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2016 Annual Report Part 4 Appendix A continued
ANNUAL TOWN MEETING Reading Memorial High School April 25, 2016 Preforming Arts Center The Precincts listed below met at 7:00 PM to conduct the following business: Precinct 1 - With a Quorum present elected Douglass Webb as Precinct Chair and Elaine Webb as Precinct Clerk. A vote was taken to appoint Edward Orsini to fill a vacancy. Precinct 2 - With a Quorum present elected Tony D'Arezzo as Precinct Chair and Denise Iozzo as Precinct Clerk. A vote was taken to remove Walter J Carroll and Carol Sampson as Town Meeting members. A vote was taken to elect George A Snow, and Gjergji Bica on a tie breaker vote from the March 1, 2016 election. Precinct 3 - With a Quorum present elected Paul Sylvester as Precinct Chair and John Breslin as Precinct Clerk. No action was taken on a tie breaker vote from the March 1, 2016 election. Precinct 4 - With a Quorum present elected Glen Hartzler as Precinct Chair and Mary Ellen O'Neill as Precinct Clerk. Precinct 5 - With a Quorum present elected Anne Landry as Precinct Chair and Patrick O'Sullivan as Precinct Clerk. A vote was taken to keep Patrick P O'Sullivan as a Town Meeting member. A vote was taken to elect Christine Lusk on a tie breaker vote from the March 1, 2016 election. Precinct 6 - - With a Quorum present elected Greg F Selvitelli as Precinct Chair and Cynthia Tozian Cool as Precinct Clerk. A vote was taken to keep Jacqueline MK Petrillo and Drucilla Wood- Beckwith as a Town Meeting members. A vote was taken to elect Etain O'Dea on a tie breaker vote from the March 1, 2016 election. Precinct 7 - With a Quorum present elected Daniel A Ensminger as Precinct Chair and John Lippitt as Precinct Clerk. Precinct 8 - With a`Quorum present elected Kathleen Golini as Precinct Chair and Dan Ross as Precinct Clerk. The meeting was called to order by the Moderator, Alan E. Foulds, at. 7:36 PM, there being a quorum present. The Invocation was given by Philip Pacino, Precinct 5 followed by the Pledge of Allegiance to the Flag. Motion made by John Halsey, Board of Selectmen to dispense of the reading of the warrant and all motions in their entirety. Motion Carried ARTICLE 2: To hear and act on the reports of the Board of Selectmen, School Committee, Library Trustees, Municipal Light Board, Finance Committee, Bylaw Committee, Town Manager, Town Accountant and any other Town Official, Board or Committee. 313 Reading Memorial High School Preforming Arts Center ANNUAL TOWN MEETING State of the Town John R Halsey, Board of Selectmen April 25, 2016 The annual "State of the Town" address given under Article 2 typically reviews the past year and briefly looks ahead. This year, Selectmen Chair John Halsey and School Committee Chair Chuck Robinson will instead only look ahead and assess the prospects for local public services given the current financial resources available and the growing community demands. R. Buckminster Fuller is said to have coined the term `ephemeralization', which is the notion that through continuous technological advancement one can do more and more with less and less until eventually you can do everything with nothing (citing various sources) ". Your elected officials and staff have worked together towards this end over several years, and while we admire the ultimate objective, we do see one important limiting factor - many public services still need to be provided by people. Later next month, the town will publish the Annual Report for 2015 on the newly designed website. You will be able to read this report on any technological device available to modern society and at a rate much faster than ever before. This report has more detail than any "State of the Town" summary could possibly capture, and Town Meeting members are urged to skim through the report when they get a chance. Below is a snapshot of parts of the Annual Report: The Year 2015 in Review The year 2014 might be said to have been a `Policy Year' with the first significant set of revisions to the Reading Home Rule Charter in twenty -five years and the first comprehensive review and revisions to the Zoning bylaws in almost'seventy -five years. In that sense the year 2015 was a Financial Planning Year' as steps towards protecting the long term financial health of the community were taken. Permanent Building Committee Town Meeting approved a General Bylaw that created a Permanent Building Committee, and the PBC was then formed from a cross - section of expert professionals from the community. Past building projects have met with Town Meeting criticism, and the PBC has designed a process that adds significant independent• formal review and evaluation. Collaboration During the summer extensive discussions between management and senior elected leadership of the Town and Schools resulted in the approval by Town Meeting of changes to the Facilities department and sharing staff in the Human Resources function. The town continued regional shared staffing with Wilmington, North Reading, Wakefield, Melrose and Saugus, and worked closely with North Reading on efforts to give them access to the MWRA water supply, piped through Reading's existing infrastructure. Budgets Town Meeting members have access to the intricate details of the FY2017 budget as part of the Annual Town Meeting Warrant Report. Your attention is especially directed to pages 24 -40 which provide a good summary of the financial reality of today with a look ahead, as well as an examination of how Reading compares to 25 Peer Communities in the Commonwealth, both as to how we fund our local budget and how we allocate those funds among departments. Highlights In the annual report you can read high level summaries of projects such as the new Public Library, or of the accomplishments of our exemplary school district; you may also drill down to learn that the average per capita usage of water in Reading is 27% below State conservation guidelines, or that 24,481 excise tax bills were issued in a town with only 25,821 residents, or that an average of two volunteers worked 314 ANNUAL TOWN MEETING Reading Memorial High School Preforming Arts Center April 25, 2016 every hour around the clock all year - just through the Human /Elder Services division. Below are some highlights from town departments. Police & Dispatch Calls for service at 55 /day were flat to the previous year - national recognition as a safe community Expand community policing efforts through RCASA, HRAC, the schools and visits to seniors Vigilance on underage alcohol sales enforcement efforts Fire Emergency responses almost 10 /day were up 9 %; ambulance revenues $784,518 up 27% Emergency Management - very active in federal and state planning efforts School oriented SAFE program extended to seniors in town Public Works New online 'See -Click -Fix' service requests about 2 /day Resurfaced 5.3 roadway miles; installed 1,400 feet of curbing; relined 9,500 feet of water mains Maintain 80 acres of grasslands Facilities Substantial time spent on project management for Library renovation and addition Seamless transition to organizational change moving to town government Significant capital plan items accomplished, buildings are in very good condition Public Library Groundbreaking for the Library renovation and addition while operating in a temporary location Added services and programs at off -site locations Strategic planning process completed to examine operations in the new space Town Hall Ombudsman role filled - created by Charter Committee as advocate for residents Significant planning foundation completed for economic development Busy construction year as Building division permits & inspections increased by 21% Social Services very busy, expanded to include intergenerational activities Historic District extended to Summer Avenue Recreational program participation increased by 8% Conclusion Reading is at a crossroads between the growing demands for services from both the town government and school department compared to limited revenue growth. We look forward to a dialogue with the community in coming months in order to resolve this imbalance. Thank you for your service and representation of our neighbors as we face these crossroads together. Challenges Facing Reading Town Government over the Next Few Years...... • Protecting public safety and community infrastructure • Reactive - our public safety staff are increasingly busy responding to calls for service • Proactive - planning for emergencies is imperative in a more dangerous world • Water, sewer, roads, grounds-and facilities need constant maintenance .... perpetuation of our capital funding (free cash) is essential • Provide high quality services 0 97% of respondents rank service as excellent or good of five choices o Demands for most public services are increasing... "Bluestone / MAPC "; average age evolution (65+ growing 72% over next twenty +years) o Reading offers more services than most peer communities • Retaining and attracting staff 315 ANNUAL TOWN MEETING Reading Memorial High School Preforming Arts Center April 25, 2016 o 7 full- or part -time positions eliminated in FY2017 Budget o Possibility of up to 10 + retirements over the next 2 -4 years... replacement concerns o Independent study showed non -union pay is 7% below the average of 25 Peer towns o Performance expectations are for high quality services o Same staff work day -time and night -time government o Next generation has very different requirements for the work place Supporting staff with training & tools o Changing technology requires training o Staffing levels don't allow for many training opportunities o Looming retirements add a high level of training challenges; especially if our starting salaries exclude or minimize the hire of deeply experienced replacements Strong communication with a wide array of customers o The Greatest Generation (1910 -1925) and The Silent Generation (1923 -1944) never asked for much o Baby Boomers (1945 -1964) are amazed at all the changes and adapt at different paces o Gen -Xers (1961 -1981) prefer technology to help them seek out answers o Millennials (1975 -1995) use the small device in their hand and expect answers to appear o Gen -Zers (1995 - present) represent the next challenge Financial planning both for operations and economic development o Town has the strongest financial management practices according to S &P global ratings; maintenance of appropriate "free cash" levels is one of the many key contributing factors o Town Manager budget overview describes why Reading has revenue challenges o Bedroom community - missed commercial economic development opportunities, but some remain o Key element to support economic development will be highly skilled staffing with focused responsibilities Leveraging private and community resources • Continuous discussions with many groups, and neighboring towns • Permanent Building Committee a perfect example of leveraging the expertise of residents • Town and Schools continue to collaborate ...... Facilities, HR. Reduce costs, improve efficiencies. State of the Town Charles Robinson, School Committee Opening Thank you. The Reading Public Schools have a lot positive momentum and successes to celebrate, and in order to continue this trend and maintain the reasons why citizens stay in Reading and come to Reading we must look to address a potentially bleak and uncertain financial future. Our current financial outlook will require us to cut back and or delay initiatives of the things that make Reading's education system great and the envy of many. Now is not the time to stand still or take a step backwards. It wouldn't be fair to our residents and more importantly our children. A sample of financial challenges that are only expected to get worse are as follows: • Retaining and Attracting Staff 0 7.3 positions are reduced in the budget you will be presented this Tonight (6.3 teachers) o We have seen an increase in teachers leaving district over last four years o Our teacher salaries rank in bottom half of 30 comparable communities Developing well balanced and prepared students for college and career 316 ANNUAL TOWN MEETING Reading Memorial High School Preforming Arts Center April 25, 2016 o Implementing new science and engineering curriculum in our schools o Implementing dedicated health and wellness curriculum in grades 3 -8 o Addressing social and emotional needs of our students o Restructuring elementary, middle, and high school schedules and course offerings to reflect changes in curriculum and practices o Increase AP and Honors Course Offerings o Provide support for struggling students Supporting teachers and administrators as we transition to more rigorous standards and curriculum • Maintaining and updating technology and technology infrastructure • Providing adequate supervision and support to teachers and administrators • Offering training in key areas to give teachers the tools they need to address all students in the classrooms • Creating time for teachers to work together to improve student learning • Continuing to improve our special education services and programs o We need to utilize the information provided in the Walker Report to improve our programs - Talk about. Walker Report • Identifying long term space needs to address program changes o Special Education Programs - Cost us less to keep students in the District o Full Day Kindergarten and Preschool o Restructured Program Offerings to meet the needs of our ever changing society • Remaining competitive with area schools o We understand we cannot be everything to everyone when it comes to students and teachers but we don't want to lose students because we can't offer a high quality, competitive and challenging public school education. And at the same time our teachers are a reflection of this we don't want to lose quality teachers due to points previously mentioned • Ongoing litigation with RMHS Building Project . o As previously reported to Town Meeting there has been an ongoing dispute over who is responsible for some of the parts of the RMHS Building Project. o At some point, we may need to address some of these issues with the town reserve funds which will impact their use for other things. Closing I stand here tonight in collaboration with Chairman Halsey to signify the unified front shared by the School Committee and Board of Selectmen when it comes to advocating and obtaining the necessary resources to maintain and move our entire town forward. I also celebrate the collaboration that has already taken place with the combination of building maintenance and the many other areas being explored to achieve savings for our residents and streamline services. I look forward to continuing our collaborative relationship as we navigate the times ahead. Thank you. 317 Reading Memorial High School Preforming Arts Center ANNUAL TOWN MEETING Financial Overview Mark Dockser, Finance Committee April 25, 2016 Thank you Mr. Moderator, Mr. Moderator, I would like permission to speak for about 14 minutes. Thank you. Good evening Town Meeting members, board and committee members and residents. My name is Mark Dockser, Precinct 1 and Chair of the Finance Committee. To provide perspective on this year's budget and budgets moving forward, I want to provide a little bit of background information on what the Finance Committee does, and just a little bit of history. The role of the Finance Committee goes back to 1870, when some Quincy citizens gathered to "restore financial order in their municipality ". The Massachusetts Division of Local Services describes the basic roles and responsibilities of the Finance Committee as: "The finance committee is the official fiscal watchdog for a town. Because it is difficult for all taxpayers to be completely informed about every aspect of a town's finances, finance committees were established so a representative group of taxpayers could conduct a thorough review of municipal finance questions on behalf of all citizens." This is a responsibility that we take quite seriously. We are a group of 9 citizens, many of whom are also town meeting members, that regularly reviews and discusses financial activities in the town, with a focus on budgets, current and future. The Finance Committee is charged with creating financial policies that allow us to monitor revenues, spending, and town liabilities. One of our key policies is to set a minimum threshold of reserves, "rainy day funds" if you will, and to recommend to town meeting if and how these reserves should be maintained, grown or spent. We have been using a policy of holding at least 5% of our budget to be held in what the Commonwealth of Massachusetts classifies as "Free Cash ", as well as additional reserves that are held in stabilization funds that can focus on a particular purpose. We currently hold approximately 10% in a combination of Free Cash and stabilization funds a high number for Reading but similar to some of our peer communities. We do budget the use of some free cash, between $1.5 and $2.2 MM per year in recent years, to balance our .budget. In the last few years, we have regenerated funds (a combination of underspending, and higher than expected revenues) which has resulted in a net increase in free cash year to year. A question that is often asked of us is why can't you spend more free cash to support the annual budget? The answer is that using free cash for one time projects is a very good use of these funds. The expense is one time and so is the cash. But if we use free cash to hire people or spend on a new program, the need for that money remains in each year going forward. So we would have to dig in to our cash that same amount (or. slightly more) each year to support that hire or program. Spending an additional $1MM this year for an ongoing person or activity would require .us to spend that same amount each year going forward from free cash.. We try to be careful in using free cash for this reason. Just to round out the picture of Finance Committee, we also lead the audit committee which with representatives from the Selectmen, School Committee, RMLD and citizens, reviews the Town's compliance with the Municipal Government version of what in the private sector are called Generally Accepted Accounting Principles or GAAP. Through the use of an outside, independent audit firm, we monitor the town's accounts overall and focus in on different areas each year to assure compliance. Finance Committee policy has been to support a spending level on capital projects of 5 % of our budget. For FY2016 and FY2017, we have spent slightly below this level recognizing how much we have done and how much is already going on in town. We anticipate returning to the 5% level for FY2018. 318 ANNUAL TOWN MEETING Reading Memorial High School Preforming Arts Center April 25, 2016 We also have some informal policies that involve recommending an annual contribution for unfunded liabilities, for what is known as OPEB, of approximately $500k per year ... Town Meeting will be voting to move those funds this evening. We also recommend using a limited amount of free cash to support operating budgets. Budgets Finance Committee spends most of its meeting time working on budgets: Each year in October, we provide guidance to the Town and the Schools about what level of spending we believe is appropriate and affordable based on the Town's financial position —on the revenue side, this is largely our property taxes based on 2.5% growth per year (Prop 2 1 /2) + any new growth that we believe we can include for the coming year, local taxes like car excise taxes and meals tax, and state aid. Please also note on the right side of this chart how Reading has become more reliant on property taxes to pay for our town services. In 2003, property taxes represented 62% of our revenues vs. 72% in the FY2017 budget. The biggest drop has been in State Aid which in 2003 was 24% of our revenues ... for FY2017 it is only 16 %. On the expense side, we estimate with the help of the Town Manager, Town Accountant and Superintendent of Schools, budgets for what we call "accommodated costs" (notably health insurance, employee benefits, debt and capital) that are not discretionary, and then with estimates of both revenues and accommodated costs we recommend a not to exceed amount of free cash to support the budget. This total revenue then is used to calculate a maximum % increase that the Schools and Town should build their budgets to live within. The Superintendent and Town Manager then work with their teams to develop a budget to deliver the best possible services to the town, being conscious not to exceed the budget guidance. The Town Manager presents his budget to the Selectman for comments /adjustments /approval and ' the Superintendent presents his budget to the School Committee for comments /adjustments /approval. The Town Manager then presents the full budget including Schools and Town sides to the Finance Committee for review. Finance Committee holds weekly meetings in March during which we review the budgets by department and by line item with the department heads and ask questions about services, possible efficiencies, and if they can. do their jobs and deliver excellent services to the town given the recommended budgets. This process culminates at the end of March with any adjustments and then a vote. At this point, the budget becomes the Finance Committee's budget, which we are presenting to you this evening at Town Meeting for your review and approval. Over the last 10+ years, our budgets have grown about 3.1% per year between the Schools and Town. In this time frame, our schools have had to work with largely unfunded mandates, our needs for core services to combat opiods and other community wide issues has required new resources, and our needs for core town services in veterans affairs, in elder affairs, and yes, in snow and ice spending in most years other than this past one, have been strong pulls on our resources. The town has been able to provide strong services based on finding efficiencies in operations, spending wisely, hiring carefully, and by finding ways to get $1.50 in services for every $1.00 that we spend. We have done a very good job of managing our spending within the tax levy, despite the fact that we are a 90% residential community. Many of our peer communities have a substantial commercial and industrial tax base that allows for more sharing of the tax burden. In Reading, it is mostly residential taxpayers that have to pick up the load. That said, our taxes, as you can see on the attached chart, are slightly below that of similar communities. Prop 2 1/2, passed in 1980, is the governing law about the maximum allowable growth rate in taxes each year. It was passed at a time when most communities enjoyed new growth (explain new growth a little ?) that had revenues increasing by 4 -5 +% per year. Cities and towns with stronger commercial and 319 ANNUAL TOWN MEETING Reading Memorial High School Preforming Arts Center April 25, 2016 industrial bases were able to sustain these strong revenue growth rates, but Reading does not have the commercial and industrial base to do this. As costs, many of them uncontrollable like health care, continue to increase at rates far higher than 2.5 -3% per year, the ability to fund the operations for schools and the town are strained. Many cities and towns will override prop 2 1/2 every approximately 10 years, to maintain their services that otherwise would have to be cut. The last time Reading voted on and passed an override was 13 years ago, April 2003. By a show of hands, how many people here tonight were Town Meeting Members @ the last override? FY2017 We have been both careful and fortunate over the past few years as we budgeted conservatively, both the Town and Schools underspent their budgets, and the net result has been that our Free Cash has increased while we have been able to provide close to level services to the taxpayers. For the past 3 years, Finance Committee has shared with Town Meeting our belief that our operating budgets would be getting very tight to support the level of services that we are currently enjoying in the town. You have heard from the Chairs of the Selectman and School Committee, and you will hear from the Town manager and the Superintendent, that we are at a point where we are no longer able to sustain level services in this budget that we are bringing forward this evening. We are approximately $1.5 -$2.0 MM below a spending level that the Town and Schools would consider to be level. The budget increase this year is 2.6 %, well below that of years past. That said, all of the departments are providing a high level of services within the budget constraints. However, our budgets are such.that people are the largest part of our expenditures, and some cuts were required this year. Tonight, we will review each line item of the budget, with presentations from the Town Manager and Superintendent of Schools explaining the key drivers of the budget and the requested amounts for Town Meeting to vote on. Finance Committee believes this budget to be an effective use of the taxpayers money, balanced, fiscally sound, and although it does not provide level services, cuts have been made in people and programs to allow for the highest possible level of services such that the department heads do not foresee any major shortfalls in services they can provide in FY2017. FY2018 The outlook for FY2018, however is much more serious. Expected increases in accommodated costs and our return to 5% for capital will leave our operating budget with very little possible increase within our current ability to raise revenues. We are probably looking at 1 -1.5% increases in the operating budget compared to the 3.1% which is what we have achieved annually over the last 10+ years, and what is required for level or close to level services. The departments will have to look at their budgets to make substantial cuts if our revenues are capped by Proposition. 