HomeMy WebLinkAbout2011-04-13 Finance Committee PacketF NCOM
Wednesday, April 13, 2011 at 8:30 PM
Town Hall Conference Room
Agenda*
8:30pm
Article 24 presentation & discussion
8:55
Finance Committee approach to Articles with insufficient data
9:00
Financial Update
9:15
Finance Committee Instructional Motion
9:30
Finance Committee Report to Town Meeting
9:45
Vote on Article 7 (updated Ch. 90 figure from state)
10:00
Update on Article 8 (Easements for sidewalk project)
10:15
Overview of FY12 Budget presentation to Town Meeting
10:30
Approve Minutes
> March 30, 2011
*Every meeting will also include an Open Session for topics not reasonably
-anticipated 48 hours in advance of the meeting.
JEAN DELIOS
Community Services Director /
Town o Reading Town Planner
16 Lowell Street Phone: (781) 942-6612
Fax: (781) 942-9071
Reading, MA 01867-2683 jdelios@ci.reading.ma.us
MEMORANDUM
To: Robert LeLacheur, Finance Director/Assistant Town Manager
From: Jean J. Delios, Community Services Director/Town Planner
Date: April 12, 2011
Re: Oaktree Development -Affordable Housing Trust Fund (AHTF)
I am writing to provide additional background regarding the request from Oaktree
Development for $400,000 from the Town of Reading's Affordable Housing Trust Fund
(AHTF). The funds are being requested to support the development of affordable
housing. An affordable housing restriction will be required that must be approved by the
State Department of Housing and Community Development (DHCD). This request is
based on Oaktree's stated need for the funds to carry out the project and will require a
joint agreement between Oaktree, the Board of Selectmen, and the Housing Authority.
We engaged the services of Housing Partners Inc (HPI) to review the financials
submitted by Oaktree Development in support of their request. Oaktree Development
has agreed to reimburse the Town for the cost of HPI's review. HPI has expertise in
Affordable Housing Financing among other things and has prepared a report included in
the attached. I also include the financials that Oaktree has furnished.
The redevelopment of the former Atlantic Supermarket, 30 Haven Street, is an important
project'that will be an anchor to both Haven Street and. High Street. It will increase foot
traffic throughout the downtown and promote Smart Growth. The CPDC approved the
80,000 square foot (plus underground parking) redevelopment proposal last September.
Approximately 20,000 square feet of retail will be built with 56 units of residential above
(11 of which will be affordable). This project is consistent with the Master Plan, Housing
Plan, and Economic Development efforts. As a rental project under the 40R zoning, the
Town of Reading will get credit for all 56 units in its affordable housing inventory
maintained by the State. If the development were to change to condominiums, the Town
would still be credited with 11 affordable units.
I hope that this helps to clarify the approach to this request. Please feel free to call on
me if I can assist further.
C: Peter I. Hechenbleikner, Town Manager
0-2--l
HOUSING PARTNERS, INC.
142 Galen Street - Suite B ' Watertown, MA 02472 (617) 924-7240 ° Fax (617) 924-7168
www.housingpartnersinc.com
Marvin M. Siflinger, Chairman msifling@housingpartnersinc.com
Eleanor G. white, President ewhite@housingpartnersine.com
Charles S. Eisenberg, Eisenberg Consulting: Affiliate cisenberg@housingpartnersinc.com
To: Peter Hechenbleikner and Jean Delios
Town of Reading
From: Charles Eisenberg, Eleanor White and Marvin Siflinger
Housing Partners, Inc.
Date: April 11, 2011
Subject: READING HOUSING TRUST GRANT
Analysis Prepared by Housing Partners, Inc.
INTRODUCTION
For many years, the Town of Reading has been attempting to implement
strategies which would improve the downtown business district. This culminated
in the recent establishment of a Smart Growth Overlay District under the
provisions of Chapter 40R. While that process was underway, Oaktree
Development, LLC of Cambridge, MA optioned the Atlantic Supermarket site at
30 Haven Street in Reading and began the redevelopment process.
Oaktree has now requested that the Town provide a $400,000 grant to assist in
the redevelopment of this site. It is their contention that without this grant the
project is not feasible. The Town, in turn, has asked Housing Partners, Inc. (HPI)
to determine if this request is justified.
As will become clear, HPI believes that the pro forma assumptions and
projections are reasonable, that the developer has proposed a reasonable
amount of profit, and that this project represents the type of development
envisioned by the Town when it passed the Chapter 40R District. However, we
also feel that the Town should benefit if this project is successfully developed and
that any financial contribution should be repaid, if possible, to be available to spur
other development projects in the future.
PROJECT DESCRIPTION
30 Haven Street is a .78 acre parcel of land at the southern end of Haven St.,
within a block of the Reading MBTA commuter rail station. It currently` houses the
Review of Oaktree Development Pro Forma for Reading Site
By Housing Partners, Inc.
April, 2011
Page 2
vacant Atlantic Supermarket. The parking lot located in the rear is owned by the
Town of Reading.
Oaktree proposes to demolish the existing structure and build a new, four-story
building. An underground parking garage will contain 75 spaces. The first floor
will have 20,000 square feet of retail space as well as the residential entrance
and common space. Above the first floor will be three residential floors containing
almost 60,000 square feet. While the October, 2010 appraisal anticipated fifty-six
one and two bedroom rental units, the current plan may be developed either as a
rental property or as condominiums. The financial projections provided to HPI by
Oaktree were for a rental property.
In accordance with the provisions of the Chapter 40R Smart Growth District
zoning, eleven of these units (20%) will be affordable to moderate income
families. Moderate income is defined as households earning less than 80% of
the Boston SMA (Area Median Income as annually established by the U. S.
Department of Housing and Urban Development).
The building will be steel-frame construction and will be serviced by several
elevators. Finishes will be of a high enough quality to accommodate a plan to sell
the units as condominiums either upon completion or at some future date.
According to the Bonz appraisal report, the 32 one-bedroom units are planned to
be 820 square feet while 24 two-bedroom units will be 1,385 square feet.
According to a March 30, 2011 memo from the developers to the Town Manager,
they will also allocate $50,000 towards the enhancement of the. adjacent
municipal parking lot.
HOUSING PARTNERS INC. METHODOLOGY.
The following report and its conclusions are based upon the information made
available to us by the Town and the Developer. This consists primarily of an
appraisal prepared in October, 2010 by Bonz and Company, Inc. as well as
information provided by Oaktree in a memorandum (which included a set of
financial projections) to the Town Manager dated March 30, 2011.
HPI has reviewed.the appraisal and the memorandum; and has analyzed both to
determine their accuracy. Due to the extremely short timeframe available for this
analysis, we have not done any project-specific independent research to verify
our conclusions, but have based them solely on prior knowledge of the area and
our general knowledge and experience.
