where we would make that up is in the adjustment or setting of the mill rate so it's going to compensate for all changes not just one of them yeah it's a tax increase it's like you hear one vo by the governor no offense to love the governor think he's doing a great job but the reality of situation is oh yeah we cut$ 250,000 you saved $250 on your personal income tax your state income tax but then you had to put the problem on the municipalities to raise the raise taxes so you're not really saving it's like Robin Peter to pay Paul and so um

again I just I'm G get off my personal soapbox but I just think it's it's affecting us and we see it real and so we will have some tough decision decisions and so for my colleagues if you are really casual with our State Rep and state senators please let them know the impact that that change is made and the motor vehicle tax because it will impact this budget thanks you can continue Mr chair yes sir you remind me would you remind me what is included in personal property now I know that some of the machinery and things equipment have been taken off by the state what what's left on it uh the the the tax assessor is coming out oh personal property it's all business asset filed by business in in town so all our businesses are required by state November 1st to report their uh personal property business assets is that net uh assets or well no they declared the full value we depreciate with depreciation depreciate Furniture equipment yes Furniture equipment after the depreciate that's net right after depreciation but there was a big hunk taken out by the state they they well they now they were supposed to give us compensators for it um I don't if it's machinery where it was okay that's fine I'll find out say that again Council M I don't think we understood some some maybe five years ago or so the state Exempted certain things correct would couldn't be taxed as personal property any more correct those are uh the manufacturing equipment yes manuf okay that was just so all PP PP is on a balance sheet okay it shows that's where you get it from or do they immediately give it to you or do you ask for we ask them to file them yes okay it file to

our office yes so that that didn't hurt us all that much okay and do you go out and do like random assess like do you random we do uh we do fied visit to businesses and we are required also to uh do I mean we have to do personal property Audits and that is one thing that I'm looking to probably uh bring it back on board I've discussed it with the finance directors that we should look into quick question if they own the business I know we can't probably mandate this but if they own the business in town um and they have vehicles are their vehicles registered in Bloomville or in the state of Connecticut if the vehicle moves in and our meaning is uh moved in and packed in an address in Bloomfield yes you have to register the vehicle in Bloomfield let's say the business is here you packed the vehicle here yes but if you are you live in let's say you live in Windor and you drive here to Bloomfield to uh run your business no you're not required to register the vehicle quick question I know this is in Weeds and I'll let you continue but does the companies that receive tax abatements from the town of bloomfi whether it's I think it may be off but like traded drill world class distribution Etc do are we requiring them by our policy to register all vehicles in the town of bloomfi if a company receives a tax abatement and they own Fleet if the fleet is packed here at the location of the business yes they are required to register the got it thank you yes yeah it's it's where the the vehicle sleeps yes so it's parked that night that it gets taxed um and I I heard you say PPE I think you were meant f

no it's person it's like property Furniture fixtures and equipment yes on slide three uh is a presentation of the property classes and the percentage change again this is an update from uh previously but it's this it's the same information because the number of parcels haven't changed it's the exemptions for several of the parcels that impacted the prior slides uh Grand list uh I will as it has been asked previously Sher that um the Bloomfield Board of assessment appeals the deadline for applications from Property Owners uh who want to appeal their revaluation that deadline is the 20th this Thursday um to date can you read that can you restate that again just for the record so that people who want to tune in and watch this hear that in India are we planning send something out to the residents of the town to let them know that that deadline is coming and maybe you'll see an uptick if we send out a so it's I've said it every time I've presented it in front of committee it is on the revaluation statements that they received it's on the Assessor's website um so we have repeatedly communicated to all property owners that the deadline is February 20th you use as many channels say it as many times as you want we need to so let's make sure that it's not going to be this Council and this body and this community this town government did not communicate those deadlines to I would suggest uh as I was getting ready to share some uh metrics with regard to Applications received by the board of assessment appeals um as of

Friday this past Friday there were 22 two appeals for commercial and 11 appeals for residential today we received 61 additional residential appeal applications so where we stand as a close of business today is there are 22 commercial properties and 72 Residential Properties that have filed the paperwork with the Bloomfield Board of assessment appeals what is the average on like for like how does this compared to last five years ago when we did this do we have data on that is this trending is this normal have we seen less if so why I haven't seen the history but I don't think that there's any normal to a revaluation process and so in our budget process Mr Hill we have to keep a percentage that because we suspect that we're going to have appeals based on the 72 and then the 22 for commercial have we kind of determined and I love to be a lot conservative i' rather more than Maria because you never know um have we determined what we believe is going to be going to the board of assessment of appeals and in further forecast what we believe will go to the courts um so we've begun that work we haven't completed it because the deadline is Thursday and we won't know what the full potential universe is right right now we're sitting at 71 993 right we received 61 today who knows what tomorrow and Thursday hold um but once we have a a better feel for uh the not only the number but the values attached to the number of applications then we will complete our work to estimate what

the offset is for next year's budget development turning to slide four um Mr chair yes Mr Council Mary yes yes I was going to ask what that estimate I I figured that those little letters now you've gone on the last slide um I'm sorry I'm asking about the last slide what's the question uh the RS and CI I think it's commercial industrial and residential what's the s oh special special special properties residential and special and Commercial and Industrial okay what's special sorry those excuse me those are our pa49 farm um properties that are on our record Farm Farms yeah yeah okay thank you9 Farms yeah okay that's all I carry about it's okay thank you um on slide four are the 2024 revaluation filed results uh couple of things of note on this page one at the very top you'll see that the 5% shift from move for please yeah thank you from commercial the 5% shift from commercial to residential there's a fraction in there um but as you can see in the Top Line residential only um the mix for FY 25 is 53 and it increases by five to 58 for the 2024 revaluation in the box right to the low and to below and to the right um that's has the heading 2024 revaluation average change I'm sure everyone remembers that that residential only line was previously 53% it's down to 51% I'm I'm sorry I'm stupid toight can

you tell me what the mix means mix it's both commercial Rel and so in looking at the residential line if you take um for each year looking at the fiscal year 2025 column that totals to 1.94 6 billion you'll see that 53% of that total is residential 47% is commercial and for 2024 it's 58% is residential and 42% commercial thank you so it's the mixture of the combined total yeah it's the percentage breakdown of what the percent 53% of residential 53% of the total is that is as bad as I thought it was going to be great so in the box below to the right the average change um you will recall the residential only increase was 53% that's down to 51 and Commercial only was 32% it's down to 27 so that that combined total increase shown as 40% is down from what was previously I think at the the November presentation 43% and does the does the shift from commercial to property because that's down also Chef it's roughly the same I believe before it was 4.1 or 4.2 and now it's 4 like 53 okay which rounds up to five yep so it goes up when that decrease it goes up yes so is the inverse slide five uh shows the mill rate Equalization C calculations uh and this is the same as was presented has been presented previously where we look at on the first line the net adjusted collectible Grand list that includes

