BOARD OF SELECTMEN
Natick Town Hall
January 24, 2005
7:00 p.m.
The meeting was called to order by the Chairman John Ciccariello at 7:00 p.m.
PRESENT: John Ciccariello, Jay H. Ball, Charles M. Hughes, Paul R. McKinley, John Connolly.
ALSO PRESENT: Philip E. Lemnios, Town Administrator; Donna Challis, Secretary
WARRANTS: Payroll warrants were signed by the Board of Selectmen on January 24, 2005 in the amount of $526,859.68. This figure was included in total warrants signed by the Board of Selectmen of $1,654,056.08.
Following a moment of silence for the men and women in the Armed Services, a moment of silence was observed for the passing of Frederick Sanford, former Building Inspector and Town Meeting member.
MINUTES
On a motion by Mr. Hughes, seconded by Mr. McKinley, the Board unanimously voted to approve the minutes of the October 4, 2004 meeting.
Mr. Connolly called attention to page 22 and his request for feedback regarding a streetlight at Willow and Winnemay. He inquired if Mr. Lemnios had heard anything. Mr. Lemnios advised that he had not heard anything as of yet, but he would inquire with the Police Chief tomorrow. Mr. Connolly asked that Mr. Lemnios call him after speaking with the Chief.
On a motion by Mr. Ball, seconded by Mr. Hughes, the Board unanimously voted to approve the minutes of the October 18, 2004 meeting.
Mr. Connolly referred to page 28 concerning the issue of DPW truck traffic on West Street and asked if there was any update. Mr. Lemnios advised that it had been forwarded to the DPW and would be on an upcoming agenda. Mr. Ciccariello requested that it be scheduled for the February 7 meeting.
FRAMINGHAM COMMUNITY CHARTER SCHOOL: REQUEST FOR BANNER
The Board was in receipt of a request from the Framingham Community Charter School to hang a banner across Main Street for the first two weeks in February 2005.
In a memo to the Board, Fire Chief James Brien recommended that there be no more banners approved until March 15, 2005. He cited the winter
months with the high winds that tore the banners to shreds creating a safety hazard.
Mr. McKinley reminded the Board that Chief Brien’s recommendation was consistent with what had historically been the Board’s policy.
Mr. Hughes asked that the petitioner be notified of the Town’s policy in regard to banners. The petitioner may want to resubmit the request for a different date.
In the letter to the Board, Robert Kaufman Executive Director, mentioned that Natick had been added to the list of towns receiving preferential choice for enrollment. Mr. Ball was curious what preferential enrollment meant. He noted that the School was an out-of-town organization and if they were seeking to hang a banner in Natick, he would like to have the rationale for doing it and would like an explanation.
FRAMINGHAM COMMUNITY CHARTER SCHOOL: REQUEST FOR BANNER (contd)
Mr. Connolly stated that he would like to see the Board respect Chief Brien’s recommendation.
Mr. McKinley moved to deny the request and that the applicant be advised of the no banner blackout and invited to resubmit the request in the spring if appropriate. Seconded by Mr. Connolly and unanimously voted.
SNOWSTORM CLEANUP
Mr. Ciccariello thanked the DPW and their employees for their efforts over the weekend in cleaning up the snowstorm. He credited them with working a lot of hours and continuing to do so. He noted that there will be an effort to clean up the sidewalks and the downtown as soon as possible.
CITIZENS CONCERNS
a. Pond Street Parking
Carl Staley of 25 Pond Street complained about the recent ban on overnight parking in the Pond Street municipal lot and he wished to know why. There was a small amount of parking at the house and it was hard to park all the cars.
Mr. Lemnios responded that the rules and regs had been unchanged. The regulation for no overnight parking had been in effect for some time. There may be more enforcement lately, but there was no change in the rules & regs.
Mr. Connolly stated that he received a call from the owner of the building about the same situation. Parking Clerk Sebastian Grupposo explained to him that people were notified on their windshield. Maybe it hadn’t been enforced but it was starting to be because it was difficult for the plows to get around. Mr. Connolly said he told the landlord that the cars had been labeled and notified that they would get ticketed if they weren’t moved particularly during snowstorms.
Mr. Ciccariello inquired as to who put the rules and & regs together, and was told by Mr. Lemnios that it was under the authority of the Board of Selectmen. Mr. Lemnios added that it was a posted lot and during the winter months it became particularly troublesome to get the lot cleared. Pond Street was similar to other lots in the town.
Mr. McKinley thought that overnight parking was banned in the zoning by-laws and it would require a zoning change to allow overnight parking. His recollection was that the issue that came up before was a situation where the number of tenants and vehicles far exceeded the number allowed. He thought it needed to be looked into from both points – the Zoning By-Laws and any enforcement on rental properties.
Another resident of 25 Pond Street, John Welsh commended the Town on its plowing. He noted that he understood the Town’s situation especially on the matter of snow and he thought this might be about compromise. The parking lot at 25 Pond only adequately held four vehicles. It was very difficult. Everybody had different schedules and sometimes you had to wake somebody up at 4:30 a.m. to move their vehicle. They could cram all the cars in the lot on the nights they knew it would snow, but they were asking for the Board’s indulgence and understanding for a simple blue-collar worker.
Mr. Ciccariello inquired if this was a 2 or 3 family house and Mr. Welsh advised that there were rooms and small efficiency apartments. Mr. Connolly was familiar with the building and knew there were probably 8-10 units. He agreed with Mr. Ciccariello’s assessment of it being like a boarding house.
Mr. Connolly felt that the people were fairly warned that they would get ticketed but this was probably the first time it was enforced. Perhaps there was a compromise, but he would prefer to talk to the landlord at length when the landlord got back.
Carol Moores told the Board that she was there on behalf of the landlord who was out-of-town. Right now there were 10 vehicles in the
CITIZENS CONCERNS (contd)
building and there was parking for five. Most of these were working people who left the parking lot (in the early morning) and did not interfere with commuters. The landlord was concerned about the snow and was willing to try to find them parking during storms. He (landlord) was concerned and wanted to know what the Board could do to help him. The old houses were not like the new ones.
b. Community Preservation Act
Regarding the Pond Street parking problem, Joshua Ostroff offered the suggestion of those people using the lower level of the municipal garage on Middlesex Avenue. Perhaps the Board could issue a permit to park if they were out by 7:00 a.m.
Mr. Ostroff explained that he was there tonight to let the Board know there were a couple of citizens that formed the NCP Alliance and were on a mission to educate people about the Community Preservation Act
(CPA). The Alliance had been meeting and would continue to meet with residents that have an interest in this. A citizens’ petition article had been submitted for Spring Town Meeting to form a study committee to report back to Fall Town Meeting on the suitability of the CPA to Natick. They (alliance) thought it had many benefits for Natick and moving forward with this they felt the best thing they could do was to inform the community and do outreach. It was a long-term process and should the Board desire to have the group come before the Board to answer any question, they would be happy to come. A forum was tentatively scheduled at the library for March 3, 2005 for the residents.
Mr. McKinley inquired if the Alliance had targeted the amount they would be seeking. Mr. Ostroff advised that they had not, noting that they felt that was premature. The CPA amounts to a surcharge on property tax between .5-3% and it went into a fund that was matched by the state currently at 100%. The money was expended on a combination of historic preservation, housing, and open space. They had no target in mind. That would depend on what kinds of projects were in front of the Town. He added that they would like to keep it as low as possible and advised that Town Meeting could pass an exemption for the first $100,000 and an exemption for low income. The legislature was considering an exemption for business, but felt it was up to the community to decide this.
Mr. McKinley commented that there was a minimum threshold below which the State did not match, but Mr. Ostroff advised that currently that was wrong. The fund of $10’s of millions was fed by a fee attached to property transfers and currently all the money was being matched. It was expected in about 2009 that fund may not be able to do the 100% match so its been discussed that those communities at 3% would get 100% and those communities at less would get less.
INTERVIEW FOR APPOINTMENT TO ELDERLY & DISABLED TAXATION FUND COMMITTEE:
a. Sheila Adams
Sheila Adams stated that she would like to get involved with Natick since she had lived here all her life and thought this would be a small way to do that. She understood that it was not a huge commitment and thought it would be interesting.
Mr. Hughes moved to appoint Sheila Adams to the Elderly & Disabled Taxation Fund Committee. Seconded by Mr. McKinley and unanimously voted.
PUBLIC HEARING: NAMING CORNER OF WASHINGTON AVENUE AND WEST CENTRAL STREET IN HONOR OF LEONARD H. FOLEY, JR.
On a motion by Mr. Hughes, seconded by Mr. McKinley, the Board unanimously voted to open the public hearing.