In order to determine whether or not the feasibility of this development is
dependent upon the $400,000 grant, we first evaluated the assumptions and
Review of Oaktree Development Pro Forma for Reading Site
By Housing Partners, Inc.
April, 2011
Page 3
conclusions in four general categories: market; cost, financing and profitability.
We then did some additional financial analysis to verify the projections provided
to us, test their impact on feasibility over time and to determine how sensitive the
results are to variation from the projections and assumptions provided.
ANALYSIS
Cost
Several months ago Oaktree provided the Town with a set of financial
projections. In the previously cited current memorandum these were recently
revised. As currently proposed, the Total Development Cost of the project will be
$18,305,312.
The acquisition price of $2,647,000 is appropriate and $1,100,000 less than the
"as-is" value stated in the Bonz appraisal. A single number ($12,872,417) is
provided for the hard costs (which presumably includes a 5% contingency of
approximately $642,000). This equals $161/SF (not including the underground
parking), which is quite reasonable for a steel frame building.
Soft costs of $1,752,395 also appear to be reasonable. They include an
appropriate development fee of 689,000, which equals 4% of TDC.
In addition, there are Finance Fees and Mortgage Broker fees for Debt and
Equity. The Finance Fees are reasonable for the size of the construction loan.
Mortgage broker fees are $98,000 for the Debt and $116,000 for Equity. There is
no information identifying who received these fees or the services for which they
were paid.
While more detail would have been useful, the Total Project Cost and major line
items are reasonable for the planned project.
Market
According to the Developer, the rents and rent-up assumptions used for their
projections were based upon the Bonz appraisal as well as their own
assessment. Our analysis of the Bonz appraisal found it to be competent,
complete and consistent with other market studies and reports. Rent rates,
capture rates and absorption estimates were based upon well-prepared
disaggregated demographic forecasts and the analysis of realistic comparables.
In addition, while the report is six months old, the market has not changed
significantly since it was prepared.
An examination of the 30 Haven Street development indicates that the
Developer's plans are consistent with the Bonz appraisal and competitive within
d5
Review of Oaktree Development Pro Forma for Reading Site
By Housing Partners, Inc.
April, 2011
Page 4
the Primary market area. This applies to rents, rent per square foot, unit size and
amenities. The location in downtown'Reading is untested for this product and
price point, but the anticipated absorption rate as reflected in the lease-up budget
takes this fact into account.
Based upon our evaluation, the market assumptions used for this project and its
financial projections are reasonable at this time.
Financing
Oaktree has proposed that 30, Haven Street be financed with $4,900,000 of
equity, $13,000,000 of construction loan, and a $400,000 grant from the Town.
The construction loan can be extended into a permanent loan with a five year
term, a 25 year amortization period and a rate that today would be 6.75%.
Alternatively, the Developer also has a commitment from the Massachusetts
Housing Partnership "...to provide alternative permanent financing (less
principal/better amortization and lower interest rate)." From the information
available to HPI, there is no clear rationale for the selection of financing source.
The debt/equity ratio is normal for the current financial market as is the interest
rate. Presumably the permanent financing has not been locked in because either
the Developer believes he can get better terms at some time in the future or due
to the uncertainty as to whether the units will be rented or sold.
Return on Investment
Presuming the cost, market and financing projections are reasonable, the need
for the $400,000 grant would be justified either because the Developer cannot
raise those funds from other sources or because adding it to the equity
contribution will render the projected project return on investment unacceptable
to the investor. ,
While we understand that the Developer has stated that the last $400,000 cannot
be raised from the lenders or investors, no corroboration has been provided. In
addition, while 20% of the units will be affordable, the Developer does not appear
to have made a serious effort to acquire the $400,000 from State or Federal
sources who routinely provide grants for such projects.
To determine the impact on profitability, HPI ran some financial models testing
sensitivity. For assumptions, we used the Oaktree pro forma: $18,300,000 in
project cost, $785,353 residential net operating income; $370,800 commercial
net operating income; and a five year, $13,000,000 balloon loan with a 25 year
amortization period and a 6.75% interest rate. We then ran cash flow models (for
a rental project) with a sale at the end of the fifth year of stabilized operations.
o
Review of Oaktree Development Pro Forma for Reading Site
By Housing Partners, Inc.
April, 2011
Page 5
To determine the sale value, we applied a capitalization rate to the fifth year net
operating income (presuming a 2% increase per year) derived by blending the
residential and commercial capitalization rates contained in the Bonz report in
appropriate proportions, and deducted the outstanding debt.
The result was a Return on Equity of 5.85% and an Internal Rate of Return of
30.5%. The ROI is relatively low for a project of this type while the IRR is
relatively high. This reflects the fact that most of the value in this pro forma
comes from the sale of the property at the end of the fifth year rather than from
the interim cash flows.
If instead of receiving a $400,000 grant from the Town, the equity contribution
were increased by $400,000 (something which it is important to note that the
Developer insists is not possible), the ROI drops to 5.4% and the IRR to 28.35%.
It is critical to recognize that these projections are only as good as the
assumptions on which they are based and the amount of data available. In this
case, the available data was minimal and the estimated sales price, which
accounts for so much of the Internal Rate of Return, is the most speculative part
of the analysis.
Risk
This analysis must account for two kinds of risk: timing and market. This analysis
is being done based on estimated construction costs, projected rents and
absorption periods and estimated operating costs. The construction cost may be
higher (or lower) when an actual contract is signed and real rents and operating
costs may be quite different when the project is actually completed. The longer
the period of time between the projections and stabilized operation, the greater
the uncertainty; and thus the risk.
The other risk in this project is the market risk. Particularly as regards the
residential units, this is the first project to test the downtown Reading market for
units of this type in this price range. All the comparables in the Primary market
area are in more suburban locations. While projects of this type have been
successful in similar locations, 30 Haven is something of a first mover.
Thus, in a fluid and uncertain environment, the Town of Reading is being asked
to assist the developer in managing the overall risk entailed in developing this
site. As shown in the conclusion, HPI believes that this is not an unreasonable
request, as long as the Town is positioned to receive some benefit if the project
is-as the Town hopes-successful. In that situation, the funding should be able
to be revolved to support further priority development in Reading.
5
Review of Oaktree Development Pro Forma for Reading Site
By Housing Partners, Inc.
April, 2011
Page 6
CONCLUSION
Based on the information available, HPI cannot'conclude decisively that 30
Haven "needs" a $400,000 grant from the Town of Reading. We note that none
of the information provided indicates that the Developers or investors will receive
an unreasonable profit; it is also difficult to conclude at this time that the
$400,000 is critical to project feasibility. At this stage in the project process, a.2%
difference is well within the range of uncertainty which must be applied to the
projections. However, as the first project proposed under the provisions of the
Smart Growth Zoning District and the first residential project to be developed in
downtown Reading in several decades, a public contribution would not be
inappropriate if, as stated above, the Town will also benefit if the project
succeeds. We will be working with Town staff to work out repayment terms that
will assure that the Town benefits and that funds will be available if possible to
support development in future years.