real estate and personal property only um a 34% increase right and that's a different number because personal properties included here on the prior side was residential only um but you take each of those grand lists or the net adjusted collectible GR lists divide by a th000 and you get the mill rate the value of one mil in the yellow box the revenues generated from taxes this year that 87.98 3 million using that same Revenue Target for after the 2024 re revaluation you'll see our mill rate equalizes generating the exact same Revenue down from 37.4 n to 27.979870 question but those are for people's homes that did not increase over the it's a no tax increase for those people who house did not increase 40% or more and didn't say there was a no tax increase the equalization it's the yellow long yellow box right above it with the 87.98 3 million in it yeah it's generating the same taxes yes the reval our grand list grew but because of that to generate the same taxes is this year the mill rate Falls yeah but if if you

equalizing right so if you equalize you equalize at like flat right so for example if my house is and I'll stop because right before you ask the question it's the last bullet you're asking a question about taxes the equalized mill rate is not used for anything other than the start of the budget development for next year it's not used to calculate taxes yeah I I hear you so all things equal we're starting out with 87. N3 not 87 m98 uh 90 83,000 288 right that's to collect but then you have all your fixed cost that may add into that 27.979870 right now this [Music] 27.979870 correct because this is this is this is flat doesn't this 27.979870 three includes the basic flat what we are currently doing right now that's the answer the 87.98 is the fiscal 20

revenue generated from taxes yep right next year's budget yes labor goes up goods and services go up debt Services going up Insurance go everything's going up the maintenance at the fixed cost of everything right so the fixed cost is not included in this for next year is not included in this that's where I hesitate but it's for me is and maybe it's because um for me it's it's somewhat conflating because we're talking about taxes and we're talking about what's includ this is an equalization exercise all it's doing is saying with our revaluation and the increase in our grand list how do we talk about that increase as though there is no increase right and it's through the equalization process this 27.979870 our reval grand list was in place this year that would be our maill rate because it generates the tax revenue that we need for this year all the fix cost for this year so as we go to next year this isn't looking at anything for next it's ending this year yeah we're saying the same thing I think we're saying the same thing I think what I'm saying is we have no fixed cost for next year in this number we have no fixed we do in this number right here yeah 87.9 million it's all the fixed cost that we have in this fiscal year or in that number in the fixed cost is going up let's say 15% next budget Year's DEC that's next budget that's what I'm talking about it doesn't but are there fixed costs in this year's 87 million absolutely there are but I'm talking about next budget cycle the one that we're yet to develop none of those cost salary wages cost a livone of the increases from this fiscal year to next fiscal year are in there in this number correct yeah that's what I was saying it's not in this number the increases are not not in this number yes correct

the increase is important yeah I think I think just the fixed cost and so what we're going to see is when this number go up next year or potentially goes up it's going to be the drivers of that is fixed maintenance costs unless we're developing new programming although the current program that we are currently providing has some kind of fixed cost increase because we may be providing eggs and bacon to seniors at the senior center and eggs is $19 a dozen right now now or there was there was something that we needed to do last year the year before that we didn't do that we now have to do next year yeah and so those are fix no new pro programs is fixed cost so just want to level set the reason why I asked that question is is because I want to level set right because we can't do anything with fixed cost fixed cost is fixed cost a lot of those fixed cost is negotiations through collective bargaining unless you want to blow those negotiations and those contracts up then you don't want you don't want to do that because then you're in years of L ation and right there's something to say for for that and so I just wanted to level set you may continue thank you so the justif side five is we equalize and this equalized rate of 27.979870 is the number well we're not done yet right now we're done and there's still things that need to be adjusted as we discussed earlier about an assumption for uh the the challenges that are going through the baa process that may result in uh decrease in our grand list all right on slide sixes uh where we begin to talk about the municipal

options for phasing in an assessment increase resulting from the re evaluation of real property apologize for the legal ease but I give the statute reference um what follows is not the statute it's just an ex excerpt um I believe the yellow highlighted line at the top is from the actual statute but then it's paraphrase the statute allows a municipalities governing legislative body to decide three things one if they want to phase in a revaluation uh assessment for real property and if they do which method do they want to use you see the three shown here there's actually a fourth one that is not included in the statute but it referenced in several of the writeups from the office of legislative review that's two things so whether or not the governing legislative body decides whether or not to phase in if the Govern legislative body decides to phase in which method and then the structure um all of the available options uh can be phased in up to but not exceeding a five-year period um and the manner in which those increases are phased in vary depending on which method is chosen I've got examples on the next four slides for the dollar phase in and the ratio phase in I've intentionally not included examples for number three the ratio phase in by property class um I'm a bit of a purist in believe in tax Equity that everyone gets treated the same um and I believe that number three is bad public policy because it allows a

municipality's governing legislative body to treat this type of property different than this type of property and I again I think that bad public policy uh but if the committee and the council desires I'm happy to go back and chop that wood so I'll walk you through could I make a comment right now I think we're going to want to understand what a ratio phas in by property class really is at some point I don't think I would I apologize counselor what's that I apologize I was speaking over you no I was just asking if you would explain what that really is uh for all of us not right now but some point oh I will um once I get through number two the ratio phase in uh the next slide is the text for the ratio phase in by property class um but after I get through number two the ratio phase in you'll see the level of complexity and the disperate treatment by property class that number three suggest yes but I will speak to number three after I'm done with number two okay thank you moving on to slide seven this is the revaluation phase in with the dollar option the dollar option phase in allows a municipality to take the increase and divide it by the number of years that the uh increase would be spread over it also allows the legislative government governing body to decide how meaning how much right whether it's if it's over four years is it 25% a year or is it 50% 10% 10% and

30% right so we're still Bound by the F not more than five years and we have to pick how many meaning when I say we I mean the council has to decide to phase in and if we phase in through the option how many years that phase in would be over and at that point as you look at the bottom part of the uh slide and online it it looks as small as I thought it would uh but you will see that the increases I've shown fiscal 25 uh and then the two through five year options vary depending on the amount is fixed for each scenario but then the number of years are spread out um and I apologize Let Me Take A A Step Up on each side there's two options or two examples example one on the left example two on the right example one on the left is the same as presented back in November with a house valued this year at 190,000 that increases by the 41% shown on the prior slide to a Val value of $286,900 or a $96,900 increase in the property value and corresponding loan values net worth all those good things example two on the right hand side is for $400,000 house again these are the same two base examples that I used back in November so the F sorry question so the fiscal year when you look at the dollar phase in and it says no phase in um value that's 133,000 why is that the start if the value of oh because it's the assess 70% of the in fiscal 25 of this so that's why it's 133 because it's

the 70% correct okay got it dumb question by no no no no questions dumb it's shown right above I'm like I'm a big fan of showing my work 70% of yep I got it NOP I asked in a question and I knew the answer to it sorry here you go um so and the and similarly on the right hand side for the only difference is it's for a $400,000 house that grows by the same 41% to 612,000 you take the 70% of that to get the assessed values and those are the numbers you see on the bottom part of the page quick question so you're going to move into the dollar option and is these real like the total estimate change in taxes on the next page are those the real numbers of what taxes would be can I get there okay sorry turning to slide eight questions turning to slide eight um each of the scenarios at the bottom of the prior page are broken out the NO phase in at the very top again the same layout example one on the left example two on the right the left is the $190,000 property the right is the $400,000 property and then you'll see the assessed value the corresponding mill rate right that's the equalized mill rate shown from fiscal 26 through fiscal 30 all of those I should have labed it better those are all equalized Mill rates right so that we can compare them to the earlier slide of the 20797 which is shown with the NO phase in at the very top yes sorry if that's to equalize the 133 uh from 26 you see it on the house that is 200,000 assess right that is a what the