Edward Jolley, President of the Natick Veterans’ Council, reminded the Board of the discussion of dedicating a square for Captain Leonard H. Foley, Jr. who was a citizen of the Town of Natick and the highest
ranking officer from Natick killed in WWII. Since the last meeting Mr. Jolley said he talked to the Historical Society and the Chairman was
PUBLIC HEARING: NAMING CORNER OF WASHINGTON AVENUE AND WEST CENTRAL STREET IN HONOR OF LEONARD H. FOLEY, JR. (contd)
going to send a letter to the Board. As far as Mr. Jolley knew the Historical Commission was in favor.
Mr. Ciccariello acknowledged receipt of a letter from Stephen Evers, Chairman of the Historical Commission and Community Development Director Sarkis Sarkisian.
In Mr. Evers’ letter he suggested that the Veterans Council consult with the Historical Commission on the appropriate signage. Mr. Hughes asked if Mr. Jolley had any objection to doing that and Mr. Jolley responded that he had no objection.
Mr. Hughes then noted that Route 135 was being repaved and there might be a timing issue, but Mr. Jolley pointed out that the street sign was already there. The plaque would go on top of the Washington Avenue street sign. He thought all of the sidewalks were done.
On a motion by Mr. Hughes, seconded by Mr. McKinley, the Board unanimously voted to close the public hearing.
On a motion by Mr. Hughes, seconded by Mr. McKinley, the Board unanimously voted to approve naming the intersection of Washington Avenue and West Central Street in honor of Leonard H. Foley, Jr.
Mr. Connolly stated that this was a request that he had asked the Veterans Council to work on and he wanted to thank the Historical Commission, Community Development Director, and the Board for being so understanding on behalf of the Foley family. He knew they would be grateful if this would happen.
Mr. McKinley requested that the Board be informed when the dedication was scheduled. Mr. Jolley indicated that he would like to do it on Memorial Day.
CONTINUE PUBLIC HEARING: AMEND LIQUOR LICENSE RULES & REGS AND ESTABLISH POLICY ON A TIME LIMIT FOR SERVING LAST DRINK AND PATRONS VACATING THE PREMISES
Mr. Hughes explained that one of the reasons the hearing got continued was because he asked for a list of the closing times vs the latest time on the license.
The following memo from Police Chief Dennis Mannix was read into the record: “After careful reconsideration of my earlier recommendations
to the Board of Selectmen regarding liquor licensing policy changes, and in order not to craft language to deal with the exception rather than the rule, I recommend the following:
Licensees authorized to serve alcohol at restaurants, inns, and clubs will have a time certain designated as “last call” for serving alcohol to patrons. That time shall be not later than 15 minutes prior to the
time designated for doing business on their liquor licenses. No patron will be served more than one drink when last call is announced.
All bottles, glasses, etc. must be cleared from tables and bars not later than the designated closing time on the liquor license.
All persons except for the manager and employees required to remain for cleanup purposes must be off the premises not later than 15 minutes after the time designated on the license as closing time.
I believe if these issues are addressed in the Board’s policy, the police department will have the right line needed for effective enforcement of the liquor laws under MGL chapter 138.”
As an alternative to what the Chief was suggesting, Mr. Ball referenced language Town Counsel and he had worked up which in effect said that no orders may be taken or served less than 30 minutes prior to the licensed establishment’s posted or advertised closing time. That was distinguished from the latest time on the license. The Dolphin closes at 10:00 p.m. but the license allowed the Dolphin to serve to midnight.
CONTINUE PUBLIC HEARING: AMEND LIQUOR LICENSE RULES & REGS AND ESTABLISH POLICY ON A TIME LIMIT FOR SERVING LAST DRINK AND PATRONS VACATING THE PREMISES (contd)
The intent of the language was to ensure that service of alcohol not take place closer than 30 minutes prior to the time the establishment closed. Mr. Hasgill from the American Legion and Mr. Carew from the Elks had testified that that seemed to be the name of the game so people wouldn’t be chug-a-lugging and out the door. The language (drafted by Mr. Ball and Town Counsel) said no more than 30 minutes prior to the time you are going to ask people to leave the establishment, i.e. the Dolphin – if someone walked in at 9:55 p.m. and wanted a drink and a meal and the Dolphin employees were willing to stay, they were entitled to serve that customer.
In conclusion Mr. Ball stated that the intent of his and Town Counsel’s language was essentially the same as the Chief’s. The difference between Town Counsel’s language and the Chief’s was that Town Counsel addressed the time at which the doors close and the Chief refers to the time on the license.
Mr. Hughes didn’t think it addressed the Dolphin’s problem. Mr. Giannocopolous was agreeing not to serve alcohol past ten, but he wasn’t asking people to leave. He was not allowing someone in to order a meal at 10:00 p.m. but would allow someone in at 9:59 p.m. Under this rule (Mr. Ball’s) the Dolphin couldn’t do that. His posted closing time was 10:00 p.m. and under this rule he couldn’t allow anyone in and serve a drink past 9:30 p.m.
Mr. Ball concurred that the Dolphin couldn’t accept anyone for a drink after 9:30 p.m. He was entitled to serve someone but he would have to stay open.
Mr. McKinley agreed with Mr. Hughes that as long as the owner was voluntarily closing before the license said he had to close, why should he be penalized. The issue that came up through the Police was specifically the definition of closing relative to what’s on the license. That’s what the Board was trying to resolve and he (Mr.
McKinley) didn’t think the Board should punish anyone if they were voluntarily closing early.
Mr. Ball submitted that they weren’t being penalized, but Mr. McKinley believed that they were with this language. If a restaurant closes at 10:00 p.m., the latest they could serve alcohol was 9:30 p.m. The Chief proposed that if the alcohol license said an establishment must close by 10:00 p.m., then everybody must be out by 10:15 p.m.
Mr. Ball understood the rationale and suggested that he go back and work some more with Town Counsel.
It was Mr. Ciccariello’s understanding that the purpose of making this change was to give the Police some guidance with respect to so-called ‘last call’ and when there was an expectation for the patrons to be out of the establishment. He thought the Board was concentrating on the closing time as designated in the license and a specific amount of time prior to the closing listed on the license would be given by which the patrons would have to be out. If someone chose to close earlier than stated on the license, they shouldn’t be penalized.
Mr. Ball explained that Town Counsel and he were concentrating on the issue that nobody was served a drink and kicked out because the establishment had to close. This had a 30-minute buffer. If someone else would like to take a crack at drafting some language, Mr. Ball said he would be delighted. Mr. Hughes offered to do a draft.
Mr. McKinley suggested that maybe the Board should converge on a consensus and give guidance to Mr. Hughes. His (Mr. McKinley) recommendation was to amend the last serve time to 30 minutes, which was consistent with Mr. Carew’s recommendation. Other than changing the 15 minutes to 30, Mr. McKinley favored the Board effectively adopting the Police Chief’s recommendation.
CONTINUE PUBLIC HEARING: AMEND LIQUOR LICENSE RULES & REGS AND ESTABLISH POLICY ON A TIME LIMIT FOR SERVING LAST DRINK AND PATRONS VACATING THE PREMISES (contd)
Using the Dolphin as an example, Mr. Ball noted that the latest time for doing business on his license was midnight so when was last call if the Board adopted Mr. McKinley’s recommendation. Mr. McKinley advised that it would be 11:30 p.m. Mr. Ball pointed out that Mr. Giannacopoulos normally closed at 10:00 p.m., and Mr. McKinley responded that that was Mr. Giannacopoulos’ business.
Mr. Hughes moved to continue the public hearing to February 7, 2005. Seconded by Mr. McKinley and unanimously voted.
PUBLIC HEARING: 2005 WATER & SEWER RATES
Mr. Ciccariello prefaced the opening of the public hearing by noting that the Board had a public hearing at which some questions were brought up and the Board made a decision to re-open a public hearing effective tonight. The public hearing notice was read, and Mr. Ciccariello continued that some information was brought to the attention of the Town Administrator during the course of the meeting with the Finance Committee Subcommittee for DPW last Tuesday concerning the water & sewer retirement fund reconciliation. The Town Administrator started investigating the matter over the course of the last several days and that topic will be discussed tonight. He advised that it would be open to comment from the Finance Committee and the public and he would ask those people wishing to comment to keep it to no more than five
minutes and for the Finance Committee if either the Chair or the Vice-Chair could speak unless another member had something different to offer.
Mr. Ball moved to open the public hearing. Seconded by Mr. Hughes and unanimously voted.
Mr. Lemnios was asked to discuss the water & sewer retirement fund reconciliation issue prior to the discussion of water & sewer rates.
