Finance, Budget, Audit & Bonding Subcommittee - Regular Meeting

Thank you, Madam Deputy Mayor. I'll try that again with the microphone on. Good afternoon, Deputy Mayor, Mr. Mayor, Finance Committee members, Council, and Bloomfield. As always, it's a pleasure to be before you, including this evening. Sounds like the microphone is turned way up. Feedback. Status update for the 2025 audit. As I reported out from the day of sitting in for Town Manager Schwab last Monday, on the week of July 20th, we submitted the town's trial balance to our external auditors, CLA, for fiscal year 2025. As planned and previously reported out, on July 27th, CLA began their field work, the actual auditing of the town's fiscal year 2025. After July 27th and ongoing, we, along with the Board of Education, began submitting supporting documentations SUPPORTING DOCUMENTATION TO GO WITH THE TRIAL BALANCE. THOSE DELIVERABLES NUMBER UPWARDS OF 100. THEY'RE SPLIT ROUGHLY BETWEEN THE BOARD OF ED AND THE TOWN, A LITTLE BIT HEAVIER ON THE TOWN SIDE. I THINK THE LAST REPORT I RECEIVED FROM THE DEPUTY DIRECTOR AND TOWN ACCOUNTANT, I THINK WE HAVE ABOUT SIX DELIVERABLES REMAINING, TWO OF WHICH ARE ON MY PLATE, WHICH WILL BE IN THE NEXT 48 HOURS OR SO. Also, as reported out last week, the audit takes the actual audit, right? And when I say actual audit, I'm referring to CLA's auditing of our financial papers. Takes two to three months. And accordingly with the July 27th start date, we are targeting the middle of March to be complete with, I'm sorry, the middle of October to be complete with the fiscal year 2025 audit. That provides roughly two and a half months, just over two and a half months for CLA to complete its actual audit work. When their audit work is done, we will be reviewing the compiled document. Of course, adding the management discussion analysis and those other last deliverables that happen at the end of the process. Everybody does a final review, signatures, dates, and the 2025 audit is completed and filed with the state and disseminated to the regulatory agencies, including Standard & Poor's. Of course, following the completion of the 2025 audit, we will immediately transition into the 2026 audit, which be the closest the town has been to starting an audit on time since 2020. With that delayed start, assuming the middle or late October to begin that, and that's not to suggest that Nothing is happening with fiscal 2026 until then. You may recall over the past two years, particularly the first six months or a year, there was a significant amount of work that wasn't completed. We are very close to being caught up. And by caught up, I'm referring to reconciliations being completed by the end of the month following. Just to replant that anchor, when after the finance staff turnover and when my deputy and I and payroll manager, accounts payable manager came on board, purchasing manager came on board, the town was about 15 months behind. Right. That's over a full year of not reconciling to the bank. The vast majority of our accounts are fully reconciled and near current, a month or so behind. And the largest general fund account, we intentionally leave it for last, but that is where the most activity occurs, and it is the last one that we reconcile. So as we're finishing up 2025, we're in 2027, staying current for 27, We will begin preparing ourselves for the 2026 audit mid-late October by having all the reconciliations and things done. And as the weeks pass between now and the middle of October, we will have capacity because for the 2025 audit, we will be responding to questions that the auditors have. additional sample sizes for various things that they're reviewing or questions about the treatment of this expense or that expense. That is normal through the audit process, but that provides us with some capacity to continue working on and preparing for the fiscal year 2026 audit. In mid-October, late October, as we transition in earnest to the fiscal year 2026 audit, the anticipation is that By mid-late March 2027, the fiscal year 2026 audit will be complete. And yes, that will be, if it's the end of March, that will be three months late, three months behind the state statutory filing deadline of December 31st annually. And as we all know from prior years, including this year, it's July 1st that you transition from being delinquent to noncompliant. All right, so as we continue to work to complete 25, prepare for 26, stay on top of 27, by Easter, the town of Bloomfield will be current with its audits. That's the plan. And even if there is slippage with regard to the 26 audit, given that the 25 audit's gonna be a little later than desired, and we'll be rolling into the 28 budget development, Right? Unless something significant changes, even if we don't hit March, we would hit April. Right? So still delinquent, but not noncompliant. And whether it's March or April, I'll even go so far as to say May or June, we are done with the audit before the subsequent fiscal year ends. And that is a very significant milestone, because as we get to the end of each fiscal year, the pre-closed activities lead into the audit preparation activities. So with the 2026 audit being completed, let's say by the outside date of the end of May, again, the goal and target is March, then The 2027 fiscal year pre-close and close happens orderly, and we roll right into fiscal year 2028, and we are then doing what we're supposed to be doing, which is preparing for the 2027 audit in July and August and completing it by the statutory deadline of December 31st, 2027. That success, when it happens, will have the town with six intervening years between timely filings. The last timely filing was 2020. And with this plan, the next timely filing will be fiscal year 2027. And with that, I'm happy to answer any questions that the committee may have.

