HomeMy WebLinkAbout2002-02-19 Board of Selectmen Minutes BOARD OF SELECTMEN MINUTES February 19, 2002
CALL TO ORDER: Rosemary Smedile called the meeting to order at 7:00 PM.
ATTENDANCE: The following were present: Rosemary C. Smedile Chairman; James M. Xenakis; Susan Haltmaier;
Donald Stewart;William Duffy; Mark Rees, Town Manager; and Raymond Santilli, Assistant Town Manager.
EXECUTIVE SESSION: James Xenakis made a MOTION, seconded by William Duffy,to move into Executive Session
to discuss collective bargaining, vote approved 5-0.
The Board of Selectmen was individually polled and each voted to move into Executive Session.
Vote: William Duffy yes; Donald Stewart yes; Susan Haltmaier yes; James Xenakis yes; Rosemary Smedile yes.
Chairman Smedile stated the Board would be returning to Open Session after the Executive Session.
APPROVAL OF MINUTES:
James Xenakis made a MOTION, seconded by Donald Stewart to approve the Executive Session and Open Session
minutes of November 5, 2001; vote approved 5-0
COMMUNICATIONS,ANNOUNCEMENTS,AND PUBLIC COMMENT
Fire Safety Donation. Lt. Andrew Melnikas, Fire Prevention Officer, informed the Board of Selectmen that the Stevens
Foundation has matched the donation of$10,000 given to the Fire Department by Mass Refusetech towards the Fire
Safety House and is asking the Board of Selectmen to officially accept this donation.
James Xenakis made a MOTION, seconded by Donald Stewart,to accept the $10,000 donation from the Stevens
Foundation to be used towards the Fire Safety House and send a letter of thanks on behalf of Town; vote approved 5-0.
Proclamation: National Child Abuse Prevention Month.
The Greater Lawrence Community Actin Council, Inc in partnership with the Exchange Clubs of the Merrimack Valley
sponsors of the Michael B. Christensen Family Support Center invited the Board of Selectmen to attend a breakfast on
March 22, 2002. The Family Support Center also requested the Board to present a proclamation in support that the month
of April is the National Child Abuse Prevention Month.
James Xenakis made a MOTION, seconded by Susan Haltmaier,to sign the Proclamation proclaiming April as National
Child Abuse Prevention Month; vote approved 5-0.
FY01 Financial Audit Report.
Frank Byron of Melanson and Heath,the Town's audit firm, presented the Town's financial statement and management
letter for the year ending June 30, 2001. On the Financial Statements Mr. Byron stated the independent auditors report
where the auditors give an opinion on whether or not the financial statements are in accordance with generally accepted
accounting principles, in North Andover you have the same opinion as prior years with two minor exceptions that are not
in accordance with general accounting principles. There is nothing to be of concern because these exceptions are shared
with most other municipality in Massachusetts and will be going away in two years because of an accounting
pronouncement known as GASB 34. The issues related to the Town does not maintain detail historical fixed assets
records for the Town. Therefore,there is no asset report in the statements. Also,the Enterprise Funds, of Water, Sewer
and Osgood,there are no fixed assets records and the Enterprise funds are not accounted for on the accrual basis of
accounting, instead it is following the modified cash basis of accounting. These will both be corrected in 2003 with
GASB-34.
Frank Byron went over the Balance Sheet and stated the Undesignated or Surplus was $2,579,598 and Bond Rating
agencies like to see between 5 and 10%of operating budget in this balance. The Town had 5%and was a major
accomplishment compared to where the Town has been in the past. Three years ago June 1998 the same account had a
balance of$500,000;a year later in 1991 the balance was $771,000; and the next year June 2000 the balance was $1.5
million dollars. The Town has made major efforts. The Bond Rating agencies like to reserves for"rainy days"and a
surplus for working capital so there are not cash shortages during the year. Most towns try to keep at least 5%.
Under Retained Earnings for the Enterprise Funds this year has a$1,660,761 balance, which is surplus. Three years
ago in 1998 the Town did not have Enterprise Funds so the balance was 0. In 1999 the balance was $338,000 and in 2000
the balance was $1.2 million and now$1.6 million so reserves have been built up for future capital additions and stability
of enterprise funds. Within the Trust Fund balance of$621,526 for year-end 2001, Mr. Byron pointed out that there was a
Board of Selectmen Minutes February 19,2002 Page 2
balance of$131,000 in the Stabilization Fund, which is available for appropriation. Town Manager Mark Rees also stated
that Fall Town Meeting appropriated another$500,000 for the Stabilization Fund.