27.979870 no increase in taxes because you're equalizing no it's not equalizing taxes it's equalizing the revenue generated from the taxes and um trying to remember my remarks from November where the same question came up and it has to do with we're using the average growth for all Residential Properties right each individual property is going to have its own Dynamic whether they're Bel below the average or above the average this assumes the average this is scary because this is not even including this is not even including future fixed costs for next year that this and if you're seeing a change in taxes of $631 or in a house that's assessed that 200 that's scar that's that is a huge burden on taxpayers and that's not even including imagine what that number is going to be with fixed cost salaries cost of living other enhancements to programming rising cost of fewu rising cost of the MDC like there's a lot of different variables and we just at the equalization is at a $631 scary that's why that's why some of us want go f well I I don't think phasing and I'm going to get to my first question related to this if the town has increased in fixed costs as I keep talking about because we do salaries Debt Service Etc if we were to delay full Revenue

collection how would that impact the town's ability to maintain because aren't you not delay full Revenue collection what does that mean well delay value full valuation of a house because you're you're that's what I'm trying to present yeah you're you're delaying it you're kicking the can down the Ro the town isn't losing anything it's just a question who pays it it's a balloon is what I'm concerned no is for the next for the next if you do four years five years it's a balloon because you are starting the 27 budget year hypothetically if you do a two-year phase in with the $631 tax increase not even including fixed cost or any new programming so it's a balloon can can I inter can I interject go ahead okay um we have a wellth thought out and designed presentation here and we we have a lot of questions a lot of concerns um but we're not going to get anywhere if we can't get through the presentation and see if some of the questions are answered um before they're even asked so I would respectfully ask that we allow Mr Hill to get through his presentation and at that point uh we can go over any points that may be of concern or may be a bit confusing or or may you know generate some questions uh from from our respected board um but I will say when you're talking about an assessed value if that value of that home is going up then the taxes on that home is going up that value of the home is worth more to that homeowner now that's a good thing that homeowner if they sell that

house is going to get more money for it therefore the taxes should be higher for that increased in value of that home so I'll just say that right now but I really want to turn this over to uh Mr Hill so that um we can hopefully be done with this uh call and and not exhaust our our our citizens with a overflow abundance of information that's already complicated but if we keep interrupting respectfully team if we keep interrupting it's going to be that much harder for them to digest so I ask that we please let Mr Hill go through his presentation and then during the Q&A portion of it uh he will respectfully give his best analysis of of all his thoughts and if anything he needs to come back to to answer I'm certain he will he will do that Mr H thank you councelor uh thank you Mr manager um on slide eight again example one on the left at $190,000 property example two on the right at for $400,000 property the NO phase in is the first line and then working down the page we show the math that supports not only what the assessed value would be phasing in over two three four and five years but also what the equalized mill rate is for each of those years and each of those scenarios and what the corresponding estimated taxes are so all the way back at the top on the NO phase in we can see that the assessed value goes up by a little under $70,000 the actual value for the property goes up by 100 almost $100,000 um and yes $631 a year $315 extra dollars twice a year uh is not an insignificant amount

um but it does have a corresponding increase in value for the property and the property owners uh say net worth down the page either scenario years 2 three four and five uh you'll notice that each of them always end at the same equalized mill rate um it's one of the things I love about math it's very clean um and years 2 through five you'll see that each of the years the equalized mill rate changes that's just the math Dynamic of how you spread bringing the revaluation value online over the 2 three4 fiveyear uh time frame they all end at the same equalized mill rate they all end at the same $631 similarly on the right side of the page example two which is for the $400,000 property the grow to 612,000 so a $212,000 increase um it's all laid out the same the NO phase in shows an increase of taxes uh at the equalized mill rate of $1,485 and continues on uh through scenarios with years phased in two three and four and five um pause there that's the end of the dollar option the next option is the ratio option um the ratio option is a a little bit higher math um laid out at the top of the page the examples are the same left side's $190,000 property right side's a $400,000 property um it's hard to see even on my page but right below the blue

box is the formula from the statue you take the fiscal year 20 2025 the current assessed value and divide it by the revaluation market value that is not a typo it's the current assessed value divided by the revaluation market value and you get a ratio it's 46% and then you take the assessment percentage which is 70% and subtract ratio then you arrive at a 24% to be phased in that 24% then gets divided by the number of years that the council may decide to phase in under the ratio option what that ratio does is the revaluation increase gets added on based on the percentage shown below each phase in Period phase in periods being NO phase in 2 3 four and 5 years so where you see on the left hand side of the page two-year phase in and 58.2% that 58.2% is the ratio divided by two and then by three and then by four and then by five to arrive at the ratio or the percentage of the revaluation increase that comes online each year and I know everybody's ch pump in at the bit for the next page which shows what those estimated taxes at the equalized mill rate uh would be and bright line difference between the dollar value the dollar option and the ratio option you'll see that the ratio option brings the revaluation increase online sooner than the dollar option does although it does still

graduate over time depending on the number of years selected for the phase in the third option which is the ratio phase in by property class takes this ratio option and bifurcates it at least bifurcates it because actually the number of property classes I think there's six or eight Subs under residential and Commercial the council would have the ability to pick and choose from all of the different property types it's not residential and commercial but the subcategories under that to decide how the revaluation increase gets phased in by property class so property classes could be treated differently if the council so decided and the last slide and I'll entertain any questions uh is for information um thank you Miss madzi again uh for doing the research to find the eight Community shown over the past three years right year of revaluation so it goes back four years I guess not including our 20124 but you can see that there are eight uh communities that did phase in their assessed value um and on the right hand side of the page as I spoke to earlier each governing legislative body has not only the first two decisions but the third third decision again the first is whether or not to phase in the second is which option to use to phase in and then the third as is demonstrated here I assume that all of these are dollar