Thank you, Director Hill. Any questions on the diaspora? Yes, sir. Council Member.

I would only make the point that we should continue the part-timer as long as we can, because we still won't be caught up this year. So even though we're getting another finance person, I think we have to pour more resources in while we're catching up stuff. And obviously, once we're caught up, we won't need the same horsepower to stay caught up. But in the meantime, it's worth the extra expense. I really think I wish we'd hired this person we're hiring now sooner. And I know you do, too. But I think we should keep the part-timer and somehow afford that in the budget. I just want to make that point because I think you've done a great job in catching up and to serve a lot of credit for it. And I think it's important that we keep the momentum going. Thank you.

I agree. Thank you for the comments, Councilor. We agree, even in communication with the town manager and leadership in finance. The plan is while we are posting to fill the newly, thank you, Council, authorized assistant town accountant is the title previously referred to as the senior town accountant. Those interviews are being scheduled. I don't believe they are next week. I think they are the Monday of the following week. And we are planning to keep the temporary staff until that position is filled. Once that position is filled and we know the skill set, and background of the person filling it, that the manager will make the decision on whether or not, well, of course, the recommendations from finance, whether or not we need to keep the temporary staff on. That assistant town accountant position is gonna add so much capacity to the finance department That I expect while yes, many hands make light work and keeping the temporary staff on longer, of course, is more hands doing more work, but it is expensive and not until we. are no longer utilizing the temporary staff, will we really have the ability to determine if the addition of the assistant town accountant is sufficient staffing for the department to run going forward? I believe it to be in large part because of the skillset that the council allowed or authorized for that assistant town accountant position, right? The experience is not someone who's new or green. um it's someone who has worked in local government our preference is that they're familiar with our system but those of us who have experience in local government know that the erps or the systems of record that are used while they go by different names and they have their own little quirks they're essentially doing the same thing the same way right um so Whoever is successful at joining Team Bloomfield as the first assistant town accountant, that will be the right hand, of course, to the town accountant, deputy department head and town accountant, as well as the director. Those three positions working together, I do believe will be sufficient to get us to success with regard to the 2026 audit being filed in that March timeframe. And then we'll be able to run with that going forward.

I mentioned the Board of Ed has some documentation I'm worried about Munis and how the Board of Ed is coming and getting up on Munis and how we are doing because you haven't reported on Munis recently. At least I don't remember it. And that's another concern because until we get up on that, we'll still be behind, so.

how are we doing on munis um the board of ed well as previously reported out the board of ed has already migrated their accounts payable into munis so they're essentially halfway in accounts payable is in munis payroll is what is not and they are working continuing to work towards uh implementing payroll in munis i believe the target is still january 1 2027 But depending on because it's not something that you can force, if you force it, you're developing a headache on the back end. So there may be a reason and support for not January 1, but the week after two weeks after February 1, something along those lines. Yeah. but the board of education from our communications with finance staff and the manager with the superintendent understand that getting payroll into Munis will then have the Board of Education fully in Munis. And to date, we've already built out and set up our account structures to accommodate that. Previously, the town had one accounts payable account and one payroll account that both the town and Board of Ed were funded out of. The town would provide the funding for the Board of Ed. In anticipation of the Board of Ed coming fully into Munis, we have an accounts payable and a payroll account for the Board of Ed and accounts payable and a payroll account for the town. It gives us a much cleaner view of the financial activity on both sides of the Bloomfield House.

Other than that payroll, is the Board of Ed up on Munis?

In accounts payable, yes.

And how about town? Are we completely up on Munis on the town side?

Yeah.

So all that's left is the payroll account Okay.

And Munis is, it's a wonderful system. It of course has its quirks, but it's doing what we need. And, you know, having the career that I've had thus far, I've seen five different systems and the comments about any one of them are the same for all of them. They all have their quirkiness and, you know, bugs and glitches and things that need to be worked out and developed. So, you know, Munis is solid. It can be improved upon. I think we all want that and hope that Tyler is working on that for the coming, I won't say months, but years. So, but Munis is solid.

Assistant Director Stewart.

