Finance Committee - Regular Meeting

[Music] I know right theit like four of them they're all what is that everything oh yeah I put I put in a contingency on it everything time is four o'cl like to call today's uh Wednesday February 12 2025 finance committee meeting of the Gardner city council to order the clerk will please call the role counc present CC present present announce of open meeting recordings uh any person may make a video audio recording of an open session of a meeting or may transmit the meeting through any medium subject to reasonable requirements of the chair as to the number placement and operation of equipment used so as to not interfere with the uh conduct of the meeting any person intending to make such a recording shall notify the chair forth with all documents and Exhibits used or references reference at the meeting must be submitted in duplicate to the city clerk as they become part of the meeting minutes is anyone here other than staff recording see none reading of minutes of Prior meeting minutes J uh review approval of meeting minutes January 15 2025 I make a motion that we accept the minutes as presented second motion made by councelor Max second by councelor heglin to accept the meeting minutes as presented is there discussion on the motion hearing none all those in favor say I I opposed motion passes uh next first time on the agenda item 11 482 discussions regarding the City's health insurance payments and

trust fund uh I would open up to the mayor for any updates to begin with unless this question unless otherwise you have any updates uh just some Mr chairman and uh talking with the city treasurer and the city auditor um there was some reconciliations that were done with the account with the payroll deductions um going back to a couple months uh that did bring the uh balance of the trust fund back up significantly up to about a 1 Point John $1.4 million at one point oh good and there's some other factors that go into that too uh we've received some stop loss payments that's insurance insurance for lack of a better term where if a claim comes in over a certain amount we get reimbursement uh on the claim uh that came in that was around $400,000 y dollars on that $484,000 on that um the claims are still coming in higher than last year for our settlement payments that we have every month but uh the financial status of the trust is a lot better than we were expecting to anything further add startor um yeah basically in one month it went from pretty much 400,000 to 1 uh 1.4 million so that's how much it can change in a month um again um the uh the stop loss $448,000 came in in one month um we have $440,000 um ready uh of stop loss that it it hasn't been reimbursed yet and when when is it going to hit we don't know so there's another $440,000 there and again our claims um for January came in at 11,000 more than our monthly payment of a m71 um the first 6 months the average was the average was $212,000 more than our monthly so that's

how much it's it it it changes so again I'm I'm hoping it continues for the the next five months low claims so my our claims are still high but not like the first six months questions comments from the committee I back um when we last met okay we were told about the you know $400,000 balance and I I for one and I'm not sure I'm sure I'm not the only one who was concerned about having such a low balance in that account um and then we received the explanation that the fund balance is now um quite substantial to what we thought and part of that reason is because of the uh monthly withholdings from employees correct yep and how many months was that just two two yeah because when I do the math it comes it to me it looks like it was more than two months it almost looks like it goes back to possibly even October so I'm just I I'm just concerned because when it comes to employee health insurance um it's important that the financial information the mayor the council and the finance committee receiving is updated and accurate um you know I I mean we were all panicking about what this was going to do to the city budget um how we were going to fund this what was this going to do to our city employees where the last thing we would want to do is is the the mayor or any of the unions be hit with a another high premium adjustment and um I I'm concerned I just want to know what's going to be done in the future to make sure this doesn't happen that all of a sudden we find out that we forgot to calculate for uh a few months of employee withholdings yeah with that there was again I have a um reminder in my Outlook that first of the month has to be in front of my desk that report and I will post it before I report any numbers so that's basically um and again

