Board of Finance - Regular Meeting

Anyway, so the meeting's called to order and um I notice that uh that David Kelsey is not present. So I entertain a motion to seat one of our alternates. I'll make a motion to seat Maria in David's place. There's a second. Second. Any discussion? All in favor say I. I. Any oppose say nay. Any abstensions? You've got the heavy burden tonight. Mr. Region 18. All right. Auditors, they failed on you. We moved you up.

We have two We have two sparring agendas and the one with you first wins out because that's the official one posted online. Holly showed up first. Yes. Yeah. She texted me that we were going first. So, um, well, thank you for having me. I do have a handout if you don't mind just taking one and passing it around. This is the one that was the print. The numbers are nice and big, too.

So, I shared with the line board of finance uh last week. I feel like each one of our budgets has a story behind it. Last year, the story obviously was debt service because we were beginning the process of the preK through eight renovations. This year, the story behind this budget really comes down to special education. Uh that is our number one driver uh for this budget. While it's not the highest number, it certainly is the biggest change overall. Um as you can see, it's a 26.11% increase there. um just a little bit over half a million dollars in special education costs. And if any of you have been following our board meetings this year, uh that's something that's actually impacting this year's budget. We've already over spent our special education budget this year. And for those of you that have heard my spiel before, you'll know that special education is a bit of a wild card because we don't have control over who, you know, moves to town, who moves out of town, um and whether or not children need services. is we're in a position this year where we had a number of students um a significant number of students who required significant services. In some cases, students required uh outplacement services. So that means we send them to special schools where they receive special care and as you can imagine that's uh pretty costly. Um so that is a a big driver for our current budget as well as we are anticipating that it will continue to be a driver for next year's budget. That's why you're seeing that big increase in special education. We also happen to be adding some special education staff because our goal is not to outplace students. Uh we would love to keep as many students in house as possible. But at some point there are students that we simply don't have the resources to support and it is our legal and moral obligation to make sure that those students get the best education possible. So there are situations where

we simply can't support that. But in an effort to continue to keep as many students in as possible, we are adding some special education positions under certified salaries. That is not the reason that that is jumping $635,000. Um that is actually due mostly to contractual obligations. If you recall, the board negotiated a contract with the teachers with a 4% increase o each year over three years. So actually the fact that we're coming in at 3.82 is pretty good. um seeing that we came in underneath the overall percentage increase and that simply has to do with not everybody that was on the rolls uh when we negotiated that contract is still on the rolls. We've hired some people due to retirements that are a little bit cheaper and things like that. Um other than that, those are those are the big increases. Benefits is increasing as well, much like everybody's benefits across the state. Um I believe you guys are still part of the state plan. I think we're looking at about the same numbers. We're anticipating a 15% increase uh this year. Um that is not locked in yet, though. Um but that may change over the course of of uh time here. Um and other than that, it's pretty much uh standard fair. Um so we do end up debt service was not a big driver this year. It's only $54,000. Um but in large part because of that uh the salary increase and the special education costs, we are looking at a 4.6 61% increase for next year. If you flip to the next page, you just see some graphic representations of that budget. Um, as you can see, certified salaries and employee benefits. You combine the two of those. We are in the business of paying uh educators to teach kids. So, that obviously those are our biggest costs. Um, when you look at the the top three lines, certified salaries, non-certified salaries, and employee benefits. and the rest of that uh just goes into supporting those um those

goals. The next page shows another graphic representation of those largest increases. I already talked about certified salaries, benefits uh and special education. As you can see, administrative services is increasing slightly, but nothing compared to the others. And our maintenance uh line item is increasing. That's in large part due to the cost of utilities that we're anticipating. Um it's uh the cost of just doing business. Um the cost of materials, cleaning materials has gone through the roof as I'm sure you've seen uh in you know all the the stuff that you're doing whether it be in this building or on the on the roads. Um as well as uh the purchase of some new cleaning equipment uh specifically floor cleaners. Um and then transportation is actually going down. remember that was a large driver last year, but we did lock in a five-year budget. Um, and the way to get the cheapest deal was to have the biggest increase in the first year. So, we're actually looking at smaller uh increases, actually decreases going forward. I always like to look at what's happening in other towns to make sure that we are, you know, not out of whack here. And as you can see, we continue to have some of the lowest, if not the lowest budget increases in the area. Clinton uh is looking at a 5.88. Old Sabbrook almost 8%. Guilford over seven. Madison is the only one who was currently when I put this together was below us. And that's actually a bit of a um unusual number because they use their insurance reserves to lower the cost of their insurance renewal. So without that, the use of their insurance reserves, they actually would have been at 6.1. Um so if you factor that in, we do have the lowest increase of all surrounding towns. Let me interrupt you for a second. What? Tell us a little more about the insurance reserve. This is for all of their insuranceances, liability insurance.

No, no, no. Just health insurance. Health and dental insurance. Um, are they self-insured? Self-insured. Yep. So, they have a insurance reserve, um, which is allowable. Uh, we actually they're selfinsured. They have a pot of money to pay claims and if they decide they don't need all the money in the pot, they pull some of it to operation.