2 1/7 as they are now. As you heard from Chairs of the Selectman and School Committee, the town boards and committees will be listening to taxpayers in the coming months to better understand taxpayer priorities in order to frame the best option to bring forward for an election in October. October 2016 is when Finance Committee will be providing guidance to the Town and Schools about their FY2018 budget preparation, so this timing is very important. The Finance Committee will work with the boards and committees as that representative group of taxpayers that will review the financial issues in depth for all taxpayers. Thank you for your attention. 320 ANNUAL TOWN MEETING Reading Memorial High School April 25, 2016 Preforming Arts Center Comprehensive Zoning Project Update Jeff Hansen, Community Planning and Development Commission Thank you Mr. Moderator, Hello fellow Town Meeting members, Jeff Hansen, precinct 7 and Chairman of the Community Planning and Development Commission, Thank you for this opportunity to update you on the work the CPDC currently has underway for November 2016 Town Meeting and beyond. For starters, our areas of focus have changed since the last time I stood here in November 2015. At that time, the CPDC envisioned a certain set of logical priorities that would allow us to wrap up our Comprehensive Zoning Rewrite, which we began in early 2013. Everything to the left of the green arrow ,in the slide behind me reflects all of the work completed to date since we started our work. It's the work on the right of the arrow that's changed. Those priorities originally slated for November 2016 included the rewrite of the Planned Unit Development section, the Planned Residential Development section and, if conditions allowed, signs and parking. Since then, a few events have occurred that have given the CPDC pause and made us ask ourselves - do we have the right set of priorities? These events are notably the December 2015 publication of Reading's Economic Development Action Plan and the United States Supreme Court ruling in the case of Reed vs. the Town of Gilbert, Arizona. The decision of this case impacts how local governments can regulate signage and, as a result, has an impact, on our existing sign bylaw. Additionally, Town Planning staff has identified a few areas of potential adjustments, based on actual use of the revised bylaw. So, the rationale to adjust our priorities was there. Following discussion in our regularly scheduled meetings, the CPDC held a public forum on February 22, 2016 where we presented and finalized our 2016 and beyond zoning priorities. This restated list of priorities is now: 1. Signs - The CPDC is revising Reading's sign bylaw, based on Town Counsel advice following the Supreme Court's decision and subsequent clarifications by the late Justice Antonin Scalia. 2. Overlay Districts - The CPDC is reviewing possible expansion of the mixed use 40R overlay district, following recommendations to evaluate expansion by the Economic Development Action Plan. 3. Site Plan Review - The CPDC is making adjustments to our Site Plan Review process, identified after some use of the recently revised procedures. 4. Minor Changes - The CPDC is making minor adjustments to our revised bylaw including accessory structures and uses and our definition of lot shape. The public input collected in the February forum supported our priorities and emphasized the importance of communication and public input, particularly for those residents that live in areas that may be impacted by proposed changes. As a way of managing these workflows and ensuring transparency, the CPDC has implemented four working groups to oversee each of the priorities. Each workgroup is led by a different CPDC member and include volunteer participation. As of today, the work groups have made excellent progress with their work. The sign work group has completed multiple reviews of and revisions to our existing bylaw to bring it into alignment with the Supreme Court ruling, with each draft building off of previous suggestions. In the coming weeks, this work group will coordinate closely with Town Counsel to ensure it stays within the four corners of the law. The Overlay District work group has decided to expand the focus of their original mandate beyond 40R mixed - use and the areas recommended by the Economic Development Action Plan. They're considering other types of zoning, including overlay districts, sub - districts and 40R. The CPDC recently hosted a public forum attended by over 80 residents, local business owners, Town Meeting members and other interested parties who provided feedback on general ideas, concepts and proposals. The feedback was both verbal and interactive, using maps and stickers to designate preferences. This feedback was recently compiled 321 ANNUAL TOWN MEETING Reading Memorial High School Preforming Arts Center April 25, 2016 and shared with the attendees and can be found on the Town website. It will be discussed in greater detail in our next CDPC meeting on May 9th. Ultimately, the goal will be to identify specifically where we should focus our zoning efforts and then develop vision statements for those areas. Public hearings will be held as we continue this discussion. The Site Plan Review and Minor Amendment work groups are making excellent strides with compiling proposed amendments. The work groups have collected feedback from the Town's building inspector, Planning Department and local businesses as well as reviewed how other Towns are handling specific situations... all with the goal of introducing amendments that fit the fabric of Reading and our unique needs. So ... a lot of good work is underway with more to come. The challenge we face is one of time. Do we have enough time to complete our work, collect and incorporate public input, vote and approve to have these amendments added to the November Town Meeting warrant? The answer is ... probably not, not for everything. I fully expect the Minor Amendments will make it before November Town Meeting, as well as revisions to Site Plan Review. The goal is to have Signs on the warrant for November as well, but there is a significant amount of work and outreach still required. The Overlay District changes are complex with a large education and public outreach component that require more planning and time. I would like to thank you for your time and attention tonight. My ongoing commitment as Chairman of the CPDC is transparency and awareness of the work we're doing. My request of you is your ongoing support and participation. I've seen many of you at our meetings and public forums. I thank you for your involvement and invite all of you to our sessions. Be sure to check in with the Town's new website, where information related to this work will be posted and regularly maintained. It's your voice as the representatives of the citizens of Reading that will help shape our work towards developing the best possible vision and roadmap for Reading. Thank you. On motion made by Kevin Sexton, Board of Selectmen Article 2 was tabled ARTICLE 3: Move to choose all other necessary Town Officers and Special Committees and determine what instructions shall be given Town Officers and Special Committees, and to see what sum the Town will vote to appropriate by borrowing or transfer from available funds, or otherwise, for the purpose of funding Town Officers and Special Committees to carry out the instructions given to them, or take any other action with respect thereto. Finance Committee Report: No report Bylaw Committee Report: No report Motion made by Kevin Sexton, Board of Selectmen to table Article 3 Motion to Table Carried 322 ANNUAL TOWN MEETING Reading Memorial High School Preforming Arts Center April 25, 2016 ARTICLE 4: Move that the Town vote to amend the FY2016 -26 Capital Improvements Program as provided for in Section 7.7 of the Reading Home Rule Charter and as previously amended, by making these changes: General Fund FY2016: - $15,000 $65,000 DPW: Replace Dump Truck C3 (1999; moved up from FY2017) $35,000 Facilities: Fire & Police station carpet /flooring $25,000 Facilities: Replace batteries for emergency UPS units for schools & town buildings ($15,000) DPW: Dump Truck surplus ($25,000) Facilities: Generator project surplus ($50,000) Facilities: Fire station technology infrastructure ($50,000) Facilities: Town Hall roof project surplus FY2017: +$65,000 $150,000 Facilities: Cemetery garage project ($20,000) Police AEDs pushed back two years to match Fire Dept. replacement cycle ($65,000) DPW Dump Truck C3 (moved up to FY2016) FY2018+ Various other changes made Enterprise Funds - Water FY2016• None FY2017: +$610,000 $575,000 Grove Street water main (1500 feet) $30,000 Unidirectional Water Main flushing 4 -year program +$5,000 add to Car #2 Replacement (now $35,000) FY2018+ Various changes made Enterprise tunas - hewer, FY2016• None FY2017: +$35,000 $35,000 Replace Car #1 (2006 - moved up from FY2018) $3 million debt for Charles & Sturges sewer stations moved back to FY2018 (reduces debt service for FY2017 by $420,000) FY2018+ Various changes made tnterprise runes - dorm water FY2016• None FY2017: +$155,000 $150,000 Grove Street drainage repairs (new) $80,000 Bond Street outfall and drainage repairs (n 323 ANNUAL TOWN MEETING Reading Memorial High School Preforming Arts Center ($ 75,000) generic drainage projects reduced from $125k to $50k FY2018+ Various changes made April 25, 2016 Background: This Article is included in every Town Meeting Warrant. The Reading General Bylaw (section 6.1.3) states "...No funds may be appropriated for any capital item unless such item is included in the Capital Improvements Program, and is scheduled for funding in the Fiscal Year in which the appropriation is to be made." Bond ratings agencies also want to ensure that changes to a long -term CIP are adequately described. Finance Committee Report - given by Marc Moll:. The Finance Committee recommends the proposed amendments to the FY2016 - FY2026 Capital Improvements Program by a vote of 6 -0 -0 at their meeting on April 25, 2016. Placing items in the Capital Improvement Program is a prerequisite but in itself does not authorize spending funds towards these items. Bylaw Committee Report: No report Board of Selectmen Report: The Board of Selectmen on March 22, 2016 voted 3 -0 -0 to support this Article. Presentation given by: • Robert LeLacheur - See Attached After some discussion a vote was taken: Motion Carried ARTICLE 5: Move that the Town vote to amend the Town's Operating Budget for the Fiscal Year commencing July 1, 2015, as adopted under Article 20 of the Annual Town Meeting of April 27, 2015 and amended under Article 5 of the Subsequent Town Meeting of November 9, 2015; and to see if the Town will vote to raise and appropriate, borrow or transfer from available funds, or otherwise provide a sum or sums of money to be added to the amounts appropriated under said 'Article, as amended, for the operation of the Town and its government: General Fund - Wages and Expenses Account Line Description Decrease Increase B91 - Benefits Disability Retirement (One Firefighter - $75,000 Wages cost shifted from department to central location ) $75,000 B99 - Benefits Health Insurance premiums - $135,000 $135,000 expenses C99 - Capital DPW: Replace Dump Truck C3 (1999; $15,000 Expenses moved up from FY2017) $65,000 Facilities: Fire & Police station carpet /flooring $35,000 Facilities: Replace batteries for 324 ANNUAL TOWN MEETING Reading Memorial High School Preforming Arts Center April 25, 2016 325 emergency UPS units for schools & town $25,000 DPW: Highway Dump Truck - $15,000 Facilities: Generator project - $25,000 Facilities: Fire Sta tech infrastructure - $50,000 Facilities: Town Hall roof project - $50 000 E99 - Vocational Reduced for actual enrollment $70,000 Education Minuteman & Essex North -$70,000 F99 - Finance Not needed for modular classrooms $75,000 Committee Reserves - $75,000 remainin balance $150,000) G91 - Administrative Vacant positions during the year - $70,000 Services Wages $70,000 G92 - Administrative HR - Hiring Process expenses $22,000 $42,500 Services Expenses Technology - software for elder /human services to tie into state system $7,500 Technology - emergency repairs for engineering hardware $6,000 Technology - software for HR to streamline Personnel Reviews $4,000 Town Clerk - Vital Records project $3,000 H91 - Public Services Economic Development planner* $10,000 Wages $10,000 I91 - Finance Wages Finance Vacation /Sick buybacks $20,000 20 000 )91 - Public Safety Police Vacation /Sick buybacks $75,000 $75,000 Wages K91 - Public Works DPW Vacation /Sick buybacks $30,000 $65,000 Wages Town Engineer overlap $35,000 K92 - Public Works Fuel-$50,000 $50,000 Expenses K93 - Public Works Snow & Ice Removal - $32,500 $32,500 Snow & Ice K94 - Public Works Street, Lights - $25,000 $25,000 Street Lights K95 - Public Works Rubbish Disposal - $80,000 $80,000. Rubbish M91 - Core Facilities Consulting Services for Security System $125,000 Evaluation $125,000 U99 - School First year funding for new K -12 Science $150,000 Department Curriculum materials $150,000 Subtotals $552,500 $562,500 Net Operating Expenses $10,000 From Free Cash $0 *From Inspections Revolving Fund $10,000 325 ANNUAL TOWN MEETING Reading Memorial High School Preforming Arts Center April 25, 2016 Finance Committee Report - given by David Neshat: At their meeting on March 30, 2016 the Finance Committee voted 8 -0 -0 to recommend this Article to Town Meeting. Bylaw Committee Report: No report Board of Selectmen Report: The Board of Selectmen on March 22, 2016 voted 3 -0 -0 to support this Article. Presentation given by: • Robert LeLacheur - See Attached Motion made by William Brown, Precinct 8 as follows: H91 - Delete $10,000 to $0 Motion to Amend does not Carry After some discussion a vote was taken: Motion Carried as Presented ARTICLE 6: Move that the Town vote to appropriate the sum of Five hundred and seventy six thousand ($576,000) dollars to the irrevocable trust for "Other Post - Employment Benefits Liabilities" or take any action with respect thereto. Background: As part of the FY2016 budget the town voted $500,000 in the general fund, $50,000 in the water fund, $20,000 in the sewer fund and $6,000 in the storm water fund for the Other Post Employment Benefit (OPEB) contributions. This Article will therefore move the total $576,000 of all these OPEB contributions to the irrevocable trust for Other Post Employment Benefit liabilities. The most recent OPEB valuation shows the Town's OPEB liability at $67.2' million. The three Enterprise Funds and the Light Department are on an aggressive fully funding twenty year schedule, and the General Fund is on a partial funding schedule projected over thirty years. The latter will transition to a full funding schedule as soon as possible, as is required by law or after the Pension Fund is fully funded in FY2029. Finance Committee Report - Anne Johnson Landry: At their meeting on. March 30, 2016 the Finance Committee voted 8 -0 -0 fo xecommend this Article to Town Meeting. Bylaw Committee Report: No report Board of Selectmen Report: The Board of Selectmen on March 22, 2016 voted 3 -0 -0 to support this Article. 326 W99 - Water expenses Specialty tools for utility truck #5 $45,000 Hydrants for new water mains $25,000 $70,000 Subtotals $0 $70,000 Net Operating Expenses' $70,000 From Water Reserves 1 1$70,000 Finance Committee Report - given by David Neshat: At their meeting on March 30, 2016 the Finance Committee voted 8 -0 -0 to recommend this Article to Town Meeting. Bylaw Committee Report: No report Board of Selectmen Report: The Board of Selectmen on March 22, 2016 voted 3 -0 -0 to support this Article. Presentation given by: • Robert LeLacheur - See Attached Motion made by William Brown, Precinct 8 as follows: H91 - Delete $10,000 to $0 Motion to Amend does not Carry After some discussion a vote was taken: Motion Carried as Presented ARTICLE 6: Move that the Town vote to appropriate the sum of Five hundred and seventy six thousand ($576,000) dollars to the irrevocable trust for "Other Post - Employment Benefits Liabilities" or take any action with respect thereto. Background: As part of the FY2016 budget the town voted $500,000 in the general fund, $50,000 in the water fund, $20,000 in the sewer fund and $6,000 in the storm water fund for the Other Post Employment Benefit (OPEB) contributions. This Article will therefore move the total $576,000 of all these OPEB contributions to the irrevocable trust for Other Post Employment Benefit liabilities. The most recent OPEB valuation shows the Town's OPEB liability at $67.2' million. The three Enterprise Funds and the Light Department are on an aggressive fully funding twenty year schedule, and the General Fund is on a partial funding schedule projected over thirty years. The latter will transition to a full funding schedule as soon as possible, as is required by law or after the Pension Fund is fully funded in FY2029. Finance Committee Report - Anne Johnson Landry: At their meeting on. March 30, 2016 the Finance Committee voted 8 -0 -0 fo xecommend this Article to Town Meeting. Bylaw Committee Report: No report Board of Selectmen Report: The Board of Selectmen on March 22, 2016 voted 3 -0 -0 to support this Article. 326 ANNUAL TOWN MEETING Reading Memorial High School Preforming Arts Center Motion Carried April 25, 2016 ARTICLE 7: Move that the Town vote to vote to delete Section 8.8 Animal Control of the General Bylaw and insert the following in its place: 8.8 Animal Control Pursuant to the authority set forth in MGL Chapter 140 Sections 136A -174E, inclusive, and any other relevant statutes and regulations issued pursuant thereto, the following requirements are adopted for the regulation of dogs in the Town of Reading. 8.8.1 Definitions The definitions of words and terms set forth in MGL. Chapter 140 Section 136A are incorporated into Section 8.8 and shall be applicable to the interpretation thereof. In addition; unless the context clearly indicates otherwise, the following words and terms, as used in Section 8.8, shall have the following meanings: 8.8.1.1 Animal Control Appeals Committee (ACAC) The "Hearing Authority," as that term is defined in MGL Chapter 140 Section 136A, charged with the responsibility of handling dog complaints for the Town of Reading, pursuant to MGL Chapter 140 Section 157. 8.8.1.2 Animal Control Officer (ACO) A person appointed by the Town Manager who is authorized to enforce this Bylaw and MGL Chapter 140 Sections 136A -174E. 8.8.1.3 Effective Voice Control An animal shall be deemed to be "under effective voice control" if it is within the owner's or keeper's sight, the owner or keeper is carrying a leash, and the animal refrains from illegal activities. 8.8.1.4 Running at Large A dog is running at large if it is not on the private property of its owner or keeper, or on private property with the express permission of that property's owner, or on a leash, or under effective voice control. 8.8.2 Licensing and Fees 8.8.2.1 License and Vaccination Requirements In accordance with MGL Chapter 140 Section 137, the owner or keeper of a dog(s) six months of age or older, while residing in the Town of Reading, shall obtain a license for the dog from the Town Clerk, which shall be affixed to the dog's collar. To obtain or renew a license, each dog owner or keeper shall annually present proof of a current rabies vaccination or a certification of exemption from the vaccination requirement, pursuant to MGL Chapter 140 Sections 137(b) and 145B. 8.8.2.1.1 New Dogs and Puppies Within thirty (30) days of either (a) acquiring a dog six (6) months of age or older or (b) a puppy's six -month birthday, each dog owner or keeper in Reading shall present 327 ANNUAL TOWN MEETING Reading Memorial High School Preforming Arts Center April 25, 2016 proof of that dog's current rabies vaccination and obtain a license and dog tag from the Town Clerk. 