options uh the council would decide the percentage for each of the years that it chooses uh to phase in and I do understand that uh Canton is going through the process now uh to phase in their reevaluation 2024 reevaluation and with that I'm happy to answer at least try to answer any questions that the committee has I have one that's yeah I I I'm trying to remember back the last time that I went through a phase in here in Bloomfield and uh I think we we did the dollar which I'm assuming everybody seems to do and I suspect that's the one we would choose and we we did a fivey year 20% a year and we did it for the first year and then we stopped it and I think we started it again every year you can decide whether you're going to do it or not that's what I understand we did then now is that still possible uh from reading the statute um and thank you for the prompt um you've heard me say several times the governing legislative body gets to make the three initial decisions if the governing legislative body makes those three decisions to phase in a revaluation increase then the Administration has a responsibility to inform the office of policy and management that the town is phasing it its revaluation and the Administration has to through the town manager communicates that we're phasing in which option was chosen and what the structure is um I do not believe that we can start stop and start back up maybe we

can't but I wonder if we can just stop after when you're just curious because we yes the statute does allow for the council to decide to phase in and then in any year that the phase in is occurring the Council can decide to stop can you can you go back to the dollar phasion um showing how much uh reduced the increases in dollars for the for the $200,000 house slide eight going back to the dollar phase it shows how much it is every I'm not that one no I think it was before that yeah it's slide eight we're working to get there okay and your question is about the amount of the yeah I'm going to point out why I think this is a good idea right so so if you say this $200,000 houses is my house um uh instead of having my taxes go up $631 if we chose the fiveyear equasion we only go up $113 which is a real nice thing for our taxpaying residential homeowner to uh benefit from and that hund that uh that that will reduce the of taxes that signal or some other office building that is not going up as much as that um they'll pay that the difference that that uh uh the rest of the $6

6431 so I you know I I think our residential voters deserve that break I mean who wouldn't want eventually you're going to have those increases by at least by the time you get to the fifth year um you're going to have to pay uh $631 more than you did Total but why not save them the money in the meantime and and go and only go up that much there is absolutely no benefit to me if I'm the taxpayer residential taxpayer for not not to delay this as much as I can which is the shows down the fiveyear phas in that for one3 one year 265 the next instead of 631 every year I mean that only makes sense that would be very desirable I just want to make that point because I don't see a downside to doing the fiveyear phasion or four year prob but five years the best uh and giving a residential the biggest reduction in taxes so I just that's why I I think if we want to get reelected next year that would be a desirable thing to do thank you so quick question when if what would be in your opinion uh this is a question from uh Miss Hall who's watching saw it in the chat uh what would be your preferred staff preferred method if we were to do this option do what option phasing which one of the three well you said three is bad public policy so one or two um recognizing that you're asking me a question that I've previously said I'm not in support of uh my answer would be none but if the council decides or is

going to decide to phas in it would be the dollar option okay perfect and then the next thing is Council Meritt says that um saving money is there Savings of money in the phas in approach for residential or for the town for residential I mean it's so professionally all the way back to the 90s um there is a difference between savings and cost avoidance right this is not savings this is cost avoidance for a period of time but eventually you're gonna have to pay those costs that's why it's cost avoidance and not savings yep and so it's that's not true you actually never have to catch up you always by the time you get to the fifth year yes you're going to be paying that full 631 addition but for the four years prior you saved all all that money so and you'll never have to pay that back the the the businesses are going to have to pay that so and they're not unhappy because their taxes are going down anyway so how does the businesses pay because they're shifting they're shifting it over onto they're taking it uh residential doesn't have to pay that much and it's they're phasing in the effect uh and and you're phasing down while the business is is facing up from the lowest option I don't follow that um the dollar option would be phasing in all the same residential and Commercial yes but commercial that anybody not don't say commercial say anybody who had a low a much lower uh uh valuation and and they didn't go up to the average

or above um but when up lower they they would really save on taxes if if you didn't do fasing but if you do fasion they're going to be they're not going to save quite as much each year and that's that's how you're Shifting the tax Town collects the same amount it's just who they're getting it from so I I want to make two points that I have not said um previously um in today right because today we're talking about phase in options um as the committee has said several times I'm showing the equalized mill rate and the equalized mill rate we know is not sufficient for next year's budget so there will be an increase to the equalized mill rate to satisfy the services and fixed costs that the town wants to provide its residents and businesses next year in addition to that even with phase in Mrs madzi and her staff are going to do what they do every year which is adjust the grand list based on market movement that year it's not a reval but it happens every year phase in does not stop that so if Market values go up by 3% next year or down by 3% we will adjust the grand list and then continue to apply any phase in that the council may choose to undertake is don't which is a snowfall effect which I just don't like it's well it's a revolving Circle or like it's just a

balloon it's a debt balloon um well not debt let me find the right word it's just not good to me in my opinion I don't think it's just good Financial all to phase in huh say it again to phase in is not good for yeah I just don't think it's a good thing because you're not like we don't have a crystal ball we don't know what disasters are going to happen in town we don't know what the economy is going to look like we don't know where inflation is going to be look like we don't know what the job market is going to look like we don't know what's coming out of Washington DC we it's just from this is my personal opinion but I'm a keep an open mind I think it's kicking the can down the road and when we see government Kick the Can down the road we leave liabilities and we leave tons of issues for future generations and I know other communities are talking about doing it like Avon but those communities are unique okay right they're very unique and there are certain inputs that um those communities that we may not have and so I'm just concerned but I will keep an open mind and obviously I'm just one of nine votes and the body can do whatever they choose to do I am just I'm happy you presented this this is a one of the tools in the toolbox that we potentially can use as a body but I know these numbers don't include fixed costs and salary wages and just to keep doing that year after year after year on our residents when we hear the burden of paying taxes the to come up with the you know on a house that is assess at uh 428 1485 just the start in fiscal year 26 that's burdensome so Ken um I'm just I'm just saying it's I'm

looking at the numbers it's B well I mean look looking at uh $1,500 I mean just to a numbers guy right I just have a different perspect perspective for me I'm happy to pay taxes as long as I know what I'm getting from my taxes if I don't know what I'm getting from my taxes then I have a problem with any taxes I pay but as we look at the $1,500 $1,485 increase in the NO phase in example two dollar option we can't forget that the taxes that they're paying now are 10,500 so let's put the 1500 in perspective it's not $33,000 going up by 1500 it's 10,500 going to 12,000 which is very different than 5,000 going to 5600 the magnitude of the dollars matter larger more expensive houses are going to have a larger increase because their property is worth more and the dynamic between a $400,000 house whose value's gone to $64,000 right I'll speak to a little bit of my personal experience over the past decades my net worth has gone up by $200,000 that impacts a lot of different things if I got in my house and had PMI mortgage insurance this is a revaluation my mortgage insurance could go away depending on how the math works and that's what like 20% of my mortgage payment right there there are my point is there are a variety of things that spill out of an increase of magnitude of what is usual usually our largest asset it's our biggest purchase In Our

