Board of Finance Meeting Minutes
Michael O. Peterson-R, chair; Timothy M. Doheny-R, Gerald A. Feinberg-D, Michael J. Freda-R, Richard F. Gillen-R, Michael T. Hallahan-D, Kevin J. Kopetz-R
(Click the dates below to view BoF meeting minutes. Materials handed out to BoF members have been added. Especially of interest are overexpenditure reports, to see the effects of underfunding various budget items, such as energy use, maintenance, and overtime.)
6-21-07 Board of Finance - Voted to delay setting the mill rate until a special June 28 meeting, to await word on the amount of the insurance contract and the increase in state education funding. Selected Kostin, Ruffkess & Co. to do the "forensic operations audit," and McGladrey & Pullen to do the annual audit.
5-9-07 Subcomittee on Selection of Auditor - Notes taken by Robert Wechsler. See blog entry for summary of what happened. Apparently, everyone agreed to having a separate forensic investigation, but what was important, I feel, is what wasn't said and what has yet to be decided.
5-2-07 Subcommittee on Selection of Auditor - Notes taken by Robert Wechsler. The principal debate was over whether the subcommittee has the authority to hire a forensic auditor. Hallahan felt that it did, Doheny and Freda felt it didn't, but that the annual auditor should have a forensic capability and this should be included in the Request for Proposal [actually, a forensic capability is included in RFP, but not a forensic audit]. Hallahan wanted the audits to be done by separate firms, and he suggested that public comments be held before adjournment, but was rebuffed. Public comments was once again the most important part of the meeting, but will not be viewable on NHTV due to the subcommittee's decision. All who spoke wanted a forensic audit right away, and explanations were presented for why the two audits have to be done by separate firms. It was suggested that the Board of Finance hold a special meeting to authorize the subcommittee to hire a forensic auditor, but the members did not recommend this.
Videos: From the Meeting: Doheny presents his Request for Proposal and says that no authorization for hiring a forensic accountant; Hallahan says that BoF members had not read details of investigation, and that subcommittee should recommend a forensic audit to begin immediately, to restore trust.
This is the only palce you can watch the public comments and questions part of this meeting (courtesy of Doug Wood): Part 1: Doheny and Freda refuse to allow public comments during the meeting (knowing that NHTV will not film them after adjournment), and when public comments begin, Janet McCarty comments on this and on the need for an independent forensic auditor. Part 2: The extent of a forensic audit, who will do it, length of auditor contract. Part 3: Why subcommittee not told to find a forensic auditor (no one had read arrest warrant affidavits) and BoF chair stated his support of a forensic audit; the conflicts of interest between doing an annual audit and doing a forensic audit; not holding public comments during meeting prevents public from hearing what public has to say, including the special expertise of town residents = lack of respect for town residents' interests.
Part 4: Little discussion, no reasons given, no vote taken about not rehiring auditor Levitsky & Berney, which had been town auditor for 25-30 years; why dragging on heels and hedging talk about forensic audit; McCarty and Fontana asked for new auditor, starting years ago, and outvoted each time; request for special meeting of BoF to get authority to hire forensic auditor (Doheny says it could be done); need to have results of forensic audit before the election; Part 5: Freda says could have special BoF meeting perhaps after May 9 meeting, not now; Hallahan feels the other two members coming around, but does not want to have same firm do annual and forensic audits; Doheny goes back to insisting that must determine scope of forensic audit, audience: know where to start with forensic audit; McCarty: North Haven residents keep telling her they want a forensic audit, even Kopetz and BoF chair Peterson are in favor of a forensic audit, and need an independent forensic auditor; Doheny: two firms would take as long as one firm. Part 6: Disagreement re timing of audits; since finance director under suspicion, not enough to focus on community services; request to have public comments on agenda, or Doheny does not believe in transparency for North Haven; BoF chair Michael Peterson, who never spoke throughout meeting, says after meeting that he does support a forensic audit.
4-18-07 Subcommittee on Selection of Auditor - Unapproved Minutes. The minutes are extremely sketchy, omitting most of Hallahan's arguments in favor of a forensic auditor. And, of course, they leave out the extended public comment period, because the BoF Republican majority refuses to make it part of its meetings.
