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HomeMy WebLinkAbout2020-05-18 Finance Committee Minutes Finance Committee 4& Minutes of May 18, 2020 Present: Chairman Sasha Weinreich, Edward MacMillan (7:39PM arrival), Jennifer Burns-Luz, Christine Allen, Kevin Foley, Tim Tschirhart, Charles Trafton Absent: Divya Bhatnager, Thomas Ringler Non-Finance Committee Members: Town Manager Melissa Rodrigues, Finance Director Lyne Savage Ms. Weinreich read a quick statement before the meeting started(referencing the opening statement off of the May 18, 2020 Agenda) "Pursuant to Governor Baker's March 12, 2020 Order Suspending Certain Provisions of the Open Meeting Law, G.L.c 30A, Section 18 and the Governor's March 15, 2020 Order imposing strict limitation on the number of people that may gather in one place, this meeting of the North Andover Finance Committee will be conducted via remote participation to the greatest extent possible". Ms. Weinreich called the meeting to order at 7:04PM via conference call. Ms. Weinreich led the Pledge of Allegiance. Public Comment Ms. Weinreich opened with the first public comment at 7:06PM. Public Comment 41: Diane Huster at 279 Winter St asked `Due to the Covid 19 pandemic and given the uncertainty with Federal and State aid as well as local receipts for next years budget and perhaps for several years beyond, has the Town Manager, BOS; and or the Finance Committee discussed or intend to discuss cutting or postponing the Capital Budget Master Plan until such time as impacts on operating budgets will be clearer? The Capital Plan proposes to use 50%of the certified Free Cash of around$10 million. This $5 million is 50%of the towns emergency fund. As a former School Committee member who made the very hard decisions in the `90's to cut all athletics, art, and music as well as fire around 40 teachers I am very afraid history will repeat itself. Back then the town had very little Free Cash. Free Cash is the towns savings account intended for just these type of unexpected circumstances and/or downturns in the economy. Can you assure townspeople that if we use half of Free Cash this year that they will not be asked next year to vote to lay offfire,police, and teachers because the savings account is empty? What is your plan to make sure this does not happen if the $5 million is spent?" Town Manager Melissa Rodrigues explained the term free cash. Ms. Rodrigues explained she would never advocate the use of free cash to offset the operation budget nor would she defer routine maintenance or projects when funds are available now. Ms. Rodrigues further explains that it will cost more money by deferring. Public Comment 42: Thomas Duggan 48 Beacon Hill Boulevard(attached letter). Ms. Weinreich tabled the first question for a later time. Ms. Weinreich asked Ms. Rodrigues to address the second question. Ms. Rodrigues stated that she is currently seeking information on the CARES act to find out the reimbursement. Ms. Rodrigues further explained that they are currently tracking the expenses now with Town and School departments and that there will be other outlets next year to offset new costs. Ms. Weinreich asked when there will be more information. Ms. Rodrigues explained that she and Ms. Savage are working on getting more information. Ms. Rodrigues commented that she is very pleased with the up to $2.7 million that North Andover is eligible. Ms. Savage commented that she is waiting to find out the steps to obtain and track this amount and that this amount must be given back if it is not used according to the guidelines. Ms. Weinreich mentioned Mr. Duggan's question concerning transfer to OPEB and capitalization fund (number 7). Ms. Rodrigues states that she is hesitant not to make stabilization transfer for bond companies to see. Ms. Rodrigues cautions that FY22 may not be as positive as a result of this pandemic. Ms. Weinreich stated Mr. Duggan's question concerning MBTA and RTA services (number 8). Ms. Rodrigues states that she will reach out to North Andover's State Rep and State Senators on this matter and that a law change must be made for communities that do not currently have these services. Ms. Weinreich stated Mr. Duggan's question concerning Amazon (number 10). Ms. Weinreich explained that there will be a discussion at the next Finance Committee meeting on Tuesday May 26'with Ms. Rodrigues and Ms. Savage. Ms. Weinreich asked Ms. Rodrigues to discuss an overview. Ms. Rodrigues explained that there will be a presentation made to the Board of Selectmen first and then an informational website will be put up on the North Andover town website. Ms. Rodrigues further explained that she would not want to put the project off at this time. Update on YTD revenue and 2021 financial proiections Ms. Savage gave an update for revenue as of May 18, 2020. Highlights are as follows: - Real Estate: 97%collection - Motor Vehicle Excise: 90% collection - Ambulance collections: 105% collection - State Aid for 2020 will remain the same Ms. Savage stated that there are no issues forseen with meeting budget, moving into FY21 she wants to leave revenue where it is. Ms. Savage also stated that she wants an MOU in place for safety measures. Ms. Rodrigues commented that state safety measures are currently in place. Discussion with Town Manager Rodrirues regarding an MOU between stakeholders as it relates to FY21 proposed budget as well as an update on Town Meeting Ms. Rodrigues discussed the topic highlighting the following: - Explained that she wants an MOU in place in case revenue can not come through - She has met with Superintendent Gilligan and Assistant Superintendent Mealey and have been working on a draft that they