TranscriptSelect Board Meeting ~ December 12, 2023

everybody to uh the Durham select board meeting on 1212 2023 we are in our new residence over here at the fire station this evening um we have a full tonight I [Music] all flag United States amendments to the agenda this evening

we have anybody for public comment we're going to do this tonight is um you can all just stay where you are state your name some's going to be able to hear you right out back no problem if you like the camera towards you feel free to turn towards it but otherwise that'll keep everybody from having to come up this evening public comment anybody okay we I haven't done this before Jean Sanders I live on um santel drive so I'm not sure if it's a comment or if I'm able to ask questions but I did see the audit report is that that's on the agenda tonight I think yes it is okay and will we have a chance to ask questions at that

audit report so there is no real audit report we just have Mark uh here to answer questions we had a couple of folks from the budget committee that questions open report that they wanted clarification on so we brought Mark to clarify some of those questions you can open it up to Q&A about the whole Bud yeah we can we can open up to a few questions we're going to let the budget committee you know a lot of this support education for everybody including the including the town so um what you say I would I would

say she's part of the budget committee sh if you're going to open it up to them but I'm not the appropriate thing would be to ask the questions okay we can do it that way too all right goad I'll just say that I found the PowerPoint on the town's website that summarizes the summary of audit results and I'm concerned um I've been a CPA for nearly 30 years I've never seen such a bad audo report um so I'd like to hear from the town what what it's doing to address it I mean this was issued four months ago so hopefully there have been some controls put in place and some things done but that's what I'd like to hear okay great thank you I think we're going to proba address that we have okay great

anything else no no thank you okay anybody else public comment all right we'll go to Old business we have the Union Church committee report Bill terrific um I hope you each have a copy of uh of the main part of the report I think Jerry has a copy with all of the append

I had a uh just a spectacular committee to work with um we had uh Paula Erman perie Lois Kilby Chesley Emily Alexander Tyler Hutchinson Hutcherson Neil Barry and John talbet on the committee and tia Wilson and Candace Des spikes were alternates um we took our charge from the select board very seriously we had a number of meetings they included um actually going to visit the uh the church as a group they included uh calling in several experts to help us with with questions and uh going out and and getting people to help us estimate how much repairs would cost uh and uh we applied I think a very thoughtful process everybody contributed and our eventual conclusion was that the best course of action for the town with respect to the church would be to uh transfer it uh for no cost to the uh Historical Society to the durm Historical Society along with the about

$30,000 that's been set aside at previous Town meetings for uh maintenance and repair of the church and uh and that way the Historical Society could take it over could run it as a museum um for the benefit of the town's people and and the kid kids in town and uh the town would be relieved of the responsibility which it has kind of not not done a great job at of keeping it in great shape and the historical society would then uh have the responsibility to keep it in good repair and open it to the public um there's a fair fair amount of detail in the report there's even more detail in the uh Report with the appendices but I'd be happy to answer any questions you have thank you questions

I um first one is a process question is this something that we're going to discuss and decide this evening we I think we're going to discuss it a little bit to decide what the wave four is here um on on I think there's two major things that we have to discuss is is the the recommendation in

general to to um transfer this property to the Historical Society the second will be is um about the money that actually the Historical Society has raised at the various Town meetings and been allocated by the town what gets excuse me what gets done with that that money I think those are the two probably major issues um that we'd have to discuss so we can have that discussion okay I should have written down what my other one was because forg someone else has one while I think for a second Josh sure well I just first thank you Bill and and the committee I know you put in a lot of work and the report was very thorough um and um and so my I I think

the recommendation is something that um is best for the building and best and best for the town uh and the town's folk and uh sort of what we've been asked to do um in uh by by Town folk regarding uh the raising and allocating of money um and my only concern with the recommendation and I don't know if you have any thought about it is um is with

our responsibility the fiscal responsibility that we have is is and and this is sort of a discussion point I guess for the board as well um is is um ra is it appropriate for us to to give the money to the Historic Society or should we sort of earmark it for the repairs and does that change earm market for the repairs and just say hey when you have the proposal and you need the funds you we approve it then uh does that does that in your opinion change uh the recommen to me it's it's a

it's a step but I think it protects the town and I don't want to imply that I don't you know but you know what I mean yeah sure sure I think and this is my opinion only we haven't we haven't floated this around the committee or anything but I think as long as um that

money gets applied to the repairs and and maintenance of the church in kind of a timely way about the same time as it gets transferred to the Historical Society I think that would work fine I think any any mechanism that has the money that's already been allocated by town meeting for the maintenance and repair of the church any mechanism that has that go towards the maintenance and repair of the church at about the same time as it gets transferred I think uh does the job I think you you and I sort of have a unique perspective on on and that inherent distrust not justified in

99% so is but that's just I mean that was the only thing I was thinking about when I saw your report but otherwise I thought it was fantastic and I really appreciate it work you did and and one of the things I had I had been thinking about since I wrote wrote the report is a mechanism to do that and I think you know if if the Historical Society got the mil the building and then they found a contractor uh to do the work maybe prepaying the contractor that money uh uh I think would make everybody happy

this did I read that this would go to town Vote or is I know that we have the authority as a select to dispose of um but did I read that correctly that you think that this should go before the voters you have the authority to do it either way but um you know the committee's opinion was that it probably ought to go to to V to town I we could we could disposition the property right now today if we really wanted to theard decided to do that we can dispose of any piece of town property um what we can't do is we can't just up and transfer $30,000 or thereabouts over to them if we're not authorized to do that that would have to go to a town so the idea that both of them needs to go together I I get it that that would be um and the right thing to do but um you you You' then be holding the property more than likely till the April meeting and then you know putting it before the voters and say do you want to transfer the money over and

also at the same time ask them about the profit did and that's exact that was the context in which we made that recommendation and you're comfortable and that that is correct in stating that the committee or commission Comm

um is comfortable yes is comfortable waiting until April for a property transfer and potential um budgetary funds I think the the committee would be happy however it happens Society right the Historical Society actually they had a meeting and they voted to accept it if it's offered by the town and the last appendix in the report is a letter from them stating

$10,000 goes away on the end of December so yeah no we do realize that would have to be reallocated atting at that point pass though do we do we know if there are any contractors lined up that we would be in a situation where we could potentially um give a deposit of that $10,000 ahead of time to be is that you

certainly could do that I mean if if at the moment it's the town's building and if you wanted to uh find a contractor and and put the money up front with the contractor to do the the repairs is that $10,000 that is more like ,000 well the $10,000 is the money that was part of last year's budget that will expire is that $10,000 included in this 30 yes okay

okay questions Neil was on the committee and I think he made Ju Just a point I think the Historical Society has a different perspective maybe on who they'd like to do the work work than the Tom might pick so leaving it to them might be a good thing yeah I I don't think that we could allocate the money until the Historic Society has sort of figure out how they're going to pay you know how it's going to be paid for and you know over over and above whatever that that money would be so I agree that that's sort of

the report's awesome um really uh lays everything out clearly well the committee did a great job did a great job example of how um volunteers can support the work that this board and town staff needs to do and I'm very personally I'm very appreciative of this because I know that you know this is really important and that town staff and

this board don't have the capacity to be able to do this type of thorough um investigation of these issues and so um I hope that the solid lease committee comes back with something as thorough and wonderful because I think you guys have done a really great job so thank you well thank

going to do store she going to get a quote to us are we taking care of it is are we going to discuss that at a later date where are we going with this well I mean based on the the board can jump in here but based on my assessment you're talking about uh estimated cost here $56,000 for the repairs in this report if I read it correctly and we have essentially $30,000 in the bank so at the very least you'd be looking at an additional 30 say $30,000 that you need added to this in order for even the town to go off and do this uh at this point in time so that wouldn't happen till town meeting anyways you've got a capital request in for the Historical Society has a capital request in for I believe it was around $50,000 I don't remember the number up and off my head so that's already going to warrant article should it fail that the building does not get transferred over the historical district commission