Mr. Lemnios explained that the issue came to light last Tuesday at a subcommittee meeting of the Finance Committee on the DPW budget. A question was posed relative to the allocation of the retirement systems costs to the Water and Sewer Enterprise Fund. Specifically the administration was asked to look into whether or not the Water & Sewer Enterprise fund had been charged a disproportionate amount of the overall retirement system costs. It was said that the entire DPW retirement had been charged to the enterprise fund rather than just water & sewer.
As a result of the review and after conversation with the Retirement System’s actuarial firm The Segal Company, an accounting error was confirmed. The nature of the error relates to the manner in which the Water & Sewer Enterprise fund had been charged for its share of the retirement systems obligation. The error resulted from a misunderstanding between the terminology used in the actuary report and its interpretation by the Comptroller and others reading the fiscal reports.
Mr. Lemnios noted that Fiscal 2003 was the first year of the enterprise fund. There was an allocation setup and a memo was issued as to what those allocations would be. There were discussions at that time between the Finance Committee, Board of Selectmen, and the Acting Town Administrator of what the appropriate allocation would be in that year
and there was a straight formula utilized – a 34% salary calculation. $200,000 was charged to the enterprise fund for retirement. The actuarial has said that if it was just water & sewer $128,756 would have been needed. In FY04 the same process was followed and Segal provided an accounting in the amount of $529,421, but the amount for water & sewer was only $136,378 which meant that the enterprise fund
paid $393,043 more into the system than it should have and the general fund paid that much less. In FY05 Segal reported to the Retirement Board an amount of $561,385. $146,401 should have been paid by the enterprise fund for a difference of $414,984. In total for the three
PUBLIC HEARING: 2005 WATER & SEWER RATES (contd)
fiscal years the Water & Sewer Enterprise Fund had paid $879,271 more than it should have and there needed to be an adjustment between the general fund and the enterprise fund in order to make the allocation be appropriate.
Currently we were in the FY2005 budget and now that the issue has arisen, that allocation should be addressed. For Fiscal 2006, an adjustment would need to be made in the projected allocation and the FY06 budget adjusted. Mr. Lemnios emphasized it should be noted that the Retirement system at all times received the full annual payment required by the funding schedule established to meet its obligations. There were no outstanding balances owed to the Retirement system. Equally important was the fact that there had not been an over allocation on a town wide basis to the Retirement Fund as a whole. There was an over allocation to the Water and Sewer Enterprise fund and a corresponding under allocation to the General Fund.
There was an accounting error that revolved around the relative share of the obligation between the General Fund (tax based) and the Enterprise Fund (rate based). As a result of this error he (Mr. Lemnios) recommended several immediate actions to fully recover the value of the over allocation on behalf of the rate payers:
1. Reduce the FY05 water and sewer budget by $414,984 to reflect the actual retirement fund costs in FY05. There should be a corresponding reduction in water & sewer rates to reflect this change.
2. Increase the FY05 General Fund Appropriation by $414,984 to reflect the actual costs for this fiscal year to the General Fund portion of the retirement fund. This action will require Town Meeting approval this spring.
3. The value of the overcharges in FY03 and FY04 are more problematic as the transactions of those fiscal years have closed. Based upon the discussions with the Actuary the effect of the over allocation in FY03 and FY04 can be addressed in three different manners:
a. Recognize the over allocation as pre-payment on the Water & Sewer Enterprise Fund’s long-term retirement liability and as such diminish the liability so that it is paid off 1.5 years earlier. In essence this is similar to making an extra monthly mortgage payment that will shorten the term of the mortgage.
b. Recognize the over allocation as an extra payment on the Water & Sewer Enterprise Fund’s long-term retirement liability and as such diminish the annual appropriation beginning in FY06 by $22,288. This option will not diminish the term of the obligation but will diminish the value of the obligation by an additional $22,288 per year.
c. Treat the FY03 and FY04 under allocation to the General Fund as an obligation owed to Water and Sewer Enterprise Fund that must be address in FY05. In order to do this existing reserves would have to be used or reduce
operating budgets to make the allocation to the enterprise fund as soon as practicable. This action would require Town Meeting action and may prove disruptive to the financial plan currently in place.
4. Adjust the FY06 General Fund Retirement request to reflect the appropriate share of the Retirement System costs. Decrease the FY06 Water & Sewer Enterprise Fund request by a corresponding amount.
PUBLIC HEARING: 2005 WATER & SEWER RATES (contd)
5. Create an ad-hoc Review Committee to examine the Water & Sewer Enterprise accounting structure and transactions to ensure that the Fund is being operated consistent with accepted practices. The Committee would need the assistance of an independent accounting firm to complete its work. In addition the Selectmen should meet as soon as possible with the Finance Committee to discuss this issue and the scope of inquiry.
It was Mr. Lemnios’ belief that taking the actions outlined above the accounting error would quickly be resolved and would put in place a framework for a more concise process for budget deliberations and rate setting discussions in the future.
Richard Miller addressed the Board as a resident of Lake Shore Road. He felt that before a decision was made on how to actually allocate the money, the Board had to find out how much money was there. Lake Shore Road was not sewered until recently. The residents paid an estimated amount and it was his understanding that the price came in well under
the estimate and, therefore, Lake Shore Road residents and perhaps others in similar situations effectively overpaid. He noted that a month ago he formalized this issue and asked that it be shared with the Board, but he hadn’t heard anything as of yet. To him the fair thing to do would be to correct those overpayments and then decide on an
allocation. He would also like to find out if that message went to the Board and if not he would like it to go to the Board.
Mr. Ciccariello explained that Mr. Miller was referring to a betterment. The original Lake Shore Road project was to be $500,000 and a betterment assessment would get charged. It was Mr. Ciccariello’s understanding that if the project came in less than
PUBLIC HEARING: 2005 WATER & SEWER RATES (contd)
$500,000, the betterment would be reduced accordingly. What Mr. Miller was referring to had nothing to do with the water & sewer allocation.
Mr. Miller responded that he raised it now because he didn’t want to come in after the money was allocated and bring it up. He then asked if the Board had seen his message. It was sent either late December or early January. Mr. Ciccariello advised that he had not. Mr. Connolly asked that when an e-mail was received that there be an acknowledgement sent that it was received.
Paul Greismer, Chair of the Finance Committee Subcommittee on DPW, noted that there was a subcommittee meeting on the enterprise funds and this issue was uncovered in the course of that hearing. He pointed out that the Finance Committee DPW Subcommittee had not concluded its work with respect to the enterprise fund. Those hearings were going to be continued and as a subcommittee they had not reported back to the full Finance Committee. There were a couple of other questions outstanding some of which arose at the meeting.
Mr. Greismer continued that before the Board set the rates, he would like to give the Board a flavor of what the impacts may be. Looking through the DOR regulations on enterprise funds there was reference to the general acceptable accounting practice. It lists a question of whether the assets of the enterprise fund should be subject to an accounting standard for full valuation and whether that was the appropriate method would require consultation with the auditors. When dealing with an accounting error where there was an over allocation to one and an under allocation to another on an unfunded pension do you deal with it on an historical basis or prospectively as a change in estimated time. There was a greater tendency for companies operating under GAP to deal prospectively and change the amount of time or keep the
estimate of time but lower the estimate of annual amounts that would have to go into it. He did not know what the auditors would recommend but did know the statute mandated GAP. He also noted that under frequently asked questions on GAP was the question of whether payment-in-lieu-of-taxes should be assessed against enterprise funds, and he wasn’t sure they should or shouldn’t.
PUBLIC HEARING: 2005 WATER & SEWER RATES (contd)
On the memos from Segal and PERAC, Mr. Greismer pointed out that neither had the detailed backup so that the Town knew that the second calculation was the right calculation as opposed to the first. Before taking any action, he felt the Town would want to be sure that it was standing on a solid foundation. Part of the problem was the fiscal year and the calendar year operation of the fund was different. In January 2003 and February 2003 there was no historical information and
when looking at 2004, Fiscal 2003 wasn’t completed as of yet. Historical information on the enterprise fund was relatively new.
Mr. Lemnios advised that one of the questions raised this morning with Segal was the question Mr. Greismer brought up. He wanted to see what employees Segal was including and they e-mailed him a list of active
and inactive employees and he (Mr. Lemnios) was in the process of doing a head count against employees.
To the possibility of a prospective approach, Mr. McKinley inquired as to how many years it would take to re-settle the accounts. Mr. Lemnios responded that currently the unfunded liability was scheduled to be completed in 2024 and this would reduce that obligation by 1.5 years.
Mr. Ciccariello noted that the Board of Selectmen could not reduce the number of years. It would be the Retirement Board who would have to vote to do that. If the Selectmen were to make that recommendation, the Retirement Board would have to concur.