HPI therefore recommends that the Town of Reading provide the project with a
$400,000subordinate loan. This loan should be the last funding contributed to the
project, and its remaining in the project following completion should be contingent
upon an independent cost certification by a recognized expert. Further, in the
event of default, the loan would be payable without any accrued interest. In the
event of project success; however, the loan and accrued interest should be
required to be repaid upon sale or refinance if a rental project, or from the
proceeds of the last two condominiums sold if a for-sale project. Finally, the loan
should have a term of ten years, at which time the principal and interest should
be due and payable.
6
0)
Memo
To:
Peter I-lechenbleikner
cc:
jean Delios
From:
Paul M. Ognibene
Date: ,
March 30, 2011
Re:
S400,000 I lousing Trust Grant
Peter:
Despite numerous delays to die closing which was previously anticipated to be in December, we
finally secured deb( financing last Friday and are now readv to formalize our grant txqucst.
As a follow-up to our phone conversation from earlier today, Pve prepared this memo to address
point-by-point. the various questions raised by I lousing partners, Inc.
L w1mt is the project?
Our development plans call for demolishing t:he former Atlantic Supermarket and
redeveloping the site into a mixed-use development consisting of 53 residential units, 20,000
square feet of retail space, and a 75-space underground parking garage.
2. What are the sources of funds to develop the project?
The current project pto-forma budget estimates $18.3 million in total development cost
(please see attached, "Budget Overview' up from the $18.0 million estimated in October
2010. The project will be capitalized as Fe:>llows:
4-.9 million 27 Equity (Developer / Partners)
$$13.0 nullion 71 Debt (Lnteiprise Bank)
S 0A million 2'!/i, Grant (Town of Rcaduig)
$18.3 nullion
As no additional equity or debt is available to us, the Town's contribution is an essential
component try the project's viability. Without it, the project would be unable to proceed.
3. Is the residential component rental, condominium, or both?
When we initially put the parcel under agreement, we had intended the project to be for-sale
condominiums. Subsequently, the market shifted dramatically in favor of rental units.
Today, condominiums are gradLIally gaining; momentum :(fain.
We've designed the building with premium finishes with the intention of selling the units as
condominiums but will reevaluate where the market is in a year from now. From a pro-
fornia perspective, we've underwritten the units from both a rental and for-sale
condominium perspective.
0
4. What is the breakout of building costs and hots- were they derived?
Hard construction costs are estimated to total $12.9 million and were derived by our general
contractor. / estimating department. Specifically, costs are estimated as follows:
Site 01,90 million (actual G(,: estimate)
Parking / Foundation $ 2.25 trillion (estimated tt $30,000/space)
Retail $ 2.00 trillion (estimated a $100 ps0
Residential S 7.75 million (approx .$130 psf-modular construction)
Total $12.90 million
5. Whit comes under the category ofneighborhood improvements?
We've allocated 550,000 toward enhancements to the adjacent municipal parking lot. "lltese
expenses are now included in the GC: budget.
G tf'hat is the JOVO lee?
The operating entity, Oak-R(F 30 Haven LLC, has silpicd a development agreement with
KNO 1.LC. In exchange for the fee, KNO will provide various development services.
7 ghat are the debt financing terms?
We have a $13.0 million construction loan facility with a 24-month maturit},: interest only
paymctits; Prime plus LOM/o with a 5.00° floor.
We have the option to extend into permanetlt financing for an additional five years; principal
and interest payments based on a 25-year amortization: FHLB rate plus -2.75,,4 with a 5.75/o
floor.
We have a written commitment Crom the Massachusetts I lousing Partnership (NI1-1P) to
provide alternative permanent financing (less principal / better amortization. and lower
interest rate).
Conipletioti of the project and repayment of all debt has been guaranteed by the three KNO
partners, Arthur Klipfel, Gwen Noyes, and Paul Ognibene.
Regarding tirathce-related charges, the bank's commitment fee was $131),000 and commercial
mortgage brokerage fees totaled approximately S200,000.
8. What is the Operating Budget?
Please sec attached pro-forma operating budfct from which the bank performed its
Underwriting.
9. How valid are the rents?
Pro-format rents are based on the bank's appraisal and our own assessment. We believe that
the forecasted rents are representative of the market and have backed our convictions by
investing nearly $5 million into the project.
10. Will tenants p;v their otvn utilities?
Yes, both market-rate and affordable tenants will pay their own electricity and gas bills.
Water will be provided by the Landlord.
OAK-RJF 30 Haven LLC
Budget Overview
Acqutstlon
Broker
Closing Costs Misc
Legal
Property
Trust Funds
Acqulstfun - Other
Total Acquistion
Finance
Appraisal
Bank Commitment Fee
Banklaspectlans
Total Interest Expense
MHP
MHP Reimbursement
Mortgage broker
Debt
Equity
Mortgage broker-Other
Total Mortgage broker
Finance • Other
Total Finance
Hard Cost
Total Hard Cost
Soft Costs
Accounting
Total Architecture +MEP(Greenllne)
Civil Engineering
Contingency
Development Fees
Environmental Engineering
Geotechnicai Engineering
Inspecting Engince0fricl In GC)
Insurance (Owner's)
Landscape Design
Lease Up Costs
Total Legal
Marketing
Other Consultants
Pre-Construction Utilities
Property Tax
Survey
Traffic Engineering
Soft Costs - Other
Total Soft Costs
Total Expense
Tonfidential'
Reading Proforma.03302011.T6wn Sheetl
3/31/2011
Reading Budget -
0,00
7,000.00
12.000.00
2,628,000.00
6.00
0.00
$ 2,647,000.00
45,000.00
S60,Otl0.00
2f,500.00
35,900.00
689,000.00
7.900.00
22:100.00
0.00
62.500.00
5.000.00
115.000.00
58,800,00
$ 12,872,417.00
50.000.00
10,000.00
5,000.00
38,295.00
19,000.00
•1,100.00
0.00
$ 1,752,395.00
10,000.00
130,000.00
14,000.00
663.500.00
22,000.00
-22,000.00
98,000.00
118,000.00
0.00
216,000.00
0.00
S 1,033,500.00
$ 18,305,312.00
Pago t of 1
OA
30 Haven Street
Reading, Massachusetts
56 Units & Retail
Proforma Operating Statement
Cross Residential Income:
/Unit
Market Residential Income:
$1,024,800
$19,300
Affordable Residential Income:
$158,088
$2,823
Market Residential Vacancy:
5.00`yo ($51.240)
($915)
Affordable Residential Vacancy:
2.50%, ($3.9.52)
($71)
Total Rental Income:
$1,127,696
$20,137
Parking Income:
$28,500
$509
Effective Gross Income:
$1,156,196
$20,646
Less: Operating Expenses:
Management Fee:
2.501% $28,905
$516
Administration:
$5,288
$94
Repairs & Maintenance:
$34,240
$611
Utilities:
$41,440
$740
Water & Sewer:
$19,600
$350
Real Estate Taxes:
$170,000
$3,036
Insurance:
$31,420
$561
Janitorial:
$23,100
$413
Landscaping:
$5,650
$101
Reserve:
$11,200
$200
$370,843
$6,622
Residential Net Operating Income:
/SIB'
Retail Income: $412,000 $20.60
Retail Vacancy: 10.0t!%1 ($41,200) ($2.06)
Retail Net Operating Income: $370,800 $18.54
CIV)
Oaktree Development lands financing for Reading project ( Boston Business Journal Page 1 of 1
This Was Printed From Boston Business Journal
Sponsored by:
Nuttef
13~1
Real Estatl% Round Up
Business news essential to Boston's leaders.
financing .