8.8.2.1.2 Lost Tags and Replacement Tags Dog owners and keepers shall replace a lost tag within three (3) business days of the loss, by obtaining a replacement tag from the Town Clerk. 8.8.2.1.3 Tag Exemptions for Dog Events While actually participating in an official dog sporting or dog fancy event, a dog may, if the event sponsors do not allow participants to wear tags, be exempt from the requirement of section 8.8.2.1 that its license tag be affixed to its collar; provided, however, that the dog owner or keeper shall have the tag at the event and available for inspection by the ACO. 8.8.2.1.4 Tag Exemptions for Medical Reasons During any period when a veterinarian has determined that a dog cannot wear a collar for medical reasons, the dog shall be exempt from the requirement of section 8.8.2.1 that its license tag be affixed to its collar; provided, however, that its owner or keeper shall have the tag in his or her possession and available for inspection by the ACO. 8.8.2.1.5 Annual Renewal Dog owners and keepers shall renew each dog license annually. The annual licensing period runs from January 1 through December 31. 8.8.2.1.6 License due Date and Late Fee Application forms for obtaining, renewing or transferring a license shall be made available annually no later than December 31 each year. Dog owners and keepers shall return forms and fees to the Town Clerk by March 31 or, if such date is not a business day, by the first business day thereafter. Any license renewed after this date shall be deemed overdue, and the owner or keeper shall be required to pay a late fee as determined by the Town Meeting in addition to the license renewal fee. The license fee and the late fee may be secured through the imposition of a municipal charges lien on any property standing in the name of the dog owner or keeper, pursuant to MGL Chapter 40 Section 58. 8.8.2.1.7 License Fees Fees for licensing each dog shall be determined by the Town Meeting; provided, however, that the fee for neutered or spayed dogs shall be less than the fee for non - neutered or non - spayed dogs. No dog license fee shall be charged for any service dog as defined by the Americans with Disabilities Act or regulations issued thereunder; or for a license for a dog owned by a person 70 years of age or older. 8.8.2.2 Kennel Licenses No person may own or board four or more dogs within the Town of Reading without first obtaining a Kennel License from the Town Clerk, in accordance with MGL Chapter 140 Section 137A; provided, however, that this requirement shall not apply to medical boarding by any licensed veterinarian practicing in the Town of Reading. To obtain or renew such kennel license, the owner or keeper of the dogs shall: 328 ANNUAL TOWN MEETING Reading Memorial High School April 25, 2016 Preforming Arts Center (a) Present proof of current rabies vaccinations for each dog older than six months in the kennel or a certification of exemption from the vaccination requirement, pursuant to MGL Chapter 140 Sections 137(b) and 145B; and (b) Pass an inspection by the Animal Control Officer pursuant to MGL Chapter 140 Sections 137A and 137C. 8.8.2.2.1 New Dogs and New Puppies A kennel licensee who is also the owner or keeper of dogs shall report to the Town Clerk each new dog in the kennel within thirty (30) days of its acquisition; shall show proof of current vaccination; and shall obtain a kennel tag for that dog. The kennel licensee shall show proof of current vaccination and obtain a tag for each puppy when it reaches six months old. 8.8.2.2.2 Periodic Inspections The Town may perform an inspection of any kennel at any time pursuant to MGL Chapter 140 Section 137C. 8.8.2.2.3 Annual Renewal Each kennel licensee shall renew the kennel license annually. The annual licensing period runs from January 1 to December 31. 8.8.2.2.4 License Due Date Application forms for obtaining, renewing or transferring a kennel license shall be made available annually no later than December 1 each year. Kennel licensees shall return forms and fees to the Town Clerk by January 15 or, if such date is not a business day, by the first business day thereafter. Any kennel license renewed after this date shall be deemed overdue, and the owner or keeper shall be required to pay a late fee as determined by the Town Meeting in addition to the license fee. The overdue license fee and the late fee may be secured through the imposition of a municipal charges lien on any property standing in the name of the kennel licensee, pursuant to MGL Chapter 40 Section 58. 8.8.2.2.5 Fees The fees for licensing each kennel "shall be established by the Board of Selectmen. 8.8.2.2.6 Penalties Any person maintaining a kennel after the kennel license therefor has been denied, revoked or suspended shall be subject to the penalties set forth in Section 8.8.6. 8.8.3 Conduct of Dogs 8.8.3.1 Nuisance and Dangerous Behavior No dog owner or keeper shall permit the dog to become or remain a nuisance dog or a dangerous dog, as those terms are defined and used in MGL. Chapter 140 Sections 136A and 157. 8.8.3.2 Leash Law When not on the private property of its owner or keeper, or on private property with the express permission of that property's owner, a dog shall be on a leash; provided, however, that it may be under effective voice control when within the Town Forest or on conservation lands. 329 ANNUAL TOWN MEETING Reading Memorial High School Preforming Arts Center April 25, 2016 8.8.3.2.1 Public Gatherings - Leash Control Only Except as otherwise specified in Section 8.8, a dog may be at any public gathering only if it is on a six -foot or shorter leash and refrains from illegal activities. 8.8.3.2.2 School Grounds Unless the School Principal gives permission in advance, no dog may be on school grounds from thirty (30) minutes before classes begin until thirty (30) minutes after classes end. At all other times, the dog may be on school grounds only if it is on a six -foot or shorter leash or remains within a vehicle. 8.8.3.2.3 Exception for Assistance Animals (service animals) The provisions of this Section 8.8.3.2 shall not apply to any properly trained assistance animal or service animal while performing its duties. 8.8.3.3 Dog Litter Every dog owner or keeper shall be responsible for expeditiously removing any feces that the dog deposits anywhere except on its owner's or keeper's private property, or on other private property with the property owner's permission 8.8.4 Animal Control Officer 8.8.4.1 Appointment The Town Manager shall appoint an ACO pursuant to MGL Chapter 140 Sections 151 and 151A to carry out the provisions of Section 8.8 and to perform such other duties and responsibilities as the Town Manager or its designee may determine. 8.8.4.2 Duties The ACO's duties shall include the enforcement of the provisions of Section 8.8 and of MGL Chapter 140 Sections 136A -174E and any relevant state or local regulations. 8.8.4.3 Issuance of Temporary Restraint Orders The ACO may issue a Temporary Restraint Order to the owner or keeper of any dog that is alleged to be a nuisance dog or a dangerous dog and is awaiting a decision under Section 8.8.5.2. A Temporary Restraint Order shall be in force for no more than thirty (30) days unless the ACO renews it in writing for subsequent thirty (30) day periods. The ACO may rescind or stop renewing the order when, in the ACO's judgment, restraint is no longer required. The ACO's order shall expire upon receipt of a decision from the ACAC on the nuisance dog or dangerous dog hearing. 8.8.4.4 Issuance of a Temporary Confinement Order The ACO may make arrangements for the temporary housing of any dog that requires such temporary housing, and may issue an Order of Temporary Confinement authorizing such temporary housing. The housing may be at local veterinary clinics, or at dog kennels within the Town or neighboring towns, and shall be at the dog owner's or keeper's expense. 8.8.4.5 Complaint Investigation The ACO shall make a written record of and shall investigate all complaints arising within the Town pertaining to violations of Section 8.8 or MGL Chapter 140 Sections 136A -174E and report its findings to the ACAC. 330 ANNUAL TOWN MEETING Reading Memorial High School. Preforming Arts Center April 25, 2016 8.8.4.6 Recordkeeping The ACO shall keep accurate, detailed records of the confinement and disposition of all dogs held in custody, all bite cases reported, and the results of investigations. The ACO shall maintain a telephone log of all calls received regarding dogs and submit a monthly report summarizing the log to the ACAC. 8.8.5 Animal Control Appeals Committee 8.8.5.1 Composition of the ACAC The Animal Control Appeals Committee shall be composed of three Reading residents, none of whom shall otherwise be employees of the Town, appointed to three -year overlapping terms by the Board of Selectmen. The ACAC shall annually select a member to serve as the Chair. At'least one of the three members must be a dog owner. 8.8.5.2 Nuisance or Dangerous Dog Hearings Any person may file a complaint in writing to the ACAC that a dog owned or kept in the Town is a nuisance dog or a dangerous dog. All such complaints shall be investigated and addressed in accordance with MGL Chapter 140 Section 157. 8.8.6 Penalties 8.8.6.1 Fines Any dog owner or keeper who maintains a kennel after the kennel license has been denied, revoked or suspended, or who fails to obtain a kennel license; and any dog owner or keeper who fails to comply with Section 8.8.3 shall be subject to penalties as .determined by the ACAC, not exceeding Three Hundred ($300) Dollars per day for every day of the violation. 8.8.6.2 Reimbursement of Costs If the ACO confines a dog and the dog owner or keeper does not pay all fees directly to the kennel or veterinary clinic, then the dog's owner or keeper shall be required to reimburse the Town for any expenses incurred .in boarding that dog. If the dog has not been licensed, the owner or keeper shall obtain. a license and pay any applicable late fee before the dog can be released. 8.8.6.3 Penalties for Violating Temporary Restraint Orders The ACAC shall determine a schedule of penalties not exceeding Three Hundred ($300) Dollars per day for each and every violation of Temporary Restraint Orders. 8.8.6.4 Penalties for Non - Compliance with and Order of the ACAC An owner or keeper of a dog who fails to comply with an order of the ACAC shall be punished in accordance with MGL Chapter 140 Section 157A. 8.8.6.5 Enforcement In addition to any other means of enforcement, the provisions of Section 8.8 and the regulations adopted pursuant thereto may also be enforced by non - criminal disposition in accordance with the provisions of Section 1.8, and MGL Chapter 40 Section 21D. The penalty for such violation shall be $300 for each offense. Each day or part thereof shall constitute a separate offense. Presentation given by: Robert LeLacheur - See Attached 331 ANNUAL TOWN MEETING Reading Memorial High School Preforming Arts Center Finance Committee Resort: No report April 25, 2016 Bylaw Committee Report - given by Marcel DuBois: The Bylaw Committee recommends this Article by a vote of 5 -0 -0 at their meeting on March 28, 2016. Motion made by William Brown, Precinct 8 to amend as follows: 8.8.3.2.1 Public Gatherings -. Leash Control Only Except as etheFwise s eeified prohibited on Town property by the authority having care, custody, management and control thereof in Seetien o, a dog may be at any public gathering only if it is on a six -foot or shorter leash and refrains from illegal activities. Motion Withdrawn Motion made by William Brown, Precinct 8 to amend as follows: Inserting a new section 8.8.3.2.3 as follows: 8.8.3.2.3 Cemetery Grounds No dogs shall be allowed on cemetery grounds at any time. and to renumbering the section entitled "Exception for Assistance Animals (service animals)" as section 8.8.3.2.4. Motion Does Not Carry Motion made by Thomas Ryan, Precinct 1 to amend as follows: 8.8.2.1.7 License Fees Fees for licensing each dog shall be determined by the Town Meeting; provided, however, that the fee for neutered or spayed dogs shall be less than the fee for non- neutered or non-spayed-4Gga nonneutered or nonspayed dogs. No dog license fee shall be charged for any service dog as defined by the Americans with Disabilities Act or regulations issued thereunder; or for a license for a dog owned by a person 70 years of age or older. Motion Carried Motion made by Thomas Ryan, Precinct 1 to amend as follows: 8.8.1.3 Effective Voice Control 332 ANNUAL TOWN MEETING Reading Memorial High School Preforming Arts Center April 25, 2016 An animal shall be deemed to be "under effective voice control" if it is within the owner's or keeper's sight, the owner or keeper is carrying a leash. and the animal refrains fFem illegal tiyities Motion Does Not Carry Motion made by Ron D'Addario, Precinct 6 to amend as follows: 8.8.3.2.3 Cemetery Grounds Dogs on a six -foot or shorter leash shall be allowed on Cemetery Grounds at any time that the Cemetery is open to the public and to renumbering the section entitled "Exception for Assistance Animals (service animals)" as section 8.8.3.2.4. Motion Does Not Carry Motion made Jamie Maughan, Precinct 4 to amend as follows: 8.8.3.2 Leash Law When not on the private property of its owner or keeper, or on private property with the express permission of that property's owner, a dog shall be on a leash; provided, however, that it may be under effective voice control when within the Town Forest or on conservation lands if allowed by Conservation Commission rules. Motion Carried After some discussion a counted vote was taken: Counted Vote 131 Voted in the affirmative 2 Voted in the negative 163 Town Meeting Members in Attendance Motion Carried as Amended On motion by Bill Brown, Precinct 8 it was voted that this Annual Town Meeting stand adjourned to meet at 7:30 PM at the Reading Memorial High School Preforming Arts Center, on Thursday, April 28, 2016. Meeting adjourned at 10:36 PM with 163 Town Meeting Members in attendance. Motion Carried 333 Reading Memorial High School Preforming Arts Center A true copy Attest: au AAGemmeA Town Clerk ANNUAL TOWN MEETING 334 April 25, 2016 4/13/2017 FY17 Budget Review & Financial Overview Report to Annual Town Meeting Mark Dockser -- Chair, Reading Finance Committee April 25, 2016 Role of the Finance Committee "The finance committee is the official fiscal watchdog for a town. Because it is difficult for all taxpayers to be completely informed about every aspect of a town's finances, finance committees were established so a representative group of taxpayers could conduct a thorough review of municipal finance questions on behalf of all citizens." Source: Massachusetts Division of Local Services 335 1 "Free Cash" Free Cash /Revenue 12% 10% 6% V 4% 2% 0% 2004 2005 2006 2007 2000 2009 2010 2011 2012 2013 2014 2015 2016E 2017P 4/13/2017 FREEOA1SH &STASIUZARON FUNDSVERSUS PER CAPITA INCOME FY2015 Stabilization funds of ^2% of budget are held in addition to Free Cash Using Free Cash -- 1 -time Project vs. Operations One time project: $1MM • Year 1 impact from FC: $1MM • Year 2 impact from FC: $0 • Year 3 impact from FC: $0 • TOTAL IMPACT: $1 MM From FC Oaeratiniz expense: $1 MM • Year 1 impact from FC: $1MM • Year 2 impact from FC: $1 MM • Year 3 impact from FC: $1 MM • TOTAL IMPACT: $1 MM /year From FC 336 2 FinComm Activities and Policies • Audit Committee • FinComm Chairs Town Audit Committee + 2 members on RMLD Audit Committee • Formal Policies • Minimum 5% of annual town budget to be held as "Free Cash" • 5% of annual town budget to be spent on capital improvement projects • Informal Policies • Annual contribution toward unfunded liabilities (OPEB) • Use of limited free cash to support operating budget FY17 Revenues Other Taxes & Fees: $6,615,000 $6,362,500 4.0% Excise, Meals, Services, Misc State Aid $13;725,000 $13,612,(331 �' 0 8% F Transfers: 3,868,490 $3,779,131 2.4 % RMLD, Enterprise Funds,Misc Budgeted Free. Cash $2,000,000 $2.199 765 -9.1% TOTAL REVENUES z <' $90,192,757 $87,$83;69 �2 fi %; 337 5 % 4% 4/13/2017 3 FY17 Budget — General Fund FY17 Budget Finance Committee -- General Fund* Category Budget % change YA % of Budget Accomodated Costs $23,492,850 2.1% 26.2% Administrative Services $2,764,040 1.0% 3.1% Public Services $1,621,125 0.9% 1.8% Finance $781,300 -7.6% 0.9% Public Safety $9,953,350 3.6% 11.1% Public Works $5,604,655 0.6% 6.3% Library $1,485,500. 3.4% 1.7% Facilities $3,140,680 5.5% 3.5% School Department $40,697,666 34% 45_5% TOTAL $89,541,166 2.6% 100% *Excludes Enterprise Funds, Voke FY17 Budget Finance Committee -- General Fund 4% 4/13/2017 338 LI Comparative Taxes Taxes paid versus SF Assessed values FY 15 Avg SF Avg Tax Concord 902,043 12,890 Lexington 820,366 12,191 Belmont 847.928 10,938 Winchester 872,118 10,588 Andover 577,689 8,648 Bedford 588.699 8,607 N Reading 482.670 8,022 Lynnfield 553,557 8,021 Westford 464.442 7,543 Reading 116 499,500 7,248 N Andover 476,092 6,851 ( Reading 115 464:281 6,824 I Wakefield 416,013 5,608 Stoneham 41T,468 5,411 d Tewksbury 327,145 5,355 Shrewsbury 381,043 ` 5,030 4/13/2017 FY17 Budget — General Fund FY17 Budget Finance Committee -- General Fund FY17 Budget Finance Committee — General Fund* - Cate¢ory - - fiudeet charge YA %oreudaet Amomodated Costs - ', _$23,492,850. 2.1% 26.2% _ Adminialradve SeMces $2,764,Q40 1.0% 3.1% PubkSeMrea $1,621,125 Finance - - $787,300 -7.6% 0--% $9,953,350 3.6% !LS% AT GORY Nbllcsafety AME] E] Pubuawoft $5,604,65S 0.6% 63% CENTAGE] Library Fadlidez $1,485,500 8.4% $3,140,680 5.5% 1.7% 35% Public —Services School Department 540697666 3.1% 45S \ 2% Tma1 $e9,54LI" 2.6% 100% `Finance 1% *Excludes Enterprise Funds, Voke Facilities Library 4% 2% 339 5 FY18 Budget • Drivers: 4/13/2017 • Modest revenue growth • Return to 5% capital projects • Continue to use limited amount of free cash • Health care and accommodated costs remain very high (8.2% health 2017) Implications: • Without additional revenues, anticipated FinComm Operating Budget guidance of 1 -2% growth (vs. 3.1% for level services, 2.6% FY17) • Substantial cuts required 340 E ANNUAL TOWN MEETING Reading Memorial High School Preforming Arts Center April 28, 2016 The meeting was called to order by the Moderator, Alan E. Foulds, at 7:40 PM, there being a quorum present. The Pledge of Allegiance to the Flag was said by all in attendance. Motion made by John Halsey, Board of Selectmen to dispense of the reading of all motions in their entirety. Motion Carried ARTICLE 8: Move that the Town vote to approve an Affordable Housing Trust Fund Allocation Plan pursuant to Chapter 140 of the Acts of 2001 entitled "AN ACT AUTHORIZING THE TOWN OF READING TO ESTABLISH AN AFFORDABLE HOUSING TRUST FUND ", or take any other action with respect thereto. Background: Chapter 140 of the Acts of 2001 authorized the Town of Reading to establish a separate fund known as the Affordable Housing Trust Fund (AHTF). The AHTF requires Town Meeting approval of an annual allocation plan submitted by the Board of Selectmen. AHTF expenditures require approval by a majority vote of the full combined membership of the Board of Selectmen and the Reading Housing Authority. AHTF uses include: ♦ Create or preserve affordable housing; ♦ Maintain or operate affordable housing; ♦ Develop new or rehabilitate existing housing as affordable homeownership or rental units; The purpose of the Affordable Housing Allocation Plan is to provide a framework for the Town to expend funds on affordable housing. The current AHTF balance of $261,391.75 reflects revenue generated through the actions of the CPDC, as well as proceeds from the loss of an affordable unit. There are no Town tax generated funds in the AHTF. The only expenditure to date from the AHTF, in the amount of $200,000, was to assist Oaktree development with financing affordable housing at 30 Haven Street. At the 2012 Annual Town Meeting, approval was given for funding to hire a consultant to assist a staff initiative to update the Town's Housing Plan, including the five -year "Housing Production Plan ". This effort is important as a defense against unfriendly 40B developments in the community, and requires the Town to develop a phased plan to produce housing to reach the 10% threshold as required by MGL Ch. 40B. Reading's Housing Production Plan has been approved by the Board of Selectmen and by the Commonwealth of Massachusetts. The Town commissioned and received a supplemental report on how the AHTF can best be used to support the "Planned Production" goals of the Housing Plan. This report was received in late winter 2012, and a presentation was made in April of 2013 to the Board of Selectmen and the Reading Housing Authority. The report recommends a significant restructuring of the Town's AHTF efforts. The Board of Selectmen considered, these recommendations two years ago, but decided against any changes. Therefore, the current recommendation is to adopt the AHTF Allocation Plan as shown below as the framework for the use of Affordable Housing Trust Fund in FY2017. Note that Reading as lead community is part of a regional effort (along with North Reading, Wilmington and Saugus) to share a Regional Housing Services Office (RHSO). The RHSO monitors and administers 341 ANNUAL TOWN MEETING Reading Memorial High School Preforming Arts Center April 28, 2016 affordable housing requirements including tracking and updating the Subsidized Housing Inventory (SHI) as well as maintaining ready buyer and ready renter lists. Affordable Housing Trust Fund Allocation Plan FY2017 Pursuant to Article 8 of the 2016 Annual Town Meeting, an Affordable Housing Trust Fund Allocation Plan for the Fiscal Year 2017 in accordance with the provisions of Chapter 140 of the Acts of 2001 is as follows: Available Balance - Unrestricted Funds: Available Balance - Restricted Funds $261,391.75 $0 Unrestricted funds shall be used for the following purposes: 5% up to a maximum of $10,000 for administration of Affordable Housing Remainder for constructing affordable housing (including loan and grant programs); or for maintaining and improving affordability of existing housing stock; or for the purchase 'of existing housing stock to -add it to or maintain it as a part of the existing affordable housing inventory Finance Committee Report - given by Peter Lvdecker: At their meeting on March 30, 2016 the Finance Committee voted 7 -0 -1 to recommend this Article to Town Meeting. One member abstained because of a possible conflict of interest. Bylaw Committee Report: No report Board of Selectmen Report: The Board of Selectmen on March 22, 2016 voted 3 -0 -0 to support this Article. Presentation given by: • Jean Delios - See Attached Motion Carried ARTICLE 9 Move that the Town vote to authorize revolving funds for certain Town Departments under Section 53E 1/2 of Chapter 44 of the Massachusetts Genera/ Laws for the fiscal year beginning