SELECT BOARD
                            MINUTES
                          June 9, 2010
Present:  Sharyn Brush, Jason Morrissey, Matt Maroney, John Zink, and Lodie Colvin
Absent: Chris Oldham, and Joe Krawczyk 
Also present: Stuart Hurd, Town Manager and Terry Morse, Water Resources Supt.
The meeting was called to order at 5:30 p.m.
The purpose of this meeting was to review and take action on the Water and Sewer Fund budgets, the Enterprise Funds. The first question was a general question by J. Morrissey about the new practice of budgeting the depreciation expense and how it differs from budgeting for reserves. The Manager attempted to explain why this new practice was undertaken. Essentially, the Town has not been covering or accounting for the depreciation expense in these funds, and therefore, running a deficit in each fund annually. Although not an expense in the same manner as a purchase, the purpose is similar to creating reserves by increasing the fund balance to offset the depreciation. In the long run, the plan is to match the depreciation annually based on an accurate forecast.  Everyone felt that a clearer explanation would be beneficial. The Manager indicated that he would speak with the Finance Director and provide that at a later date.
M. Maroney was concerned that we are not prepared for a catastrophic failure of the system. Both Morse and Hurd agreed, but historically, the goal had been to minimize rate increases while doing as much as we could. This generated a question about cash on hand in each fund. The Manager indicated that the monthly budget status may contain enough information to show that. However, the Treasurer places all cash income in one account to maximize interest earnings. The Treasurer tracks the cash monthly and reports to the Board. The Enterprise Funds use that cash, but it is not a direct correlation under the municipal accounting system, a modified accrual system.
T. Morse went on to explain the first phase of the Northside Drive project. The Town will be replacing an aging and poorly operating pressure reducing valve near the Wal Mart Plaza. This will hopefully minimize the disruptions caused by breaks in the water main in the area. And allow the Town to budget a section of main replacement over the next several years. This is budgeted at $259,500.00 including final engineering. This brought a question form M. Maroney about the potential need for a Town-employed engineer in order to save on these contracted design costs. T. Morse explained that this year, the costs have been high, but it was necessary to design this entire project to understand its budgetary implications. It was also necessary to do the same with low pressure project for the southern part of the system in areas of low pressure, Jefferson Heights and the Margaret Lane area. The Manger felt that for the smaller, less complicated infrastructure projects, a Town engineer may make economic sense. However, for projects involving treatment plant upgrades or more complicated projects, the Town would still need to use outside engineering firms and their expertise.
M. Maroney asked the staff to rethink the equipment purchases such as the truck to perhaps down-grade the vehicle and save money. The saved money could then be added to the reserves or the depreciation. The staff agreed to take a look at that and, if the "bottom line" of the budgets are approved, the staff would reallocate projected savings to the appropriate accounts and revise the line item budgets to reflect those savings. Discussion continued for a time on the long-term planning that the Capital Plan describes. The Board encouraged the staff to look further out and report back at a later date.
On a motion by S. Brush, seconded by J. Zink, the Board voted unanimously to approve both Fund budgets with the caveat that equipment purchases would be reviewed and savings transferred to the appropriate reserves or depreciation.
In other business, staff asked that the Board certify by motion that it had the authority to borrow the final bond monies for the Bolles Brook screen device. The motion by S. Brush, seconded by J. Zink, was approved unanimously and the documents circulated for signatures.
The meeting adjourned at 6:45 p.m.
Respectfully submitted,
Stuart A. Hurd