Lifetime it's what we put the most money into and it just grew in value by 40 some per. I I get that paying more taxes is burdensome right my taxes are going up right um I I got to pay them I got options I can move I I can do different things right I can get a renter I can get the ten there's all kinds of things I can do but simply looking at the the math behind the value of a property and the taxes on that property it's not only about the taxes yes it is of concern but there are other benefits that come along with us have a question I want to make sure I'm understanding this so we did the twoyear phas in right from the dollar value the first year in taxes would be a a a a payment of three example one we have example one phase two twoyear phasing 335 right and then the following year you will add 296 onto that to get the total 631 correct or is it 335 plus 630 no it's so essentially what council Meritt is saying is just lowering the burden right now instead of temporarily temporarily so instead of seeing 300 631 this year you're seeing 335 and then the next year you'll see you start out with a 22 296 I still think that is just kicking a can you're not you're not Ken can I speak to that yes you are saving personally $300 forever avoiding you're avoiding no you're you aren't having to pay yes you're avoiding paying it okay so you

you get to keep that money because you don't have to pay it so the difference between C saving costs and doesn't matter to me but if you go down to in that's why the five in five years very P you only have to pay1 13 more instead of 631 more and you'll never have to pay that back you will always pay that money and that say you'll save that everything less than 631 is the first four years here is saved yes in the last year you paid the full amount that you would have had to pay if you'd gone early with no phas in but you don't have to pay that until fifth year so why on Earth wouldn't you choose that somebody else pays it the town doesn't lose any Mone the town does gets the same amount of collected taxes because it's just collecting them from different people and it's collecting them for the people whose values went way down way up councilor Meritt the assessor stepped to the podium let's hear from her yeah I would like to respond a little bit to that um looking at our ground list is a measure of residential and Commercial properties so we would have to also look at the other end of it in terms of I know we are looking to reduce burden especially for our taxpayers which is a residential who also make up a greater portion of our grand list however we should also think about our commercial base because our appeals comes from that base a lot that is where the cost to the town when we go to court and all of that we see most of our pills um the cl to the town comes from that um so one thing I want you to consider is that the tax liability when we do phase in would uh no longer be

distributed on the current market value that this Grand list is providing us remember we if we do a two-year phasing we are reducing the grand list by the increase by half okay so let's let's assume that next year as you rightly said um um we don't know what the budget will bring next year so we are assuming that if we do a 2-year phase in the tax of 631 we'll pay three let me just run it up 330 this year and hopefully next year will'll be the same but definitely we know it will not be the same because the budget would definitely change so we might be assuming that the mill rate will be lower um excuse me uh will be lower but we we as you rightly said we might be kicking the buet for um our taxpayers but we have to also consider that our commercial base they are looking to see the Merit lower and that is the costs I'm getting they are just waiting to see what the council would would decide as to uh this coming budget and they are I don't know how as darl said what appeals we will be getting by the end of this week but we also have to consider that um also we need we need to know that our mail rate when we do not face then we are also giving taxpayers a break on their motor vehicle taxes as well if we choose to go with the groundless without doing a phas in we have to also look at that and also um we also need to consider the fact that if we do a phas in then we are increasing the I know motor vehicle is cap rate but if we choose not to we are going to see a lower tax bill for uh a motor vehicle because we will not be at the cup so will you increase motor vehicle if we do the phas in or would that if we do

the cap for motor vehicle is 32 as at now so if we do not do uh phasing uh depending on whatever budget we we adapt our hope is it might be lower than the cap for motor vehicle so something we have to consider apart from that we administratively in the assessor office there is also the challenge of when we adopt a pH in that's why most often when this conversation comes up as darl rightly said we would not um would want we would not want to go that route but if the council decide the council decide we can't do anything about that um but um the administrative challenge in our office when The Phase in is adapted it's also something that has to be considered um um Deputy Mayor and then councilor Mary thank you Mr chair uh are there any documented other ways of addressing this huge increase I mean are there other towns that have sought to be creative and address not obviously the whole amount but some portion of it that would make our residents feel like um we made every effort and I know we're making every effort now I'm just wondering if there are some some discussions that that that other towns have presented and have been successful you know um apart from phasing apart from phasing is that what you're request yes no unfortunately okay

statue that's the only way we can phas in is the only option to uh lessen the burden for tax okay yes Council mayor and then the deput the town manager yes you you would certainly um make some commercial property owner unhappy if a little bit unhappy if his his taxes only went down 10% rather than 15 but people who taxes are going down AR is have to come in and peel you'll see the number of peels you've been getting from residential probably is much higher right now uh than uh commercial normally it is commercial because that's there's a lot to be done there but uh I I ended up swing the town my business was in and saving a lot of money in taxes but uh I I I really fly remember our phasing um because you save um yes you do tax your businesses a little bit more they they taxes don't drop as much as it would if you didn't do phas them but uh and some residential too but uh generally speaking it it is very helpful to it means the total taxes over time paid by residential is lower and I think that's a desirable outcome I'm sorry I just do and I don't think you have people who taxes are going down anyway you're going to complain much Mr Town manager yeah um I want to be very respectful of this circumstance because I I know when we start um to speak about finances but everyone is in in certain areas right we have some people up and coming and and

um and and new to the workforce dealing with challenges we have those who are uh making good money um in the prim of their lives and and we have our seniors who are um on very much a fixed income but um but I I I just think it's important to to sort of put things in perspective and and as we talk about the the 6113 um what we're talking about folks is is $52 a month $52 a month you can't even fill up your c tank with with $52 uh uh every time you pull up to the state to the station so $52 a month is is what we're talking about when we talk about the the 600 and some odd dollars and and when we talk about the the the, 1400 or or or, 1500 um if you're paying that much in in in in taxes at at that um at that rate then what we're talking about for you is is is about $125 a month right and and people who are in that that assessed value um that doesn't even buy them dinner all right so uh but I I just want to get in perspective into what we're talking about with with um with these values of increase and um and it's a it's a fact of Our Lives it doesn't matter where you live I live in Simsbury my taxes are going up and and I pay the taxes because I want the service I value um the the services that are provided and the only way we can really make uh an impact on our taxes is to reduce our services which has a direct imp impact on the quality of life for our citizens and none of us want to do that but there's no cost that are going down and and in any other part of doing business there's no part cost are going down in any other part of life we all go to the stores we all buy houses we all buy cars we all buy food we buy clothes we we see it going up and with co-pays

