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HomeMy WebLinkAbout2020-06-09 Finance Committee Minutes Finance Committee y Minutes of June 9, 2020 I w Present: Chairman Sasha Weinreich, Edward MacMillan, Jennifer Burns-Luz, Christine Allen, Kevin Foley, Tim Tschirhart, Thomas Ringler Absent: Divya Bhatnager, Charles Trafton 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 7:03 PM via conference call. Ms. Weinreich did a roll call. Ms. Weinreich led the Pledge of Allegiance. Public Comment Ms. Weinreich presented one public comment from Thomas Duggan. See attached. Discussion with Town Manager Rodrigues and Finance Director Lyne Savage regarding the proposed MOU and any foreseeable revenue impact to the FY21 budget Ms. Rodrigues shared that the Town was issued a AAA bond rating again. Ms. Rodrigues confirmed that the Board of Selectman approved the MOU at their last meeting and explained what the MOU is. Ms. Allen asked about new initiatives. Ms. Rodrigues explained that if something was not in the budget last year it would be considered a new initiative. Ms. Luz asked when the timing is for new initiative to be implemented. Ms. Rodrigues explained by September there will be a better idea of where the collections are at. Mr. Ringler asked about free cash and reserves and how much can be used from reserves to maintain budget. Ms. Rodrigues explained it would be used for one-time costs. Ms. Rodrigues explained there is $5 million dollars in the Stabilization Fund. Ms. Savage confirmed the amount. Mr. Ringler asked about the possibility of having 12 children to a classroom in Massachusetts and the concern of the cost associated. Ms. Rodrigues stated it would be the perfect use of the Stabilization Fund and that much has changed in the past 2 months since the onset of COVID-19. Ms. Rodrigues discussed the CARES Act funding. Ms. Weinreich asked Ms. Rodrigues to send CARES Act documents for the Finance Committee to review. Ms. Allen asked if the CARES Act is reactive rather than proactive. Ms. Rodrigues confirmed that$2.7 million will be put into an account to be used for eligible expenses, only COVID-19 related. Ms. Savage stated there are specific categories that it falls into and that records must be kept for auditing purposes. Ms. Weinreich asked how FEMA and CARES Act interact. Ms. Rodrigues explained that FEMA is more emergency suited and that it could allow for lost revenues which is being discussed presently in Congress. Mr. Tschirhart asked when expenses need to be incurred and what the Town's position will be on accrued expenses. Ms. Rodrigues stated that when the contracts are signed by 12/31/20 and cost are incurred by 12/31/20. Mr. Ringler asked if CARES Act funds are already allocated. Ms. Rodrigues confirmed that it has been allocated and is based on Town population. Mr. Tschirhart asked about Emergency Relief Fund for school. Ms. Rodrigues explained what has been received and what North Andover has applied for. Ms. Weinreich asked about revenue impact for FY20. Ms. Savage discussed the revenue collected to date and that North Andover is above budget by$310,000.00 by 6/30/20. Ms. Savage states there are no concerns with meeting and exceeding FY20 budget and that there is a freeze right now. Ms. Savage stated that with the MOU in place there should not be any issues with the FY21 budget. Mr. Ringler asked what the structural differences are with North Andover compared to other towns. Ms. Rodrigues explained that 75% of the budget is made up of tax revenue and North Andover commercial base is small compared to other communities. Mr. Ringler asked about the Stevens Estate. Ms. Rodrigues explained that there is no revenue but the expenses are decreased as well and that each parties that had cancelled also rebooked other than one party. Follow up discussion with Town Manager Rodrigues regarding proposed TIF agreement with Amazon Ms. Rodrigues gave a presentation about the TIF agreement with Amazon. Ms. Allen asked if Amazon will want the TIF renegotiated and if there is language in the TIF in regard to renegotiation. Ms. Rodrigues stated that it can not be renegotiated without a qualifying reason. Ms. Luz asked when year one will begin. Ms. Rodrigues stated FY22. Ms. Weinreich asked when the permit fees will be received. Ms. Rodrigues stated FY21 and the remaining benefits will be received at various times with the $4.5 million in estimated permit fees most likely to be received in FY21. Old Business Article 31, page 48 in Town Warrant, Tax Increment Financing Agreement. Motion: Mr. Tschirhart motioned to seek Favorable Action for Article 31 Tax Increment Financing Agreement. Ms.Allen seconded the motion. Motion approved 6-0. Roll Call: Tschirhart- yes, Luz- yes, Macmillan- yes, Weinreich- yes, Ringler- yes, Allen- yes Ms. Weinreich stated that a statement will be made to present at Town Meeting and will have it available on Sunday June 141 prior to the next Finance Committee meeting. Articles 12 and 13, pages 28-30 in Town Warrant, were discussed by Ms. Rodrigues. Ms. Rodrigues explained that construction will begin in July if it is passed at Town Meeting. Ms. Allen asked how North Andover can spend the funds on the