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HomeMy WebLinkAbout2012-10-17 Finance Committee Minutes REGEIV- U TOWN CLERK"- READING, LERKREADING, MA. Finance Committee Meeting October 17,2012 2019 JUN I I PM 4: 51 The meeting convened at 7:35 p.m. in the Town Hall Conference Room, 16 Lowell Street, Reading, Massachusetts. Present were Chairman David Greenfield, Vice Chairman Barry Berman and members Jeanne Borawski, Mark Dockser, Karen Herrick and Hal Torman. Also present were Assistant Town Manager/Finance Director Bob LeLacheur, Superintendent Dr. John Doherty, School Committee Chairman Karen Janowksi and School Committee member Chuck Robinson. FINCOM member Paula Perry arrived at 7:45pm. Mr. Greenfield called the meeting to order. On a motion by Mr. Greenfield to go into executive session to consider the purchase exchange lease or value of real property because the Chair has declared that an open meeting may have a detrimental effect on the negotiating portion of the public body and to reconvene in open session at approximately 8.00 pm seconded by Mr. Berman. the votes were as follows, Ms Borawski—yes- Mr. Dockser—yes; Ms. Herrick—yes; Mr. Torman— Mr Berman—yes; Mr. Greenfield Mr. Greenfield called FINCOM to order back in open session at 8:15pm. Water System Master Plan Mr. LeLacheur said before he reviewed the November Town Meeting Warrant that he would respond to FINCOM's request to discuss a recent Water System Master Plan Final Report (WSMP)issued by Weston& Sampson to the Board of Selectmen at their meeting on October 9, 2012. Their findings concluded with three phases of water main replacement projects that should be completed as part of a (very) long-term capital improvements plan. The projects stated in current costs were approximately$25 million. Mr. LeLacheur suggested that these costs had not been agreed to by the Selectmen yet and in any event should be viewed over several decades as water mains were expected to last about 100 years. Many replacement projects were for water mains built in the 1890s. He said that in contrast the capital plan only looked at the next ten years, and in fact there were already about$3 million of planned water main improvements mentioned in the WSMP that were in the capital plan. These included an H. StreetlIvy St. loop for $350,000; a Causeway Road loop for $276,000; $1.0 million for South/West/Gleason and $1.4 million of future miscellaneous water main projects from FY16-FY22. The Water division had identified a total of$2.2 million of projects from the WSMP that should be considered a priority in order to assure the highest standards of water quality. In addition, about $0.8 million of other water main projects should be done as a priority because of paving and other improvement plans scheduled. Mr. LeLacheur reviewed a draft financial plan for accomplishing the Phase A work identified in the WSMP. He stressed that this was only a staff working document and had not been reviewed in detail with the Board of Selectmen yet. The four phases would begin in FY14 by selling $3 million of six-year debt to accomplish the highest priorities listed above. The last of these phases would be completed by FY23. Financially the water capital/debt plan was approximately $2.0 million per year for the next five years (unchanged from FY13 levels) and then increasing to $2.5 million/year for the next ten years. Town Meetine Warrant Article 3 Amendments to the FY13-22 Capital Improvements Plan Mr. LeLacheur mentioned that under this article the intention was to have brief presentations on the Library and Killam renovation projects as well as the School space needs status. He then reviewed the $42,000 request for Fire Station repairs as well as the $30,000 FINCOM transfer for a West Side generator that is now listed in the CIP; he also reviewed Senior Center kitchen repairs & improvements. There was a discussion that the latter was in the capital plan, some work was done, and then it was removed from the plan. Mr. LeLacheur reviewed a memo from Community Services Director/Town Planner Jean Delios that explained the current list of work that she had reviewed with Facilities Director Joe Huggins. Mr. LeLacheur reviewed a request from the School Committee to 're-purpose' their current FYI $400,000 capital allocation for modular classrooms to instead more broadly examine the feasibility of other alternatives, as has been discussed in several public meetings for a few months. Mr. Berman expressed an interest to make sure any unused funds were returned to free cash this year when the feasibility work was completed, and Mr. LeLacheur indicated