and and everything else this is just where we are and and and I just want to be very respectful because I know an extra $52 a month um may be a tremendous burden on some right so but um so I'm trying to be very respectful and and and and and not appear in in any way uh uncaring about the circumstance but but I know this cost of living for for social security for for veterans benefits uh as well so uh so these things are in place and and I I just feel this important to put things in perspective and and and that's what I wanted to add so um I'm thinking we're at a point now where you know um we're not even talking about the the true impact on maintaining services that go up all we're just talking about is what the cost of taxes would be with the revaluation so uh I think having this discussion right now to the where we're at um it's it's an academic discussion and is a good one to have but we're not even at that point where we're talking about the true impact of next year's budget so um I I just wanted to add those thoughts and I'll turn it back over to my esteem colleagues thank you so so I appreciate those thoughts but you know we do have a high percentage of Alice population in bloomfi and the $52 is just the base it's not the fixed cost that is like you talk about rising and so when you are talking about the Alice population you are talking about um seniors on fixed incomes when you all talk about young families like myself who are uh two or three paychecks away from not being able to afford to live in bloomfi we have to tighten our belts and I know it may be may be tough nobody wants to see um nobody suggesting that we cut services but we streamline services and we get the true cost of what it cost to run this government and we do it efficiently as possible as we can and so these discussions that we're

having is to get to that point so that we can make sure that people have the services and the quality of services that they need in this community and the services that they do but at an efficient cost and a reasonable cost to taxpayers being reasonable and responsible um and I think those what these discussions are and if we're talking about at the equalization $500 plus imagine when we add the fixed cost in the contractual Services debt Services going up which the people did vote for that number is going to dramatically increase and then that's going to get into an affordability issue and we want to make sure that we're doing and asking the tough questions so that we minimize the burden on our taxpayers so I agree we should move on if there's no other outstanding uh questions related to this thank you Mr Hill and staff the assessor for putting this information together as the council decides to go when we move into budget season we'll have this information to go about and use if as a tool if we decide to um and so I want to again appreciate because it's a lot of um um information I know this is already out on the website under the council minutes and stuff but we can put this um either on the Assessor's website or the finance department website whatever it's appropriate just so that people don't have to dive deep to find it I think it would be helpful um and then you should tell people where to direct their questions to if they have a question about this presentation okay the presentation's available on the finance committee's website under the agenda package got it uh Council Meritt I see your hand yeah I just want to thank uh you the the presentation is excellent and I I know you've repeated it but I think there's still some misunderstanding so I wouldn't I think people need to hear this over and over again so I and I appreciate putting it in there but I we

may have to I I don't really think we have to deal with this until for another month or two but uh we certainly have to be prepared and I I understand it's a difficult chore for our assessors to do it so thank you very much so we start budget March 11th counciler and I know the assessor and the finance team would like uh a heads up if we decide to go down this route so that they can do all the necessary filings with the state and start to develop their budgets appropriately well as uh assessor maazi mentioned you know the administrative burden would be a challenge um that's what we'd be looking to get a head start on um we can't do anything formally until the council Acts and after the council acts then the manager acts to inform OPM but yes if if the town is going to go down that road um sooner rather than later would be helpful to the assessor's office as the town meeting uh budget approval slated for May 5th which I believe is the first Monday in May and um the assessor and collector working together in May to prepare invoices that go out in the middle of June is where the time crunch is um so if the council decides to go down the phase in route um the assessor's office will need as much time as possible to prepare to adjust the grand list prior to the tax being laid and the invoices being generated for July 1st is sorry the next item on the agenda for new business is the discussion additional Financial policies to be consider yes thank you counselor um

pulled together a a just one page that shows if you could scroll up to the the first green section there you go um that shows our existing Financial policies um you'll see the debt and general fund and fund balance uh which are obvious but also the sale of excess Town land um is a financial policy uh and the tax abatement tax increment and tax incentives options uh are also Financial policies and the affordable housing trust fund uh that the town created a couple years ago um is you know also a financial policy uh because of what that trust is doing uh for the town so similarly on the bottom half of the page I've listed um it's that nine different uh areas some of which have uh the potential to be uh subdivided is that the right word uh I'll use rate stabilization as the example um we could have a rate stabilization fund for a variety of things for a mill rate Water and Sewer rates um you know any rates that are passed on that we want to have some Financial wherewithal to mitigate or like in the financial services world we call it smoothing where we shave the Peaks off the highs uh and you it's not need to fill in low we want to go as low as possible but um even if there are uh uh not the suggested MDC is doing this they're going to do it but if they had a multi-year plan to increase rates over time a rate stabilization fund for water and sewer or either water or sewer uh could be utilized to even e even further graduate those increases coming

online um similarly I put Reserve funds down at the bottom right and while we have our general fund and fund balance uh policy we may desire to create other sub reserves for very specific purposes um the concept for the rate stabilization Reserve fund a variety of these is not only they are but how they're built up over time what level they're maintained at and if they're utilized the process for replenishing them again these are all things that are not uh seeking to bind us but to provide us with guidance from a policy perspective on how to make well-informed decisions and also to have Financial wherewithal uh after the fact um and financial planning at the bottom left is another good example uh that would speak to how we go about um managing our finances uh for those that read the uh rating agency report uh one of the things that they mention is it's just best practices for budgeting right you look backwards and use your prior as your your history as you make decisions about what's going to happen in the next year or multiple years um but putting these things in writing creating and approving formal policies that again are guard rails right they're not making the decision but they're providing the framework to make a decision um would be productive for the town to add over time mind you add over time to our existing policy shown in the middle of the page thank you so much for this um I've been another the audit top number one these guard rails was number two um and

it's all um in the benefit of planning and looking out for taxpayers um and I know you said overtime and I may not be here over time given I keep saying that because it's the will of the people um but I hope the Legacy would be that I made the tough decisions to focus this committee with my colleagues here on these guard because I think it would do well for us when we go out for future debt because rating agencies look they' look towards these in a good light and it helps outstanding because they see that we're planning and we're being fiscally responsible one of the things that two of the things up there that I'm very much interested in um well three is the economic development trust fund I think that is so crucial for this town for us to get that Economic Development trust fund started pension funding uh there um I don't know if opep falls under I see does the opep fall in the pension and the adak is in there we we could modify the title to include the other post employment benefits because we have a trust for OPB I we we have a trust for OPB to pay it for our liabilities but I think just getting out pension and figuring out I know that was a discussion in finance a couple of months ago should we look at moving to the state given the performance Etc some other things and we're working through that but that Economic Development trust fund the pension funding sloped and the investment management all of them are important but I think that investment management came to the top three over rate stabilization for me because we put $1.1 million in here and if we don't get another what $280,000 well $71,000 $72 th000 a month

