January 25, 2024 Selectboard Special Meeting Minutes

January 25, 2024 Selectboard Special Meeting Minutes

OFFICE OF THE SELECTBOARD

TOWN OF HALIFAX, VERMONT

SPECIAL MEETING MINUTES

January 25, 2024

4:00 PM AT THE HALIFAX TOWN OFFICE

 

 

CALL TO ORDER:

Pete Silverberg called the Special Meeting of the Selectboard to order at 4:00 PM on January 25, 2024.  Selectboard members present were Pete Silverberg, Edee Edwards and Karen Christofferson. Patrick McAllister participated remotely.  Others present in person (or remote) were Patty Dow.

CHANGES AND ADDITIONS TO THE AGENDA

None

NEW BUSINESS

Discuss error in 2023 Town Meeting Article 4

Edwards opened the meeting saying she had done some research regarding the calculation methodology for the Raise and Appropriate article and confirmed the calculation.  Edwards asked if the funds in the Grant Reserve Fund that were provided by ARPA could be used to fund budget shortfalls.  Edwards further reported that she spoke to Katie Buckley, the Director of Federal Funding Assistance Program for VLCT.  She noted that we may need to circle back to discuss Article 17.

Silverberg asked to quantify the amount of the miscalculation.  Christofferson her screen. A discussion ensued, with the result being the confirmation that the amount of the budget shortfall is $218,500

McAllister described the variance as a transposition error between the spreadsheet and the text version of the Raise and Appropriate Article included in the Town Meeting book, not a financial error.

Edwards said that Katie from VLCT suggested that the Article as worded for FY26 might not need to be worded this way and to do the tax vs non-tax element when the tax rate is calculated.

At 4:35pm Town Hall lost internet

McAllister joined the discussion by telephone

At 4:48pm internet connection was re-established.

McAllister asked when this should be brought to public attention. As soon as possible?

Edwards said “Yes”.  Edwards and Christofferson said that the response should be:

  1. Identify the error
  2. Show the implications
  3. Explain how it was mitigated so it doesn’t happen again

Silverberg said that “we own it” and that as a result “we undertaxed you” by not properly documenting the amounts in last years Town Meeting Article 4.

A discussion ensued regarding options to mitigate including, adding $218,500 to the FY25 budget plus the additional FY25 increases or to not do any road paving this year.

Edwards reminded the Selectboard that we have until February 4th to finalize.

Christofferson asked Dow what the largest expenditures are for the balance of the fiscal year. Dow said the biggest needle mover is the Highway Repairs and Maintenance.

Silverberg asked Dow if we had $218,500 would we make it through the year? Dow said we would and discussed the timing of anticipated cash flows.  Dow noted that we currently have approximately $277K in the General Fund, including $64K from the School. In response to a question by Christofferson, Dow said the funds were in Account 1100.

Silverberg estimated that we have a $125k monthly cash burn rate and will be short by 6 weeks, or circa Mid-May.  The $218,500 shortfall if the $64K from the School is applied, results in a $154,500 remaining gap.  It was noted that the Paving Reserve fund has $128K.

Edee noted that Katie Buckley said that an interfund loan over two years could be used.

Dow noted that a Loan in Lieu of Taxes from a bank could be obtained relatively quickly.

A discussion regarding the amount and timing of FEMA reimbursements from Vaughn Road ensued.

McAllister made the following points:

  1. We must acknowledge what happened and have a forum for residents to ask questions
  2. The amount underestimated was Town Taxes. We must remind residents that they approved the FY24 budget so the amounts are correct.  We made an error in the amount to be raised by taxes.  This is a temporary situation.
  3. Voters were undertaxed for FY24

McAllister concluded by saying he didn’t believe borrowing from a bank to fund this short term requirement is the best option.  McAllister explained that we have an option to use the Scott funds.  He noted that they are available for any needs of the town.

A discussion ensued concluding that the FY24 budget was up by 16% but taxes only increased about 9%

McAllister asked about the rules around borrowing from a reserve fund, noting that the voters must authorize any change in use from a reserve fund’s intended purpose.

McAllister suggested that we take $154k from the Scott fund for the shortfall and pay the amount back over a scheduled period of time.

Edwards asked that we add a line item to fund the shortfall to the budget and that we should schedule another Special Meeting and incorporate the amount into the budget for FY25.

Christofferson added a new tab to the worksheet called “Raise and Appropriate” to provide the comparative calculation for both FY24 and FY25.  A discussion ensued, Christofferson made changes to the Budget worksheet reflecting the discussion. The Raise and Appropriate number for FY25 was agreed to be $1,976,769 calculated as $2,441,469 budget less $464,700 non-tax revenue.

Edwards observed that this comparative schedule, when used during future budget cycle discussions would help mitigate similar errors by adding another reconciliation point.

It was noted that taxpayers got a break last year and that the most cost effective (i.e. no interest expense) is to use the Scott Fund and then pay back the principal.

Dow told the Selectboard that the impact of adding $150K to the budget to a taxpayer with property valued at $200K is approximately $223 in additional tax.

Edwards reviewed the timing and necessity for another two Special Meetings:

  • An Informational Q&A regarding the FY24 Budget shortfall
  • A Special Meeting for the Selectboard to sign the Town Meeting Warning which must be posted by February 4th

The following dates were proposed:

  • Friday, February 2nd @ 6:00pm to sign the warning. McAllister will be overseas.  Methods to obtain his signature were discussed
  • Tuesday, February 6th is a regularly scheduled Board meeting. Dow suggested that the first hour could be dedicated to a Q&A about the error.

6:05pm McAllister had to leave the meeting

A discussion ensued, with the conclusion that it is better to have a standalone, dedicated meeting to discuss the error.  The discussion regarding key dates and timelines continued.

  • Monday, February 12th @ 6pm was agreed for the Special Meeting to discuss the FY24 Raise and Appropriate matter
  • Tuesday, February 20th is a regularly scheduled meeting
  • Saturday, February 24th is the last day that the Town Meeting Books can be mailed to residents. The Town Meeting book can be posted to the Town website as soon as it is sent to the printer
  • Tuesday, February 27th is the plan for the Informational Meeting in advance of Town Meeting

 

Before adjourning the meeting, Christofferson asked if she could review the revised FY24 Equipment Schedule which was informed by a meeting with Fournier and Silverberg that morning.  A review of the Vehicle Equipment Schedule occurred at the conclusion of which, Christofferson noted she would clean up the Budget Worksheet following the edits made during the meeting and recirculate it in its final form to the Selectboard as soon as possible.

 

HEARING OF VISITORS

None present.

 

ADJOURNMENT

Edwards moved we adjourn at 6:18 PM, Silverberg seconded. The motion carried unanimously 3-0.

Recording stopped at 6:22 pm

Respectfully submitted,

Karen Christofferson, secretary pro tempore

Recording link, Part A: https://youtu.be/hU2DIT6irIM

Recording link, Part B (after Internet was restored): https://youtu.be/LSUsorZd5yM