Under Bonds payable, Mr. Byron stated the Town does have a lot of projects going on and a large amount of bonds
payable $66,916,860 however,the State will be paying $14,430,000 of the $66 million dollars.
Revenues-Revenues are up about$5 million from the year before. Property taxes are up $3.2 million dollars and State
Money(Cherry Sheet money) is $1.8 million more than last year and you cannot count on the State to fund future growth
in the budget. Total expenditures are up about$4.4 million dollars from the year before. Education is up about$2.5
million dollars from the year before.
Excess of revenues and other sources over expenditures and other uses (Net Income for private industry) for year-end
2001 was $1,125,105. Three years ago in 1998 this was (-$400,000);in 1999 $135,000;in 2000 $341,000. Definitely
positive trends.
Mr. Duffy thanked Mr. Byron and stated Mr. Byron was a big part of this improvement with conservative efforts working
with the Town.
Mr. Byron pointed out that the Town budgeted conservatively and the over all Actual to budgeted amount of revenue was
a positive $876,493 for local revenues, which built up a surplus,that goes into free cash. The largest favorable variance
was for Excise taxes, which came in at$660,227 more than was budgeted.
On the expenditures, Mr. Byron stated the Town has a very tight budget and the Town Management is monitoring that
budget.
Water & Sewer Budgets. The Water variance was negative $248,103. The Sewer Fund was a negative $304,087. The
Town saw that these funds were running short so projects were turned back and the net effect came out with a positive
$140,000 due to the turn backs on the appropriations. This fed into the need to increase the rates for Fiscal 02.
Management Letter.
Mr. Byron commended the Town for implementing most of the prior year audit management letter comments. There were
several items over the past years but the most important that were reportable conditions that have been taken care of were:
the improvement in the timeliness of bank reconciliation's and performing monthly general ledger reconciliation's.
Current Year Issues:
1. Integrate Tax Collector with General Ledger. The Tax Collector and Town Accountant currently use different
computer software programs for recording receipt and receivable activity. Manual summaries must be compiled from
computer-generated reports in order to communicate transactions between offices. This increases potential for errors,
and an inefficient use of staff time.
2. Establish Separate Account for Student Activities. The Town's general ledger currently commingles the student
activity account with other Town-held agency accounts. This complicates the cash and student activity account
reconciliation process. The auditors recommended the Town Accountant establish a separate general ledger account
to track student activity fund transactions. This will simplify reconciliation.
3. Reconcile Performance Bond Balances. Several Town departments receive monies from residents and contractors
as deposits or to be held in escrow until the completion of a development project. The departments responsible for
these escrow monies do not currently reconcile their records of these escrow balances to those of the Treasurer. The
Auditors recommended the departments formally reconcile their logs of performance bond balances to the Town
Treasure's balances on a quarterly basis. This will provide additional checks and balances and should simplify the
year-end reconciliation process.
4. Reconcile Outstanding Check Lists. The review of payroll and vendor bank reconciliation's, it was found the
outstanding checklists contained certain old and/or erroneous entries,typically related to voided checks. These items
continue to complicate the bank reconciliation process. The Auditors recommended the Town review all old
outstanding checks for accuracy.
Follow-up on prior year unresolved issues. Other items mentioned: Improve timeliness of grant reimbursement
requests, Evaluate self-insurance trust fund, monitor activity in other funds, prepare for GASB 34 Implementation,
formalize controls over departmental receipts and reconcile water fund receivables.
James Xenakis stated after hearing the Auditors presentation this is a testament to Town Manager Mark Rees who was
hired primarily for his expertise in Finance. A debt of gratitude is owed to the Town Manager, Finance Director and the
Town Accountant and all those involved in the Budget process.
Board of Selectmen Minutes February 19,2002 Page 3
Mark Rees thanked James Xenakis but stated most credit should go to the Finance Director and Town Accountant who
have done an excellent job. Thanks also went to the Board of Selectmen and the Finance Committee. Mr. Byron also
complimented Lyric Savage as Town Accountant as Ms. Savage did not have municipal experience but already has a
thorough knowledge in municipal finance. The records are in very good shape.