July 1, 2016 with the receipts, as specified, credited to each fund; the purposes, as listed, for which each fund may be spent, the maximum amount that may be spent from each fund for the fiscal year, and the disposition of the balance of each fund at fiscal year -end. 342 ANNUAL TOWN MEETING Reading Memorial High School Preforming Arts Center April 28, 2016 Revolving Spending Revenue Allowed Expenditure Year End Account Authority Source Expenses Limits Balance Consulting and Fees as engineering services provided for in for the review of Conservation Reading General designs and Available Commission Bylaws Section engineering work for for Consulting Conservation 5.7, Wetlands the protection of expenditure Fees Commission Protection wetlands. $25,000 next year Legal, oversight and inspection, plan review, Building, initial property Plumbing, appraisals and appeals, Wiring, Gas and Public Services other permits Planning and general for the Oaktree, management, curb Addison- sidewalks and Wesley/ Pearson pedestrian safety Available Inspection and Johnson improvements, records for Revolving Town Woods archiving and other expenditure Fund Manager developments project related costs. $200,000 next ear Clinic fees, Materials and costs Available Public Health charges and associated with clinics for Clinics and Board of third party and public health expenditure Services Health reimbursements programs $25,000 next ear Charges for lost Available Library Library or damaged Acquire Library for Materials Director and Library materials to replace expenditure Replacement Trustees materials. lost or damaged items $15,000 next year Facilities Director Available Mattera won Utilities and all other for Cabin AdFninmstr- maintenance and expenditure Operating f Rental Fees operating expenses $10000 next vear Director of Public Works upon the recommenda Available tion of the Sale of timber; Planning and for Town Forest fees for use of Improvements to the expenditure Town Forest Committee the Town Forest rrown Forest $10,000 next Vear Background: The revolving funds established in this article are subject to annual renewal by Town Meeting. • Conservation Consulting Revolving Fund - These funds are used to receive payments from applicants, hire expert consultants where required, and return the balance to the applicant. The balance in the Conservation Consulting Revolving Fund as of February 2016 is $2,888. • Inspections Revolving Fund - Beginning in 2004, Town Meeting approved the Inspections Revolving Funds as a way to deposit building and other permit fees from three large projects (the Oaktree, Pulte 343 ANNUAL TOWN MEETING Reading Memorial High School Preforming Arts Center April 28, 2016 Homes and Johnson Woods developments). The balance available as of February 2016 in this fund is $772,105, and of that total $200,000 is proposed by the Town Manager as part of the FY2017 budget: $75,000 to be used to help offset some building division related activities in the Public Services budget, as has been the case for several years, plus upon the advice of the Board of Selectmen along with the support of a Financial Forum up to $125,000 is set aside to fund a new economic development planning position. The balance in this fund will allow four years of expenses at this pace at which point the results of the economic development efforts can be fairly judged and should be self- funding. Health Clinic Revolving Fund - The Reading Health Division contracts for third party payments for a number of immunizations. The funds are used to augment the influenza vaccine supply from the State Department of Public Health to insure vaccine for the homebound clients and first responders. The Division also uses these funds for materials for other screening clinics. Clinic client fees are also deposited into this fund to offset vaccine and clinical supply costs. The balance available as of February 2016 in this fund is $60,459. The State has been cutting back on the free flu and other vaccines to be distributed to cities and towns, and the Town therefore needs to purchase extra doses. The necessary amounts used for clinic vaccine, supplies and staff salaries related to the clinics each year directly from the revolving fund is therefore approximately $25,000. Library Materials Replacement Fund — During the course of a year, the Library recovers funds from patrons who have lost or damaged books or other materials. Previously, those funds went into the Town's General Fund and at the end of the year went into Free Cash. Once this Revolving Fund was adopted (beginning in FY2010), those funds 'recovered from patrons for lost or damaged materials were available directly to the Library for expenditure to purchase replacement materials and processing supplies. The balance available as of February 2016 in this fund is $433. • Mattera Cabin Operating Fund — The log cabin on the Mattera conservation land was purchased several years ago, and was renovated by the Vocational School. Some of the use is revenue generating, and it is anticipated that over time the site will generate enough funding to pay the operating costs of the cabin — primarily utilities. This Article allows those revenues that are generated to be used directly for the operating expenses of the cabin. The balance available as of February 2016 in this fund is $1,006. In response to an instructional motion by Town Meeting, the Town Manager has moved the responsibility for both the Mattera Cabin, and Cemetery garages to be moved to the Facilities department. • Town Forest Revolving Fund was created in 2011. The purpose is to allow revenues from controlled timber harvesting and permit fees to then be spent by the DPW Director upon the recommendation of the Town Forest Committee, on improvements to the Town Forest, including planning efforts. The Town Forest Committee has had a forest stewardship plan created (through a grant) to make recommendations on forest management including controlled timber harvesting. The balance available as of February 2016 in this fund is $0. It is anticipated that timber harvesting on a limited basis could begin at any time, and therefore there will be future proceeds which can be used for the purposes of the revolving fund. Finance Committee Report - given by Paula Perry: At their meeting on March 30, 2016 the Finance Committee voted.8 -0 -0 to recommend this Article to Town Meeting. Bylaw Committee Report: No report Board of Selectmen Report: The Board of Selectmen on March 22, 2016 voted 3 -0 -0 to support this Article. Presentation given by: Robert LeLacheur - See Attached Motion made by Thomas J Ryan, Precinct 1 as follows: 344 ANNUAL TOWN MEETING Reading Memorial High School April 28, 2016 Preforming Arts Center Mattera Cabin Operating - Delete $10,000 to $0 Motion to Amend does not Carry After some discussion a vote was taken: Motion Carried as Presented ARTICLE 10: Move that the Town vote to authorize the Board of Selectmen to sell, exchange, or dispose of, various items of Town tangible property, upon such terms and conditions as they may determine. Division Year Make Estimate Value Notes Cemetery 1999 Ford $7,500 Dump truck Highway 1994 Ford 9,500 Aerial Highway 1981 Clark 1,500 Forklift Highway 1999 Bobcat 12,500 Skid Steer Highway 1993 Bombardier -8i500 Snow Bombardier Highway Broken granite curbing Parks 1999 Giant Vac 3,750 GV Leaf Vac Parks 1999 Smith Co 3,500 new motor; unsure of hrs Parks 1994 1 Smith Co. 500 hr meter stopped Cemetery 1999 Skag mower Water Em to 150 Adm Svc Office Furniture Police 2011 Ford Car 14 Police 2005 Ford Car 17 Police 2011 Ford Car 11 Police 2007 Ford Car 4 Finance Committee Report - given by Vanessa Alvarado: At their meeting on March 30, 2016 the Finance Committee voted 8 -0 -0 to recommend this Article to Town Meeting. Bylaw Committee Report: No report Board of Selectmen Report: The Board of Selectmen on March 22, 2016 voted 3 -0 -0 to support this Article. Presentation given by: • Robert Lel-acheur - See Attached 345 ANNUAL TOWN MEETING Reading Memorial High School Preforming Arts Center Motion Carried April 28, 2016 ARTICLE 11: Move that the Town vote to raise and appropriate, transfer from available funds or otherwise provide a sum or sums of money to pay bills remaining unpaid from prior fiscal years for goods and services actually rendered to the Town, as follows: $328.65 Canon Financial Services (copier lease) in Administrative Services expenses (source: Free Cash) or take any other action with respect thereto. Background: In December 2015 the town became aware of an outstanding invoice to Canon Financial Services in the amount of $328.65 that had been bundled into current balances due, while it was in fact for services rendered in April 2015. The services rendered were a copier lease managed through the Town Manager's office. Finance Committee Report - given by Craig Merry: At their meeting on March 30, 2016 the Finance Committee voted 8 -0 -0 to recommend this Article to Town Meeting. This bill is an obligation that should be paid by the Town, with a source of Free Cash. Bylaw Committee Report: No report Board of Selectmen Report: The Board of Selectmen on March 22, 2016 voted 3 -0 -0 to support this Article. Presentation given by: . Robert LeLacheur - See Attached 4/5 Vote Required Declared Unanimous by Moderator 149 Town Meeting Members in Attendance Motion Carried ARTICLE 12: Move that the Town raise by borrowing, or from the tax levy, or transfer from available funds, and appropriate the sum of: $102,168,260 for the operation of the Town and its Government for Fiscal Year 2017, beginning July 1, 2016. Move that the Town approve and appropriate the proposed FY2017 Budget as presented for Line Item B99 (Benefits): $15,988,500 to be provided as follows: Line B99 - $2,000,000 from Free Cash; $300,000 from Overlay and the balance from property taxes, State aid and non - property tax local receipts Move that the Town approve and appropriate the proposed FY2017 Budget as presented for Line Item C99 (Capital): $2,220,000 Ow. ANNUAL TOWN MEETING Reading Memorial High School Preforming Arts Center to be provided as follows: April 28, 2016 Line C99 - $150,000 from Free Cash; $50,000 from the Sale of Real Estate Fund and the balance from property taxes, State aid and non - property tax local receipts Move that the Town approve and appropriate the proposed FY2017 Budget as presented for Line Item D99 (Debt): $4,900,000 to be provided as follows.: Line D99 - from property taxes, State aid and non - property tax local receipts Move that the Town approve and appropriate the proposed FY2017 Budget as presented for Line Item E99 (Vocational Education): $384,350 to be provided as follows: Line E99 - from property taxes, State aid and non - property tax local receipts Move that the Town approve and appropriate the proposed FY2017 Budget as presented for Line Item F99 (FINCOM Reserve Fund): $150,000 to be provided as follows: Line F99 - from property taxes, State aid and non - property tax local receipts Move that the Town approve and appropriate the proposed FY2017 Budget as presented for Line Item G91 (Administration Services Wages): $1,431,140 and Line Item G92 (Administration Services Expenses): $1,332,900 to be provided as follows: Lines G91 and G92 - from property taxes, State aid and non - property tax local receipts Move that the Town approve and appropriate the proposed FY2017 Budget as presented for Line Item H91 (Public Services Wages): $1,253,375 and Line Item H92 (Public Services Expenses): $367,750 to be provided as follows: Lines H91 and H92.- from property taxes, State aid and non- property tax local receipts Move that the Town approve and appropriate the proposed FY2017 Budget as presented for Line Item I91 (Finance Wages): $634,550 and Line Item I92 (Finance Expenses): $146,750 to be provided as follows: Lines I91 and I92 - from property taxes, State aid and non - property tax local receipts 347 ANNUAL TOWN MEETING Reading Memorial High School Preforming Arts Center April 28, 2016 Move that the Town approve and appropriate the proposed FY2017 Budget as presented for Line Item 391 (Public Safety Wages) $9,500,350 and Line Item 192 (Public Safety Expenses): $453,000 to be provided as follows: Lines 791 and 192 - from property taxes, State aid and non - property tax local receipts Move that the Town approve and appropriate the proposed FY2017 Budget as presented for Line Item K91 (Public Works Wages) $2,478,605 and Line Item K92 (Public Works Expenses): $871,050 to be provided as follows: K92 - $25,000 from the Sale of Cemetery lots to support Cemetery expenses; and the balance of Lines K91 and K92 from property taxes, State aid and non - property tax local receipts Move that the Town approve and appropriate the proposed FY2017 Budget as presented for Line Item K93 (Public Works - Snow & Ice Expenses): $625,000; Line Item K94 (Public Works Street Lighting Expenses): $180,000 and Line Item K95 (Public Works Rubbish Collection & Disposal Expenses): $1,450,000 to be provided as follows: Lines K93, K94 and K95 - from property taxes, State aid and non - property tax local receipts Move that the Town approve and appropriate the proposed FY2017 Budget as presented for Line Item L91 ( Library Wages) $1,168,175 and Line Item-1-92 (Library Expenses): $317,325 to be provided as follows: Lines L91 and L92 - from property taxes, State aid and. non - property tax local receipts Move that the Town approve and appropriate the proposed FY2017 Budget as presented for Line Item M91 (Core Facilities): $2,853,790 to be provided as follows: Line M91 - $100,000 from School Rental Revolving Fund; and the balance of line M91 from property taxes, State aid and non - property tax local receipts Move that the Town approve and appropriate the proposed FY2017 Budget as presented for Line Item M92 (Town Buildings): $286,890 to be provided as follows: Line M92 - from property taxes, State aid and non - property tax local receipts Move that the Town approve and appropriate the proposed FY2017 Budget as presented for Line Item U99 (School Department): $40,697,666 to be provided as follows: Line U99 - from property taxes, State aid and non - property tax local receipts w ANNUAL TOWN MEETING Reading Memorial High School Preforming Arts Center April 28, 2016 Move that the Town approve and appropriate the proposed FY2017 Budget as presented for Line Item W99 (Water Enterprise Fund): $6,240,274 to be provided as follows: Lines W99 - $800,000 from Water Reserves and the balance from user fees and other charges Move that the Town approve and appropriate the proposed FY2017 Budget as presented for Line Item X99 (Sewer Enterprise Fund): $5,706,390 to be provided as follows: Line X99 - from user fees and other charges Move that the Town approve and appropriate the proposed FY2017 Budget as presented for Line Item Y99 (Storm Water Enterprise Fund): $530,430 to be provided as follows: Line Y99 - $250,000 from Storm Water Reserves and the balance from user fees and other charges Move that the Town approve and appropriate the proposed FY2017 Budget, exclusive of State and county assessments: $102,168,260 • Representing the total of all motions made under Article 12 • Funds are to be provided as set forth in said motions Background: Please see the yellow pages of this document for the full details of the FY2017 budget. Finance Committee Report - given by Paul McNeice:. I Please see the yellow pages - Spending Scorecard of this document for the votes of the Finance Committee online items in the FY2017 budget. The Finance Committee recommends the subject matter of Article 12 as explained by these votes at their meeting on March 30, 2016. Bylaw Committee Report: No report Board of Selectmen Report: The Board of Selectmen on March 22, 2016 voted 3 -0 -0 to support this Article as presented to the Finance Committee. Presentation given by: • Robert LeLacheur - See Attached • John Doherty - See Attached After some discussion a counted vote was taken: 2/3 Vote Required 129 Voted in the affirmative 3 Voted in the negative 149 Town Meeting Members in Attendance 349 ANNUAL TOWN MEETING Reading Memorial High School Preforming Arts Center Motion Carried April 28, 2016 ARTICLE 13: Move that the Town vote to accept and expend such sum of money as may be available to the Town pursuant to Chapter 90, Section 34 of the Massachusetts General Laws as reimbursement for the costs of repair, construction, maintenance or preservation of the Town's roads and bridges and other related costs that qualify under the State Aid Highway Guidelines adopted by the Massachusetts Department of Transportation; and to authorize the Town Treasurer, with the approval of the Board of Selectmen, to borrow said sum in anticipation of such reimbursement, in accordance with Chapter 44, Section 6 of the Massachusetts General Laws., or take any other action with respect thereto. Background: After a one -time increase in FY2015 to $900,000, Reading has settled back into the $600,000 range - $595,949 is expected for FY2017 for Chapter 90 (local road repairs). The motion made at Town Meeting will be to accept the Chapter 90 state assistance at whatever level is ultimately available, a trend in other communities in order to avoid any uncertainty of the timing of the final state budget process. Finance Committee Report - given by Paul McNeice: At their meeting on March 30, •2016 the Finance Committee voted 8 -0 -0 to recommend this Article to Town Meeting. Bylaw Committee Report: No report Board of Selectmen Report: The Board of Selectmen on March 22, 2016 voted 3 -0 -0 to support this Article. Presentation given by: • Robert LeLacheur - See Attached Motion Carried ARTICLE 14: Move that the Town vote, pursuant to Section 2.6 of the Reading Home Rule Charter, to declare the seats of certain Town Meeting Members to be vacant and remove certain described persons from their position as Town Meeting Members for failure to take the oath of office within 30 days following the notice of election or for failure to attend one -half or more of the Town Meeting sessions during the previous year or take any other action with respect thereto. Background: The Reading Home Rule Charter provides for the removal by Town Meeting of Town Meeting Members who did not attend at least half of the Town Meeting sessions during the previous year. 350 ANNUAL TOWN MEETING Reading Memorial High School April 28, 2016 Preforming Arts Center Total of 2 Town Meetings resulting in 6 nights to attend I ie* rl kolnut nrn thnen Mfhn attanrlpri IPCC than 'I ninhtS Finance Committee Report: No report Bylaw Committee Report: No report Motion made by Tony D'Arezzo, Precinct 2 Chair to accept to list as presented. Motion made by Angela Binda, Precinct 5 Chair to amend the list of Town Meeting members as shown in chart above. Motion made by Greg Selvitelli, Precinct,6 Chair to amend the list of Town Meeting members as shown in chart above. Motion Carried as Amended John Halsey, Board of Selectmen moved to adjourn the 2016 Annual Town Meeting sine die at 9:59 PM with 149 Town Meeting Members in attendance. Motion Carried A true copy Attest: xawe-',�� Laura ,A Gemme Town Clerk 351 Remove Keep as From Town Total Town Meeting Nights Meeting Member Precinct First Name MI 11 Last Name Term Attended - Yes - No 2 Walter J Carroll 2017 0 X 2 Carol Sampson 2017 0 X 5 Patrick P O'Sullivan 1 2018 2 J X 6 Jacqueline MK Petrillo 1 2017 2 X 6 Drucilla Wood- Beckwith 1 2018 2 X Finance Committee Report: No report Bylaw Committee Report: No report Motion made by Tony D'Arezzo, Precinct 2 Chair to accept to list as presented. Motion made by Angela Binda, Precinct 5 Chair to amend the list of Town Meeting members as shown in chart above. Motion made by Greg Selvitelli, Precinct,6 Chair to amend the list of Town Meeting members as shown in chart above. Motion Carried as Amended John Halsey, Board of Selectmen moved to adjourn the 2016 Annual Town Meeting sine die at 9:59 PM with 149 Town Meeting Members in attendance. Motion Carried A true copy Attest: xawe-',�� Laura ,A Gemme Town Clerk 351 SPECIAL TOWN MEETING Reading Memorial High School Preforming Arts Center September 12, 2016 The Precincts listed below met at 7:00 PM to conduct the following business: Precinct 2 - With a Quorum present a vote was taken to appoint Paul McNeice to fill a vacancy until the next election. Precinct 3 -With a Quorum present a vote was taken to appoint Lori Briere to fill a vacancy until the next election. Precinct 6 - With a Quorum present a vote was taken to appoint Al Mosier to fill a vacancy until the next election. The meeting was called to order by the Moderator, Alan E. Foulds, at 7:34 PM, there being a quorum present. The Invocation was given by Philip Pacino, Precinct 5 followed by the Pledge of Allegiance to the Flag. The Warrant was partially read by the Town Clerk, Laura Gemme, when on motion by John Halsey, Board of Selectmen, it was voted to dispense with further reading of the Warrant. Motion made by Kevin Sexton, Board of Selectmen to dispense of the reading of all motions in their entirety. Motion Carried ARTICLE 1: Motion made by Kevin Sexton, Board of Selectmen and Article 1 was tabled ARTICLE 2: Motion made by Kevin Sexton, Board of Selectmen and Article 2 was tabled ARTICLE 3: Move that the Town vote to amend the FY 2017 -27 Capital Improvements Program as provided for in Section 7 -7 of the Reading Home Rule Charter and as previously amended, by making these changes: General Fund FY17 + $ 26,000 (funded by FINCOM Reserve Funds) + $1,700 Fire: Ambulance purchase (now $ 276,700) $ 24,300 Fire: Ambulance / EMS equipment Debt: Reduce Birch Meadow Phase I Field Lighting from $ 1.0 million to $ 0.1 million FY18: + $ 610,600 $ 462,000 Facilities - Schools: Parker roof repair project (moved up from debt in FY19) $ 350,000 Facilities - Schools: RMHS boilers (new item, replacement for energy efficiency) $ 115,000 Public Schools- Recreation: Replace backstop & infield at Barrows (moved up from FY20 and increased by $ 20k) $ 40,000 Facilities -Gen: F -350 Box Truck (new - ree 2006. model) SPECIAL TOWN MEETING Reading Memorial High School Preforming Arts Center September 12, 2016 $ 40,000 Facilities -Gen: Chevy 250OHD Pickup (new - replace 1999 Chevy 2500) $ 30,000 DPW: Engineering Scanner /Plotter (unknown age) $ 22,000 DPW: Mover SKAG 72" (1998) moved up from FY19 $ 18,000 DPW: Mover SKAG 52" (1995) moved up from FY19 and decreased from $19,000 $ 18,000 DPW: Mover SKAG 52" (2008) moved up from FY19 and increased from $17,500 $ 12,000 DPW: 2GV LeafVac (2000) moved up from FY21 and decreased from $43,600 + $ 1,000 DPW: Dump Truck #24 Parks (2000) - increase from $64k to $65k ($ 10,000) Library: Delete Equipment ($ 14,000) Facilities - Schools: Parker furniture moved to FY17 (below) ($ 26,800) DPW: HW Compressors moved up to FY20 and increased to $50,000 ($ 34,000) DPW: Move Engineering vehicle from FY18 to FY20 ($ 39,500) DPW: Delete HV4 Ford Van (1995) ($ 78,100) Public