in that interest then that is going to show a deficit in that line item um and I think we need some guard rails around how we use our use of assets so those would be my top priorities but I'm open to hear um from our committee members I see Council mer on where we should focus our attention on these um these Financial guard rails policy guard rails councilor Meritt No I um I'm trying to think how not having these has affected Us in the past I I don't think we've had a real problem um yes we've say you have a revaluation is going to cost a lot of money so you kind just put put so much in the budget over two or three years instead of doing it all in one lump and uh that's the way we've handled mostly like Capital expenditures that um are spread over um several years sometimes I I can think of several projects over the years that we've put so much a year because you don't want lumps in your budget you want it to be kind of a smooth increase over time I think that's what you're going after so that you don't have these extraord things we've avoided that but mostly on the rather informal budgeting effort uh during the budget time not the problem about guard rails is we put them in we can take them out so that's of course happened in the state by the state and I I really like the the uh oh oh the other other postretirement benefits uh uh policy we have except I would try to take more out every year and to because it does cost us so much in interest and uh I I think we'd be

better off doing that but that's a certain good example of why you need something like that um but I I I just don't think generally speaking it's it's all that necessary be honest with you well Council M I think it is necessary because um when you are putting everything in fund balance in unassigned fund balance and your fund balance at a certain level I think these will allow some guard rails and policies on how how you use these things related to that instead of just always going into your fund balance you start to put you know a percent of if you have 10 million five $3 million extra at the end of the year you put 10% of that into Economic Development trust but there's guard rails on how you use that money and when you can use that money if you take money out then you have to replenish from somewhere else or whatever the case may be whatever we set up same thing with the pension funding same thing with um investment and I think some of the will help our standing with the credit rating agencies because they look when you put these guard rails in it's almost like a it's almost like a security blanket for all of the investors who are going to give us money because they know that our fund balance is going to maintain a certain level and then we're planning for other things like Economic Development housing the environment RIS well risk management Etc um and we put ourselves in a better financial position so um Mr town finance director if you can pick the top three that you think from your experience working here for the time you have been what do you think should be this body's priorities um and establishing so that we can get our town attorney to work with you to start developing some of these

things I get three yeah I think so right in no specific order or do I have to get number oh no particular order just from your experience that would also look well to the rating agencies um I mean the economic development trust fund is is Progressive um particularly for a community like ours that's uh looking to expand uh its development efforts um other two I would probably add the rate stabilization fund just to formalize it um we are some somewhat doing it or have been doing it over recent years with the uh planned use of fund balance to balance the budget that ultimately at the end of the year isn't needed because there's Surplus uh so some although coming backwards at it that that's a rate stabiliz what an example of what a rate stabilization fund would be used for it's not that it's put in to be used it's put in there to keep the mill rate low or to keep the water and sewer rate low and if needed we use it if not goes back in the fund uh instead of the practice now or I think three or four years of appropriating fund balance we don't use it goes back to unassigned fund balance um and a third um i' probably say risk management um you know it's often ignored uh or passively uh addressed uh but I think formal risk management policies um the real benefit of having them is identifying where the risk are um and how we would mitigate them if we were challenged by them um so for me the risk management policies go beyond just

managing risk um it's very insightful into where that risk comes from and what our abilities are to uh mitigate or eliminate any individual risk any other questions related to this I get a fourth one oh you can have a fourth one didn't have a fourth one you're well and pleasure like M great all right if not then uh what is the next steps regarding e um I'd uh I'd like to get through budget okay and implied in that is audit as well it um but to take what is now two down to one uh and I think that a that freed up bandwidth would allow uh to focus on these anything else would be uh suffering from a a lack of attention for the next month or two got it thank you appreciate it agree uh next item on the agenda is the review of financials thank you counselor uh looking at the financials as of July 31 202 25 that is the end of period seven for fiscal year 2025 um as shown in the detail Pages behind the memo our revenues uh received stand at just under 94% uh which is slightly lower than the same period last year uh with our tax collections actually being 0.1% higher than the same period last year so essentially level uh at 98.4% um which is uh to be expected uh in February on the backside of the second collection month of the fiscal year second and final collection month of the fiscal year uh taxes are still coming in uh understand today was actually a busy day uh for delinquent

collections uh with interest applied as the taxes were due January 1 and became delinquent on February 4th um councelor McClary mentioned our interest income uh earlier we are sitting just over 775,000 or 77.6% of budget um we're chasing that $1.1 million that was uh repeated in this year's budget I continue to be optimistic with four and a half months left in the year that we will get there but as you've heard me say before my crystal ball is cloudy um building and demolition permits uh stand uh a little under 900,000 which is down from the same period in the prior year and our real estate conveyance is at 75.3% of the budget um you'll notice in the expenditure detail that we overall are lagging lagging meaning that we're in the this report is through seven months of the fiscal year um but we are in aggregate at 40.3% of budget um there's a couple of drivers that you'll see at the uh on the last page or last two pages of the expenditure detail that are really driving that the miscellaneous charges Debt Service and Board of Education um those payments or expenses and the payments for miscellaneous charges and Debt Service uh while Debt Service has a a set schedule we're retiring debt and bringing on new debt and the new payment dates uh and the old payment dates can shift to result in a being a little bit out of sync but if you remove those three categories uh we're you know approaching 60% a budget uh on the expenditure side and this being February uh next month being March

so next month I'll present as of February 28th but we will be in or at the end of the fourth third quarter in March next month uh so next month we will begin to look at uh our projections for fiscal year end so that uh for April uh any need to transfer budget amongst departments which requires council's approval uh could be put in front of council for your you and your colleagues consideration uh in April May or June my current thinking is that we will have a fourth quarter transfer in April and then potentially in June as the numbers get firmer uh for the fourth quarter of the fiscal year and with that I'll I'm happy to answer any questions that you may have question um related to the expenditures and the primary reason for lagging of expenditures I see a correlation between that and the audit for next here being done right I don't follow so if you don't have the if you lagging with the entries into are you lagging because it's not put into a mun because it didn't come through it it didn't come it didn't come payments haven't been made yet payments that's the lag it's it's not anything related to the audit okay and so so this 40.3% is like the actual expenditures like is that all things encumber so that we can start to figure out what an estimate or guesstimate of what we may end the year from a from a revenue versus expenditure so we can know potentially what we are forecasting to be our roll over into fund balance and where fund balance will be potentially that we're forecasting that's un audited

yes right um yeah I mean the numberers shown here percent used are actual doesn't include incumbrances it's actuals um as I've said previously and I'm hopeful I won't go so far as to say optimistic I'm hopeful that by time we get to April the use of munus primarily purchase orders which encumber monies has grown to a point that we've got comfort that the encumbrances that we see through June 30 are accurate right the council appropriates for the fiscal year July 1 through June 30 there are expenses being incurred on a daily basis and as we look some may think it's bad information it's just timing right when is the good when are the goods or services ordered when's the purchase order entered when's it approved when's the report pulled right I've got to adjust for all those things before I present to the manager a recommendation for a fourth quarter transfer on the front end in April as well as on the back end in June now once we get to June that work is a lot easier because there's very little of the fiscal year left but the same Dynamic exists because we're still buying things in May and June it's part of why we leave in a normal year some purchase orders open after June 30th those are only purchase orders that are either non-aps because they capital or something like that um but for operating costs we leave them open if theyve something's been purchased in June that we haven't received the invoice for when we receive the invoice it'll liquidate the purchase order and it'll close out that's just a timing it's not that we're

