HomeMy WebLinkAbout2016-06-01 Board of Selectmen Minutes o'� OFke�i
Town of Reading
Meeting Minutes
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Board - Committee - Commission - Council:
Board of Selectmen
Date: 2016-06-01 Time: 7:13 PM
Building: School - Coolidge Location: Multi-Purpose Room
Address: 89 Birch Meadow Drive Session:
Purpose: Community Listening Session Version:
Attendees: Members - Present:
Chairman John Halsey, Kevin Sexton, Barry Berman, Dan Ensminger
Members - Not Present:
John Arena
Others Present:
Town Manager Bob LeLacheur, Assistant Town Manager Jean Delios,
Superintendent of Schools John Doherty, Bill Brown, Kevin Vent
Minutes Respectfully Submitted By: Secretary
Topics of Discussion:
The Town Manager noted that the Selectmen are the only authority that can call for a Special Town
Meeting, which would be held on September 12. Town meeting is, strictly speaking, not necessary and
has no formal role in the override process. Including Town Meeting in the process is unusual, but this
BOS wants to present a case to the Town Meeting before calling a Special Election.
The community will be invited on Thursday, September 1 at 7PM at the RMHS Performing Arts Center to
attend a Community Financial Forum if an override course of action has been decided. The community
will hear extensive presentations from town staff and elected officials about proposed solutions to the
issues heard at the three Community Listening sessions. This would then be followed by: Monday,
September 12 possible Special Town Meeting;Tuesday Oct 18 possible Special Election.
In terms of calendar logistics, the Town Manager explained that in order to get good community
feedback, instead of the summer, September is really the best time to start a Town Meeting and
September 12 is the first date one can expect good attendance due to the Labor Day holiday schedule.
The Town Manager noted that there are also election complications. Wouldn't save enough money to
run two separate elections in the building — and the Town Clerk says she would have to double her
election workers, and would only save $2-3K.
Why have the special election in October? The town could wait until the winter or next April for a
special election, but Supt. Doherty and the Town Manager want to know the budget constraints before
they go through the budget process in the fall. Two budgets would need to be developed, and the
impact on staff moral would be very negative and employee retention would be challenging. The Town
Manager reviewed the typical annual budget process for the audience.
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Board of Selectmen Minutes—June 1, 2016—page 2
The Town Manager noted that the last time the town had an override was 13 years ago and he was on
the Finance Committee at the time. He remembered that a failed override had happened a couple years
before—that process was very condensed with very few public meetings.
The Town Manager next asked for questions on calendars and logistics... Should they call for a special
election it will be the night of the special town meeting?
Bill Brown, 28 Martin Road, said that he thinks it is totally out of place to bring an override vote to Town
Meeting. It is not the proper place for it, it belongs only at the ballot box.
The Town Manager responded that there will be other articles desired to be discussed in addition to a
possible override ballot question. Some of the articles will be aimed at helping elderly low income
residents.The first three such articles would go to the next Town Meeting regardless, but a fourth one is
coupled with an override. In response to Mr. Brown's comment, he agreed that Town meeting's vote on
the override is somewhat ceremonial.
Back to the slide presentation:
Financial Overview—The town's budget has been growing 3%, in part because the Town has weaned off
financing capital projects inside the levy limit. However, the Town Manager notes that the Town cannot
reduce the budget further without impacting operations.
Health Insurance—Reading is doing well compared to peer communities.
Premiums paid have risen 5.5% - that stacks up very well if you look at any other employer. The actual
increases are ameliorated by paying people NOT to take health insurance. Employees pay 29% of the
premiums, average of peer communities pay 24%. If the town were to offer more competitive
premiums, the town would have to find another $11VI in order to make up the difference. Employees
have agreed to pay more insurance in order to avoid layoffs.
Revenues (local receipts, taxes, and fees) are up 3% per year. The Town Manager estimates that
insurance will rise 7%. People that professionally project insurance costs are estimating an increase
between 8-10%.
State aid (chapters 70 and 90) has performed poorly over the last few years.