Rosemary Smedile also thanked and credited the management team as well as all the employees in Town who have
worked so hard to hold the line.
Financial Task Force Presentation. Vice-Chairman of the Financial Task Force made a presentation on the findings of
the Task Force. Mr. Watkins reported the Financial Task Force was created to investigate the situation and to recommend
solutions. The Town's trouble has been clearly described in the Finance Committee's Annual Report to Voters:
"The financial situation of the Town of North Andover continues to be poor, as it has been for over a decade. We
collect enough money each year to provide minimal services to our growing population. However, our resources are
inadequate to provide the requested service levels in education, public safety, general government and maintenance of our
town. Every Annual Finance Committee Report to Voters since 1995 has carried a similar warning. The effects of
insufficient revenues continue to accumulate, as our town remains reactive and marginal in its response to growing needs.
The solution to the problem is not easy to find but without a plan and an effort by all citizens to implement it, we will
continue to find ourselves in this difficult situation."Annual Town Meeting Warrant and Finance Committee Report to
Voters, May 14, 2001.
The Task Force met with all Department heads and other department representatives and asked for recommendations to
improve the efficiency of their department. The Task Force reached agreement with the Fire and Police Departments and
General Government. All of these departments would continue with the same level of funding. The Task Force felt the
DPW is understaffed and recommends a slight increase in funding. The task of finding the appropriate funding for
Education was more difficult and required more analysis. One of the original objectives was to be sure the children in
North Andover perform in the top 25%of all children in the Commonwealth. The Task Force met with the School
Department representatives and was given 5-year projections (white book) for the School budget. All details were looked
at and the dollar figure was huge and the Task Force was skeptical. The Task Force tried to look at the situation in
different ways and focused on the performance of the schools. The results on aptitude and knowledge tests were an
interesting basis for discussion. It was interesting to see what other districts in the Commonwealth were doing the Task
Force spent some time identifying those communities performing in the top 25%and what they were spending on the
students. The numbers were surprising as they were much higher on average than in North Andover. Then the Task
Force went to look at the average spent on all communities in the Commonwealth. All members agreed the Town is
spending too little on our kid's education. Finally,the Task Force adopted Option 2. There is no scientific correlation
between per pupil spending and performance that could be found. Most members of the force felt the right thing to do is
to bring spending up to the State average. The committee took the number and it was modified for benefits, multiplied by
the number of students in the school and increased it annually by inflation and by expected enrollment and arrived at what
the Task Force felt should be the School Departments budget for 2006. The numbers were very close to the numbers the
School Committee gave them in the first place. The School Department has been stretched to the limit for a long time and
has done a good job with the limited financial resources they have been allocated.
A recent editorial in the Lawrence Eagle Tribune stated "the town's fiscal restraint in the pre-Proposition 2 'VZ days left it
with a smaller levy limit than surrounding towns". In other words, Mr. Watkins stated, we were running lean before the
restraints of Proposition 2 ''V2. Since then,North Andover has been limited to increasing our tax levy 2 ''VZ%each year while
inflation has reached an annual rate of over 4%. On top of that,North Andover's rapid residential growth, our inability to
draw any significant commercial tax base to the community, and our lack of qualification for many State or Federal aid
programs, has left us unable to provide the right level of service to our townspeople.
The Task Force recommendations are the following:
1. The initial financial forecasts should be replaced with The Task Force's updated forecasts.
2. Action on each of the Revenue Enhancement Recommendations should start as soon as possible. Although these
cumulatively can only solve a small percentage of the problem,they are each a help towards a longer-term solution
and many take time to implement.
3. Continue to search for additional revenue sources or opportunities while working for changes in State law that would
allow Towns to raise money more flexibly.
4. In order to satisfy the anticipated revenue shortfall through FY06, an immediate $9.5 to $10.4 million override is
required.
