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HomeMy WebLinkAbout2026-04-06 Finance Committee Minutes di Finance Committee Meeting Minutes of April 6, 2026 I IIIIiY)loll`ii�Ei@tl} �}pIt 1}i'I}y, (IIII II Illt'lll�ll I i ,i Call To Order: Chair Regina Kean called the open meeting to order at 7:OOPM in the School Admin Building located at 566 Main Street North Andover. Present: Chair Regina Kean, Vice Chair Denevan O'Connell, Christine Allen, Jeanne Irwin, Eva Pastor, Nancy Sarro, Keith Chaney, Michellle Nadeau, and Jennifer Watson. Non-Board Members in Attendance: Finance Director Dennis Keohane. PUBLIC COMMENT None. NEW BUSINESS Discussion of Warrant Financial Articles with Town Finance Director Mr. Keohane discussed Article 2, which is the authorization of contracts in excess of three-years. Mr. Keohane stated nothing has changed from prior years. Mr. Keohane stated they do not issue all contracts in excess of three years; it just provides the town the ability to allow them to do it. Mr. Keohane stated this is a contract by contract, not a blanket. Mr. Keohane discussed Article 5 the approval of payment of prior years unpaid bills. Mr. Keohane stated currently, they do not have any unpaid bills and do not anticipate having any unpaid bills by Town Meeting. Mr. Keohane discussed Article 6 salaries and compensation of elected officials. Mr. Keohane stated this is standard and authorizes them to pay the elected officials the amount as presented. Mr. Keohane discussed Article 7 the Capital Improvement Plan. Mr. Keohane stated the only change is that they removed $200,000 from the old senior center, and it will be reallocated to police officer body cameras. Mr. Chaney asked if that is going to affect the contract with the police. Mr. Keohane stated that is currently being discussed. Ms. Allen asked if they are pursuing a grant for this. Mr. Keohane stated if any grant funds are received it will offset this. Ms. Watson asked if they had body cameras currently. Mr. Keohane stated no. Ms. Allen asked who would be in charge of doing the application for the grant. Mr. Keohane stated it would be a combination of people at Town hall, the procurement office and the police department. Ms. Watson asked where the $3 million comes from for Kittredge if it is not getting passed to the taxpayers. Mr. Keohane explained where the funds would be coming from. Ms. Watson asked if they were going to increase taxes to meet the new capacity. Mr. Keohane stated yes. Ms. Watson stated her understanding was that Amazon was paying the difference. Mr. Keohane stated a significant portion of the new growth that was generated this year related to the Amazon property, which is within the levy. Mr. Keohane stated they did not utilize all of the levy capacity therefore, they will be raising taxes going forward. Mr. Keohane stated this will not require an override, and it will not increase the taxes above what they could otherwise be raised. Ms. Sarro asked what the discount that Amazon was getting was called. Mr. Keohane stated the TIFF. Ms. Sarro asked if that money from Amazon would correct the homeowners real estate tax bill. Mr. Keohane stated yes. Mr. Keohane stated the savings for Amazon goes down 10% every two years. Ms. Sarro asked if this was a temporary impact to the taxpayers from Kittredge and would be corrected later as the TIFF goes away. Mr. Keohane stated yes. Ms. Nadeau asked if there was a contingency plan if they were to exceed what was budgeted. Mr. Keohane stated it would still be debt and explained why they authorized the debt for the total project. Mr. Keohane stated if they exceed the authorized debt amount they would likely need to go back for additional appropriation. Mr. Keohane discussed Article 10 the Fueling Station. Mr. O'Connell asked if this is an improvement to the current one. Mr. Keohane stated it would replace the current one. Mr. Keohane discussed di Finance Committee Meeting Minutes of April 6, 2026 I IIIIiY)loll`ii�Ei@tl} �}pIt 1}i'I}y, (IIII II Illt'lll�ll I i ,i Article 11 the Water Treatment Plant. Mr. Keohane discussed Article 13 revolving fund spending limits. Ms. Kean asked if revolving funds are just to remind them that it is a fund that pays for itself. Mr. Keohane stated yes. Mr. Keohane discussed Article 17 the OPED transfer. Mr. Keohane discussed Article 18 snow and ice. Mr. Keohane asked the Committee to take no position on this article until Town Meeting. Mr. Keohane stated they do not anticipate that they will need to request free cash for this article. Mr. Keohane stated they are hopeful they will