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HomeMy WebLinkAbout2025-04-07 Finance Committee Minutes 4 • • Finapice Committee N1ec9ing Nfinutes,ol`Ap ril 7,'2025 Call To Order: Mr. O'Connell called the meeting to order at 7:02PM. The open session meeting took place in the Select Board Meeting Room at Town Hall on 120 Main Street. Present: Chair Denevan O'Connell, Vice Chair Christine Allen, Regina Kean, Eva Pastor, Nancy Sarro, Brianna Stetson, Keith Chaney, and Dustin Silk. Not Present: Jeanne Irwin PUBLIC COMMENT None. NEW BUSINESS Presentation of the Community Preservation Committee -Chair Bill Callahan William Callahan, Chair of the CPC, was present. Mr. Callahan discussed an overview of the Community Preservation Act. Mr. Callahan stated they have $18 million in their fund now, but$10 million is encumbered meaning it is dedicated to a project. Mr. Callahan stated they project to take in $3.3 million. Mr. Callahan stated the CPC voted to recommend approximately$4.5 million in projects for this year. Mr. Callahan stated it is approximately$1.2 million on open space, $2.1 million on historical preservation, $800,000 on recreation, $300,000 on affordable housing, and $50,000 for administrative expenses. Mr. Callahan discussed 470 Johnson Street. Mr. O'Connell asked if this project moves to recreation in the future, does that mess with the percentages. Mr. Callahan stated no. Mr. Callahan stated in terms of recreation projects, the big project is the tennis courts at the high school. Mr. Callahan stated they recommended this project with conditions about out of hours usage by the public. Mr. Callahan stated the next recreation project was the Windrush Farm trails. Mr. Callahan stated this would be $15,000 to do proper markings on the trails. Mr. Callahan discussed the last recreation project in Patriots Memorial Park to place a global war on terror monument. Mr. Callahan discussed historic preservation. Mr. Callahan discussed the Parson Barnard House Insulation and the Johnson Cottage Insulation. Mr. Callahan stated they want to ensure the envelope of the houses were strong and airtight enough to protect the historic nature. Mr. Callahan stated the CPC approved both of those projects. Mr. Callahan discussed the historical home repair. Mr. Callahan stated the Historical Commission agreed to run the program. Mr. Callahan stated the CPC recommended $25,000 of funding for that project. Mr. O'Connell asked if the applicant was the Historical Commission. Mr. Callahan stated John Simons worked with the Historical Commission to put in the application, but the application was administered by the Historical Commission. Mr. O'Connell asked if interior items would be eligible. Mr. Callahan stated no, it would have to be exterior so the public can see it. Ms. Allen asked when would they have the outline completed for the parameters for applying. Mr. Callahan stated they would work through the grant agreement. Mr. Callahan stated this is a pilot and none of the money will be dispersed until the grant agreement is signed. Mr. Callahan discussed Cochichewick Lodge. Mr. Callahan stated they are asking for funds to replace their roof in the amount of$30,000. Mr. Callahan stated one of the committee's conditions was that the youth center could use it two afternoons a week for their academic programs. Mr. Callahan discussed the Atkins Gate. Mr. Callahan stated this project is important as this is how most people access the cemetery. Mr. Callahan stated they only concern they had was they did put money in to fix the roadway which is not allowable under historic preservation therefore, they would have to do that with their own funds. Mr. Callahan discussed second burial ground tomb restoration. Mr. Callahan stated they did start phase 1. Mr. Callahan 4 • • Finapice Committee N1ectin,g Nfinutes,ol`Ap ril 7,'2025 stated they discovered an additional series of tombs that need to be restored. Mr. Callahan discussed the historic master plan implementation part 1. Mr. Callahan stated they are working on a number of aspects in terms of inventory and mapping of significant historic assets. Mr. Callahan discussed the Stevens Estate Stables. Mr. Callahan stated the next phase of work is sealing the building to ensure it is more watertight so they can move onto the