good morning my name is jim williams i'm a selectman this year i'm serving as chairman of the board of selectmen i'm joined by my colleague adam dice also a selectman and he's in his first year but soon to be in the second year he's also chairman of the light board which we thought was a good accommodation i think it's more well i think you've done a great job and i thank you i appreciate the fact that you were able to step up to new and eleven when the light board meeting happened yeah exactly room we have a few community announcements number one is talk of the town presented by the vision twenty one implementation committee scheduled for march twentieth from seven pm to nine pm at the general middle school at the auditorium and for information available through facebook at facebook dot com slash meet belmont sort of a series of ted talks by belmont residents second would be for all the local news you need less than thirty minutes be sure to tune in to belmont journal media centers new weekly news program it airs on fridays at ten pm and sundays at five thirty pm wednesdays at nine thirty pm and thursdays at nine pm on comcast channel nine and verizon channel twenty nine should also note that we have books in bloom coming up this coming weekend which is you pardon me for a moment is the at the library this all this weekend the floral interpretations of books on display friday march second seventy nine is the opening the set reception saturday march third is our town our history our library history intertwined media exhibit from ten am to four pm and sunday march fourth is the family birthday party the library turning one hundred fifty from one till three pm and then lastly as always the memorial day parade will be held on may twenty eighth two thousand and eighteen rain or shine you  where did you do your homework in high school where i do my homework going to school at home i was in my at the library and i always feel peaceful when i go away brad like the town library it's amazing to me there's hundred fifty years old so craig is going to go over the with me and that i'm the review of the two thousand and seventeen financial statements and we're doing this for the public primarily because the people at the table have seen them and we understand them what we're going to do is we're going to do as we did last time we're going to use the accrual financials  because that's the best way to manage the town in my opinion and and i i'm not alone on that because it tells you what your accrued accounts receivable are and it tells you what your accrued of payables are and it also the independent auditors make a report to the honorable board of selectmen which is mark adam and i and then there is a management discussion an analysis which is written in reviewed by the auditors floyd and i have lobbied to change this because it's really hard to read for a novice i think and i've spent two years with craig talking about it but like everything else in town government there's all these rules right has to be written a certain way and has to that dialogue has to say a certain thing so you can read it  but i think the best way to understand the town is simply to go to this thing called the basic financial statements page fourteen fifteen sixteen and and then we'll talk a little bit about footnotes to the financial statements because that's where the real information is aside from the the financial reports on fifteen sixteen and seventeen now for the people in this room we have passed out those three pages so i invite you to fall the follow along and then susan what do we do for the public at home with regard to this is it on the screen ok on the web on the town website so for those of you who are watching from home even though this is an odd hour you can go to the town website and click on women's meeting pac ok is that on the cover page or how do you get there all right so go to the selectmen page and then click on the selectmen meeting packet ok so now we're raising a go i think we should say first that we're talking about as of june thirtieth two thousand and seventeen which was eight months ago these statements have been out before now but when were they fin myself ok so this is as of june thirtieth last year we are currently operating in what's called fiscal two thousand and eighteen and as of june thirtieth two thousand eighteen will be heading into fiscal two thousand and one thousand so that's the way it works it's not calendar year it's fiscal year ok so this is a statement of the town's net position and it's it has its essential e a balance sheet and it reports government activities and business type activities in the business type activities for belmont are the light company the sewage company and the  water company everything else is reported under governmental activities ok so what can we say about this craig what are our total assets well government again this this schedule is broken out between as you just mentioned your business type with your and to prize funds in governmental soul for governmental we have total assets of two hundred thirteen million dollars and for business type activities total assets of one hundred forty two was call a point seven million right now for those who are not familiar with accounting there are two things one is called current assets which are assets that turn over within a year yes and the other non current assets which are assets that do not turn over with within a year so we have cash an equivalence of forty million and we're going to talk about that in a minute on the town side we have investments of twenty million we're going to talk about that in a minute and then the rest of the assets are kind of i hate to use the word trivial but that's how i would think of it if i were an analyst because almost everything is under a million dollars except for intergovernmental which is two and a half million and we'll talk to that but the continent current assets get more significant because those are where our capital assets are there are two so we're going to go back up to the top on the current assets where is all this money the forty million