then they would take the building at that point You' put both on the valot Bas both on the on the warrant you would you would you would leave the money allocated to the capital account in the event that the building did not transfer to them with the currently allocated $30,000 you'd have to raise the other 10 again that's 21 in the restoration no right right 21 in the restoration you 10 that was allocated that will go back into the coffers of the town you take that at town meeting and say we're going to reallocate that 10 making it for $31,000 right transfer that over with the building that's that's one I'll say one warrant question might be two and then you have a second question which is the capital amount if we decide to keep the build then we need to raise another $50,000 for doing the work that's listed here at the 56 plus having extra money in the kitty to be able to continue with repairs of the

building so it's a it's an either or scenario it's kind of what I'm what I'm kind of looking at but Joe yeah I think we should just put it on a war warant article that we give the building to them with $30,000 and so even though 10,000 of that comes back to us at the end of this year we'll just earmark that to go back with it with a $21,000 in in their curent account so I think we should just put that on the more article I don't know what the process is if we vote tonight that we want to put that on there just state that we want to put that on there and move along with it or or what that process looks

building ownership transferring as one question and the money as one question because where my brain is going is if the town votes to transfer ownership but doesn't vote to transfer the money is the historical society then still going to want to assume ownership of the building if they don't have the money to do the repairs that that's a good question which is kind of why I was thinking of making a contingent building and money together and then a separate pool of money that the town could they could vote to give it to them on top of that if they wanted to but it would be a separate contingent line can the money in the building be in the same question legally is that allowed I I don't know I don't know that I have somebody in the audience shaking their head yes as far as I know I think it would be fine so can can I just interject for one second uh my only caveat to all of this is I I

would want to know from the historical if there's any benefit for them getting the building sooner I don't know if there are Grant funds that are available sooner if there's any anything they could take advantage of sooner um uh Lois tells me there is grant money available before then so there would be some benefit to getting it before that they could apply for it sooner and and so I I guess I don't want to put I don't want to put Lois on the spot but I mean is it would would it be advantageous for us to transfer the property sooner there are there are rolling deadlines on some grants so for instance

could be due on January 31st I don't I don't know or 30th I don't know what the deadlines are without looking them up but it would be advantageous for the building to be owned by a nonprofit if you're applying for grants that are only available to non for offense so so that would be something I would urged for to think about because I think maybe tonight's not the appropriate night um and that question of whether they they would still accept the property without the $30,000 which I think you know I think at least the 21,000 I think we could do um uh is something for for them to

consider um but I think if it if it's advantageous for for them and fundraising I think we should do it sooner than other 10,000 or more that the town would allocate at town meeting could give that would be you no I could hear what was said you just asked me

doing a transfer of ownership before count um I don't know how it would read but I I would feel more comfortable where um first riter refusal isn't the right word but that um if they were to sell the building or something like that that the town would have the opportunity I I'm a little bit I I completely understand that it could be more advantageous to be able to make the transfer sooner I it does make me a little bit uncomfortable to not go before the voters with the question and so if there were some sort of part of the agreement where doesn't that exist for the Methodist Church that there refs back to the town

select Bo it was okay thank you that's good to know do you know what I'm they can't raise money to repair it or something it goes to the Historical Society but that's the West Methodist I see this is where I'm going to confused about the different organizations thank you for clarify yeah I think would if if the organization was to accept it without funding for right now holding over expecting funding to once we get to the town meeting or is it contingent upon them getting the funding they don't want transfer of property unless the funding is absolutely guaranteed to be there I think I would I I would want to ask somebody who speaks for the Historical Society so that's that's where I'd want to run with it I'd want to I'd want to ask that question um so if that's a contingency let's find out secondly um I suspect if they you know

if if it were to be transferred and then there was a good faith effort to to also transfer the money in a later time I think that would that would probably work fine I think the time will do it it's just my only sticking point is on this I I know we have the authority to transfer the building it gets a little gray for me when it comes to transferring the funds to a private entity so I but I with that said if if

particular entity wants to come back we can put this on a on a board maybe our next meeting and in the meantime we could do a little due diligence with the town attorney and ask them how this could all shake out if if in fact what we're talking about could even be achieved by just the board or how we should approach it for the towns perspective that's great that's

town to make the repairs that are necessary before the transfer and use the $330,000 up to the point that it's been allocated the the renovator that Jerry and I talked to said that he could obviously take some things off there are some things that are not as um that don't need to be expedited as

much as others so if the town wanted to keep the building and put the $330,000 or some portion thereof onto the repairs prior to the transfer that's a contingency that lots of real estate deals have you make the you put a new roof on you put a whatever new furnace in whatever that's a contingency before a deal goes through so you have the money that's your option so I mean my recommend I I I support doing this um my recommendation would be that we um uh we we have somebody from the Historic Society at our next meeting and I know it's on December 26th but I think this is important um I know we're trying to keep that meeting relatively short but I think this is important enough for us to have this conversation and and I don't know if they have a meeting between now and then but if there could be some discussion but what we've talked about um because I mean what Lois said is is a good idea but would would they

rather be the ones making the decisions or would they rather have the town do it mean that's I don't I I don't I don't want Lois to make that decision unless she's unless she's able to which I can't I don't think she is um uh uh I think

that's something that there needs to be further discussion on um so that would be my suggestion we table this till the next meeting yeah I like agree with Josh's point I think it's important that we get clarity whether the organization wants it up front even if the the vote for the money has to come later so because if if they're not comfortable with that then we go back to the table of should we do repairs before transferring stuff like that so I think just getting that Clarity from involved parties is important do we do we want to come are we all in a consensus on the board I think it's important to say or vote if we are perhaps that are we all in agreement that transferring the property and just the logistics that we're all in agreement that we want to transfer the property and the logistics around it are what need to be ironed out should we take a vote on that is that something that we're just I wasn't

thinking a vote was necessary for that I think we need some legal input to see i' like back I think something that rich mentioned earlier transferring the property with the money are we able to do that with money that's allocated like clarification on that

of of actually um know the town not doing the work um would be better for everybody transer with the money and have a historical society take over so is the town going to write an agreement and offer that to the Historical Society or is the historical society coming to the town with an

six and half does the other I think right now it's really their offer that's what's presented to us but I mean it could go either way I mean the last followed his Direction I think that's the most prudent thing to do in this situation whenever you're dealing with real estate so you know I think I think everybody wants this to happen both sides want it to happen so we just need to find the right mechanisms to put it in place and let it happen and do it the right way so there's no recourse back on either party in the future Jerry is there anything that you need from us in terms of next steps for you to know just Direction that's what I was getting at by asking for are we all in consensus is this are we seeking the legal legal opinion is he writing an agreement I I feel like coming out of this Jerry needs Direction on what he needs to do when our meeting's done so what I will do is I will contact the attorney

know information him that I can bring to [Music] meting so there's there's nothing else that you need from us at this time you know that we're in in a consensus about whether or not we want to transfer and you're going to seek out the information from the attorney put on the agenda for next meeting to discuss further information I found out from the the attorney on the legalities of uh transferring over with money or no money or taxpayer money or however that works I'll I'll have information for you

committee appreciate thank you for thoughtful discussion thank you very much appreciate right we're going to move on to new Associates started off okay so when the audit report come out there was some questions from few members on the budget committee that uh in regard to undated fund balance and that uh sort of thing um and the result

of that was I was asked if I could bring Mark in to talk about that to clarify some questions that's that's why he's here today so if you still have those questions we can just just open it up uh I don't know where you want to start I I can't even remember what the questions were when they were coming across detail so I'm leaving it up to you folks to get clarification that Union and that's why here so I know mil meil was leading those questions I don't know where you are I got I got an answer

of the same questions the biggest one was the unassigned fund we have called undesignated fund forever was incorrect uh is what we've used to consider what we could transfer to reduce the tax levy so in my discussions email discussions with Mark he has said and he let clarify this that it's both the unsign and the assign fund that should be considered for those purposes and in that process of asking those questions I learned how those balances get sort of tallied at the end of the year and reallocated and I think he has some suggestions he May's already talked to you about how to change that process like we use this year's revenue