Hi, thank you. Appreciate it. Good evening, everyone. I just wanted to elaborate a little bit because the Board of Education is actually, for instance, this week has five meetings scheduled with Tyler. One full day session was today. There's two more full day sessions, two more half day sessions this week. So they're actively pursuing getting payroll onto MUNIS. So I think they are using that as, you know, they do have that as a priority. And like Daryl said, AP has been on MUNIS for the Board of Ed. So they are, I just wanted to kind of reassure you that they are working toward that. Um, and just to, uh, I know I got on a little late. I was having a little link problem here. Um, but, uh, I, I gotta tell you, I am just very excited. I know this is a little off subject for a counselor mayor and it was more towards the audit, but, uh, yes, the audits are getting caught up. FY 25. I'm going to knock on wood as I'm saying, this is really awesome. Very near, very near. We've submitted over 100 submissions to the auditors already for FY25. I haven't gotten any requests lately. I still got a couple of little things to submit for FY25. But to give you an idea, what my plan is, is to this week, because we've got a more aggressive industry standard, I might add. timeframe for closing the FY26 books. So this week, when I'm not working on the day job or FY25 audit, I'm already starting to prepare for the FY26, which involves a lot of different reconciliations of balance sheet accounts and stuff. And I know you guys don't want to talk accounting speak, but I do have to say that what I am very, very proud to say is that The town has over 30 bank accounts and investment accounts. And when Daryl and I came on board almost two years ago, those bank reconciliations and as well as all the FY24 entries, and I know you've heard that part before, a lot of things weren't done for FY24, but the bank recs were 15 months behind. So I am proud to say that as of this past week, the town is current. In every single bank reconciliation, we are balanced through the end of July 2026. So that is a tremendous accomplishment. And what that does is allows us to begin the FY26 audit preparation. It doesn't mean we're ready for the FY26 audit. Don't get me wrong. There's still a lot of work to do for that. But we are just eons ahead of what we were. And so I kind of just wanted to say that now I can't. Do we have an update call with the Board of Education? I think on Wednesday to see where they stand, because I think they were still working on some of theirs. But we are working really hard to close the books and to be ready for that 2026 audit. And the other last exciting thing that that means is that not only are we in really good shape for the 2026 audit compared to prior years, but we also have better numbers than Daryl and the rest of the staff have had to work with for budget for these years. we should, I'm hopeful, be able to come up with a really, you know, good budget as far as that goes. You know, we were working on, you know, estimations that were, you know, a couple years behind. So I'm just really excited to say all that. And I guess that's it. So thank you.

I am excited as well. Certainly better to have a bird in the hand than two in the bush, and you don't really know what's going on. So no small credit to yourself, Ms. Stewart, and to you, Director Hill. So we do thank you for your hard work and getting caught up, as well as your continued interface with the board. um because only being halfway on munis was really a challenge as well that many people in the public didn't understand and so just generally they heard you know the audit's not ready the audit's not ready stuff is not in um but it's not just the town side it's the board and so we have to continue to work really diligently together to ensure that everyone's up to speed so that we can continue the path that you've already started paving to be timely um you did walk into um I'll nicely say quite a bit of a mess and a backlog to be tactful. And so we do thank you for your hard work. We're grateful that we were able to afford the assistance of some consultants and part-timers to get us to this point. And so now we should be moving full steam ahead. And I look forward to March of next year, having good news for the town. Mr. Mayor, did you want to add something?

Yes. First, I would like to also extend my thanks for hearing that great news. We've been talking about the convergence of the board and Munis for quite some time. So I'm very glad to hear that. I do have a question in reference to Now that we're looking at October versus August for FY25, what impact, if any, will there be on our status with S&P?

So thank you for the question, Mr. Mayor. It was... Two or three weeks ago, I received an email from S&P. It's their standard. I think it's automated, actually. When it hits a timeframe, they ask you to send in your audited financials, right? Because they expect them to be done by then. We received that email. I replied to let them know where we were. I think at the time we had just submitted the trial balance. Let them know that our plan going forward is targeting October. mid-October, reminded them that we submitted the fiscal year 2024 audit just in March, right? So five months ago. And I clicked send. And I think it was late in the day, whatever day it was. The next morning I received a reply from S&P and said, thanks. When they're ready, send them to us. Thank you.

Thank you. You're welcome.

Thank you. I'm looking for hands online. Mr. Mayor?

One more question. I'm not really sure how this interfaces, but what harm, if any, is there in others outside of our administration contacting OPM for information relating to our audit status? Your question was about what harm or what impact, if any?

So the state's governor's office of policy and management is doing what they do for the General Assembly for the state. And with regard to us, with 168 other towns, I think a couple of school districts, they're going to try and be responsive to but the information that they have, I would speculate is likely and largely not what somebody calling and asking a question wants, right? The information that OPM receives is what we provide them, right? the corrective action plan, the year-to-date reports, status updates. You know, because we're noncompliant this year, like last year, we are eligible for the municipal finance advisory committee, I think it is. And not unlike last year where there were, I'll refer to them as critics of the town that thought that eligibility meant that you were under the control of MARB, which is a completely different acronym. It's wrong, right? So when folks are asking questions, albeit of government, and OPM in this case, but lack of a basic and fundamental understanding of how everything works together, it can muddy things up, right? OPM is going to rely on the town, its elected officials, and its administration for the information that it acts upon. Residents, businesses, interested parties calling and asking questions. I don't know that there's any harm or any good that comes from it. Other than I would speculate that there's likely frustration on OPM's part. Okay. Thank you.

And I would guess because in town that is in that status beyond July 1st, OPM is already aware of. And as in Bloomfield, I can only speak to, um, are in regular communication and receiving updates from the town. So to your point, thank you so much. Um, I don't see any hands online. Okay. new business for new business, a discussion of June, 2026 monthly financial report.