interior. Mr. Callahan discussed the affordable housing trust home repair fund, which is a partnership with Habitat for Humanity. Ms. Kean asked how they decided on that amount of money. Mr. Callahan stated that is what they asked for this time around. Ms. Kean asked if this will be an application process. Mr. Callahan stated yes. Mr. Callahan discussed the Fountain Drive acquisition. Mr. Callahan stated they are speaking about adding more units there. Ms. Sarro asked regarding the tomb restoration, how many tombs need to be restored and what do they do to restore them. Mr. Callahan stated bricks are starting to fall in, the tombs are starting to collapse, and there is water damage. Ms. Kean asked if they are not head stones but are actual tombs. Mr. Callahan stated yes. Ms. Allen asked if they received quotes to figure out the costs. Mr. Callahan stated yes. Mr. Chaney asked what is the timeline for when they will complete this project. Mr. Callahan stated about a year. Mr. O'Connell stated there is $50,000 for administrative expenses, but they plan for it just in case. Mr. Callahan stated yes. Ms. Kean asked if they had funds put back into the account from funds allocated to previous projects that have not been used. Mr. Callahan stated yes. Mr. Chaney asked who oversees the cemetery project. Mr. Callahan stated it is the applicant themselves. Presentation of a Special Education Reserve Fund -Mark Rodgers Mark Rodgers is present. Mr. Rodgers discussed his citizen petition to raise and transfer$700,000 from available funds or certified free cash to the Special Education Stabilization fund. Mr. Rodgers stated this article is in the spirit of complying with the Select Board policy. Mr. Rodgers discussed his analysis of free cash. Mr. Rodgers stated regarding the trajectory of the estimated revenues versus actual revenues for local receipts, there is an increasing underestimation of those revenues over time. Mr. Rodgers stated the underestimation has been closer to$3 million where it departed from an average of about$1.7 million. Mr. Rodgers stated this is important because it can be used inside the budget. Mr. Rodgers stated in his analysis, he removed the unspent free cash from the prior year and focused on what was generated in that year. Mr. Rodgers stated free cash has continued to climb. Mr. Rodgers stated they have a conservative revenue estimate of$5 million in free cash. Mr. Rodgers stated that money can be returned to the general fund, and it would be repeating. Mr. Rodgers discussed the town government reserve. Mr. Rodgers stated those funds earn interest and are placed back into the general fund. Mr. Rodgers stated they are being conservatively estimated. Mr. Rodgers stated in 2024, it was budgeted for$625,000, and they had over$2 million in interest. Mr. Rodgers stated $1.4 million fell to free cash that could have been used inside of the budget. Mr. Rodgers stated they have room to reinvest some of those funds into the core budget. Mr. Rodgers stated he would like to make a motion at Town Meeting to increase the school's line item by a million dollars. Ms. Kean asked if his motion was going to increase the revenue projection. Mr. Rodgers stated no to increase the school line item budget. Mr. Rodgers stated there are other ways to fund it; they can use up more of the levy limit. Ms. Sarro asked if there were two articles Mr. Rodgers was proposing. Mr. Rodgers stated no, one is a motion. Ms. Allen asked where Mr. Rodgers came up with the $700,000. Mr. Rodgers stated there was $65,000 in the fund, and the maximum amount of the fund is $750,000 so it was a round number. Ms. Sarro asked if what Mr. Rodgers is proposing to build the fund 4 • • Finapice Committee N1ectin,g Nfinutes,ol`Ap ril 7,'2025 back up to$750,000 as it used to be at one time. Mr. Rodgers stated a reserve fund inside the budget not from free cash, not a stabilization just another line item on the budget. Discussion of Warrant Financial Articles with Town Manager Town Manager, Melissa Murphy-Rodrigues and Finance Director, Dennis Keohane were present. Ms. Murphy-Rodrigues discussed the financial warrant articles. Ms. Murphy-Rodrigues discussed Article 2: contracts. Ms. Murphy-Rodrigues stated they have an article every year that allows the Town Manager and the School