Boston Business Journal
Date:.Wednesday, April 13, 2011, 1:54pm EDT
Oaktree Development of Cambridge has landed $17 million in
construction and equity financing to advance its mixed-use development
at 30 Haven St. in Reading.
The financing consists of a $13 million loan from Enterprise Bank of
Lowell and an equity investment from Concentric Real Estate Group, an
affiliate of RJ Finlay & Co. of Milford, N.H. The funding was arranged by
the Boston office of Goedecke & Co. LLC.
Once home to Atlantic Supermarket, the development site is slated to
house a new 53-unit residential structure with roughly 20,000-square-feet
of first-floor' commercial space.
Related:
Banking & Financial Services, Commercial Real Estate, Residential Real
Estate
< Older posts
http://www.bizj oumals. com/boston/real_estate/2011 /04/oaktree-development-lands-fmancing.htm... 4/13/2011
~~M Ydf
4,J) or-7, LIVy S mk 414
Town of Reading
One Year
One Year
One Year
Revenues - Details
Current
Changes
Projected
Changes
Projected
Changes
41131117:22 PM
FY - 2011
FY - 2011
FY - 2012
FY - 2012
FY - 2013
FY - 2013
Property Taxes
Tax levy (within levy limit)
49,274,826
3.7%
50,878,533
3.3%
52,406,747
3.0%
New Growth
362,768
-34.4%
250,000
-31.1%
250,000
0.0°%
Tax levy (debt exclusion)
2,086,631
-1.0%
2,059,719
-1.3%
2,031,369
-1.4%
Abatements and exemptions
526,683)
-17.5%
(539,850)
2.5%
553,346
2.50/c
Total Property Taxes
51,197,542
3.3%
52,648,402
2.8%
54,134,769
278%
Other Local Revenues
Motor Vehicle Excise
2,450,000
-2.0%
2,500,000
2.0%
2,500,000
0.0%
Meals Tax
140,000
100.0%
150,000
7.1%
150,000
0.0%
Penalties/interest on taxes
145,000
-16.8%
145,000
0.0%
145,000
0.0%
Payments in lieu of taxes
315,000
8.7%
315,000
0.0%
315,000
0.0%
Charges for services
1,450,000
-6.7%
1,475,000
1.7%
1,475,000
0.0%
Licenses & permits
156,000
18.9%
156,000
0.0%
156,000
. 0.0%
Special Assessments
3,000
-4.8%
10,000
233.3%
10,000
0.0%
Fines
130,000
-17.5%
130,000
0.0%
130,000
0.0%0
Interest Earnings
400,000
-33.3%
400,000
0.0%
400,000
0.0%
Medicaid Reimbursement
70,000
-82.5%
70,000
0.0%
70,000
0.0%
Total Other Local Revenues
5,259,000
-9.5%
5,351,000
1.7%
5,351,000
0.09%
Intergovernmental Revenue
State Aid
12,493,308
2.6%
11,250,000
-10.0%
11,250,000
0.0%
Federal ARRA
350,000
-58.5%
0
-100.0%
0
0.0%
MSBA
462,036
0.0%
462,036
0.0%
462,036
0.0%
Total Inter ov't Revenues
13,305,344
-1.3%
11,712,036
-12.0%
11,712,036
0.0%
Operating Transfers and Available Funds
Cemetery sale of lots
25,000
0.0%
25,000
.0.0%
25,000
0.0%
Sale of real estate.funds
300,000
-7.7%
300,000
0.0%
250,000
-16.7%
Reading Ice Arena Authority
95,000
100.0%
95,000
0.0%
95,000
0.0%
MSBA payments
696,990
11.3%
720,070
3.3%
720,070
0.0%
RMLD earnings distribution
2,171,880
-0.7%
2,205,957
1.6%
2,250,076
2.0%
Enterprise Fund Support
756,069
0.0%
756,069
0.0%
774,971
2.5%
Sick buy-back Stabilization
9,615
Overlay surplus
204,827
-47.5%
150,000
-26.8%
150,000
0.0%
Total Transfers & Available
4,259,381
-1.2%
4,252,096
-0.2%
4,265,117
0.3%
Free Cash & Savings
1,253,000
1500,000
11000,000
TOTAL REVENUES
75,274,267
2.60%
75,463,534
015%
76,462,922
1.320A
A
No,
Al
A2
A3
X
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Office of Representative Brad Jones
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House Republican Deader
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1VMEMORANDUM -
To: Peter Hechenbleikner, Reading Town Manager
From: Representative Bradley H. Jones, Jr.
Copy: BOS, Fin Com, School Committee
Date: 4/13/2011
Subject: Fiscal Year 2012 House Budget Proposal
Today, the House Budget proposal for the Fiscal Year 2012 (FY12) was released. I wanted to take a
moment to share with you a few of the budget matters that will affect the Town of Reading especially,
Chapter 70 funding, Unrestricted General Government Aid and the Special Education Circuit Breaker.
• Chapter 70 - Chapter 70 fiuidnig is the primary source of state aid to public elementary and secondary
schools. In the proposed FY12 House Budget, Reading would see the same level of funding that was
appropriated in the Governor's proposal, $9,488,181. This is an increase of $50,665 more than the
FYI I funding for Chapter 70 aid for the town.
• Unrestricted General Government Aid (UGGA) - Due to the current economic conditions facing
Massachusetts, Reading, similar to all Commonwealth communities will see an overall decrease in
UGGA for FY12. Reading would receive a total of $2,546,818, which is a decrease of $198,264 from
FYI 1.
FY 2011
FY 2012
Difference
Chapter 70
$9,437,516
$9,488,181
$50,665
UGGA
$2,742,082
$2,543,818
-$198,264
Total Estimated Receipts (All Accounts)
$12,179,598
$12,031,999
-$147,599
In addition to the items detailed above, the House Budget proposal recommends the same allocation for the
Special Education Circuit Breaker as the Governor, $213,119,160. Funding for the Circuit Breaker at this
level would be an increase of $80 million for the account overall.