We have copies of that director Hill.

Uh, I apologize. It was posted, uh, I think earlier this afternoon. Um, I will, it is posted. We will get copies for you, but I'll talk you through the June report, which is reflective of the entire fiscal year for 2026. Of course, the fiscal year ended on June 30th. Our total revenues and, you know, This is the standard backdrop for every monthly financial report. These numbers are unaudited, and they will change. The audit adjustments are required to make sure that the financial reporting in our annual comprehensive financial report is accurate and reasonable for the average person. So our total revenue for fiscal year 2026 sits at 102.6% of the budgeted amount. It's down a little bit from 103.4% for fiscal year 2025. Our tax collections for the current year were at 98.5%, which is a little bit lower than last fiscal year when it was at 100.8%. Investments on interest on investments continues to outperform budget. And while some might think that that's bad, budgeting is intentional, right? We would rather have interest earnings as well as building permits and real estate conveyance taxes outperform the budget because if they do not, the budget ends up short. And then we're coming back to council either asking for an additional appropriation or or cutting expenses and the corresponding services that go with that. So that overperformance, 190% of budget for interest on investments at $1.14 million, it's down, right? It's almost half, actually a little bit less than half of the prior year. So while the performance is 190.3% of budget, it's half of what it was in fiscal year 2025. Similarly, building demolition permits for fiscal year 2026 came in at just over $1.75 million, or just under 135% of budget, which is higher than last fiscal years. Similarly, the real estate conveyance came in at 208.9% of budget. You know, property sale, we don't know when they're going to sell. Improvements on properties, the interest rate environment. To me, on the revenue side, this is strong performance, which, as I'll touch on in a moment, speaks to why the impact on the fund balance is so favorable. Are expenditures excluding encumbrances? And again, this is as of June 30 at the end of the fiscal year. So we would expect to see remaining encumbrances be very small. The invoices that are coming in through the end of the year or after the end of the year, that treatment. So you'll see the expenditures at 99.3% of budget excluding encumbrances. And when you include the encumbrances, we're sitting at 99.6%. Last year and the prior year, you may recall my speaking to the utilization of MUNIS specifically with regard to purchase orders and encumbering monies. We continue to do better as a town in the utilization of the system. And again, specifically encumbering monies so that we have the most accurate possible reflection of what our anticipated expenditures are through the end of the fiscal year. which is why at this point we're able to show both numbers. And actually, I'm getting ahead of myself. That's in the July report. Through the end of June 2026, fiscal year 2026, we didn't have both numbers. So after the 99.3, excluding encumbrances, 99.6, including encumbrances, the only number that we have after that is the 90.7%, excluding encumbrances from the prior year. But what you're able to see from that Nine percentage point, roughly nine percentage point difference is the value and the utilization of the system to encumber monies to identify anticipated expenditures from July 1st, the first day of the fiscal year through the end of the fiscal year. But the bottom I alluded to earlier is a bit of an overview with regard to the fund balance. We have an audited fiscal year 2024 number, which is the 19.1%. Again, to remind anyone who needs to be reminded that the town's fund balance policy targets a range between 15 and 20%. And that range is determined by the unassigned fund balance annually divided by the subsequent years budgeted operating revenues. So the 2024 unassigned fund balance, that 19.1% in the calculation is utilizing the 2025 budgeted operating revenues. Of course, 19.1% is within the 15 to 20% range that's included in the town policy. Similarly for 2025, which is unaudited, right? We're still moving. But utilizing what we see as changes to the 2024 audited fund balance based on fiscal year 2025's performance, And utilizing fiscal year 2026 as budgeted operating revenues, we're projecting that the fiscal year 2025 fund balance will grow to 22.9%. Of course, higher than the 15 to 20% targeted range included in the town's policy. Both 2025 and 2026, the fiscal years, the unaudited numbers reflect a roughly 3.5 million. That's not an error. Both fiscal years, both numbers are approximately 3.5 per million dollars to the good. As you will see when we flip over to the revenue expenditure summary and the expenditure detail, there's a mix of it. Some of it comes from revenues higher than budgeted and expenditures lower than budgeted. And for fiscal year 2026, our revenues, and actually I'll turn you to the next page, which is the status of revenues and expenditures. At the top of the page, it shows the revenues. And you'll see that at that last line, total revenues far right, 2.950 million of favorable variance. And I'm sure there are those who remember my talking about the bookends of the fund balance. In fiscal year 2006, the council appropriated 3.75 million of unassigned fund balance to help balance the budget and keep the mill rate lower. Of that $3.75 million, the only amount that we need, again, unaudited, to support fiscal year 2026 operations is $750,000 of that $3.75 million. That is because our revenue came in higher than budgeted. Similarly, on the bottom half of the page, the expenditures were budgeted at $113.6 million, and we're currently tracking roughly $450,000 of favorable variance below the budget. And as council and the committee knows, at the end of June, the council authorized fourth quarter budget transfers, not only for the town, but as a result of the revenue shortfall for the Board of Education, there's also an additional fourth quarter transfers to backfill at $670,877. And where you see that in the middle of the page is the adopted budget and the immediate right is the revised budget. And focusing on the bottom half of the page, expenditures, you'll see some zeros. That's the operating transfers out. The line immediately above that is the Board of Education. So the adopted budget was $54,321,894. But after the budget transfer to cover the revenue shortfall, The revised budget is $54,992,771, which is why off at the far right, you don't see a variance, right? Without the budget transfer, the Board of Education would have been $670,000 over budget. Now, the town's fourth quarter transfers coupled with the Board of Education's fourth quarter transfers If you look at the very bottom of those adopted and revised budget columns, the number does not change. It remains $113,619,271. We say that closer to English. $113,619,271. All of the fourth quarter transfers on the town side and the Board of Ed side, the budget remains the same. We are moving money within the budget. And if you look at the far right where the expenditures are shown, you'll see that there are two lines that have numbers that are black as opposed to red with brackets. The red with brackets are under budget. The black numbers are over budget or to the good in terms I'll spare everyone the finance and budget argument fight over the years of how you show positive and negative numbers for revenues and expenditures. It does get a little bit wonky, but as it's shown here, the variance column for revenues at the top and expenditures at the bottom is what you think it would be. More revenue would be positive, less expenditures would be negative. So that negative 452,000 is a favorable variance, even with the two lines that reflect over budget numbers, 60,107, 118,084. Those amounts I could have adjusted but for the council taking issue with the last sentence in the fourth quarter transfers resolution, which authorized the town manager to keep the town in balance. So because there was that issue, and I don't recall whether or not the council included that last line in the resolution, but based on the conversation and the intent, we did not transfer additional monies to keep us in balance. But what this demonstrates is the 60,000 and the 118,000, call it 178,000, is less than the favorable variance of 452. So while there are two lines that are shown and actually the town administration line, as you turn to the expenditure detail, you'll see that that next page, which has the same roll up at the top, first line town administration and all the other boards, commissions and departments, including the Board of Education. But the next section is labeled town administration, kind of sits a little below the middle of the page. Those are all the departments and offices and divisions that make up the town administration. And there are one, two, three, four, five, six different lines that are over budget. But when you look at them all together, there's $60,000 over budget. That's because, of course, there are offices and departments and divisions that are under budget to compensate for it. So while there may be individual offices, departments, divisions who have line items or whole departments that exceed their budget, we are still, even with those departments, divisions, offices over budget, $452,000 below the adopted budget for fiscal year 2026, hence the favorable variance. So when you add the 2.9 million of favorable revenue variance to the 452,000 of favorable expenditure variance, the total favorable variance for the That $3.4 million is what, in our projection, we utilize for fund balance. We have an audited 2024. We take a projection for 2025 and a projection for 2026 and walk it forward to the percentages that are included in the next to last paragraph of the cover memo, which ends with the projection for fiscal year 2026 is 17.4 million, which of course is within the town's policy range of 15 to 20%. And with that, I'm happy to answer any questions that the committee may have.