dollars well it's essentially sitting in the various bank accounts that the town treasurer maintains  and again it's there's a lot of municipalities use what we call pulled cash so there's a few main bank accounts for those activities that aren't required to have their own bank account and then those accounted for on a monthly basis within those statements right now when we met we talked about there are two is a footnote there's a page in here that goes where that is yes the audience is not going to have it neither is the public but if you could get us to that on certain gabby's and such it's just different information that's required to be presented to allow the reader to understand the forty million in the twenty million that we were seeing up front and it sort of gives a breakdown of the investments breakdown of the veriest insurances and such that the town mike carey we got in there deposits both f d i c as well as any other collateral  to page forty two so it just gives some different information as far as the liquidity inside of the various types of investments as a town is carrying all of which are essential ly you know u s government backed as well as some equities and money in money markets so the other thing that's interesting about that footnote is that that includes the investments of the retirement fund is that yes it does however it is broken out separately so on page thirty eight and thirty nine you'd see at the bottom a thirty eight it'll show towns investments and at the top of thirty nine it'll show their retirement systems investments by the different categories that they are in ok so i see ok so the the forty million that's all right and those are spread amongst the different fund all among the different funds in there provides the town with liquidity which is appropriate for a company of the size of two hundred million dollars so there's no there's no fluff and there it's all funds that are used to pay our bills and when do i'm going to stop for a minute and say that mark polow selectman wage and vice chair has joined us thank you now we're we're going to skip deferred outflow of resources as we will skip deferred inflow resources because that has to do with an accounting convention that primarily related to the pension funds and it's it's a complicated discussion it's not material amounts of money because as you can see it's seven million of assets three million of liabilities are deferred inflow and the net is four million so it's not going to make or break the town and if somebody wants to pursue that with me or i'm not going to offer floyd or cheater but if you want to pursue that with me i'll be able to get you an answer to any question you have now we're going to go on to current liabilities and our current liabilities are craig the largest i numbers in current liabilities realistically excuse me relate to  bonds and notes payable due within the next year as well as an accrual for the what we all i b a n are incurred but not reported health claims so it's just the timing of when you know i fall and break my am today it takes x amount of time for that paperwork to follow its way all the way through insurance and make it back to the town and so there's and the crew at year end based on the third party  ministry there of what's in the pipeline and that would be the about a million seven and as you mentioned most of the other guys are de minimus if you will where you know there's o my abilities tax refunds which is your appellate tax board cases people you know that are file with the appellate tax board and most of the other stuff is you know pretty small all of us still some landfill closure out there a career interest that type of thing and you warrants payable really just at that again these are at fiscal year end so at fiscal year end we have various warrants that are being run at y rend to pick up and essentially count for the budget for fiscal seventeen and sometimes there's just a timing difference between when the cash leaves the door and the recognition of the expense of that's why you warrant payable as governmental entities call it are up a little bit there and that's really all that's in no car no i think the important thing about total liabilities is that the two largest liabilities that the town has are other post employment benefits which is health care for all of our employees as health care for our retirees and that includes the teachers whereas the pension fund does not include the teachers the net pension liability at sixty four million for the town is for town employees it does not teachers because the teachers pensions are covered by state pension fund i also w to say about total liabilities in total assets is that these numbers are recorded at cost which is an accounting convention so these these financial statements are not marked to market so for example if the investments have increased such like that all right so some people have said well the market value of the town's buildings are much greater than the cost but that's not how you think either on an accounting stand which damn thing ok so then we get down to the total net position of one point four million dollars which is arguably low for a company of this size if you have two hundred million in assets and two hundred fifteen in liabilities you would like to have a little more of a net position however  we can say that if you well we're not going to say that now but in any case a million four years is low for a company of this size now we're going to go to business type activities and it's the same story except and i'm going to speed up a little bit here craig thank you for being here though because i don't know everything about this or one hundred forty two million in total assets what's important there is the fifty eight million in which is the property plant and equipment largely of the light company although that's broken out in this report later and then there's a note payable which is twenty seven million and that relates to the blair pond  there in assets that is all cash that we had received from the issuance of of two bond offerings yes the long term