July 12, 2006
1:30 p.m.
Members Absent:
Alice Foley and Virginia Ross
Staff: Keith
Bergman, Paul Gavin, and Alex Heilala,
Others: Mark Abrahams, David Nicolau, and
Jessica Waugh.
The meeting was called to
order promptly at 1:30 p.m.
Gary Delius did a meeting overview and referred to an article in the Banner of June 15th. He stated the Banner article of June 15, 2006 raises questions, which require FinComm to become much more knowledgeable about school finances.
Keith Bergman introduced Mark Abrahams of The Abrahams Group. Mark has year of experience in the intracacies and details of school finance and provides audit and consulting to a number of school systems and municipal governments across the state. This is important to us at this time because of the recent changes in the school formula for state aid and required spending just signed by the Governor. His firm has done a lot of work in nearby communities on the same subject. Mr. Abrahams has been hired by Provincetown since May of this year to perform a variety of Financial consulting tasks.
Meeting Agenda
To consider
the following:
A presentation
by financial consultant, Mr. Mark Abrahams
Jessica
Waugh also joined Keith Bergman and Alex Heilala at the table. The presentation by Mark Abrahams consisted
of hand-outs and visuals listed as the following:
A. Chapter 70 Trends, FY93 to
FY06 - (Chapter 70 Aid, Foundation Budget, Required Net School Spending, and
Actual Net School Spending.)
B. Town of Province-town's FY07
Preliminary Net School Spending. The
determination of the Town's total required contribution, Preliminary FY07.
C. Massachusetts Department of
Education - FY07 Chapter 70 Aid projections.
D. Town of Provincetown FY07
Final Net School Spending. a
determination of the Town's total required contribution for FY07.
E. Mark Abrahams resume.
F. Proposed format for the Town's Chart of Accounts.
Mark then presented a detailed explanation of the
new Chapter 70 formula.
The
formula is based on our base enrollment of 155 pupils including students who
attend all institutions. This number
represents the total number of students to be educated as a responsibility of
Town Government.
Tom
Coen asked if the figures are scaleable on a yearly basis? "If you scale down the numbers to a
certain point does the information become useless?" There seemed to be no real answer.
Robert
Vetrick commented that the foundation budget, which the State refers to as the
minimum amount required to provide an
education, is hypothetical and does not reflect the reality of providing a
quality education.
Ruth
Gilbert then asked, "Do you find this to be a realistic formula?" –
Mr. Abrahams reply, "This year's
formula formally addresses equity issues.
Is this reflective of actual issues? – not yet." The State DOE wants each community of
similar characteristics to pay the same percentage toward education.
Fred
Biddle reflected that we are penalized by our preponderence of high-value
second homes homes where residents’ income isn’t counted. Also, the number of people on fixed income
skews our statistics.
Mark
went on to give examples of how this formula will affect Dennis and
Yarmouth………… and how the proposals he had drafted would address these issues..
Dr.
Vetrick said that he would assume that these communities like Dennis and
Yarmouth originally got into regionalization for economics. Dr. Vetrick also wondered if there was any
talk about Mass DOE mandating regionalization if a Districts student population
fell too low? He had heard that
communities who drop too low would have the state mandate consolidation. Mr. Abrahams replied that currently
districts are only being asked to merge administrations.
A
general discussion ensued about the formulas involved and complexity of
deriving the formula variables.
Discussion on the DOR
complaint and steps envisioned to resolve the complaints.
The
next segment of Mr. Abrahams
presentation dealt with the steps taken to address the DOR complaints. Mr. Abrahams has already worked with Alex
and Betty White to set up a revised and compliant chart of accounts which will
allow for timely filings of various State schedules an allow for the
integration of the school's accounting
with the Town's MUNIS system.
Ruth
Gilbert wondered if the school budget were already on MUNIS? Ruth said we always had trouble reading the
school budget because it was in a different program and format. Keith explained that the budgets are on
stand-alone systems separate from the various accounting systems. Alex said that we do enter Town Meeting
approved spending articles in the MUNIS
budget system and it works well but it’s not user friendly enough to be used
for budget hearings.
Mark
will take all the comments he heard under advisement and address them at a
later meeting.
To review the comments
publicized by the DOR regarding Provincetown's filing schedule, presented by
the Town Manager and Town Accountant.
Keith
Bergman explained that the problem we had in filing schedule A have finally
been fixed. The previous Town Accountant depended on the auditors to complete
our Schedule A . Alex Heilala, Town
Accountant feels that we now have
control of our schedule A process and
we will be able to file on-time in the future. . She projects the submission of schedule A by October 31st,
2006. Mr. Bergman apologized for
the $1,200 borrowing cost due to our late receiving of the 3rd
quarter payment. Cost was a huge
embarrassing headline. KAB continued,
"We’re sorry and we do apologize," However, considering the $2,500
charge we would have had to pay the auditors to do the filing, we have a net
gain of $1,300 on the cost for filing Schedule A.