Having had numerous discussions with Mr. Lemnios, Frank Foss Finance Committee Chair said he felt it appropriate for the Finance Committee to take this topic up tomorrow to at least hear a presentation from Mr. Lemnios and to see if the Finance Committee would exercise its powers under the by-law to commence an independent audit. Craig Ross was the General Government Subcommittee Chair and Mr. Foss stated that he was going to propose having a discussion tomorrow evening for Mr. Greismer’s and Mr. Ross’ subcommittees to do the work and to get their arms around this whole issue in order to lay a good groundwork and plan for the enterprise fund to be substantial and operating correctly. He invited the Board of Selectmen to attend the Finance Committee meeting.
Mr. Ciccariello advised that the Board of Selectmen had posted the meeting for tomorrow night.
Finance Committee and Town Meeting member Jeffrey Phillips realized that the Board probably wouldn’t get to the issue of the water & sewer rates tonight, but felt there were some issues the Board needed to consider as it went through this process. He had several concerns. He had come across some historical stuff that happened in last year’s rate setting hearing in December 2003. There was some discussion about a new water only multiple unit rate. In the packets given for the December 6th meeting there was a multiple unit only rate sheet and he was confused. On the electronic site with billing information this chart didn’t appear and it didn’t appear on the back of the water bills. There was a need to understand who these rates were for, how they were applied and
why they weren’t published.
In another matter which Mr. Phillips said he would address quickly to see the format for a larger discussion was the way the billing applications were instituted. There was a major problem in that billing applications for multi-unit single meter residents, be that condo’s or apartments, were very discriminatory in the effective rates
their units were charged. He came across a posting on the Newton site that as of October 1, 2004 Newton set up a new system. It divides the total water consumption of the building by the number of units and charges at the applicable tier. The number of units was certified by the Assessors. As a single family resident when the bill arrived the bill starts at 0-7 units and when it gets between 8-20 hcf the cost
went up. In places where there was one meter serving 200 or 400 units, they only got that 0-7 rate once per quarter for the entire group. When the bills were figured out the effective rate was 20-40% higher than if those same people were using the same amount of water and sewer living in a single family home. This was a charge in excess of
PUBLIC HEARING: 2005 WATER & SEWER RATES (contd)
$500,000 per year that the Town wouldn’t be receiving if a discriminatory rate method wasn’t being used. It was unfair and that had been recognized in Newton.
Mr. Phillips continued that in December the Commonwealth became the last state to allow landlords to begin to meter and collect money for water & sewer for each apartment. It would be a problem in West Natick where one meter served several hundred units if they were independently metered and the landlord went to charge those tenants, what rate would be used. The Town will only give the master meter and only give the 0-7 rate one time. Mr. Phillips asked for the Board’s indulgence to give him a little time as he thought there was a need to understand the implication of this. In terms of equity he thought it would be a good thing to know how many units in water in different categories the Town collected assessments for. The MWRA was charged out and the Town should know whether the money collected by
category was approximately the charge on the bills. With computers he would think that it would be easy to say “x” was collected for MWRA and paying “x”. He also didn’t understand why the water-to-water only users rate was different than water to water and sewer users. He understood why the irrigation rate was different, but when the Town gave people water without sewer the cost of giving the water was the same.
Mr. Ball noted that Mr. Phillips was talking about making multiple unit rates more equitable and had said that the Town was overcharging by close to $1/2 million. Mr. Phillips clarified that the Town was bringing in an additional $1/2 million plus because of the billing system. In follow-up Mr. Ball commented that if the system was more equitable, the revenues would be reduced by $1/2 million and the Board would have to raise that shortfall by raising rates. Mr. Phillips replied that maybe there wouldn’t be $1.5 million in retained earnings.
As an owner of rental property, Mr. McKinley advised that under state law the landlord was responsible for paying the water bill for that property which was the reason for the master water meter concept. It was inequitable, but he didn’t know how the Town could calculate it when there was one meter for 100-200 units. The new state law proposed the water bill become the responsibility of the tenant and the reason behind that was one of conservation.
Mr. Phillips noted that Newton was doing this and it was on their web site. He pointed out that if someone was to move into Selectmen’s Sanctuary, he would use the same exact water as in an individual home and pay 20-40% more than if he lived in a single family home.
Mr. Ciccariello felt that Mr. Phillips had made some valid points. His concern was for individuals who get water from Natick who live in Dover
or Wellesley and the developments approved by the Planning Board that would have to go back and look at the conditions of those approvals because some of those only requested a specific water line to their building. Those were some of the things that would have to be looked at in taking this under consideration.
On the issue of over-allocation, Mr. Ball noted that Mr. Lemnios had said that the total amount paid was correct and it was simply a matter that the water & sewer account paid too large a share and that was reflected in the rates. Mr. Lemnios confirmed that that was correct, and Mr. Ball continued that this was an accounting error that has not been detected by the auditors in the 2-3 years the enterprise fund had been in existence.
Mr. Lemnios responded that there was a meeting today with the auditors and that issue was talked about. The enterprise fund was established in FY03 during the January-April 2003 period and the Board of Selectmen, Finance Committee and Acting Town Administrator were working furiously to press together a budget under a difficult situation. There was a trash fee, a school bus fee and the enterprise fund established to address budgetary concerns. In FY03 an allocation model was established where everybody walked through the key issues of how an enterprise fund should operate. In FY04 when the allocation was being
PUBLIC HEARING: 2005 WATER & SEWER RATES (contd)
determined as of yet there wasn’t a full year under the budget. There was an actuarial study as required every three years and Segal was asked to breakout the water & sewer enterprise fund portion. They understood that it was a breakout of the DPW. Some folks say it was a coding issue, but that was when the amount first showed up. It turns out it was the entire DPW and not just water & sewer. In FY05 the number was utilized. The number didn’t look too dissimilar and didn’t raise anybody’s radar until the other night.
Mr. Ball inquired if he was correct in assuming that there were no other misallocations having to do with the individuals such as health benefits. Mr. Lemnios advised that there were not. This was the only misallocation and it hinged on the actuarial study commissioned by the Retirement Board. That study was sent to PERAC and PERAC looked at the actuarial study to verify that it was done using good accounting practices, but they did not know if the breakout was correct. The Town got a letter back from PERAC on the amount to be appropriated to the retirement system and a breakout of the dollars.
Mr. Ball noted that Mr. Lemnios’ recommendation was to reduce FY05 by $414,984 to reflect the retirement fund costs and a corresponding reduction in rates. If no other changes were made, that was a 3.7%
reduction. Mr. Lemnios advised that that was correct and that was his recommendation. When the Board scheduled tonight’s hearing the hearing was to talk about use of retained earnings and that was a policy driven talk. This was different than that discussion. It was now known that the $414,984 was not needed in water & sewer, and if it was known that that wasn’t needed, that change should be made as quickly as possible. It drew a clear demarcation line in the sand for the problem and the
Board had to do whatever it could to stop the problem and make adjustments to go forward. FY03 and FY04 were more difficult.
Mr. Lemnios explained that the whole point of these recommendations was a recognition that the Town wants to make sure the ratepayer was whole as quickly as possible. There has been a problem and when a problem was identified it was the Town’s obligation to address the problem as quickly and intelligently as possible and make sure it didn’t happen again. Everybody who played a role in accepting the problem had to play a role in rectifying it.
In response to Mr. Ball’s query as to the impact on switching from a calendar year to a fiscal year, Mr. Lemnios advised that the Board would come out of Town Meeting in April and immediately set rates for the next fiscal year. Right now the MWRA assessment was being spread (over two fiscal years) and the ideal would be that you propose a budget, run it through the vetting process, and then the Board would know what was available and could put forward a rate structure with what was approved and that would be the rate structure on July 1. When the enterprise fund was established there was a discussion to go on a fiscal year, and in that discussion there was a concern that the tax bill and water bill would arrive at the same time and people asked if there was a way to get it cycled in such a fashion that they didn’t
arrive at the same time. One recommendation would be to look at establishing it on a fiscal year basis.
Mr. Hughes inquired if the $414,984 for FY05 would come from free cash. Mr. Lemnios replied that he was looking at a couple of different sources including overlay surplus. Asked if it would be the same thing for FY06, Mr. Lemnios said he was in the process of identifying a source for that as well.
Mr. McKinley commented that for FY06 it was taking it from one column to another. It was a budget not as yet approved. Mr. Lemnios agreed that the budget was not as yet approved, but he would have to compensate for taking it from the general fund rather than water & sewer.
Mr. Connolly expressed the opinion that this was an accounting error and whether an accident or on purpose it was a real sloppy use of the ratepayer’s money. People were asking if this one was caught and
PUBLIC HEARING: 2005 WATER & SEWER RATES (contd)
others were missed. They were also asking why a lay citizen had to find the problem and what was he supposed to tell a ratepayer when they asked what’s going on.