bonds for the for the like company in the short term bonds for the for the light company so we paid off the twenty seven million and then i believe the bond payable number will go down as well as a result of the  ever source payment to the town of forty five million i think that's what you were talking not in these numbers what we're talking prospectively now my report to the public for the selectmen is that this pond substation and then subsequently once it was completed assets that we had finance for ever source were paid to the town by ever source and then so when we see this next year that that whole balance she in my book backwards because what it does is it summarizes the town expenses and then charges for services operating grants and contributions capital grants and contributions and then it comes up with a net revenue number in the case of primary government which is the government activities from the previous page yes the  is one of the things that we talked about in terms of understanding these statements are they welcome that's just the way it is i mean at some point you have we have to accept that right so sometimes you see government which would be the town referred to as government activities and other times you see it referred to as primary government but it's the same doing the same thing so we have a third one hundred thirty two million in expenses for primary government i know a lot of people think the town's budget is one hundred million but through it's also reported that way in the audit report that's the order to financial statements are our budget is what is really how we manage the town we've talked about this in the right times but you know that's that's why we have one hundred seventy eighty million dollars in debt on the balance sheet for employee benefits because we do it that way and we shouldn't do it that way so i'm going to continue the expenses that the town spends are one hundred thirty two million whether people believe that or not lloyd were here he would tell you that he writes checks for that same story for the business type activities so the total primary government expenses are one hundred sixty seven million and the reason it's reduced is because of we collect forty seven million in charges for services almost forty million of which is the fees that are paid for water sewerage and light and then we receive operating grants and contributions mostly for education and capital grants and contributions of one million to so in this schedule that get you down to primary government expenses of ninety six million because of those revenue sources with regard to charges for services we can't charge more than it cost for services because we can't we're not supposed to be making money so for example if the clerk's office issues licenses certificates there's a charge for each one a lot of us are putting our dog licenses together and we can't charge twenty five dollars for a dog license if it costs fifteen to make so those services those charges offset the cost of government as we can do it then when you get over to the next page which is the other revenues we find out that our real estate taxes and personal property taxes are eighty five million in this year and when you add the rest of the motor vehicle and other excise taxes in the community preservation surcharge and grants and contributions not restricted to specific programs you end up with total general revenues and transactions of ninety five million which in this fiscal year resulted in a six million dollars shortfall meaning we spent six million more than we took in and the our net position at the beginning of the year was seven and a half million and now it's down to a million for that's on the primary government activities with regard to the  to the business type activities we actually made five million dollars on those activities and paid nine hundred  forty nine million most of that is a transfer a pilot payment that's made to the town of six hundred fifty million dollars so the change in that position two thousand six hundred fifty thousand i say million  forty four million and of years forty eight so about forty eight million of the fifty million net position of the town is in the enterprise funds i think we can also say that some of you know that the ok committee had great success in revaluing our liability there and so this hundred  eighteen so as you and i have discussed the thinking now is that that number's going to go down and to ninety to eight as you say yes so that would be about a thirteen million town net position actually to increase next year all else being equal and this is the main change i would agree with that statement yes right so we'll get it back up to maybe maybe not ten million but close i mean we have certainly again by do the math of enterprise yes we have a sixty eight million swing that's going to occur on the governmental side right so all is being equal it i think that that seems like a pretty fair statement you know so that's that's still in my opinion not an adequate position for a town of this size but it's certainly going in the right direction  know what can we say about the pension plan because i think it's important and then we may have to stop unless you have other comments what can we say about the pension plan in an with regard to how it works in other words those were both unfunded mandates from the past yes yes and it's it's always hard for companies and governments to understand unfunded mandates and how you should respond to them or could respond to them but the idea is that basically they give you thirty years to fund the obligation fully and if you begin at year one you get what i call a second source of income which is the investment income and this is the way it's working for the pension fund because where is that footnote in this because i want to just mention that to the public you know eighty nine is other post employment benefits thanks to most of the pensions is on seventy seventy one seventy two funding the percentage funded which that's not a required at that schedule doesn't get reported any longer but with the combined