Correct. Yep. That's how everyone that's we are also we aren't individually self-insured because as I've mentioned before we're part of the Eastern Connecticut Health and Medical Collaborative. Uh but that group itself is self-insured. Unfortunately, right now we don't have money in the reserves to make those sort of moves. In the past we have um and that has been tremendously helpful. We actually had uh a 0% increase one year because of the use of our reserves. We've had some negative increases uh or it wouldn't be an increase. Uh we've had some decreases I should say um in our medical cost because of reserves and claims combination of of both. Um but yes, Madison was using their insurance reserve um to do that. Um look at the next slide just gives some historical perspective. I always like to keep track of kind of where we are and where we've been. And I also recognize that people sometimes have short memories. I'd like people to have short memories about last year's budget because that was higher than we'd like. But if you recall, we did actually have a negative budget in large part because uh due to insurance uh reductions back in 2223, also due to debt service reductions, 2.91 the following year, 3%, 7.99 last year due to debt service, and then this year we're proposing a 4.61. But the message here is that over the course of five years, we're still pretty we still have a pretty good average of about 3.67% increase per year. Um, and I think if you looked at surrounding towns, you would find that that's better than most, which will be my next topic. Uh, the state records what's called a per pupil expenditure. Well, I guess technically they call it the net current expenditures per pupil. Commonly referred to as the per pupil expenditure. And I won't read this whole page, but what it does is includes all current public, elementary, and secondary expenditures from all sources, excluding reimburseable, regular education, transportation, tuition

revenue, capital expenditures for land, buildings, equipment, and debt service. And what that does is that evens the playing field because it would be very hard to compare us to a municipal school district if those things were included because keep in mind we own our buildings and land and we are therefore responsible for maintaining them and paying for um you know the add-ons changes etc. That's why we have debt service. Whereas other towns, you go to Westbrook or anywhere else uh that's a municipal district, they do not carry debt service because the towns own uh the land, the land and the schools. Um so that just it's it makes it an even playing field. Um and shows you what we pay per student. And again, I took the surrounding areas. Um so you can see Westbrook is the highest. Uh and the reason the data only goes back to 2425. We'll have to wait another year to get uh this year's data data. Um but Westbrook and in part because Westbrook is small, it does cost them more to educate each student. Um but region 4, as you can see, is next. And all the way down, we are seventh in just this list of local school districts. Um but I think more important is the average increase in that per pupil expenditure on an annual basis over the last four years. And you can see uh much to my chagrin, region four is at 11.13 because that's my tax dollars at work. Um and some of the others are in the fives and the sixes while we remain the lowest at 2.15 uh% increase. Yes.

I just have a question. U if a student comes into the school system from the outside, I assume there's some that do. Yes. Uh, and then how are they charged, so to speak, in terms of Tom Walsh lives in Essex and he sends his kid in. How does that work?

So, we do take tuition students. Um, if they move to town, obviously they say it's free. Uh, but we do take tuition students. We have, I believe, 17 tuition students now. And there's a different cost at every level. Um, at the high school it's $19,000 a year. The middle school 17,000. elementary schools 15,000 and our prek program is 10,000. I often get asked or I shouldn't say often I have been asked well why doesn't that match the per pupil expenditure? Um well the reason the board and we used to do it that way every year we would change the rates based on the per pupil expenditure but became such a moving target it was confusing to our tuition uh families um uh because sometimes it would go down sometimes it would go up um and it was a kind of a bit of a guessing game. So, we decided to go with a set cost that not only was close to this number, but also made us competitive compared to some of those other schools that are trying to recruit kids from, you know, the Xavier's, the Mercy's, the Williams. Um, uh,

so that's really the critical factor. You're competing for that. Exactly. So the difference of let's just say you know $6,000 uh you know at the high school it doesn't if a student comes in it doesn't automatically cost us $25,000 off you know that this is a calculation they come up with a number if we have to hire a new teacher because it a student comes in. Sure it's going to cost us more than $25,000 but to add one student doesn't cost us $25,000 if that makes sense. So that's where we stand. Any questions? So are most of those students in the high school? So

uh it varies actually. We have a range. Um uh we have I'd say probably 25% of them are staff member students because we also offer a discount for staff members. Um, and I think it right now it's probably I'd say well I think about five of them are seniors. So that's not good for our numbers going forward because we'll lose that that income stream uh when those students graduate. But it's mostly the high school, but it's certainly spread out at all grade levels. How many students we have now? 17. Yeah, I think the whole district.

Oh, I thought you meant I thought we were still talking about the Sorry. Okay. Yes. Uh total students uh 1269 I think it is or 1270 something like that. Yeah. So there was a lot of talk last year about having sort of I think it was like 3.1 million closer to almost 4 million once you got state money back in sort of a reserve fund to take down I don't even know I think the pod back there and and there's a whole bunch of things that was slated for. Yes. How much do you have now in that reserve and what has been completed from the year before? So present day.