Mr. Lemnios replied that Mr. Connolly was correct that this was an error and everyone wished that it had not occurred. He hadn’t seen anything to indicate it was done with any purpose in mind or any malice. The Town had a $90 million budget that had many different parts and pieces with many different inputs. Some of the inputs there was control over and some there wasn’t. In some instances there were folks with direct oversight and with others it was a co-mingling of
responsibility. It was a difficult set of circumstances. What he could say was that when an error was identified either from a lay person or an employee, the first task was to fix the problem. The next issue was to examine why it occurred and what could be done to ensure that it didn’t continue. He knew the public standard was high and everyone was sorry this occurred. Changes would take place as a result of this occurring including the financial operation and members involved in the financial operations.
Mr. Connolly stated that he was embarrassed this happened on his watch and followed-up on Mr. Lemnios’ comment that the Finance Committee didn’t pick this up.
Mr. Lemnios didn’t want to focus on the Finance Committee. When the enterprise fund was established there was a variety of entities involved – the Finance Committee, Board of Selectmen, Acting Town Administrator, Town Meeting. In this case the budget process worked as designed. The Town Administrator puts forward a budget. That budget was vetted by the Finance Committee and they take a hard look at all the budgets and line items. Their (Finance Committee) charge was to look out for the citizens and Town Meeting. Mr. Phillips was the FinCom member who raised the issue at the Finance Committee meeting and they dug into this budget and pointed out a serious issue. Mr. Lemnios was thankful it was pointed out and circuited. He also noted that there were independent accountants who
looked at this and he talked to them about why they didn’t catch it.
Mr. Connolly asked why the auditors didn’t catch it, and Mr. Lemnios responded that the auditors looked at FY03 and that was a calculation. They looked at FY04 and saw the total allocation paid to the Retirement system and the first year’s allocation. They (auditors) said they asked about it and it was reported back that the allocation was appropriate plus they saw the relationship between FY04 and FY05 and because that didn’t change significantly no alarms went off. The auditors indicated that they felt that it would have been picked up in the FY05 audit, but he (Mr. Lemnios) didn’t know.
Mr. Connolly then asked Mr. Lemnios to elaborate on his mention that there would be some actions. Mr. Lemnios declined to comment at this point in a public meeting. He added that when he looked at this issue and the impact on public confidence he was very concerned, as was the Board, and the administration had to make sure the public had confidence in what was done.
Mr. Ciccariello reported that he and Mr. Lemnios met today with the accounting firm and there was also the issue of the company retained by the Retirement Board who did the actuarial study. He suspected that the Retirement Board had to have some discussion with the firm they retain. There was some preliminary discussion with the individual that worked for that group and some indication that there was confusion on their part in discussion with individuals from the Retirement Board and the information they received. To what extent he didn’t know. Mr.
Ciccariello advised that he made some telephone calls himself to try to find out what happened, but for now the focus had to be on what steps to take to get the over-allocated funds back into the enterprise fund.
Mr. Hughes inquired if the Retirement Board had indicated which option they would agree to in terms of FY03 and FY04. Mr. Lemnios noted that this was an issue he began working on Wednesday morning and he didn’t
PUBLIC HEARING: 2005 WATER & SEWER RATES (contd)
think the Retirement Board had an opportunity to fully vet the issue. He didn’t think they were at a point to make a determination.
Mr. Hughes didn’t see the Board having the discussion on the issue of reserves tonight and asked if the Board was going to set the rate tonight or continue the hearing and direct Mr. Palmer to produce the rate reflecting the $414,984. Mr. Lemnios proposed that the purpose of tonight’s hearing be put off given this situation coming to light and put this on the table. Tomorrow the Finance Committee will be taking the issue up at their full meeting and hopefully some decisions could be made.
Mr. Palmer noted that at this point in time he would recommend the adoption of the rates as presented with a 5% reduction since it was more than half way through the fiscal year. He would recommend a change in the elderly discount but he wasn’t sure the Board was in a position of being ready to move forward with that. The 5% reduction could be in place for the next billing cycle, which was the end of February.
Mr. Hughes noted that the 5% reduction wasn’t based on last meeting’s discussion but to pick up the over-allocation. Mr. Palmer responded that it had morphed into that, adding that long-term the Board may decide it may want a different set of rate reductions.
Mr. Hughes inquired if the Board could set the rates without closing the public hearing, but Mr. Lemnios said he had never heard that request before. He thought the Board would need to close the public hearing and then re-open it.
Regarding the pension funding in the Water & Sewer enterprise fund, Mr. McKinley proposed that further discussion be tabled tonight and that the Board agree to meet with the Finance Committee and see what consensus came out of that and see if the everyone couldn’t converge on a position that all could agree on. He was not prepared to make any decisions on those tonight until it was discussed with the Finance Committee. With regard to the water & sewer rates, Mr. McKinley
suggested that the Board direct Mr. Lemnios and Mr. Palmer to return at the next meeting with a specific recommendation for this year’s water & sewer rates that were not less than a 5% reduction and perhaps some options from the earlier discussion about drawing down the reserve fund just to get some closure on the water & sewer. That was not to say that there wouldn’t be further reductions next year, but he wanted to give the public some closure on the rates.
Mr. Connolly commented that what was being talked about was reducing the rates to compensate for the accounting error. After having that confirmed by Mr. Lemnios, Mr. Connolly stated that he thought that (5% reduction) was the least that should be done. On top of that there was excess money in retained earnings that he thought could have reduced the rates. This was no bargain for the ratepayers. This was the minimum that should be done.
Mr. Hughes agreed. He felt the Board should close the public hearing and reduce the water & sewer rates by 5% to cover the accounting error and then immediately have a public hearing on how much of the retained earnings should be retained. The 5% was unnecessary and the Board knew it was unnecessary.
The Board unanimously voted to close the public hearing. The vote was taken on a motion by Mr. Hughes, seconded by Mr. McKinley.
Mr. Ciccariello inquired about the impact on the budget, and Mr. Lemnios explained that the $414,984 would have to be found in the current operating budget. The difficulty in part was that it was 7/12 through this current fiscal year and to do it within the operating budget would be problematic. The Town could be compelled to look at existing reserves. He did not recommend looking at the operating budget.
PUBLIC HEARING: 2005 WATER & SEWER RATES (contd)
Mr. Ciccariello inquired if using reserves would require Finance Committee approval. Mr. Lemnios advised that it would ultimately be Town Meeting. If the operating budget were used (to fund the $414,984) either expenditures would have to be frozen or a reduction-in-force and then transfer the funds at Town Meeting. Mr. Ciccariello asked about using either the stabilization fund or free cash. Mr. Lemnios noted that there were funds in both but the stabilization fund had a projected use as did free cash. With the Fiscal 2003 and 2004 issue there was an opportunity to look at those and deal with it in a different manner and the Board may want to wait until there was an opportunity to devise a plan.
Mr. McKinley pointed out that this wasn’t an issue of accounts not being funded. It was funded by the wrong place, but in those years the pension was funded. It needed to be fixed but it wasn’t a crisis.
Mr. Ciccariello said he understood but he spent the last three weeks meeting with Mr. Lemnios, the DPW and the Finance Director on the issue of what to do with the water & sewer rates - whether to keep them fixed
or use another $550,000 or additional relief to seniors. After looking at all the DOR regulations, he was concerned about moving forward with establishing rates without knowing if the enterprise fund was operating in the correct format, following all the guidelines, and whether the allocations of the departments were correct. He wanted to resolve the $414,984 for Fiscal 2005, but he wasn’t sure he was ready to make a recommendation or vote on something else without a complete study of
the enterprise fund and hearing what the Finance Committee had to say with respect to an audit.
Mr. McKinley felt that he and Mr. Ciccariello were in agreement. What he (Mr. McKinley) proposed was for Mr. Lemnios and Mr. Palmer to come back with a rate proposal that was not less than 5%, which captured the $414,984 misallocation in this year’s budget. That could be addressed immediately and as soon as some of the other issues were sorted out that required input from the Finance Committee and more understanding on the Board’s part, Mr. Hughes’ recommendation could be adopted to re-open the public hearing and re-set the rates at this time.
Mr. Hughes clarified that he was not asking Mr. Lemnios to come back some other night. He was saying that the rates be reduced by 5% tonight. He agreed that how to deal with FY03 and FY04 needed to be looked at, and that was why he was saying to have another public hearing as soon as possible, but the Board could vote the rates tonight.
Mr. Lemnios thought it would be wise to wait until the Board had a conversation with the Finance Committee and all the numbers being researched have been gone through. There were some doubts as to what
was in retained earnings and how the Town was accounting for some of these monies. It was not clear how the fund was capitalized in FY03 and between the number in the Powers & Sullivan audit, the memos to the Town Administrator, and the schedules made to the DOR, he felt the Board would be well advised to wait until there was a future discussion and the audit conducted to set rates.
