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FINCOM 20250226 Minutes
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Canton Finance Committee Minutes Voted on: 3/5/25 801 Washington Street Vote: B-0-0 Canton, MA 02021 Finance Committee Meeting Minutes February 26, 2025 Virtual Meeting Finance Committee Members Present: Dave Clough, Dan Cole, John Leonetti, Emilio Mauro, Maureen Menconi, Kristin Mirliani, Reuki Schutt and Cindy Thomas, Finance Committee Members absent: All Finance Committee members were present at the meeting. Guests Present: George Comeau, Chair, By -Law Modernization Study Committee (Article 18) Alan Hines, Trustee, Revere & Son Heritage Trust Ellen Jones, Recording Secretary Tracy Kenney, Town Clerk Lisa Lopez, Article 27, Canton Residents to Move the Vote Randy Scollins, Finance Director Jennifer Wexler, Article 27, Citizen Petition, Canton Residents to Move the Vote Call Meeting to Order: Mr. Mauro called the virtual meeting to order at 7:00 p.m. Mr. Mauro introduced the Finance Committee members and the guests that were present at the virtual meeting. New Business: Dlscussion —FY26 Budget Request - #544— Revere & Son Heritage Trust —Quasi Department of the Town Mr. Scollins displayed meeting documents on the Zoom screen that were provided by Mr. Hines. Alan Hines, Trustee of Revere and Son Heritage Trust Corporation (RSHTC), confirmed that the Finance Committee members received all of the documents he emailed: R&S FY26 Budget Requests for Town's Essential Services, his PowerPoint Presentation, the Audited Finance Statements for year ended June 30, 2024 and the IRS Form 990 Tax Return of Organization Exempt from Income Tax for July 1, 2023 through June 30, 2024. Mr. Hines stressed the point that all of the financials for the RSHTC do not go through the Town's financial accounting system. Mr. Hines stated that RSHTC is a Quasi Department in the Town with the authority to request town appropriations for their budget and capital needs similar to how other departments in the Town request funding for their budgets. The RSHTC is a non-profit 501(c)(3) Trust that raises funds from grants and charitable donations. Mr. Hines slated that the funds they raise are to build the Museum and to support the operations of the Museum and not to supplement Town appropriations. The RSHTC accounts are in the custody of the Town Finance Director, Randy Scollins RSHTC Insurance — Mr. Hines stated that RSHTC's insurance has been underfunded for the past 3 years. The cost of their insurance will increase once the $2.0 million of museum exhibits are added to the policy. Mr. Hines has requested a meeting with the Town Administrator to develop a way to have the RSHTC's insurances paid from the Town's Fixed Expense Insurance Budget #946 Town Insurance. Mr. Hines stated that most of the budget expenses being requested are basic appropriations for RSHTC to function as a Town department to manage the RSHTC properties and that it was always assumed the Museum would pay for itself. None of their FY26 requests relate to the Museum. RSHTC Audit — Mr. Hines stated that he was under the impression that the Town's Auditor would be performing the RSHTC yearly audit. He was shocked that the Town Audit did not include the RSHTC audit. The RSHTC Auditor, Michael Geier CPA, was impressed with the RSHTC's very complex Excel spreadsheets that were created by Randy Scollins and modified by Mr. Hines since. However, the Auditor stated to Mr. Hines that if the Trust does not have a closed accounting system next year they would not be willing to do their audit. Mr. Hines asked every member of the Finance Committee to write a letter to the Select Board and the Town Administrator requiring the RSHTC to have an annual audit. FINCOM 20250226 Final Minutes WRS DNC EM.docx Page 1 of 9 3/1/25
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RSHTC Audited Financial Statements for 2023-2024— The RSHCT had $686,085 of revenue, $175,977 of expenses for an increase to Net Asset of $510,108. He stated that since they started they have added a Net Asset Value of $902,224 to the Town. The RSHTC receives most of their revenue from grants, Mass Cultural Grant, state earmarked grants, Town appropriations and funds raised outside of the system. IRS Form 990, Part IX — Mr. Hines showed a slide with the following appropriations that die thinks the Town should be covering (these figures are per the 2023-2024 Audited Financials): Salary and Payroll Tax: $36,770 (requested budget $25,000) Office and Technology: $8,087 (requested budget $10,000) Professional Services: $19,350 (requested budget $15,000) Occupancy and Cleaning: $7,521 (requested budget $12,200) Insurance: $9,002 (requested budget $9,000) Programs (Heritage Day, Children's Concert): $5,000 (requested budget $5,000) Total expenses 2023-2024: $175,977 Requested Budget: $76,200 Town Appropriations: $66,200 There was $25,000 of expenses that were reclassified because the services provided were considered part-time employees. Mr. Hines showed a slide that compared