As always, I look forward to working with all of you to work through these difficult times to preserve the
core programs and services that are vital to the community. Please feel free to contact my office with any
comments or concerns at (617) 722-2100.
0
Massachusetts Department of Revenue
Division of Local Services
FY2012 Local Aid Estimates
Education:
Chapter 70*
School Transportation
Charter Tuition Reimbursement
Offset Receipts:
School Lunch
School Choice Receiving Tuition
Sub-Total, All Education Items
FY2011
Cherry Sheet
Estimate
9,437,516
0
9,326
READING
FY2012
Governor's
Budget (H1)
FY2012 HWM
Budget
Proposal
9,488,181
0
5;828
General Government:
Unrestricted General Government Aid
Local Share of Racing Taxes
Regional Public Libraries
Police Career Incentive
Urban Renewal Projects
Veterans' Benefits
State Owned Land
Exemptions: Vets, Blind, Surviving Spouses
& Elderly .
Offset Receipts:
Public Libraries
Sub-Total, All General Government
9,488,181
0
5,822
14,404
16,921
16,921 x
0
0
0
9,461,246
9,510,924
9,510,930
2,742,082
2,543,818
2,543,818
0
0
0
0.
0
0
20,525
20,112
0
0
0
0
143,126
130,686
130,686
35,985
35,853
35,853
104,748
103,108
103,108
23,021
23,727
23,727 X
3,069,487
2,857,304
2,837,192
Total Estimated Receipts 12,530,733 12,368,228 12,348,122
*FY2011 Chapter 70 does not include State Fiscal Stabilization Funds of $50,665. Jt ~1 ) 25z, CeD QSS«'A 91
~3a M(3TA-
~
Q
County Assessments:
County Tax
Suffolk County Retirement
Sub-Total, County Assessments
State Assessments and Charges:
Retired Employees Health Insurance
Retired Teachers Health Insurance
Mosquito Control Projects
Air Pollution Districts
Metropolitan Area Planning Council
Old Colony Planning Council
RMV Non-Renewal Surcharge
Sub-Total, State Assessments
Transportation Authorities:
MBTA
Boston Metro. Transit District
Regional Transit
Sub-Total, Transportation Authorities
Annual Charges Against Receipts:
Special Education
STRAP Repayments
Sub-Total, Annual Charges
Tuition Assessments
School Choice Sending Tuition
Charter School Sending Tuition
Essex County Tech Sending Tuition
FY2012 Local Aid Assessments
READING
FY2011
FY2012
FY2012 HWM
Cherry Sheet
Governor's
Budget
Estimate
Budget (1-11)
Proposal
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
7,053
7,286
7,286
6,950
7,154
7,154
0
0
0
15,580
13,980
13,980
29,583
28,420
28,420
470,185
472,315
472,315
0
0
0
0
0
470,185
472,315
472,315
2,989 10,183 10,183
0 0 0
2,989 10,183 10,183
0 13,500 13,500
50,155 61,422 61,452
0 0 0
Sub-Total, Tuition Assessments 50,155 74,922 74,952
Total Estimated Charges 552,912 585,840 585,870
For information about how the estimates were determined and what may cause them to change, click: Local Aid Estimate Program Summary.
1~)
Page 1 of 2
LeLacheur, Bob
From: Boatwright, Bill
Sent: Wednesday, April 13, 2011 11:03 AM
To: LeLacheur; Bob
Subject: RE: BOA
Bob,
Yes to Fred attending the meeting last night after being sworn in by the clerks office. He did not return under any
conditions so yes to his intent on staying through his term.
With respect to the overlay account, the BOA reached a decision last night. They are not releasing any funds this year
given the potential need of funds for pending court cases. I will draft a letter to Gail today or tomorrow in this regard.
Bill
William L. Boatwright MAI
Town Appraiser
Town of Reading
16 Lowell Street
Reading MA 01867-2601
Main: 781-942-9027
Fax: 781-942-9037
E-mail: bboatwright(a,ci.reading.ma.us
Web: www.readhigMA.gov
Please note New Town Hall Hours effective June 7, 2010
Mon. 7:30 am to 5:30 pm; Tues. 7:30 am 7:00 pm; Wed. & Thurs. 7:30 am to 5:30 pm; Closed Friday,
From: LeLacheur, Bob
Sent: Wednesday, April 13, 2011 10:14 AM
To: Boatwright, Bill
Subject: BOA
1) Did Fred show up?
2) Is he staying?
3) Any word on overlay?
Thanks,
Bob
Bob LeLacheur
Assistant Town Manager/Finance Director
Town of Reading
16 Lowell Street
Reading, MA 01867
(P) 781-942-6636
(F) 781-942-9037
Please note new Town Hall Hours:
Monday, Wednesday and Thursday: 7:30 a.m - 5:30 p.m.
Tuesday: 7:30 a.m. - 7:00 p.m.
Friday: CLOSED
4/13/2011 1~
TO: Finance Committee - i! 5 t5, U
From: Bob LeLacheur, Assistant Town Manager/Finance Director a:S o
Date: Wednesday, April 13, 2011 a 2'
Re: Town Manager's Proposed 2012 Budget
FYI 2 Budget Overview
Update on State Aid $4,000 to line K2 Community Services expenses ($2,650
As of yet there has been no early aid resolution from the for animal disposal costs and $1,350 for professional
legislature. It is anticipated that we will have information on the development);
House Ways and Means Committee budget proposal on 4-13-11,
and that within a week after that the Senate will adopt a local aid
resolution. To prepare for this possibility, internally staff has
discussed FY12 budget priorities with the prospects of additional
State Aid. Here is that consensus, in the order that the line items
appear in the warrant report:
1.) The first $150,000 of additional funds (operating budgets):
$47,000 to ,the Town budgets as follows:
$6,500 to line 192 Finance expenses for technology ($3,500
for PCs and $3,000 for parts & supplies);
$6,500 to line K1 Community Services wages (to increase
the 0.8 FTE clerical position to 1.0 FTE for document
storage, license & permits, and customer service);
q)® Page 1
$30,000 to line M92 Public Works expenses (for pothole
repairs supplies and some new equipment to allow patching
in the colder weather);
$103,000 to the School budget in line U99;
2.) The next $125,000 of additional funds (accommodated costs):
$50,000 to line E99 for Vocational Schools;
$75,000 to line M92 for DPW fuel expenses;
3.) Any amount over $275,000 of additional funds:
Reduce the use of free cash in supporting the FY12 budget.