Yep. So we have uh a reserve fund and it's called the reserve fund for educational expenditures is the official legal term. We refer to it as the undesated fund and the reason it's called that is years ago you had to designate it for specific projects and you can only use it for that. We uh have still designated for projects. That's just no longer a requirement. Um, so I don't know if you were at our October meeting when the board uh put together a policy um that guides how much we put into that fund because previously we were just putting we're allowed to put up to 2% used to be 1% then a few years ago it shifted to 2%. We were putting either 1% if we had it or 2% if we had it. So we came up with exactly to your point a list of projects or not came up with we had a list of projects um that we assigned over certain years. So, we have a chart that shows when we'll need the money and we have this whole spreadsheet that shows exactly how much money we have to put into in order to be able to pay for those projects. To answer your question, I think we have 3,

if I recall, and I apologize, we had 3.1 and then the board voted to move 400,000 correct like around

3 about 3.5 uh million dollars um in there. a million dollars of that right now is the only project earmarked for this year was to use a million dollars towards paying for the security vestibules as part of the prek through8 project. The good news is it doesn't look like we're going to have to use that million dollars. That's not 100% yet, but there's a pretty good chance that that will not money will not be used. So, knowing that, most likely when we go back and look at that chart in the fall, which we do every October, we'll realize that we might not even need to add any money. So the majority of the money or all of the money that we have remaining at the end of the year could potentially be returned to the towns. And then going forward, we'll evaluate it based on the needs of what what we're doing. Like you said, removing the old classrooms in the back, putting up a new storage building. Uh I'm trying to think what else was on that list. Those were kind of the the big ones. Paving the parking lot.

Yeah, I kind of remember the parking lot. So those things haven't happened yet, but you anticipate them to happen. Correct. Yes. And if the undesated fund uh is is funded for identified projects, then do you not have any additional money available for unexpected problems? So we build into our budget a contingency of $200,000 every year and that's been going on for gosh, Andy would know how many years? Probably 15.

Yeah, at least if not longer than that. um uh that we build in and that's something that you know like you said if uh water heater breaks and we need to replace it we would use that money. Good news is we haven't used a whole lot of that money this year. Um uh I don't know exactly how much is remaining. I don't want to put Holly on the spot again. It's 128,000. Well, that's okay. I didn't need to She's on the spot. Uh about 128,000 remaining. So we haven't used much of that this year. and the board of education obviously decided that was sufficient and it's not necessary to supplement that in the undesated fund.

Uh that's correct and again we haven't changed that number in my entire time here and it seems to have worked. There's hasn't been a year where I can recall that we've run out of that uh monies uh and again any unused funds in that are returned to the town. When do we when does the town see that return? because it usually goes into a like it doesn't go back to taxpayer you know pockets really it just goes to the town so the town has more money conceivably to do something different or

so I think my concern really is that you know we don't have an overly inflated population and the budget isn't terrible in terms of what you're asking but there is there's over $3 million in projects that may or may not need to be done immediately I Just considering the fact that we're doing a big renovation that's costing around $47 million, it would be nice to see something that was a little bit more pocket friendly, I guess, than than 4%. Yeah. Well, just so you know, so that the undesated fund is not part of any of this. That's completely separate. That's not part of this budget. Um

Right. But if you don't utilize it, just gets moved over into the town budget. I mean, we can we can use that money then to lower the mill rate. So then it sort of goes back into people's pockets in that we they don't write us a check back. It's going Yes. Yes, I understand. And that's what we see at the end of the year when we have money that we can carry over. Right. Correct. And to back to the point earlier about potentially not having to put money in, that will increase the amount that we're returning to to you uh at that point because as I said, I don't anticipate using that million dollars. So that's should certainly help in terms of the return to the towns pretty significantly.

Question, do we have um we know population percentages yet or it's an average? Oh, go ahead. Sorry. Um well, the impact to towns is based on the October one and the April one counts. So, but I do issue one with October and March so that you can get close. I'm currently in the midst of working on the budget book and it includes that page that shows exactly what the impact would be. But again, it's from October and March and then as soon as we get April's um count, then I'll update it. Okay, thank you. Yeah, and it didn't shift. I don't have the October numbers off top of my head, but it shifted onetenth of a percent. I shared that with

Yeah. Yeah. Oh, was it time? I couldn't remember. Yeah. So, it's it's pretty much the same in as it was. We'll take it. My my only other question is where did we get all these athletes from? Well, could have used them last night. Yeah, we didn't we got knocked out of the boys basketball tournament last night, but um uh Yeah. Yeah. But but the the high school athletic team seems to be doing remarkably well. Yes, they have. Our our kids excel at many many things. They're very impressive group. The musical was also fabulous. It really is. Yep. And this weekend is the middle school musical. Middle school musical and

the beast. Uh this room will be hosting the invention convention come uh Friday on display Thursday. I think it's Friday. Correct.