will have before the June 1st Board of Selectmen meeting - Without an MOU, Ms.Rodrigues stated that potentially she would have to make cuts. Ms. Rodrigues expressed concern that cuts can hit FY22 budget if done too quickly. Ms. Luz commented in regard to MOU that there is concern with items that will drive up costs regarding school. Ms.Rodrigues stated that both budgets are 80%personnel. Ms. Rodrigues discussed potential cuts and that the new initiatives would be on the list for first cut. Ms. Rodrigues explained that the Reserve account is healthy for unanticipated costs that are not reimbursable. Ms. Weinreich mentioned she will ask for Superintendent Gilligan to attend the next meeting. Discussion of the draft of the Finance Committee Letter Ms. Weinreich commented that she felt it will help to discuss the draft and that this letter is due on Wednesday. Ms. Weinreich asked if Mr. MacMillan or Mr. Ringler had joined the meeting. Mr. MacMillan stated he was in attendance. Mr. Ringler was not present. Ms. Weinreich asked Mr. Tschirhart to review all of the numbers to make sure the correct format is being used. Ms. Weinreich discussed the warrant letter and the recommendation that she does not recommend making recommendations on budgetary warrant items until Town Meeting to wait for MOU. Mr. Tschirhart agreed. Ms. Allen also agreed. Committee discussed each part of the warrant letter draft. Voting on Warrant Articles Ms. Weinreich commented that all articles marked with no action will be discussed at Town Meeting. -Article 2: Authorization of the Town Manager or Superintendent of Schools Regarding Contracts in Excess of Three Years. Favorable Action. Ms. Allen motioned. Mr. Tschirhart seconded. Motion passed 7-0. -Article 13: Appropriation- Capital Improvement Plan for Fiscal Year 2021. No Action. Ms. Allen motioned. Mr. Tschirhart seconded. Motion passed 7-0. -Article 14: Report of the Community Preservation Committee- Appropriation from Community Preservation Fund. Favorable Action. Ms. Allen motioned. Mr. Tschirhart seconded. Motion passed 7-0. -Article 15: Set Salaries and Compensation of Elected Officials. Favorable Action. Ms. Allen motioned. Ms. Luz seconded. Motion passed 7-0. -Article 16: Revolving Fund Spending Limits. Favorable Action. Ms. Allen motioned. Mr. Tschirhart seconded. Motion passed 7-0. -Article 17: Appropriation- General Fund for Fiscal Year 2021. No Action. Ms. Allen motioned. Mr. MacMillan seconded. Motion passed 7-0. -Article 18: Appropriation- Water Enterprise Fund for Fiscal Year 2021. No Action. Mr. Tschirhart motioned. Ms. Allen seconded. Motion passed 7-0. -Article 19: Appropriation- Sewer Enterprise Fund for Fiscal Year 2021. No Action. Mr. Tschirhart motioned. Ms. Allen seconded. Motion passed 7-0. -Article 20: Appropriation Stevens Estate Enterprise Fund for Fiscal Year 2021. No Action. Mr. Tschirhart motioned. Ms. Allen seconded. Motion passed 7-0. -Article 21: Transfer to Stabilization. Favorable Action. Ms. Allen motioned. Mr. Tschirhart seconded. Motion passed 7-0. -Article 22: Transfer to Capital Stabilization. Favorable Action. Ms. Allen motioned. Mr. Tschirhart seconded. Motion passed 7-0. -Article 23: Transfer of Funds from the Health Insurance Trust Fund to Other Post-Employment Benefits (OPEB) Liability Trust Fund. Favorable Action. Ms. Allen motioned. Mr. Tschirhart seconded. Motion passed 7-0. -Article 24: Transfer funds from Free Cash to Fiscal Year 2020 School Department Revolving Fund. Favorable Action. Ms. Allen motioned. Mr. Tschirhart seconded. Motion passed 7-0. -Article 25: Approve Payment of Prior Years Unpaid Bills. Favorable Action. Ms. Allen motioned. Mr. MacMillan seconded. Motion passed 7-0. -Article 31: Tax Increment Financing Agreement. No Action. Ms. Allen motioned. Ms. Luz seconded. Motion passed 7-0. Old Business None Approval of May 6,2020 Minutes Ms. Weinreich mentioned the document links in the agenda are needed going forward. Ms. Allen mentioned there needed to be an amendment made to correct Mr.Allen to Ms. Allen under Public Comment section. Ms. Weinreich mentioned to make an amendment to a typo of the word Chairperson under Old Business section. Ms. Allen motioned to approve minutes with amendments of May 6, 2020. Mr. MacMillan seconded. Motion approved 7-0. Ms. Allen made a motion to adjourn at 8:50PM, seconded by Mr. MacMillan. Motion approved 7-0. Public Comment question sent in by Thomas Duggan: To the members of the Finance Committee, Board of Selectman, and School Committee Thank you to Town Manager Rodrigues, Finance Director Savage, Boards,and members of the school and municipal departments that have been engaged in this budget process. As a former deputy chief financial officer and chief of staff in state service that participated in numerous budget reduction exercises, you have my deepest respect and admiration for your management of this evolving situation. I am grateful for your commitment to transparency by continuing to hold these meetings, implementing the financial transparency center, and, most importantly, celebrating the contributions of all municipal workers on Facebook,Twitter,and other media. Our audited,basic financials show that tax and other revenue was flat(-0.01%growth)from FY08 to FY09 during the Great Recession. Growth in tax and other revenue was anemic during the following years (2.13% in FY10, 2.45% in FY11) as the town and region continued to recover from the recession. As discussed in prior meetings the conservative nature of the revenue forecast for FY21 should be maintained for the coming year as we face another recession,and possible depression. Guidance has been issued today on the reopening of the economy and a return to the"new normal." We will need to adjust our department and service budgets to reflect the needs of our residents, students, and children. I ask that this committee and the leadership of the town consider the following in the development of the memorandum of understanding,the FY21 budget,and the FY21 Town Meeting. 