Board of Selectmen Minutes February 19,2002 Page 4
The 13 voting members of the Task Force were appointed by various Town Boards and officials specifically to constitute
a broadly diverse and knowledgeable cross-section of North Andover. The members are:
1 appointee of the Town Moderator James Gammie
1 appointee of the Superintendent of Schools Lianne Cristaldi
1 appointee of the Selectmen James Messeder
1 appointee of the School Committee Jerry Minihan
1 appointee of the Town Manager Mark Weber
1 Planning Board Member Richard Nardella
2 Selectmen Rosemary Smedile and James Xenakis
2 School Committee Members Al Perry and Bruce Baker
3 Finance Committee Members Bernice Fink, Michael Garron and Jack Watkins
1 non-voting member ex-officio Finance Director Chuck Benevento
It was noted that all recommendations brought forward by the Task Force should be by consensus of all of the members.
By serving on the Task Force, individuals agree that it may be necessary that they subordinate their individual viewpoints
to effect the necessary compromises to develop a consensus report.
Rosemary Smedile thanked Mr.Watkins and the Task Force for numerous hours working on this Task Force.
Resident James Cassidy stated we are in a recession;there are 4,500 senior citizens and 3,000 veterans that will be
forming a coalition. None of the senior citizens and veterans will support any override.
William Duffy made one last comment that in looking back he has been on the Board for over six years and finds it
difficult to accept the allocation that the Board has been marginal in the response to growing needs. To suggest that it is
marginal when we have added 8 new police to the force. The Town has a water&sewer system, which covers 90%or
water users, and 60%of the sewer uses. It is a more extensive system than Andover, and major improvements have been
made on the west trunk and east sewer. In the same period of time sewers on 125 have been installed. The school budget
is $2.3 million more than what the State calls for and has been achieved in the last couple of years. As heard from the
auditor this evening,this town for the first time in six years is on a sound financial basis. To say the Board has been
marginal in response to the growing needs of the town is neither accurate or a fair statement.
William Duffy stated the suggestion that the Board now form a 6 member committee of 2 Selectmen, 2 Finance
Committee, and 2 School Committee members when that is meant to come into play at the last minute to reach a
compromise, is another deviation from what is called for in The Charter,the budget cycle. Mr. Duffy wanted to make it
clear that he feels we have gotten off on the wrong track,to have this umbrella group looking at the big picture, but to
have them be the driving force in the budget cycle when it is a manager responsibility,the Board and the Finance
Committee. It is not the responsibility of some un-elected adhoc group. We do not even have a budget yet from the Town
Manager, so there is no need to have the Budget Communication Group. They should be formed when there is an impasse.
Board of Selectmen appointments to Boards and Commissions.
Town Manager Mark Rees has been working with the subcommittee of Selectmen Smedile and Haltmaier on the
appointments and reappointments to the following committees.
James Xenakis made a MOTION, seconded by Donald Stewart,to appoint members to the following Committees:
Commission on Disability Issues, Local Arts Council, Zoning Board of Appeals and the Youth Services Board of
Directors.
Commission or Board Last Name First Name Expiration of Term
Commission on Disability Issue Greenwood David(Reappointment) June 30, 2004
Commission on Disability Issue Perkins Leonard(Reappointment) June 30, 2004
Local Arts Council Pearlson Gillian L. June 30, 2004
Local Arts Council Egan, Nancy June 30, 2003
Local Arts Council Reeve Brenda C. June 30, 2002
Local Arts Council Cavanaugh Ann June 30, 2002
Zoning Board of Appeals Karpinski Scott June 30, 2004
Zoning Board of Appeals LaGrasse Joseph(Associate Member) June 30, 2002
Youth Services Board of Directors Murphy Cathleen M. June 30, 2003
Youth Services Board of Directors Markuns John F. June 30, 2003
Board of Selectmen Minutes February 19,2002 Page 5
Update on Lake Cochichewick on March 12, 2002 Agenda.
James Xenakis asked for an update in March on the Lake Cochichewick Committee, as boating season will soon be here.
LICENSING COMMISSIONERS:
Susan Haltmaier made a MOTION, seconded by James Xenakis to move into Licensing; vote approved 5 — 0.
William Duffy made a MOTION, seconded by Rosemary Smedile,to approve the request from Evy Gillette, Manager,
The Stevens Estate, 723 Osgood Street, for the following One-Day Liquor Licenses: vote approved 5-0.