be able to remove most of the deficit through transfers. Ms. Pastor asked if they were going to pay it by June 30th or only partially going into next year. Mr. Keohane stated there may be some lingering that they have to raise on the recap in FY27. Mr. Keohane discussed Article 19 transfer to stabilization. Mr. Keohane discussed Article 20 transfer to capital stabilization. Mr. Keohane stated the town is proposing to use $1.3 million for the Capital Improvement Plan. Mr. Keohane stated the modular classrooms for the school are proposed to use $1.3 million. Ms. Nadeau asked what the current balance on that was. Mr. Keohane stated $4.8 million. Ms. Nadeau asked if that is within the guidelines of what is recommended. Mr. Keohane stated they do not have a formal policy on this one. Ms. Kean asked if it would be $3.8 million or$4.8 million once the million is taken out. Mr. Keohane stated it would be $4.8 million; the current balance is$5.7 million. Ms. Nadeau asked if this is a fund that would be used for an emergency such as if a boiler goes in one of the schools. Mr. Keohane stated yes. Ms. Kean asked how much would be remaining in free cash after all of the transfers. Mr. Keohane stated $4.2 million. Mr. Keohane discussed Article 21. Mr. Keohane discussed Article 22. Discussion of the Kittredge School Building Presentation Mr. O'Connell provided his thoughts on the Kittredge School Building project. Mr. O'Connell discussed his experience while being on the Kittredge School Building Committee. Ms. Allen stated the design really looks great. Ms. Allen stated redoing the traffic will make it a lot safer. Ms. Watson stated the planning of the project has been phenomenal. Ms. Watson asked, knowing what they know now, is this the time to do it. Ms. Watson stated they are operating under an enrollment decline and facing some tough financial choices in town for next year. Ms. Allen stated the state has agreed to help with payment. Ms. Allen expressed that they could lose that funding if they do not take it now. Mr. O'Connell asked if six months was really enough time to determine if the schools are functioning fine with only four schools. Ms. Allen explained why four schools could work with having a brand new school with a lot more functionality and room. Mr. O'Connell explained why it is important to jump on board for the funding from the state. Mr. O'Connell stated it may not be fiscally responsible to consider jumping out of the program after they have spent millions of dollars to get to where they are. Ms. Watson discussed her concerns with funding for the school with the potential of a failed override that would affect teachers being laid off. Ms. Watson asked what if there was a decision to not go for a debt exclusion override. Ms. Watson stated they are taking the money that could be spent on the operating budget and making the decision for the town that the school is more important. Ms. Kean stated if they did a debt exclusion and used the excess capacity to cover operating costs, that is a huge impact on the taxpayer. Mr. O'Connell asked Mr. Keohane if that scenario was considered. Ms. Nadeau expressed her concerns for this project and people in town not knowing about the project. Ms. Sarro stated there was talk about this in prior Town Meetings. Ms. Watson stated up until last year, all of the discussion was that it was going to be a debt exclusion override and now it is not. Mr. Keohane stated previously the plan was to have a limited debt exclusion for this project due to capacity being available. Mr. Keohane stated if the project does not pass, it will be a very long time before they have that opportunity again. Mr. Keohane explained why they are not seeking a debt exclusion. di Finance Committee Meeting Minutes of April 6, 2026 I IIIIiY)loll`ii�Ei@tl} �}pIt 1}i'I}y, (IIII II Illt'lll�ll I i ,i Fire Station 3 Presentation from Fire Chief Chief John Weir and Deputy Chief Graham Rowe were present. Chief Weir stated the Fire Department is seeking a $7.5 million bond authorization for the construction of Fire Station 3. Chief Weir described how the project would be funded. Chief Weir stated this would be no additional tax levy for the residents. Chief Weir discussed the project background. Chief Weir stated a needs assessment was conducted in 2024 that identified limitations to the initial plan for Fire Station 2. Chief Weir stated it was determined a 3rd station would better serve the growing community. Chief Weir discussed the increase in call volume, a large area of Town that falls outside of the recommended response