The last time the town passed an override there was only $200K in reserves, which the Town Manager
said made the town nearly bankrupt.Today, the Finance Committee keeps 4-5%of the operating budget
in reserves, some other towns aim to keep 7-8% in reserves.
In MA towns cannot compare to other national practices because we have these tax restraints—such as
Proposition 2-1/2.
In terms of the override question = is it too early to ask?
Currently the Town has $4-$5 Million in reserves and noted that so-called Free Cash is something of a
misnomer. The Town Manager recounted mid-year 9C cuts from 2009 as a time when the reserves
helped close the unexpected gap.
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Board of Selectmen Minutes—June 1, 2016—page 3
In some recent years funds have strong regeneration — comes from money you didn't spend and
revenue that came in higher than expected. Those revenues are above the revenue projections. If there
are employment vacancies that don't get filled — that salary is turned back to the town and goes into
free cash. A very large percent of those funds returned are unpredictable. The Town Manager stated
that he cannot promise that the free cash balance will plummet as it is shown in the slide, however, he
added that usually the town sees$1.5-$2M of regeneration, but he suspects it could drop to$750K.
Peer Communities Slide — the Town Manager explained how peer communities were determined
through two independent studies.
Peer Revenues slide—the Town Manager notes the huge difference in commercial tax base—and that is
driving the increased reliance on state aid. Local receipts help and the town receives a dividend from
owning the light department. Property taxes are a little bit lower than others relative to income and
Reading's commercial tax base is low compared to peers.
On the expenditure side, Reading is "remarkably dull in how we spend money." Reading spends almost
the same with other towns, education slightly above average, general government and town hall a little
bit lower.
Peer Education Expenses Slide - Reading spends an average amount on education, but Reading has a lot
of students, and the per pupil amount is very low. Of our peers, the average enrollment 16%, Reading is
17.5%.... there are a few that are higher but Reading is in the top third.
From a revenue and expense side, Reading is a bedroom community with a very low commercial tax
base, a large student population, and a high quantity and quality of services. For example, the Town
plows the downtown when it snows—many other towns do not do that—for the commercial tax base.
State aid is 50% lower in real terms over the past 15 years, and the Town is overly reliant on state aid
because we have so many students.
Town and staff are working on significant real estate developments for the town. If you drive around
and look at all the empty land (which doesn't exist), it is the clear that the Town cannot develop its way
out of this.
Some expenses are not within our control — both the schools and the Town will need to reduce services
and staffing.The Town Manager stated that, "In the last few years, we have combined jobs, we've asked
a lot from our employees in terms of effort. We will either have to eliminate services or the quality of
the services."
The Town Manager added, "I am not for or against an override... but your Town government will provide
whatever level of services you are willing to fund."
Selectmen Concerns:
• Increasing gap in expectations of the community- residents expect a high level of services.
• Elderly residents' ability to pay — could be priced out and Town Meeting should protect this
class, the low income elderly especially.
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Board of Selectmen Minutes—June 1, 2016—page 4
• Maintaining quality of services — no more creative costs cuts. We provide services that cost
about$100 per elderly resident, compared to about$10,000 on a student.
• Any proposed override should project to last for many years. Bourne's override vote failed, in
part, because it was only a 3-5 year fix. �.
Listen to the Community
The Town Manager noted at this point in the meeting, not one person has spoken up or volunteered to
give up a service.
This is really a community value question, what services should be eliminated?
Kevin Vendt, 33 Hillside Road, noted his purpose here is to help generate a discussion. He will moderate
the conversation. The Board of Selectmen and the School Committee are looking to hear more from
residents.
Are any questions about the slides or information presented?
A John Street resident wanted a definition of what an override really is.
The Town Manager explained Prop 2.5: how the levy limit increases, and how the allocation can change,
and explains new growth. An override asks residents to pay MORE than 2.5%. The last override was
10%. That 10% moved the whole bar up forever. So for one year the taxes increase significantly.
Another resident, Eileen, wanted to see the override amount stated as a dollar figure.
How is the override split between the Town and the Schools? Are there conditions on the override?
