🪙 Financial Committee 10-15-25 AI Recap

Below is a summarized version of the Finance Committee, organized by timestamps and speakers, focusing on key points raised during the discussion in Reading, Massachusetts. This summary condenses the discussion into major themes, speaker contributions, and decisions, avoiding excessive detail while retaining the essence of the conversation. Timestamps correspond to the video linked at the bottom.

🗓️ Finance Committee Meeting Summary

📅 Date: October 15, 2025
⏱️ Duration: ~2 hours 15 minutes
🖥️ Format: Hybrid (in-person Select Board room + Zoom)
🧑‍⚖️ Chair: Joe Carnahan 

👥 Members Present: Joe Carnahan, Emily Sisson, John Sullivan, Ed Ross, Mark Zarrow, Geoffrey Coram, Endri Kume, Joseph McDonagh
🏛️ Staff Present: Sharon Angstrom (Town Accountant), Matt Kraunelis (Town Manager), Jayne Wellman (Assistant Town Manager), Chris Cole (DPW), Chief Rick Nelson (Fire), others as noted
🎯 Main Topics: Bond rating and financial policy review, FY27 free cash usage vote, capital plan adjustments, town meeting article recommendations, and override planning

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🔹Public Comment

🕒 4:16–4:30 

• No public comments were made in person or via Zoom.

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🔹Liaison Reports

🕒 4:30–6:43 

• Killam School Building Committee (Ed Ross):
  • Exploring early site work packaging to improve cost and schedule efficiency. 
  • Project remains on budget and on schedule.

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Bond Rating & Financial Policy Review

🕒 6:57–28:32 

Bond Rating Risk

• Sharon Angstrom reported that dropping from AAA to AA+ could cost the town \$1.3 million in interest over the life of the loan (based on current rates and full \$85M borrowing). 
• AAA rating increasingly requires 15% reserves (not just 10%). 
• Reading’s reserves are currently at 14.8%, putting the rating at risk if free cash use continues at current levels. 
• FY27 is likely the last year Reading can maintain AAA without an override.

Financial Policy Review

• FINCOM requested a free review of town financial policies by the Division of Local Services (DLS). 
• Select Board will vote on the request at their October 21 meeting. 
• DLS provided a policy template; FINCOM may supplement it with peer community comparisons. 
• Sharon confirmed current policies are strong and have supported AAA rating, but updates may be beneficial.

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Vote: FY27 Free Cash Usage

🕒 28:32–54:55 

Options Considered

• 2.75% Operating Budget Increase: \$6.55M free cash 
• 3.00% Operating Budget Increase: \$6.75M free cash 
• 3.25% or higher: Not seriously considered due to reserve impact

Discussion Highlights

• Emily Sisson: Supported 3% to avoid school service cuts; difference from 2.75% is only \$200K. 
• Joe McDonagh & Ed Ross: Initially leaned toward 2.75% for fiscal discipline but supported 3% after hearing town and school collaboration. 
• Matt Kraunelis: Confirmed 3% is manageable for both town and schools; lower would risk service cuts. 
• John Sullivan & Geoffrey Coram: Supported 3% as override is likely regardless; cutting now wouldn’t delay it. 
• Committee Consensus: 3% is a balanced approach that maintains services and prepares for override.

✅ Vote Result

• Motion: Approve 3% operating budget increase using \$6.75M in free cash 
• Vote: 7–1 in favor (Joe McDonagh opposed)

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🔹Capital Plan Review

🕒 54:55–1:11:55 

Highlights of FY26–FY28 Adjustments:

• Added:
  • RMHS lighting control upgrade (\$200K) 
  • Parker MS auditorium lighting upgrade (\$230K) 
  • Fire truck cost increased to \$1.3M 
  • ALS defibrillator system (\$310K) 
  • Town/school building security server (\$80K) 
  • Turnout gear replacement (\$350K every 5 years) 
  • Town Hall elevator upgrade (\$325K)
• Deferred or Reduced:
  • Road paving and curb work reduced 
  • Several vehicles and equipment pushed to future years 
  • Facilities master plan moved to FY28

Inflation Impact:

• Equipment costs rising; assets with 10–15 year lifespans are being replaced after 18–20 years. 
• Sharon emphasized the need to balance capital needs with reserve preservation.

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🔹Town Meeting Article Recommendations

🕒 1:12:03–2:02:28 

Article 3 – Capital Plan

• Recommendation: Approved unanimously (8–0)

Article 4 – FY26 Budget Amendments

• Changes Include:
  • Health insurance adjustment (\$305K) 
  • Northeast Metro Vocational School tuition increase (\$240K) 
  • Rodent control baseline funding (\$50K) 
  • Reimbursement for RMHS radio amplification (\$50K) 
• Funding: \$355K from free cash + \$200K in additional state aid 
• Recommendation: Approved unanimously (8–0)

Article 5 – Transfer of Funds from Closed Capital Projects

• Proposal: Reallocate all leftover funds (~\$200K) to Killam School Building Project (longer borrowing term = greater savings) 
• Recommendation: Approved unanimously (8–0)

Article 6 – Prior Year Bills

• Bills:
  • \$3,245 to City of Woburn 
  • \$246.30 to Next Step Volunteers 
• Recommendation: Approved unanimously (8–0)

Article 7 – Municipal Veterans Assistance Fund

• Purpose: Allow residents to donate via tax/excise bills to support local veterans in need 
• Recommendation: Approved unanimously (8–0)

Article 10 – Town Forest Invasive Species Removal

• Request: \$50K from free cash 
• Purpose: Continue removal of invasive plants following tree clearing 
• Recommendation: Approved unanimously (8–0)

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🔹Report Assignments for Town Meeting

🕒 2:02:28–2:05:08 

• Article 3 (Capital): Geoffrey Coram 
• Article 4 (Budget Amendments): Endri Kume
• Article 5 (Transfers): Mark Zarrow 
• Article 6 (Prior Year Bills): John Sullivan 
• Article 7 (Veterans Fund): Joe Carnahan 
• Article 10 (Town Forest): Joseph McDonagh

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🔹Future Agendas

🕒 2:05:08–2:15:24 

• October 21: Select Board to vote on financial policy review 
• November 5: FINCOM to vote on senior tax exemption article for special town meeting 
• Override Planning: Committee to begin discussing mechanics, timing, and messaging in future meetings

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🔹Approval of Minutes

🕒 2:13:36–2:14:27 

• October 8, 2025 Minutes: Approved 7–0–1 (Endri Kume abstained)

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🔹Adjournment

🕒 2:15:31 

• Motion to adjourn passed unanimously

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✅ Key Outcomes

• FY27 Budget: 3% operating increase approved; \$6.75M in free cash allocated 
• Bond Rating Risk: AAA rating at risk without override in FY28 
• Capital Plan Adjusted: Inflation and urgent needs prioritized 
• Town Meeting Articles: All financial articles recommended unanimously 
• Financial Policy Review: Select Board to vote on DLS review request 
• Override Planning: To be discussed in future meetings

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