Meeting Minutes

The Finance Committee met Monday, September 12, 2011 at The District Offices at 245 Main Street, Cromwell, Connecticut.

The Chair, Doug Sienna, called the meeting to order at 4:35 PM. In addition to the Chair, present was Committee Member - Gerry Amodio. Former Board Member & Committee Member - John Luddy from the Town of Berlin was not present as his Board term expired on August 31, 2011 and he did not seek reappointment. There was a quorum. Also present were Board Chairman - Bill Candelori, Board Member - Ed Sasso and Executive Director - Brian Armet.

1) General

The Committee and Board Members present discussed the Town's and City's appointments to the Board of Directors, how does each Town/City allow for the continuation of a member whose term has expired, and does each Town/City do it differently. The Executive Director was directed to check with the Towns of Berlin and Cromwell and the City of New Britain.

2) Line Item Transfers Fiscal Year 2011-2012

The Executive Director reviewed, with the Committee, the transfer of $34,025 of Contingency Funds to Bonded Debt Payment Line Item, $29,270 and $4,755 to the Capital Line Item. The Bonded Debt Payment is Bond Counsel's Fee for the Clean Water Fund Nitrogen Upgrade Design Grant and Loan through DEEP. As it was associated with a Debt Payment it was assigned to this line item and not the Legal Services Line Item. The Capital Line Item expenditure was an overage due to unanticipated required expenditures. The Committee also reviewed the ambiguity of the Unaudited Budget Statement format and changes thereto, which are described in item 3 below.

Mr. Amodio moved, Mr. Sienna seconded, and the committee approved unanimously:

MOTION: The Finance Committee recommends transferring $29,270 from the Contingency Line Item to the Bonded Debt Payment Line Item (Bond Counsel Nitrogen Upgrade Design CWF Loan) and $4,755 from the Contingency Line Item to the Capital Line Item (Major Part) for a total transfer of $34,025, and refers this recommendation to the Board of Directors for their review and consideration.

3) FY 2011-2012 Unaudited Budget Statement Format Revisions

The Executive Director, the Committee, Board Chairman, Bill Candelori and Board Member, Ed Sasso discussed reformatting the Unaudited Budget Statement to more clearly present the Line Items and their amounts and balances. These changes include: renaming the "Balance" column to the "Variance" column; moving the Bonded Debt Payment Line Item from the Capital Expenses to the Operating Expenses; and moving the Nitrogen Upgrade Line Item from the General Capital Expenses to a separate Capital Expenses. These changes will be reflected in the August 31, 2011 ending Unaudited Budget Statement.

4) Selection of Auditor for 2011-2012, 2012-2013 & 2013-2014 Fiscal Years

The Committee reviewed the five responsive Professional Service Fee Proposals for auditing The District's Financial Records for the next three Fiscal Years: 2011-2012, 2012-2013 & 2013-2014. The Committee stated that as the Committee and Board were satisfied with Castanho Financial Group's auditing of The District's Financial Records for the past two years that they would stay with Castanho. They directed the Executive Director to contact Castanho Financial Group and request that they perform each audit for the same Fee that they propose for the first year: $15,500.

Mr. Amodio moved, Mr. Sienna seconded, and the committee approved unanimously:

MOTION: The Finance Committee recommends that Castanho Financial Group, LLC, The District's current Auditors, be retained as The District's Auditors for Fiscal Years 2011-2012, 2012-2013 & 2013-2014 for a Fee of $15,500 each year, and refers this recommendation to the Board of Directors for their review and consideration.

5) Review of Chairman's and Executive Director's Spending Limits

The Committee, Board Chairman - Bill Candelori, Board Member - Ed Sasso and the Executive Director - Brian Armet briefly discussed the status of this review and the next steps. It was agreed that the Executive Director and Finance Committee Chair - Doug Sienna would meet on Tuesday, September 13th to develop a format and formula for adjusting the spending limits for presentation to the Board on September 19th.

6) Kozak & Salina Gov't Relations Services

The Committee, Board Chairman - Bill Candelori, Board Member - Ed Sasso and the Executive Director - Brian Armet discussed Kozak & Salina's Gov't Relations Services request to renew their Contract at a reduced rate of $3,000 a month ($1,000 for State Lobbying and $2,000 for Federal Lobbying), reduced from their previous service contract of $5,500/month. The discussions revolved around the need for these services (no federal stimulus money and the State Legislature is not in session), the value, and tight budgets and the need to curtail expenditures. The Committee decided that they wanted Kozak & Salina to meet with the Finance Committee to discuss their services and directed the Executive Director to arrange this meeting.

7) Nitrogen Upgrade

The Committee, the Board Chairman, Board Member - Ed Sasso and the Executive Director - Brian Armet discussed the Nitrogen Upgrade, not moving forward on the Nitrogen Upgrade, Middletown, wet weather flows from Middletown, and if we do not go ahead with the Nitrogen Upgrade and take in Middletown the physical impacts and cost impacts to accommodate Middletown's normal and wet weather flows. The Executive Director was directed to update the financial costs of these upgrade options for review by the Committee.

8) Related Business and Staff Updates

The Executive Director reported that the Nitrogen Credit Purchase Line Item will be considerably under budget due to two factors: the cost of a DEEP nitrogen credit is projected to increase from $4.59/credit to $5.10/credit a 11% increase; and The District's nitrogen removal has not been good due to the longer than normal cold spring influent water temperatures and wet weather flows.

Adjournment:

Mr. Amodio moved, Mr. Sienna seconded, and the committee approved unanimously to adjourn at 6:30 PM.