for next year's budget right next year's reeven for next year's budget but we currently we do this year's revenue for right currently so right I mean part of what I see is as creating lot of confusion at least based off of the questions that I got from the budget committee members is it's two

different ways of looking at the same problem but you're trying to talk about the same thing um so there's a perspective from the town of okay well this is how the resources flow in and out of the town from a budget perspective uh but then there's the the gby standards on how you actually record and recog recognize resource inflows and outflows and also how you present them in financial statements like the the the annual financial statements the end of the year and so there's this disconnect between okay well yeah you budgeted to use last year's revenues but you're not going to see last year's revenues on the financial statements that doesn't make any sense because under gby standards you recognize revenues in the year that that you earn them right that that you that they're measurable and and earn so um my recommendation and what I've been working with Jerry is to first as as we've been uh starting to

record the transactions and take over the accounting function uh for the town uh there's been a couple changes that I've just done within the accounting uh system to make it as clear as possible and also to align how how uh

the budget committee and the select board and the town's people think about the budget and how it's presented on a gby basis right on gasby formatted uh basis so uh in in uh you know FY 24's budget my recommendation is that you actually budget for estimated revenues estimated non-t tax revenues to help determine how much you're going to reduce your tax levy by to arrive at whatever you know Appropriations that that you know you've appropriated for because you're budgeting for Appropriations in fy4 you should be estimating non- tax revenues in FY 24 that you're going to get in in FY 24 um so that you can determine what your tax levy is by doing it the way that the town has been doing it you're estimating based off you're using revenues that you received in the prior year and then using that to try to figure out how much you're leving in taxes and the and the the end result has been that you taxed too much I mean

every year you just tax more than you really need to um so you end up with this with what you have which is I think an overlarge fund balance uh for the general fund the other the a couple other problems are that you just had everything in the general fund when you really for as far as I'm concerned it's much clearer and much more transparent to people anything that is restricted for specific exens you might as well report that in a separate fund right a special Revenue fund a capital projects fund something like that gby allows for that uh and by doing that that clears out anything that is already it's you're not it's it doesn't lapse at the end of the year you're not spending it in any one particular year it allows for the general fund to really just show you what your activities are for this current fiscal year and what the results of those activities are for the current fiscal year and then you can step from

one year to the next here's where our fund balance was at the beginning of the year total fund balance which you know may have some different classifications but primarily it's going to be on assigned fund balance here's our fund balance at the beginning of the year here's all the resource inflows and outflows that happen during the year so that we can arrive at well this is what our fund balance is at the end of this year and then we step from one year to the next it makes it so much easier than the way the town has been doing it in the past so I I am going to be recommending to the select board and to the budget committee this year what when we're going through the uh budgets to kind of shift the focus of how they've been thinking about resources that are available and how they're used because to give you an example the way the way it it seems like you've been doing it and it's not uncommon among calendar year towns every

time I see budgeting happen in the manner that the town this town has been using it has been for count towns that have calendar years I really haven't ever seen it with towns that have like a June fiscal year end um but the way it is is it's oh well the revenues that we just generated last year it's like it's filling up a pot and then that's available at the end of the year to use for next year right but that really doesn't I mean nobody ever nobody nobody budgets businesses don't budget for that budget that way they budget you know well what revenues am I going to get in this month compared to what am I going to have this month I mean house households don't budget that way you don't oh well I made $30,000 last year so now let me that's the $30,000 I have to spend this coming year nobody do them right so it doesn't it I get I get the idea behind it and like I said it's not uncommon it's just

a very odd way to think about it particularly when the end result the financial reporting that you see after the fact is misaligned with that right that's what I think really causes confusion so how do you estimate for the

income for 2024 by taking a by doing any other estimates that you would do normally you take a look at what you've had in Prior years and then you also say okay well what do we really expect to to have in significant or material changes from one year to the next so excise tax for example is your primary your primary uh Revenue Source right you go okay well in general do we are we going to have less excise taxes well it's not likely uh in a in any particular year that you're going to have less excise taxes unless you all of a sudden have residents that leave or or maybe there's a significant you know uh depression right where okay well I'm not going to you know renew my car or whatever right um but in most years because your excise taxes are based off of the value of car cars anyway and you're buying new cars on a general basis most years your excise taxes are going to generally go up right so you

can and what I did with Jerry on this first draft of the budget that he's been working on I said well what you can do is just take a look at what you budgeted for last year and just flat budget as a starting point so if you budgeted a million dollars last year for excise taxes just start with a million for your first kind of go round of the budget and then you use that that uh those estimations you you modify those estimations as you're going through to say all right well is it reasonable that we're only going to get you know the exact same amount that we that we budgeted or compare it to actual actual amounts right did we over budget last year compared to what we actually received we budget a million and only got 900,000 then we should modify our budget did we budget a million dollars but actually got 1.2 million well now we should really adjust our estimate for revenues um or if you're if you're you

know expecting to get um you know most of the other most of the other revenues apart from state revenue sharing are not a significant portion of your non- tax revenues and so most times people you know most times towns will simply go okay well what did we budget last year what did we actually receive and let's just kind of play with that the only reason why you're estimating those non- tax revenues is to arrive at how much you're going to be raising in taxes so if you're using last year's revenues which have not last year's actual revenues as your amount that you're going to factor in on reducing your taxes tax levy this year it it has no correl there's no correlation between the two but isn't that an estimate you got a low what I'm saying is it's a low estimate well I mean if you in tax went not 1% you could take that number and times it by 1.1 well yeah that's what I'm saying you could you could use last

year's actuals like I said right you could take a look at last year's actual and go okay well what's reasonable of an increase or maybe a decrease but it's not likely in normal economies that you're going to decrease the amount of revenues that you're taking in just like in normal economies you're not going to decrease the amount of expenses you're going to have right so but just to use the actual amounts that you had in Prior year doesn't ends up meaning that you estimate low for your revenues and that necessarily results in taxing more than you would necess than you would really actually have to have and so when you do that year over year over year you end up building up a fund balance unnecessarily or unintentionally yeah so if what I'm hearing I'm understanding correctly is that what we have been doing in terms of expenditures I'm saying we talking to the budget committee and the select

board members and how we look at the utility cost and then what we spend as an actual and then estim what we think we're going to spend Mark is suggesting that we do that same thing for revenues and we haven't done that in the past correct is that okay that's correct yeah yeah so what ends up happening like when I first did the but like when I first trans you know pulled the information from your accounting software into mine and was I'm just trying to pull everything together and there was nothing budgeted for Reven right and the reason why is because when I look through the warrant articles well yeah you didn't really actually budget anything for revenues you just using last year's actual amounts right so it makes it look really weird and as I said it makes it a low estimate usually unless something unusual happens year what happens when you if you're using going with that philosophy that you're

talking about with estimating the revenues for this in 2024 what happens if your estimate is too high and you're basically under right so and right so what you're going to come up with a shortcom at the end of the year how do you adjust for that how do you adjust for that M well that's what you have that's what your unassigned fund balance is for so what happens is when you have a again thinking of it in terms of you know stepping from one year to the next this is our starting point this is the activity that we're happening that we're doing during the year and this is where we end up but at your starting point think of your bucket of of total you know uh fund balance right which is just whatever we have the net between our assets and our liabilities right right now the town has 3.4 starting this this fy22 right when I take out when I trans when I move all the committed fund balances and all

those restricted fund balances to just separate funds capital projects funds special Reven funds you have 3.4 million right so if you end up overestimating in any particular year I'm sorry 3.4 million in the general yeah okay in the general so 3.4 million in the general fund your warrant articles to uh appropriate funds those are your those are your appropriation authorizations where the town's people are saying yes you can take our money and go ahead and spend it on these things right so your Appropriations don't change regardless of whatever your um your estimated revenues are in actuality which is why I I I uh um intentionally um avoid saying budgeted revenues and you always say estimated revenues even though that's just my personal thing right because estimated revenues you can be over or under your estim it doesn't really matter right they're not it's not anything that has any impact in the

terms of budget to actual right there's nothing that stops you even though you may have estimated a million dollars in excise taxes uh and a million dollars in appropriations of whatever all of a sudden you have 800 you only have $800,000 in revenues it doesn't change your appropriation you still are authorized as a town to appropriate a million dollars the question is well where does that extra money come from that's what your that your existing resources are for right so it's much better to know what your starting point is uh as an unassigned fund balance and say okay we have $3.4 million we're estimating we're going to have in non-t tax revenues well let's say our total Appropriations are $10 million right all the warn articles to appropriate to to provide the you know goods and services to the town $10 million our non- tax revenues we're estimating to be uh2 million right well

the difference between your your Appropriations and your estimated non-t tax revenues is we mon that you expecting to tax right because you're just going to well we're going to have $10 million in Appropriations and uh we're only going to have $2 million in uh non- tax revenue well if we're having a balanced budget then we're going going to raise $8 million in taxes but that's where you say okay well what do we have for starting resources well we have $3.4 million do we really need to raise $8 million in taxes or is this a little too high is this Surplus excess right excess