So yes. Well, one of the other things I didn't get into it uh in this presentation, but one of the things I do talk about to the board is return on investment. You know, you ask about well how much money we're spending on schools and things like that. uh when you look at the return on investment, we have consistently, if you use the SATs as a comparison, which I consider a good comparison because that is the one test that every single student in the state of Connecticut takes, will show you that we are in the top every year we're in the top 10, most recently in the top five in the state of Connecticut in terms of average SAT scores. And we're not competing with the Guilfords and Madison's and Waterfords and Clintons. we're compete competing with the dairy and the new canines uh of the world. Um so uh I think that's a important factor to consider when you look at you know cost uh per student. Um we are paying you are paying less per student than the surrounding towns and you are getting much better results um than that. So I'd say that's a pretty pretty good deal. I agree. No,

but the quality of education and the recognition of that has not wavered. It's only been getting stronger, it seems to me, over the past 10 or 15 years. Well, we have a great staff, too, that really, you know, helps support our kids. I think that's a key component. And we always try to make sure that we are hiring the best people. And fortunately, we have uh we're able to recruit uh the best people as well because of the support of the communities. um because of our contracts that we offer for teachers. So, we're in the process right now of hiring people for next year and we have some excellent candidates. So, well, thank you, Mangal. I have a general question. It's not going to help us immediately,

right? But, um you know, this the cost that comes through with the special education, I mean, that seems very unfair to a lot of districts because that can change so dramatically just who's moving in. So the question is is there any discussion at the state level for the state to provide funding for that and spread that risk?

That is a topic of conversation during every legislative session. Uh if you look in the papers now, you'll see it hasn't gotten as much attention this year. They still are talking about it. I can assure you that. I just spoke to one of our lobbyists this morning. Um the the issue with some of that is and there's all sorts of talk and I don't know what's going to come to fruition, but there was some talk of if a student switches schools midyear, the district that originally had the student maintains the cost for the remainder of the year so we don't get that midyear surprise. Um pros and cons to that. You know, obviously you when a kid leaves midyear that's costing a lot of money. It could be a benefit financially and to the town that they're leaving. So, I I don't know what the right answer is there. They're also talking about additional funding, but as I shared with the community leadership, that's great. Additional funding would be wonderful, but where's it coming from? Uh it's got to come from somewhere. So, um uh that but that is definitely a topic of conversation. It's just I think gotten lost in the shuffle with some of the homeschooling legislation and cell phone legislation and all the other stuff that makes the news.

So, do you think there's any prospect of that happening? some I think there will be slight changes. There will be slight changes um that I I used at another meeting I used an example of the um uh ECS funding um which obviously the money you you the towns receive to help pay for education. That's another item that's they're talking about that's stationary for years. They have been talking about that my entire career. Um and they've changed it. um they change it, they adjust it every few years, but has anyone come up with the perfect solution that satisfies everybody? No.

Um Ian, one of the numbers that wasn't in here that I've seen before in your presentations is the number of special education students in our district that do have to be outlaced versus other districts because this number seems big to us right now. But this is actually a very low number compared to a typical district because we do so much in-house care ourselves and education.

Yes, I did not include that slide because this whole presentation I think was like 54 slides before and I thought I was going after the auditor. So um uh no offense to the auditor. Uh but yes, you're absolutely right. So yes, we see this and it is a big increase, but it is a very small number of students relative to the number of students we have. As an example, and I'm not picking on Clinton, but Clinton had 33 outplacements last year. We are concerned about eight. Um and they're not much bigger than we are. Yeah.

Um so, uh Guilford, I think, was in the 40s or 50s. Um, so again, I think we do a great job of keeping students in our communities when possible, but there's certain kids that have such significant needs that we just it wouldn't be fair to the kid for us to keep them here. But that highlights the concern because you never know next year could be a lot more for some reason or down the road to deal with the large increase.

To Anna's point, we've put programs in place uh that help address some of that. So for example in center school um one of the area one of the programs that we have there is a combined program with old Sabbrook. They provide the teacher and we provide the classroom otherwise there's no cost to us um additional cost to us and it's for all of our students who are special education students but we're still ob obligated to educate them through their 22nd year so till they turn 23. Um, and uh, it's got 15 kids in it right now. Uh, it's close to about 50/50. I don't know the exact split, but uh, it's a phenomenal program that saves both districts, I would say, millions of dollars by doing that.

Well, it's greatly appreciated how you're mitigating that as well. And we're always looking at ways to do that, but some cases it's just not possible. Ann, do you want to mention um some of the other bills that are coming up, especially the electric buses?