to look through the what we call the r s i schedules and the footnote information we can gather all of the information that we're looking at in regards to the pension the funding what it's called holding for investments and that type of thing now with regard to this page seventy one this this kind of explains what i think the public needs to understand the service cost is is that's how much the town has to put in to keep   current is that the idea yes ok so that's three point seven million interest is the amount of money that we receive from the portfolio is that correct yes and that's a significant amount of money it's a twelve million dollars magic verify the interest in this top portion is injures based on past service costs that hasn't been fully funded yet ok so this is the reverse it's to reverse because then the second net position that's where the investment income on the assets comes into play ok so the service cost is the current cost the interest is the cost of the unfunded  hundred sixty five million to one hundred seventy one now we get now we get to employer contributions which is eight million and that's that unfunded liabilities schedule payment that we make we have member contributions because employees do contribute to the fund and then we have net investment income lost this year was a good year it was seven million and then again they have the ten million in benefits and minute expenses which are attributed to the retirement board in the net increase or decrease in the fiduciary position then was it was almost seven million an increase so what happens then is that that seven million was added to the assets that we that the retirement board has under management and we now have ninety five million instead of eighty eight which is where we had it last year you are right so unfortunately we're still only fifty five percent funded we do have a plan that will fully fund this obligation by twenty twenty nine we do not have the cash flow in the system to pay for the increases that are scheduled in that that plan but we are working on it and  currently it takes that eight million for the town does that include the enterprise fund as well in this what we know yes this is the system as a whole and everybody current so that eight million is going to go to twelve million through twenty twenty nine and we the eight million now represents around ten percent of our real estate taxes because the real estate tax is around eighty three million now on the the budget cycle i'm going to talk to my two colleagues about hopefully changing that so that we can related to cost instead of free cash what else can you say about these financial well i  towards which that that twenty twenty nine had the state allows you to go all the way up to twenty forty now so that's great that the town's been able to manage their investments and such to hit that goal at twenty twenty nine at which time the are going into the pension plan can be diverted into the open plan which i understand is the town's goal at this point there is currently no mandate in massachusetts to fun in there are viewing their financials there now not just looking to say does the time of belmont have any money put aside for this op ed liability again there's not a requirement they're now starting to compare u appears the various communities in the area that would be the town of belmont spears and are saying ok x this disc community has has been putting away some money they have a plan they're working towards it has belmont done anything so i don't believe what we've seen anyways is that they're not looking simply to say one has thirty million dollars put aside for a liability ok great will wall going to keep them at a good they're looking for more for management's perspective on the liability how are dressing it what's our long term plan is there a plan in place and comparing that to your peers which is ben you know going favorably for the town well i think what happened is as a result of the reduction of the liability from two hundred million to ninety two that the so called strategy that the town had which unfunded which was always been my problem with it actually pays out the old have liability by twenty forty one so that is going to help us in terms of the rating agencies it also helps us in terms of planning because we don't have to increase the twelve million further but there are other things that we can do to control that cash flow and to control that liability that i think we are going to pay attention to this year certainly and going forward  if you have an unfunded mandate for me the important thing is it's like saving for your kids college you know you can start when they're eighteen or you can start when they're one and if you put money away in there when you  get this additional stream of income from interest which is which is what we have here we had almost seven million dollars of interest that came from the money that's been set aside and we don't have to tax people for that because the assets are but if you don't some are funding that liability then then you're paying a dollar for dollar when when the liability comes due for ok anything else well i'd simply like to say the town again received an unmodified committee and you finance team everybody is very involved in the audit and takes pride in their responsibilities to draw the town so we're able to all work together to hopefully assist the town  town i'm going to go on a limb and say between cities schools school districts either types of governmental entities over one hundred one hundred twenty year that we we we work with ok so we're in good hands package that you oh i said my views are on my back ok so you know it's i hope that didn't hurt your back to bring that over ok thank you very much adam but i want to serve on the permanent audit committee we've been through this very detailed already and i've heard craig go into this much more detail than today so i think we've got a lot to do today martin ok all right i can thank you so much for coming on early i hope you found a parking place absolutely sorry about that you have no problem oh we're