4-18-07 Subcommittee on Selection of Auditor - Notes taken by Robert Wechsler. The principal debate was over whether to hire a forensic auditor in addition to a new regular auditor to replace the old auditor and look at financial controls. Hallahan insisted on immediate need for forensic auditor to get to the bottom of what occurred and help heal the community's wounds. Doheny and Freda questioned need for forensic auditor, cost, ability to direct investigation. Doheny and Freda did not read the arrest warrant affidavits, nor was a sample Request for Proposal supplied to the members until the meeting (and they had no list of forensic auditors), so that they were not prepared to discuss important matters. Wechsler raised conflict of interest that he'd already raised in a letter, saying the acting director of finance should not be involved in any way with the process of selecting an auditor. As in the "response" from BoF chair Michael Peterson, his concerns were not even discussed. Others in the audience brought up the possibility of a state audit, the belief that the subcommittee wanted to sweep the matter under the rug, the need to revive the public's confidence in our town government. You can watch parts of the meeting on You Tube (the videos were shot and put up on You Tube by North Haven resident and founder of this website, Doug Wood): the charges against town officials and why they require a forensic auditor, Hallahan arguing effectively for need for forensic auditor, Doheny preferring look at need for internal controls over forensic audit looking at past misuse of funds, Hallahan's request for names of companies and individuals the town pays in no-bid contracts (along with Democratic Selectwoman Janet McCarty's argument for a forensic auditor, and responses), Wechsler describing Swinkoski conflict of interest, more questions re conflicts and failure to look at charges against town officials, comments about qualifications of board to evaluate accounting firms, Freedom of Information confusion regarding notice of the meeting.
4-5-07 Unapproved Minutes. Republicans decided to take $250,000 more out of the unappropriated fund balance to pay for restoring library and pool hours, plus $100,000 to reduce taxes. Feinberg objected to taking this money from the fund and noted that Republicans had agreed not to do this. The Republicans voted for a town budget, with this change, and the Democrats voted against it, as well as the education budget. Almost nothing of what the Democrats said at the meeting is reflected in these unapproved minutes.
Relevant Materials: File 1: Revenue Budget Report, Overexpenditures Report (a great way to see how underfunding ties in to overexpenditures in such areas as energy, maintenance, and overtime). File 2: Special Funds Report, Accounts Payable Report (what's been spent vs. what budgeted in all town budget areas). File 3: Decrement List, Stipend for Public Works Assistant Directorship
3-14-07 BoF unanimously pulls turnaround regarding the $140K fire rescue vehicle, recommending it for town meeting authorization. The Republicans voted for a town budget, and the Democrats voted against it. The Democrats moved to restore to the education budget $200K of the $400K the Republicans wanted to cut, and the Republicans voted this amendment down. Republicans voted for their education budget decrease, and the Democrats voted against it and the education budget.
Relevant Materials: File 1: Revenue Budget Report, Overexpenditures Report (a great way to see how underfunding ties in to overexpenditures in such areas as energy, maintenance, and overtime), Special Funds Accounting; File 2: Portable Classroom Report, Budget Modifications (Decrement List, Budget Recap, Revenue Recap)
2-14-07 Everyone voted for special town meeting to approve four capital expenditures totaling $385K.
Relevant Materials (some reports are in the same PDF file, so scroll down if you don't see the one you're looking for right away): File 1: Revenue Budget Report, Overexpenditures Report (a great way to see how underfunding ties in to overexpenditures in such areas as energy, maintenance, and overtime) File 2: Grand List, Bond Amortization Schedule, Teachers Contract Costs; Link to Estimates of State Formula Aid to Municipalities
1-10-07 Report on the school bond sale. Action on capital & non-recurring fund tabled (Preliminary Study of Capital & Non-Recurring Fund).