Surplus meaning too much if that's the case then we don't need to raise $8 million we can actually budget a deficit we can say well we're going to have $10 million in in estimate in Appropriations we're going to have2 million in estimated revenues uh which normally would result in 8 million but we actually want to kind of draw down we want this re this uh fund balance to actually be at the end of the year a little bit less because it's just too much right so we're going to budget 6.6 million or whatever $7.6 million and budget to use $400,000 in fund BS so all of that is budget right all of that is saying that's what we plan on doing then at the end of the year you go well what did we actually do so may be that you appropriate you appropriated 10 million but you only spent 9.5 and it may be that you estimated 2 million but you got 2.5 million well now that's a a million dollar swing right I mean between what

you wanted to have happen with regard to your fund balance we wanted our fund balance to go from you know 3.4 down to three but the actual results are that we had no deficit we actually had a surplus and that built it up by doing that year-over-year which obviously this will be the first year we're doing it by doing that year-over-year you can actually start to really control how your fund balance is going when you're when you're not doing meaning what level it's at uh when you're not doing that consistently or when when the when the town's people are not understanding that process very well um or even the budget committee you select board what ends up happening is you end up getting where you're at where you're raising more in taxes every year and you end up having an unnecessarily large fund balance or at least what from my viewpoint and not necessarily which may not be from your Viewpoint yes um we've

had some discussion in the past about moving to a June um fiscal year yeah and how we would accomplish that um especially for our fixed income residents and this may be a discussion for another day but I'm curious at how you're saying that our fund balance is in your opinion too large yeah um on what type of percentage do you think it's too L and could that potentially be a way for us to help bridge to bridge that Gap to be able to change our our fiscal year yeah I mean so you know a general rule of thumb uh is your unassigned fund balance meaning whatever you have left over after you take out all of your reserves your sign fund balance should be about two months worth of expenditures right and the only reason for that is because it gives you Financial flexibility it allows for VAR fluctuations in month-to-month cash flows or you know emergencies like oh well we got a pandemic and so we need to

have this huge cash flow out door which I experienced with schools particularly they if you had a small fund balance um at the beginning of 2020 um and then all of a sudden Co hit and you have promises from the federal government hey we'll give you $200,000 worth of Grants or 500,000 but you have to spend the money first well if you don't have that $500,000 well youve now missed out on the grants or you're or you're really you know un you know drawing down on your cash reserves um uh so that you're becoming very thin yes if you start with 3.4 million and you say okay well really we only need about you know 16 to 20% of our of our expenditures uh which is about two to three months almost um that would only come up to about 1.8 million 2 million at the most and that's a healthy fund balance right that because it's a healthy fund balance because in addition to that you already have all of these reserves that are set

aside for well you know Capital expenditures for fire department equipment and capital expenditures for Public Works equipment so you I think you have uh a significant amount that you could use if said well we we're going to need to do an 18-month budget in order to get us from a January a December year end to a junior and thing

um and we want to we we want to kind of make sure that when we're raising our taxes we're not you know killing everybody for that kind of stretch um yeah I mean you could definitely use that and say well all right we're going to budget how we would normally for 18 months plus estimating for 18 months worth of revenues uh but that'll result in x amount of dollars being raised we don't necessarily think we want to raise all of that amount so um let's use fund balance and budget a deficit for that for that 18 month period and on drawing down from that F balance the other use of obviously of unassigned fund balances when you have very large ones there's two two primary ones right you either start giving it back to the taxpayers through budgeting deficit if you do that in a reasonable manner that can be done you know safely you do it unreasonably where you're like oh well we have a million dollars you know

more than we should let's cut taxes by a million dollars well that doesn't that's bad that's bad idea you wouldn't want to do that the other thing is you just say well look it's on assign well let's assign it let's let's commit it for something let's ask the town towns people what do you want to do we have this million dollar that we already raised in taxes yes we're going to try to lower taxes or the amount that we would normally raise otherwise but we have roads that we got to take care of we have buildings that we have to take care of we have you know projects that we want to do we have a you know a pumper truck that we need to buy what do you want to do with this money right so I'm still a little confused on on the assigned and unassigned like the 480 Surplus we had in 21 I I asked Mark earlier we could take that and give it to Capital Improvement funds and said yes but it's in the assign fun now yeah so the way can you

repeat what you just said what that can you repeat what you just said so we had a we had a $480,000 surplus in 21 which is now in the unass the assigned time yeah I think so I think you guys do backwards from how I do told yeah okay which says to me it's not available to use for uh putting in a Capital Equipment fund but you that's correct right uh you said in another it was yeah again because the way that the way that your fund balances have been classified I think are not are not in line with gb's definitions personally I don't think they are so who put the 480 in in the assign fund well I mean technically it's the the town's Treasurer right but in reality what ends up happening yeah what ends up happening is because towns small towns and schools don't have the technical expertise they end up relying on their auditor to say Hey you know how should this be done now me it's me personally the way that I've seen uh the

classification of the fund balance I get why it was done that way but it's not the norm it's not common from the clients that I've worked with as both an auditor as also as a a business manager it's not common on the classification the common classification is Everything Is unassigned Right unless you actually commit it or restrict it and then your budgeted deficit what what most people call the budgeted use of fund balance is the only thing that is assigned it's taken out of your unassigned fund balance and set aside and the reason for that is because you want to it helps the users of the financial statements to understand hey if we come in exactly on budget then our fund balance at the end of the year will be this um let me give you an example again let's say you had 300 $3.4 million in total fund balance total general fund balance at the beginning of the year does that include on ass sign yes yeah

that's what I'm saying right total fund balance is bro you know toal saying fund balance but I'm not sure you say fund balance is it the unassigned fund or talking about the whole general f so I'm talking about the the general fund fund balance so there's a bit of terminology here so fund balance in at first let's first understand that fund balance is equity right it's your it's the difference between your assets and your liabilities right so you have you know a million dollar in cash and $200,000 in payable your fund balance is $800,000 right total fund balance okay gby takes that total fund balance and it says well let's classify that let's let's break that out into components in terms of their relative liquidity right in terms of their relative ease of use so there's nonspendable fund balance which is in nonspendable form that just says look it's already it's not even in spendable form so it's obviously not liquid so can

you give an example of that it would be helpful for people to have an example of can I write on that white yes I was actually going to ask you to do that because I was about to get so let's say you have assets of uh let's say $10 million which includes cash you know receivables you know tax receivables prepaid expenses right a whole bunch of different things right this is the general fund you're talking about this is all just one fund okay including committ right let me so general fund a in in governmental

accounting a fund is a set of self-balancing accounts and what that means is when you think about the accounting equation it just means assets liabilities and Equity right or assets liabilities and fund balance so you have assets let's say there's $10 million in assets these are your resources these are what the town has it's the definition is that it it has a potential future use right right um so cash has a potential future use it can be consumed right you have liabilities which are obligations on those resources so accounts payable is is one acude acude payroll um if you have escro accounts that you know you have impact fees that you know you have to give back to the developer something like that right those are all claims on these resources right so let's say that's $2 million okay Bond payment