Schools- Recreation: Move Barrows basketball court repairs to FY19 ($ 125,000) Public Schools- Recreation: Move Barrows tennis court repairs to FY19 ($ 170,000) DPW: Woodsman Chipper (2004) moved. from FY18 to FY19 and increased to $195k Note that FY18 debt service reduced by $637,500 including changes to Birch Meadow Phases I and II and the roof project below: Debt: Increase Birch Meadow Phase II from $1.5 million to $2.5 million, add Field Lighting component and move out from FY18 to FY19 Debt: Eliminate $2.7 million School and Town building roof repair projects (fund as capital) Funding Expected to be Proposed for Future FY17 Town Meetings: FY17: + $ 490,000 ($ 365,000 net funding at November Town Meeting) $ 210,000'DPW: Loader JD 624G (2007) move up from FY19 and increase by $ 10,000 $ 125,000 Facilities -Gen: Security Systems Evaluation (reclassified from FY17 expenses) $ 65,000 Facilities - Schools: Furniture increased from $14k in FY18 (Parker as placeholder if code issues) $ 50,000 Facilities -Gen: EMS upgrades to buildings $ 40,000 Facilities -Gen: Plumber's Van Ford E350 FY17: + $ 120,000 (April Town Meeting) $ 75,000 Facilities -Town: West Side Fire Station roof repairs $ 30,000 Facilities - Schools: Wood End Masonry $ 15,000 Facilities - Schools: Parker Masonry Background: This Article is included in every Town Meeting Warrant. The Reading General Bylaw (section 6.1.3) states "... No funds may be appropriated for any capital item unless such item is included in the Capital Improvements Program, and is scheduled for funding in the Fiscal Year in which the appropriation is to be made." Bond ratings agencies also want to ensure that changes to a long -term CIP are adequately described. Because the Department of Revenue is expected to certify the Town's June 30th Free Cash balance by October 2016, but has not yet.done so, FINCOM Reserves must be used to fund the two current requests by the Fire department. The other changes will be requested at November 2016 /April 2017 Town Meeting if financial resources are sufficient, or they will be deferred. The FY17 capital plan had allocated $275,000 towards the purchase of a new ambulance. The winning bid, including necessary related equipment, was about $1,700 over budget. In addition, the Fire Department is requesting (1) a new $14,700 power ambulance stretcher, which has become necessary as extrications have become more complex with heavier patients resulting in too many Firefighter injuries; and (2) to replace a $9,600 recently broken CPR compression3wMt. SPECIAL TOWN MEETING Reading Memorial High School Preforming Arts Center Presentation given by: Robert LeLacheur - See Attached Finance Committee Report — given by Eric Burkhart: voted 7 -0 -0 in support of the subject matter of this Article. Bylaw Committee Report: No Report Board of Selectmen —aiven by Dan Ensminaer: 0 to support the subject matter of this Article Motion Carried September 12, 2016 At its August 31, 2016 meeting it was At its September 6, 2016 meeting it was voted 4- ARTICLE 4: Move that the Town vote to amend the vote taken under Article 15 of the May 2010 Annual Town Meeting to further increase the elderly tax exemption specified in Chapter 59, Section 5, Clause 41C of the Massachusetts General Laws from $750.00 to $1,000.00. Background: This Article increases an outright property tax exemption for elderly taxpayers with very low income and assets, as determined under MGL Chapter 59, Section 5, Clause 41C. Currently about 20 taxpayers qualify for this exemption, which would bring the additional cost to $5,000. This cost is borne by the Overlay under the care of the Board of Assessors. This $1,000 exemption brings the town back up to area community practices, much as was done by Town Meeting in 2010. Finance Committee Report — given by Peter Lvdecker: At its August 31, 2016 meeting it was voted 7 -0 -0 in support of the subject matter of this Article. Board of Assessors Report — given by Steve Crook: At its August 30, 2016 meeting it was voted 2 -0 -0 in support of the subject matter of this Article. Bylaw Committee Report: No Report Board of Selectmen — given by Dan Ensminaer: At its September 6, 2016 meeting it was voted 4- 0 to support the subject matter of this Article Presentation given by: Robert LeLacheur - See Attached After some discussion Motion Carried ARTICLE 5: Move that the Town will vote to accept the provision of General Laws Chapter 59, Section 5 added by Chapter 181 of the Acts of 1995, which authorizes an annual increase in the amount of the exemption granted to senior citizens, surviving spouses and surviving minors under General Laws Chapter 59, Section 5, Clause 17D, by up to 100% of the percentage increase in the U.S. Department of Labor, Bureau of Labor Statistics, Consumer Price Index (CPI) for the previous year as determined by the Commissioner of Revenue, and to fix that annual increase at 100% of the CPI, to be effective for exemptions granted for any fiscal year beginning c�§4 after July 1, 2017. SPECIAL TOWN MEETING Reading Memorial High School September 12, 2016 Preforming Arts Center Background: This Article annually changes the property tax exemption cited under Article 4 by an area consumer price inflation measure. This will allow the exemption to track local inflation, and perhaps avoid future trips to Town Meeting. Again this nominal cost is borne by the Overlay under the care of the Board of Assessors. Finance Committee Report — given by Anne Johnson Landry: At its August 31, 2016 meeting it was voted 7 -0 -0 in support of the subject matter of this Article. Board of Selectmen — given by Dan Ensminger: At its September 6, 2016 meeting it was voted 4- 0 to support the subject matter of this Article Board of Assessors Report — given by Steve Crook: At its August 30, 2016 meeting it was voted 2 -0 -0 in support of the subject matter of this Article. Bylaw Committee Report: No Report Presentation given by: • Robert LeLacheur - See Attached • Victor Santaniello After some discussion Motion Carried ARTICLE 6: Move that the Town vote to reduce the interest rate specified in any tax deferral and recovery agreement to be entered into pursuant to. Chapter 59, Section 5, Clause 41A of the Massachusetts Genera/ Laws, for any fiscal year beginning on or after July 1, 2017, from 8% to 4 %. Background: Currently state law allows elderly (65 years or older) homeowners that earn a maximum of $40,000 (with no asset test) to defer real estate tax payments while living in their home. Deferred taxes accumulate with simple interest at 8 % as a lien on the property until it is sold. If the owner passes away while in the home, the estate is liable for taxes for all deferrals at a higher interest rate. The town may change only the 8% interest rate, and this Article requests a decrease to 4 % which is the lowest allowed by the state under this tax policy. Any taxes deferred result in lost revenues for a given year, and eventually those revenues are recouped. Presentation given by: • Robert LeLacheur - See Attached Finance Committee Report - given by Marc Moll: 0 in support of the subject matter of this Article. Board of Selectmen — given by Dan Ensminger: 0 to support the subject matter of this Article Board of Assessors Report — given by Steve Crook: 2 -0 -0 to recommend this Article. Bylaw Committee Report: No Report . 355 At its August 31, 2016 meeting it was voted 7 -0- At its September 6, 2016 meeting it was voted 4- At its August 30, 2016 meeting it was voted SPECIAL TOWN MEETING Reading Memorial High School Preforming Arts Center After some discussion Motion Carried September 12, 2016 ARTICLE 7: To see if the Town will vote to authorize the Board of Selectmen, on behalf of the Town, to petition the General Court for passage of a special law substantially as provided below. The Legislature may make clerical or editorial changes in form only to the bill, unless the Board of Selectmen approves amendments to the bill before enactment by the Legislature. The Board of Selectmen is hereby authorized to approve amendments that shall be within the scope of the general public objectives of this petition. AN ACT AUTHORIZING THE TOWN OF READING TO ESTABLISH A MEANS TESTED SENIOR CITIZEN PROPERTY TAX EXEMPTION SECTION 1 With respect to each qualifying parcel of real property classified as class one, residential in the town of Reading there shall be an exemption from the property tax in an amount to be set annually by the Board of Selectmen as provided in section 3. The exemption shall be applied to the domicile of the taxpayer only. For the purposes of this act, "parcel" shall be a unit of real property as defined by the Board of Assessors under the deed for the property and shall include a condominium unit. The exemption provided for herein shall be in addition to any and all other exemptions allowed by the General Laws. SECTION 2 The Board of Assessors may deny an application if they find the applicant has excessive assets that place them outside of the intended recipients of the senior exemption created by this act. Real property shall qualify for the exemption under section 1 if all of the following criteria are met: (a) The qualifying real property is owned and occupied by a person whose prior year's income would make the person eligible for the circuit breaker income tax credit under section 6(k) of chapter 62 of the General Laws; (b) The qualifying real property is owned by a single applicant age 65 or older at the close of the previous year or jointly by persons either of whom is age 65 or above at the close of the previous year and if the joint applicant is 60 years of age or older; (c) The qualifying real property is owned and occupied by the applicant or joint applicants as their domicile; (d) The applicant or at least 1 of the joint applicants has been domiciled and owned a home in the town of Reading for at least 10 consecutive years before filing an application for the exemption; (e) The maximum assessed value of the domicile is no greater than the prior year's maximum assessed value for qualification for the circuit breaker income tax credit under Section 6(k) of chapter 62 of the General Laws as adjusted annually by the Department of Revenue; and (f) The Board of Assessors has approved the application. SECTION 3 The Board of Selectmen shall annually set the exemption amount provided for in section 1, provided that the amount of the exemption shall be within a range of fifty per cent to two hundred per cent of the amount of the circuit breaker income tax credit under section 6(k) of chapter 62 of the General Laws for which the applicant qualified in the previous year. The total amount exempted by this act shall be allocated proportionally within the tax levy on all residential taxpayers. SECTION 4 A person who seeks to qualify for the exemption under section 1 shall, before the deadline established by the Board of Assessors, file an application, on a form to be adopted by the Board of Assessors, with the supporting documentation of the applicant's income and assets as described in the application. The application shall be filed each year for which the applicant seeks the exemption. 356 SPECIAL TOWN MEETING Reading Memorial High School Preforming Arts Center September 12, 2016 SECTION 5 No exemption shall be granted under this act until the Department of Revenue certifies a residential tax rate for the applicable tax year where the total exemption amount is raised by a burden shift within the residential tax levy. SECTION 6 This act shall expire after 3 years of implementation of the exemption. Background: In preparation for a future Override, almost two years ago Town Finance staff began researching tax policy that could assist the Reading seniors for which property taxes were a high financial burden. The three previous Articles all assist a very small number of seniors as has been mentioned. However, Town Public Safety and Human / Elder Services staff routinely interact with a much larger senior population, which face both medical and financial challenges to remain in their Reading homes. Many of them have lived in town for decades. No such tools existed in state tax policy to accomplish this assistance. Several months ago we learned of two relatively recent Home Rule Petitions - in Sudbury and in Wayland - that aim to protect senior taxpayers. The Assessing division and the Town Manager began researching these options, asking peer communities, local legislators, and the state Department of Revenue. The research showed that interest was high, but only these two communities had made an effort. The Sudbury model appealed at first, but the two main drawbacks were a tax benefit as high as 50% of the tax bill ($3,600 on an average home in Reading) and the amount of staff .labor involved in reviewing applications and applying local rules to determine eligibility. Combining the approaches from both Sudbury and Wayland lowered the potential benefit, as shown below, and significantly reduced the staff workload. Therefore this Article seeks a `third -in- the - state' Home Rule Petition to address property tax financial challenges faced by seniors. In a discussion with our peers, this approach may become a model for other communities, and in speaking to our legislators this effort may find its way into state legislation. It is important to note that the state made clear that it would only consider approving a Home Rule Petition with a term of three years or less. Recently Sudbury sought to extend their initial three year term to be permanent, but the state denied their request and allowed a three -year extension. To be eligible for the Reading property tax exemption, the senior:. (1) has filed and been deemed eligible for a prior year Schedule Circuit Breaker for the purpose of state income taxes; (2) has owned property in Reading for at least ten previous consecutive years; and (3) applies annually to the Board of Assessors for the exemption. Using the state's.Schedule Circuit Breaker takes local government out of the business of determining eligibility. Our Assessing division has been reduced to 1.5 FTEs plus clerical help from 2.7 FTEs plus clerical help five years ago. Placing local eligibility determinants beyond the Schedule Circuit Breaker will require additional staffing - and this needs to be done by full -time town staff due to the confidential nature of the information. In addition, the Circuit Breaker state income tax break serves as the basis for determining the local property tax relief. Annually the Board of Selectmen at their Tax Classification Hearing (usually in November, to be effective the following July), will set the exemption between 50% and 200% of the Schedule Circuit Breaker income tax relief. The exact % multiplier will be determined by how many seniors qualify for the exemption, and the total amount of senior tax relief (discussed below) desired by the Board. Please see the following Table for some examples of possible local property tax relief seen by applicants: Schedule Circuit Breaker Benefit 500/b Local Tax Relief 125% Tax Relief 200% Local Tax Relief $1070 Maximum $535 $1337 $2140 $856 (Average) 428 $1,070 $1,712 357 SPECIAL TOWN MEETING Reading Memorial High School Preforming Arts Center September 12, 2016 The only data we have from the state from 2014 is that the average Circuit Breaker income tax benefit in Reading was $856, and that 645 local residents qualified. Thus the income tax relief was 645 x $856 = $552,120. We know some of those that qualified under Circuit Breaker rent property and others have not owned property for ten years. Both factors shrink the pool that is eligible for local property tax relief. We don't know how many seniors did not file Schedule Circuit Breaker that might otherwise do so in order to obtain a property tax benefit, however. It is this real lack of data that led the Board to request a wide 50% to 200% variance in terms of setting the local tax relief. If only that 2014 income tax pool were fully eligible, the total local tax relief would be between $276k (at 50 %) and $1.1 million (at 200 %). In a discussion, the Board indicated a strong desire to set the %figure to keep the total amount under $1 million, and that a reasonable annual goal would be the 125% midpoint, or $0.7 million of tax relief. According to state tax policy, by default only the rest of the residential taxpayers would bear the full cost of this tax relief. However at a recent meeting the Board of Selectmen indicated a unanimous desire to share this tax relief across all classes of property by splitting the tax rate. Here are some examples of what this proposed senior tax relief will cost various taxpayers under that scenario: Single 500/o Relief - 125% Relief - Max Relief - Family % $276k Tax $700k Tax $1.Omil Tax Homes Parcels Benefit Benefit Benefit $700k 13.5% $19 48 $69 $600k 14.0% $25 $64 $192 500k 31.4% $32 81 115 $400k 30.9% $38 $97 $138 $300k 10.3% $44 $113 161 Here are the qualifications for state income tax relief Schedule Circuit Breaker for 2014: (1) You, or your spouse if married filing jointly, must be at least 65 years of age before January 1, 2015 to qualify for this credit. Also, you must file as single, married filing jointly or head of household to qualify for this credit. If married filing separately, you do not qualify for this credit; (2) The assessed value of principal residence as of January 1, 2014 must be $691,000 or less; (3) Qualifying Income (includes MA Adjusted Gross Income (AGI) + social security benefits + untaxed pensions + miscellaneous income - certain income tax exemptions) is capped at $56,000 (single); $70,000 (head of household); or $84,000 (married filing jointly); and (4) Real estate taxes paid in calendar year 2014 for your principal residence (plus some adjustments, including 50% of water & sewer charges) must exceed 10% of the Qualified Income above. 358 500/o Relief - 125% Relief - Max Relief - Commercial % $276k Tax $700k Tax $1.0mil Tax Parcels Benefit Benefit Benefit <$500k 40.8% $25 $63 90 500k- lmil 29.6% $58 146 209 $1 -2mil 17.0% $1.,10 279 $398 $2 -3mil 3.9% 183 $464 663 $3 -10mil 5.8% $353 $895 $1,278 $10mil+ 2.9% J $1,530 $3882 $5,54 Here are the qualifications for state income tax relief Schedule Circuit Breaker for 2014: (1) You, or your spouse if married filing jointly, must be at least 65 years of age before January 1, 2015 to qualify for this credit. Also, you must file as single, married filing jointly or head of household to qualify for this credit. If married filing separately, you do not qualify for this credit; (2) The assessed value of principal residence as of January 1, 2014 must be $691,000 or less; (3) Qualifying Income (includes MA Adjusted Gross Income (AGI) + social security benefits + untaxed pensions + miscellaneous income - certain income tax exemptions) is capped at $56,000 (single); $70,000 (head of household); or $84,000 (married filing jointly); and (4) Real estate taxes paid in calendar year 2014 for your principal residence (plus some adjustments, including 50% of water & sewer charges) must exceed 10% of the Qualified Income above. 358 SPECIAL TOWN MEETING Reading Memorial High School Preforming Arts Center September 12, 2016 When reviewing this proposed senior tax relief, Town Meeting members are asked to consider these factors: - The state has extensive data that we do not have, and they have set tax policy for a wide variety of policy issues using this criteria posted above; - Please examine Qualifying Income (above) to see that MA AGI alone is not the basis for income in this calculation; - Any changes to this approach will require additional town staffing, and open up possible perceptions of subjectivity at the local level; - Senior residents must apply annually in order to receive this benefit - they are not required to apply if they do not wish to be considered; - As with all local tax exemption requests, all residents that apply for and either receive or are denied tax relief are a matter of public record, and such lists are published in the town's Annual Report. Finance Committee Report - given by Paul McNeice: At its August 31, 2016 meeting it was voted 7 -0 -0 in support of the subject matter of this Article. Board of Assessors Report - given by Steve Crook: At its August 30,. 