Finance, Budget, Audit & Bonding Subcommittee - Regular Meeting

name is Council Kim McClary this is the January 21st 2025 a finance committee meeting um I see we have our Deputy uh Finance director but I don't see our Chief Financial Officer Director of Finance yet um and so oh he's walking in as we speak and so I'm going to call this meeting to order uh I am present the deputy is present uh Council Meritt is present Council Lloyd is present I see her online and then councelor Waterhouse is also in the building but it's going back and forth between two meetings so I'm count of her present because she did check in um and I know she's in the Next Room um and so with that uh we will turn it over to our finance director to provide us an update on the town reevaluation process good evening counselors uh finance committee uh Happy New Year first time uh in 2025 that is um thank you um in the printed materials I reproduced the calendar showing that all of the reevaluation activities have been completed um the assessor is in the process of compl completing the reports that are required to be filed with the office of policy and management with regard to the revaluation and what is remaining is the board of assessment appeals work um any Resident or business property owner uh be they residential or commercial that wants to challenge their

revaluation uh must fill out the form provided by the Bloomfield Bo of assessment appeals um and file it with the baa the board of assessment appeals on or before February 20th that's next month um any applications received the board will process through the balance of February and into March uh as necessary um and from experience um any appeals um that may be challenged would be time consuming uh that's something that would be resolved likely before the end of this fiscal year um but uh they tend to be resolved by the courts um which you usually have a year or two uh tail on them so um the 2024 revaluation uh is complete except for the paperwork um and appreciate uh council's support through the process it of course started long before I was here back the November December of 2020 23 um and the activities complet completed or concluded at the end of last month the end of calendar 24 thank you any questions for members of the committee councilor Meritt make sure your mic is on okay he wanted me to make sure everybody knew he is the most conservative Democrat in the world on budgeting he wants to cut our expenses by 10% no I wonder I have all I have very strong memories of the 1990s the early mid 1990s when we had taxpayers

associations running the town and it was very uncomfortable beond the Town Council and um I mean it was very difficult if and uh I I and that was a direct result of a similar situation where we had a Ral that shifted a lot of the tax burden onto the res residential and I'm wondering how bad is that going to be um I don't know if how you measure that exactly I know I might I my house value did not go up so I I went up the average which is very nice from my point of view for taxes but I wish my house were worth more anyway um but uh I I heard other people had considerable uh increase in there and they were some of them have figured out it was going to be a serious problem so I just wonder how much of a problem we're going to have is it is the council all going to get fired because of this or I sure hope not oh okay um I I I don't believe so as I believe it was at the November meeting present Ed variety of analysis uh showing the uh approximately 43% increase in aggregate yeah and then that average on average and that bell curve above and below and the some examples of the potential impact on an individual property owner yeah with the most meaningful uh piece being the distinction between looking at the numbers in aggregate in total versus looking at an individual property but in response to your question about the shift between residential and Commercial believe it's just under 4% shifting from commercial to residential so that means you'll have the average increase for residential would be something like

8% no it's I mean for the total taxes of residential because commercial is like half our half our tax bace so it would be if they're they're going down 4% that means uh that and we had they had to make up that that would be have residential going up 4% maybe so looking at residential only in total the increase is 53% the commercial only increase is 32% in total you combine both the residential and Commercial together the total increas is the 43% yeah so in and that's the looking at residential commercial and combined um the shift from commercial to residential um is that 4% it's 4% shift from commercial to residential I believe it's 3.9 so something I mean if if if our taxes were $100 million which isn't too far off isn't but I'm just using as a round number that means the the amount paid by the residential sector will be going up $4 million and down commercial down $4 million is that true um no not not quite councilor Mar I think I mean it's not a100 million so it's yeah so I think the shiff and uh uh director Hill let me know if I'm wrong I think the shiff talks about the the percentage of growth if I'm not mistaken right so the shift 4% means that commercial drop 4% because it was at 27 and am I correct it grew at a lower amount residential grew at a rate higher than commercial

group about 4% yes by 4% that means 4% um if it was 50% it's now 46% of our commercial yes and 54 residential and residential is now 56% if it were you know if you whatever 4 anyway yeah okay my question thank you you done Council well I'm I'm still wondering if we how late can we decide to do phas in if we decide to do it because beaten up councilor remember he said phasin is kicking a can down the road I know it I don't I don't agree with that I'm sorry that means that we may get reelected if you didn't care about that oh no no we what would I we would be lessening the impact on the residential by doing fasing so so so what I will ask before we start budget if it's okay with the committee is for us to see scenarios of what it would cost and forecasting and forecasting out years five years all five years so if we pH in we need to I understand forecast out all five years now Grant it to forecast okay right is all projections and it's scheduled to change based on the market and the economy Etc right we can't all like for example we can't forecast to the te it's not going to be perfect because the MD we have external partners that oh obviously we have changes in our tax level contract we have uh unionized contracts over the years that may think uh are going to come up and be a part of some of the negotiations in those five years you're saying we can't assume that our tax level is going to be the same as it was this current year yeah or emergencies right an emergency may happen happen yeah but I just want I was asking how late can we make that

decision may may yeah I believe it's when the uh budget is adopted the mill rate is set is until next yeah okay that's all I care about now okay perfect I'll confirm that so I see Council lawyer but before she go I I have a question um director h u so usually in the budget we put a certain percentage um and our budget for appeals so we we bake the the number of PS based on your um informal hearings do you have a a percentage of like is it 2% 3% 1% that we're baking in for um as you said U most people are going to go through um the board of assessment appeals what percentage of the properties in the town do you think will go out and what do you forecast that number to be for us to be prepared through litigation so that we can budget for that um so I hear two things in that question uh one is um the value or the assessed value of the properties that are appealing um which we would address by reducing the assumed assessment value for the budget and I'll work with the assessor office to see what our prior history has been and make the best educated guess that we can off of that for to be conservative because um while none of us want to generate uh more Revenue than necessary to operate the town um it's a worse situation to not generate enough Revenue um so in addition to our collection rate uh which is normal in the budget process I believe we're at 99.4 or six it's undulated over the years uh in there so one way is we can

reduce our collection or we can reduce the assessed value um based on the uh what we will then know right because the manager's proposed budget is after the application deadline for the board of assessment appeals we'll use that best information uh as our guide or gauge for what we should reduce the assessed value be it residential or commercial which will have baked into our 2026 budget uh and a assumption for appeals but also our collection rate I think we can just to be safe can we go back to the last two prior reassessments to see what that percentage was of which one did we do did we do the assess did we excuse me let me back up to go back to the last and see what we did and make sure that we're being conservative to protect ourselves um that was my question related to that thank you um councelor Lloyd thank you I'll be brief I was just going to um piggy back on CFO Hill's comment about the presentation in November for those residents who are concerned about what it means and what it looks like for their taxes potentially um the finance department did an excellent presentation uh produc some scenarios that if you're a visual person you're going to be able to understand it probably a little better than this conversation here but it was a great presentation it it was made very understandable and we also know what was discussed was Equalization and so while uh Council Meritt is talking about what does a phasing look like I don't think we're not talking about a property going from 200 assess to 300 assess and getting that same 38 and a half or whatever mill rate applied to it there's going to be Equalization formula that needs to be looked at so that we can still raise the funds that we need to to run the town as well as understanding these new higher

um property values so I recommend anybody else uh who's listening who has those questions to go back and watch the presentation it was excellent and very understandable thank you Council ly uh Deputy Mayor thank you chair um my question was along the lines of uh the chairs in reference to uh the number of residents in commercial properties that will be appealing to the town um do we have records and I know it would be different because this is every year is not the same so my my question is you know was there like the last time a standard percentage that we could anticipate our residents coming and appealing and not to say what number would be successful in their attempt but just trying to gauge um is this something because we're getting a lot of feedback from the community and they want to find a way to reduce this so the only option that we can convey really is to appeal or to go through the process and I'm just wondering how successful have we been in the past with man managing that and then still meeting the numbers that we need uh at the end of it and I'll work with uh assessor madzi um to look back at the last two or three reevaluations and the number of appeals received after each um from the informal