7%7-104
o
~`u32 x4-7
Instructional Motion from Finance Committee for Annual Town Meeting 2011
DRAFT
Move that Town Meeting instruct the Board of Selectmen, Town Manager, and School Committee/School
Department to explore the following revenue enhancement ideas recommended by Reading citizens at the
Financial Forum held on September 15, 2010 and report back to Town Meeting and FinCom with by October 2011
with:
• Specific actions taken (organizations consulted, timelines).
• Comments on feasibility of opportunity
• Follow up tasks to achieve additional revenue
The goal of this motion is to include all feasible opportunities in the revenue budget for FY 13. FinCom would
appreciate interim monthly updates beginning in June 2011 until the ideas are either implemented or the
responsible Board/Manager votes to take other action on them.
1. Town Manager:
a. Additional cell tower opportunities
b. Advertising/Billboards (including electronic billboards)
c. Expanded rental of space/increased rental fees
2. School Committee/School Department:
a. Expanded rental of existing space
b. Naming rights for buildings and other property
3. Board of Selectmen
a. Increase parking fees at Depot
b. Sponsoring of town trees, benches, lights, etc.
c. Sale of Town land (Oakland Road)
Submitted by the Finance Committee
Background:
The Finance Committee sponsored a series of Financial Forums last fall to encourage citizens to bring forth their
ideas on revenue enhancement as well as cost reductions. At the September 15, 2010 session, approximately 50
citizens and board members attended and offered their revenue enhancement ideas, then voted their priorities.
More than 25 ideas were generated and received votes. Each of the items listed above was among the top voted
items (7+ votes for each). Many of the cost reduction opportunities identified at the October 27, 2010 Financial
Forum have been incorporated into the FY2011 budget proposal.
The goal of this motion is for the Boards, Town Manager and Schools to actively pursue these opportunities and
implement all feasible revenue enhancement measures. FinCom would like to be informed of their status on a
regular basis using the evaluation criteria on the attachment developed by the Committee to help assess the
opportunities. Our goal is to keep these ideas front and center to help provide additional revenues that benefit
the Town. (Categorized list -of revenue opportunities from Financial Forum attached.)
61
Revenue Enhancement ideas from Reading Financial Forum September 15, 2010
Categorized List Evaluation Criteria
Opp Cost /
Being Easeto Implement Ongoing Community Unintened Who Should FinCom
Next
ONE TIME REVENUE
Sale of Town Land (Oakland Rd-last big parcel)
25
High
Medium None
TBD
Varies by lot Selectman
ONGOING REVENUE
1 School and Town Land: Opportunities
49
Cell Towers
20
Yes Medium
Low-Medium
TBD
TMgr/Selectman
Advertising/Billboards
15
Yes
Medium
TBD
Selectman/SC
Wind/Solar Power Generation and Sell Back
9
No
RMLD
Sell Timber in Town Forest
5
Yes
DPW/Town Forest Committee
2 School and Town Facilities: Opportunities
24
Rental of existing space
15
Yes
Low
Low
Selectman/SC
Naming Rights
9
No
Selectman/SC
3 Fees: Introduce New Ones
18
Pay as You Throw Trash Fee
6
No
Selectman
Preferred Parking Fees at RMHS.
6
No
Schools
Billing At Fault Accidents
5
No
Public Safety
Wireless air rights billing
1
No
4 Economic Development
17
Low-Medium
Positive
Town Economic Development/PR
12
Yes
Selectman
Tax Incentives for New Business
5
No
Selectman
5 New Initiatives
16
TBD
TBD
Grant Writers to Bring in
5
No
Selectman/SC
Endowed Positions at Schools
5
No
Schools
Road Races Program
3
No
Recreation
Reading Branded Credit Card
2
No
Selectman/SC
Remove state gas tax on Town
1
No
Legislators
6 Fees: Increase existing
12
Low-Medium
TBD
Parking Fee at Depot
10
Yes
Selectman
Raise Parking Tickets & Fines / Parking Meters
1
Yes
Selectman
Increase RMLD annual in lieu of Tax Payment
1
Yes
Selectman
Increase Ice Arena payments
0
Yes
Selectman
7 Gifts/Donations/Sponsorships
12
Low
TBD
Sponsoring Town Trees, Benches, Lights, etc.
7
Yes
Selectman
Focused Approach for Gifts/donations
5
No
Selectman/SC
8 Expand Service Offerings
6
Low-Medium
TBD
Offer Ambulance Services to Other Towns
6
No
Selectman
Total Votes
179
'~)l
To. Bob LeLacheur, Assistant Town Manager/Finance Director
From: George J. Zambouras, Town Engineer
CC:
Date: April 13, 2011
Re: Article 7 & 8 Update
Article 7 - Chapter 90 Funds
We have received the final numbers for Chapter 90, our FY12 apportionment is $ 597,663. 1 have
attached the Governor's letter indicating the final amount.
Article 8 - Easement Authorization for Safe route to Schools Proiect
The easements are required for the Safe. Routes to School Infrastructure Program Project (SRTS). The
SRTS project is a federal program where all design and construction cost are 100% federally funded
and is administered through MassRides of the Massachusetts Executive Office of Transportation. The
program creates and enhances safety for school pedestrian and bicycle access.
The Parker Middle School project received approval in 2008 and includes improvements to:
• Woburn Street and Temple Street Intersection - sidewalks and handicap ramps
• Westerly side of Washington Street from Woburn Street to Prescott Street - new sidewalk and
curb; and handicap ramps at the intersections of Woburn and Prescott,
• Easterly side of Sunnyside Avenue from Prescott Street to Fairview Avenue - new sidewalk and
curb; and handicap ramps at the intersection Prescott and Fairview
The temporary easements are required to allow construction up to the edge of the right of way and to
permit minor grades changes along properties that may result from the project. The minor grade
changes typically involve re-grading lawns, driveways and walkways so private properties will blend into
the new sidewalk. Temporary easements will be required along all properties where the sidewalk will be
installed.
In addition 1 permanent easement (at the intersection of Washington and Woburn St.) will be required
to permit room for the sidewalk. Presently a public sidewalk exists on private property and the
easement will simply officially take a portion of the property that has been historically used for the
roadway layout.
In all 20 properties are involve, with 1 parcel receiving a permanent and temporary easement. The .
federal and state regulations require that the easements are required prior to the start of construction.
All costs associated with acquisition of easements are the responsibility of the Town. The State will be
holding the design Public Hearing for the project this Thursday and would like to be in construction this
summer. Plans are basically at 100% so they will easily meet this schedule. Since it appears the only
• Page 1
potential hold-up would be the acquisition of easements, we have pushed the easements to this Spring
TM.
The easements are obtained under the eminent domain provision of MGM which permits property
owners to be compensated for the value of the easements. Residents could offer the easements,
however they would still have up to three (3) years to change their mind and request compensation.
Because of this, Town Council has recommended the Town formally acquire the easements.