Superintendent to authorize contracts of over three years with the Select Board or School Committee approval. Ms. Murphy-Rodrigues discussed Article 5: prior year bills. Ms. Murphy-Rodrigues stated she is asking them to wait to report at Town Meeting as it is likely they do not have any. Ms. Murphy-Rodrigues discussed Article 6: salaries of electeds. Ms. Murphy-Rodrigues discussed Article 7: Capital Improvement Plan. Ms. Murphy-Rodrigues discussed Article 8: water department improvement plan. Ms. Murphy-Rodrigues stated they pulled out these items because they are going to do debt for those, and that debt will be paid by the enterprise fund. Ms. Murphy-Rodrigues stated the first project within this would be the million dollars for the demolition of 400 Great Pond Road. Ms. Murphy-Rodrigues stated $1.2 million is for improvements at the water plant. Ms. Murphy-Rodrigues discussed Article 9: CPC. Ms. Murphy-Rodrigues discussed Article 10: revolving funds. Ms. Murphy-Rodrigues stated revolving funds are user fees, and the new one being added on is the EV charging station. Ms. Murphy-Rodrigues discussed Article 11: general fund budget. Ms. Murphy-Rodrigues discussed Articles 12 and 13: water and sewer enterprise fund budgets. Ms. Murphy-Rodrigues discussed the town's reserves. Ms. Murphy-Rodrigues stated the interest for these accounts stay with the account, which is why they see it fluctuate year to year. Ms. Kean asked if the capital stabilization fund is $9 million but it is going to be minus $3.6 million plus $50,000. Ms. Murphy-Rodrigues stated yes. Ms. Murphy-Rodrigues discussed free cash available after appropriation. Ms. Murphy-Rodrigues discussed free cash. Ms. Murphy-Rodrigues stated if all passes at Town Meeting, they will carry a balance about$1 to 3 million in free cash. Ms. Murphy-Rodrigues stated this year they have agreed to use Medicaid as a revenue source. Ms. Murphy-Rodrigues discussed certified free cash over the years. Ms. Murphy-Rodrigues stated they supplemented the school's budget with free cash. Ms. Murphy-Rodrigues discussed free cash generated annually. Ms. Allen asked if they like to maintain the 5% because it helps the bond rating. Ms. Murphy-Rodrigues stated it is the recommendation from the state, and it does help the bond rating, but more importantly they want to make sure they have that money for emergencies. Ms. Allen asked if it is 3%what do you expect to get back from the state. Ms. Murphy-Rodrigues stated they would be more likely to see that when they went to bonds. Mr. Keohane stated they do utilize all of the capital spending so the reason they budget conservatively is due to needing to generate free cash to be able to fund capital. Ms. Sarro asked if another way to say this is that the revenue is intentionally understated to shoot for free cash generation every year. Ms. Murphy-Rodrigues stated no. Ms. Sarro asked if the 5 to 7% was a recommended amount to generate each year. Ms. Murphy-Rodrigues stated yes. Ms. Murphy-Rodrigues discussed the Finance Committee Reserve balances at the end of previous fiscal years. Ms. Allen asked for example in 2024, what did they spend that$1.5 million on. Ms. Murphy-Rodrigues stated it was for the schools. Ms. Murphy-Rodrigues discussed Article 14: transfer $65,691.17 from Special Education Stabilization to FY25 General Fund. Ms. Murphy-Rodrigues discussed Article 15: close the Special Education Stabilization Fund. Ms. Murphy-Rodrigues stated she would like to ask the Finance Committee and the Select Board to amend the financial policies contingent on Article 15 4 • • Finapice Committee N1ectin,g Nfinutes,ol`Ap ril 7,'2025 passing at Town Meeting. Ms. Sarro asked if that was not needed in a given year, they could not use that $250,000 for something else. Ms. Murphy-Rodrigues stated if they got to the end of the year, and they did not need it, they could use it for something else. Mr. O'Connell asked if it was $250,000 of the $1.5 million. Ms. Murphy-Rodrigues stated yes. Ms. Allen asked if they had any ideas for revenue sources for a Special Education reserve. Ms. Murphy-Rodrigues stated if the revenue from Medicaid fluctuates in the upward pattern, they could take the excess of that. Ms. Murphy-Rodrigues discussed Article 16: FY25 school general fund budget