Yeah. So, I sent I sent you something else about that. So, there was a bill by I think 2030 we and Holly knows about this too, so she can chime in if uh there's additional info I forget to cover, but we were supposed to have zero emission buses, I think was the term they used by 2030. Um, we've looked into electric buses and a they're not cheap. Uh, b they're some would argue they're not ready for New England winters in hilly conditions. So, they do have limitations and they are certainly not ready to take, you know, you mentioned the basketball. Joel Barlo came from where they Fairfield County to play us last night on an electric bus. They're not making it home. Um, so, uh, because that's that's one heck of a trip, especially on a a cold night. Um, so there is a push actually to push that out another I think it was 10 years. Um, which would be helpful, but it still will be there. But there's also some concerning issues within that bill, such as we'd have to switch starting next year from regular diesel fuel in our buses to biodiesel fuel. And there's I'm not an expert in diesel fuels, but from what I've gathered speaking with our oil company, biodiesel does not function as well in the cold and requires a lot of kerosene, which then ruins the engines of the buses and it's just a a total disaster. Um, so there are a lot of concerns with the uh that bill. There's also um I this is my own personal opinion. Uh, I've shared with with Martha and some others and BJ that um the state is pushing for a cell phone ban. Um, great in concept, but the reality is that's something that schools have been doing for 20 years. So, put your efforts into something that actually is worthwhile versus correcting a problem that doesn't exist anymore. Um, but that that one I think is going to be pushed ahead anyway. Um, my

concern with that is, uh, I don't want to be required to purchase, you've heard about these Yonder pouches. We did not budget for that, and that's probably a couple hundred,000 cost for us. And from schools that have them, we've spoken to, it is a disaster trying to manage that every day. You have to collect a phone from every kid every day. Talk about a waste of time. Put in the patch. At the end of the day, they're all lining up to get their pouches. Absolute disaster. Um, but I worry that one's going to get pushed through. Um, let me just speak for you because I think what you're saying and what I would say isn't that we want the kids to be on their own. Absolutely not. No, we just want the local school district to decide how to manage that issue.

Absolutely. Have it not have a single mandate solution fits all right in both of the state. Right. Well, it's interesting to hear you say we have it under control in our schools.

Yeah. I'm not going to sit here and tell you that every single kid, you know, follows every rule we have, but it might be a fool to say that, right? That's never going to happen. Um, but yes, the majority of students keep their phones away when they're asked to. We have uh the cell hotel concept. You know, kids put their cell phones in the calculator holders when they go into class. Middle school and the elementary school, they don't have uh cell phones on them. Um, that's not to say they can't use them after school. Um, but uh it's it's not a a major issue. Um, uh, not I'm not saying cell phones aren't a major issue. They are, but uh, it's not a major issue is issue for our kids during class time. Um, and I think that's true.

There's no Wi-Fi. No, no, we have We were up at Lime school the other day trying to get something done. I was like, never mind. I can't do this. Yeah, I'm over there. It's like that free zone. Never mind. I can't do anything.

Yeah. Um, so who knows? Um, I'm trying to think of some of the other big ones that were out there. The homeschooling is a is a big one. Uh, and we are and actually we are on the same page. When I say we, I speak for the superintendent organization and, uh, a number of other education organizations. We are on the same page as the homeschooling people. Nobody wants a law that regulates homeschooling. Um, this is a knee-jerk reaction to two terrible, terrible incidents um that happened last year and unfortunately in somewhat typical fashion of legislators that, you know, want to look like they're solving all the problems. Well, those were two isolated incidents. Um, you know, there's talk of having homeschool students. We'd have to register all of them. We would have to track all of them, which we don't do now. Um, they would have to there's all sorts of DCF involvement with this. they'd have to get background checks done. Um, but a most concern is they're proposing that homeschool students can participate uh in classes and in sports, which I know Martha, you shared with me that that's worked in other places. That won't work here because how do you manage GPA? How do you manage attendance? Now, we're telling all of our kids who come to school, hey, you have to be here for half a day, but you homeschooler to play sports. You homeschooler, you can do as you want and you can still come play sports. it's just not setting up for a fair situation with uh with the students. Um so I don't know what's going to happen with that. Um but I think the fact of just monitoring uh the homeschooling uh is going to take up a lot of time and effort um and could potentially have a cost in terms you know maybe not for a district our size but certainly for larger districts who have more kids that they'll they'll have to monitor. From what I read, they also had a piece where they were regulating the curriculum, which seem that seems

like it makes sense to ensure that if you're homeschooling, you're getting something that's reasonable. Yes. I I think what you might run into is part of the reason, I'm not speaking for every homeschooler, but the feedback we get from people who choose to homeschool their kids is sometimes because of curricular reasons. they don't agree with certain curricular decisions um or they have a belief whether it be a religious belief or another belief that they want to teach a different curriculum. So that too could be another issue. Do you have any idea how many uh students are homeschooled in our district? I could only guess uh because they are not right now required to do anything for us. Uh we know

Yeah. Yeah. They're not. We know of students that went to our schools and then chose to homeschool. And that's a very small amount. I can think of two maybe this year, one or two this year off the top of my head. Um, but other than that, I couldn't tell you. I don't think it's a large amount in in our community, but I don't I'm not aware. We get them in sports, so you kind of know who those families are. you have one Ian for the benefit of the board of finance how is the con the renovation project coming along compared to budget

very well uh as I just shared with Maria the the um we are right now on budget so that's great news and that is not including that million dollars that was put aside um we are also uh we have received a large majority of the grant funding that we were assured by the state of Connecticut and the amount that we ended up having to borrow is going to be less and at better interest rates than we anticipated. So all of that combined, the numbers that we had originally shared when we went to the bond referendum are going to be significantly lower in terms of what we spend and what it's going to cost each of the individual taxpayers. Well, that's good news. Yeah.