that was common practice with all capital projects and it met with the School Committee's stated desire as well. Mr. Greenfield asked FINCOM if any additional restrictive wording should be placed on this request, and after a discussion no further changes were required. Mr. LeLacheur reviewed a request by the Selectmen to fund $350,000 of design work for a Downtown Phase II (DPII) improvements project primarily for the Haven and High Street neighborhood. He stated that the sources of funds would be $250,000 of the current balance of $330,000 from the Permits Revolving Fund and $100,000 from free cash. He quickly reviewed the scope of the project which included several traffic, roadway and streetscape improvements for a total cost of approximately $5 million. He showed a timeline where the DPII design work needed to be done quickly in order to be able to apply for partial funding under a MassWorks Grant. Previous grants were generally in the $0.75 million to $1.5 million range, but given the work was being done in a very successful Smart Growth area that the state may well provide a higher amount. FINCOM had a lengthy discussion of this project against a backdrop of other large projects including the Public Library renovation ($7 million local share), Killam School ($3 million), school space needs (unspecified between $2 million and $20 million), and the WSMP work($25 million spread over many years). Most members had not heard of the DPII project before, and wondered why it was rushing past these other projects and being considered under the tax levy when by FINCOM policy a project of this size should be considered only as capital or debt exclusion — much as those other four projects are. Mr. LeLacheur said that if the grant were between $1 and $2 million, then the annual cost of the local share would be between $425k and $600k for the next ten years. FINCOM asked what existing capital projects would be ignored so that DPII could be completed. Mr. LeLacheur reviewed the capital plan which for the next ten years shows $1.8 million in requests that are not expected to be funded, and that this project would add another$5 million or so to that amount. FINCOM debated voting against including the DPH project under Article 3, but Mr. LeLacheur requested that they approve it under this Article which simply allowed a discussion at Town Meeting of the relative merits. If any member of FTNCOM objected to the project, that was best expressed under Article 4 which funds specific capital projects. After more discussion, FINCOM agreed to this approach. FINCOM requested that both the Water System Master Plan Final Report and the Downtown Phase II projects be discussed at the beginning of this Article. On a motion by Mr. Berman seconded by Mr. Dockser, FINCOM recommended the subject matter of Article 3 to Town Meetine by a vote of 7-0-0. Mr. Greenfield will do the Town Meeting report. Article 4 Amendments to the FYI Budgets Mr. Greenfield asked if there were any other discussion on the DPH project, and there was none. Mr. LeLacheur suggested that any motion on this project be made in the affirmative, and then voting should be done on that basis. On a motion by Mr. Berman seconded by Ms Borawski FINCOM recommended against the Downtown Phase II project by a vote of 0-7-0. Mr. LeLacheur reviewed the remainder of the budget amendments. Mr. LeLacheur explained that the Veteran's Services Officer (VSO) request was to allow for a regionalization discussion with several area communities to continue this winter. The current part-time VSO Frank Driscoll is doing an outstanding job in a current regional arrangement with Wilmington. The state has expressed some interest that Reading formalize whatever regional The larger budget requests, Town Manger transition and a new Police officer, had been well advertised and FTNCOM did not have any reservations about any of the other individual budget requests. On a motion by Mr. Greenfield seconded by Mr. Dockser, FINCOM recommended the subject matter of Article 4 with the exception of the Downtown Phase fI by a vote of 7-0-0. Mr. Berman will do the Town Meeting report. Article 5 Prior Year Bills Mr. LeLacheur described one FY12 invoice from the school department for about $1,000 came in late as there was some confusion over who would be paying the bill. He explained that this Article would require a 9/10 vote of Town Meeting. On a motion by Mr. Turman seconded by Ms. Herrick, FINCOM recommended the subject matter of Article 5 by a vote of 7-0-0. Ms. Perry will do the Town Meeting report. Article 6 Smart Growth transfer Mr. LeLacheur explained that $309,000 had been received in August from the state as unit density payments of $3000/unit for the two Smart Growth areas. He added that Pulte Homes would generate a few more $150,000 payments in future years. This Article would move that $309,000 into the Smart Growth Stabilization Fund, and then in the future Town Meeting could allocate the funds as outlined by a plan to fund extra road improvements. On a motion by Ms Herrick seconded by Mr. Torman. FINCOM recommended the subject matter of Article 6 by a vote of 7-0-0. Mr.Torman will do the Town Meeting report. Article 7—Sick Leave Stabilization fund Mr. LeLacheur reviewed the balance of the Sick Leave Stabilization Fund will be about$3,800 if the transfer in Article 4 is approved. The Town has identified over $41,000 funds that will be needed in early 2013 so this Article requests a transfer of$50,000 from free cash. FINCOM discussed the merits of this method, which allows a better historical look at operating budgets without the distortion of these one-time payments. Mr. LeLacheur noted that sick leave buyout was being phased out. On a motion by Ms Borawski seconded by Ms Perry, FINCOM recommended the subiect matter of Article 7 by a vote of 7-0-0. Ms. Borawski will do the Town Meeting report. Article 8—Drainage easement Mr. LeLacheur reviewed the easement which will allow the Town to complete some drainage work that will alleviate neighborhood flooding concerns. FINCOM is asked to vote because the Town has offered $1 to each of the two parties granting the easement. FINCOM debated if the Town should be involved in private drainage problems or instead use the betterments process. On a motion by Ms Perry seconded by Mr. Dockser, FINCOM recommended the subject matter of Article 8 by a vote of 7-0-0. Ms. Herrick will do the Town Meeting report. Article 9—Authorize MWRA sewer debt Mr. LeLacheur reviewed the 45%grant/55%interest-free loan program offered by the M W RA to conduct sewer inflow & infiltration repairs. This Phase 8 allocation is for a total of$421,000 so $231,550 will be a five-year loan for the Town. On a motion by Mr. Greenfield seconded by Mr. Torman. FINCOM recommended the subject matter of Article 9 by a vote of 7A-0. Mr. Dockser will do the Town Meeting report. Article 11 —Jacob Way/South Street road configurations Mr. LeLacheur reviewed a required reconfiguration of Jacob Way and South Street during the Reading Woods project being built by Pulte Homes. The Town will pay Pulte no more than$100 each for two land transfers. On a motion by Mr. Berman seconded by Ms Perry, FINCOM recommended the subject matter of Article 11 by a vote of 7-0-0.Mr. Greenfield will do the Town Meeting report. Update on Assessor's Telecommunication tax dispute Mr. LeLacheur reviewed the situation with old personal property tax assessments that were disputed by telecommunications firms throughout the state. The Reading Board of Assessor's have assessed the tax and collected, then reserved the full amounts in case a refund was needed. Changes to state law made this tax indisputably legal going forward, but a few past years are nearing the end of litigation. Although not yet final, one likely outcome is that Reading will needing to refund over $146,000 of FY09 taxes to Verizon NE, who will then cease claims for FY05, FY08 and FY09. By law there will be an 8% interest charge on this settlement that cannot be paid for from the overlay account. Mr. LeLacheur wanted to update FINCOM that approximately $45,000 of interest charges will need to be funded. In the past, small settlements have been made through the Town's debt interest budget, but this year there was no new issuance planned so there is no surplus to make such a payment. Minutes On a motion by Mr. Greenfield seconded by Ms. Herrick, FINCOM approved the minutes of September 24 2012 by a vote of 6-0-1 (Mr. Berman abstaining). On a motion by Mr. Dockser seconded by Ms. Perry. FINCOM approved the minutes of October 10 2012 as amended by a vote of 5-0-2 (Ms. Herrick and Mr. Turman abstaining). Mr. Greenfield asked for feedback from the capital projects portion of the Financial Forum held on October 10. FINCOM agreed that the Killam presentation for Town Meeting should be less detailed on the timeline and steps, but an overview of the proposed project and the repair `moratorium' were valuable information for Town Meeting. FINCOM reminded their wish to hear about all five capital projects previously mentioned under Article 3. On motion by Mr. Berman seconded by Mr. Torman the FINCOM voted to adjourn it's meeting at 10:50 p.m. by a vote of 7-0-0. Respectfully submitted, Secretary