1. Colleen Nault/Christening February 24, 2002 3:00 p.m.- 7:00 p.m. All Alcohol
2. Kathy Bligh/N.A. Hockey March 2, 2002 7:00 p.m.-12:00 a.m. All Alcohol
3. Elizabeth Farragher/Christening March 3, 2002 2:30 p.m.- 7:30 p.m. Beer&Wine
4. David Goldstein Party March 9, 2002 7:00 p.m.-11:00 p.m. All Alcohol
James Xenakis made a MOTION, seconded by Susan Haltmaier,to move out of Licensing; vote approved 5-0.
OLD BUSINESS
Debt Service for High School.
At the last Board meeting Diane Huster of the School Committee raised concerns about the Board's previous decision on
how the new high school was to be financed. Her concerns centered around two areas: excess debt as used in the state's
school aid formula and net present value calculations. Regarding excess debt, a review of the state aid formula shows that
the approved financing plan would not have an impact on how much Chapter 70 money the Town would receive, but
could lower the Town's net school spending requirement. However, since we are several million dollars in excess of our
net school-spending requirement, an adjustment in the net school-spending requirement would not impact the School
Department budget. Regarding, present value calculations, Selectman Haltmaier, Chuck Benevento and the Town's
Financial Advisor met last week to review the calculation.
The Town Manager and Finance Director feel Option A: which the Board of Selectmen had approved of$15 million
funded upfront. This is still the best option because it removes the risk of escalating interest cost associated with
borrowing because $10 million would be borrowed now to take advantage of the lower interest rates. On the negative side
that would have a greater impact on taxpayers over the next two years. The Finance Director provided some of the
positives and negatives of Option A:
Positives
• Full capture of low current interest rates for the Town share of the project.
• Begin to pay down project obligation at the time of construction.
• More rapid pay down of obligation,therefore creating funding opportunities for future capital projects.
Negatives
• Accelerated pay down creates large burden on current taxpayers.
Susan Haltmaier stated for the record that even though she asked for this issue to be brought up again,the Board voted on
January 7, 2002 to adopt Option A, Ms. Haltmaier stated she was looking at total cost and not the time payment of those
costs. Ms. Haltmaier became concerned when she saw year-by-year tax costs. Selectman Haltmaier stated the biggest
payment for the high school of$472 in due in Fiscal 2004. There is a potential need for an override and if passed, along
with the $472 for the new high school would not be the most responsible thing to do for the current taxpayer, even though
delaying it and paying it over more years would add to the borrowing costs.
William Duffy stated that with interest rates at historically low rates the Town can get permanent financing at 4.15%.
As equally important because there is such a clamor for new projects like the Police Station, renovating Town Hall,the
need for 2 elementary schools,the idea that we just leave it out there, means we are hiding our debt service requirements
and pushing other projects onto the table. It is the prudent, responsible and economic thing to bond this at the present
time. This should come as no surprise to the taxpayers, as they voted for this two years ago.
Bernice Fink spoke as a resident and not a member of the Finance Committee and she feels Option A is the best option
because we don't know the future, right now interest rates are low. We are talking $15 million and not$60 million. Ms.
Board of Selectmen Minutes February 19,2002 Page 6
Fink stated we might as well start paying it back now; otherwise it would be like putting it on a credit card and paying
minimum balance and pushing it out further.
James Xenakis agrees with Ms. Fink and stated the Board of Selectmen made a vote on January 7, 2002,based on the
recommendation of the Town Manager and Finance Director. Mr. Xenakis does not see any new information and bottom
line Option A is the cheaper option and we should take advantage of it now.
The Board of Selectmen did not revote this issue and stands on its original MOTION from January 7, 2002 to endorse
Option A.
Airport Economic Enterprise Commission
There has been an ongoing discussion as to which would be more advantageous sale vs. lease for approximately 27 acres
of land. Two meetings occurred last week. One meeting of the Enterprise Commission at the Mayors office in Lawrence.
The second meeting on Friday was with the FAA in Burlington, MA. The positive aspect of that meeting was that the
FAA was willing to look at these competing economic models and come back with the Enterprise Commission with what
they thought was the one with the most validity. The Town Manager is of the position that until numbers come in that the
Enterprise Commission should not make a final decision. Mr. Rees personally thinks the sale is in the best interest of the
Enterprise Commission because it provides us with greater marketability of the land and reduced future liability if
something goes wrong.