I'm going to Hound it until I get that report in front of me and so I'll push yeah push that stop loss Insurance to that's something that we've been fighting with for quite a while to get that amount back too um so that does help us substantially too and and and but the stop loss I understand that you didn't know that was coming in however not being informed about what was actually should have been there from the employee contributions that's that that's two different things and one could have been prevented and that's what I'm just trying to impress here that that needs to be um more thorough in the future in the correction yeah I didn't have a a a reminder on my Outlook so that's me it sounds so simple but I usually just um a month I do 30 about 30 uh journal entries uh reoccuring journal entries a month so this one again just slipped for the last two months and and that's and that comes from the treasure as well so correct so it should be actually double checked by two departments not not just one one so yeah but that's just my concern y thank you that was actually I have different questions but while we're on that topic I I really appreciate the way you said it cuz I had the same concerns and questions and that was I think that was my question is who is responsible for initiating that withholding is it on your end is it on the treasurer's end I knew you were the reminder I appreciate that that was one of the things that first came to my mind I was like oh it's probably a simple fix but is it who needs to initiate that so it's not just on you or is it only on you or it's basically at the end of the month is once everything's posted I just received a uh a report via email from the treasuring Department um and again I'm I'm going to look I can look into if if I can get it manual or myself go in and get it um I can look at doing that but again by putting that that reminder something simple don't get done I don't understand I don't fully understand obviously the capabilities of munice as

a system It's ability to automate and not automate certain things I know some of the systems I use that work we automate reports reports come at a certain time we get them then those type of things can be put in place um I don't want to ble the work that your office and treasur office does you guys do fantastic work um maybe a review of just so nothing like this happens again anywhere else I don't know if there's other processes that are very manual that are being done that way yeah um and those can be reviewed at this time so nothing comes up um like this I'm glad to hear that the amount is where it is that is good news um so thank you for that but that was my my concern is not just even not just this we corrected this but is there anywhere else where while we haven't nothing's fallen through the cracks yet is there an opportunity to prevent that um in the future exactly that could be looked into be appreciated and I will look into it right now I can't see any other uh issue like this um but if I do I can let you know but um yeah I I don't I can't yeah this I again like I said I I got a reminder now and never appreciate that and glad to see it's being addressed sounds like for questions councelor yeah yeah just a few some from my own edification being new to the finance committee um and thank you I really same thing I just like I appreciate like the efforts to address it too so it doesn't happen again um just what is stop loss and then like GL entry ibnr there's some of those terms I think accounting terms that are probably taken for granted but a like me yeah the stop loss I don't fully understand it um it's basically insurance policy so one claim one person if if that place person keeps getting claims like I don't I don't want to say like a lot lots of dollar amounts um there's a limit and then this insurance covers whatever over um I going to say it's 500,000 is the limit yep exactly and so we'll still pay

up to the 500,000 but we'll get reimbursed for the items over over that yeah and then the ibnr is basically the expenses that we have to report at the end of the year that we have to claim in that year we it basically will hit the because there's a lag um we have to report it when we close the books so that's what the ibnr and it's usually but not reported thank okay than you y and it's usually around like uh between $500 and $600,000 thank you um so is the 1.4 does that in include the anticipated 440 cuz I was looking at like 3555 484 and 300,000 that's like 1.1 sure or maybe I'm doing my math somehow it doesn't so the the 448 plus the 300 is known the middle the claims that's again I can pinpoint it the difference would be the claims basically yep yes thanks I tra from 355 to 1.4 yeah um and then so we are we no longer anticipating a need for free cash appropriation no we'll still need free cash appropriate and the reason for that's what we corrected in this year's uh health insurance year uh so the group that deals with health insurance for the city just to give the overall view of how health insurance works is uh the group that meets with our health insurance brokers is myself and the Human Resources Director from the executive branch and then the auditor and the treasurer from the legislative branch the four of us together meet with the health insurance broker and discuss the um ways that our claims are going discuss the way that our uh claims are trending discuss the balance in the health insurance trust fund and discuss the way that uh rates should be

