Finance Committee - 3/21/2018 Page 9
through, or is David Fredette going to do it? David Fredette City Treasurer is going to brief us on the CERT
account, the Capital Equipment Reserve Account, how it works, what the balances are and what is proposed in
the budget that you received the other night.
Alderman Klee
| just have one quick question. The CNI, that includes all businesses like a restaurant as well as all multi-units
greater than five?
Mayor Donchess
| think it’s great than four. So any condos, any single family homes, any multi-unit buildings, smaller multi-
building units, four or less, would be in the residential category. But anything residential greater than four
units, apartment complexes, larger buildings, nursing homes, other things like that, those are all in the
commercial and industrial category.
Alderman Klee
So large single unit buildings that they created different apartments, if they are over four?
Mayor Donchess
Right, so a six unit building is within the commercial and industrial. One sale that we talked about the other
night was the sale of the apartments up Somerset Parkway — 600 units were sold at $65 million dollars against
the $36 million dollar assessment. Now that was a disqualified sale so it is not included in the equalization
calculation but would have great relevance in terms of evaluating that category of properties by KRT. If there
are no other questions now, why doesn’t Mr. Fredette proceed.
Dave Fredette
| am the City Treasurer, Tax Collector. A brief overview of the Capital Equipment Reserve Fund, otherwise
known as CERF, on the second page in simple terms, just think of it as a savings account that the City has.
We have many of them, but this is one. It is strictly for funding equipment in this City. The CERF account has
been around in the City since the last 70’s. It was changed drastically in fiscal year 2010. Prior to that, what
used to happen was when a Department needed a new vehicle, like a fire ladder truck, about 40% came right
out of the Department’s budget and about 60% came out of the CERF account. What we try to do is fund this
more aggressively so the departments aren’t hit with those costs every year. Fire, Police and Public Works
always have vehicles, every year, that have to be replaced.
In 2015 we adjusted it a little more where now you actually see the list of equipment planned to be purchased
for that next year in the budget. So you get to see that and you get to ask questions on it. That was the
change made in 2015. The goal of CERF is to fully fund capital equipment vehicles. The majority of the
purchases are with cash and some bonds and there a few items through grants and trust funds. The grants
are mostly transit, the busses, a lot of that is through grants from the Federal Government. Trust funds are
usually related to the cemeteries, they also have vehicles. When we started this, Phase |, included the Public
Works Division, Fire and Police since they have most of the vehicles as you can see, they have about 245 line
items in the schedule. Phase II which was started a little later included the smaller groups like school, general
city departments, cemetery, purchasing, they all have much smaller needs and that total is about 16 line items.
What we try to do is a 10 year look at needs for each division and department. We review it annually with each
division, we actually meet with them and sometimes it’s more than once, especially when we deal with Public
Works, Fire & Police because, again, they have a lot on their lists. The amounts that are in there are not exact
they can be a little higher or lower when they go out to purchase. Anything that is over 10% from what is in the
budget that you see and approve, we have to notify the Board of Aldermen, they have to vote on that. Since