Yeah. No, it's definitely gone well in that regard. Anybody have anything else for Dan? Thank you very much. All right. Thank you. Thank you. Thank you.

We're ready for the auditors. Sorry. It's okay. Good evening everyone. How are you? Hopefully my presentation will be much shorter than this. You have to be brilliant. Um, so could you just introduce yourself? I'm sorry you forgotten your name. Sure. So my name is Leslie Zol. Leslie and how do you spell from Z as in zebra? O L L is my last name. Yeah. Department

CLA. Yeah. Um, so I'm here tonight to present the audit results for June 30th, 2025. Got a presentation. Um, I like to start all my presentations. I know some of you I've seen before, some of you might be new. So, I always like to start with what do we do as auditors um when we audit a town. Um, if you can go to the audit scope slide, Anita, that'd be great. Audit scope. Oh, one more.

Thank you. The financial statements are the responsibility of the town. Um, so Anita gives us that information. We do help her create the draft to be in the format that is required by the state of Connecticut, but it's the town's responsibility to create those financial statements. And we come in and we make we opine on those financial statements and we make sure that they're in accordance with generally accepted accounting principles um and that they are free from any material misstatements. We also express an opinion in relation to um the state and federal single audit, state awards, federal awards in relation to the financial statements as a whole. Um and we do express an opinion on compliance related to major state and federal awards. Um, we do not opine on internal control. So, we don't dive too too deep into the controls of the town, but as it relates to the numbers within the financial statements, we do get an understanding of those internal controls. If there's something that we think rises to the level of a significant deficiency or a material weakness, we're required to share that with you as those charged with governance either on the financial statements or in relation to state and federal awards. So, as far as the executive summary of results, um the town of Old Lime has received a clean opinion yet again this year. Great news. Um the federal the financial statements had an unmodified opinion. The state single audit also had an unmodified opinion. That's what you'd want to receive each and every year. Um and you have again um the federal expenditures for old lime did not reach the threshold. So a federal single audit was not required this year. Um, as far

as internal control issues, we found nothing that at all that rose to those levels of a significant deficiency or a material weakness I discussed um earlier with you. So, clean clean opinions all around. As far as the financial results of the town, you can see here this comparative schedule is included in the management's discussion and analysis. um you have total net position of 51.6. That's an increase of 5.2 million from the previous fiscal year. Um that previous um exhibit was on full approval basis of accounting which means it includes all of your assets, all of your liabilities, all of your funds, governmental funds together with the exception of um any pension funds that you have. um this particular schedule which is exhibit three in the financial statements is on a modified basis of approval. So it does not include all those long-term um assets or liabilities that you would find um in the previous slide. We opine on each of these columns separately. So as you see the general fund that's always a major fund of a town and we have a separate materiality level for that fund. Same with the other two columns. the miscellaneous fund and senior center. The other governmental funds um is what we call an aggregate remaining opinion unit which includes um some other fund types as well um aggregated together. Um you can see from this this is the balance sheet. However, um I just want to go through some of the increases from last year. So the general fund um currently at 63025 had 17.6

million in fund balance. That was an increase of 2 million from the previous fiscal year. Miscellaneous fund increased 38,000. The senior center expansion fund increased 958,000. And then that's what the bond issue that um of 4.1 million that you had last year in last year in 2025. And then that other other governmental funds column increased 60,000 from last year is the other governmental those are our designated funds like for fire equipment.

All your smaller funds together. Yeah. And and there's a um a schedule in the back of the report that shows what those are. If you can go to the next slide, Anita. Um tax collections remain um pretty strong. Um as it has been in the state of Connecticut, we've been very lucky with tax collections overall in the state. Your general fund on assigned fund balance of 15.5 million um represents 35%. That's more than we've seen pretty much anywhere. So you have a very healthy fund balance. Um in terms of budgetary activity, um revenues came in higher which you would want to do, right? 617,000. Budgetary expenditures came in lower by 619. So overall great budget year for you for 63025.

Let's let me introduce you for a second and ask Anita for collections. Do we assume 98.5% that our assume collection rate? Thank you.