time, and an increased demand for calls along route 114. Mr. O'Connell asked if 17%was a combination of overall calls. Chief Weir stated yes. Deputy Chief Rowe stated they took where the station was and looked at the district it served to determine that it was a total of 18% of their calls last year alone. Chief Weir discussed the limitations to the current Fire Department infrastructure. Ms. Nadeau asked if they were paying the airport to store some of their equipment. Chief Weir stated no. Chief Weir discussed the project location, and how the location will benefit the town. Chief Weir displayed a precinct map that shows the department's current response time. Chief Weir described the average response time for each precinct. Chief Weir displayed a map showing proposed response times with a new Fire Station at Berry Street. Chief Weir described the potential average response time for each precinct with the new Fire Station. Chief Weir displayed the elevation of the proposed station and the elements that would be inside of the building. Chief Weir stated they were trying to ensure it was going to meet the needs right now. Deputy Chief Rowe stated Station 2 is about 6,000 square feet and Station 1 is about 14,500 square feet. Deputy Chief Rowe stated Station 3 would be about 8,500 to 9,000 square feet. Chief Weir discussed the benefits of a new Fire Station. Chief Weir stated they are requesting this without any additional money for additional staffing at this time. Chief Weir stated they are going to be reallocating their resources. Ms. Sarro asked if that would reduce the response times. Chief Weir stated no, all of those models were their first unit responding on scene. Ms. Nadeau asked if they only have two ambulances right now. Chief Weir stated two frontline ambulances. Ms. Nadeau asked where would they go. Chief Weir stated all the models showed an ambulance at Station 3 and an ambulance at Station 1. Chief Weir stated they have six front lines. Chief Weir stated all of the engines and ladders are licensed by the state of Massachusetts as non-transporting ambulances. Mr. Chaney asked if the police department was having the same discussion about substations. Deputy Chief Rowe stated not that they are aware of. Chief Weir stated there would be a modest increase in the budget from the planned renovation of Station 2. Chief Weir discussed the upgrades to Station 2. Ms. Watson asked since they have kept very close to the original budget, if they had any regrets for things they wish they could have. Chief Weir explained the steps they took to remain close to the original budget. Chief Weir explained some of the aspects they cannot do at this point, but how they are setting themselves up for the future. Ms. Irwin asked what drives the number of fire stations. Chief Weir stated it is a factor of both population and the physical area of the Town. Deputy Chief Rowe explained the history of North Andover and its fire stations. Ms. Irwin asked if there are usually three fire stations in similar size districts or towns. Chief Weir stated it had to do with population and described the number of fire stations in neighboring communities. Chief Weir described the next steps for Station 2. Chief Weir stated they came up with a four phase plan to address the needs of Station 2. Chief Weir stated they have funding through grants and donations to cover the cost of the station renovations. Chief Weir displayed the floor plan for Station 2 and discussed the upgrades. Chief Weir stated they will have capacity in all three stations as the needs of the Town grows. Ms. Nadeau asked if the brush fire truck would have a place. Chief Weir stated yes. Chief Weir di Finance Committee Meeting Minutes of April 6, 2026 I IIIIiY)loll`ii�Ei@tl} �}pIt 1}i'I}y, (IIII II Illt'lll�ll I i ,i stated the three-station plan will provide the Fire Department with the tools needed to meet the growing needs of the community. Chief Weir discussed the non-hydrant district. Vote on Community Preservation Committee Article Ms. Kean displayed the CPC recommendations. Ms. Sarro asked if they were voting for excluding the project with no dollar amount. Mr. O'Connell stated it would depend upon the motion. Ms. Allen asked if those numbers will be available at Town Meeting. Mr. O'Connell stated that was the impression he got. MOTION: Ms. Allen motioned to recommend FAVORABLE ACTION on all CPC proposed projects excluding 0 Great Pond Road. Ms. Watson seconded. Motion approved 9-0. Vote on Warrant Financial Articles MOTION: Mr. O'Connell motioned to suspend the rules to allow