Bond payment right uh well in in governmental funds they focus on current resources and current liabilities so long-term assets and liabilities like Capital assets and long-term debts are not included in governmental funds but yes in general that you're understanding what a li the just the basic this is just basic accounting not even necessarily gasby account right governmental accounting so the net between these two is under gby governmental accounting is called fund balance now the total fund balance is going to be $8 million it's simply what do you have for resources minus your claims right to those resources and and it's the it's the standard accounting equation I'm sorry assets equals liability plus owner's equity or in this case fund balance right it's two ways of looking at the same thing assets minus liabilities equals fund balance right those two equations are the exact same statement

it says well look it's useful to the users of the financial statements to break this out because users of the financial statements are focused on fund bals because that's their resources that are available after claims are taken out that's their resources that are available for use in the coming fiscal year right if I have a$ 10 million in cash and I only focus on cash I might overestimate how much resources I have to be able to provide goods and services in the future right well yeah sorry no fine um so let's say so I just want to make sure that I understand we here this isn't any of like the capital accounts no that's correct that will come out of of here and this is where we're going to start separating uh correct but what I I mentioned earlier is it's actually even more useful um under governmental accounting to separate out funds that are for specific expenditure that don't lapse the general fund you use for or at least

I use because it's easier um to understand and con and convey it to taxpayers the general fund I just use for your operating you know fund so there are no Capital reserves you actually have other self-balancing accounts the Public Works capital capital reserve you have the fire department capital reserve right you have uh the municipal buildings capital reserve you have the you guys raised for uh a revaluation Reserve right so that's separate from all of that is separate from these resources they have their own self-balancing accounts right they all have their own assets liabilities and fund balance right so the the Public Works capital reserve has its you know whatever 500,000 whatever is in there the fire department has its public has its amounts in there the the revaluation Reserve has its assets and liabilities and it has nothing to do with these okay got it so this is just your resources

for providing your day-to-day goods and services right so getting back to the fund balance gby says you know it's useful yes $8 million is is good to tell people right when when they're trying to make economic decisions with respect to the town to say okay well we have $8 million in resources but it's even more useful for them to know okay well of these resources what's their relative liquidity and that's where you get

[Music] restricted would benefit from an example of each of one of those things I will go thank you okay so each of these has a definition right nonspendable by gby definition is any of your net resources any of your Port any portion of your fund balance that is not in spendable form an example of this is prepaid expenses prepaid expenses oh well I paid you know whatever we paid rent on this fire department of this fire building and we paid with the money went out the door the cash went out the door um but because it's it's for the coming month we're not going to recognize that expense until the coming month right this happens primarily with insurance so you pay general liability insurance of you know $40,000 a year Well usually you prepay it even though it applies to the Future right pay July one to apply for the next six months that's a prepaid expense well that's not ins spendable form because you already set the cash

out the door it's part of your unassigned it's part of your fund balance right it's still a resource when I send the cash out the door for $40,000 this goes down by $40,000 so this is 960 and this is $40,000 my resources haven't changed my total assets haven't changed I still have $10 million in assets uh but it's useful to know oh yeah you know what of that of of this 8 million that we have in um resources some of it is not ins spendable form another example would be inventory right if you uh do you guys do um bulk fuel gasoline right so you have a tank somewhere where you bu you know bulk Fuel and you have a huge tank of gasoline well that's an asset but it's not in spendable form you can't really use it for well it's not you you can use it but only for very very specific thing right so that's nonspendable that's the least liquid because it's not spendable form restricted and committed you guys are

familiar with restricted is simply means it's it's set aside for specific expenditure by an outside Source right either by a donor or by operation of law or some other reason right so lrap funds the local road assistance program funds if you don't spend them for what they're supposed to be used for you have to set them aside and they're restricted only in the future for working on the roads right a donor gives the the town you know $20,000 for scholarship funds right those would be restricted right um that's also useful because you go oh yeah in this $10 million that we have we also have $10,000 that you know is is for you know buying whatever committed

um is uh the same is restricted it's set aside for specific expenditure but at the highest decision making Authority at the town and in Town's case because of the way you guys are set up that's the town's people right so the town's people say yeah uh we're setting aside a reserve for the reval valuation Reserve right $60,000 that's going to be committed if if if you keep accounting for it in the general wait it's going to be a confusing example and I just want to make sure that that's what you want to say yes because in our mind that is going is capital reserve that's right that's right but now it's over here but no no no I'm only WR I'm only writing it here so I can do the next demonstration it's much clearer do you want to use a different example since we're doing that as a reval in a capital Improvement account I can be like okay so we committed money we committed money this is what we're

doing now yes I I know and and what I what I want to show you this is what you're doing this is what you will see in your fy22 uh your 2022 to um financial statements what you will see uh as I've changed the uh accounting is I've moved all this anything that's restricted and committed I've moved them to their own funds I've taken them out of the general fund and moved them so now you have the $60,000 sitting here you had a public I think you had the an emergency Reserve you had uh you know

the River Park Reserve I mean you had a bunch of different reserves well yes under gasby rules you can keep them in the general fund if you want to um in under or if if you want you can set them up in their own funds right uh which is what I prefer to do because it makes it easier to then just talk about the fund balance for operations and delivering services from one year to the next so what you had in here I think was like 900 and some odd thousand of committed and restricted fund balance at the end of this year well I've moved all of those out to their own funds and so yes when you said when you say move it to their own fund I mean is it like put it in layman's term I might have three different savings accounts yeah and each savings account is is the the savings account is designated for corre so I don't necessarily get a state well I don't get a statement for the totals I get individual indidual statements correct

and so you're saying that rather so you're saying that right now all of our money is sitting in one account which is that general account F One Fund we we should have separate funds to so that those bodies aren't under the general fund but are under their own designated correct and the reason why and you don't have to actually open up a physical checking account for those reserves I mean right so I don't you don't have to have a checking account specifically for every single fund um but the reason why my

preference is to do it this way is because then each fund has its own purpose the all of these Reserve funds everybody knows what their purposes are now and everybody knows that the general funds purpose is to provide for General eneral goods and services for Town Services throughout the year yes we used to do this right we just changed this format like not that many years ago we went to the town's people and we voted right when I first started we did this this way no we didn't what what's the difference between having a line account that says that says the line account is for valuation whatever that's what you versus um separate accounts because then then you get confused that where you're where you're getting confused when I say look you have a total fund balance of $8 million yeah I know but you also have to account for the fact that you have really of that fund balance you have a restricted fund

balance a subset of that $8 million is restricted for x amount of dollars a subset is restricted for committed fund balances right these are all called nonspendable fund balance restricted fund balance assigned fund balance unassigned fund balance and when people people start using that terminology without really fully understanding what they're talking about they say oh well isn't that our fund you know you're saying fund balance but is that our that's that's different from our unassigned fund balance no no no when I say you have $8 million in total fund balance I'm talking about the total of all of these sub accounts if you will or subcategories of your fund balance it's just to break it out now you can like I said gby allows for both you could do it either way you can account for everything in your general fund or you can account for it in separate funds my preference because I think it makes it

clearer to people when you're talking about this fund is for this purpose right the only time I don't do that is when it's such a minuscule amount comparatively to your total assets right if it's a $1,000 Grant do I really want to take the administrative hassle of having to record it in a separate fund and pres you know present uh and prepare financial statements for that one will fund probably not but if it's this is something that's an ongoing thing like you know your fire department Capital reserves or your Public Works Capital reserves or something that you're saving for like your revaluation revaluation reserves I think it's much clearer to Town's people to be able to see hey because in your financial statements you can see these as separate and go oh yeah okay we see what the activity is in for each of those when you when you put them all in the general fund then their use right the buildup of those reserves and

the use of the reserves starts to get lost in the general fund activity because the use of these these reserves has to be presented in the financial statements and they get categorized in those normal expenditures your general government expenditures Public Work expenditures so even though it might have been coming from the public works capital reserve that you set aside in the financial statements it's not clear to see it because it's all part of the general fund so it's just part of one of your Public Works expenditure accounts right so the way I have uh now uh set up