Senior Center instead of the schools. Ms. Rodrigues discussed the importance of taking care of the senior population of North Andover and that funds have already been allocated as well as used for this project. Ms. Weinreich recommended voting on Article 12. Article 12, page 28 in Town Warrant, Authorize Board of Selectmen to Acquire Land- 1 and 3 Surrey Drive. Motion: Mr. Tschirhart motioned to seek Favorable Action for Article 12,Authorize Board of Selectmen to Acquire Land- 1 and 3 Surrey Drive. Mr. Ringler seconded the motion. Motion passed 6-0. Roll Call: Tschirhart- yes, Ringler- yes, Allen- yes, Luz- yes, MacMillan- yes, Weinreich- yes Ms. Weinreich discussed upcoming meetings on Monday June 15, 2020 and Tuesday June 16, 2020. Approval of May 26, 2020 Minutes Ms. Allen motioned to approve minutes of May 26, 2020. Ms. Luz seconded. Motion approved 5-0. Ms. Allen made a motion to adjourn at 8:28 PM, seconded by Mr. Tschirhart. Motion approved 6-0. Public Comment: June 9th, 2020 Joint public comment to Finance Committee and School Committee I am submitting comments to both committees for your respective June 9th and June 11th meetings. My comments are related to the police budget, FY2021 memorandum of understanding, and CARES Act reimbursements. Item#1- It is my experience that the women and men of the North Andover Police Department are honorable,fair, and compassionate. Chief Gray has made great strides in creating a professional department. However, my perspective is biased with the privilege inherent in being a white male. In light of last night's community gathering in support of Black Lives Matters and ending systemic racism, an addendum must be added to the Town Meeting budget documents that details how FY2021 funding is linked to policies on training, community policing, student resource officers, and other emerging best practices on the issue of bias, race, and policing. Item #2- 1 ask both boards,the Town Manager, and Superintendent to more clearly define the term "new initiatives" included in the FY2021 budget memorandum of understanding as endorsed by the Board of Selectman (BOS). For example, additional resources for the Atkinson School is not a new initiative; it is a longstanding goal of the strategic plan adopted by the district. I believe more precise language and illustrative examples should be used to describe the types of services impacted by the agreement. Finally copies of this document must be made available to the public at Town Meeting.The original document was included at the end of financial statements provided to the BOS.The current version was not hyperlinked within the BOS meeting agenda at which it was approved. Members of our community deserve the awareness and transparency of knowing what may occur should budgetary revenues not meet the benchmarks established in the proposed FY2021 budget. Item #3-The state is facing a$6 billion to$10 billion budget shortfall. Here is a chart showing the impact of local aid cuts to our budgetl, which indicates a 5% reduction in local aid is a $594K decrease in revenue; a 20%reduction in local aid is a $2.3M reduction in revenue based on the values used in the town's draft FY2021 budget. For those listening who are not well versed in municipal and state finance terms, our"Cherry Sheet"values represents the amount of the annual state budget recommended by the Governor and ultimately appropriated by the Legislature for schools and local services. My point in this chart? No one has a crystal ball or a Harry Potter spell to tell the future about final local aid numbers, pyrrhic choices coming in the state budget, DESE regulations for school reopening,the length of our Commonwealth's economic recovery, or WHO guidelines on COVID. Levity aside, our town budget is the numerical representation of services, policies, and plans. Given the high probability of a cut to local aid, potential weakness in federal programs that provide formula and discretionary grants to police, education, and health services, and the entirely reasonable expectation that our needs in FY2021 will exceed the budget approved at Town Meeting,we should effectively budget(plan)the finite resources represented by the CARES Act(e.g. capped at$2.7M for FY2020 and FY2021 until a Congressional reauthorization occurs).At this time, I have found no public documents outlining how the$2.7M in funding will be used in North Andover. I request that the school and municipal departments work together to create a memorandum of agreement(MOA) on the use of CARES Act funds. Similar to the draft budget MOA,this document should communicate how funds will be prioritized towards new or existing services eligible for reimbursement,the relationship of CARES Act funding to changes in our revenues and levels of service in FY2021, and outline a process for collaborative, productive public input with the appropriate boards, commissions, and staff.A MOA is a prudent planning and awareness tool that allows the community to collectively discuss priorities and tradeoffs. 1 For the purpose of this discussion I am using the total estimated receipts to the town per the Department of Local Services Cherry Sheet databank Thomas Duggan