the Committee to vote on the financial warrant articles without a second meeting. Ms. Allen seconded. Motion approved 9-0. MOTION: Mr. O'Connell motioned to recommend FAVORABLE ACTION on Article 2. Ms. Allen seconded. Motion approved 9-0. No action was taken on Article 5. MOTION: Mr. O'Connell motioned to recommend FAVORABLE ACTION on Article 6. Ms. Pastor seconded. Motion approved 9-0. MOTION: Mr. O'Connell motioned to recommend FAVORABLE ACTION on Article 7. Ms. Pastor seconded. Motion approved 9-0. MOTION: Mr. O'Connell motioned to recommend FAVORABLE ACTION on Article 8. Ms. Allen seconded. Motion approved 8-1. MOTION: Mr. O'Connell motioned to recommend FAVORABLE ACTION on Article 9. Ms. Allen seconded. Motion approved 9-0. MOTION: Mr. O'Connell motioned to recommend FAVORABLE ACTION on Article 10. Ms. Pastor seconded. Motion approved 9-0. MOTION: Mr. O'Connell motioned to recommend FAVORABLE ACTION on Article 11. Ms. Pastor seconded. Motion approved 9-0. MOTION: Mr. O'Connell motioned to recommend FAVORABLE ACTION on Article 13. Ms.Allen seconded. Motion approved 9-0. di Finance Committee Meeting Minutes of April 6, 2026 I IIIIiY)loll`ii�Ei@tl} �}pIt 1}i'I}y, (IIII II Illt'lll�ll I i ,i MOTION: Mr. O'Connell motioned to recommend FAVORABLE ACTION on Article 17. Ms. Pastor seconded. Motion approved 9-0. Ms. Allen asked if they were holding off on Article 14, 15, and 16 until Town Meeting. Mr. Keohane stated they voted at their last meeting to allow them to work on their warrant letter. No action was taken on Article 18. MOTION: Mr. O'Connell motioned to recommend FAVORABLE ACTION on Article 19. Ms. Watson seconded. Motion approved 9-0. MOTION: Mr. O'Connell motioned to recommend FAVORABLE ACTION on Article 20. Ms. Pastor seconded. Motion approved 9-0. MOTION: Mr. O'Connell motioned to recommend FAVORABLE ACTION on Article 21. Ms. Watson seconded. Motion approved 9-0. MOTION: Mr. O'Connell motioned to recommend FAVORABLE ACTION on Article 22. Ms. Pastor seconded. Motion approved 9-0. OLD BUSINESS Discussion of Warrant Letter Ms. Sarro suggested stating what the balance of the circuit breaker will be after the school department utilizes some of the funds. Ms. Kean described what was in the letter for the circuit breaker. Ms. Sarro stated it will be $2.9 million at the end of FY26 and $1.7 million at the end of FY27. Ms. Watson stated all that has to be spent next year because they cannot carry it over twice. Ms. Kean asked if the school department already had that in their budget. Ms. Sarro discussed what she believed would be left over. Ms. Kean stated the $1.5 million is what they need in addition, and they already assumed in their budget that they will have $600,000 left over. Mr. Keohane stated they are planning on using $1.5 million. Mr. Keohane stated they are anticipating $2.9 million in circuit breaker and having $1.7 million left over. Mr. Keohane stated essentially they are planning to use some amount of the circuit breaker and planning to carry over a certain amount. Ms. Sarro suggested emphasizing the amount in reserve from FY26 to FY27 is going to drop a bit because of this. Mr Keohane explained that there is no requirement for them to carry a balance. Ms. Watson explained her concern of the school department using one time funds for operational expenses. Ms. Kean stated they voiced their concerns about this in the letter. Ms. Watson suggested they do not need the dollar amounts. Mr. O'Connell asked if everyone was okay with the sentences Ms. Kean read regarding the concerns about using one-time funds. Ms. Nadeau stated the school department is caught between a rock and a hard place. Ms. Watson stated they are making decisions that are backing them into a corner. Mr. O'Connell made suggestions on how to make this section stronger. Ms. Kean explained the difference between the COVID one time fund use situation and the current situation. Ms. Watson stated they get$10 million in variable grants and reimbursements every year, which can vary 10% per year. Ms. Sarro asked what this means on a practical level. Ms. Allen stated there could be an amendment. Mr. O'Connell stated it would just be the bulk number not individual. di Finance Committee Meeting Minutes of April 6, 2026 I IIIIiY)loll`ii�Ei@tl} �}pIt 1}i'I}y, (IIII II Illt'lll�ll I i ,i Ms. Kean asked if there were any comments on the municipal section. Ms. Kean discussed the topics with the municipal section of the letter. Ms. Kean discussed the outlook of the budget and how it is not sustainable. Ms. Kean asked if they should talk about the additional