adjustment. Ms. Murphy-Rodrigues stated they are asking for the Finance Committee to take a position directly prior to Town Meeting. Ms. Allen asked if this was free cash which is going directly to the schools already. Ms. Murphy-Rodrigues stated yes. Ms. Murphy-Rodrigues discussed Article 17: transfer to FY26 for fire retro. Ms. Murphy-Rodrigues discussed Article 18: OPEB transfer. Ms. Murphy-Rodrigues discussed Article 19: snow and ice. Ms. Murphy-Rodrigues stated the snow and ice deficit is approximately$740,000. Mr. Chaney asked if they could use funds that are dedicated for full-time employees for activities such as this. Ms. Murphy-Rodrigues stated yes. Ms. Murphy-Rodrigues discussed Articles 20 and 21: transfers to stabilizations. Mr. O'Connell asked if Ms. Murphy-Rodrigues wanted to express any sentiment on Article 28. Ms. Murphy-Rodrigues stated if they can put that language on their next agenda and get it passed contingent on the Town Meeting vote that they will have some positivity moving forward. Ms. Sarro asked if the $1 million that Mr. Rodgers proposed were to pass where would that revenue come from. Ms. Murphy-Rodrigues they would have to use the remainder of the levy capacity. Discussion of Warrant Financial Articles with School Superintendent Superintendent, Pamela Lathrop and Finance Director, Gail Dowd were present. Ms. Lathrop stated the School Committee voted in favorable action for Articles 14, 15, and 16. Ms. Lathrop stated they are looking for favorable action for Article 14 in order to help with the deficit. Ms. Lathrop stated they are in agreement with Article 15 to close the stabilization fund for all of the same reasons. Ms. Lathrop stated they are requesting a transfer of$1 million from the Finance Committee Reserve to the North Andover Public Schools Budget to address unforeseen expenses in FY25. Mr. O'Connell asked if there was any specificity that Ms. Lathrop can share around that. Ms. Lathrop stated they have taken necessary steps to eliminate several unbudgeted positions however, this did not fulfill the operational needs of the district. Mr. Chaney asked if they could have those efficiencies for the $1 million. Ms. Lathrop stated the efficiencies in terms of how they are reporting to the School Committee, and the measures they have put in place in terms of spending within the school budgets. Mr. Chaney stated it is important to keep a running list of the efficiencies that they find department wide during this difficult time. Ms. Lathrop stated it is more about reporting correct expenses or putting in the correct line item numbers that they need in order to run the district. Ms. Kean asked if they have provided monthly budget updates to the School Committee on what the FY25 spend is versus budget. Ms. Lathrop stated they have shared salary and expenses. Ms. Kean asked if it is salary and expenses per school. Ms. Lathrop stated per cost center. Ms. Lathrop asked if this $1 million was not incremental. Ms. Lathrop stated no, they are projecting $4 million. Discussion of Finance Committee Reserve Reauests Ms. Murphy-Rodrigues stated Essex North Shore Agricultural &Technical School is a moving target for them. Ms. Murphy-Rodrigues stated they have special legislation that says that anyone can apply there 4 • • Finapice Committee Nlec9ing Minutes ol`Ap ril 7,'2025 from any community. Ms. Murphy-Rodrigues stated they usually have safeguards in place when you have a home district so it is something they need to keep an eye on. Vote on Warrant Financial Articles MOTION:Ms. Allen motioned to recommend FAVORABLE ACTION on Article 2. Mr. Silk seconded. Motion approved 8-0. MOTION:Ms. Allen motioned to recommend FAVORABLE ACTION on Article 5. Ms. Kean seconded. Motion approved 8-0. MOTION:Ms. Allen motioned to recommend FAVORABLE ACTION on Article 6. Ms. Kean seconded. Motion approved 8-0. MOTION:Ms. Allen motioned to recommend FAVORABLE ACTION on Article 8. Ms. Kean seconded. Motion approved 8-0. MOTION:Ms. Allen motioned to recommend FAVORABLE ACTION on Article 10. Ms. Kean seconded. Motion approved 8-0. MOTION:Ms. Allen motioned to recommend FAVORABLE ACTION on Article 11. Ms. Kean seconded. Motion approved 8-0. MOTION:Ms. Allen motioned to recommend FAVORABLE ACTION on Article 14. Ms. Pastor seconded. Motion approved 