2016 meeting it was voted 2 -0 -0 to recommend this Article. Board of Selectmen Report - given by Dan Ensminger: The Board voted 4 -0 in favor of this proposed Article at their meeting on August 16, 2016. Chairman John Halsey was absent and did not vote, although he expressed his support in a letter to fellow Board members that was read into the record of the meeting. Bylaw Committee Report: No Report Presentation given by: • Robert Lel-acheur - See Attached • Victor Santaniello Motion made Ronald D'Addario, Precinct 6 to amend as follows: (d) The applicant or at least 1 of the joint applicants has been domiciled and owned a home in the town of Reading for at least --8 5 consecutive years before filing an application for the exemption, Motion Does Not Carry Motion made Jack Russell, Precinct 3 to amend as follows: (d) The applicant or at least 1 of the joint applicants has been domiciled and owned a home in the town of Reading for at least 4-9 15 consecutive years before filing an application for the exemption; Motion Does Not Carry 359 SPECIAL TOWN MEETING Reading Memorial High School Preforming Arts Center Motion to move the question made by David Tuttle, Precinct 3 2/3 Vote Required 123 Voted in the affirmative 26 Voted in the negative 163 Town Meeting Members in Attendance Motion Carried September 12, 2016 After some discussion including non -Town Meeting Members a counted vote was taken: Counted Vote 120 Voted in the affirmative 29 Voted in the negative 163 Town Meeting Members in Attendance Motion Carried as Presented Alan Foulds, Moderator offered and explanation of next steps: Before proceeding the chair offers an explanation of what will be happening with the substance of Article 8. As you all know, the purpose of the town meeting is to enact legislation and to approve the budget. Upon reading article 8 I saw a problem. There was no call to action - no proposed motion. And there really could not be one. The decision on a proposed 2 1/2 override sits squarely with the citizenry as a whole, and not its legislative body. After a meeting with the Chairman of the Board of Selectmen and the Town Manager, I came to understand their desire for transparency for Town Meeting on the updated financial condition of the town, and the Override Election in October 2016. Next spring, Town Meeting will be voting on a budget that will be greatly shaped by the outcome of this Override vote. At the same time I explained my reservations from a purely technical standpoint on bringing this Article to the floor of Town Meeting, and the precedent it might set. This proposed Article 8 is more of a Report to Town Meeting such as is typically made earlier in the meeting, yet at the same time it creates an obvious opportunity for a two -way dialogue. Our Reports at Town Meeting do not allow for such two -way discussion on the floor. My decision, which has the full support of the Chairman of the Selectmen and the Town Manager, is to call for an adjournment of this body without a formal discussion of Article 8. As a legislative body, Town Meeting has no formal role in the Override, though it may have a great interest in the outcome. I will call for a motion to indefinitely postpone the substance of Article 8. Next, we'll deal with any instructional motions under Article 2 then I'll call for a motion to adjourn Town Meeting Sine Die. After adjournment I will turn the meeting over to the John Halsey, Chairman of the Board of Selectmen. The Selectmen's meeting will continue in session, and substance of Article 8 will be discussed as it was designed. I encourage those. Town Meeting membLg$Iyho have an interest in the topic to remain - as I will SPECIAL TOWN MEETING Reading Memorial High School Preforming Arts Center September 12, 2016 - in order to facilitate the discussion. This approach will satisfy my technical concerns about Town Meeting and the Selectmen's desire for transparency. Bill Brown, Precinct 8 moved to adjourn the 2016 Special Town Meeting sine die. Motion Does Not Carry ARTICLE 8: Motion made by John Halsey, Board of Selectmen to Indefinitely Postpone Motion to Indefinitely Postpone Carried The information below was provided in the Warrant Report for Article 8: Background: Proposition 21/2, passed as an Initiative Petition in 1980 and enacted in 1982, caps increases to property taxes in the Commonwealth by 2.5% annually. Proponents would cite the significant decline in property taxes paid as a percent of income over a twenty year period as evidence of its success. Opponents would suggest that a cap does not hold down certain costs outside of a town's control. Both statements are accurate. As Town Meeting members know, we have explicitly cautioned that balancing the budget with increasing amounts of Free Cash was not a good or sustainable practice. As was mentioned last winter, the town is at a crossroads, and must now decide how to balance the financial resources available with the demand for services. Community Listening Meetings In a series of meetings held after the Annual Town Meeting and before the start of summer, the Town invited residents and business owners to hear a brief overview of these crossroads, and to tell us their views. The meetings were heavily attended, and many `new faces' were in the audience. Participants learned some of the following basic financial facts: (1) Revenues have grown at +3.1% since the last Override: +3.6% Taxes (includes New Growth); +2.7% State Aid (slower lately); +0.1% Local Receipts; and +1.3% Other; (2) Since the last Override, the +3.1% Spending has been divided up as follows: Schools +3.2 %; Town +3.1 %; Capital and Debt -0.9 %; and Shared Costs +5.2 %; (3) In FY17 the town had a $2.0 million structural budget deficit requiring the use of Free Cash in order to balance. In FY18 that structural deficit looks to have increased to $3.0 million, and each year thereafter it is forecast to grow by another +$0.7 million; (4) Town and School Operating Budgets, growing at a target rate of +3.5% annually, should be able to maintain and occasionally enhance service levels to the community within future Revenue forecasts, once this structural deficit is repaired; (5) Accommodated Costs are expected to be the source of the +$0.7 million increase to the structural deficit. Since the last Override, staff has worked diligently to wring out inefficiency and add creativity in this area, but there are few idemn the horizon. SPECIAL TOWN MEETING Reading Memorial High School Preforming Arts Center September 12, 2016 Participants also learned how Reading is either similar to or different from our 25 so- called Peer Communities. On the revenue side, there is a big difference in that Reading is much more residential than an average Peer Community, deriving about $12 million less in tax revenues annually from the Commercial, Industrial and Personal Property (CIP) sectors. As a result, Reading relies more on the other non -tax categories of revenue, which are less predictable and have historically had lower rates of growth, as shown above. Here is a quick summary of the Revenue comparison: Revenues from: Readin Peers Tax Lev 60.5% 66.6% Residential $53.8 mil $54. 8 mil CIP $5.0 m il 17.3 mil State Aid 13.7 11.0% Local Receipts 21.6 17.5% Other . 3.6% ° T12 On the spending side, Reading looks a lot like our Peer Communities. Because of the high residential tax base, Reading has a larger student population. Using 2014 -15 MA Department of Education data, Reading has 17.4% of the population of the town in the public school system, compared to 15.8% among Peers (the range is from 22.1% in Westford to 10.7% in Stoneham). Thus while the town spends slightly more than average of the budget allocation on Schools, we also spend a low per -pupil amount. Because of our proximity to the highways, and presence of a lot of commuter `cut- through' traffic, the town also spends a bit more in Public Works and Public Safety. Because we offer Advanced Life Support, about $800,000 in ambulances fees flow offsets the above aver average spending be Pubic Safety. The town spends budgets. e on Town revenue more than Hall staffing, and on fixed and other costs. Here is a chart showing the Spending comparison: of Budget Reading Peers erence Spending o 39.3 /o 39.1% 17fo 0.2% Ed ucation Fixed Costs and Debt 17.7% 9.2% ° 5.1% 17.8% .1% Public Safety 8.7% 0.5% Public Works +0.2% -0.7% General Government 3.6% ° T12 +0.3% Culture - Recreation - 2.7% Human Services ° 22.4% Other incl Ent Funds A final piece of information presented at the Community Listening Meetings was that the Single Family Home annual property tax burden in Reading is below that of our Peers, when looked at either on an average ($500 below) or regressed against median family income ($700 below). The following chart uses MA Department of Revenue 2015 tax data and Boston Globe 2010 -2014 median household income data: 362 SPECIAL TOWN MEETING Reading Memorial High School Preforming Arts Center • • s ! so.M September 12, 2016 While opinions at .the Community Listening Meetings certainly varied, there was a strong sense from participants that town and school services needed to be maintained, restored or enhanced, and an understanding that both the town and schools were being good stewards of taxpayer funds. During the past two months, elected Boards and their staff have worked on this issue, reflecting what was heard from the community at these meetings. Following is a deeper analysis of the problem, and a proposed solution. Overview The first question to answer was if the Town and Schools were satisfied with the current budget model that has been in place for about ten years. A set of Accommodated Costs are subtracted from Revenues, and the remainder are divided up in a pro -rata share between the Town and Schools. Due to the shift of the Facilities department last year, that ratio is now approximately 64% Schools and 36% Town. After a discussion between senior management and elected officials, both sides agreed that the budget model has worked well, and has enough.built -in flexibility to handle unforeseen circumstances. The first assumption that was discussed by the Superintendent, the Town Accountant and the Town Manager was what figure to use as the right target for an annual operating budget increase for the Town and Schools? We know since the last Override that figure has been about 3.2 %, but we also know in recent years that increases of 3.6% have required staffing reductions. We settled on 3.5% as a reasonable long -term target. Prudent annual financial management should allow the Town and Schools to add new services as needed within that framework, and minimize budget reductions. Note that an assumption of how long an Override would need to last is a decision made later in this process. The next set of assumptions involved our expected Revenues and Accommodated Costs. All estimates were done line -by -line by the Town Accountant (Revenues) and Town Manager (Costs) in a bottom -up fashion, though only the summary results are described below. Revenues: Property taxes ($61 million) are straightforward at +2.5% annually plus New Growth. The latter is conservatively estimated at $500,000 /year from no through FY21, below the recent $830,000 three- SPECIAL TOWN MEETING Reading Memorial High School Preforming Arts Center September 12, 2016 year average. This figure is then increased to $1,000,000 /year gradually by FY24 given staff ground work being done in the commercial development sector. Local Revenues ($6.6 million) were estimated at about +2.5% annually. State Aid ($14 million) was estimated to grow at 2.5% annually. FINCOM has previously supplemented any shortfall with Free Cash. This practice is still plausible because future budgets will plan to use no or low amounts of Free Cash to balance. Operating Transfers and Available funds are projected to increase at less than 2% annually, driven by the RMLD dividend calculation that is CPI - based. All measures of inflation are significantly lower than when that arrangement was decided many years ago. In general aside from Free Cash usage, Revenues are projected to increase by between 3.2% and 3.5% using this approach for the foreseeable future. Accommodated Costs: Health Insurance as a driver of Benefits was the first hurdle. National models of about +8% declining over time to +5% annually are typically used in the actuarial community. The predicted reduction from 8% to 5% is generally stated as `because the nation cannot afford to continue these increases and needs to figure out something'. While we have historically managed the Reading rate of growth in this area reasonably well below national averages, we believed it was important to use +7.5% annually throughout in this model. If someone figures out something - so much the better! Combined with other benefit costs this area is forecast to climb at about 6.4% annually. Note that the Town Accountant and Town Manager strongly believe that future costs this obligation faster, allowing for an earlier shift of funding towards $350,000 /year in order to fully fund g OPEB. That pension increase is within that +6.4% annual forecast above. For now, continuing the FINCOM Policy of 5% towards capital and debt is continued by this model - more on this topic later. Energy costs were forecast at +5% annually, in line with national forecasts. Out of District Special Education costs are also forecast at +5% annually, in line with recent trends. Other accommodated costs were forecast at just below +3% annually. In cieneral, Accommodated Costs are forecast to increase at about 5.4% annually, after a first year increase closer to 7% to allow for that stepped uR increase in Pension contributions. Funding Gap As shown below, the squeeze will be on the Operating Budgets for the foreseeable future as Revenue growth (3.2% to 3.5 %) is not expected to keep pace with Accommodated Costs (5.4 %). That Funding Gap translates to an annual $660,000 budget shortfall - and the effect is cumulative. Table 1 Accommodated Costs Gap Annual Gap .....__.. ... Annual Gap FY18 : $ 660,000 FY22 $ 3,300,000 FY19 . $ 1,320,000 FY23 : $ 3,960,000 FY20 ; $ 1,980,000 FY24 $ 4,620,000 FY21 $ 2,640,000 FY25 $ 5,280,0 By contrast, the Funding Gap is much smaller on the $57 million Operating Budgets growing at +3.5% annually. These differences should easily be made up by conservative revenue assumptions, such as New Growth, and may be ignored: 364 SPECIAL TOWN MEETING Reading Memorial High School Preforming Arts Center Table 2 Operating Budgets Gap Annual Gap Annual Gap FY18 $ 85,000 FY22 $ 425,000 FY19 ! $ 170,000 FY23 $ 510,000 FY20 $ 255,000 FY24 $ 595,000 FY21 $ 340,000 FY25 $ 680,000 September 12, 2016 These Funding Gaps cause a fundamental structural deficit in the budget, which in recent years has caused an increasing amount of Free Cash to be used in order to balance and not significantly reduce services. Every year that structural deficit is expected to grow - although the town has worked hard on many of the Accommodated Costs during the past several years to keep the Gap smaller. For FY18, given the assumptions above, a structural deficit of $3 million exists ($1.925 million Schools and $1.075 million Town), in order to fund +3.5% Operating budgets. Baseline Override At this point we can begin to discuss the 'for how long ?' part of an Override. Each year will add to the $3 million baseline figure because of that Funding Gap. Models looked at the period until FY25 and FY30 as two possible objectives. The shorter 8 -year period coincides with when most of the RMHS and Library excluded debt is fully repaid, theoretically opening up some space in the taxpayer's pockets to consider another Override. The longer 13 -year period is where we are now, compared to the last Override. Anything shorter or longer seemed unrealistic. Here are the somewhat astonishing results, hinted at by Table 1 above: Table 3. Projected Structural Deficit ($ millions) Now FY25 FY30 Strucural Delat $ 3 0 ; $ 6.0 ' $ 13 0 _ --- _. -- __... _ It is this type of analysis that causes actuaries to shrug and say that 'somebody will need to do something'! We revisited the model several times, loosening up a bit on the conservatism. Finally enough was enough, and we chose to focus on the shorter 8 -year period and stand behind all financial assumptions, understanding that they still lean a bit to the conservative side. Therefore a $6 million Override is needed to sustain +3.5% Operating budgets through FY25. The financial model therefore tells us. to request $6 million in the first year and use $3 million to fill the current gap, and to save $3 million for the future. That situation seems unrealistic and almost unbelievable to any rational person not deep into the town's budget situation. So the next step was to find a set of costs that could act to mitigate that funding gap - something that could be budgeted lower each year. The best solution was to change the FINCOM policy on spending 5% annually on capital plus debt. Instead, spend more than 5% in early years, and less than 5% in the later years. Given that the capital plan is showing a strong surplus of funding available after the next five or so years, this seems a plausible approach. This requires that bigger building projects are considered outside the tax levy, as per current FINCOM policy. Also consider the fact that the Town usually has one -time funds available at November Town Meeting to supplement budgeted annual capital spending. RMHS construction litigation We do not know either the final amount or even the final timing of when we will know the final amount. However we must plan to take care of this issue within our normal budget process and model shown above, which means we need some creativity and we need to build in some flexibility. The Town Accountant and the Town Manager agree that some amount of Free Cash should be used as part of any settlement, and the rest needs to be paid by the overall annual budget over as short a period of time as is possible in. to minimize borrowing costs. This approach suggested above to increase capital spending in early years may fit well with this poteraUlegal liability. SPECIAL TOWN MEETING Reading Memorial High School Preforming Arts Center Thus a baseline $6 million Override could look this way in FY18: $3.0 million structural deficit $2.0 million additional capital $0.7 million to the general stabilization fund (to help fund future budgets) $0.3 million in additional Pension funding September 12, 2016 Each year thereafter will see an increase in the portion of additional funds devoted to the structural deficit, and reductions to both the additional capital and contributions to a stabilization fund. Property Taxes Today, the $499,500 average Single Family Home (SFH) pays a tax bill of $499,500 x $14.51/$1.000 or $7,247.75 - let's call it $7,250. Here are the components of that tax bill: Tax Bill Tax Lev RMHS Library $7,250 $6,905. $161 $184 The RMHS amount remains about $160 until being fully repaid in FY24; the Library amount declines to about $160 and is fully repaid in FY25. Any Override would be added only to the Tax Levy portion. Therefore over the next ten years, the table below shows the average Single Family Home Tax Bill and annual change assuming no Override, no more Excluded debt or capital, no Senior Tax Relief, the full tax levy is assessed, current tax property classification ratios (92% residential; 8% CIP) are maintained, and the town has a Uniform tax rate. FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 6 $8,563 FY26 $8,625 FY27 $8,840. SFH $7,418 $7,590 $7,767 $7,947 $8,13 8 32 $8,51 +2.32 +2.32 +2.32 +2.35 +0.55 +0.72 +2.50 Re a 2.31 +2.33 +2.33 % % % /O % % FY26 when the RMHS and Library are fully repaid. Over this ten -year period, Note the impact in FY25 and the SFH tax bill will have increased at an average rate of +2.0 %.annually. Tax Impact of Baseline Structural Override for the same average SFH as described above, a $6 Over the next ten years, the table below shows that million Override would pay the equivalent of +2.9% annually: FY18 FY19 FY20 FY21 FY22 F23 F FY25 FY26 FY27 Rat +2+11.67 +2.33 .33 2.32 +2.32 +2.32 +2.35 +0.72 +0.88 +2.50 % e % % % % % % % 0/0 % Override - Additions above a Baseline Structural Amount As has been mentioned, both the Town and Schools have had to pare back budgets, consolidate positions, regionalize with other communities and find creative solutions to keep service levels as high as possible. Each side would agree that the reductions have not allowed for "level service" budgets in a couple of years. One comment we heard clearly from the Community Listening Meetings was the desire to restore some of these budget reductions if we were to request an Override from the community. Over the summer, the School department discussed this issue at length, creating a list of these six challenges: 1. Retaining and Attracting Staff 2. Developing well - balanced and prepared students for college, career, and life 3. Supporting teachers and administrators as we transition to more rigorous standards and curriculum 4. Continuing to improve our special educatiorB "vices and in district programs SPECIAL TOWN MEETING Reading Memorial High School September 12, 2016 Preforming Arts Center 5. Identifying long term space needs to address program changes 6. Remaining comparable and competitive with other towns and school districts In response to five (1 -4 and 6) of these challenges, they created two lists that constituted a request for funding. The first was to solve the structural deficit, estimated at 2/3 of $3 million. The second list was an additional $1.925 million that was a mix-of add -backs and additions. Following is that entire list, not in priority order: Resources Needed to Address Challenges and Structural Deficit I,s Structu�rall Deficit { =EY18 $2000,{1U0 1. Salary Adjustments ( 2 �u11: ©ay of School on 'Wednesday at�Elem+�ntary Level S,;$�455000 `i 3. .Middle School Health Education s $140,000 { 4 �li�#y�Sc�hool � .�ra�g'ram�trnro�remen� ; $20,000 5. Additional Supports for Struggling Students (Tutors, $150,000 BCBA) sph�alraf►rmonran Funded RosiasOfl4, a '� z 511% 7. Curriculum Supervision Leadership $285,000 �ec� � ducation Leaidet�ship t � i � x � � ° � � � � t ' .���•� �� � j 9. Additional Clerical Support $60,00!0 t. The Town conducted a similar exercise and created the following list of restored or additional services for the Board of Selectmen to consider, also not in priority order: 367 SPECIAL TOWN MEETING Reading Memorial High School Preforming Arts Center September 12, 2016 In recent years, both the Town and Schools have faced increasing difficulty in attracting and retaining staff. On the Town side, staff is expected to perform at top quartile levels, but average compensation is below Peer averages. Once upon a time, more Town and School employees were perhaps more involved in the community because they were also residents. The following table describes the ability of employees to continue to live in the community: Using the 1990 census as a baseline, in 2010 Reading home values had grown by a factor of 119 %; average family income by 88 %; and town and school wages by 56 %. Thus the challenge as a more mobile generation enters our workforce. Override — How Much? rity under The Board of Selectmen has the sole autho state law to call for an Override; to determine the language and number of ballot questions; and to determine the funding amount(s) requested. In their discussions they focused on the impact to the taxpayers as well as what funding levels would support various services. For example, the following table shows the impact in FY18 on Single Family Homes at the various assessed value segments. The figures shown are increases in taxes over and above the normal +2.5% cap. Residential ! 1990 2010 Annual Reading average home values 1.00 2.19 4.0% Reading average family income 1.00 1.88 3.2% Town and School wages 1.00 1.56 2.2% Using the 1990 census as a baseline, in 2010 Reading home values had grown by a factor of 119 %; average family income by 88 %; and town and school wages by 56 %. Thus the challenge as a more mobile generation enters our workforce. Override — How Much? rity under The Board of Selectmen has the sole autho state law to call for an Override; to determine the language and number of ballot questions; and to determine the funding amount(s) requested. In their discussions they focused on the impact to the taxpayers as well as what funding levels would support various services. For example, the following table shows the impact in FY18 on Single Family Homes at the various assessed value segments. The figures shown are increases in taxes over and above the normal +2.5% cap. Residential ! $6 mil $7 mil $7.5 milt $8 mil $8.5 mil ` $9 mil 300,000 %l $ ._. 398... $ 464 -.$ .. 497 $ $ ... 563 $ F 400,000 't _10 31 %� $ 531 $ 619 ! $ 663 $ 707 ;` $ 751 ! $ 795 $ 500,000 31 %j $ 664 i $ 7741 $ 829 $ 884 $ 939 $ 994 $, 9/6' $ €... $ 929 ' _ $ . 