the FY2024-2025 Budget for Town's Services vs. Actual Costs. The total FY25 requested budget is $117,788, approved FY25 budget is $88,783 with the FY25 expenses of $112,898. Approximately $24,155 of expenses were funded with donations. Mr. Hines complained that they did not realize the amount of taxes associated with their payroll expenses and that if the payroll had "run" through the Town's system these added expenses would have been adjusted in the base budget. RSHTC IT and Office Supplies — For FY25 the Trust's IT cleaning and Office Supplies is estimated to be $8.35 over the $2,000 budget covered by the Town. For FY26 the Trust is requesting a $9,500 increase for an IT budget of $11,500. Mr. Hines stated that their request is for basic needs for their employees including Zoom, Microsoft Office, Adobe, the same software packages that are provided to Town departments. Because they were so short in certain areas of the budget, they were forced to cut down on cleaning costs of the Barn to cover other costs. They need to get $24,000 of charitable contributions that he thinks the Town should cover. FY26 Budget Request — RSHTC - Mr. Hines made reference to the Executive Office budget that had a $24,957 increase (due to contractual obligations) to their FY25 Voted Budget of $574,503 for a new FY26 Base Budget of $599,460. Mr. Hines claims that if the RSHTC financials had been "running through" the Town's financial system they would have had an adjusted base that was $42,631. He complained that the RSHTC did not have the luxury of receiving an adjustment to their base budget for FY26 like the Town departments received. If their budget had received an adjustment to the base budget, their budget would have increased from $33,500 to $58,800. Due to the enormous amount of time being spent by the Town's Finance Director/Treasurer Collector, Randy Scollins, on the handling of the accounting records for the RSHTC, it was eventually transferred over to retired Actuary Alan Hines. Mr. Hines stated that the RSHTC needs to have a plan whereby they have an individual that understands the books and to obtain accounting help to assist them with the process. Mr. Hines is hopeful that the Finance Committee will vote to have the RSHTC to have their books audited next year. Mr. Hines stated that It looks like they are only asking for an approximately $50,000 increase to their budget, but if their books were on the same books as the Town's books the only thing they are asking for is a new employee. Most of the other Items are contractual obligations that should have been covered by the Town's Fixed Costs Budget and an adjusted base budget. Their real ask is for a new employee but it looks like they need a $50,000 increase because they do not have the luxury of an adjusted base budget, A Finance Committee member slated that she was a bit confused with regard to all the expenses that are being identified and exactly how much revenue is being raised and how that revenue is being distributed. Mr. Hines replied that most of the revenue being received is through charitable contributions but that they need to put enough in their financial statement to be able to run the Museum. The 501(c)(3) was created to help fund and run the Museum. They are also using some of the revenues generated by the Northern Spy Restaurant. The Select Board have control over the restaurant revenue account and approve RSHTC's expenses out of this account. Approximately $600,000 of Norfolk County ARPA grant money that was received by the Town was specifically earmarked and used to pay for the RSHTC's expenses for the Museum design costs. The Town also has been approving capital requests to the RSHTC that have been used for such items as the purchase of a shed, a public restroom installation, and granite monument signs for the Heritage Park. The RSHTC declares FINCOM 20250226 Final Minutes WRS DNC EM.docx Page 2 of 9 3/1/25
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these items as assets and accounts for the depreciation of them in their financial statement. The net asset value of approximately $1 million includes the value of the Museum design, the design of the pavilion, the shed, and other items purchased with those donations. The Finance Committee member stated that the funds the RSHTC is raising is not really covering any of the RSHTC's G&A costs. Mr. Hines replied that the money they are raising has gone back into fundraising expenses, running a few programs and part of running the Museum. Mr. Hines stated that last year the Revere and Son Heritage Board of Directors donated more money than the Town appropriated to them to run their operation but that some of the Board's donations were specifically designated to be spent on programs or on certain things. Mr. Mauro referred the members to the Financial Statements prepared by Michael Galer, CPA. Mr. Mauro stated that the RSHTC audit should continue because It Is a Quasi Department of the Town and money from Town funds is being brought into it. Mr. Scollins stated that it is