If the Board was going to vote to reduce rates to recapture the $414,984, Mr. Ball noted that that was about 4.1%. A 1% difference was about $100,000 and he didn’t think the Board should be cavalier about it and say let’s do 5%. It would also take a defacto bite out of retained earnings and that wasn’t a discussion the Board had had as of yet.
Mr. Hughes moved to set the water & sewer rates for 2005 at 5% less than last year’s rates. Mr. McKinley seconded for discussion. Unanimously voted.
In discussion of the motion, Mr. McKinley stated that he understood Mr. Ball’s argument, but there was definitely $414,984 more than needed and that was several percentage points. The Board hadn’t made a definitive
PUBLIC HEARING: 2005 WATER & SEWER RATES (contd)
decision on how much, if any, reserve funds to use but there had been plenty of conversation about it and the mere fact that there was a 5%
recommendation even without the $414,984 should eliminate concern. The Board has been delaying this for a month or so and while there were other things that needed to be addressed, some closure was needed. He agreed that there was a small amount of subjectivity in the 5%, but thought it was the right thing to do.
Mr. Ciccariello pointed out that the original proposal would keep the rates fixed and would take $600,000 out of retained earnings. The recommendation now was to reduce the rates by 5%. He questioned if the 5% reduction which was roughly $550,000 would reduce the $4.8 million (in retained earnings) by $550,000. Mr. Palmer advised that it would and added that going forward it had to be kept in mind that in Fiscal 2006 there would be a lesser appropriation so not as much would have to be raised in retained earnings. He also reminded the Board that a recommendation had been made to alter the structure for the elderly discount.
Mr. Ciccariello preferred taking two separate votes. The motion on the table was for the rates themselves and after that vote the Board could then come back to the elderly discount.
Mr. Connolly asked if the discount was strictly for the elderly and was told by Mr. Palmer that currently the program allowed for persons who qualify for elderly exemptions to receive a minimum bill of zero and the remaining water consumption at a discount. It was determined that there were 142 receiving the discount and 50 receiving no bill. If the discount was increased up to 20, that would capture the average. He proposed changing the structure so the minimum bill was zero up to 20 hcf which was tier 1 and only after they exceeded 20 hcf would they receive a bill and that would be at a 25% discount. The people qualifying for these elderly discounts were the neediest and he thought it made sense to have it go through tier one.
In follow-up Mr. Connolly asked if the seniors would have to apply or if it was automatically put in place. Mr. Palmer advised that everybody was pre-qualified who received the elderly exemption and it automatically went to them.
To Mr. McKinley’s query as to the cost of the new rate structure, Mr. Palmer advised that it would be $16,372.60. He further advised that all but about 20 of the (senior discount) accounts would have a zero balance for water & sewer.
Mr. Ball asked if Mr. Palmer had any idea of how many people living in Town who were not seniors but were hurting as financially as people in this population. He had no problem with the $16,000 and thought it was a fine thing, but was there any idea of the folks who do not qualify because they weren’t old enough but would otherwise because they were financially strapped.
Mr. Palmer had no idea and explained that to have a discount program there had to be a definitive plan for qualifying. At this point in
time the elderly were chosen and there was a test of income and age. That was not to say that expanding the program wasn’t a good idea. Mr. Ball inquired if it was proper to expand the program to folks who were really hurting and if the Board could write its own rules to say that discounts were going to be given to people of any age who could show
they qualified. Mr. Palmer advised that the Board could do that, but those rules had to be established.
Mr. Hughes moved to adopt Mr. Palmer’s recommendation to expand the elderly discount so that the minimum bill would be zero for usage up to 20 hcf. Seconded by Mr. Ciccariello and unanimously voted.
In view of the votes just taken, Mr. Ciccariello inquired as to what was left in retained earnings. Mr. Palmer advised that there would still be in excess of $4 million and the Board would have to decide how
PUBLIC HEARING: 2005 WATER & SEWER RATES (contd)
much it would like to have set aside in retained earnings. The certified amount was a little over $4.8 million.
Mr. Connolly was of the opinion that more could be done for the ratepayers than the Board just did and still be OK. Mr. Ciccariello thought that Mr. Connolly may be right but having spent the last three weeks on this, he (Mr. Ciccariello) wasn’t prepared to go in that direction until the Board had a presentation and a complete understanding of the impact. There were still a lot of questions that need to be addressed with respect to the enterprise fund. Until that was resolved the Board could take the action it did but he didn’t want to say let’s reduce the rate by another $l/2 million right now.
Mr. Hughes suggested, and the other members of the Board concurred, that another public hearing be set up to discuss the reserves and the impact of the use or non-use of those on the rates just set. The date of the hearing was set for February 7, 2005 after Mr. Lemnios gave assurance that that would be ample time for a presentation to be put together.
Following a five-minute recess, the meeting was again called to order at 9:30 a.m.
DPW DIRECTOR: SNOW OVERDRAFT
DPW Director Charles Sisitsky reminded the Board that on January 10, 2005 he appeared before the Board to request an additional $150,000 to supplement the snow budget and at that time he mentioned that if that were approved it would put the snow account in the black by only about $12,000. The $150,000 was approved and since that time there have been three additional snow events and as of Friday there was a deficit of about $89,000. When he prepared the memo, Mr. Sisitsky noted that he asked for $150,000, which would give them $60,000. This weekend the DPW spent $60,000 and he did a quick calculation today and that only includes the cost for the contractors and the overtime and didn’t include the repairs and the materials. That would be another $45,000. Even with the $150,000, he would go out of here
with a deficit and
there was another event predicted for Wednesday and perhaps next Sunday night.
Mr. Sisitsky told the Board that the DPW appreciated the Selectmen complimenting the department on doing a good job. He felt the thanks went to all the employees, but especially Highway/Sanitation Supervisor
Tom Hladick. Mr. Hladick was incredibly well organized and spent the whole weekend at the DPW and had the organization humming.
Mr. Ciccariello said he noticed a lot of clean up crews doing sidewalks and wondered if snow removal for the downtown was included in the storm figures given. Mr. Sisitsky advised that it was not included. However, a snow removal pickup was scheduled for Thursday at a cost of about $25,000 and that figure was included in the deficit mentioned.
In terms of material, Mr. Hughes inquired if the DPW had to buy more salt. Mr. Sisitsky advised that a lot of salt wasn’t used over the weekend but now that the streets were cleared they would be using more.
Mr. Ball questioned if the cost of repairs wasn’t normally factored in and was told by Mr. Sisitsky that for the most part they were unless it was directly attributable to snow.
Mr. Ball noted that it had been explained why more money wasn’t appropriated to snow removal, but he didn’t understand why Mr. Sisitsky didn’t ask for a larger transfer since he (Mr. Sisitsky) knew he would be in the hole after Wednesday. Mr. Sisitsky explained that in the past he had tried to do that and had been instructed by the Board to keep it on a tight budget and the Board preferred to see him come back more often rather than give a blank check.
Mr. Lemnios thanked the DPW for their outstanding work, noting that the Board of Selectmen’s office had not received one call of complaint. Mr. Sisitsky was cruising the streets at 2:30 a.m. Saturday morning and
DPW DIRECTOR: SNOW OVERDRAFT (contd)
he (Mr. Lemnios) knew that Mr. Hladick had once again risen to the occasion as had all employees of the DPW, Police and Fire in getting the roads back to passable as quickly as possible. He added that this was a troublesome budget transfer because there wasn’t anything to show for it in three months when the grass returned and the robins were singing. The Town had no choice but to make sure the roads were open and the sidewalks cleared for the school children. He noted that the downtown would be addressed later this week.
With the Governor declaring a state of emergency, Mr. Ciccariello asked if there was any opportunity to get some funds. Mr. Lemnios advised that typically in the past some funding was received through MEMA, which typically worked out to 65-70% of the cost. The hope was to hear from MEMA and recover those expenses.
Mr. Connolly commented on the effort he had seen on the sidewalks in different areas that may have been overlooked before.
Mr. Hughes moved that the Board authorize a second snow overdraft in the amount of $150,000. Seconded by Mr. McKinley and unanimously voted.
SASSAMON TRACE GOLF COURSE UPDATE
Providing the Board with an update on the Sassamon Trace Golf Course were Recreation & Parks Superintendent Richard Cugini and Golf Professional Peter Meagher.
Mr. Lemnios prefaced the discussion by noting that the last presentation on the Sassamon Trace Golf Course was around this time last year when the decision was made whether or not to continue the operation of the golf course. As the result several significant changes were made. Instead of having an outside contractor run the golf course in its entirety, it was determined to be more advantageous to have the golf course run by the Recreation Department and have a maintenance company do the grounds and the Town run the front-end operation at the golf course. The goal was to realize a greater return and overcome the deficit. Tonight’s presentation would review the results and have a recommendation to continue to operate the course in the model adopted last year.