995 $ $ _1,127 _. $ _._1600,000 .i ..14 700,000 149/o ` $ 930 $ 1,084 $ .1,161 $ 1,238 $ 1,315 $ 1,392 Over the next ten years, that same average SFH would pay the equivalent of +2.9% annually for a $6.0 million Baseline Structural Override, and +3.4% annually for a $9.0 million Override. The latter takes into consideration the full funding requested by the Schools. For the Commercial property class, here is that same marginal impact in FY18 at the various assessed value segments: .: SPECIAL TOWN MEETING Reading Memorial High School Preforming Arts Center Commerical : $6 mil $7 mil $7.5 mil $8 mil $8.5 mil $9 mil $100k- $500k' 41% $ 413 $ 481 $ 516 $ 550 $ 584 $ 618 $500k -$1mil 31 %0, $ 955 $ 1,113 $ 1,192 $ 1,271 $ 1,350 $ 1,429 $1mil - $2mil ; 17% $ 1,823 $ 2,125 ° $ 2,276 $ 2,427 $ 2,578 $ 2,730 $2mil - $3mil 4 %; $ 3,037 $ 3,540 $ 3,792 $ 4,043 $ 4,295 $ 4,547 $3mil - $10mi1 6% $_ 5,852 $ 6,822 $ 307 $ 7,792 $ 8,276 $ $10mil + 3% $ _ 25,391 $ 29,5 98 $ 31701. $ 33,804 ; $ 35,907 $ 38,7611 8,011 September 12, 2016 At their meeting on August 16t ", with representatives from the School Committee and Board of Library Trustees, as well as many other interested parties, present, the Selectmen discussed the Override and decided that one question, written generically 'for the operation of the schools and town' was appropriate to simplify to the voter the basic request for more funding. After extensive discussion, the Board voted 4 -0 to request $7.5 million in additional funding through an Override of Proposition 21/2. Chair John Halsey was absent from the vote but had a statement of his support for a $7.5 million Override read into the record, after the public discussion and just before the final vote. This amount is meant to cover the $6.0 million structural deficit and add /restore $1.5 million of other items from the lists above. Using the current budget model, the Schools receive $960,000 and the Town receives $540,000 of this additional funding. The School Committee will prioritize their requests at an upcoming meeting and discuss their list with Town Meeting members. Prior to the Override vote by the Board of Selectmen, all parties involved agreed that it was appropriate for the Selectmen not to know such information before they selected an Override amount, as the School Committee has.full spending authority over their budget. The Selectmen were also viewing the situation from a taxpayer affordability standpoint as opposed to a budget funding need standpoint. The Town, however, had prioritized their list of additions. The table below shows the Town priorities to be funded: ^4. Support for Volunteer Boards 75,b00 S. Technology (licenses and hardware in $ 70,000 year 1) $70,000 6. Additional Town Halt Clerical Support $ 65,000 $25,000 (05 FTE for Finance` department) ! i TOTAL $2,080,000 $1,540,000 What Happens if an Override Does Not Pass? Over one year ago the Town Manager and Superintendent met to discuss employee morale, and the challenging hiring process as has been discussed. The conversation evolved to the timing of a future Override election. The usual April choice would mean that two budgets would need to be created and then presented in public during the preceding winter, which would damage employee morale. A September /October election was a preferable choice, even considering the extra costs involved. During the winter of 2016, an FY17 Town budget that eliminated several positions was presented in public. All but one of those positions could be handled through planned attrition; that one position might be handled the same way depending on an upcoming retirement and promotion. The one employee involved decided not to wait for the promotional process and was hired by another community quickly. Employee morale is difficult to place a financial value on, but it is quite real, as is the high organizational cost of turnover. Given this background, both the Town and Schools are reluctant to lay out exact ramifications of a failed Override vote at this time. In so doing, we are keenly aware that the public has less transparency than they might desire, and hope that the public understands our thought process. Each side has publicly stated that positions and services will be eliminated in FY18 without'an Override. The Schools have a higher proportion of their budget spent on labor costs, and have indicated that up to 30 positions could be in jeopardy. The Town with less labor costs relative to expenses could need to eliminate up to 8 positions. The Town has also built in some one -time budget costs, such as technology purchases, and has an option to eliminate some of these in order to minimize any FY18 staffing reduction. Over the past year or more, the Town has stated that in order to balance a budget without an Override, services will need to be eliminated or curtailed. Past budget cuts have focused on Town Hall, but future ones will need to be expanded to include Public Safety and the Public Library, which have been exempt from recent staffing reductions. At a minimum, one Police Officer and one Firefighter will be eliminated in each subsequent year without an Override, and frankly the cuts may need to go deeper. It is impossible to avoid this conclusion, given that Public Safety constitutes over 60% of the Town's wage budget. The Library Trustees have discussed lowering FY18 costs through attrition and expense reductions and then FY19 costs through a reduction in Hours of Service. Public Works, once staffed at 120 employees and now staffed with about 45 employees, may need to cut back on some services and staffing provided to the community. As is mentioned in every annual budget message, we will all strive to meet the expectations of the community with whatever level of resources that are made available. Regardless of the path ahead, Reading remains a very special place in which to work - and to live. Point of Order by Richard Coco; Precinct 4 of a concern that Town Meeting members are not being asked to vote on taking the Proposition 21/2 Override to the Voters, It was noted that is it the Board of Selectmen that makes that decision. 370 SPECIAL TOWN MEETING Reading Memorial High School Preforming Arts Center September 12, 2016 ARTICLE 2: To choose all other necessary Town Officers and Boards or Committees and determine what instructions shall be given Town Officers and Boards or Committees, and to see what sum the Town will vote to appropriate by borrowing or transfer from available funds, or otherwise, for the purpose of funding Town Officers and Boards or Committees to carry out the instructions given to them. Instructional Motion Presented by Barry Berman, Precinct 4 and member of Board of Selectmen: In the event the Home Rule Petition outlined in Article 7 in enacted by the Legislature, Town Meeting advises the Board of Selectman at its earliest tax rate setting meeting after enactment, to implement a Classification factor such that the cost of senior tax relief is borne 75% by the residential class and 25% by the CIP class. After some discussion a counted vote was taken: Counted Vote 86 Voted in the affirmative 53 Voted in the negative 163 Town Meeting Members in Attendance Motion Carried Instructional Motion Presented by Ron D'Addario, Precinct 6: To ask Town Finance to begin researching tax policy that could assist Reading residents of all ages for whom property taxes might become an overwhelming burden. Motion Did Not Carry On motion by John Halsey, Board of Selectmen, it was voted that this Special Town Meeting stand adjourned sine die. Meeting adjourned sine die at 9:56 PM with 163 Town Meeting Members in attendance. Motion Carried Board of Selectmen: At 7:15 PM the Chair John Halsey called a Board of Selectmen meeting to order, the board then conducted business and went into recess to join the Special Town Meeting at 7:25 PM. At 9:56 PM Chair John Halsey called the Board of Selectmen back into session to present information to Town Meeting Members of the Proposition 21/7 Override called by the Board of Selectmen. After giving a few remarks John Halsey asked Alan Foulds the Town Moderator to moderate the meeting. A Presentation was given by Robert LeLacheur and John Doherty. There was some discussion among Town Meeting Members with comments from the following: Paul Sylvester, Precinct 3 Thomas O'Rourke, Precinct 2 Mark Dockser, Finance Committee 371 SPECIAL TOWN MEETING Reading Memorial High School Preforming Arts Center Erin K Calvo - Bacci, Precinct 5 Gary Phillips, Precinct 7 Kendra JG Cooper, Precinct 8 September 12, 2016 After closing comments by John Halsey a motion was made by John Arena to adjourn Board of Selectmen at 11:20 PM Motion to Adiourn Carried 372 SPECIAL TOWN MEETING Reading Memorial High School Preforming Arts Center Erin K Calvo - Bacci, Precinct 5 Gary Phillips, Precinct 7 Kendra JG Cooper, Precinct 8 September 12, 2016 After closing comments by John Halsey a motion was made by John Arena to adjourn Board of Selectmen at 11:20 PM Motion to Adjourn Carried A true copy Att st: Laura A Gemme Town Clerk 373 4/13/2017 374 1 4/13/2017 375 2 RV SatatyAdutments Staffatar� S36Q,OOQ { l,6 r ex i3 curr6cu � Lderstiip�, �' 2 p rum Ctxirdin�a�ius �� � � �14�,1iC� �,�4,b r s uY�ict�iu�r��upenr�sls�n , „� � �� � �xpA�i�tfon� �iippexts foY�Streg�ii�g5tudents � � " � � d Q Fi'F�cademicTu� ors � � ; � �'1Q7,� ,� �� �t4 ✓ n3 *';., '� .�" �`;5.' 2 'id���ri14,Fyl y%i £y�$' yt ♦�,�1w'.�Qi�i��MlF� `AS¢``�. *n �8 4itZS+.l�a�it i}Ar1T+forMl+..M l��iii r♦`,�,,'J' k' r' ti... :u 2 xC <r ?,� 3 C i > 7d` {�{lY, Schoal�eai,�tieti+zi 4 :; E�3 �L bi�iNti /l-1: �eRrSt i"Q /�e'Yd+Nt�7474, Y 1T9?J;a Zr AR fi ze.'.i �.y� y}�..f,1,,,/"{ A M t i3��ti.+.4ROOM- haUren� `es . 1 Retaining and Attracting Staff 4. Continuing to improve our special education services and in 2 Developing well balanced and prepared students for college and career district programs 3 Supp6rting.�eai hers and'adrninisfrators as we transition to more rigorous S. ldentifyin tong,term space.needs to address program changes statdards'`and,cur`riculuiri 6. Remaining competitive with area ,schools 375 2 4/13/2017 `For example• FY18:Schoot department budget (estimated) Wages $35.78 million • Expenses $ 7.15 million CUTS: $ 1,950,083 Expenses by Cost Center, (in: mi [lions) Administration (legal, audit, employee physicals, licensing) • $1.25 Regular Day (text and materials, supplies, pd, classroom technology) $4.81 Special Education (transportation, Out of District Tuitions, adaptive text and materials) • ,$0.38 School Facilities. (Contracted cleaning services and supplies) $0:50 " Districtwide Programs {HeaEth, extracurricular, athletics,'technotogy infrastructure) 376 3 4/13/2017 377 ng Term Challenges That Need To Be Addressed Challenges Retaining and Attracting Staff Developing well balanced and prepared students for college and career Supporting teachers and administrators as we transition to more rigorous standards and curriculum 378 4. Continuing to improve our special education services and in district programs 5. Identifying long term space needs to address program changes b. Remaining competitive with area schools 4/13/2017 4/13/2017 Finance Committee Chair Comments: Town Meeting and subsequent meetings September 12, 2016 FinComm Review of Budget • Annual Budget Review • Structural deficit exists and requires.action for FY'18 • No new revenues-> strong cuts • Override is only vehicle that can strongly impact level of services 379 1 Free Cash 4/13/2017 • What is it? • "Rainy day fund" • Good for 1x expenditures • As of July 2015, balance was ^'10% of revenues • Past few years, FinComm recommended use of $1.5 -2MM of Free Cash to supplement operating budget • Hid the structural deficit /delayed its impact • Did not allow level services, but minimized impacts Where we are now... • Using free cash use not recommended going forward —not sustainable • Operating budget expenses continue each year...free cash as a source does not • FinComm updated policy -- target 7% of revenues • Old policy was 5 % ... variances/needs Iprger now than they once were • 7% more consistent with peer communities • If balance falls to 5 %, reason for additional scrutiny • FY'18 budget requires either strong cuts or new revenues . 1, 6 FinComm review of Override materials • Reviewed model that has been used by Town with expectations of revenues and costs • Assumptions seem reasonable • Recent history on revenues /expenses incorporated • Likelihood of "good surprises" now lower • Believe that structural deficit reasonably represented as $6MM in this timeframe • Selectman's proposal for $7.5MM override and usage expressed by Town and Schools represent financially responsible way to fund these priorities 381 4/13/2017 3 4/13/2017 Town of Reading RPS GUEST WiFi password: none Special Town Meeting September 12, 2016 2 4/13/2017 2016 Special Town Meeting Article 2 - Instructions ► None are known in advance 2016 Special Town Meeting Article 3 - Capital Plan FY17 -FY27 ► Extensive changes (see pages 3 -4); does not authorize funding ► FYI +$26,000 for Fire department capital already funded by FINCOM ► FYI +$610,600 moved from various years, or added as new; note that debt service in FYI is now projected $637,500 lower because of changes to the Birch Meadow phase I Field lighting and changing $2.7 million town & school roof projects from debt to capital ► FYI (November) expect $490,000 requests; the $210,000 DPW loader is urgent - a replacement is being leased for $1 5,000 /month ► FYI (April) expect $120,000 Capital Plan is in excellent shape 383 2 4/13/2017 2016 Special Town Meeting Article 4 - Senior Tax Relief #1 ► Increases an existing tax exemption from $750 to $1,000 under MGL Ch 59 Sec 5 Clause 41 C ► State eligibility guidelines are strict: 65+ single $20,000 income; $40,000 assets (excludes home) 65+ married $30,000 income; $55,000 assets (excludes home) ► About 20 seniors qualify, and this is tax revenue lost to the town 20 x $250 additional = $5,000 increased tax loss ► May 2010 Town Meeting had increased this from $500 based on area community survey ► Currently $1,000 Melrose, Stoneham, Wakefield, Woburn; $750 Lynnfield; $500 Wilmington 2016 Special Town Meeting Article 5 - Senior Tax Relief #2 ► Indexes the previous exemption to a cost -of- living benchmark ► Very low cost to the town, may save future Town Meeting action 384 3 4/13/2017 2016 Special Town Meeting Article 6 - Senior Tax Relief #3 ► Currently eligible seniors may defer property tax payment Age 65 +; $40,000 maximum income; no asset limit ► When the taxes are ultimately paid, the current deferral interest is 8 %. If the senior passes before paying these taxes, the estate is responsible for this tax payment as a first lien, and the interest rate increases to 16% per state law on the date of death ► This article would reduce the 8% to 4% with the other terms above remaining in place ► Under the interest rate situation for the past several years, 4% is well above what the town earns on cash balances ► No tax payments are currently deferred under this program; a recent high enrollment was 3 seniors 2016 Special Town Meeting Article 7 - Senior Tax Relief #4 ► Previous tax relief measures have a. meaningful but limited applicability in Reading ► There are both medical and financial challenges for our seniors to remain in their homes, or -age in place' ► Seniors represent the fastest growing segment of our community - extensive town planning efforts have been underway in areas ranging from construction projects to changes in bylaws (such as 'inlaw' apartments by right) ► This seems like the morally right thing to do, but additionally seniors are less expensive than students in terms of cost of local services ► State tax law does not provide any tools to offer more protection 385 4 4/13/2017 2016 Special Town Meeting Article 7 - Senior Tax Relief #4 ► This article is a Home Rule Petition requesting additional tax relief - and if approved would be the third one in the state ► The town cannot afford to simply forgo the tax income, estimated at $500,000 to $700,000 annually, that would be granted under this senior tax relief - other taxpayers will pick up that cost ► After examining many options, the Town preferred a choice that was easy to understand and administer, ie a `no -cost' operational budget impact to the town. The previous senior tax relief articles require extensive staff work, but for a very small pool of eligible seniors 2016 Special Town Meeting Article 7 - Senior Tax Relief #4 ► Proposed eligibility criteria: Applicant has filed & received a prior year Schedule CB state income tax relief benefit; Applicant has owned property in Reading for at least the prior ten consecutive years; o Applicant applies annually to the Board of Assessors (in August) ► Advantage: very easy to understand and administer ► Proposed tax benefits: Between 50% and 200% of the CB income tax relief received above, as determined annually by the Board of Selectmen. That benefit is graduated by income, with a current maximum of just over $1,000 (so the local benefit could be $500 to $2,000) ► Advantage: very flexible since no one knows what the pool of eligible applicants will look like as the program starts 386 5 4/13/2017 2016 Special Town, Meeting Article 7 - Senior Tax Relief #4 Schedule CB eligibility (2014): • Age 65 or older; must file as single /married jointly /head of household; • If homeowner, assessed value $691,000 or less; • Income qualifications (maximum) Single $56,000; Head of Household $70,000; Married jointly$84,000 • Income defined as MA Adjusted Gross Income PLUS Social Security PLUS untaxed (by state) retirement income PLUS some MA exclusions (Form 1 lines 2.b -2d) added back in to income • Tax credit (max $1,050) only if Real estate taxes paid plus 50% of water /sewer charges paid are greater than 10% of the income calculated above 2016 Special Town Meeting Article 7 - Senior Tax Relief #4 ► What we know (2014 CB data): 645 residents qualified; average income tax benefit was $856 ► What we don't know: • How many of the 645 were renters and therefore ineligible • How many homeowners have not been so for 10+ years • Did anyone eligible for CB not file, but they might • What is the data distribution of that income tax relief ► What we must therefore do as we gather local data: o Build in flexibility: a wide property tax relief range of 50% to 200% ► Targeted tax benefit/ Estimated cost: Maximum $1,300 & Average $1,000; Total at 125% $700,000 387 6 4/13/2017 2016 Special Town Meeting Article 7 - Senior Tax Relief #4 The Selectmen indicated a desire to share the cost of this tax relief among all taxpayers. As we do not have good data on how large the qualified applicant pool will be, that 50% to 200% range will allow the Board to target $700,000 (125 %) of tax relief in total to be reallocated (with a policy maximum of $1 million). R Commerdal 00,000 10% $ 48 -$SOO$ 63 00,000: 31% S 64 S500k -$lmil 30% $ 146 500000 31% $ 81 $imil - $2m11 1796 $ 279 600000 14 %' $ 97 $2mi1- $3mit 4% $ 464 700,0Do ! 140 $ 113 $3mil- $10mil 6% $ 895 $10mil + 3% $ 3,882 2016 Special Town Meeting Article 8 - Financial Condition of Town Review of Public Discussions since Annual Town Meeting ► 3 Community Listening Sessions ► June 1 @ Coolidge MS; June 7 @ Sr. Ctr.; June 16 @ Parker MS ► 18 Public Meetings to discuss what we heard from the community ► Board of Selectmen (7); School Committee (7) and FINCOM (3) Meetings ► Community Financial Forum September 1 @ RMHS PAC ► Next Steps: ► Monday September 12th Special Town Meeting ► Tuesday October 18th Special Election 388 7 4/13/2017 Town of Reading Revenues compared to before last Override Includes.$4.5 mil. Override plus annual +2.5% plus new growth 2 Lost $3 mil. annually - if State Aid had risen at only 2.5% 3 Lost $1 mil. annually - decline in Fed Payments, lover ant parr Town of Reading Revenues - compared to after last Override FY17 4% 2% ■Property Taxes ■ Local fees 7% a State Aid •Other e Rainy Day Fund .:%Lid ItYiCt�a i; . 389 8 4/13/2017 Town of Reading Budget model in Reading $90.2 million Revenues (current year FYI 7) First take care of these: $33.2 million Accommodated Costs {Benefits, Capital, Debt, Energy, Financial, Vocational Education; Out of district SPED; Miscellaneous} Then this is leftover (current split Schools 64% Town 36 %) $57.0 million School /Town Operating budgets 390 9 C Town of Reading Structural Deficit: $3 million today FYI total budget: $2.15 million out of balance FYI estimated total budget: 3 million out of balance Current Structural deficit breakdown: School budget $1.92 million Town budget $1.08 million Town of Reading Structural Deficit: future - forecast to be worse In the future, our revenues 1.6000 are projected to roughly cover the +3.5% operating budget 1.5000 target- to the right these two lines are almost identical 1.4000 1.3000 However forecast Accommodated costs are 11000 clearly a challenge - they add $0.7 million annually to the 1.1000 structural deficit 1.0000 —Revenues — ACC.IU -- Oper Target 1 2 3 4 5 6 7 8 391 4/13/2017 10 Override An initiative petition was passed in 1980 and implemented in 1982 that limited the total property tax (the tax levy) increase in MA communities to +2.5% (plus any New Growth). Because of annual changes in assessed values, individual tax bills go up by various amounts, but are limited to +2.5% for the tax levy. An Override seeks to permanently increase the tax levy by a specified dollar amount. After that, annual increases are again limited to +2.5% Note that capital or debt exclusions, such as Reading has for both the High School and Library projects, may be added on top of this +2.5% limit, when approved by the voters. These exclusions are temporary - for a specified amount of time - and when the projects are paid for this part of the tax bill vanishes. More on this later. Town of Reading Structural Deficit: Why $6 million? In 8 years this annual funding gap is 0.0 therefore forecast as an additional $5.6 mil. to be a total of $8.6 million (1.0) An Override by state law must be a lump 12.0t sum; we really need $3 mil. plus $0.7 mil 13.0t more each year Solution: $3 mil. to fix the current deficit; (4.0) then an additional $3 mil. to fix this 15.0) annual gap as shown on the right (6.0) �37iL'1vv`, �z 392 1 z 3 4 5 6 7 8 save 4/13/2017 11 Town of Reading Structural Deficit: let's not make it worse FY18 $3.0 mil. current structural deficit $0.3 mil. pension funding $2.0 mil. additional capital* $0.7 mil. Savings* 0.0 2 3 4 5 6 7 8 (2.a) (3.0) (4.0) (5.0) (6.0) Beyond FYI Spend more on capital in early years, then spend less in later years. The capital plan is in solid shape and can withstand a lower future baseline of spending. This will reduce the amount of 'savings' needed to shift into future 'spending' 393 4/13/2017 R) 4/13/2017 Peer Revenues may, sari 394 13 Peer Education Expenses Peer average is 15.8% enrollments/ population; Reading is higher at 17.4% Town of Reading Residential Taxpayer View - current Average $500,000 single family home (SFH) tax bill: Taxpayers will have completed repaying excluded debt for the High School project in FY24 and for the Library project in FY25, leading to tax increases below the annual +2.5% levy ceiling as shown below: . This translates into an average 2M annual tax bill increase over the ten year period 4/13/2017 395 14 Pop. Enroll %Enroll %Budget Pop. Enroll %Enroll %Budget Westford 23,265 5,139 22.1% 45.0% North Andover 29,217 4,795 16.4% 41.0% Lexington 32,650 6,785 20196 36.0% Walpole 24,818 3,946 15.9% 41.9% Winchester 22,079 4,505 20.4% 36.8% Natick 35,214 5,368 15.2% 34.2% Westborough 18,630 3,624 19.5% 44.4% Canton 22,221 3,326 15.0% 35.8% Bedford 13,975 2,522 18.0% 39.7% Wilmington 23,147 3,446 14.9% 44.0% Lynnfleld 12,395 2,205 17.8% 43.9% Milton 27,270 4,011 14.796 38.3% Andover 34,477 6,076 17.6% 42.3% Burlington 25,463 3,499 13.7% 39.7% Mansfield 23,566 4,144 17.6% 44.9%. Wak field 26,080 3,439 13.2% 31.7% Reading 25,327 4,407 17A% 39.3% Danvers 27,483 3,588 13.1% 31.9% Belmont 25,332 4,283 16.9% 34.2% Tewksbury 30,107 3,658 12.1% 36.3% Marshfield 25,509 4,267 16.7% 44.496 Dedham 25,299 2,776 11.0% 31.S% North Reading 15,377 2,556 16.6% 38.896 Concord 19,285 2,114 11.0% 50.2% Shrewsbury 36,309 6,016 16.6% 43,4% Stoneham 21,734 2,317 10.7% 35.2% Town of Reading Residential Taxpayer View - current Average $500,000 single family home (SFH) tax bill: Taxpayers will have completed repaying excluded debt for the High School project in FY24 and for the Library project in FY25, leading to tax increases below the annual +2.5% levy ceiling as shown below: . This translates into an average 2M annual tax bill increase over the ten year period 4/13/2017 395 14 overrides - what do our Peers do? Sorted by reliance on Residential Tax Base: Town of Reading Structural Deficit - History Previous. Override: $4.5 million • Equivalent as % of taxes to $8.5 -million Override in FYI • No financial modelling looking towards the future • "Hope this lasts for 8 -10 years" Why did the previous Override last for so long? C �^ { 5 4/13/2017 396 15 TOT Most Recent YES Res %,SPLIT -. .,,.,,. 