adjusted for the year uh under the previous employees who were in those positions the health insurance year used to run from October 1st to September 30 and the reason for that is we normally hire a fair amount of new employees for the school department in the month of August M so that way we would have everyone on the books so we knew we were paying for actual employees rather than vacancies and employee spots however that was for the school department but we still had vacancies here in the city and so it really was one of those made sense on paper didn't really make sense in practice because that was only taken to account one Department rather than the full city as a whole um so for better budgeting purposes we've now moved that health insurance year to the fiscal year and the reason for that is when we've had the increase in health insurance this year that we had we budgeted for an increase but in needed an increase for much greater than we thought we were going to need so that wasn't in the budget so therefore we're going to need about $900,000 of free cash that we already have set aside in our internal list that we track uh free cash appropriation that's because the city pays 75% of the health insurance cost and the employees pay 25% of those health insurance cost so our employee share uh the employer share of that also had to go up by the 20% that rates went up too so the 900,000 of free cash that we have set aside and that's a conservative estimate it may be under that it maybe close to that we'd rather just be safe than sorry on that one is the 20% increase on the 75% share that the city would have to pay we didn't budget for that much of an increase on the budget side of things so when you see the budget this year you'll notice there's a um in the insurance section of the budget there's a health insurance lineup that's our 75% share so that's the difference in that no that makes sense thank you appreciate it thank you just one last question so knowing that you're going to need that money from free cash do you still anticipate needing to do any other incre in Insurance before the end of this fiscal year not for the fiscal year okay thank you anything further um as this is an ongoing item I think it's something we should keep on a calendar

um so unless is an objection I recommend keeping on calendar agre second yeah yeah uh move on to the next item item 11497 a communication from the mayor regarding the contract with Keller Partners uh company for grant writing and lobbying Services I had asked for this information um it's obviously complete with the the contract there's references references from um other municipalities in there with all the groups that um that the Keller um Kell Partners works with I don't know if the mayor has anything else to add no just the follow up to the previous conversation we had at the other meeting the committee asked for a copy of the final contract just to see what work that they would be doing so just providing that for your information thank you entertain a motion um I make a motion that we place the item on file and present it to the full Council as a communication second motion made by councelor Max seconded by councelor hegland to place to recommend place in the communication on file is there any further discussion hearing none all those in favor say I I I opposed motion passes next item item 11499 and order to reappropriate 8 million1 161,000 of unexpected Bond proceeds to other capital projects Mr Mayor thank you very much Mr chairman at the state of the city address this year I uh that was on January 15th I uh noted that the school building project came in just over $8 million under budget uh due to various factors uh the bids coming in about 5% less there was a 5% contingency uh that was built into the cost that was Associated there the state pitched in some extra money on the reimbursement side and by there's things were covered that we weren't expecting uh all of those reasons there um made it so that the funding came in just over that $8 million under budget uh the original loan that was approved by the city council in September of 2019 was approved for 8955 uh 89 Mill M5 58,5 70 um of that uh the msba did reimburse about 80% of those costs for eligible

costs there were costs that weren't eligible uh there are certain things that are on their regulations that are there the way that the massachusett school building authority process works is that you have to borrow the full funding upfront first then go out to bid then see what your cost com in at and so the original loan appropriate uh appropriation and approval uh is done based off of estimates based off of comparable projects and that's the way that the school building authorities regulations go it's not really how we do a lot of the purchasing if we do it regularly here on our end where we' find a more solid number and then go out to bid after after the appropriation is done that way but we had to follow the regulations in order to be eligible to get that reimbursement that we got on the school cost uh so working with our bond legal council uh and uh our finance team trying to figure out what to do with the remaining 8 million uh we were you know suggested that yes the money could go back into the loan but you're taking a 30-year loan and making it a 29e loan over the course of the life of the $90 million that was taken out originally or approved to be taken out originally uh so as such you're paying for it anyway if you're carrying in the budget it might as well go to a project that has a benefit now since we're paying for it anyway uh Bond Council informed us in order to get something that qualified for the reappropriation of these funds we needed a project that had a letter stamped by a professional engineer so it's a certified engineer that took the state test and got the official professional engineering status uh to say that the lifetime of that project had a minimum 30-year lifespan what that means is there's different warranties that play into that but there's also different state laws uh that specify what projects fit into that 30-year category so for instance Paving uh by law can only be have a uh a loan taken out for up to 10 years outdoor recreational facilities can only have a loan taken out for 15 years and Equipment can only have a loan taken out for up to 20 years building Improvement however are 30-year and other projects that meet certain engineer specifications and the specifications of the general law are also 30y year so