hearings um I don't want to quote a number I I have in my head that it was around 40 or 50 people came in uh with questions about their reevaluation um most were seeking understanding of the components that led to the revaluation um I won't stand here and say that there were none that had successfully demonstrated or provided information to support that their revaluation should be something different uh but I do believe that if there are those that went through the informal hearing process um that were encouraged that they had information that would support uh a different revaluation that they will appe appeal um you know the crystal ball for Success um who who who knows it depends on what information is provided um but knowing how robust the process was not only from the assessor's office but from the vendor's office and all the quantitative analysis and quantitative analysis that was utilized to arrive at the revaluation and in addition that the revaluation wasn't seeking to uh have our 2024 revaluation get to 100% of market and Target is somewhere between 93 and I believe 98% of market so we air on the low side um which helps with the from the administration's perspective with the informal and formal appeals that that may or may not come thank you for that um final thing uh because I am seriously concerned about um we talk about Equalization of the 43% but there are certain people who property went over the 43% and so then inherently although you have the equalization and I think this is where Council mer is talking about although you have the

equalization if your house grew 45 to 50 to 60 to 70 to 100 to 120% more than um what it was previously you're automatically going to get a a increase in your taxes and what do we do hence why we have a mill rate stabilization policy um on the agenda tonight but what do we do and how do we mitigate um the perception of those people who already feel like they are overly tax burden how do we mitigate and support them through this process um I haven't heard any creative ways outside of the equalization but I would love to hear from you if you have any or seen anything from your colleagues AC across the state on how they have mitigated the people who are above the mitigation well the equalization number um in growth um you know that's a it's a difficult question because um embedded in the question is um a philosophy that's contrary to what the revaluation is right the reevaluation is as required by state law every five years um in the Securities or the financial sector uh we'd call it Mark to market right so every five years we bring everyone up all properties in the town up to what Market is for that 14 months 13 months or so that the revaluation is going on and then in the intervening annual um uh budgets there is an estimated growth right so the Mark to Market every five years wipes away the prior four years estimates and says this is market so in the question that is asking how to have the market arrive

at a different value um I'm not aware of any creative ways to um reduce what is market value yes did I was going to say the problem here is that houses have gone up in their market price the market has grown up sometimes doubled the value of a house in the last five years double so that therefore for the assessment uh probably double and um that that can c that may cause the taxes to go up quite a bit and um that I but people don't seem to they're very happy the value of their house is gone up but they're not selling it they'd rather not pay the taxes on that and the other problem you're going to have is businesses so you're going to say wait a minute value of my where the library is right now that building that's going plummeted and the market value of that is going way down and I know with businesses you you do use different ways of doing it not just Market but still um it basically does reflect the market and they they may not be happy with how much their taxes are reduced so you've got two people two groups that are going to probably be knocking on the door and uh and I I had I had 4,000 squ foot factory and I was paying taxes on in Weathersfield and I ended up S suing town after I went I did the appeal and that didn't yell much and U so I SU the town that that and proved that indeed the value had gone way down and the market was unjustified and it

saved me an awful lot of taxes so you're going to find some people businesses trying to do that and so it could be a tough year um but we'll have to see sure I think I think the phas in is one way you can react to that I know you don't like it but uh we may all want to do it next year so director Hill also when you do the the forecast of the phasing in can you also provide to the committee how many other communities who've been through this process and seeing their values go up similar to bloomfi have done the phas in process so that we have kind of like a a a starting point as to what other communities are doing and if we see that other communities are doing it then it makes sense but if we see that other communities aren't doing it and have the growth that and property values that we are seeing then that begs the question should we be doing it um because I'm of the philosophy that it kicks the can down the road because you got inherent on Top If You phase it in next year you got all contractual obligations next year on top of the phasing for this year and then vice versa the same thing and it's like compounded because of why the value of a dollar Etc and so you just have to be very careful and tell me if I'm wrong director here in my Approach but you have to be very careful with those things and I'm sure um other town councils if we're here or not um would not appreciate us kicking the can down the road and and locking them in um in those budget years so just my thoughts sure I I do um having taken a quick look at the relevant statutes um any community that chooses to phase in at any year can cancel the phase in yeah they only they don't have to do it each of the five years right um but the

statute does prescribe I I think two methods by which we we could phase in I when you asked the question about other communities uh in the state that are phasing in I chuckled a little bit because in my head I I thought if if I can provide that information that demonstrates that there are no other communities in Connecticut phasing in do I have to do all the work to evaluate it for us I'll leave that to the um uh minority I'm going to do the work minority party representa representative council of Meritt to see regardless of what other communities across Connecticut or across the country are doing um I I shouldn't joke right we'll we'll do the work right so that we have it and it'll be on the shelf and while different revals have different Dynamics uh the analysis of the phase in should stand so whenever the town did it last if there was analysis um that that analysis should still hold but uh I've not seen that and would rather uh undertake it myself even though it's um adding to a long list challenging list challenging time so we have to okay is there any additional questions from members of the committee I see Council Cooper online Council ly are you good perfect thank you hopefully and Council ly thank you very much uh for the kind words about the reval presentation from November I appreciate you all of you but especially councelor Lloyd thanks hopefully every member feels like they had the ability to communicate and get their questions answered from the finance director in this discussion good thank you thank you thank you uh the next item on the agenda is an update on the FY 24 audit

um it's ongoing um we are uh next week uh two days a the Auditors will be on site uh for the first time uh for the audit of fisal 24 um we are getting much closer day by day with finishing the bank reconciliations um for fiscal 24 uh and uh I earlier today submitted our request to OPM to extend our filing deadline from January 31st to February 28th I mentioned that I think at the November meeting um we're still optimistic that we'll be able to hit that date but uh given competing workload complete uh competing workload primarily the budget um I'm not optimistic at this point that we will be able to hit February 28th I do believe it will be into March um this is a symptom of um once you get off track it's hard to get back on we should not be in audit and budget at the same time they should bump up against each other audit's done in December and the budget spins up in December we are still finishing 24's work so I stand on my belief that we're not really auditing 24 yet right because the work for 24 still isn't done I believe that that happened because like last year Focus was on the audit then budget rolled around audit got put aside budget was achieved and then as we know uh July of 24 the audit was completed couple of months after the budget was done I'm looking to compress that uh it

won't be July it won't be June won't be May um I feel really good about March um and that would shave three or four months off of believe the prior three years audit submission any questions from members of the committee one one last thing I will share um was brought to my attention last week when we were price our bonds which that update is coming up um I do not say this in any way shape or form as an excuse uh or whatever adjective uh folks come up with but there are communities in Connecticut uh highly regarded financially well off that are still working to finish their 22 audit and their 23 audit downstate right AAA rated communities we're doua plus one notch under them um and their ratings are on the watch list because they're two years behind on their financials so while in Bloomfield we've been late for several years in filing our audit and as I stand here in the middle of January and we haven't filed we're late this year um the work of Miss Stewart um to get through fiscal 24's work and how we're approaching 25 not only the budget development for 26 the completion of the fiscal 24 audit but the preparation for the 25 audit the 25 audit will be orderly um we will get to the fourth quarter um we will issue right before the fourth quarter our fiscal year en close memo which will be the start of the audit

process and as we get through the summer and into the fall the Auditors will be here reviewing fiscal 25 and we will meet the December 31 filing deadline this year well hopefully that would be good not hopefully it's something we're going to do whether I'm here or not that was my go that has been my goal um over the last three years since I have been the chair of this committee to make sure that we get back on track and I say every meeting is there any additional supports that you need so that we can make sure that we get on track because although you say other communities are two years behind I want us to be the Press I want us to be the model of other communities and I'm not I'm not criticizing you or Donna um about not getting the audit done you're doing Yan's work um the finance department was in shambles and we finally got good leadership in there and I trust this leadership that's in there but the public the a it is so that the public understands where we stand with our assets our liabilities and everything else and it's the clearest picture that they have to know that we are being good stewards of their dollars and so I am going to be a little uh on this I know the manager is going to say his team is doing great work um but I am if there's anything that we can do to make sure that I know the Auditors are on board that we can get it as close as possible to February and not go into March I would greatly appreciate it because that would be a huge Improvement year over year over year so those are my comments and I appreciate the work that you and Donna are doing along with your team and the town managers um with his support you guys are doing great work