12-13-06, 11-15-06 Nothing of note. So I'll use this space to mention something left out of some of the following budget-related minutes. Hallahan asked department heads whether there were any expenses, over $10,000, that were neither purchased under a state bid program nor put out to bid. The answer was always no. Palmeri said that each such case was a "continuation of previous contract" to "argue" that the bidding requirement in the Charter did not apply, although that exception does not appear in the Charter.
10-18-06 Planning of budget workshops, approval of budget guidance letter for department heads. Kopetz spoke about bid specs prepared for a school security system, and need to have an appropriation to pay for it, but it doesn't seem to have come up at a future meeting, at least according to the minutes. Police Overtime Memo given to BoF members.
9-13-06 Revised draft of preliminary study of capital and non-recurring fund handed out to board members, so that can't be discussed until following meeting (and wasn't discussed then, either, according to minutes; see 1-10-07 for most recent report). Everyone votes to authorize $85K for the supposed costs of phase-in, although the costs were not shown to apply specifically to phase-in. (Report on Phase-In Costs, stating that much work will be done in-house, but means no change in cost estimate!)
8-9-06 Budget transfers each less than $20K ($20K being the amount that requires Town Meeting approval), totaling $1.2 million, unanimously approved. The minutes do not reflect that of this $1.2 million, $739,963 represents 37 transfers each in the amount of $19,999, thereby preventing the need for Town Meeting approval by a total of $37. It does not appear that there was any debate concerning this means of getting around Town Meeting approval. Expenditures of $800K, over and above what was approved in the budget, taken from the contingency fund, unanimously approved. Budget transfers each less than $20K, totaling $255K, were unanimously recommended for Town Meeting approval. In other words, the Town Meeting got to approve only 11% of budget transfers and extra expenditures. In addition, the BoF unanimously recommended adjustments in certain appropriation line items in the amount of $445K. The BoF discussed a reorganization of the Public Works department, with a stipend for the Building Official given much greater responsibilities under the reorganization. Feinberg wanted more information before voting, but the Republicans insisted on voting immediately and the Democrats unsuccessfully opposed the stipend motion.
5-17-06 Report that budget referendum passed 2,220 to 1,750, and phase-in passed 3,058 to 658. Feinberg noted that the town is getting more from the state budget than expected and felt the extra revenue could be spent on extra teaching positions. Finance Director Palmeri said only $120K of the net increase was available, but there appears to have been no discussion about how to spend this money. The vote on a 28.70 mill rate at a 97.5% collection rate was all Republicans yes, Feinberg no, Hallahan abstention. [It turns out that the collection rate as of Feb. 2007 was 98.9% (and the rate will end up higher) which, according to Palmeri, is consistent with prior years. This means that the 97.5% not accepted by the Democrats was set intentionally low so that the administration would have extra money in the till to put into funds for future expendtures, to spend and distribute as it chooses without the approval of the Town Meeting.]
4-5-06 Palmeri promised to give board members reports on the Fund Balance the day after the meeting. The BoF voted unanimously to once again approve Levitsky & Berney as the town's auditor. [For years, there have been concerns about using the same firm year in and year out, but these were ignored until the April 2007 arrest of Finance Director Palmeri, who is the one who recommended the firm.] Feinberg said that phase-in would allow the BoF to take another look at the budget, but Republicans disagreed [even though at the prior meeting, Kopetz argued that the budget had to be cut due to revaluation, which would mean that phasing the effect of revaluation would, logically, mean that the budget would not have to be cut as much]. Hallahan moved to increase the education budget by $438K, and his amendment failed with the usual Republican-Democrat split, and the both budget votes succeeded with the same split.
3-8-06 The first discussion of what was to be called the capital and non-recurring fund. Democrats tried unsuccessfully to add in $125K to bring back the past library and pool hours. Hallahan moved to add $639K to the education budget, but everyone else voted against the amendment. The Democrats voted unsuccessfully against both budget resolutions. Feinberg said he felt they were both inadequate.
2-8-06 Nothing of note
1-11-06 Palmeri reported that the auditors' opinion was "absolutely unqualified." Chair Peterson stated that six months into the current budget, the town was running 4.5-5% over budget.
2005 Minutes - all in one file; no summary yet