what Bond Council required is an engineer stamped letter that is included in your packet from tyan Bond uh and fuss and O'Neal our City's two on Call engineering firms that these projects that are included here were stamped by the professional engineer saying that these have a minimum lifespan of 30 years and meet all the requirements of the general La that work was then checked by our City's Bond Council to make sure that all of the requirements in the general laws were also met on top of just the engineers warranty checks uh that uh actually took out some of projects from this list uh and made it so that uh it's everything was double checked by both the engineers Bond Council again and that's the final product that's here before you uh these were all products that were on the capital Improvement list that was presented to the city council and approved by the city council this last fall uh and it's one of those things that many of these projects have been on the uh capital Improvement project for um years and in some cases over a decade uh so it's one of those things that this does help us try to catch up on what we have in our Capital Improvement plan uh and get some of the you know larger building renovation upgrades and um back to where our building should be and need to be and get us to spot where some of these projects can move forward uh so that's the uh cliff notes of the projects that are here you'll notice that the original loan order that's included in your packet as well also references Waterford Street School I want to clarify that that differentiates from the current Community Center project that we have the way that the school building authorities uh project works is they titled the new school building project The Waterford Street school replacement project so that's why when you see that referenced in the bond council's letter in the engineers report and in the original loan order that's because the we were still using Elm Street School as Gardner Academy the superintendent's office so the school we were replacing was and discontinu use of was the Waterford Street school facility so that's why you'll see the loan

reference in that name there is some funding that is not included in the loan order that is still remaining in the loan uh about $500,000 was not included in this this does remain in the account um these are also best estimates that we've received uh from our uh different firms that the city works with uh for these various projects what would happen from here is if the vote is approved by the city council we would have to go out to bid for almost all of these projects the bids would go out if something comes in under bid or we have a balance remaining in the account after then the city council has the op the we would have the option for the administration to put forward another proposal basically doing this over again and reallocating those funds to a different project the remaining balance that's in there that we're not touching is just in case anything comes up that we don't know think about right now with the new school but the projects just wrapped up um so it was one of those just to be safe keep a small amount in there and see how the go forward and then readdress it at another time uh so that's really what got us here now uh this is something that has fully been cleared uh we have several department heads here who are either part of the process of creating the loan order the process of working with Bond Council and the engineers or overseeing the projects that are listed in this um order that you see before you and if there's any questions I'm happy to answer those one um so none of these projects have started n none of the school um Community Center City Hall none of these projects have started some of the school the school auditorium project has begun already so this would be that uh funding was taken out of the school's school choice account which is a one-time funding account um this would be reimbursing that project because this that is an eligible cost and that is a um account that does vary year to year depending on how much we take in in school choice uh so this would be reimbursing that $1.5 million that's been expended on the auditorium Improvement project putting that back into the account and carrying it here in a place that we're already paying for

the funding in a different way what would have happened if the council didn't approve to appropriate this if by Ed starting a project I guess it's my question uh it would have been paid for out of the school choice account there's some other variables that get taken out of that account uh and the superintendent and uh School business administrator are here so if you have any specific questions on that I'm sure they could answer that as well uh but the school choice account is um a account the school department can pay regular budgetary operations out of it can pay different one-time Capital costs out of um but it's one of those that it's not a guaranteed source of funding either and because that varies year to year having that up point where we have some type of a savings account for the school for lack of a better term that we can pay for unexpected expenditures that may come up through the year um reimbursement fund gives us that flexibility to just account for any unexpected cost that may come up mid year it also wasn't it was a little over a million dollars wor from ESS the ESS Grant which we had had to spend by September September 30th so that's what kind of jump started this so most of it was paid for by that Grant um my other question is um just the term Middle School storefront what's the storefront of the middle school is it the the the entrance the main entrance okay all right I just it's just a odd term yeah for the entrance is just storefront is just it's not Walmart but yeah I I know I'm like because the the reason I'm saying that is because the high school did have a store so if you said storefront and there not a lot of people that know that the high school had a store there is a glass in a whole area there that would be could be considered still the storefront because that's what it was meant to be uh but that I just wanted to distinguish that um but thank you for the explanation I just wanted to make sure that um you know we were just I was just clear on a few things my only other question um