the funds in the town is you're only left with the signed and unassigned okay and so the question is well what that what are these two so your assigned fund balance is any fund balance by gb's definition any portion of your fund balance that is um set aside for specific expenditure or use or consumption um by anything uh any level

below the um you know highest decision- making Authority so in the Town Council format Town Council is the highest decision- making level Authority if they for whatever reason gave the authority to their Public Works director to say well you can assign you know monies in your department for things that's where it would be right by convention um what has happened uh in um

in Maine and New England mostly because we have that Town's people are the highest decision-making Authority in town town uh government formats right in the town meeting government formats um by convention uh we have used assigned fund balance to tell us what the budgeted deficit is for the coming fiscal year okay so let's say let's say we we took out everything like we did this year or like we will do for 2023 and we say okay well we have $8 million fund balance the question then is well how is this broken up how is this 8 million you know categorized here the default is that it's all unassigned because if it if it doesn't fall into any of the other categories nonspendable restricted committed assigned then it's by default unassigned right by convention we say well what's the budgeted deficit for this year now the budgeted deficit for this fiscal year for the town is like 150,000 or

something like that so instead of showing 8 million you'll show 7, 850,000 and 150,000 of a sign and again when it comes to external financial reporting the entire point is to provide decision useful information to the people who are reading this the reason why this is decision useful to people is because then they can see at the end of fy22 if you had presented it this way they could see at the end of fy22 hey yeah we have a total of 8 million in resources available to provide goods and services for the coming fiscal year 2023 um and we're actually budgeting to consume $150,000 the planned Appropriations uh compared to the planned Revenue sources the planned outflows versus the Planned inflows is a deficit of 150,000 and so if we come in exactly on budget in in 2023 then we should end the year and this is what I was talking about Neil by the way when I was said yeah it goes to zero and then you build it back up at

the end of the year we will end with a total fund balance of 7,850 let me explain that again right December 31st 2022 and this is our financial statement right 10 million in assets 2 million in liabilities total fund balance of 8 million we haven't done anything with this yet and let's assume we have we have nothing else right great this is useful for us to know because it helps us plan for the future so now in our budget for 2023 is budget we say uh well how much do we need in Appropriations well we need $10 million in Appropriations for all of the things that we provide to the the taxpayers okay great that's number one that's appro

estimate that we're going to get in revenues well we million in non- tax revenues right um through excise taxes state revenue sharing whatever right okay well that's great that means we need to come up with $8 million uh in other resource INF Flows

In order to at least satisfy this appropriations of $10 million and you say well where can we get that well the primary source is Raising it in taxes you go yeah but we don't want to raise $8 million in taxes we have 8 million available in resources already do we really want to raise $8 million in taxes no we don't need to instead of raising $8 million in taxes why don't we just raise 7, 300,000 uh yeah let's say that

7, 300,000 in tax you go okay that's great well what does that mean well that means that that $700,000 of this uh $10 million Appropriations is going to be funded by the existing resources that we started the year with so that's now called assigned that's called assigned so now what happens is this is now reclassified as 700,000 and 7,300 okay and you say great that's very useful to know too because now just by looking at the balance sheet of the general fund I can I can say and knowing the convention by the way knowing the the local convention I can say oh I know what we're budgeting for deficit for fy4 and if we come in exactly on on budget if we actually spend $10 million and we actually achieve $2 million in revenue and we only raise 7.3 in taxes well then

we'll end the year with 7.3 million in fund balance and that's how if you do it consistently from one year to the next you can actually start to control the level that you have for a fund balance from one year to the next right you can say yeah well we really need to now the the uh sticking point is the act

right because you may budget this right this is what your budget this is your budget then at the end of the year you have to know okay well how did we actually come in well we actually spent 9 milli actually got $2 million 2,100 in

Revenue right and we actually because this was our budget this is what we committed we actually got 7.3 million in taxes right so 9.5 million minus 9.4 million right means instead of having a $700,000 deficit right this would result in a $700,000

budgeted deficit as opposed to a budgeted use of fund balance right but they're the same thing budgeted use consumption of fund balance right instead of actually having a $700,000 deficit the actual result was that we had what $100,000 deficit was it a surplus no we had 9.5 in outflows 9.5 outflows and 9.4 inflows

right so so we only had a $100,000 deficit so at the end of the year what does our financial statement look like well our financial statement looks like this assuming that we had the same liabilities at the end of the year looks like this 99 9 9 million 7.9

considered unassigned at first because we haven't gone to town meeting yet to figure out what our budgeted deficit is so December 31st 2023 we went from 8 million to uh 7.9 million and that's what I was talking about when I said will you step forward from one year to the net and this is useful to know when you're going into budget season or a town meeting to go oh yeah you know what especially when you you've done it year-over-year say yeah last year we had $8 million and we budgeted to hit a $700,000 deficit well what did we have this well we only have seven we still have 7.9 million we obviously didn't do this well right we could Shore this up a bit we budgeted 10 million in Appropriations we maybe we should adjust our estimates because well we think we have too much of a fund balance when we really want to drive this down right so that's why the way that you have been doing it it in the

past that the town has been doing it where you're taking what you actually had for revenues and using that figure to arrive at how much you want to raise in taxes you because it's it's historical actual Revenue that you raise you end up committing in taxes usually more than you need and that necessarily starts to pump your fund ons up yes so making say that we're going to change this philosophy of estimating yeah and this is the first year that we're going to do that M so we basically have our actuals from 2023 yep and you're saying

okay let's make the let's bring in the estimates for 2024 aren't we doubling our revenues no what do you mean doubling your revenues because you're using the actual revenues of 2023 and now you want me to estimate what we oh no no no no no I'm sorry no the actual revenues that you have they're not revenues for 2024 the revenues that I had for even if I had you know $2 million or whatever however money million dollar those those don't aren't revenues for 2024 they're already earned they're already sitting in your fund balance they're part of this deficit that gets closed to this fund balance at the end of the year but that that's what we've always done we've always used the actual revenues for forecasting the next year no I know and what I'm saying is you're essentially saying hey how much did we make in in Revenue last year well we made $2 million okay well let's use that number as opposed to an estimate for what we

will get to drive what we're going to raise in taxes and in reality what happens is if you use 2022 numbers for 20 2022 actuals to arrive at 20203 um estimate you're normally going to be underestimating your revenues because in normal in normal economies your revenues are just going to slowly increase so if you actually adjusted what you took for an estimate last year right last year's revenues and just simply adjusted them you would have raised Less in taxes right created um

more of a budgeted deficit and likely all else being equal you would have had more of an actual deficit this year I think everybody's hesitant to when you look at the actuals from a previous year you're hesitant to say well my actuals are going to increase this year no I get that right and right therefore by estimating this next year that they're going to increase we haven't been doing that therefore we've been raising too many taxes correct you being you basically you've been Ultra conservative in your estimates well that's not bad well no no what I'm saying is it well it depends on what your it depends on what your objectives are right it depends on if your objective is to actually bump up your fund balance then yeah you want to be conservative in your estimates and using last year's actuals is just as good as you know coming up with some random number but wouldn't you we had talked about then mentioned about transitioning

to our calendar year fiscal year changing that so wouldn't that to do that wouldn't this be the appropriate time to do it because you got the your resue is going to be higher therefore less impact on that tax it really just comes down to when the town feels comfortable in doing it it I don't I don't see it as a as a significant hurdle to go from June I mean from a December year end to a June year end right all it means is you just got a budget appropriately it just means that instead of 10 million in Appropriations you're going to have a year and a half worth of Appropriations so you're going to have $15 million in Appropriations instead of $2 million in estimated Revenue you're going to have $3 million in estimated Revenue right I mean I me you it just means you just multiply by one and a half it doesn't mean that your tax levy then should generally be one and a half times then it's that's really

just a question of either you fund that half from an existing fund balance which is what she was suggesting or you simply uh adjust when you collect those taxes which you can do at a tax perit you can say well instead of one one you know collection point we collect it two times over the year or three times during the year we take up take your total tax levy and you just you you know you have to pay it in November and May and then again whenever right so Mark in your world does a sign go to zero at the end of the year a sign goes to zero at the end of the year and then at at at annual town meeting you guys approve an appropriation along with estimated revenues and then that drives okay well we're we're going to budget to use x amount of dollars and usually there's a warn article in the town meeting that says says shall the shall the town authorize the select board to um you know use up to x amount of dollars of