Mr. Lemnios reviewed a handout noting that Exhibit 1 broke down the costs for the course if the facility was not re-opened. For Fiscal 2004 the debt payment for the construction of the course was $278,715. Fiscal 2005 had a debt payment of $337,126 because it recaptured the landfill debt identified in the audit. There was a 50-year lease and that lease had an inflator in it for roughly a 4% increase. The golf carts were a five-year lease option at a cost of $22,140 for FY04 and $22,140 for FY05.
Exhibit 2 was a projected budget for the Course through FY09. Mr. Lemnios pointed out that the actual experience in FY04 was $59,000 better than budgeted for and he gave much of the credit for that to Mr. Cugini and Mr. Meagher. In FY04 the budget amount was $894,128 and it came in at $833,438. For 2005, an additional $10,000 in personnel was included because the hours of part-time coverage turned out not to be enough. To accomplish the additional $10,000 expenditure, there was a proposed decrease of the line item for environmental monitoring. The contract for environmental monitoring came in at $34,000 in large part from the work of Environmental Compliance Officer Robert Bois in fine-tuning the contract. The total cost for FY05 was projected at $936,600. For FY06, 07, 08, 09 it was projected in the
$900,000 range.
Mr. Ciccariello asked about the FY04 salaries & wages vs the FY05 and Mr. Lemnios explained that the full-time position came on later in FY04 so a full allocation wasn’t needed.
Continuing Mr. Lemnios noted that Exhibit 2A provided detail for the FY05 & FY06 personnel line item and Exhibit 2B provided detail for the FY05-FY09 maintenance contract fee line item. Regarding the maintenance contract, Mr. Lemnios pointed out that both a calendar year
SASSAMON TRACE GOLF COURSE UPDATE (contd)
and a fiscal year were shown because the payments crossed fiscal years because the season crossed fiscal years. The maintenance contract was for three years and severable each year.
When asked if based on performance he anticipated the maintenance contractor continuing, Mr. Lemnios responded that the maintenance contractor was constantly being evaluated. In view of their performance to date he would want to keep them on for FY06 and do an evaluation for FY07, 08, and 09.
Exhibit 2c, which provided detail for the FY05-FY09 golf course revenue projections, had the same format of a calendar and fiscal year.
Mr. McKinley was concerned about the optimism in some of the revenue numbers going from $481,000 in FY04 to $526,000 in FY06. Mr. Lemnios responded that FY04 was an actual number and the FY05 and FY06 projections were based on the actual from FY04. Until there were a good number of years of solid revenue stream, he would like to stick to a conservative estimate. The seasonality and weather still made it difficult to get a handle on it. Because this was a new course, there were still some anomalies, but at some point it would begin to level off and not continue to see the same kind of growth as when it was new.
In response to Mr. Ciccariello’s inquiry as to a rate increase, Mr. Lemnios replied that he didn’t anticipate a rate increase being sought. The course started at the top of the rate structure for a course of this nature and it didn’t make sense if the course was trying to attract customers to raise the rates. It made sense to keep the rates stable. In follow-up Mr. Ciccariello noted that the numbers presented didn’t anticipate any rate increase. Mr. Lemnios advised that the numbers didn’t provide for a rate increase for the balance of FY05 and FY06.
Exhibit 3 was a summary of the close option vs the open option for the FY04-FY09 period. Mr. Lemnios advised that if the course were closed in 2005 the Town would still have an expenditure of $423,000 primarily because of the debt. If the course were kept open there would be an expenditure of $463,000. That was a $40,000 difference and he (Mr. Lemnios) believed that would shrink if the revenue was pushed beyond the $472,000 and every dollar past that would diminish the $40,000 deficit. These numbers were more positive to keeping the course open than closing it. The model put in place last year performed as everyone thought it would. Expenses were lower and revenue higher. The Town had gotten control over what was happening and the course had more rounds and better participation from the public. The analysis presented last year still held true. The open vs close was still a very tight analysis and if it were closed the Town would get none of the benefits of an operating
facility and there was a slim margin between having a facility and not having a facility. The variances were more favorable than last year and it would seem to make sense to keep it open. If the town made a decision to close for all intents and
purposes it would never re-open because the capital expenditure to re-condition the greens would go beyond the fiscal capability.
Mr. Ciccariello inquired as to how much the Town was still supporting the enterprise fund and Mr. Lemnios advised that it was in the range of
$450,000. In Fiscal 2006 the projection was $435,000. Mr. Lemnios pointed out that the general fund would be subsidizing the operation whether the course was opened or closed for years to come until the revenue grows. If the course were closed, there would be a deficit until the debt was paid.
Mr. Meagher provided the Board with a power point presentation that began with a look at the rounds of golf being played on the national level. Nationally since 2001 the rounds of golf played decreased by 4.60% while in the northeast the rounds decreased by 6.40% although the northeast was rebounding more than other parts and the belief was that the health of the industry had stabilized and was positioned for growth in the future. For Sassamon Trace during calendar year 2003 there were 22,237 rounds played which was 15% more than in 2002 and in 2004 there
SASSAMON TRACE GOLF COURSE UPDATE (contd)
were 24,697 rounds played or an 11% increase. Mr. Meagher thought that within the next 2-3 years Sassamon Trace would be at its maximum participation.
Continuing, Mr. Meagher noted that in 2003 the revenue was $421,000 including greens fees, carts, season passes, but it did not including anything from food and beverage or merchandise.
The next slide shown was a rounds breakdown that showed the monthly activity of who and when people were playing. The course opens in March and July was the busiest month, but June and August were also big months.
The presentation continued with an overview of the maintenance contract with Sterling Management. Mr. Meagher reminded the Board that when the course first opened Sterling had total control of the course and management of the turf as well as the golf shop. At that time he (Mr. Meagher) was employed by Sterling. At the end of the contract the Town went in another direction and Sterling won the contract for turf maintenance. In 2003 Sterling was paid $438,000 to run the operation
and maintain the course. This year the Town paid $191,000 to Sterling. The Town had to pick up the payroll, but there was still a savings of $130,000 not to mention additional revenue from additional merchandise sales, food and beverages. The new superintendent Brian Howard started this year and he works with an integrated pest management plan.
With regard to golf course improvements, Mr. Meagher stated that they knew there wouldn’t be a clubhouse soon so the decision was made to make it as aesthetic as possible. Those aesthetic improvements included the replacement of the chain link gate at the entrance with a park style gate, a gazebo on the first tee for cover and to improve the sightline, flower boxes on the clubhouse, new skirting for cover on clubhouse, new tent next to clubhouse to add function space, pave dirt
path to first tee, addition of second water cooler on 6th hole, landscaping project on the first hole near gazebo, motion detector flood lights in the parking area.
In conclusion Mr. Meagher highlighted the league play at the course noting that it had been flat in 2003 but more leagues had been added for 2005. Tournaments were added in 2004 and the High School Golf team was in full swing.
Mr. Cugini reviewed the revenue vs expenses but first told the Board that he felt one of the big reasons the course was heading in the right direction was Mr. Meagher and the staff at the course. He noted that in FY03 the revenues were $408,876 while in FY04 the revenues were $481,057 while the expenses for the same period of time were $920,649 and $833,438 respectively for a net improvement of $159,392. For calendar year 2003 the revenues were $421,319 and $409,005 in calendar 2004. Expenses for the same time were $832,832 in 2003 and $835,114 in 2004 for a net improvement of $85,404. Looking at the first half of this fiscal year the main increase was in revenues and at this point the expenses were pretty even.
Mr. Cugini noted that the newly formed 501c(3), The Supporters of Sassamon Trace Golf Corporation, would help support the course and ultimately would be coming to the Board of Selectmen to donate funds to the course and keep costs away from the taxpayers.
Mr. Cugini then presented the Fiscal 2005 revenue projections noting that the July through December numbers were actual through December 4, 2004. He advised that a conservative approach had been taken and the projections were pretty much the same as in the Spring of 2004. If things were better that would be great but sometimes Mother Nature made it a little tough. Those projections were based on the first l/2 of the year expenses and the same revenues from year. For Fiscal 2006 there was a conservative 3% projected increase with only 800 new rounds. Using that as the projection and spacing it over the months, it came out to a revenue projection of $526,405 for the FY05-06 season. Mr. Cugini thought the 3% was a conservative projection and was one
SASSAMON TRACE GOLF COURSE UPDATE (contd)
that could very easily be met, but as the course moved forward the course was starting to plateau.