well it's not a question it's just a statement I found it interesting that steer Treads could last 30 years um because these ster Treads at the high school have needed replacement for many years for example and that you know even though the buildings 40 something years old they probably should have been done 15 years ago so I just felt it fascinating that they think ster Treads with that traffic would last 30 years but um other than that I have no further questions they're definitely in rough shape when I was there years so that's what I just that's what I'm saying the life of ster Trad I was surprised I think they were fine I was um with you talked about go coming under budget if say for example the high school bathroom upgrades came in over budget what would be the result are these individualized or just so if that one came over be back in front of the city council and finance committee to ask for exceeding that amount for that project U that that's an option that we could do we could also see what funding we just have available in other accounts too that that's going from the loan though yeah if we were going from the loan we'd have to that 500,000 yeah yeah now this yes yes yes I had didn't think about that for a second but yes you are correct okay um and are there with the school choice account are there other plans for that account other improvements that are planned to utilize that for uh this money seems to be replenishing those funds yeah the funds come in and come out you know um a lot of our school trp this year we have 150 students coming in um and um 152 going out so it's somewhat um it's somewhat balanced but typically the amount going out is more than the amount coming in so that account every year gets a little bit more diminished um and you know we're moving by way of example this fiscal year we're using over a million dollars salary that's how we stabilized the

budget from last year this year so it's there as a safety net we're not use that much for salary next year been trying to move money out each year but we have to do it kind of we have to do it somewhat slowly um but that amount has been just slowly going down every year okay anything further I think just who is our bond counsil is it is it lot U we work with Hilltop security and no than I think I think it does look good I think what I appreciate about the list is that instead of letting projects or buildings slip into disrepair which is obviously going to focus for me since I came on with Helen may and um Stonefield even it's nice to see that we're looking at what can we start to salvage or prevent from getting into disrepair um so I appreciate it thank you including City Hall I think City Hall has been overlooked for many many years for the necessary repairs and I think that's one we're not going to find grants for we're not going to find state funding for federal funding for well that's on us yeah no I you've spoken to in the past the electrical upgrade is a necessity with the technology used these days and um it's going to be a this going some lead time to get the equipment necessary to do that as well so acting now I think is of the UT most importance I have um nothing further so I'd entertain a motion I'll make a motion that we uh approve an order to re appropriate 8,161 th000 of unexpected Barn proceeds to other capital projects and move the uh recomend recommendation to the full Council second councel excuse me motion made by councel Mac second by councelor heglin to recommend uh the order to the full councel all those in favor say I I all those opposed say no is there any further discussion I'm sorry hearing none motion passes next item uh we're into in subcommittee item 11457 an ordinance to

amend the code of City of gardener to have the Community Development block steering committee meet monthly submitted by councelor George tyros um as the city council has um created a new subcommittee the committee um the economic economic and Community Development subcommittee um I would entertain a motion to refer this item over to that committee so second motion made by councelor Mack seconded by councelor hegan to refer this item to the economic and Community Development subcommittee is there any further discussion hearing none all those in favor say I I I those opposed motion passes item 11477 discussions in regard to internal working groups review of the salary study this was submitted by myself um I know if there's further updates from the mayor on the salary study at this time any further questions from I don't have any at this time just I would recommend just leaving this on on our agenda for future meetings for further questions unless there's any objection no objection hearing none uh preferred to finance a report on the investigation of the Macky Park project in the city council referred to finance committee on 1216 24 again with the new committee being created by the city council I would recommend um I would rain a motion to refer this to the economic and community community development subcommittee second motion made by councelor Hein second by councelor Mack to refer refer item 11 1454 to the subcommittee uh the economic and Community Development subcommittee is there any further discussion there none all those in favor say I I all those opposed motion passes I make the I have nothing further I motion I mean motion we second made by councel Max by councel he return all those favor say I iOS the committee stands Jour thank you everyone