Any questions? Do we have any questions online? Any hands? One second. We'll go to Councilor Merritt.

That means that we have about Our surplus on balance going into this coming year is about 19%, you said?

As of the end of fiscal 26, it's projected to be 17.4%.

We have more than that because of these

No, that includes the favorable variance for fiscal year 2006. If you look at the second page behind the cover memo, it's the revenue and expenditure summary. At the very bottom right are the calculations for the unassigned fund balance estimate. As I talked through it, I wasn't pointing to that section of the page. But again, we have a 2024 audited number. We have 2025 that is being audited right now and will wrap up in the next couple of months. And then we get to 26, which is unaudited, but you take the audited 24, add the operating performance, best available information for 2025, and the same thing for 2026. And as of June 30, 2025, we'd be sitting at 25, just over $25.2 million. You take this financial performance for fiscal year 2026, the revenues and the expenditures favorable variances, That 3.4 million you would add to the 25.2. But then in 2026, the council utilized 3.75 million to help balance the budget. And as we all know, transferred 4 million from the unassigned fund balance to the Economic Development Trust. That $4 million for the Economic Development Trust moved from the unassigned fund balance, I believe, to the committed category. That committed category requires council action for any expenditures. So while that $4 million is there for economic development townwide, to spend any of that would require a council action. So it is still there, but when you back both of those out, the $25.2 million plus the favorable 2026 operating variance, less the fund balance use and transfer, the end of fiscal year 2026 is projected to be just under $20 million. That's the 17.4%. The minimum we asked for is 15%.

The targeted range is 15% to 20%. So we have...

We're complying with the policy.

Over 2% more than our minimum.