but it's very important for the public to understand and see that the audit sure and you know opm's uh extension requ they asked that uh 10 days be allowed for processing which is 10 days before the end of the month so with the timing of next month's meeting I believe it's on the 17th um which will be just inside the 10 days um which is just under a month from now um uh of course we'll know at that point whether or not we're going to meet the February deadline um and we'll be able to speak more definitively about where we are and if we're not able to meet the February 28th deadline um you'll hear greater certainty about March um it won't be you know it's it's not as though the end of the month filing deadline is what we're shooting for we're shooting to get it done as soon as possible so while at this point I believe we are not likely to make February 28th uh it may be the second week of March or something along those lines again I'm looking at it not only for the completion of the work um of our predor cessors uh but also how it impacts our ability going forward to break the cycle of being late yeah I I agree and it also gives the council good clear picture as we move into budget where our fund balance is and other revenues for you like it's just we are going to go into another budget blind not knowing where our fund balance truly stands having estimates everything is a estimate except the audit because the audit is the we get through February and are successful uh at filing our fiscal 24 audit with the state by the end of March uh we will know for the budget deliberations we won't know for the manager's proposed budget uh but we will for the council deliberations in advance

of uh the town meeting by a month or more thank you Council looy you have the floor thank you you stole my thunder because you said most of it um you you and um CFO Hill you basically said it thank you than you for sharing the information regarding other more uh wealthy communities who are not even doing as well as we are so I do give kudos and um compliment to the great work that is done with our new staff um there was some disconnects right but things were getting done before but now they're just getting done to a much higher level so the public definitely needs to know that um we're light years ahead of where we were last year so that needs to be acknowledged and with you guys tracking the way you are I definitely see us getting caught up as it relates to the audit work and when it's due and meeting deadlines so um I feel confident in that thanks to the work of the the new staff and as well councelor McClary to your credit because you kept pushing you kept pushing you kept pushing you kept asking the right questions and now here we are in a much better place than we were a year ago this time so um kudos to to all of Team Bloomfield I I just really appreciate you guys as a resident of the town for the continue work you do so good job everybody that manager yeah good evening good evening team good evening um citizens of Bloomfield and counselor Council thought thank you for the time and uh thank you CFO Hill for your your presentation which I I know it's continuing and um and uh Council McClary you're spot on you know I'm going to come in here and and and tell you that the team is is doing the best they can and and um and one thing that they're they're doing as well is is learning through this process so I know you have um very uh generously

offered resources to help us I know resources have been provided in the past uh but uh we have it we we have it and and there's a a learning process that is taking place uh to make certain that uh we are positioned for Success uh moving forward from this point forward so uh just ask for your continued patience and and understanding and um because uh if if we were not uh situated for Success I'd be the first one saying that's not going to happen or this is what I anticipate happening but but that's not what I'm hearing that's not what I'm understanding so uh when I tell you that we're working uh it's it that is the truth and um and I sort of make the analogy of um of uh um from some military experiences right and it could be a ruck march you know 20 mile Force ruck march with 100 pounds on your back or or it could be uh it could be one of those runs that that we love to take in the Army calling Cadence for upwards of 7 10 miles and and just when you think we're about to finish well here comes another mile here comes another lap here comes another five miles and you just have to keep reacting to what's in front of you and that's what our finance team is doing as they think that they are at a point of um meeting success uh here comes another awareness of a challenge that was unanticipated and now we have to go back and and address that issue before we can move forward and unfortunately and and I'm not here to to cash shade on on anyone who was trying their best with the capacities that they had in the past but the reality is this is where we are now and and it it seems like we don't go um more than a few days without hearing well you got another lap you got another you got another mile you got to stay in the race you got to stay on that ruck

march and that's what we're facing it this target is moving and and because it's moving it's it's very hard to sort of capture that end State although we we know what we want it to be trust me if we could have been there yesterday we would have been there yesterday but these these challenges keep presenting themselves and they cannot be ignored so um I just ask for for everyone's understanding uh this is not about excuses we don't make excuses we provide explanations as to what's occurring so there can be an understanding of of what we're facing and um and the last thing I I would want it to be is appearing as if we don't own it because we own this we own this audit we own this budget and we don't look in the back in the in the back to say it's somebody else's problem we we're just saying this is what we're addressing right now so um I I just hope that there's an appreciation for our situation and um and trust me as soon as we can make it happen we will uh only funding I would need a sort time machine to to get uh the Daryl and and and Donna in in the town of Bloomfield you know maybe about 10 years ago I know we can't afford that so uh but but short of that and uh I make light of it just to bring a little humor but short of that I just say we we're working we're working and we understand the mission and we're committed to it and and we're putting a lot of hours uh into that um uh uh desired end State and and but when it changes we just have to react to that and and and unfortunately you know you just don't know what what that next stone is going to what's going to be under that next Stone when you when you pick it up but whatever it is we have to deal with it and and that's what we're doing so um I I just hope that provides some understanding of what we're doing and and yet through all of this you know um there there may be some thoughts that the the aa+ was just a continuation of the path I'm here to say it's not a continuation it's through the the the

diligent efforts of those who are a part of this this command team that are part of this Finance team a part of our Council that allows us to be at Double A Plus because if you look to your left and right there's communities right next door uh that did not maintain did not maintain their rating so for anyone to believe that this is just a gimme and um and you're just continuing um part for the course no it was earned under some very uh under a lot of duress and and I'm proud of the team and I'm proud of all the all the people I I consider colleagues and part of Team Bloomfield to make that happen so so thank you for the time to speak I'll I'll shut it down now thank you Mr to thank you Mr Town manager any other questions from members of the committee related to this action item if not we'll move on now to the discussion and Status a perfect set way Mr Town manager and provide an update uh Mr Hill on the recent Bond sale May if you can present the screen so that the public is aware of what we just did yes last Tuesday Morning the town received uh bids for its refinancing of the bond anticipation notes issued in January of 2024 quick question interrupt can you start back from when you did the an came in and sure go the whole process and let the public understand the process in which was just undertaken I think it it will be helpful sure um so again in January of 2024 the town issued uh long-term bonds but also short-term notes the short-term notes are what we're discussing this evening um the total amount of the bond anticipation notes issued in January of 24 was 17.25 Million the maturity date um uh for

those Bond anticipation notes is January 28th next Tuesday so to refinance our bond anticipation notes and issue long-term bonds um that's a a completely new public offering uh similar to the town uh to what the town undertook last year last January uh and in that process we work with the town's financial advisor uh uh Barry berari at uh Phoenix advisors um our bond Council for the bond documents um and the rating agencies um we had a schedule developed over a two-month period beginning in late October uh preparing uh to update the official statement or the preliminary official statement for the bond pricing uh that and other documents related to the transaction were shared with standard and pores global ratings uh they rated our bond issue last year went through the same process uh where we provide information uh about the town generally and more specifically about the town's finances all of the documents including the preliminary official statement uh for the bond issue and then we meet with the rating agency the rating agency at that time after having reviewed all the information provided uh they ask a long list of questions I I believe this year there were I a dozen and a half maybe two um about the information provided or just general information that they ask uh every local government that they rate that is all so that standard and pores can develop its own independent opinion of the town of Bloomfield that independent opinion isn't necessarily for Bloomfield um the rating agencies