In addition to meeting other federal and MassDOT requirements, under MGM the easements:
• Must be appraised
• Individual meetings must be held with each owner
• Owners must be given individual reports.
I have received three quotes for the appraisal work ranging from $10,950 to $15,600. The firm of
Donald S. Welinsky, MAI, Appraisal & Advisory Consultants has been authorized to start and has been
instructed to complete an estimated value for all 21 easements on or before April 25th. As soon as the
estimated easements costs are available I will forward them to you.
Funds from the roadway capital funds will be utilized to pay for the appraisal work and easement
acquisitions. While I have not received any firm indication from any of the appraisers I believe the
easements would most likely be in the range of $100 to $300 each.
9 Page 2
CLY
COMMONWEALTH OF MASSACHUSETTS
M w OFFICE OF 'T'HE GO V ERN®R.
e State House, Room 360, Boston MA 02133
(617) 727-3.6.00 FAX (617) 727-5291 .
0 J° p .
DEVAL L. PATRICK
GOVERNOR 4
TIMOTHY P. MURRAY
LIEUTENANT GOVERNOR
March 31, 2011
Mr. James E. Bonazoli, Chairman
Town of Reading
16 Lowell Street
Reading, MA 01867
Dear Mr. Bona oli:
We are pleased to inform.you that the Chapter 90 local transportation aid funding for Fiscal Year
2012 will total $200 million statewide. This is. . a 29 percent increase from the previous fiscal year,
representing the highest level of funding. ever apportioned for local transportation aid.
We recognize the importance of this capital spending to each municipality across the
Commonwealth, especially during' these difficult. economic times. This' is 'why, we worked with our
partners in the Legislature to 'ensure that additional state funds are. available -to support transportation
infrastructure improvements. This will not only deliver immediate economic benefits but ensure the long.
term viability of our infrastructure. We pledge to remain supportive of the Chapter 90 program and your
local transportation needs. We expect legislative authorization for the FY 2012 Chapter 90 program within
the next several days.
letter certifies that the Tomm of. Reading's Chapter 90 apportionment for Fiscal' 2012 is
$597,663. his apportionment is automatically incorporated in your existing 10-Year C.90 contract which
sot Weli site http www.massclot.state.ma.usl
was signed in FY2008 and is ,posted on the 1VIa sD
highway/municipalasgx. ,
We look forward to working closely with your community to ensure the continuing success of the
Chapter 90 program in the years to come.
Please feel free to contact Matt Bamonte at (617) 973-7647 with any questions you may have
regarding the Chapter 90 prograin.
Sincerely,
Governor Lieutenant Governor
2Y
OFP 4A
Finance Committee Meeting
March 30, 2011
0 ea` V Conference Room, Reading Town Hall
,NR
The meeting convened at 7:00 PM in the Conference Room at Town Hall.
FINCOM Members Present: Chair Marsie West, Hal Torman, Mark Dockser, Bryan Walsh,'Kevin Leyne,
David Greenfield, Francis Fardy, Barry Berman and Paula Perry.
Members Absent: None.
Also Present: Assistant Town Manager/Finance Director Bob LeLacheur, Superintendant of Schools John
Doherty, Director of Finance and Operations Mary DeLai, School Committee members Karen Janowski,
Chris Caruso and Chuck Robinson, Town Engineer George Zambouras, Town Meeting member John Arena,
Kara Deyermenjian (Reading Patch), and recording secretary Abby McCabe.
There being a quorum the FINCOM meeting was called to order at 7:06 PM.
The FINCOM Chair explained that this was the final meeting in the budget process for the Committee to
vote on the remaining budget items and warrant articles. The Superintendant and School Committee are here
tonight to update the Committee on the vocational school application process.
Budget:
Dr. Doherty explained that there are 4 students interested in attending the Minuteman Regional Vocational
school next year for majors not offered by the Northeast Regional Vocational school. Four students will most
likely be the maximum number of new students enrolled next year but there is an application process and the
students must be accepted to enroll. Transportation to the regional schools may need to be paid for by the
Town. Mr. LeLachcur explained that the Northeast Regional's budget was recently submitted to the Town
Manager and it is lower than what we had expected.
On a motion by Mr. Walsh, seconded by Mr. Dockser, FINCOM recommended $369,343 in line E99 of
the FY12 budget for Vocational Education by a vote of 9-0-0.
On a motion by Mr. Torman, seconded by Mr. Berman, FINCOM recommended $35,902,307 in line
U99 of the FY12 budget for School Department and Facilities by a vote of 9-0-0.
Discussion on line U99 School Department & Facilities:
The School Committee explained that 2.4 teachers would be lost without the $103,000 that was originally
included in'the School Committee's approved budget but is not included in the Town Manager's budget. Mr.
LeLacheur explained that returning money to the school department would be a staff recommendation if
State Aid comes in higher than expected. FINCOM discussed the possibility of using free-cash to cover the
difference but Mr. LeLacheur explained that FINCOM can only spend FINCOM's reserve funds and Town
Meeting needs to approve the use of the Town's free-cash reserves. Mr. LeLacheur recommended not using
free-cash until after the State Aid figures are finalized. Moving Town Meeting to a date later in the spring
wouldn't necessarily make much of a difference because the State does not always have a budget by June
and there are often time sensitive items on the April Annual Town Meeting Warrant.
On a motion by Mr. Leyne, seconded by Mr. Torman, FINCOM recommended $699,877 in line V99
for Town Facilities in the FY12 budget by a vote of 9-0-0.
Mr. LeLacheur explained that the MWRA water and sewer charges have increased as shown on page 5 of the
meeting handout. The assumptions for the FY 13 - FY 16 budgets are that wages are up 2% and expenses up
8% which is higher than usual while the net water fund will likely increase by 3%. The $40 storm water fee
for a single family house will likely stay at the $40 until the two river drainage projects begin. Mr.
LeLacheur also noted that the street sweeper purchase was moved from the FY12 budget to the FYI I budget
because the Town can get a good deal if purchased this fiscal year.
On a motion by Mr. Dockser, seconded by Mr. Fardy, FINCOM recommended $377,826 in line Y99
for the Storm Water Fund by a vote of 9-0-0.
Water Enterprise Fund:
Mr. LeLacheur explained that the Selectmen haven't set the water rates yet and will not do this until after
Town Meeting in May.
On a motion by Mr. Torman, seconded by Mr. Walsh, FINCOM recommended 55,295,343 in line W99
for the Water Enterprise Fund by a vote of 9-0-0.
On a motion by Mr. Greenfield, seconded by Mr. Berman, TINCOM recommended $5,147,890 in line
X99 for the Sewer Water Enterprise Fund by a vote of 9-0-0.
Warrant Articles:
Mr. Fardy volunteered to write the report for ArticIc 4 that was voted on during"Monday's meeting.
Article 5:.