Yeah. Yes. And as you'll see in a minute, as we want to short the conversation about 26, if you have questions, please ask them. But that's a nice segue to the first month of fiscal year 2027. Of course, July 2026 is our first period of fiscal year 2027. It's the first month of the year. The most significant thing is that we've collected total revenue of 52.4% of budget. And looking at tax collections for the current year's levy, we're at 57.2% already. That's strong collections for July, which of course we and the Board of Ed need to support operations town-wide until the January collection. That coupled with the various state grants that come in at different times throughout the year. Interest income isn't shown as there's been none received and booked in July. I think last year it starts to show up around September. Building demolitions and permits as well as the real estate tax conveyance are getting started. $121,000 for building demolition permits and just under $105,000 for real estate tax conveyance. Now, here is where I got ahead of myself in the June report. The expenditures, so the second to last paragraph at the bottom of the page for the July 2026 FY27 monthly financial report. You see the expenditures, excluding encumbrances and including encumbrances. So while there have only been 4.3% of actual expenditures through the end of July, we've encumbered roughly a quarter of the budget because we know that there are things we're going to pay. And even that is a little misleading, only in that there are things that we don't encumber, like debt service. Right. Most of the medical expenses, the fixed charges, we don't encumber. Right. So it would. Be miss thinking or inaccurate thinking. To assume that we should with encumbrances be at, or even close to 100%. Right debt service is 8, 9Million dollars, right on 118Million dollar budget. So that's call it 8% right there. And as we saw in the June report. As of June 30th, and we're in the 13th period where we're making adjustments, we are still at 99.6%. All of the debt service has been paid, all the medicals have been paid, and we're still not at 100%.

Dr. Hill, when you finish that sentence, I'm going to have you pause before rolling into July. Councilor DeBetham-Brown had her hand raised. Sure. Okay.

That was July comments, but we can stop and come back to it.

Okay.

It's about June.

I'm not sure. Let's recognize Councilor DeVita-Brown. You were in June, so let's see if she has a question for you regarding June.

Thank you, Madam Chair. I don't know if this went out later, but I don't have this report.

I believe it's posted on the website. It was posted just after lunchtime today.

Okay, so it didn't come out in the packet. I'm so sorry. I was expecting it to be a part of the packet.

As was I.

For the meeting. Okay, so I'm hoping that Director Hill, once I get to view the report, if I have any questions, I will directly send you an email. Thank you so much. You're welcome.

Okay. You're going to send it? Okay, Ms. Rod, Councilor DeVita Brown, Ms. Rogers sent that to you. And then if you go back previously, I think it came out at 3.09 with the attachment for this evening's meeting as well. So it should be at the top of your email for the time. Thank you. Any other questions for June?

No, I think I do have some questions, but I'd like to look at the report and then I will send an email and make sure that you guys are all seated on it.

Thank you. Okay, so back to July 2026. Thank you, sir.