SNP included along with Moody's and uh for us S&P in this bond issue um they're forming an opinion that opinion is what investors or potential investors utilize when they're making decisions about whether or not they want to buy the town's bonds the most critical component of that is the independent review right um having been a former governmental investment banker uh back in the 90s and 2000s I know that prior to my starting in banking I caught the tail end of it uh there was a uh rating agency not S&P um that uh was coming out of a bit of a a scandal uh where it was viewed that issuers could purchase a rating that is the complete opposite of an independent opinion um it took that rating agency uh better part of a decade upwards of a decade and a half to fix their reputation um so I mentioned that because standard and Poor's opinion of the town of Bloomfield is What's led to the successful pricing that we had last week um so as the manager said well you know each issuance and annually they do annual surveillance if we don't issue bonds uh is snp's independent opinion of the town of Bloomfield they answer to no one they answer to themselves they have a very robust methodology with regard to how they rate local government in the United States um they do metrics so that uh communities can compare themselves to others that's challenging because each state is different population sizes are

different I mean we're double a rated and they are doublea rated cities across the country that have over a million people right uh there are doublea rated communities that have half the population of Bloom field so that rating methodology is really key so that it provides a consistent standard with regard to how this rating agency uh develops their independent opinion Moody has their methodology they're all slightly different based on their um the firm's methodology your philosophy with regard to how not only you rate local governments in the United States but how those ratings relate to state governments in the United States um but again that standard and pores Global ratings rating methodology uh I would refer anyone who believes that uh it's just a continuation of the past to to to take a a glance at it it's not an easy read because it is uh heavily uh into the quantitative analysis of local government's uh governance and financial performance so when uh standard and pores affirmed our doua plus long-term rating they also affirmed our short-term rating at sp1 plus SP is standard in pores um the sp1 plus is standard and pores highest short-term rating uh which said very succinctly uh means that we don't have liquidity issues right there's no short-term concern um So based on the updating of the preliminary official statement uh for where the town stands as of the date which is I believe the first week of J

January 25 um we updated the documents uh from last year to this year um and provided those broadly uh to the uh broker dealers the Underwriters that could or would be interested in submitting a bid to purchase our bonds we're not actually buying something from them they're buying our bonds so they're buying something from us um the result was that uh the town received 10 bids um and if anyone that's familiar with procurement and competition uh a robust competition starts at three um five is even better we achieve double digits and as is shown on the screen uh the low bidder was UBS Financial Services Inc with a true interest cost of just under 3.6% that true interest cost is a total look at the cost uh to the town uh of these bonds not the principal the 17.25 million but when you take out all of the um the mathematics related to the bond market that 3.58 s is a blended rate that we will pay on these bonds there's actually a scale of interest rates with a different rate attached to each Year's bonds maturing you add all those together you look at the interest you add in the cost of issuance and you arrive at that 3.58 s um the 3.58 7 as you can see the cover bid was a full three basis points higher 3.61 um but in the first three bids even four at 3.62 very strong competition and not until you get down

to 68 uh the ninth bid is their 10 basis points uh spread between our our top nine biders um so from a a pricing perspective a % interest rate is is very good um it's not as low as it's been you know there were folks issuing bonds during the pandemic uh that had a one in the front um when when I started in the business uh there were fives in the front um occasional six um and it's as the markets are always moving um we were lucky to be in a market where uh the inverse relationship between the stock market and the municipal Market uh was to our benefit it was a little bit of tur turmoil with the FED uh taking actions to reduce interest rates but the stock market not doing what the FED anticipated um that's all good news for us so now we want the stock market to turn around and do better uh for the economy sake U since we we've priced our bonds so with UBS is Our Winning underwriter again at that 3.58 7% uh we are preparing this week uh to close the trans trans action we're going to have pre-closing this Friday uh with the formal closing Monday morning that's when wires will be sent uh receipt confirmed and the bonds released and then on the morning of Tuesday January 28th our trustee US Bank uh will make the final payment of principal and interest on the bond anticipation notes and they will no longer exist uh any questions from thank you for the update Mr Hill really appreciate that um councelor Meritt I just I wonder where we are on

whether are we ending up going to bond 30 something around $30 million of bonds outstanding no new bonds for the library um yes it's 34 how much of that have we already um when you include this January's um increased how how much of that is now been borrowed it's all been borrowed all of it yes last last uh January there were two pieces to the transaction I believe it was 17 million of long-term bonds and 17.25 million of the bond anticipation notes okay so that pretty much covered the whole thing these Bond anticipation notes are what we're refinancing now long term so we'll so it's 100% bond is uh as of next Tuesday yes okay and that they are 20-year bonds yes and so we pay 12 12th every year of the principal correct interest so it it's a big deep up front but gradually goes down as there's less interest yes we have a a 20-year final maturity uh given the timing of this transaction instead of making it a 21 oneyear final maturity we held the 20 years as the final maturity but we deferred the first year of principal okay to lessen the budget impact in 26 okay and in addition to the bond premium right and yes um there was roughly 900,000 of bond premium generated from last week's uh transaction um the IRS allows us to utilize that Bond premium for a couple of pretty narrow things uh the most significant of which is what we'll use them for which is to pay cost of issuance and to pay interest cannot pay principal with the premium so as in

fiscal 26 27 and any remaining premium from this transaction we will use to shave the Peaks off of the increase in debt service so it won't go as high right and with the analysis uh from our financial advisor uh we're anticipating being able to keep our debt service with the use of that premium uh to repay interest in fiscal 26 and 27 uh that our debt service will not go above 8 million but this coming year will be the highest Debt Service year is that um so before the refinancing of the Bands right because in January of 25 they were issued as short-term obligations the principle wouldn't show in The Debt Service only the interest would show and yes 25 would be our highest at what looks to be about 7.2 or 7.3 million this refinancing is adding about 1.3 million in the first year really the second year because of the Deferred principle uh which would push our Peak up in 27 to about 8.2 or 8.3 million oh but that use of Premium about 900,000 we're going to pay our cost of issuance we're going to buy down some interest in 26 to stay below 8 million as well as 27 to stay below 8 million and as you uh pointed out uh well councelor Meritt um in Connecticut we're required to issue level principal so the principal principal amount maturing each year is the same or no more than $5,000 difference that's one bond is $5,000 so we're paying essentially the same principle every year but as we work

our way down the repayment schedule the interest decreases which is why the payment decreases the principle is essentially the same every year the interest is declining which is why looking just one two three four five years out the premium is fully exhausted and our new debt service is back to where this year's Debt Service is that's 7.2 million and then it continues to decline um the philosophy behind uh a uh conservative level principle approach to repayment is that it's financially responsible it's financially conservative and while you have a higher payment in the early years instead of a lower payment and level that service payment throughout the 20-year repayment um with level principle that declining repayment schedule uh builds capacity for new issues without Debt Service going up for places that allow level Debt Service you do a bond issue like ours and your debt service is at not 1.3 million in the first year it's say at 800,000 in the first year but then it's 800,000 every year so then when we issue new debt whenever that is in the future it gets laid on top of that 800,000 so now Debt Service is higher for the next 20 years or until that first issue gets paid off with level principle and the graphic for you the decline we can backfill and still never get back up to our our Peak depending on how frequently we issue and how much we issue is it possible we could have a update of the chart that shows our debt service level over time so we see when these Peaks are sure I'm I'm sure you're doing everything you can to push out the Peaks

but uh be nice for budgeting reasons to be aware CU it's it's going to make things tough sure I can put that on the list for next month's meeting yes and and also let us know where we are as it relates to our 10% debt policy which I think we know we're well we're approaching about $2 million I think the policy says uh not Debt Service not to exceed 8 to 10% of the uh annual budget yep so with $110 million budget I don't think it spoke to any reductions in the budget and I mentioned that because sometimes there's a little caveat that says the tax generated budget right which is around 90 million um the policy says 8 to 10% so not to exceed 10 and we're working to stay below eight so we'll be well within our policy and a net decision that the Council made not to exceed that is also looked at by absolutely S&P right because it's financial management of the town and the fiscal Health very just just want to make sure that sure one of the things that uh S&P pointed out in their write up and I believe their reports are publicly available um was the existence of not only the existence of financial policies with regard to reserves with regard to Debt Service but adherance adherence to them right so it's not just that we have them it's that we follow them um and that's something that they cite how do they say it very crafty wording downward pressure on the radio would be non-compliance with our policies M thank you uh any additional questions I think this was really good for the public to to see that we are working and that the decisions that we are making are affecting them and it's not just this portion of borrowing is not just for Wall Street that it's just for everyday Bloomfield residents