The Town Manager stated that there can be conditions placed on those dollars which can be specified
for the first year, after that it can be split or re-allocated according to Town Meeting.
Another resident wants to see Budget Allocation expenses.
The Town Manager stated that the Town spends money on average like our peers. We spend the rest on
debt, insurance and capital.
Reading and North Reading have a single tax rate—businesses and residents pay the same rate. In other
towns businesses pay a higher rate—referencing the CIP shift.
Selectman John Halsey said that no matter how you split the tax rate, the amount of tax collected
doesn't change. The shift does not increase revenues to the town to pay for increasing expenses.
Halsey said that by splitting the rate may result in a $69 savings to residents but an average $2500
increase for business owners.
Tim Angle, 10 Morgan Park, I'm sure we want to support the elderly, the school children, and yet where
I work, everyone comes to Reading to shop — REI, Jordan's, Home Depot — we have established a
commercial center, why are we not able to lean on these corporations who can pay these higher rates to
help us?
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Board of Selectmen Minutes—June 1, 2016—page S
Selectman Barry Berman responded: we don't have a lot of commercial property here in Reading, and
the Board has spent the better part of a year and a half to attract more. The tax rate on the Home Depot
is the same as the resident. It is a big deal for the Board to decide, how to decide the split. It is an
�... important piece to remember, what do we spend our money on and who pays for it.
Tim Angle asked why are we not having a meeting about the CIP shift rather than an override?
The Town Manager responded: If we can collect $SOM in taxes, you can only go up 2.5%, we could shift
to have businesses pay more, but a split by itself doesn't cause more revenue to come in.
Tim Angle —indicated he didn't understand how that's the case. Why can't we talk about increasing
business tax revenue and not increase the resident rates.
Residents—State won't allow it.
Commercial, Industrial, Personal property— includes large and small businesses—The Hitching Post and
Home Depot get same tax rate.
RMHS teacher noted that class sizes are increasing, a bubble of students coming up, but the district
hasn't hired more teachers. In three of her science classes, she has too many students enrolled and that
exceed the safety limits of her lab. She is concerned about the safety of the students.
Rebecca Iberman, 50 Pratt Street — concerned about the teacher cuts too at the elementary level and
middle level... she says she would call for increasing fees -pay for the parking — pay to throw trash —
price of residential sticker parking could be raised — building permit costs. She likes the idea of these
fees. She would rather see this than cutting teachers.
The Town Manager responded: Would you rather have people pay fees than taxes? Property taxes are
deductible for those that itemize but fees are not. Fees by law may only be set to cover a cost, and not
earn a profit. Looking at ambulance fees, the Selectmen are comfortable keeping fees lower than
average of neighboring communities.
One of the best parts of living in Reading is the value of the services to residents.
A resident asked about elderly services that are in need of being added.
Jean Delios, the Department Head for Public Services, said they are studying what the community's
appetite is for services. For the elderly the biggest thing is transportation.
An elderly gentleman spoke and asked for the Town to look at how to reduce expenses, and help keep
seniors in their homes.
A resident asked a question regarding the Birch Meadow master plan, and part of that was to light some
fields. The Town Manager noted that it was a one-time cost and that indirectly revenues fees would
replace most of the funds needed. However, without an override he stated that Recreation is not an
essential service and would likely see less funding, certainly in the capital plan.
Another resident asked what have other peer communities gone through in the past decade, since the
last override.
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Board of Selectmen Minutes—June 1, 2016—pope 6
The Town Manager prepared a slide to address this topic Peers Overrides and Exclusions
Is Reading unusual for asking? Clearly that answer is no, it is more unusual for not asking for 13 years.
Communities with lots of students and a lower commercial tax rate typically find that they are more —
reliant on overrides.
Another resident asked about Prop 2.5 and if the Town is asking for 7-10% increase in one year, then
there is still a conversation possible about WHO pays that budget, and commercial can still pay a higher
rate.
The Town Manager responded: Because commercial is 8%of the revenue—there would be a question as
to whether the businesses cannot afford to foot the entire cost of an override. He added that the Town
will likely bank money in the first few years in order to extend the effectiveness of the override.