Mr. LeLacheur reviewed the General Fund Wages and Expenses on page 18 of the handout and explained
that Article 5 pertains to FYI I budget amendments such as the street sweeper that was taken out of the initial
FY 12 budget to be purchased this fiscal year for a lower price. There is a decrease in the school department's
energy costs because of the performance contracting. Mr. LeLacheur noted that public safety (fire) wages are
often unpredictable and Mr. Greenfield suggested reviewing overtime and regular pay after Town Meeting is
over.
On a motion by Mr. Berman, seconded by Mr. Dockser, FINCOM voted to recommend Article 5 as
written by a vote of 9-0-0. Ms. Perry to prepare the report.
Article 10:
The FINCOM reviewed the list of surplus vehicles that are scheduled to be disposed of in FY12. One
member asked why the 2007 Crown Victoria was on the list and Mr. LeLacheur expected it was because of
high mileage.
On a motion by Mr. Torman, seconded by Mr. Walsh, FINCOM voted to recommend Article 10 as
written by a vote of 9-0-0. Mr. Leyne to prepare the report.
Article 11:
The Committee reviewed the Capital Improvement Program detailed on page 23 of the meeting handout. The
total capital budget for FY12 is $948,000.
On a motion by Mr. Fardy, seconded by Mr. Dockser, FINCOM voted to recommend the Capital
Improvements Program as presented in Article 11 by a vote of 9-0-0. Mr. Torman to prepare the report.
S
Article 15:
Ms. DeLai explained that Article 15 authorizes the School Committee to enter into school bus transportation
contracts that would allow extensions of up to 5 years as opposed to the current contracts of 3 years. They
believe this would allow more competitive bids to be received. In response to a question about how many
proposals are typically received Ms. DeLai responded that the School Committee usually gets about 2 bids
but believes the option of an additional 2 year extension will attract more companies.
On a motion by Mr. Greenfield, seconded by Mr. Dockser, FINCOM voted to recommend Article 15
as written by a vote of 9-0-0. Mr. Berman to prepare the report.
Article 16:
Ms. DeLai explained that this Article authorizes additional debt under the'Massachusetts School Building
Authority's (MSBA) "Green Repair" program that was approved by Subsequent Town Meeting in November
2010. In November, Town Meeting approved an amount not to exceed $2,000,000 for roof replacement for
Killam Elementary and new windows at Killam and Birch Meadow Elementary schools and now the
projected cost has increased. The increased cost accounts for an upgrade from an EPDM to a PVC roofing
system and hazardous materials abatement costs. The roof upgrade also provides for an increased warranty
from 15 to 25 years. Mr. Torman asked when the construction is expected to begin and Ms. DeLai responded
that work can't begin until the appropriations are approved by Town Meeting. The Committee discussed the
durability of the PVC roof and Ms. DeLai felt it would have a longer life span than the EPDM. Ms. DeLai
explained that 47% of the cost is eligible for reimbursement forma the MSBA.
On a motion by Mr. Walsh, seconded by Mr. Greenfield, FINCOM voted to recommend Article 16 as
written by a vote of 9-0-0. Mr. Greenfield to prepare the report.
Article 24:
Article 24 is to allocate money from Reading's Affordable Housing Trust Fund to subsidize the affordable
housing units planned for 30 Haven Street. A memo from the Town Planner is provided in the meeting
packet further explaining Oaktree Development's request for the funds. Several members of FINCOM did
not feel they had enough information to vote on this Article. Mr. Greenfield was not supportive of spending
the fund this way. FINCOM wanted to know more details about why Oaktree needed this money and have
assurances that these funds will be protected. Mr. LeLaeheur explained that a detailed project pro-forma
from the developer is expected by the Town Manager tomorrow morning. An email from a resident was also
included in the packet suggesting certain language that could be included that would require the developer to
repay funds if the project is later converted to condos. Town Meeting member John Arena also expressed
concern about making special arrangements for the developer.
On a motion by Mr. Berman, seconded by Mr. Dockser, FINCOM voted 0-1-8 (Mr. Greenfield
opposed) for Article 28 as written. Mr. Berman to prepare the report.
Article 29:
On a motion by Mr. Berman, seconded by Mr. Greenfield, FINCOM approved Article 29 as written
by a vote of 9-0-0. Mr. Walsh to prepare the report.
Update on Meals Tax:
Mr. LeLacheur informed the. Committee that the payment from the local meals tax covering December,
January and February came in at $72,000 which was double the first quarter payment from October and
November. The Town projected $150,000 annually in the FY 12 budget but at this rate the Town is on track
for $300,000 for the year. FINCOM suggested a press release for this news.
(0)
Instructional Motion:
Page 33 of the meeting handout is an instructional motion drafted by Mr. Dockser from the Finance
Committee for Annual Town Meeting. The motion asks the Board of Selectmen, Town Manager and School
Committee to look into specific revenue enhancement ideas recommended during the September 2010
financial forums. The motion includes only the revenue suggestions and not the expenses. Mr. Dockser will
make changes to the motion to ask for a specific deadline instead of the monthly updates. The Committee
will further review, this at the April 13th regularly schedule FINCOM meeting.
Key Points for FY12 Budget Message:
The Committee reviewed the draft budget message prepared by a few members of the FINCOM. Mr. Arena
suggested making the message more quantitative. It was also suggested to include the instructional motion
and a summary of projections. for FYI 3 that might need to experience cuts to the schools, library and public
safety. Mr. LeLacheur recommended showing a level funded budget over time and the impacts that it will
have.
Approval of Minutes:
On a motion by Mr. Torman, seconded by Mr. Walsh, FINCOM voted to approve,the minutes from
March 28, 2011 as amended by a vote of 8-0-1 (Mr. Berman abstained).
On a motion by Ms. Perry, seconded by Mr. Walsh, FINCOM voted to approve the minutes from
February .9th, 2011 as written by a vote of 9-0-0.
On a motion by Mr. Berman, seconded by Mr. Walsh, FINCOM voted to-approve the minutes from
March 2,2011- as amended by a vote of 7-0-2 (Mr. Dockser and Mr. Fardy abstained).
On a motion by Mr. Berman, seconded by Mr. Torman, FINCOM voted to approve the minutes from
March 9th, 2011 as written by a vote of 6-0-3 (Mr. Leyne, Mr. Dockser, Mr. Walsh abstained).
On a motion by Mr. Leyne, seconded by Mr. Dockser, FINCOM voted to approve the minutes from
March 16th, 2011 as amended by a vote of 9-0-0.
On a motion by Ms. Perry seconded by Mr. Fardy, FINCOM voted to approve the minutes from
March 23, 2011 as written by a vote of 7-0-2 (Mr. Berman & Mr. Fardy abstained).
On a motion by Ms: Berman, seconded Mr. Leyne, FINCOM voted 9-0-0 to aWourn at 10:17 PM.
Respectfully submitted,
Recording Secretary
4
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