because it does impact our bottom line in our budget um I.E The Debt Service payment that we have to put in our budget every year it affects them and thank you for that prompt counselor um that's one thing I didn't mention right so we're doublea plus we have a a very strong investment grade rating the only rating above us is triaa um one of the things I've asked our financial advisor and I expect to have for next month's meeting is some analysis that shows how we priced last week compared to triaa um I believe there was only one other transaction uh in the market last week in Connecticut um but looking at othera be they in Connecticut neighboring states or you know Northeast East Coast Nationwide uh to see how they price but there is a uh a scale it's the it's the Benchmark that the municipal Market uses to base interest rates off of um Richi I know it as the right Richfield I know it as the uh MMD index uh which is just AAA rates but they show AAA rates and then based on the strength of a credit right they're looking at our S&P write up and the investors's opinion about snp's opinion of the town they look at the town and they develop their own opinion and say do I want these bonds right you think about uh whether it's a trust fund not a trust fund a uh an investment fund or even small mom and pop investors uh but for the the funds the larger investors you know they have a a three billion dollar portfolio and there's something that matured last week and they need to fill a hole so they're not only looking for credit quality but they're also looking for the magnitude

of the dollars for the hole that they have to fill so with our 17.25 million transaction with a very strong investment grade rating our bonds are very desirable um while the quantity isn't as much as some would like um it's what we had to offer and when they can find highly rated doublea plus paper uh they they they really want it which I think is why our rates are lower now if we were double A or double A minus or A+ or a minus that 3587 would be higher um so there is a a direct benefit to anyone who's interested in the town of Bloomfield of being so highly rated thank you for that um because I think I drafted a letter to the editor this week explaining this process a little bit um and in my research given where I work and can see all of the reports of borrowing across the state because it's public um we just got I think it was five basis points higher than I think it's Richfield Connecticut who has a AA rate triaa rating so that tells me that the market is treating our paper borrowing paper just as well as they're treating a AAA Plus triaa trip excuse me not plus AAA community and so to articulate and I know we're getting into weeds and we should be focusing on residents I want residents to know that this is a win for you because we are being fiscally responsible we are managing the town uh you may disagree with some of the decisions we we make up here but we're doing it with the focus on making sure that we ease the burden and find savings across our budget and I think this

credit rating here and this borrowing of 17.5 helps ensure us that we didn't add a significant burden unnecessarily on our residents as it relates to the debt service and so um I'm going to stop there um and ask one question related to um maybe next month um the financial advisor could come in and do a presentation on some of the things that we can do as a committee to move us up to the Triple A I know I've spoken to him previously like maybe two three years ago and he mentioned to me offline when he came about it being about demographics of a community and not necessarily racial demographics but social economics Etc and that's what's stopping us from moving from the from the doua plus to the AA but for him to come back and do it in front of this committee so that residents know that um this body and the council is doing everything we can to try to elevate us to become a AAA Plus but sometimes the market and the economy is out of our hands and we can't directly impact that and so um if he can just come next month and do a presentation so that councelor Meritt andbody and the public can hear from him any additional questions related to this topic uh Town manager yeah well thank you thank you I I just want to make certain and I I know this won't be a heavy lift for um our CFO but um all our efforts and and all our Focus right now are on two things right budget audit audit budget right and um and anything that gets in the way of that is is is a challenge right now for us so I do understand the ask in this uh is of the consultant but uh I just want to make sure we stay laser focused because we don't have a lot of time and and anything that takes away from that focus it it it it keeps us off Mission so um I

I I just want to make sure as we're we we talk these things that we understand are our primary focus has to remain uh constant thank you point well not um moving to the next item discussion and status update regarding Financial policies this is a item that I'm just going to keep on the agenda we talked about it at the last um finance committee meeting about the mill rate stabilization policy I call it like fiscal guard rails um I.E the state um and uh Economic Development trust fund um to promote Economic Development Across the town what we can do um right now we at like 22% fund balance and if it continues to grow it makes no sense to just keep putting that in our emergency fund because it is used for emergency funds and so if we start to create these other trust funds and special Revenue funds similar to our Savers account when we hit a certain number of percentage 1% 2% over can go into these account into these funds to promote Economic Development if future councils get into a pickle with reval and looking for extra funds to mitigate the you know these are one-time funds and I wanted to create some type of uh uh structure around the usage of them like how we have our debt policy how we have our um fund balance policy to create something um so that if if we get to 28% of our fund balance and we have an extra 10 million maybe we don't put it into fund balance maybe we put it f two million into Economic Development a million into mill rate stabilization to start growing those things because fund balance and I heard I read through the rating you know some concerns about the 2.75 million that we keep putting in as a as a buffer to stabiliz the meal rate stabilization to

stabilize taxes we might as well just create a m a mill rate stabilization policy to do that in case those years come around along because I know um the analysts from the rating agencies kind of look front upon that when you keep putting that onetime Revenue in your budget and so um this is on here not to tell you to do it right now because I know I heard the town manager budget audit budget audit but at some point if we can start to develop in some policies around these initiatives um I think it would be be good same thing with Town Council contingency every year we're looking for things to not roll over so if the Town Council contingency could be a special Revenue fund and roll over year to year so that the council's contingency starts to build a nest egg for other things that deem appropriate maybe it's an extra position for the town manager education summer school came up Etc so that we can continue to support um the great things that the residents of Bloomfield ask for hopefully that makes sense to members of the committee um is trying to create some gu guidelines and some long-term Vision in planning um for this body and future bodies yeah I I think it's great I mean and the the town has already um taken two very good steps with the fund balance policy and The Debt Service policy um and in both of those you'll see some things that are uh typical for local government financial policies they're they're not hard and fast we're going to have this at this percentage we tend to put a range and as we add more policies to our suite of financial policy guidelines one of the things that we'll do and I'll say in the coming months really meaning a couple of months from now after we get the audit done um will be looking at not only

these but potentially others um and you know it's multifaceted it's not you know what's the level that any of the new policy should be at um it's range right so that the council has some flexibility and it's not hard and fast um and also includes a a a component for how the town would replenish if we utilized right not every policy needs to have that uh replenishment process spelled out um but if depending on the policy itself um and I think This lends itself more to our fund balance policy right if we were to find ourselves with our fund Balance Falling below our policy our policy should have a replenishment process um in the conversation about what's needed uh what the town could do to try and influence the opinion and achieve the AAA rating um that replenishment is important um not falling below is important uh having multiple buckets is important because one of the consistent things you see from AAA communities uh similar to Bloomfield ours isn't large enough yet is very healthy reserves right we have healthy reserves but our healthy reserves in the magnitude or compared to magnitude of our budget um they're not that healthy right so even at the 20% or 22 or 24% level um you know I could put some numbers out there and suggest that you know we'd need to be at 30 or 35%

reserved uh to be in that AAA category because and that's that's only looking at one piece that's why the my remarks earlier about the methodology at standard and por is and important that methodology they kind of Chunk it out uh your rating is based on you know 25% of this 25% is this 20% is this 25% is this and 5% is this you add them all up and based on their methodology it's going to just a rating but it's not that hard and fast where if you hit this number and hit this number you're going to be this they use those as guidelines for their own um rating methodology and then they give it independent thought and look at what's going on in the community what the history has been how strong the management is what the reserve levels not only are but have been and are they maint are we maintaining those levels so there's no silver bullet for a lack of a better word um but rather a very methodical approach over a number of years to achieve a rating upgrade not not to triaa any rating upgrade right it it just doesn't happen quickly it's it's a a very slow and deliberate course of action good question thank you for that explanation so our current policy that says uh 15% is it yeah it's 15% right for fund balance yes yes um that was 15% yeah that was 15% of whenever it was adopted right I think it was like 90 million 96 million at the time that was adopted believe it's 15 to 20% of the current budget so as our budget increases every year that's my question should be moving that 15% up a little

bit given that our budget I think when we adopted it was in like the low 90 million range dollar M range and now we're approaching 100 $10 million should we move that number up or is it fine to save 15% of $110 million I mean I think it's our policy now um my view of it um you know and I'll because I can still you know use my newness to the town but um I think we leave it where it is and consistently outperform you know the conversation about adding to our financial policy guidelines is going to have monies that would be sitting in our unassigned fund balance the rainy day fund that will get moved elsewhere so we'll be focused on making sure that our unassigned fund balance our rainy day fund continues to maintain policy even with the growing next budget because those dollars unless they grow will decline over time so we're going to have to add to our unassigned fund balance on an annual basis just to maintain 15 so that's my that's my goal my goal is to do like if we have $10 million to still put a percentage no matter what whether we at 22% 28% put a percentage of that $10 million in fund balance but don't put the whole $10 million and start breaking up the pieces and say maybe eight% of the $10 million goes into or whatever the the number is I'm just throwing out a number it's not the solid number it's no I just want to be very clear this is just an example it is not actual actual number but if it's between 10 8 to 10% goes into fund balance but then you put another 10% here 30% here 40% here it would make up here you would still to your point you would still have to add to the fund balance to keep up but you just don't put the whole $10 million in