As I said, um the federal single audit was not required this year because the expenditures did not raise that level of the threshold that meets um that requirement. But you did have a state single audit expenditures were 2.2 million and we go through a risk based approach. Um that's the state of Connecticut um has um required us to do. And so this year we've tested town and road grants and steep. Um and as we said earlier there was no findings to report to you on the state single audit. Um and I just want to take this opportunity to share with you some required communication. It did come in your deliverables um in a letter format but I just want to highlight some of those things. um Gazsby 101 and 102 which are government accounting standards board statements. Um the Gazsby is required to implement 101 and 102 this past year. So compensated absences um and certain risk disclosures. Compensated absences was a little heavier of a lift. We had to do some analysis, some history going forward, but it did not materially impact your financial statements. Um, certain risk disclosures are on any transaction that would cause a risk to the town. There wasn't any of those transactions, so we didn't have to implement that standard. And Gazsby 100 on accounting changes and error corrections, we did have some movement. um things that were non- major became major or vice versa. Um and the way that you have to present those on the financial statements is included in Gazby 100. So we did implement that this year. Um but there was no difficulties during the

audit. Anita is great. Um we never have any issues with with any of the information she gives us. Um there was no significant estimates um that were material enough to report to you in the financial statements. Um no disagreements with management. No opinion shopping. Um no independence issues. Um there was one past adjustment where a capital asset that should have been recorded last year was was caught this year and booked this year. Um and so the impact of that is just timing. um between this year and last year on the um governmentwide statements, but it was not material to the financial statements. So, we did not restate. May I ask a question?

You sure can. Uh when you think about risk um for our town, do you take into account that we're a shoreline town, do you do you assign more risk to a shoreline town than one that's further inland? I wouldn't say just the fact that you're a shoreline town would not necessarily raise it to a higher risk. The smaller the town, maybe there's more risk in terms of segregation of duties, right? Because there's not that many employees, but just necessarily geographically may not rise to the level of an additional risk if that answers your question.

So, it's not a risk factor. GE the geography is not a risk factor generally speaking not not in Connecticut at least right now. No, we have been reasonably lucky with respect to the environmental catastrophes that have been visited on other parts of the country, right? Whether they're fires or tornadoes or Okay, we'll go any more. Hey, don't mention that. Every year though, we assess things that are going on um in the state and and we evaluate that when we do our audits. Okay.

Okay. Um and then lastly, I just want to share with you what's coming down the pike for 2026. There's two GSBs that we need to implement. Um, one of them is, um, Gazsby 103, the financial reporting model improvements, which means there's going to be more work for Anita on changes to the MDNA. Um, the budgetary reports are going to look a little bit different with just different headings. Um, and then there's going to be some, um, somewhat major changes in proprietary funds, but that's not going to affect Old Line. Um the next standard is on 104 for capital assets and I think most of um really it's just a footnote disclosure which we help Anita do. Um if you have any land for resale or anything like that you're going to have to break those out which I don't think is going to impact old lime

very much so. Um so who mandates these additional GA aspies? So there is a board, a government accounting standards board that issues these yearly and and makes us all do it in accordance with our standards. Okay. Because it seems like the audience up to now kind of cover everything and so everything is copy. You would think you would think always find things. Okay. They always find more things for us to do unfortunately. probably due to a situation in one community that occurs that

Yeah. And this is more this is national, right? So they're trying to make all of us do the same thing on a national level. Yeah. And the these are standards that apply to you as accountants or apply to municipalities because the state of Connecticut has seen fit to uh implement them in accordance with general accepted accounting principles. do have to apply these standards. So it's municipalities have to have these standards within their financial statements to be in comp state law or your audit standards as professionals.

Both the states adapt these and it's it's a double application. Okay. Well, Anita was looking forward to have some more stuff to do this year. Leslie, I just want you to know that our staff loves your staff. They come in, they're so professional, they work so well with us. I'm glad to hear that. Just really and truly nice people. And um I know that Anita enjoys them. And um they're just lovely. Thank you so much. Any other questions?

There was a reference in here to a December 15th letter. Was that part of the packet? It was referred to a number of times. You should find it. They're probably referencing um the letters within the state single audit. So in that states single audit package there's two okay two letters. Okay. Um there's one on compliance on state and federal programs which we went over tonight. And then in the back of that there's a letter on internal controls and compliance. Andy it starts I think on page one. It's a three. There wasn't a date on it. So I It's right at the end. Oh, is it?

It's on the last All of our opinions are the same date and they're on the the last page. Thank you very much. I apologize. Yeah, that's okay. Read the date on your name. That's okay. Any other questions for Lesie? There's anything that ever comes up, please, um, give us a call. Um, Anina knows where to find me. Um, I'd be happy to help. Thank you very much. Thank you.