obvious that an audit of this operation should be done. His expectation as the Fiduciary of these funds is that there will be another audit and any aspect of the funds that flow through the Town are indeed audited. Mr. Hines stated that Mr. Scollins is on the RSHTC's bank account and that he can get downloads of any statements at anytime. Mr. Scollins requested that Mr. Hines send him reports similar to those he prepared monthly for the RSHTC Board on a periodic basis. Mr. Hines will provide to Mr. Scollins the spreadsheet that Mr. Hines will continue to maintain. Mr. Hines stated that there will always be differing opinions on what and how much the Town will pay for this museum project. Mr. Hines got on the Trust because he did not want his tax dollars going to building a Museum and that not many of his tax dollars have come through the Trust. It is Mr. Hines's opinion that the basic services that he is asking for the RSHT budget, whether this was a Museum or the buildings were being used as a Community Center, there is not an employee in the Town that is providing services or managing these properties and that it is solely the RSHTC responsibility. A Finance Committee member inquired about Mr. Hines's statement made that the RSHTC does not have the luxury of an adjusted base budget. The Committee member does not think it is a fair comparison when looking at the other 32 tabs in his Finance Committee binder that they are evaluating as a Committee because the other 32 areas/departments of the Town government do not have the luxury of raising funds like a 501(c)(3). He asked why the RSHTC should have the benefit of an adjusted base budget and the benefit of additional budget for expenses when the Trust has the ability, as an independent fundraising organization, to generate revenue independently for this enterprise/budget, Mr. Hines stated that as a 501(c)(3) they are not allowed to supplement Town expenses and that was not how they were organized. They were organized as a 501(c)(3) to raise funds and operate a Museum. Mr. Hines further stated that someone at the Town should be managing these two important assets of the Town —the Museum and the Rolling Mill. The Finance Committee member continued by asking if the RSHTC does has a $510,000 surplus, why is the Trust asking for additional funds when the Profit and Loss Statements seems to be showing a surplus to handle the expenses of this enterprise? Mr. Hines stated that they could afford to pay for the expenses out of their charitable contributions. The Finance Committee member questioned that if there is a $686,085 of revenue, why can't the expenses be paid out of that amount. Mr. Mauro also pointed out that part of that RSHTC surplus depicted in the audit for FY24 had been ARPA funds from the county that are a one-time revenue source for the RSHTC. Mr. Hines stated that he would be happy to provide a breakout of the $686,085 and how much of that is able to be spent on operating expenses. He stated it would be a very small portion. Most of the $686,085 is related to the Norfolk County ARPA grant. Mr. Hines stated that the Trust has been able to build up their checking account to pay for many expenses. A Museum Director will be hired but will be paid out of the rental Income from the Restaurant. The Finance Committee member stated that it is inconsistent for the Trust to compare themselves to a small startup business but yet they want to be treated with the same accounting standards as a government agency. He respected Mr. Hines's comment that he did not want his tax dollars going towards the Museum but yet is asking the Committee to support the approval of funds for the Museum, which could only get greater in the future. He asked if the Town should not be in the business of buying property and running buildings if there Isn't a well developed plan for them. He asked if there are other towns that run museums that are faced with financial challenges. Mr. Hines stated that the concept of a museum was considered when the property was acquired with three options considered: a building for municipal use, a building for School administrative offices and a Museum. The Feasibility Study included information to run a Museum, which included Easton Museum as an example. Mr. Hines stated that the RSHTC is building a $10 million asset for the Town (using state, federal and corporate funds) and they will have raised $5 million to build out the Museum by the end of the upcoming fiscal year. The Finance Committee member thanked Mr. Hines for all the time that he is putting in for this project and appreciates his passion. FINCOM 20250226 Final Minutes WRS DNC EM.docx Page 3 of 9 3/l/25