8-0. MOTION:Ms. Allen motioned to recommend FAVORABLE ACTION on Article 15. Ms. Pastor seconded. Motion approved 8-0. MOTION:Ms. Allen motioned to recommend FAVORABLE ACTION on Article 17. Mr. Chaney seconded. Motion approved 8-0. MOTION:Ms. Allen motioned to recommend FAVORABLE ACTION on Article 18. Ms. Pastor seconded. Motion approved 8-0. MOTION:Ms. Allen motioned to recommend FAVORABLE ACTION on Article 19. Mr. Chaney seconded. Motion approved 8-0. MOTION:Ms. Allen motioned to recommend FAVORABLE ACTION on Article 20. Ms. Kean seconded. Motion approved 8-0. MOTION:Ms. Allen motioned to recommend FAVORABLE ACTION on Article 21. Mr. Silk seconded. Motion approved 8-0. 4 • • Finapice Committee Meeting Minutes ol`Ap ril 7,'2025 Vote on Reserve Reauests MOTION:Ms. Allen motioned to recommend FAVORABLE ACTION on the Superintendent of Schools request for$1 million from the Finance Committee reserve for FY25. Ms. Pastor seconded. Motion approved 8-0. MOTION:Ms. Kean motioned to recommend FAVORABLE ACTION on transferring$352,312 from the Finance Committee reserve account to the Greater Lawrence Tech and Essex Agriculture School accounts. Mr. Silk seconded. Motion approved 8-0. OUT OF ORDER: APPROVAL OF MINUTES FROM MARCH 25, 2025 MOTION:Ms. Kean motioned to approve the Open Session minutes of March 25, 2025. Mr. Silk seconded. Motion approved 8-0. OLD BUSINESS Discussion of Warrant Letter Mr. O'Connell stated the idea tonight is to look at the drafts and finalize the letter as best as they can. Ms. Stetson displayed the visuals that were created for the warrant letter. Ms. Kean asked if this took what Ms. Allen and Ms. Sarro wrote and was placed into a visual format. Ms. Stetson stated yes. Ms.Kean made suggestions on things to change within the introduction. Ms. Kean stated this introduction is only for the schools. Ms. Kean asked if they were going to have a general introduction and then get into the schools and municipal departments. Mr. O'Connell stated yes. Mr. Chaney asked what are they doing to guard against unallocated invoices from previous administrations. Ms. Allen stated the issue with that is that they do not have the authority to tell the School Committee anything about how they budget. Mr. O'Connell stated they do receive monthly reports from the schools now. Ms. Sarro suggested focusing on getting the message across before fixing grammatical errors. Ms. Kean asked Ms. Allen how much of her document is in Ms. Stetson document. Ms. Allen stated very little. Mr. Stetson stated she has not seen anyone's documents. Ms. Stetson suggested adding why it is hard to build a 2026 budget under the complication section. Mr. O'Connell stated to think about it as a letter that is told with some graphs and charts. Ms. Stetson suggested adding a looking ahead section to address some of the things they are going to have to keep in mind for next year. Ms. Kean stated FAQs should be included in the letter. Ms. Kean stated the FAQs should include why they are not using the levy capacity, why they are not using all of the stabilization funds, and why they are not using free cash. Ms. Kean displayed the draft document of the municipal section of the letter. Ms. Kean suggested adding why they are not using all of the reserves. Mr. O'Connell stated he would rather the letter not look like the old letter but keep it formatted similar to the schools portion. Ms. Allen stated the reduction piece is important to have within the letter. Ms. Sarro asked if these are cuts to services or are they just services not being provided. Mr. O'Connell stated it is a combination of both. Ms. Kean discussed the OPED and reserves section. Ms. Kean stated an analysis of free cash needs to be done using graphics. Ms. Kean stated language needs to be added to discuss the SPED Stabilization fund. Ms. O'Connell suggested that they appoint 3 or 4 people to get the letter finished. 4 • • Finapice Committee Meeting Minutes ol`Ap ril 7,'2025 ADJOURNMENT MOTION:Ms. Allen made a MOTION, seconded by Ms. Pastor to adjourn the Finance Committee meeting at 9:27PM. Motion approved S-0. Respectfully submitted. Nicole Civitarese Executive Assistant Documents used at meetinq 2025 Warrant Article List Warrant Letter Assignments CPC Recommendations Memorandums Presentation Minutes from March 25, 2025