Next item is the approval of the March three minutes which we all received by email. Then we need the minutes. Does

anyone need a hard copy today? Got them on the way by you pass. I have a question. Do we have a um standard practice as to when we um detail a conversation that took place and when we just list so on page two under um capital project funds transfers out we've essentially just listed all the amounts that we approved but my recom my recollection is that for 1000 08 uh parks and recreation. We did have um a discussion about that and we changed that number. I don't know if that discussion should be reflected in the minutes or not. We decided a couple years ago not to reflect conversations specifically so we could call out that we had discussion, but it got to be too confusing to remember like did Mr. Kelsey say such and such and did Mrs. writer say such and such and there was disagreement on how people said things and um it was very convoluted. So we had decided a while ago that um we would just reference if there was a discussion that a discussion happened and then whatever our vote was because you can always go back to the the transcript that's always available if you wanted to hear like what the discussion was. Um, so but I know I I I don't know why we we're listing all this, but that's not we need to talk about today because we didn't talk about any of that stuff. We just voted on it. Um, I had a I was concerned with um on

page two the water pollution control authority discussion with Mrs. Dailyaly. I I don't think that the months of the testing were correct because we were I think we decided we were going to do some kind of quarterly testing because she wanted to do it this year in this fiscal year and next and we had decided that we were going to not talk about this fiscal year because she was going to have to do that separately but I don't remember exactly what we had decided for that um late March, June, August, and October. Okay. So, they were just missing August in here in the minutes.

She did talk about summer season. Yep. That's right. When it was busy. So, we'll add add the month of August after the month of June. I think also she mentioned I mean, we did sort of said that the environmental testing company may have some suggestions. this may not be what we decide to do, right? I think after that there was discussion about what the latency is between a lot of people there using the well and then when you're going to see the results. So testing in August doesn't necessarily reflect a lot of people in August, right?

That may there may be a latency and that may not show up till October. I don't know. So, I don't know how you want to say that in the minutes, but I don't think the minutes quite reflect. I think discussion would be better and then just that we gave her $18,000 or whatever, however much money we ended up voting on. Well, but I think it may be accurate. I think it's accurate that she requested that the the wills be tested during these months, right? We didn't act on it. We didn't vote on it. It's just a request. I would like to add though on the legal counsel line, it was decided to reduce the legal counsel line by $18,000. Add by $18,000. It says by It says by 18,000. Yeah. The last sentence. Oh boy.

Is that what was passed out tonight? Yeah. Okay. So, my email version didn't have that. Okay. the legal council line by 18,000. I've got the wrong Yeah, I've got the wrong thing. I'm sorry.

Anything else on the minutes? I'll make a motion to approve them. Second. Seconded. Yep. Any discussion? All in favor say I. I. Any oppose say nay. Any extensions? Good for you. One abstension. The motion passes. Thank you. Any anything else? Any other business? Martha, do you have anything you want to talk about? I sent you all an email with my homework assignments from last week and I just didn't hear back from anyone. So, I didn't know if any had any questions.

I had one thought. You, if I remember right, you were asking them, do we paint every four years or do we paint sides? That question the people were here today to give us a quote, but it hasn't come in yet. Yeah, I guess the the question I I I meant to send you was how often should we paint? Well, that's going to be one of the questions we asked, but they were here today because it was such a beautiful day. So, they were canvasing canvasing the building. And of course, as I was asking Eric this, I was looking up out of a window and I said, "There's a big piece of chipped wood coming in." He said, "Yes, it's a cement board pulling away."

So, I was as I was looking out a window, I said, "Oh, we have a problem right there." So, anyway, because they may come back and say, "You should paint every four or five years, but the weathered side should be painted x number of times." Right. We'll we'll have answers for you next week. I um I really think that the US guidelines do have it. If you have an underground storage tank, it's an underground storage tank and it it because propane is liquid in the tank. Like that's how it's stored. So I understand. But they went they did they did did they talk to DEP about it? Did they talk to the USDA group? They reviewed the Connecticut state statutes

which which say includes propane in it. So that's why I don't know where he's getting this from. I would call Deep about this because I just don't want you to end up getting in after the fact of having to do it all over again. So you are replacing the tank within the ground, a new grant. So um doesn't matter. You still have to do all that testing. I'll tell them to call. So I mean it would be a real shame if they put the tank in the ground. Yeah. And then you find out you have to the testing afterwards. It's just a phone call to say, "Hey, we have a propane tank." I'll have him call. Can you send this? Can you send the verbiage that you have noted so that we can review it? Yeah, I mean it says all underground storage tanks containing petroleum products which okay just

propane is a petroleum product so I'll use it so essentially to respond to her email to re to reinforce why I'm asking I mean I don't like calling it when it's under pressure. Let's just keep it under pressure so it looks boys and girls. The February financial reports we all gotten hard copies tonight. Let's take a look at them over the week and talk about them at next week's meeting. Right. And Michelle, they don't do till like May. Now say what?

I give you out the financial room until like May after the budget. Well, but is it okay if we do it? Say what? No, you already done that. You already did it. You did. I got do it. No, you you passed out.

You You passed them out and we're going to We'll review them next week. Um I think we might have had this discussion a year or so ago, but um I I don't remember the history. I don't really care about the history. Let's talk about them. Any no public comments or no publics online like oh you're you're muted there. Do you have any public comments? He's muted. He can unmute. Maybe he's not there for your reporter. Oh yeah, he's definitely there.

Nothing very exciting. No votes. Motion. So move. Motion to adjurnn. Second. Yes. So moved. Move to adjurnn. So move. I don't know what to do with myself. 802. Paul's probably gonna be shocked if he