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A Finance Committee member stated that the commitment has been made to the project but she agrees with the phrase that RSHTC is a Quasi Department of the Town. She stated that the site is beautiful and the work that has been done is tremendous but that every year RSHTC comes to the Town for funding and that she and some of the other Finance Committee members have trouble with the argument that this should be treated like every other Town Department. This does not mean that the Finance Committee or Town is not supportive of the Revere site and the Museum. Mr. Hines asked, "what would it take to have someone in the Town's Accounting Office to take over the managing of all the financials of the RSHTC?" A Finance Committee member stated that, if the Town were to commit to this, he believes that the Town's "back office' should take over all the handling of the RSHTC financial/accounting system. Mr. Cole commented that it Is difficult to view the total scope of the RSHTC. Having a Total and Comprehensive Financial Statement for the RSHTC, including financials from the Town of Canton's books and the books of the 501(c)(3), could be helpful when having to evaluate decisions with financial implications. Mr. Cole further suggested that the Town's Finance Operations should consider bringing the RSHTC into the Town's financial systems and to be supported by the Town's financial personnel. If the Town needs additional resources (personnel and equipment/software), they would be in the best position to make this happen and the risk of having one volunteer responsible for the RSHTC accounting would be eliminated. Mr. Scollins felt compelled to provide clarity. 1) It was stated that the Town does not provide any financial support for the buildings. That is an inaccurate statement. The Town is responsible for all of the exterior of both of those buildings, and is responsible for the mechanical systems in both of those buildings and there is an entire budget within the Parks and Recreation Department that is responsible for maintaining the entire park. There are a lot of Town resources that go into the operations of those buildings. 2) When Mr. Scollins was the Treasurer of the Trust he was providing a monthly statement to the RSHTC Board that captured all of the funding sources for the Trust and all of the associated expenses that were charged against those funding sources. He never could have sorted through the labyrinth that is the Revere and Son Heritage Trust's finances if he had not consolidated all of that onto one page with many supporting schedules. Mr. Scollins further stated he has not received anything to date since he left as the Treasurer that helps him to understand the finances of that operation at that level. Mr. Mauro stated that it would be beneficial to the Committee to understand how the $139,468 fits into the full RSHTC expenses and revenue streams and how it fits into the Trust as a whole and what percentage of the total expenditures that the Trust has are paid for by the Town versus other funding sources. Mr. Scollins requested some information from Mr. Hines who stated that he cannot do any more as a volunteer and that there is no one on their Board that can do the accounting work and that it is getting overwhelming for him to handle. If the $20,000 is not approved for a part- time position he will put a hold on the RSHTC article at Town Meeting. A Finance Committee member mentioned that he would like to see the RSHTC do more fundraising by hiring a professional fundraiser. The question remains as to who will own the Museum exhibits and who will Insure them. Mr. Hines stated that Representative Galvin is requesting $500,000 from the state budget for RSHTC. The RSHTC budget presentation ended at approximately 8:27 p.m. Mr. Mauro thanked Mr. Hines for the presentation and the start-up of these two assets of the Town. Discussion and Vote — Article 27 — Citizen Petition Article for Movina the Local Election Date Ms. Jan Wexler, presented a PowerPoint presentation (see meeting documents) to move the annual local election date from April to November. On November 12, 2024, the Move the Vote group (MTV) submitted a petition to the Select Board to permit a non -binding question to appear on the April 8' 1 ballot at which time the Select Board voted 3-2 against including the ballot initiative. A volunteer group of 30+ Canton voters collected 2,369 signatures in favor of a ballot initiative on the April 81, election ballot. In January 2025, the MTV submitted a warrant article for the May 2025 Annual Town Meeting (ATM). Some of the highlights of the discussion are as follows: • Article 27 is an article that will be considered at the ATM on May 12, 2025, but only if there is a favorable majority vote on the April 8, 2025, ballot question to move the vote from April to November. • if there are favorable votes at both the April 81° ballot question and the ATM Article, the Select Board would be allowed to proceed (but not required to do so) by filing a Home Rule Petition with the State Legislature to change the date of the local elections. Ms. Wexler stated that Senator Paul Feeney will champion the Home Rule Petition and seek to encumber additional funding for the Town Clerk's office if the Select Board decides to proceed with the Home Rule Petition. FINCOM 20260226 Final Minutes WRS DNC EM.docx Page 4 of 9 3/1/25