Thank you, Madam Deputy Mayor. So in the second to last paragraph, this is July 2026, first period of fiscal year 27. without encumbrances at 4.3%, with encumbrances at 24.5%. And you see the prior year. So now with a full year of embracing MUNIS with regard to purchase orders, we have the ability to compare year over year where we were for both numbers, with and without encumbrances. So you see the actual are lower this year than they were last year. But the encumbrances, and that's what, two percentage points lower. But the encumbrances are a full 5% higher. That's positive. That's strong. That's good for Bloomfield and its financial management. Turning to the next page, and I'll be brief here because, again, we are one month into the fiscal year. The same presentation as the June 2026 report, revenues and expenditures are summarized on the first page with revenues at the top, expenditures at the bottom. Spoke to our year-to-date collections sitting at just over $62 million in aggregate. and expenditures of just over $29 million. As I've done in the past, we'll continue to project through June 30th at the budgeted level, unless there are things that we know, such as revenues coming in higher than budgeted or expenditures that we know we're not going to incur. We will project those out and show them as the variance as they are certain, which naturally happens as we approach the fourth quarter. And as we approach the fourth quarter, that last month of the third quarter, is when we'll start preparing it so that the first quarter, the first period of the fourth quarter, as the administration and the council are preparing for fourth quarter transfers, we start to see in the monthly financial report where the variances are, what departments are over, what departments are under, how are the revenue collections year to date. So right now, so early in the year, until one of our revenue numbers exceeds the budget, we will continue to anticipate receiving all the revenues that are budgeted for and incurring all the expenditures that were budgeted for. And again, at the bottom right, which is where I was trying to get to in continuation of my response to Councilor Merritt's question about fund balance, you can compare the two. It's the summary of revenues and expenditures page. Revenues at the top, expenditures at the bottom. The very bottom section on the right side shows that same unassigned fund balance projection. HOWEVER, THIS BEING THE FIRST PERIOD OF FISCAL YEAR 2027, WE START WITH WHERE WE ENDED THE PRIOR YEAR, WHICH IS THE 19.959 MILLION AS OF FISCAL YEAR 2026 END. WE DO NOT HAVE A PROJECTION FOR VARIANCES ON THE REVENUE OR EXPENDITURE SIDE WHICH IS WHY THEY'RE BOTH SHOWN AS ZEROS. AND THEN WE KNOW THAT THE BUDGET TRANSFER Best budget of use and transfer. That 3,642,500, I have to go back and take a look. That should be 3,665,000 is what's appropriated in the current fiscal year, 2027 budget. Trust me when I say that that $23,500 will not move the needle with regard to sitting at 16.3 million projected as of the end of fiscal year 2027. Now, similar to fiscal year 2026, the budget includes the use of $3.665 million. We know that $665,000 of it is to shave the peak off of our existing debt service to keep us below $8 million. But the same question for 2027 exists as in 2025. I'm sorry, 2026. The book ends. We may need all 3.665 million, or we may not need any of it. And until we get through the year, or at least to the fourth quarter, we won't with confidence be able to say how much of that we're going to use. But as I just spoke to, as we get into the fourth quarter, we're going to start showing the variances for revenues and expenditures. And that picture will become clear as it did in fiscal year 2026. And feel free to go back and see that $3.4 million favorable variance. What I just said about the bookends with regard to the use of fund balance in fiscal 27 is the exact same thing I said in 26. And the way that 26 ended up is of the $3.75 million that council appropriated, we only needed $750,000 of it. That same question we have for fiscal 27. As the year goes on, it will become clearer. I anticipate that the town's financial performance will continue to be consistent within prior years, with prior years, in that we won't need all $3.665 million of the appropriated fund balance. To Councillor Merritt's question about where the fund balance sits, that's important. Because while we don't have the denominator for the calculation of the unassigned fund balance percentage. It is the subsequent years budgeted operating revenues. We won't know that until the council adopts the 28 budget. later this year, approaching around the fourth quarter of this year. We'll have a 25 audit. We'll have the 26 audit, right? So we won't be projecting that starting $19.95 million. We will be utilizing the unassigned fund balance that's included in the fiscal year 2026 audit that, again, should be completed in the March-ish timeframe, right, as budget is kicking off. And then... The assumption for 25, the assumption for 26 will be firmed up, we'll know where we stand and we will have an assumption for 27, right? And again, I think it's about a million dollars If we don't need to utilize, but 2.665 million of the 3.65 million appropriated, our bottom right ending fund balance as of June 30th, 2027, will continue to be compliant with the town's fund balance policy. at 15% or above. These numbers, assuming all of the fund balance is utilized as we walk forward 25 and 26, I believe this 16.3 million has us sitting at 14.2%. but that is a projection. You know, some might say we're in violation of the policy. No, we're not in violation of the policy. We can't even calculate that number because we don't have the 28 budget and we have estimates for two fiscal years. It will settle itself down with the passage of time. And again, I believe that the town's financial performance will continue as it has in the past. We won't need all of that 3.665 million and our fund balance will continue to be compliant with our own policy. And with that, I'm happy to answer any questions that the committee may have.

Thank you for that. Although that explanation, a catalyst from council merits question, I think I really do appreciate your deep dive into the fund balance because it's always a hot button item and topic. And it's very promising what you're describing. Last couple of years, we know that we've allocated unassigned fund balance to be used towards the budget and have not had to use it. And I do look forward to possibly not having to utilize all of it on this year. at the end of this fiscal year. So very much a deep dive. Hopefully those watching will have gleaned a lot from your explanation of years past and what we possibly protect for the end of FY27 is very encouraging. Do you have any questions, Council Merrick, Mayor Harrington? Any questions online? Councilor DeBetham-Brown.

Thank you so much, Madam Chair. And I really do thank you for acknowledging even though I'm not in the room and or on the committee. So I really thank you for that. And I know that these are just projections, right? And I'm really holding that in the back of my mind. And I am hoping, too, that we're not going to spend as much money as we have projected for FY27 as far as the fund balance go. But I want to go back to And i'm looking at the worst case scenario planning for the worst hoping for the best that if we do go back to I think that was your last slide. Looking at the fund balance going into 2028 what was that percentage.

So in the July 2026 report, the first period for fiscal year 2027, at that bottom right, you'll see that last line is the estimated unassigned fund balance as of June 30th, 2027. That 16 point, whatever the number is, I can't see it over there, I believe, I believe that utilizing the fiscal year 2027 budgeted operating revenues, the calculation is 14.2%. But that calculation is not consistent with the town's fund balance policy, which requires that the budgeted revenues for the subsequent year be utilized in the calculation.

Okay. And I think I just wanted to, once again, just to kind of highlight that, because I do remember specifically the town manager cautioning the council and the residents, right? Looking at the fact that we might be, that we're gonna have to increase taxes again, right? So we're gonna have to, we're starting earlier, says the town manager, and he has given a charge to the council for us to come up with, the priorities. And this is just reinforcing that. We're going to have to come up with priorities. Once again, I am planning for the worst, hoping for the best with this, but I'm grateful that you guys are giving us these little crumbs, these little nuggets now so that we can do a little bit better in planning and preparation for the next budget season. So thank you for that. Thank you once again, Madam Chair.