operating costs for the Kittredge School. Ms. Kean suggested adding something about the MSBA contributing back to the Kittredge School. Ms. Allen suggested adding debt plus funding from the state. Ms. Nadeau suggested putting the percentage or the amount the state will be paying. Ms. Pastor provided the amount. Mr. Keohane stated they will only take the debt for the $50 million, and they will be reimbursed prior to the issuance of debt. Ms. Kean asked if they went article by article in their letter last year. Mr. O'Connell stated no. Ms. Allen suggested putting the MSBA reimbursement and use of debt for other operational expenses in the Q&A. Ms. Nadeau asked what year they went on the list for Kittredge. Ms. Allen stated they have been on the list for about 3 to 5 years. Ms. Sarro stated there are reasons to move forward with this project but some costs should never be a reason to just move forward. Ms. Allen stated it is difficult to build a school without the MSBA. Ms. Sarro stated it is the very first step to refreshing the elementary schools. Ms. Allen stated it is unheard of to turn down money from the MSBA. Ms. Watson asked how many times have they been turned down. Ms. Kean stated several. Ms. Kean stated they tried to word the letter so they were not advocating for an override. Mr. O'Connell suggested changing some of the wording in the override section. Ms. Watson asked if they could state the school department indicated a need for an override. The committee discussed the wording for this. Ms. Nadeau asked if that is to sustain services. Ms. Watson stated they added nine new positions this year. The committee discussed the override the school department would be requesting. Ms. Kean stated if there is an override request, it is not only going to include things for the schools, it will also include things for other departments. Ms. Kean stated she does not want it to appear that they are suggesting if there is an override request it would just be for things for the schools. Ms. Sarro suggested saying it may be a challenge to meet level service the following year without an override given the current projections. Ms. Watson discussed the email from Joe Hicks summarizing the School Committee's public hearing. Mr. Keohane stated in his opinion, the most likely outcome to maintain level services will be an override request next year. Ms. Watson asked where the new growth came from. Mr. Keohane stated there was more than $5 million of new growth. Ms. Watson asked if that was Amazon filling up their warehouse. Mr. Keohane stated yes. Ms. Watson asked if they expected that to continue. Mr. Keohane stated they do not anticipate that continuing. Mr. Keohane stated it is a fair statement to say that many people anticipate the need for an override based on the budget that is being presented. The committee discussed the FAQ section. Ms. Allen suggested adding something about a new fire station. Mr. O'Connell stated he does not feel the need to include that. Ms. Irwin stated if they did not allow them to use the circuit breaker, would they still need the override. Ms. Kean stated they are not in a position to tell them they cannot use the circuit breaker. Ms. Irwin asked, based on the Town's needs without the school department's situation, would an override still be necessary. Ms. Allen stated probably not. Ms. Watson asked how far below the tax levy are they taxing or are they hitting the capacity. Mr. O'Connell stated he believes they are a little below the capacity based on what happened at Town Meeting last year. Mr. Keohane stated the amount of money currently estimated for levy capacity in the future is essentially zero. Mr. Keohane stated it would roughly be zero because all the capacity that they have currently will be utilized for the debt projects. Ms. Kean stated to that point, should they add something to the CIP section. Mr. Keohane suggested proper wording for this. di Finance Committee Meeting Minutes of April 6, 2026 I IIIIiY)loll`ii�Ei@tl} �}pIt 1}i'I}y, (IIII II Illt'lll�ll I i ,i APPROVAL OF OPEN SESSION MINUTES FROM MARCH 25, 2026 AND MARCH 30, 2026 MOTION: Mr. O'Connell motioned to approve the open session minutes from March 25, 2026 and March 30, 2026 as presented. Mr. Chaney seconded. Motion approved 9-0. ADJOURNMENT MOTION: Mr. O'Connell made a MOTION, seconded by Ms. Nadeau to adjourn the Finance Committee meeting at 9:35PM. Motion approved 9-0. Respectfully submitted. Nicole Civitarese Executive Assistant Documents used at meeting Draft Warrant Warrant Letter Presentation Minutes from 3/25/26 & 3/30/26