Present:  Board Members Present:  Messrs. Muller, Carter, Atkinson, O’Brien, Chairman Sargent and Ms. Kopas.  Absent: Richard Nichols.

 

Also present: Director of Finance/Operations Dr. Jo-Ann Keating, Town Administrator Tom Landry, Finance Director Rick Darling, Selectman Richard Miller, BOE Chair Ellen Uzenoff, BOE members Philip Schafer, Lyn Kimberly, Weston resident Margaret Wirtenberg, Scott Basset of MacGladrey & Pullen, Steve Lemanski of Milliman Inc., and Secretary Donna M. Anastasia.

 

Mr. O’Brien made a motion to set the mill rate, Mr. Carter seconded, motion passes unanimously to set the FY 2007-2008 mill rate to 23.39.

 

Mr. Scott Bassett of McGladrey & Pullen gave an overview of fiscal year ending June 2006. Mr. Bassett commented on the increased fund balance, short term assets/liabilities, the Town’s AAA rating, pension liabilities, Internal Service Fund, fund balance target, controls over remaining open accounts, periodic inspections, policy procedure manual. Mr. Bassett said the audit indicated the Town was in ‘good shape and financially sound’. Mr. Bassett discussed some of the BOE audit issues and review of the Special Education grant accounts. He explained that samples are pulled and control procedures are assessed. The firm reviews the ED001 expenditures and also the grant expenditures. The education review is subject to the same audit review as the Town’s although the audits are done separately.     A complete copy of the audit is available for inspection from the Town Clerk.

 

 

January 11, 2007-  Ms. Kopas made a motion to approve the minutes as submitted, Mr. Muller seconded. Motion passes. 

 

February 12, 2007- Ms. Kopas made a motion to approve the minutes as submitted, Mr. O’Brien seconded. Motion passes.     

 

February 15, 2007-  Ms. Kopas made a motion to approve the minutes as submitted, Mr. Atkinson seconded, motion passes.  Mr. O’Brien abstains.

 

 

 

 

Finance, Bd of

4/12/07

 

 

Mr. Lemanski of Milliman outlined the topics to be discussed; the GASB                 ( Government Accounting Standards Board) statement 45 which addresses  OPEB ( Other Post Employment Benefits)

 

GASB 45 specifically addresses medical benefits, dental benefits and life insurance benefits.

 

The Town of Weston is required to begin reporting the costs for these benefits in fiscal 2009.

 

Mr. Lemanski explained the various assumptions used to estimate costs and rates and explained the Implicit Rate Subsidy and how it works.

 

1)  ARC:  Normal Cost- This is an annual accrual for active employees while the employees are still working. The cost is put into a fund each year and accumulates until retirement to pay for benefits. 2) Past Service Cost- This option acts like a mortgage payment to pay-off any unfunded liability that exists. GASB allows a period of up to 30 years for re-payment but most plans fall between 10-30 years. GASB also allows an increasing payment schedule that is designed to stay level as a percentage of payroll. These payments start lower and increase gradually over time. (Assumption; 4% increase each year)

 

Plans are funded as a whole and not on an individual basis. Planning depends on the overall age of the group; funding a younger group would allow a longer length of time to cover the cost of benefits. Plan evaluations are done about every 2 years.

 

Mr. O’Brien mentioned the possibility of the State being unable to fully fund future benefits (teachers) and as a result the liability may be passed down to towns.

 

Mr. Lemanski explained the Discount rate and the rate’s sensitivity to the assets that are backing the payments. For example a General Fund as opposed to a dedicated Trust (bonds and equities)

 

 

Unfunded benefits earned to date for the Town and BOE as of 7/1/2006 is $12,078,000.

 

An 8% discount rate and 9% medical benefits inflation rate was used to project long term calculations and cost estimates.  

 

Discussion regarding the varying fluctuations in actual costs (using a 1% increasing medical inflation rate)  with a dedicated Trust as opposed to a General Fund expense account.  

 

Asked whether there were investment restrictions, Mr. Lemanski stated that as far as he knows there are no investment restrictions.

 

Chairman Sargent suggested further research into investment restrictions and possible diversification of investments.

 

Mr. Lemanski discussed the 10 year plan outlined in Funding Alternatives.

 

Chairman Sargent suggested calculations/comparisons to actual pay-outs and ARC projections. He also would like to see Funding Alternatives cast over a variety of time periods i. e. 10, 12 and 15 Year projections.

 

The question is raised regarding the ‘bonding’ of the entire accrued amount;  Mr. Lemanski does not know of any town that has done this.  Mr. Landry stated that the town is authorized by statute to bond for this purpose with possible restrictions. Mr. Darling will also follow up.

 

Mr. Lemanski went over the required financial statements the Town will be required to prepare once GASB is implemented.

 

With no further business to come before this meeting, Ms. Kopas made a motion to adjourn seconded by Mr. Muller. Motion passes unanimously. 

             

Meeting adjourned at  10:04 PM.

 

Respectfully submitted

Donna M. Anastasia, Secretary

            Approval of January 11, February 12 & 15 meeting minutes

            Any other items of business to be brought up for Board consideration

     Adjourn.