sure yeah I wanted to say something about opep because we struggled to get program going and I think I think it was a wasn't very aggressive program but putting money into funding opep ends up saving us more over the long run and uh I just wonder how we're doing on that are we observing that or is that yes we are are we catching up or we uh we are on our plan we weel aggressive plan we developed the plan and we're working that plan of so they call the ADC the actu determined employer contribution um it's a number and to make the math easy I'll say it's $10 and the town got on a plan that said okay well we can't afford $10 right now but you know we can afford five and so we'll pay five this year and next year we'll pay six and the year after we'll pay Seven the year after we'll pay eight and we'll get to the ad deck and that's what we're doing so in I think two years it might be three don't quote me we will be at funding the ad and that ad is actuar determined to over a period of either 20 or 30 years I'm not sure what it is here uh to get to 100% is isn't that a little too mod I mean we wouldn't we save us money okay I no no no I just five months I've been here I I love answering this question um I've answered it for over 20 years both as a financial advisor in the Mid-Atlantic uh and his staff at a number of places um whether it's OPB or pensions right we are not a private Corporation we're not going out of business right so I believe that our

Target should not be 100% okay I believe our Target should be there's lots of debate and there's some research out there about what would be an appropriate level uh below 100% for government local government state government we're not going anywhere it's not as though we could decide to close the doors or sell the business and then play some funny games with folks pensions right we are doesn't it cost us more though to be well below 100% than if we were 100% cost us more for the benefit for the the other post-employment benefits I think the cost is the cost so it doesn't cost us more um I I'll maybe incorrectly assume that your question is more speaking to the rating agencies yes High unfunded long-term liabilities push ratings down which push Debt Service up which cost us more but that's not OPB that's not pension cost right they are what they are and the actuaries God bless them right uh I love numbers they're like money going ahead of it it not in the it doesn't save us pension money it doesn't save us opep money it indirectly could save or cost us money if we were so far out of line I'll again go back to snp's write up of the town of Bloomfield they mentioned that that we have high long-term liabilities right our our OPB funding is low right but it's not zero uh and we have a plan that we're sticking to and year over year we're contributing not the ADC but our plan to increase and achieve the adak contribution over a period of years okay

thank you Dar on our annual comprehensive financial report um I if I'm not mistaken I recall our pension liabilities dropping significantly like from I'm looking at it now I think it was like I if I'm not mistaken like $20 million if I'm not mistaken and I was I think when the um actuario came came to one of the meetings when we were talking about the board of education's still open pension plan which is now closed thanks to negotiations through partners with the Board of Education the new board of education um trying to figure out um a plan on how we continue to bring that liability opep and pension liability down um and they were supposed to get me a plan on what we can do to decrease it I know it may be um unpopular with current staff about raising their contribution levels but we need to look at because the rating agencies are talking about our long-term liabilities we need to come up with the plan as to council miror and start to chip at it because I think long term it is going to cost us um significant and God forbid if something major happened we got to make sure our hous is in order so can we get I know it's the audit and I know it's the budget but this is from Consultants that we pay if we can get a plan for them on how we address our long-term liabilities whether that's putting more money in our opep trust yes that that's the first thing they're going to say yeah contribute I know that but contribute more towards the unfunded liability other than that there's tweaking uh benefits to reduce the cost of those benefits which I'm not the town attorney but I

believe needs to be negotiated yeah negotiated through Union contracts but I just would like to see a plan on like how we can as a body start to attack that long-term liability we don't want to take collective bargaining away from anybody we don't want to take benefits away from anybody but we want to make sure that we're putting the town in a good position to be able to be S to sustain what we're offering sure because ultimately it's gonna come back to taxpayers yeah I mean the the the work of the actuaries is they look at um our prior vested employees our current employees the age the health and you know the expected life um of Prior employees and current employees employees that were participating that separate from service um that that's what I first think of when you asked earlier about the reduction in our pension liability um reduction in pension liabilities occur for a variety of reasons uh including as I just mentioned separation from service oh Daryl's here now Daryl's going to be here for 20 years and then he's going to retire and then he's going to draw benefits that's what actuaries do but uh actuaries don't recognize that after 10 or 15 years Daryl might leave so annually or on a rhythm be it annually every two years three years they will update their experience to say who are your current employees now right um have any separated have any un unfortunately you know passed on or gone gone on to Glory um all of that impacts the valuation uh that the actuaries calculate thank you any additional questions if not okay next item on the agenda um is the discussion regarding budget

development and guidelines this is basically to figure out how you doing any development of the budget if we on track to get it done and yes we we we have um council's calendar uh with the recommended dates and the the not to exceed dates uh we are working towards uh the February 27th uh recommended date for the manager to submit his proposed fiscal 26 budget um today is Tuesday so it must have been last week um there's a little syncing up that we have to do with the Board of Education based on their timeline uh that may push it in the first week of March um but uh there are other dates that I believe will require us the manager to submit his proposed budget and capital not later than I think it's the end of the first week or beginning of the second week of March so there's there's not too much room uh in the schedule for us to slide um departments submitted their rooll forward operating budgets today uh CIP was submitted week before last um I say those two they are the two biggest pieces we have our fixed cost and miscellaneous costs uh that we're working through and over the next uh four weeks five weeks uh through a series of meetings with the manager uh departments as well as hearing from Council of any initiatives uh that you would like the administration to implement and undertake for next fiscal year uh our ask is that those be provided sooner rather than later so

that if the council has initiatives for fiscal 26 that we have the ability not only to receive them and digest them but work them up into the manager's proposed budget so that they will be part of the conversation and if included in council's adopted budget when we hit July 1 we'll we'll be Off to the Races to Implement those initiatives and if Council doesn't have any initiatives uh just tell us so and we will move forward uh with the manager's recommended or proposed budget uh without any Council initiatives thank you any questions Council Meritt yeah I was going to say and I um the capital budget um is where probably those initiatives would be and I I would ask that we the councilman councilors get to see um we have what a threeyear plan or some 5e plan but usually it's a selection of things of what we think what counselors think is more important to do now rather than later I I I wonder if there some years we've been able to see that early on and have some input so that it can be uh help determine what things uh the uh Town manager wants to put in his budget for capital budget because that's where usually that's the big change thing the rest of it's just kind of continuing as is to a great degree well we hope so and but when you I mean we're not to add 10 people here or there or the other place I hope not this year and uh but it' be nice for us to see your proposed capital budget so we we could

have some input early on and not get surprised at the end uh thank you for that counc Meritt I'll I'll make uh a few additional comments but in two buckets one with regard to the CIP and the other with regard to our approach to developing the operating budget um so process-wise um I uh under the manager's Direction and working across the town uh to prepare a recommendation for the manager's consideration uh the manager will then uh do his evaluation with all the conversations that he's having including those with Council um and we'll arrive at what it is that he's going to propose from the capital Improvement plan perspective right we have a five-year plan and as I've learned in recent weeks and months this year and some of the prior year the Direction with regard to Capital was inconsistent with best practices right departments some departments if not all were told uh not to submit CIP projects because they weren't going to be funded that is not what a capital Improvement program is capital Improvement program is where we identify the needs across the town be they in year 1 two 3 four or five and we include them in the CIP but as Council considers the annual budget and the C CIP included in that budget the only thing that council is authorizing for funding is year one years two through five are planned right so I say that because the inclusion of projects because they are capital needs of the town in years two through five they are not being approved for funding only the first year is approved for