unassigned fund balance to lower the tax levy once that's approved then that's what becomes unassigned so basically let's say it's 400,000 this year so this drops down to 7 7.5 and this goes up to 400 your to notice your total fund balance doesn't change right your total fund balance at the end during the year doesn't change it only changes one once you've closed out the year and you've closed all of your activity to fund ons at the end of the year and then what becomes the recommended use of the unassigned funds I'm sorry what becomes the recommended budget deficit or budgeted use of fund BS it depends on how large it is really and also what else what other what other um uh activities that the town wants to engage in so like I said you had 3.4 million going into this year you're likely based off of what I was looking at today you're likely to maybe have $1,000 deficit at best right

so you're only going you're still going to end up with at at the end of FY 23 at least from my unadjusted amounts 3.3 million the question then is okay well how do we use that we don't need 3.3 million right we probably need at most 2 million in the fund balance just to have a really healthy fund balance because we already have all of these reserves set aside the more reserves that you have the the smaller the fund balance that you really need um so 3.3 million well that's where you guys come in together and you say okay well what do we want to do with that do we want to set aside more money to Capital reserves because we want to buy something or you know pave some roads or whatever or uh do we want to set it aside for transitioning to a you know a June fiscal year end or what do we want to do with that that's where that's really just a conversation where do the payments to the RSU fit in they're part

of your expenditures they're part of your um Appropriations so there are certain things that you don't uh normally have approval Authority at town meeting anyway right so you don't have approval authority over County assessments RSU assessments uh or any general obligation Bond uh payments Debt Service but those would be accounted for they would be accounted for in here yes that's corre as estimates and you'll see that you'll see that in the budget workbook this year which I don't know if that's how you guys have done it in the prior year but we've accounted for all of the actual out resource outflows for the year primarily because you'll see on the on the uh the summary sheet the first page primarily because I'm trying to show uh this targeted how much you're going to raise in taxes because that's really the most important question how much are we going to be raising in tax compared to last year and so you you

know you first you do your first SWAT you know your first go through and you say okay well we want this for a budget and this is what we have have for estimated revenues and then as your budget committee meets over and over again you're starting to adjust this either upwards or downwards and you're starting to adjust this upwards and downwards and all of that's doing is is it's just modifying how much you're going to raise in taxes yeah so the estimated revenue is there a formula for that or is there a Clen boyant wizard we ask yeah it's it's really it's not really a formula it's it's normally just well this is what we like I said this is what we receive what we got last year in actual revenues um the state for example comes up with its uh initial estimates in March for state revenue sharing most towns take that and they go all right well we don't want to budget we don't want to estimate that we'll get all of

that so let's kind of do 95% of that I mean there's there's a bunch of different techniques but like I said most of your most of your revenues your non-t tax revenues comes from state revenue sharing and excise taxes so those are the two big ones everything else usually does doesn't account for more than uh well it depends on the town I guess but usually it's not more than 10 or 15% of the rest of your non- tax revenues uh those take up the line share yeah doesn't every single thing that comes in has to go into a line item or into a chat of accounts so you see where every single pen was like that's a balance sheet yeah but that's correct so the CH we's the chart of accounts you know so there's so yeah right I mean obviously I'm aggregating them here right so there is chart of accounts that has all all income and expenses it has all accounts right it has so your chart of accounts includes all of your

accounts within uh your town so we have all the accounts for the assets we have all the accounts for the liabilities the revenues you have individual line items for revenues but normally you you categorize them so you'll have taxes excise taxes intergovernmental charges for services um other revenues grants Grant uh yeah yeah right I mean so there's so there's you know just a few categories likewise there's categories for your expenses right so you'll have a whole bunch of expense like I don't know the town has maybe what 200 different expense accounts right or expenditure accounts um but then those are categorize well this is General government or general Administration this is municipal buildings all these accounts are municipal buildings all these accounts are fire department all of these accounts and so you categorize them because uh the it's really not useful to exter financial statement

users to see every single account it's fine to just say well what are we budgeting for public works this year what are we budgeting for fire department what are we budgeting for uh admin what are we budgeting for you know Debt Service just large categories but yes there are accounts for every single one yeah so are you recommending that we do an overall budget this year versus warrant articles on each department yeah well the way the the way that I do it is or that I advise cents to do it is um the way that your budget is set up the budget workbook is going to be translated directly to Warrant articles so that people can see BU you know the select board the budget committee can see but also normally uh the the budget is printed out as a booklet so that a town meeting individual taxpayers can see okay well what did they budget for you know yeah they're asking for at a warrant article you know for uh General

Administration right they're asking for you know $200,000 well that's made up of a whole bunch of things right salaries you know retirement uh supplies whatever right usually the budget workbook that uh taxpayers can see at town meeting that they can flip through will break this out to into those individual accounts now when they vote on a warrant article that's the budget Authority right so the $200,000 is just for General Advent so even though they may have said oh well we budgeted $80,000 for payroll and $60,000 for supplies well if you end up with you know $85,000 for payroll and $40,000 for supplies that's fine so long as your total departmental expenses comes in under that warn article Authority yes so we used to do that right and that turns into seven8 hour

long time you mean having the because people will get up and and make um motions on the floor to adjust those numbers and so it depends is is is it a situation where because I mean I do think it's important for voters to be able to see that level of detail but at the same time I also recognize why we want to vote on um a budget as whole and

not nitpick every single line at town meeting right and so with open versus closed wording for articles is that a way to be able to control that the warrant article would be specific to that number and not to broken out into the level of detail where it could be changed do you see what I'm saying yes I see what you're saying so for to get to your first point TOS despite what I what my advice is and because my advice is that just because I I prefer the transparency the very open hey look this is what we're budgeting right and if you don't agree with it then make a motion to change it um um but I can see particular and it it varies from town to town I can see how that can you know you know cause a town meeting to go from you know an hour to 18 hours right um so

some some may opt to simply just put that available on the on the website the town's website is publicly available but it's not really at town meeting you should have looked at it yourself ahead of time done your homework right um and yes the the the wording of the warrant article um is important right if you word it so that it's um so that it's um I think

it's this I don't maybe it's called closed right but there's one way to word it where you can you can make a motion to reduce it but you can't make a motion to increase it uh and then there's another wording where it says to see what amount if any and and then there's a recommendation and then that recommendation is simply that and then any towns person can go well I make a motion to even the budget committee and the select board you know budgeted 200,000 I make a motion to to budget 250,000 for no reason whatsoever um normally that's why select boards as budget committees do want to have conversation will be as open as possible in their uh in their um meetings their

public meetings so that the towns people feel confident that when they give them recommendations I'm not just coming in willy nilly going hey uh we think we should it should be you know something else I have experienced town where there was no trust even among the the select board members right there were factions and so you ended up at town meeting two different budgets one that was the official budget that the select board had voted on but a minority had not approved right had voted no but they were overridden and then they came to town meeting with a whole bunch of different amounts and it there's no information that goes into that and there's no trust in any of those numbers and so what happened well most people just I'll just vote for whatever's less even though that may not necessarily be the most prudent thing to do given the town's planned activities for the year right well we need want to give races we

need to pave you know that road and that road we want to do this and that right so it's much better if the select board and the and the committee can always agree I understand that's not the case but if it it's much better if you guys are um acting as boards and saying you know we agree on all this because then that just gives more confidence to your towns people when they go yeah okay we we elected these people we appointed these people to really look out for our best interests and if they're all in agreement then okay maybe I'll go along with right um one question that I had about the things that you've pulled out and earmark is that a good way to to say that is that actually an account or is that just represented on on spreadsheet data that type thing or is that money actually not in that account and in a separate a bank account yeah uh I think the town has what six or seven different bank accounts where there are some like