1.61 - W.kefietd 7OTMost "7 YES Res %SPf1T': 84.91 02- Miton 8 2009YE5 . 6/M 96 1; _ 'Westford 1 1940 YES 3/90 �84.7t tOf Winchester 201SNp " 3� 960'064. �2006NO_ 3199 - Betmoiii.... 6 2015YE5 "- 43,5 94.4 -l.Ot Tewksbury _ - 2 2007NO 81 t 89= Marshfoetd 1S , 20pgyE5/NO 4' 92.1': f'0 Dedham p, 866, 2.14: It D qp 5 2003 YES 4/03 91.4 1.0 Andover 2 2003N0- ' 80-2i 1.661 - ' Concord 22 26WBYE.S . 0* 91,0 '1.0' Bedford r 70 ° S/Q@ 78 61 2 20, r 77 41 l Stoneham 6 20.N0 - 88 9, 1 ,Canton 2 zapsy Lexingan lq 2pp7YE5 - 6LPT - tdatltk 4 2pp8Y85� , . 3%08 774 1.0: E , ._ North Reading ]4 2D09NO ; ,2(05 87.31' —CO` - Mansfield _ -., 22000YES _. _ _. 4100 _ 7861 1.34, 76.41 2.28:_ LynnRetd 4202,1YE5 87.2 119: Wiknrngton _ 31995NO . _... E 74 0 1.44. North Anmver 82007YF5 67 2� M1 41 Daners p I Shrewsbury :62Q34YE5 ^ 04 r .. 67.01 ':1.9, - 0 - - 64.6, 1.9 , - Walpole - q 26�Y , =. 6/12 _Westborough- 86.41 .t33, Budmgton p 62 7: 2 69'.. Town of Reading Structural Deficit - History Previous. Override: $4.5 million • Equivalent as % of taxes to $8.5 -million Override in FYI • No financial modelling looking towards the future • "Hope this lasts for 8 -10 years" Why did the previous Override last for so long? C �^ { 5 4/13/2017 396 15 Town of Reading Structural Deficit - History Efficiencies - the list is quite long, but here are some highlights Spend money to save money: Performance contracting; some out of district SPED brought in- district; opt -out Health Insurance payments Spend moneyto generate revenues: Fire Dept. Advanced Life Support Operational efficiencies: capital spending; rubbish/ recycle; technology Restructuring large departments and single positions Financial planning (next slide) emphasized Fees & Revolving Funds increased ZFlo, V'K- Town of Reading Financial Planning: Example In FYI 7, the Town will spend 2.1 % of the general fund budget on debt service inside the tax le w, and 80% of those funds are for 'productive' principal payments, repaid for needed capital expenditures that were financed by debt. In FY06, the Town spent 6.8% on debt service, and almost 40% of that was on 'unproductive' interest payments. If FY06 practices were continued, FYI School and Town budgets would need to be cut by over $4 million Eunt 4/13/2017 397 16 4/13/2017 Town of Reading Override = Structural Deficit + How Much More? The Schools requested $1.925 million and the Town requested up to $1.08 million -. or a combined $3 million of additional funding. Town of Reading Taxpayer Impact - Override For the same average SFH tax bill, a $6.0 million Override to remedy the current structural deficit for 8 years will cost $664 above the +2.5% limit as shown below. Over the same ten -year period, this translates into a 2.9% annual increase. Costs for additional Operating budget funding are also shown below, with a $9.0 million Override translating to a 3.4% annual increase: 17 Town of Reading Residential Taxpayer View After extended discussion, the Board of Selectmen selected a $7.5 million Override to request from the voters. This figure would be able to restore or add half of what had been requested, plus fund the structural deficit. Here is the tax bill impact: Average $500,000 single family home (SFH) tax bill with a $7.5 million Override nui This translates into a +3.1% annual increase Peer Residential Tax Burden 13,500 12,500 11,500 1 Single 0,500 Family 9,500 Home Taxes* 8,500 7,500 6,500 5,500 4,500 60,000 80,000 100,000 120,000 1 ,e- 4/13/2017 399 18 Town of Reading Structural Deficit - Future The financial model will allow future Town and School leaders to track annual financial reality versus what we have guessed might happen. Don't forget that today we have two projects on the horizon as excluded debt - Killam School and the DPW Garage /Cemetery building. In a perfect world we'd wait until other excluded debt projects are paid off. We DO NOT want to fall back into spending Operating budget funds on projects of this size, as we did for Barrows and Wood End. The rest of the Capital Plan was then largely ignored, and debt serviced ballooned inside the tax levy. Town of Reading Structural Deficit - Future The town is actively engaged in efforts to promote more commercial development that could add as much as $2 million of New Growth to our annual revenues. These efforts will require another five years, but if successful delay the need for any future Override. $lo kc - $M 84 41 %r $_ 311,010 8.6%_ $ , _- 379,092 $ 4,513 $500k - $lmil 61 30% $ 719,956 14.4% $ 637,267 $ 10,447 E $1mil -$2mi1 35 1,373,140 15.8% $ 697,340 _$ 191924 $2m1) - $3mll 8 4% $ 2,287,475 6.0% $ 265,528 $ 33,191 1 S Omi I +10mif 3 19'0 333 37.7%: $ 1664 616 . $ 277,436 f Y, 4/13/2017 400 19 Town of Reading Impacts of a Yes Override Vote Town government - Additions of $540.000 $200,000 Retaining and attracting staff $ 85,000 School Resource (Police) Officer $ 75,000 Firefighter /paramedic $ 70,000 Technology equip. (yr 1) then staffing $ 60,000 Library staffing $ 25,000 Town Accountant staffing (PT) $ 25,000 Volunteer Board support (will change each year) 4/13/2017 401 20 on 4/13/2017 pal SPECIAL TOWN MEETING LITIGATION Reading Memorial High School Preforming Arts Center November 14, 2016 The meeting was called to order by the Moderator, Alan E. Foulds, at 8:01 PM, there being a quorum present. Motion made by John Halsey, Board of Selectmen to dispense of the reading of all motions in their entirety. After a brief explanation by Bob LeLacheur a motion was made by John Halsey, Board of Selectmen to adjourn Special Town Meeting until a date certain. Motion Carried On motion by John Halsey, Board of Selectmen, it was voted that this Special Town Meeting stand adjourned to meet at 7:30 PM at the Reading Memorial High School Preforming Arts Center, on Monday, November 21, 2016. Meeting adjourned at 8:02 PM with 146 Town Meeting Members in attendance. A true copy Attest: I All-xl� Laura A Gemme, CMMC Town Clerk 1 1 P a g e 403 SPECIAL TOWN MEETING LITIGATION Reading Memorial High School Preforming Arts Center November 21, 2016 The meeting was called to order by the Moderator, Alan E. Foulds, at 7:47 PM, there being a quorum present. After a brief explanation by Bob LeLacheur a motion was made by John Halsey, Board of Selectmen to adjourn Special Town Meeting until a date certain. Motion Carried On motion by John Halsey, Board of Selectmen, it was voted that this Special Town Meeting stand adjourned to meet at 7:30 PM at the Reading Memorial High School Preforming Arts Center, on Thursday, December 8, 2016. Meeting adjourned at 7:49 PM with 140 Town Meeting Members in attendance. A true copy Attest' 6 Laura A Gemme, CMMC Town Clerk 404 11 Page SPECIAL TOWN MEETING LITIGATION Reading Memorial High School Preforming Arts Center December 8, 2016 The meeting was called to order by the Moderator, Alan E. Foulds, at 7:35 PM, there being a quorum present. ARTICLE 1: Motion Carried ARTICLE 2: Motion Carried Motion made by John Halsey, Board of Selectmen and Article 1 was tabled Motion made by John Halsey, Board of Selectmen and Article 2 was tabled ARTICLE 3: Motion made by the Board of Selectmen - Whereas, The deferred operation of this vote would tend to defeat its purpose, which is to amend forthwith the FY 2017 -27 Capital Improvements Program in order to allow for necessary funding for the Reading Memorial High School project, I move that it be declared to be an emergency measure, necessary for the immediate preservation of the peace, health, safety or convenience of the Town; and I further move that the Town vote to amend the FY 2017 -27 Capital Improvements Program, as provided for in Section 7.7 of the Reading Home Rule Charter, and as previously amended, by making this change: General Fund FY17: +$6 million + $6 million added to RMHS construction project Background: This Article is included in every Town Meeting Warrant. The Reading General Bylaw (section 6.1.3) states "... No funds may be appropriated for any capital item unless such item is included in the Capital Improvements Program (CIP), and is scheduled for funding in the Fiscal Year in which the appropriation is to be made." Bond ratings agencies also want to ensure that changes to a long -term CIP are adequately described. Presentation given by: • Bob LeLacheur - See Attached Finance Committee Report: Bylaw Committee Report: Motion Carried No Report No report 2 /3rds Vote Required 103 Voted in the affirmative 3 Voted in the negative 122 Town Meeting Members in Attendance SPECIAL TOWN MEETING LITIGATION Reading Memorial High School Preforming Arts Center December 8, 2016 ARTICLE 4: Motion made by the Board of Selectmen as a courtesy to the School Committee - Whereas, The deferred operation of this vote would tend to defeat its purpose, which is to provide forthwith the necessary funding for the Reading Memorial High School project, I move that it be declared to be an emergency measure, necessary for the immediate preservation of the peace, health, safety or convenience of the Town; and I further move that the Town vote to amend the vote take under Article 5 of the January 13, 2003 Special Town Meeting, as amended by the vote taken under Article 10 of the November 13, 2006 Subsequent Town Meeting, to transfer an additional sum of $2,196,604.94 million from Free Cash in the Treasury and to raise and appropriate an additional sum of $3.0 million, for a total of $5,196,604.94, for the purpose of making extraordinary repairs and additions to the Reading Memorial High School at 62 Oakland Road, including the costs of engineering and architectural fees, plans, documents, cost estimates, interest and related expenses incidental thereto and necessary in connection therewith, said sum to be expended by and under the direction of the School Committee; and, for the purpose of meeting such appropriation, to authorize the Town Treasurer, with the approval of the Board of Selectmen, to borrow $3.0 million in accordance with Chapter 44, Section 7(1), of the Massachusetts General Laws, or any other enabling authority; to authorize any agency of the Town to file applications for grants, loans, exclusions, or other sources of additional funding to be used to defray the cost of all or any part of the cost of the project; to authorize the School Committee to enter into all contracts and agreements as may be necessary to carry out the purposes of this Article; provided, however, that any premium received by the Town upon the sale of any bonds or notes approved by this vote, less any such premium applied to the payment of the costs of issuance of such bonds or notes, may be applied to the payment of costs approved by this vote in accordance with Chapter 44, Section 20 of the Massachusetts General Laws, thereby reducing the amount authorized to be borrowed to pay such costs by a like amount; or take any other action with respect thereto. Background: The Reading Memorial High School construction project began in 2004, and TLT Construction Corporation was the general contractor for the project. In the fall of 2007, TLT filed a lawsuit in Middlesex Superior Court against the Town of Reading, claiming that the Town owed additional money for work performed under the contract. In response, the Town filed a counterclaim, alleging that TLT did not complete the contract work on time and that the Town had to correct various parts of the project work TLT did perform. In 2013, after several years of the litigation discovery process and attempts at reaching a settlement with TLT, the court referred the case to a Special Master, a retired judge, who conducted a hearing process in lieu of a trial in the Superior Court. The hearings began in December of 2013 and concluded in March of 2015. Closing arguments were presented in July of 2015. Since that time, the Master has been preparing, and issuing to the parties, draft decisions on the various issues that make up the matters in dispute. These issues included payment to TLT for asbestos abatement work, the Town's replacement of the outdoor track, compensation to TLT for additional work outside the scope of the contract, correction of site work, and liquidated damages for failure to complete the work on time. The first draft ruling was issued in January of 2016, and the most recent ruling, which left only a small portion of the claims still to be decided, was issued in September of 2016. The net result of the rulings to date is approximately 3 million dollars, in TLT's favor. If the process continued, each party would have the opportunity to respond to the draft rulings with proposed revisions; and the Special Master would then prepare a final report to the Superior Court. Under the applicable legal procedure,,the court would review the Master's final report and may adopt it, reject it in whole or in part, or send it back to the Master with instructions for additional action. Ultimately, the Superior Court would enter a judgement in the case, whether on its first receipt of the Special Master's report or after such additional action by the Master as it may order. On account of the volume of material to be reviewed, a Superior Court judgment woujpo got be expected until sometime well into 2017. By SPECIAL TOWN MEETING LITIGATION Reading Memorial High School Preforming Arts Center December 8, 2016 Massachusetts statute, a court judgment is subject to 12% annual interest, and interest would apply from the date the complaint was filed in November, 2007. As a result, the amount of the judgment would now more than double. If the final court judgment were issued in late 2017, it is expected that the total amount could be close to $7,000,000 in TLTs favor. Given these circumstances, the School Committee and TLT have reached a tentative settlement agreement in the amount of $6.0 million, subject to Town Meeting approval. A draft settlement. agreement has been developed and is currently being reviewed by Town Counsel. If approved by Town Meeting, the settlement would be paid through three sources of funding: remaining funds from the RMHS building project (approximately $800,000), certified free cash, and borrowing - with the debt being paid off over a period of several years. No operating budget funds would be utilized. As a result of the settlement, it is expected that capital projects currently on the 10 -year capital plan (i.e. roof replacements, field replacements, and capital equipment) would be pushed out additional years into the future. Town officials are also exploring the possibility of additional MSBA reimbursement funding for the High School project. Although litigation has taken years, it was a process that legal counsel at the time believed was the best course of action. After almost a decade -long process, however, the School Committee supports moving forward on a settlement in order to bring the litigation process to a necessary close and to best position our Town and schools for the future. Presentation given by: • John Doherty, School Superintendent - See Attached • Jeanne Borawski, School Committee Chair- See Attached • David J Doneski, Counsel to School Committee - See Attached • Bob LeLacheur, Town Manager - See Attached Finance Committee Report - given by Paula Perry: was taken with 5 -0 -0 in support of the subject matter. Bylaw Committee Report: No report Motion made by Bill Brown, Precinct 8 to amend as follows: At the December 8, 2016 meeting a vote Funds to come from: $400,000 Permit Revolving Fund and $600,000 Sale of Real Estate Motion Does Not Carry Motion made by Ben Tafoya, Precinct 4 to amend as follows: to authorize the School Committee to enter into all contracts, legal settlements and agreements as may be necessary to carry out the purposes of this Article; provided, however, that any premium received by the Town upon the sale of any bonds or notes approved by this vote, less any such premium applied to the payment of the costs of issuance of such 'bonds or notes, may be applied to the payment of costs approved by this vote in accordance with Chapter 44, Section 20 of the Massachusetts General Laws, thereby reducing the amount authorized to be borrowed to pay such costs by ,a like amount; Motion Carried .M SPECIAL TOWN MEETING LITIGATION Reading Memorial High School Preforming Arts Center Motion made by David Tuttle, Precinct 3 to move the question 2 /3rds Vote Required 107 Voted in the affirmative 10 Voted in the negative 122 Town Meeting Members in Attendance Motion to Move the Ouestion Carried After some discussion a vote was taken: 2 /3rds Vote Required 110 Voted in the affirmative 5 Voted in the negative 122 Town Meeting Members in Attendance Motion Carried as Amended December 8, 2016 John Halsey, Board of Selectmen moved to adjourn the 2016 Special Town Meeting sine die at 10:11 PM with 122 Town Meeting Members in attendance. Motion Carried A true copy Attest: Laura A Gemme, CMMC Town Clerk ,m Special Town Meeting December 8, 203.6 RMHS Construction Litigation Presentation Topics • Description of Case • Chronology of Events • Master Judge Rulings • Legal Cost Breakdown • Lessons Learned • Settlement Terms • If there is no settlement approved • How litigation settlement will be funded if approved l 4/13/2017 1 4/13/2017 TLT v. Town of Reading. • RMHS renovation and addition construction project began in 2004. • TLT Construction Corporation was the general contractor for the project. • Awarded project as the "lowest qualified" bidder. • Construction had multiple problems, including: • Larger than expected amounts of asbestos requiring special handling and disposal. • Project fully completed 22 months after agreed -upon deadline (April 2007 to January 2009). Major Issues in Dispute Was amount of asbestos found foreseeable? • Remediation of foreseeable asbestos covered by original contract amount; • Extra cost for remediation of unforeseeable asbestos. Was contractor responsible for delay in project completion? • Contract language in the project specified liquidated damages of $2,500 per day if TLT failed to complete the contract work on time. • Beginning in 2007, the Town withheld payments in the belief that amount of liquidated damages, rejected work, and punch list work would offset amounts owed. • Total amount of undisputed costs withheld: $2,366,473• • Total amount of liquidated damages claimed: $�-3.,59o,000. 410 2 4/13/2017 Litigation Commences In the fall of 2007, TLT filed a lawsuit in Middlesex Superior Court seeking payment by the Town of the amounts owed. In response, theTown; filed a counterclaim alleging thatTLT did not complete the contract work on time and that the Town had to correct various parts of the project work thatTLT did not perform, including: • Town's replacement of the outdoor track Correction of site work • In 2013, after the litigation discovery process was complete, the court referred the case to a Special Master, a retired judge, who conducted a hearing process — in lieu of a trial in the Superior Court. • December 2013: Hearings begin. Reading's Representation • January, 2014: Brackett and Lucas requests to be removed from the case. • April 2014: Kopelman and Paige (now KP Law) takes over the case as counsel replacing Brackett and Lucas 411 3 4/13/2017 Chronology of Case Chronology of Case 412 4/13/2017 Master's Rulings The net result of the Master's rulings thus far is approximately $2.875 million in TLT's favor (including undisputed amounts withheld), 413 5 4/13/2017 Construction Fund Breakdown Since 2007 Legal Costs Associated with Lawsuit 414 N. 4/13/2017 Settlement October, 2016- Agreement reached on s6,000,00o settlement amount. October, 2016- School Committee votes to move forward with settlement, requests Board of Selectmen to hold Special Town Meeting 415 7 If No Settlement 4/13/2017 • Additional hearings for claims not yet ruled on, and each party would respond to the draft rulings with proposed revisions. (est. spring 2017) • When all of the rulings have been issued, the Special Master will prepare a final report to the Superior Court. (est. summer 2o17) • The court will review the Master's final report and may adopt it, reject it in whole or in part, or send it back to the Master with instructions for additional action. • Ultimately, the Superior Court will enter a judgment (not expected until several months after report filed ). • By Massachusetts law, the court's judgment will be subject to 12% annual interest from the date of the complaint (November 2007). • If a final court Judgment is issued in late 203.7, the final net result of the judgment could be close to s6,750,000 in TLT's favor. Potential Additional Damages If there is no settlement 416 N. 4/13/2017 Settlement Terms • Agreement is between the Town and TLT Construction Company. • Upon payment by the Town of $6 million, Western and TLT release all claims against the Town. • The Town releases most claims against Western and TLT and TLT's surety. • The Town retains the right to assert claims against TLT or its surety for indemnification or contribution with respect to any future claims by subcontractors and suppliers. How to Pay for -the Settlement Special Town Meeting — request debt authorization s3.omillion will be issued and repaid over so years capital plan will be rebalanced to accommodate the debt (recreation projects, facilities repairs, DPW equipment delayed) Balance to be paid by: so.8 million from the remaining RMHS Construction fund $2.2 million Free Cash Town is pursuing reimbursement from MSBA Any recovery will replenish the Free Cash used 417 E