funding um so in the valuation of the CIP both at the proposed and the adopted level uh that's just a fundamental understanding that the council is not authorizing expenditures for the entire five years it's only one year at a time um and then we have the ability annually if there is a need let's say that for this year was in year two we can bring that forward to year one or we can decide we want to continue to wait and keep it in year two right but the projects need to be there for visibility not only internally in the administration but forward facing so I'll give another hypothetical there's a project that's shown in year five and then we do a new budget and it's in four and we do a new budget it's in three and we do a new budget it's in two we do the next budget it's supposed to be in one and we delay it and let's say we delay it for three four five years and then something goes bump in the middle of the night right the part of the administration's work is identifying those Capital needs the council is the only one that can appropriate so a council doesn't authorize expenditures for the project we cannot do it that doesn't mean the capital need doesn't exist so we still need it there for visibility so that if something goes bump in the night we can point to it and say we've been trying to get this done for years now we actually have to do it and doing things under duress because they went bump in the middle of the night tends to be significantly more expensive than doing it as part of a plan on the operating side um the approach to uh developing the recommendation for the town manager consideration is very simply this we're going to roll forward

our fiscal 25 budget status quo all of the services that we're providing the staff everything that we're doing in 25 we roll that forward to get the Benchmark that's the first Benchmark from the budget process that says what would it cost so in light of the reval um and the reval mill rate then we look at what would we need to raise the mill rate for status quo right so that's the first look and where again over the next four or five four five four weeks uh we'll have that information and then from there we're looking at uh the two buckets of our operating cost there are things that we have to do right we we can't eliminate we have to pick up trash and not only do we have to pick up trash we have to pick it up every week right vector control right no we don't I mean some people people said we can drop that and lower the budget who said people that didn't want to get real I would uh refer anyone to I believe it's the State Health Department for vector control right that Weekly pickup of trash is required because as I learned a couple decades ago uh the gestation period for a maggot winter doesn't up trash they depend on private companies to do it so do we we have a contract we don't pick it up I know but it comes through our budget W doesn't they so I'm not talking about who picks up the trash okay I'm talking that the trash has to be picked up that's a mandated service and in this description of our process for the development of my recommendation to the manager for the proposed budget for next year in our operating budget we have things that are mandated we can't change we might be able to tweak the

service level a little bit to try and capture some cost but we have to do those things the other side of the operating budget the other side from mandated are discretionary and then there's the discretionary things in our budget those tend to be the feel-good things the things we want to provide our residents and businesses those we have full discretion over so as we roll forward the 25 budget fiscal 20 the fiscal 2025 budget into the fiscal 2026 budget development Roll It Forward status quo we're going to keep doing next year the same thing we're doing this year but then once we have that cost we look at what we not might need to cut to get to an acceptable mill rate and that's where the difficult decisions come not only for the manager and his proposed budget but for the council and their adopted budget um because what I can't say as of now because I we haven't just due today the operating submissions by departments is what that new level is of role forward as Council McClary pointed out earlier we know that our contracts even though expire June 30th they uh the current contracts include an increase of 2 and a half% we know that debt service is going up million dollars we know that insurance goes up single digit sometimes d double digit fuel right all of the things that go up that's the role forward status quo and then we figure out what if anything we need to cut either partially or totally to arrive at that acceptable mill rate um and I do believe that the manag is going to submit a proposed budget that communicates well what's in the budget what's not in the budget um and all the components right what each department does we look at Debt Service

we we'll have it all laid out so that the document itself will be our communication device we may have questions from it that's natural but the document should do a very good job of communicating what and why each dollar that uh is included in the manager's proposed budget thank you any other questions thank you financials right uh two this month November and December of course I'll do November 1st um this is the fifth period of the fiscal year or the fifth month is these actuals because I know the last couple of ones was still trying to figure out where we were these are actuals what I believe you're referencing are the encumbrances yes uh the incumbrances are still not in there right I do expect I'll have them for January at least an initial look with a higher level of confidence than these prior months that's in part because uh across the administration we're doing a better job of actually entering purchase orders to encumber funds for contracts and dollars that we know are going to be spent this year um that's not only important just every day uh to utilize munus as our system of record uh and have that be the source of Truth When anybody has a question not a spreadsheet or what is in somebody's head um but for November December uh in the expenditures detail that uh estimated to be expent and encumbered is I believe the line you're referring to but what it reflects now is our actuals so for November uh 24 again the

fifth period of fiscal 25 um our revenues came in uh at 60 we're at 64.2% and actually coun uh counselors you know I can go through November and then go through December or because they are fairly close to each other I can kind of string them together or you want me to do them just do December because that's the most just December because it's the most relevant we have this for our information purposes so for which I do want to compare to December but I actually correct myself because and there's probably folks on home uh uh that know that I was referring to November as the 5th period when November uh is the 5ifth and December is the six halfway through the year after December so for December 2024 the sixth period of fiscal 24 uh revenues are at 64.5% um slightly lower about three percentage points lower than the same period last year uh with our tax collection at 65.1% um that hasn't changed all that much and I think it only Changed by about $20,000 from November uh but it's about five percentage points lower than the same period last fiscal year uh but as we're in January uh I know our tax collector uh Mrs daus is uh collecting the second half of what is roughly uh $50 million um interest income uh continues to be lower than the prior year uh you know last year was a a high water mark at over a million dollars but we are sitting at $717,000 of interest income uh through six months of the fiscal year uh if that work to hold uh we would be approaching

1.4 million in interest income uh for the fiscal year uh that does not mean that I expect it to hold um building permits and demolition uh is up at 87,000 uh trailing last year uh but I do anticipate seeing a slight up Tick than that uh for the January financials and our real estate conveyance is uh out performing uh the prior year at just over $400,000 or 67.4% of budget uh which is30 plus thousand higher than the same period last year and our expenditures uh through the sixth period are at 34.6% uh of budget with the revenue detail on the next page be sure at the top it says f wide 2025 as of 1231 as opposed to 11:30 make sure you're looking at December our tax and assessments uh are at 64.5% of budget at just over $62 million uh with total revenues just over $71 million with expenditures against that 71 million of $38 million or 34.6% of the budget our expenditures of course LED Naturally by Board of Education uh just under 15.5 million uh through six months followed by our fixed charges where insurance and benefits are uh at just under 5.5 million and Public Safety at 5.2 million question what is the is overtime driving the increase from month to month with the police department because in um November lease was at like one point

excuse me they were at like 3.8 million and now they're like 5.2 million so that was what $1.3 million if I'm not mistaken increase from month to month and so what's driving at i' I'd have to drill down and uh get that answer for you I will have it for you at next month's meeting sorry I just want to know what's driving the increase and if it's overtime because usually police does a really good job at giving us money back so I just want to make sure that that um we on track to continue that precedent yeah I know but still it's still up and and then my next qu my other question um Mr Hill is I for the life of me could not understand why um if you look at previous year's budgets we were very conservative on what we put in the budget for use of assets and then this with the former deputy mayor uh Mr Davis and I um advocated really really long and hard to like reshift some of our use of assets and where they housed and we put it in the treasury and we saw an increase and I guess staff at the time got really excited because they saw that as additional revenues and I really argued two for now against increasing that use of asset number in the budget because I knew that use of asset was driven by the market and you want to use one-time revenues well not well yeah onetime revenues in the budget as just that onetime revenues because if we don't hit that number that's budgeted which I don't foresee us not doing but we never know what this market and with the geopolitical stuff that's going on in this country and internationally what would happen with interest rates um in the market um are we projecting to bring

that use of asset down give it granted if we bring it down we have to find money somewhere else to replace it since we put it in the budget as what 1 one 1.2 million dollar when before it was like between two and $300,000 uh it's a very dangerous practice Yeah I fought against it and I was looked at as being a troublemaker for that and I'm going to continue to be loud about it I thought it was a mistake then and I still think it's a mistake now and moving forward I would like to correct that yeah I mean that that's that interest income or use of assets line uh is uh an easy place to be a Target good and bad um from experience the best practice is to be conservative um you know as I've said before you know I have crystal ball and it's always cloudy um we're trying to not predict but estimate what interest rates are going to do over the next 15 months right 15 months not 12 because of the budget development process that's several months in this fiscal year um so to arrive at what that estimate would be we'll be utilizing a variety of sources not the least of which is the Federal Reserves projection for the coming 12 24 months uh I'll look at the Congressional budget office um you know without mentioning any other names we'll look at a variety of sources es and formulate our own opinion about what we think is going to happen and then we'll crunch the numbers to arrive at an estimate and then we will take that estimate and back off it to make it conservative so that we'd be looking similar to this year I'm not suggesting the million dollars but I'm suggesting that halfway through the