the cemetery trust has its own bank account uh there's one for the park fund that has its own bank account there are some it's not required there are sometimes where it is required based off of like the grant or says that it has to be like um you know whatever um but it's not required it can be just what you say which is it's just an accounting for um and that's where governmental uh interfund accounting comes in where it well due to and due from this fund owes that fund it's it's just basically saying well we have all of our cash represented here in the assets of the general fund but part of these claims to those are due to other funds so even though we legitimately in the general fund have $9.9 million well the the claims to that are other funds so a million dollar is here well what's the net effect of that the net effect of that is to reduce your fund balance I increased to reduce your

fund balance so that so that when you're actually looking at fund balance which is why most people just focus on the fund balance um or primarily focus on the fun because that tells you okay well what are my net resources that are available for use in the future so are our Capital funds accounts are they a

part of the like I said not all of them yeah most of them most of them are in here with a representation of two other funds in the general fund and then uh on the in the other funds you have do from other basically do from

answer no can I can I ask a question to just looked at the financial statements I I assume you're looking at you're talking about the the the internal control documents yeah yeah sorry what what's your role I'm sorry this is my first time yeah no so my name is Mark Roy uh I'm a CPA with a firm and our one of our jobs uh one of our lines of business is to do Municipal business management so we act as the business managers on an Outsource basis for towns and school school around the state um meaning we manage not just the day-to-day stuff like accounts payable payroll but then we also provide advice prepare financial State interm financial statements prepare yearend financial statements and then we take we send those off to an auditor to be audited so you didn't actually do the audit no we're not the Auditors right auditor spoke with us a lot of what her concerns were that were in the audit being addressed by the work that

Mark and his firm are doing right to clean up some of the account yes right so a lot of the inter any internal control issues you have I mean obviously there's always going to be room for improvement for anything right so it's always a kind of a risk versus the amount of resources that go towards it um a lot of a lot of that has been addressed or I would imagine that at least the most significant ones I don't I don't know I didn't read it what was the CU it the what they've highlighted is material weaknesses related to cash account reconciliations and I've heard rumors that there's missing cash I don't know if those are true or not those are not true but but the cash reconciliation is a obviously as you know is a critical control to make sure that you're accounting for the cash from one month one month to the next pretty pretty basic um right it's it's a very basic control and apparently it hadn't been

done for months and months and months so then the second one is significant deficiency related to segregation of duties and the third one yeah yeah I don't want to go into the audit right now directly I mean this this the goal of what Mark as company been hired to do is to get us to a point that all of the all the cash all the accounts are accounted for um so there there is no money missing the idea is to get these all bucketization

easily read um as a town as a board as the boards I think that makes sense I guess the feedback that I'd have is I did look on the agenda and it just said Mark Roy I didn't know who that was so I had been under the impression that he had prepared the audit so I think it would be good if the agendas included a little bit more detail so that people understood who was speaking um but what would be the appropriate time to get some questions answered about kind of what the town has done to address these things and first of all I'd like to understand what the problems were and then I'd like to know what the town has done to address other than hiring an external consultant you able to feed that into our town manager okay so I should come down to the town hall and it was all addressed at the meeting with the auditor that was that was your question is a question I asked to her yeah so if you go back and find that

meeting it's Show address so it's on the website it is okay so I can watch that and then I can come down and is it Jerry I can come down and talk to Jerry okay I just want to follow up with that also and I think that a large part of what Jerry identified as soon as he got here is that this was a significant issue and advocated um strongly to hire

Mark and his firm to be able to address the issues that were um identified in the audit and so um I I am just so happy that you're here Jerry well done and Jan please follow up because I know I know you will and I'm glad um and I'm I'm yeah this is

okay the budg that's what I'm sorry Jerry you don't need me anymore no no you're good thank you thank you so much no just been working with our chief Ro commissioner Rome to get the budget together as well working on guys pretty much wrapped up for the most part there's still some stuff we need to talk about other than that uh Jessica's back to work for the most part uh she doesn't work a full day um all time it won't be she back I think she's in a wheelchair until the 1st of January she gets out of that attend the window um other than that I don't really have much much else to to rep on than right now the focus is the budget and there's a lot of changes in the budget so we'll talk about that we get together all right um any questions for

Jerry um going forward are we need to here from now on or is this because you expected a lot of people yeah I just expected okay I just wasn't sure this affirmative change no starting okay well we can talk about that when we get budget talks and things like that when we I thought this was going to be a fairly lengthy meeting with Mar so I didn't add too much other

members reports anybody have anything to report or like to Jos I just to address the issue I raised last meeting about the sheriff's department I did I spoke with to Sheriff's about what the sheriff's the plan is and so the money that was allocated by the County Commissioners is not specific for root for it's just for a new Deputy so um so there is that and I know there was talk before one of them recommended we put aside money if we wanted specific speed details and stuff in town uh and I said well I just want to make I said my question was what the plan is um and that was an issue for the town um but they they do do that um and

he wanted me to pass that along um yeah that's okay so that that that's it some context we we have tried that in the past we have tried and one of the quickest things I've ever seen shot down in the town floor can I say something as a reminder as to why that might help you guys for the future um take a call that now thank you um

only thing I have is we did meet with the rsu5 um week um and so we got a download of of um they're mostly looking for us to give them an idea of any upcoming projects um so that they don't um if they happen to have a project as well um that they don't want to conflict with maybe say a large upgrade that we might have going on um so everybody was um somewhat projecting what they might what they might need in the future um for most of capital expens expenditures uh there was no real uh large item like schools that they were considering um and we we had very little to to add to that um as to what we might be doing from an infrastructure wise other than I know we had um Jerry's been looking at the um um

upgrade in the town hall which we've already discussed and that needs to be a bigger picture moving forward that was the largest uh capital expenditure that we thought might be coming up that would affect the RSU and maybe some of their decision process how they make sure they kind of U keep their budget in line with not getting the town get hit from both sides at once so that was that was our meeting last week anything else um the solid waste committee I kind of expected to see them on the agenda tonight but I understand that we got I mean it is is starting to get late do you anticipate when you expect the solid waste committee to have a report I don't okay that's fine and then did the RFP there was a resident who reached out asking about the r for the solid contract has that um no it was the the the that I

brought so I haven't he hasn't reached out to me okay um is it posted it is posted well the the whole RFP is not posted so if he wants the whole RFP it'll have to be CH I'll just make sure that he has your contact uh consent agenda motion I had thing for board member report excuse me I just had question uh last meeting we talked about uh our next meeting being where we

submit Redline comments or policy and one of the things that have been discussed was putting that discussion off until the January meeting um is that's something we can officially we're GNA we'll put the discussion off but I still want the red lines yeah yeah that's what I send the red lines to me for the um to to to the um I just wanted to confirm we were going to have that discuss session in J it'll be later into into January we're going to do it around all the budget meetings that we have coming up so just want to confirm yep so that that yeah that's what we'll end up doing so uh yeah red lines um so I'll get to that in a second um get to uh consent agenda we have a motion to accept I move we accept the consent agenda moves do I have a second have seconds any

discussion hearing none all in favor all right carries 5 z um upcoming meetings we got the select board meeting on uh 12:26 um be a relatively short meeting although we will add to the agenda a discussion um depending on the input from our uh attorney on the um Union Church uh options there and um

we'll have a short meeting on the 26th and then we have our next meeting on 1 n uh again that'll be at the town office at this point uh planning board meetings on 13 of 2023 24 24 oh sorry I'm reading reading the reading the script all right sorry about that we'll have to get used to that um and then the only other thing I had was yes on the on the um rules and regulations that are going to consider for the select moving forward that yeah if you guys would give me the red lines by um say Christmas break uh then I'll

I'll attempt to merge all those into one pleas put TR changes on we'll be helpful in word format and then um and then we'll get that on the agenda for one of the meetings in January but I want to make sure that the budget is all straightened out before we get into that heavy uh we'll do a workshop on it is what I'm expecting to go do move forward with that all right

um do we need an executive session this evening I'll defer to you on whether or not you think we should do that tonight if we could we could do a quick one just to have that quick discussion that that probably be appropriate I don't think it'll take very long so thank you