Another resident asked for numbers on population growth.
Very generally school enrollment has not changed much in the last 10 years, and the population is up
about 5%. The development of the landfill (Home Depot) required more Police and EMT to support
commercial development, but no new school costs were added.
Resident: asks if there is something that can be done to protect seniors and help keep elderly in their
homes? The Town Manager stated that future Town articles might be able to help. Three are aimed at
the neediest residents, and a fourth would require legislative support. The Town Manager has reviewed
the likely request with some of the legislative delegation.
Resident wants to know if they can make the CIP shift part of the override vote. The Town Manager
responded that the responsibility for the shift is with the Board of Selectmen and they cannot be
compelled to shift the levy burden.
Another resident wanted to know about the litigation pending against the town. The town is very
limited in what it can disclose at this time, other than a settlement or resolution is likely to require
funding from cash reserves or a debt issue.
Resident—wants to know what debt the town is carrying. And she notes that the Pleasant Street Center
seriously needs some building repairs... and she doesn't like the food at all. And she wants to know if the
state will increase the funds to the town.
The Town Manager stated there is debt being paid, but both library and the high school will be paid off
in ten years outside the tax levy. The elementary schools are being paid off inside the tax levy. In
response to a question he replied that the state will not give us more money, I always ask, you are
welcome to ask, but they won't. The state has a lot of their own budget issues, many revolving around
the health care issue.
Assistant Town Manager Jean Delios stated that the lunch program at the Pleasant Street Center is
provided 5 days a week—they contract out to Mystic Valley Elder Services. These are the same meals as
meals on wheels and that is what is being served at the lunch program. In Lexington, they offer lunch 3
days a week, and they contract out to a private operator—an assisted living facility in town. They spent
$16M on their facility—and they have the Cadillac model of services for the residents.Jean said that
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Board of Selectmen Minutes—June 1, 2016—page 7
MVES is preparing food elsewhere, as The Pleasant Street Center doesn't have a scratch kitchen, so they
cannot prepare food there. Also said she wants to have a master plan for elder and human services.
..�.. The same resident asked about water and the Town Manager stated that what the town pays for water
has nothing to do with the operating budget. Reading has high water rates, in part because they had to
pay off debt to buy into the MWRA. Also that they have to pay for infrastructure. The Town Manager
drew a strong distinction between sewer/water rates being separate from the operational budget.
Return to a discussion by Mr. Brown — population hasn't grown as much, and he notes that many
commercial developments failed for NIMBY reasons.
A High Street resident added that the population increase in Reading means another Police Officer and
Fire Fighter are needed.
She notes that there is an increased desire for full-day Kindergarten.
Dr. Doherty noted the more diverse the needs of the population creates a strain on the budget.. ELL
population has increased, so they have had to increase teacher English. Also special education costs also
require services. Also more social/emotional services are needed.
Mary Ann Denneher: We provide more services to our town, and talking about the CIP shift... she notes
that our commercial rate is less than half of the neighbors.
The Assistant Town Manager provides a free consulting service to many commercial interests.
Resident: Social/Emotional needs have services on ed plans and some don't, she wants to know if the
IDEA and ADA and how that impacts the costs that every town and every city has to pay across the
country. If we are not able to do that, what are the legal ramifications. Special Education is one third of
our budget now.
Dr. Doherty noted that we are required to provide FAPE (Free Appropriate Public Education) including
some additional supports and services for some students to access the curriculum. The law supersedes
whatever the city or town can do. We will get a lot of litigation and out of district placements (more
expensive than in district programs), which keep kids away from their peers in their communities. Those
students will have to get those services elsewhere due to the placement and transportation.
Brian O'Meara noted that residents are more likely to support a tax increase if they know where that
money is going to go. My conversations with folks is that the money will go to elderly services, schools,
and town hall.There is no real clarity on what they will get for the override.
The project $1.5 M for a cemetery garage when I think I am paying for elderly services, town services,
and schools. At what point do we hear what we are going to get? Not knowing where the money goes in
year two and three—that is where the opposition will form.