year we've already captured 71% of the budget so save you know some knock on wood disaster in the last five plus months of the year and I'm not talking about in Bloomville I'm talking about the general economy that would impact interest rates um we are going to not only meet but will exceed uh the budget for this year now trying to do that on an annual basis is difficult um we've been on the the uptick or upstroke with regard to interest rates coming out of the pandemic and the stock market doing well and a variety of things you know um so at some point uh there's always a correction oh yeah and trying to avoid that correction is the real art yeah I I saw it then as like okay we bringing it this and we be very conservative again put the extra if it's over fund balance you're not depending on that that's something extra that you have support a you know support infrastructure we know we have tons of infrastructure needs if you have extra you put it towards infrastructure you don't put it in the budget because then if you don't get it then what do we do we find ourselves using fund balance anyway because if we run a deficit doing fourth quarter transfers we will autocorrect it right and so you want to just be mindful of that and so I'm happy you are keeping an eye on that councilor Meritt yeah can I point out that the Board of Ed uh after the first six months last year had spent 19 million uh um or had yes and this year it says 15 million so this year so I that sounds pretty optimistic but I think it was pointed out to us that munus is not giving

us 100% information on these sheets is that still true um well it's not munus we not onto meus this is it's it's um the like in the accounting world we we call it fifo or lifo first in first out or last in last out um in technology they have Geo if you haven't heard that before anyone garbage in garbage out right so if you put bad information in a system you're going to get bad information out of it not suggesting that that's what's going on with munus and the board of education at all it's more of as I've been speaking to in in over the the months the information is not even getting to munus it's in a spreadsheet yeah and then at at an interval that spreadsheet gets processed through and then finally gets to finance to be entered that's the prior practice what we're migrating the town to now is entering the munice the information in munus you know it doesn't have to be immediately although that would be preferred particularly when a payment goes out but within you know 24 48 hours so that it's not well anyone me included can look in munice and expect to see where we are that's is councilor McClary mentioned earlier about incumbrances we're increasing the use of purchase orders which is how money's get encumbered which is why I'm starting to feel better about what the encumbrance numbers will show we when I get to the January report if the information is not in munus I can't report it I'm not doing what I saw I'm I'm I'm not continuing prior practices quick question uh this is more

credible than it was last year last year yeah I have no idea I wasn't here okay but oh I six months ago then yes we're doing better and better with us every month we're doing better and better because if internal policies right that you've established with people submitting requisitions so that you can do the is that a part of your plan corrective action plan for the audit making sure that you know what's being spent when is being spent reconcile creating practices of reconciling monthly are you incorporate I know you've incorporate based on our conversation some of that with the town staff have you talked to your counterparts not again preference this not blaming the Board of Education because they've been very good partners um over the last couple of months with the town and the town manager has a very good line Communications with the new superintendent I assume you have a very good line of com communication with Dominic over there so not this next statement preferencing not blaming the board of education but in the pass they would then send incumbents like six months four months late and then one month we'll get this update and we'll just see a huge balloon of that year-to dat number on this sheet because they are kind of late in getting you the information are you comfortable with this $15 million versus 19 so that's a almost a three and a half $4 million difference from year to date yeah I'll say this trying to compare year-over-year budgets is only for reference right um to really not know what's going on and why the same period last year was at 19 million we'd need to

dig down into six months worth of dispersements to see where it is it may have simply been that they paid an insurance payment a month earlier and when last year they paid a month right so it's irrelevant right [Music] um but the Board of Ed is on board right folks inside the administration know one that I'm very philosophical in approach to the work but that we have a capitalized p and a lower case P when we refer to policies [Music] um I think you're talking about a lower case P I've not issued any policies I've issued directives and my directives have been to comply with existing Town policies and best practices that's that's um and that in of itself is is what we're doing and where we're going um and whether it's the Board of Ed and general or conversations with Mr Greco um we're all rowing in the same direction but that's good to hear any additional questions for members of the committee I I just preference I think this right here also helps us forecast and we know that it's projections and it's subject to change but this helps us forecast where we believe we're going to be at the end of the year for fund balance and as again as we go into budget we know okay based on these monthly statements that you provide us updates we are going to be able to project that we are moving towards having x amount to roll over to fund balance and you know one year um we didn't know where our fund balance was going to be and we raised taxes 6.5% because we didn't know that right and then they came back two three months later said we found $5 million you ain't found $5 million you just didn't have an accurate call a count of where we were

from encumberance and the spin number Etc um well then I would I would even suggest more than that right knowing um true cost of government knowing where the town was with the audit of fiscal 2023 during budget development the question is did you have a good number for where didn't for where you ended 23 so let's talk about where we are now pass is the pass right where we are now is while it may not be February we're looking at march to finish the audit which is not June or July right we'll know where we're going to finish fiscal 24 and what the impact on our reserves will be um while we're in budget right that coupled with this information that will be two more months long right I I think we'll have pretty solid information to make well informed decisions on I appreciate that because I think during this budget season we have to figure out what the true cost to run this government is and I know it's all a projection but I want to get fiscally conservativeness uh Council may try to get as accurate as possible to what the true cost of it is to run this government so that we're not overburden people with taxes that we don't have to because it's rough it's still rough out there you know on paper it says that the economy is doing well but the reality of it it's it's rough and I know it I talked to my neighbors I friends and other young people in this community some of us on this body are want two paychecks away from not being able to afford to live here and so we really have to get the true cost of government and try to scream line where we can so that we're not putting this burden on residential uh Bloomfield residents and

our commercial space so that we can continue to promote Economic Development and that people can live work and play here and so um over the next couple of months I want to get that true cost of government as close as possible and I know you hear me say this all the time yeah oh yeah I know I mean I've got two young adults in college and gez God willing they'll graduate uh this may and they'll get a little bit of a tuition raise so I can have sushi more often um um yeah yes I mean so the I'll make this my last comment unless you have additional questions on the budget um yes no one wants to overburden our taxpayers but in the budget process you've heard me say it's our most important document of the year it's where we identify our priorities by funding those priorities and while that's a a very strong sound bite the reality is it's where we get to determine what type of town we want right through the services we provide the services we don't provide so one way of looking at it is how much is my are my taxes going to be another way of looking at it is what services am I getting for my taxes and if I want my taxes to be lower you're going to get less service it's just the way the world Works nothing is free but you have to determine you have to show the where the services are absolutely that's why the budget document is so important to communicate yeah I say to most of my colleagues up here they can't see it or feel it it doesn't mean that it happens in their eyes quite frankly and so we have to do a better job of letting them see it and feeling it and so things like this and why the the audit is so important to be on time so that they can see it and then they can relate to filling it um and so I'll get off my

Soap Box because over the next couple of months I'm going to be very micro and macro focus on um trying to get this to the true cost of what it runs for government and the same thing with the bard of a what is the true cost to really run that board of education and the education system in Bloomville um so that people see their return on their investment um and so looking forward to a uh robust conversation uh through budget development of questions and answers right perfect any other questions for Mr Hil caring none next item on the agenda is public comment thank you counselors thanks please raise your virtual hand we have three minutes is there any public comments this one time is there any public comments going twice is there any public comment three times and for the final time is there any public comment seeing none we will move now to the approval of the no October 21st minutes move by Council mayor is second second by deputy mayor uh any discussion any edits seeing none all those in favor say I I I minutes passed Now we move on to the November 18th minutes of the finance box second move by Council mayit seconded by Council Waterhouse and Deputy Mayor Harington any discussions or edits hearing none all those in favor signal by saying I I po have the same right motion passed uh thank you Mr Hill thank you Donna thank you Mr Town manager for your work if there's anything that this committee can do to assist you um and providing resources to you uh we would appreciate that letting us know and we would be um happy to oblig um move to motion to

adjourn seconded by Council waterhous have a good even