Rosemary Smedile personally thanked William Hansen, Susan Haltmaier and Dennis Card for their work in preparing a
presentation on the airport.
Tim Campbell from Eagle East Aviation extended his services to work on the noise issues at the airport. Certain noise
cannot be addressed but airplanes taking off at 2:00 AM can betaken care of By talking to air traffic controllers,the
Airport Manager Mr. Campbell would like to work together. There is a handout that explains the procedures and there are
signs on the runway regarding noise abatement. The booklets come out every 56 days. The noise abatement policy will be
mailed out with the billing to all owners. Mr. Campbell stated he would contact all the area flight schools and let them
know that there is a noise abatement policy in Lawrence. To reach the airport manager call 978-794-5880.
School Audit Phase II Proiect
Due to the lateness of the hour the Board decided to table this issue and revisit this on 5:00 PM on February 25, 2002.
Town Hall Temporary Office Space
Below is a matrix of estimated costs associated with temporarily re-locating Town Hall offices, using an office trailer
donated by Lucent Technologies. It was recently discovered that moving the office trailer may not be as simple a
proposition as originally thought. The trailer is not one unit as originally thought, but instead is an amalgamation of six
separate components. There is not a cost in the ballpark of$33,000- $40,000 to move these trailers.
East Water Street Atkinson/Middle School
Water& Sewer Connection $8,250 $42,000
Computer&Telephone 10,723 $10,723
Minimum Service $18,973 $52,723
Water& Sewer Connection $8,250 $42,000
Computer/telephone 33,604 $33,604
Duplicating existing service $41,854 $75,604
Police Recommendation Favorable Unfavorable
The Board decided to go with the East Water Street location and would like Fire Chief William Dolan to continue to work
with Lucent Technologies, as the Town is interested in the Trailers for temporary office space.
NEW BUSINESS
Environmental Bond (HR 4213), Request for support, Mass Land Trust Coalition
The Town received a request from the Mass Land Trust Coalition to write a letter of support to our legislatures in support
of the Environmental Bond(HR4213).
Board of Selectmen Minutes February 19,2002 Page 7
Susan Haltmaier made a MOTION, seconded by William Duffy,to request the Town Manager write a letter in support of
Environmental Bond(HR4213) and send it to our legislatures; vote approved 5-0.
Freeze Tax Roll Back, Request for support, Town of Framingham.
The Town of Framingham is requesting other municipalities in Massachusetts in urging our legislators in delaying to
freeze the rollback of the state income tax rate and utilize the excess income as direct revenue to the cities and towns of
the Commonwealth.
William Duffy made a MOTION, seconded by Susan Haltmaier,to have the Town Manager write to the state legislature
urging them to freeze the rollback of the state income tax rate and utilize the excess income as direct revenue to the cities
and towns of the Commonwealth; vote approved 3-2. (James Xenakis and Rosemary Smedile opposed)
Greater Lawrence Technical School, FY02 Budget Amendment.
The state has increased Chapter 70 Local Aid funding to the district, but in order for them to access the funds,they need
approval of two thirds of the member communities. The Board of Selectmen is requested to approve the spending of this
additional state aid.
James Xenakis made a MOTION, seconded by William Duffy,to approve the spending of the additional Chapter 70 Local
Aid Funding; vote approved 5-0.
Town Manager's Report.
Public Safety Commissioner James Jaiuga.
Public Safety Commissioner James Jajuga will be at the Steven's Estate sponsored by the Merrimack Valley Chamber of
Commerce on February 22, 2002.
March 1, 2002 Legislative breakfast.
March 1, 2002 the Town will be sponsoring the Legislative breakfast at the Stevens Estate.
March 6, 2002 Reception to Welcome State Senator Steven A. Baddour.
On Wednesday, March 6, 2002, at 8:00 AM the Town of North Andover is having a welcome reception to meet newly
elected State Senator Steven A. Baddour at the Stevens Estate.
ADJOURNMENT: William Duffy made a MOTION, seconded by James Xenakis,to adjourn the meeting at 10:45 PM;
vote approved 5-0.
Kathleen O'Neill
Administrative Secretary James M. Xenakis, Clerk of the Board