incurring we're entering POS and incurring cost after June 30 right so you know when I came to Bloomfield one of the surprising things to me was that purchase orders were held open until August and September I'd never seen anything like that um but now having more experience in how Bloomfield bloomfield's an es have functioned I understand why it was kept open got it we're not going to do it going forward but I understand more why it was in the past so I again I asked the question because the Board of Ed in eight months of the budget year is at $17 million so that's $2.1 million and so I wonder like I know they probably have more incumbent like they have more they spent more money than it's showing here why don't we have it on ourside so that we can have a clear understanding of where they are almost eight months into to the and this is not an attack on the board of education but it makes it a little hard for us to kind of make guesstimates unaudited forecast guesstimates of where we potentially may end the year with three qus of the budget year already gone and they only encumbering as of January 31st 17 m544 th000 and a 53 million budget the the the Board of Ed isn't involved in the fourth quarter transfer no no I'm just saying we can't take money from that I know but like if they don't spend all of the money it comes back to the town doesn't it they only get to keep 1% the superintendent only gets to keep 1% I think there's another 1% that they put in place but yeah 1% and then everything else gets to come back to the town and roll over that's if they don't spend it if they don't spend it but we and we don't control their spending I hear you but I'm saying we should see more than $17 million I know they're spending more than 2. what are you suggesting that $17 million is potentially good news for the town that they're going to significantly I think it's 17 I think it's 17 million

I think that $17 million is not a true accurate agree with that I think it's more and we should I think payroll in seven months of the fiscal year the Board of Ed is more than that 177,000 this is what we have in the system from the Board of Ed right if you want to so that's why I'm concerned about the audit because I don't think that that goes with the reconciliation right it tell me if I'm wrong so when you reconcile and put stuff into the system right you're putting into put in and put well we reconcile to the bank yeah but then you put and we also reconcile a board of ed to the town because we're in different systems now once we all get in munist it'll all happen at the same time yeah but their system is probably reflecting something a higher number than our system and we don't have that there's a there's a couple things with Board of Ed um first of all there is a little bit of a lag because right now we're not on two systems and we have to do everything via journal entries so there there is a little bit of a lag so that is a little bit shy um which we're working on tighten tightening up and will definitely be tightened as we as time moves on um one thing I also wanted to point out with Board of Ed is uh I believe there are contracts would have um uh for certified staff a balloon payment in the end so a lot of their costs you won't see until the last period in June so a lot of their personnel C uh costs you know it's going to be way up in a month of June so you have to be really really careful there uh so it's a little you know it's not going to run under the same percentage of use kind of thing yeah I I hear you I agree um thank you for the explanation but that's $34 million in a quarter and a half so that's basically what needs to be spent based on this because they're only at 17 million so 17 plus 34 is

they're only at 17 million in munus yeah that's what again we're in month seven I would guess that they are probably if not halfway through approaching halfway through their budget recognizing that the school year doesn't begin July 1 right so those first couple of months payrolls light everything's light but then August start to spin up September right and as Miss Stewart said um the balloon in June at the end of the school year right but I'll go back to my original question um we don't control the board of it only if they don't spend it does it come back and excuse me could you share the screen on the revenues and it's not showing up so I can't read what you're talking about um the bottom of the last page bottom I don't want to see I don't want to see the writing I want to see the charts there you go thank you no charts thank you no that's that's the summary but that's that's fine Deputy Mayor I just want to say uh this is not out of the ordinary I'm not saying it's right I'm not saying it's correct but we've been battling and trying to infuse munice into the system for the water of Ed so given the fact that it's not fused yet this is not out of the ordinary we're just hopeful that we can get this done uh at a much faster pace and once they come on board uh with the use of munus in the manner that we're hopeful

of then this will not be a recurring issue yeah because I think it's gonna hold up the audit for next year right because it's been in our experience it's been the hold up of the tring up from their system to our system and hence that's why the and this is again not an attack I know they've been very Cooperative with us just for the record but I don't want the TR up from their system to our system to delay like it the audit like it has been in the past and so I'm hearing no and if it's no I think that's a good thing okay perfect I remember that come a July August September December well yeah deadline deadline December 31st okay got it uh thank you so much any other questions Council mayor is that the Legacy hand yeah yes I still want to see that chart what chart the the annual the Board of Ed no I don't want to see the Board of Ed I want to see the the one before that there you go I want to see those thank you do you have questions or do you just want to hold up I I didn't see it I don't know okay so we'll give you we'll give you a few minutes to see it and while you're doing that we'll move to the minute and then we will come back thank you a public comment and then if you have any questions we'll Circle back around counc while you watch that is there any public comment is there any public comment seeing none I'm ask one more time any public comment okay thank you so much we're gonna move on to the approval of the minutes for the January 21st meeting is there a

motion so move it's been mayor seconded by Council Meritt any additions revisions subtractions hearing none all those in favor sign by say I I the I have it it is pass councilor Meritt before we adjourn do you have any questions related to what you're seeing on the screen no I I'll have I'm I just want to spend some more time with it but I have no questions on it okay well you know that you can always uh contact the town manager after you review it I think it's it's in your email yeah um and so if you have any questions feel free to reach out to the town manager who will then forward your questions to the finance director uh is there a motion to oh the town manager before we do that Mr Town manager yeah uh good evening again everyone and to our citizens who are partaking in in in uh tonight's meeting uh I just want to say thank you uh I want to say thank you to you Mr chair and and all counselors for your support uh this is obviously a uh a very cumbersome process and involved process that that we know is is going to have significant impact on our populace and and I thank you for you know just your your ability to form questions which create thought and and uh lend itself to um really getting after the heart of the matter is which is to make sure that we're doing everything possible to to take care of our citizens uh under uh what will be uh added taxes and um and we are going to do just that we're going to um get after this in a way that um is respect and is efficient and effective and um and puts the priorities of the council and our and our Citizens First and I also like to thank um uh my my finance team uh um represented in the lead by Mr

Mr Hill um along with Donna and Vincy for for their attendance this evening and and provided um expert analysis of of of our present situation and and answering the questions to the their ability uh I am very confident that we will be able to move forward and and put together a budget that will take care of the needs of our citizens and uh be financially responsible as well so I I just want to take this opportunity to say thank you to everyone and I look forward to the the budget process which lies us before us thank you so much thank you Mr Town manager Echo thank you Daryl thank you Donna viny thank you I know has been uh thank your staff in the assessor's office I know has been quite some time a couple of lot of annual reports and doing this reevaluation and working with the consultants and doing the appeals thank you so much for your work Daryl thank you for building a team in the finance department to stabilize us uh Mr Town manager under your leadership thank you and with that is there a motion to adjourn move all right we