No problem. Anything else, Director Hill?

No, ma'am.

We really do appreciate you, especially you mentioning going over the numbers on different schools of thought on reconciling the variances and providing a little more detail instead of zeros. We're only, I think, in the past reflecting the numbers that were over and under to cover what was there and maybe not necessarily showing any of the other numbers. I do appreciate that. I think for those that are not accountants and stuff, it gives them a little more clarity on being able to follow it. In particular, The red in parentheses is counterintuitive to how, you know, the lay person reads the numbers, but your footnotes are important in explaining that. And it did so well. So if they really thoroughly read it, they'll be able to follow. And again, I do appreciate more detail being shown department to department and line by line. It really gives a better picture for those that are interested in diving a little deeper. So I do thank you so much for that as well.

You're welcome. And thank you, Deputy Mayor.

No problem. Well, let's see what we have next. Item number five, public comments. As we enter public comment, if you have signed up for a public comment, you're welcome to approach the dais. Ms. Barringer, you've been recognized. Residents will have three minutes to make their statements and public comment. If we have any non-residents, they'll be allowed two minutes to make public comment regarding our finance committee meeting.

And thank you so much for being patient, Ms. Barringer. Oh, thank you. Good evening. Deputy Mayor, Mayor Harrington, Councilman Merritt, my name is Erin Barringer, 28 Kenmore Road. First, I'd like to thank Councilwoman DeBetham Brown for asking the question earlier about the packet because that's where I wanted to start. with it's very helpful for residents to have the supporting materials the 24 hours before the meeting. Having attended these finance subcommittee meetings over the last year, I do look at Director Hill's monthly financial report in the status of expenditures by department and by activity. And as you can see, I was running late and I'm coming from work, so I didn't get the alert at 3.09 that there was something updated to review. So I, in addition to Councilwoman, might have some additional questions. MOVING ON, I KNOW AS I ATTENDED, DIRECTOR HILL MENTIONED MUNIS AND BOE CONVERSION FOR PAYROLL, AND I THINK Councilor Merritt asked and Director Hill mentioned that it was January. However, at the last May finance subcommittee meeting, I shared having listened to all the BOE meetings in, I don't quote me, but it could have been in their meetings. April, May or June BOE meeting, their timeframe is April. So I would urge these council subcommittee meeting to have Director Hill coordinate with BOE because their projection is April, not January. In addition, I'm sorry that Director Hill left the room because looking at open finance, which again is our residents' way to look at our financial health, there are two invoices that were paid past due. Under our OpenGov, there were two POs that were for fiscal 2026. that were paid, again, it was small numbers, under $6,000, so nothing to be alarmed about, but two invoices are indicated as past due. So as Mayor Harrington and Deputy Mayor Lloyd had shared in previous town council meetings, as residents stand up and ask questions, I would greatly appreciate the answer to these questions. On the past due, which was $4,000, for OpenGov, which is the system that I can look at our financial health, was there a late fee? When was the invoice date and why was it late? And I mentioned this because yes, these might be two offsite things, but as you know, back in fiscal 26, there were three other additional invoices that should have been paid in October, November, December, and all three of those invoices were paid April 8th. So I would just like some clarity on when invoices are being received by the town and who's reviewing and when we're paying those. And then I would like to close on a positive note because I do appreciate Ms. Donna Stort and Director Hill and their excitement that we're getting close to closing out fiscal 25. And yes, I congratulate you because it is an improvement over the 15 months that we had for fiscal 24. So I hope the projections on the 10 months being late will be completed by October. Thank you.

Thank you very much. Are there any other public comments? Any other public comments in the room? Okay. And we go to public comment online. Mr. Rickford-Currington, you have the floor.

Thank you. very much. Good evening. I was hoping that the finance director would still be around, and it was a question that I hoped that the committee would have asked. When we say that we did really good in revenue, I think that could be a little misleading, because I think I heard strong revenues, but I think it should not leave the impression that somehow this was just ordinary tax collection, I think. I'm trying to go through, obviously, the report to try to the cipher exactly. And I think it had to do with, you know, we projected 1.7 million in tax relief, and I think we got 3.2. And I think one of the items that when it came to the MDC, you know, I think there were some savings there as well. So I would just ask the committee and I'll send an email because once again, I still have to go through this. But the question is, shouldn't be, hey, we're not going to put two point something million back into the fund balance because we didn't need it. The question should be why and what were the drivers that that that we should be looking at? And that's part of any budget analysis. So I would. Hope that the finance director would provide that. But those are my comments for now. Like I said, I've had opportunity to go through this in detail and I will send an email to the town council and other items that I've identified. But thank you for your time.

Thank you for your comments, Mr. Curtin. I don't see any other hands. Sometimes there's a second screen. Ms. Rogers, are there any other hands online? Okay. Seeing none. Yes, Councilor Merritt. I would like to move that we adjourn.

Second.

Okay. All in favor? Aye.