Two
issues that Department of Revenue (DOR) has with Provincetown are late
submissions and over estimates of our non-tax revenues. Late setting of the tax rate happened
because all property values had to be updated and upgraded. This upgrade completed to DOR's
specifications is now finished. The Assessor's office has completed its
transition to PSK Assessing Software, the gold standard in Massachusetts.
DOR
has required Provincetown to complete and submit our audit before DOR would set
the Tax Rate. Auditors will be due in
earlier, other timing issues will considered for 2007 the tax rate will be set
by January. This should be the last time Provincetown submits outside the
States guidelines. DOR has accepted this timetable.
Another
issue is that the Cape End Manner (CEM) since the expenses were higher than
projected.
Previously,
we had a history of over projecting local receipts. This year, Ms. Heilala conservatively estimated these receipts.
Aa a result we took in $120K more in local receipts than estimated.
The
issues related to setting the Tax Rate are complex and timely. Updating systems
and meeting timelines required by the DOR and the normal assessing process are
complicated and require a long time to perfect. This work has now been
completed.
Ruth
Gilbert said she appreciated the explanation, apologizing, etc. and wondered if
it would help if Mr. Bergman made this
statement available to the press.
School Budget
The
Ms. Jessica Waugh, School Superintendent will look into putting Mark on board
with the budget systems..
Dr.
Vetrick said, "Please urge the
schools to join on board." Jessica
Waugh said that she will check in on this.
To review and act on the
annual end-of -year budget transfers, presented by the Town Manager.
Keith
Bergman noted that Massachusetts General laws have now been changed to allow
end of the year transfers after the close of the fiscal year. The Board of Selectmen (BoS) voted at their
meeting on July 10, 2006 to approve the transfers. The transfers total $227K and are made up of $109,168 for Cape
End Manor expenses and $118,589 for Legal Services. Mr. Bergman further said that he is in the process of submitting
a request to the state for development of the Cumberland Farms site through the
Cape Cod Commission. He was hoping to
find other funding sources for this expense but was unable to identify such a
source. Survey costs for the sale of
the High School annex of $21K were charged to legal and an additional $20K for
the damage to the floating docks.
Basically, these items are non recurring. Regarding Legal expenses, Mr. Bergman said, "We're going to be more circumspect about the suits we
take on in the future."
New England
Deaconess
Target
date for the land transfer is October 1st, 2006. Deaconess has sold
10 units and have 10 remaining as their initial goal. Dr. Vetrick wondered if there were a chance that they may fail to
meet this goal? Mr. Bergman advised
that they are at a point of no return and will break ground on October 1st and that this date is set.
Our
final involvment with the Manor is $400K for transition costs and the
additional $227K transferred at this meeting?
Gary asked, "So this is beyond our prop 2˝?" Mr. Bergman replied "Yes."
Projections
for revenues from CEM. Estimate was
$400K. We still have revenues coming in
if someone pays, i.e., agency or private pays.
"How much private pays are we expecting?" No definite answer but the Town did settle
some outstanding bills for 70 cents on the dollar.
In
discussing the transfer request for the legal budget, Ruth Gilbert commented
that this is the highest legal budget ever presented!
Tom
Thurston stated that three years ago, at his first FinCom meeting to vote in
favor of transferring $22,000 from the FinCom Reserve Fund to cover the legal
expenses incurred by the Town in its suit against the Crowne & Anchor (for
Naked Boys Singing). He was not in
favor of making that transfer but felt pressured to do so being new. He indicated his vote this year would
reflect his true opinion of the $42,000 in legal bills incurred by the Town
fighting George Bryant over the clean-up of his property.
Motion: Approve the transfers as written.
Motion: Robert Vetrick Seconded: Walt
Winowski Vote 8 in favor,
1 against (Tom Thurston) and
no abstentions.
To consider other business
which may legally come before the Finance Committee.
Ruth
asked if there were any point in hiring Mark before the schools complete their
transition to MUNIS? Ms. Heilala said
Mr. Abrahams is designing the system so the school can easily convert to MUNIS
when ready.
The
Committee wondered if we can request a educational quality assessment of our
schools? Truro is already scheduled for
an EQA this next school year.
Mr.
Delius stated DOE is doing automatic audits but they have only just begun the
process.
Motion: Request an ETA state audit.
Motion: Ed Gage Seconded: Robert
Vetrick Vote: unanimous.
Ruth
Gilbert wants the FinCom to work with the school committee and get the budget
in a readable form so it can be analyzed.
Mr. Abrahams can explore the financial implications of regionalization. The two-day conference talked about
restructuring. What does restructuring
look like and how does it affect everyone?
Motion: Submit a correspondence to Mark Abrahams asking what we can request
from him and what he suggests doing for us in terms of analysis of the school
budget and also what the cost would be?
Motion: Ruth Gilbert Seconded: Tom
Thurston Vote: unanimous
Mr.
Bergman suggested that Mr. Abrahams' analysis should include all monies
received and expended by the School Department.
A motion was made, seconded,
and unanimously approved to adjourn the meeting at 4:30 p.m.
Respectfully
submitted,
Evelyn
Rogers Gaudiano
Approved by ____________________________on
______________, 2005
Gary Delius, Chair