1. The memorandum of understanding must be informed by a plan to invest in services critical to our community. In the context of a "new normal";what are those important services that we will need to ensure our common health and wellbeing? 2. Education programs will be different this fall. It is not appropriate to cut the School budget. We must consider creating a reserve of operating and capital funding that will provide us with the flexibility to implement appropriate state guidelines. This may include the hiring of additional teaches, paraprofessionals, support staff(in particular counselors, librarians) to ensure that our students have the services they need to thrive and recover from the impacts of the Spring COVID- 19 interruptions to education. In addition, if socially distance learning continues, we will likely see the need for expanded information technology bandwidth and changes to the configuration of our classrooms to ensure a safe and effective learning environment. These appropriations can be written as spending is allowed at the discretion of the Town Manager and School Superintendent, and further, if the funding is not necessary,then the amounts can revert to the general fund, repurposed to other services with notification to the Finance Committee,or as free cash at the end of the fiscal year. 3. Many of our residents do not have access to pools or recreation facilities outside of their yards or common areas. I respectfully ask that the operating and capital budgets reflect adjustments to allow for the safe opening of Stevie's Pond, playgrounds, and other summer events for children. Summer concert and entertainment events on the commons, along with Camp Invention and other programs offered by the School, Library,and Recreation departments will be critical for our children's(and their parents) emotional and physical wellbeing. 4. Police, Fire,and Public Health services are critical to the community. I respectfully ask that in the planning for FY21,the personnel line items of these budgets are not reduced. 5. During my time with state government we explored many options to reduce the cost of services to fulfill reduction targets or implement a "cut to fund" mentality where savings were redirected into frontline,public facing operations. I know that no stone is being left unturned in your efforts, but it is worth mentioning that we must exhaust all of our options to renegotiate vendor contracts, implement prompt pay discounts, manage discretionary purchases, leverage regional or state buying power, and other options. This is not only incumbent upon our municipal employees, but also us as residents to think about if your ask of government is a "need" or a "want." I know most of our budget is personnel and benefits, but we must find all available savings for reinvestment into the town. 6. One of the most effective tools in government, if not annoying to agencies,was the sweeping of special funds by the Executive Office for Administration and Finance and the Legislature. I respectfully ask that the administration review each special revenue fund,trust,or other account that is holding cash to determine if the amounts appropriated are still necessary or can be transferred to fund another critical need within the community. 7. 1 respectfully ask that the Finance Committee and the administration suspend the OPEB and capital stabilization fund transfers for FY21. OPEB is a critical issue,but it is a long-term issue that the suspension of one fiscal year payment will have little material impact. The funds currently programmed for these transfers should be redirected to the Finance Committee reserve as a working fund to support investments in education, public health, and economic development to assist our community moving forward through this crisis. 8. 1 ask that the leadership of the town consult with our legislative delegation to revisit the cherry sheet formulas for MBTA and RTA services. Why must the town be responsible for continuing to pay for services that we will likely not see for the remainder of calendar year 2020 and fiscal year 2021? 9. We must look towards alternative sources of revenue for our community. There are institutions in town that do not pay local taxes due to their tax-exempt status. We as a community should develop a bylaw, like Boston or Cambridges, that assess payment in lieu of taxes (PILOT) or community benefit requirements on these institutions. These payments do not need to represent a payment of cash. For example, both St. Michaels and Brooks partner with our town departments and community groups on services that are of great benefit to our town. These types of partnerships can be a model for a community benefit exemption to a PILOT payment. 10. Please suspend the warrant article relating to the tax financing agreement with Amazon. Given the local and regional economic uncertainty this is not the appropriate time to defer millions in tax revenue for one of the largest corporations in the world. Additionally, there has been very little meaningful public discussion about this second phase of the project. It would be more prudent to defer this article to a special town meeting in the winter or spring. This allows us as a community more time to assess the economic and resulting community impacts of this proposal. Thank you for your time and attention to this letter.