The Town Manager responded that there are not expenses that we can trim at the margin. There is a
general consensus about things you cannot eliminate. There will be a lot of disagreements in the
' community. We are here asking for the community's advice. He also asked for what people are willing to
cut, and no suggestions have come forward.
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Board of Selectmen Minutes—June 1, 2016—page 8
Another woman—asked why the Town didn't see it coming.
The Town Manager said "we have discussed this for 8 years. Very clearly, through every budget process,
the Superintendent and I have described this very clearly in writing. What's the surprise is that we could
have had an override a few years ago. We have been able to cut services along the way, consolidate
positions, etc. and we did such a good job on the expense side and continued to provide services but we
cannot do it anymore."
Tim Angle—asked "What are our options for cuts? I could go through the budget line by line, but frankly,
that's not my job. I'm not for cutting anything in particular. No one ever proposes an option for cutting a
service. That's because we honestly we don't know what they are."
The Town Manager stated that every Town department is on the table to be cut. There is nothing that is
not on that list including Police, Fire, Library... "We can figure it all out, we can propose something about
how to balance the budget, but if we don't get any community input, what is more or less valuable to
the community."
One man wants a referendum — but he'll settle for a survey. To ask the community what they want to
cut.
Resident asks what happens if an override fails and stated that residents want to know the
consequences. Feels it is easier to make a decision when specific items are in the offing.
Mary Ann Danneher said people don't know how much things cost.
The Town Manager said that the money needed could basically cut out the library... or you can cut
positions like police or teachers—in order to close that gap.
Barry Berman added that 80% of the town budget is personnel. "So if we cut personnel we will cut
quality and quantity of services. It's not like we're going to lose something, it just means that we are
going to not have it be as nice as it is now. Some will be cut and we won't be able to do as good a job."
One resident said not to touch schools, public safety, and elder services but."everything else is fair
game..."
Another resident said she lived in another community and she saw the Town tear itself apart over
budgets... "The value of people, the value of employees, who are already paid below average, but I see
we are going to start falling. We need to make judgement calls about what we value. I'm very
concerned about seniors."
Resident: He has all the faith in the world in the Town Manager and Superintendent and has watched
the rabbits they pull out of their hats year after year. He is worried that we are losing good teachers,
losing them to other districts. "For me, I looked at these questions a little differently. I think the appetite
for the override is there, because they know it will be spent responsibly. No one wants to hurt seniors."
I haven't heard anyone say that there is something that they want that they aren't getting, people want
to have that police and fire and teachers...
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Board of Selectmen Minutes—June 1 2016—page 9
Another Resident: Assume the override goes through, how is that money distributed? Selectmen will be
discussing that over the summer. In October the tax classification will be decided... but they can vote for
a rate in the summer for a rate they want to support ... the amount will also be decided this summer.
Town Manager said he mentioned $5M, and 2-2.5 should be banked in the first year. As much as we
would like to announce a bunch of new things to the Town - Do you want to offer an override budget
with lots of new things or not? Hard to do it without anything.
The Town Manager promised to bring more granularities for the budget at the next two meetings.
Mark Baxter: Suggests for the budget presentations, they went through cuts that they had to make for
this year and a list of things that they wanted to fund but they could not due to the budget constraints.
Discussion about moving the Pleasant Street Center, potentially to the temporary library space (rent is
about$15-$16K per month), or to combine with the new library.
People are interested in getting more information. It is on the website — Selectman @ci.reading.ma.us
there is a link that they can email to.
Another gentleman from "Yes for Reading" invited people to engage with their website.
The Town Manager reminded folks that Town employees are limited to their actions around an override
but Yes for Reading has more latitude.
Eileen Manning—Full day kindergarten is not one of the things on the wish list... it is a conversation that
the school committee has not had regarding the override.
Another woman says that we want to prioritize schools, and not sure we value non-teaching personnel;
she would prefer to keep personnel vs technology if that were an option.
The meeting was adjourned at 9:13 p.m.
Respectfully submitted,
Secretary
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