Mr. McKinley felt that overall this was a positive report and gave his compliments to everyone involved. He assumed that Mr. Lemnios was making a recommendation for the net deficit to be budgeted and the course kept open. Mr. Lemnios replied that he was, noting that he presented a full budget for FY06 and put in the caveat that it was dependent upon the Board taking positive action for the course to stay open another year and that was the recommendation. A similar presentation would be done next year and each year the Board would make that determination until the Board was comfortable (that the course could succeed).
Mr. McKinley moved to make a recommendation to the Finance Committee that the Sassamon Trace Golf Course be kept open for the FY05-06 season and the necessary net deficit be budgeted for FY06. Seconded by Mr. Hughes and unanimously voted.
In response to Mr. Ciccariello’s inquiry as to how often the Oversight Committee was meeting, Mr. Lemnios responded that it had been less active and he was in the process of replacing two members.
Mr. Lemnios extended this thanks to Mr. Cugini and Mr. Meagher for doing a great job of picking up the ball. He noted that Mr. Meagher was there morning, noon and night when the course was open and was a wonderful employee and a great ambassador for the course.
TOWN ADMINISTRATOR PERFORMANCE APPRAISAL
Mr. Ball explained the process followed in preparing this year’s performance appraisal of the Town Administrator. He noted that a questionnaire was circulated to the Board of Selectmen, 14 department heads plus the Deputy Town Administrator, and the Chair of the Finance Committee. Their views of Mr. Lemnios and his performance in 29 different subjects were solicited and they were asked to indicate how they felt Mr. Lemnios was doing in any of those areas by putting a tick mark on a graphical scale. Responses were received from all five members of the Board of Selectmen and from seven of the 16 other individuals whose opinion were solicited. The Selectmen’s responses were identified but the others were anonymous.
Mr. Ball called attention to the four pages before the Board that mimicked the questionnaire and indicated the responses of the Board of Selectmen and the others. Respondents were requested to respond only in those areas with which they were familiar and questions responded to by only one Selectman or by one non-Selectman were deemed to be statistically insignificant. He noted that the Selectmen’s responses were segregated. From the responses received, everyone had a high opinion of Mr. Lemnios in virtually all of these areas and the vast majority were well above “meets expectations” although there was a spread and sometimes a considerable diversity of opinion. Mr. Ball pointed out that the one thing that was apparent was that the Board of Selectmen tended to be more critical of Mr. Lemnios’
performance than the department heads and others. He didn’t think it was a surprise, which didn’t mean the Board’s views of him were less valid or more valid – just that the Board had a different perspective. The Board only responded to 28 of the questions and in 25 Mr. Lemnios’ performance was “substantially exceeds or meets expectations” and in two there was only one response from members of the Board.
Mr. Ball continued that he thought the view of Mr. Lemnios by the Board and Mr. Lemnios’ peers tended to be very high. There were a couple of areas in which Mr. Lemnios received only “meets expectations” grades – in the use of the Town’s web site and Natick Pegasus as tools for communicating with the public and Mr. Ball knew that Mr. Lemnios was working hard in those areas.
Mr. Ciccariello noted that the Board of Selectmen was required under the Charter to do an annual evaluation and the evaluation was based on
TOWN ADMINISTRATOR PERFORMANCE APPRAISAL (contd)
Mr. Lemnios’ performance in the area of budgeting, supervision and personnel management, communication, and work and work product.
Mr. Connolly expressed the opinion that Mr. Lemnios was a good guy and had the best interest of the Town.
Mr. McKinley concurred and added that his opinion of Mr. Lemnios was very high. He (Mr. McKinley) had watched Mr. Lemnios enter a difficult
and challenging environment full of ruts and pot holes and was pleased with the result and pleasantly surprised that everyone agreed with his (Mr. McKinley’s) opinion.
Mr. Hughes agreed with both Mr. Connolly and Mr. McKinley and remarked that he thought the Town had been well served by Mr. Lemnios. He thought Mr. Lemnios came at a difficult time and did a very good job of steering the ship.
Having served as chairman and having had the opportunity to work with the Town Administrator directly, Mr. Ciccariello stated that it had been an enjoyable opportunity. From where he stood any time an issue arose or a problem arose, Mr. Lemnios promptly got in touch with him to discuss the issue. Mr. Ciccariello read the comments he (Mr. Ciccariello) had submitted regarding Mr. Lemnios’ performance. Under the budgetary/financial management category Mr. Ciccariello submitted that the Town Administrator had a clear handle on current fiscal year budgetary matters and how current issues may affect future fiscal years. Budgetary detail has been increased in anticipation of questions from the Finance Committee and Town Meeting. Mr. Ciccariello noted that over the past two years the amount of information
handed to the Finance Committee had increased more and more in the past two years and allowed members of the Finance Committee to better understand the Town’s finances.
Under the personnel management category, Mr. Ciccariello wrote that based upon meetings he attended with Mr. Lemnios and various Town employees, he would consider his skills above average. He has communicated his thoughts and ideas well during these meetings and has sought the opinions of others and to his credit has never embarrassed an employee or shown any disrespect.
Under the communication skills category, Mr. Ciccariello wrote that based upon the numerous meetings he had had with Mr. Lemnios, his communications have been clear and thorough and to the point. He (Mr. Ciccariello) had been involved in several meetings with various department heads and Mr. Lemnios concerning questions or issues which have arisen and Mr. Lemnios has expressed his concerns and opinions quite well while maintaining his composure.
In conclusion Mr. Ciccariello stated that Mr. Lemnios and he talked about a lot of issues. He (Mr. Ciccariello) was very happy with Mr.
Lemnios’ performance and Mr. Lemnios had certainly exceeded his expectations as a Town Administrator to date and he hoped Mr. Lemnios would continue in Natick.
On a motion by Mr. McKinley, seconded by Mr. Hughes, the Board unanimously voted to accept the report as the official performance review of Mr. Lemnios for the past year.
Mr. McKinley thanked Mr. Ball for taking this on and developing a process that seemed to work well.
Mr. Ciccariello noted that under the contract the Board had to notify Mr. Lemnios no later than March 1, 2005 whether the Board intended to retain him as Town Administrator. Mr. Ciccariello requested that the Board take a positive vote on retaining Mr. Lemnios and Mr. Ball so moved. Seconded by Mr. McKinley and unanimously voted.
Following the vote Mr. McKinley inquired as to the time period (for retaining Mr. Lemnios), and Mr. Ciccariello responded that it would be a three-year period.
TOWN ADMINISTRATOR PERFORMANCE APPRAISAL (contd)
Mr. McKinley pointed out that normally a review included a compensation component and asked if the Board wished to address that now or in the future. Mr. Lemnios suggested that that was a discussion for the future.
Mr. Ball stated that he had had the opportunity to work with Mr. Lemnios and never ceased to be impressed by his grasp of finances and his ability to make time for any issue. In his (Mr. Ball’s) opinion Mr. Lemnios’ performance had been stellar and he was glad that Mr. Lemnios would be here for another three years.
UPDATE ON GIFT FOR AFFORDABLE HOUSING
Mr. Ciccariello noted that the Planning Board had approved a project for Edgewater Development and part of their approval was conditioned upon the developer making a payment of $40,000 to Natick for the Natick Housing Partnership. An opinion was received from Town Counsel that the Town could accept the gift but there would be problems with transferring the funds to the Natick Housing Partnership as there was no authority or method of doing that.
Mr. Ciccariello reported that he attended a follow-up meeting with Elizabeth Fancy, the President of the Natick Housing Partnership, and Community Development Director Sarkis Sarkisian and the situation was explained to Ms. Fancy. In the course of that meeting Mr. Sarkisian brought it to their attention that he was presently working on a Town sponsored community housing fund and was putting some drafts together for discussion by the Board. A bill has been signed by the Governor that allowed a community to create a municipal housing trust fund and that was being looked at to see if there was a method to transfer these kinds of funds when they were received. In all likelihood the $40,000 would remain sitting in a holding account until the Town could develop
a method to do it. There was also some discussion about a piece of property that somebody was considering gifting to the Town for housing and that would probably come to the Board to consider what type of trust fund the Town might want to put together.
In response to Mr. Hughes’ request that Town Counsel review the Municipal Trust Fund prior to it coming to the Board, Mr. Lemnios responded that Town Counsel had given a very clear opinion relative to the $40,000. At a minimum if a trust fund wasn’t done, it would have to go to Town Meeting and have a competitive bid process to choose the entity that gets the funds. Mr. Hughes inquired as to who gets to choose, and Mr. Lemnios replied that he would think it would be under the purview of the Board of Selectmen.
Asked if the Planning Board had been told that this was what was being done, Mr. Lemnios advised that the Community Development Director had a copy of this opinion and he (Mr. Lemnios) was sure that Mr. Sarkisian had shared with the Planning Board.
TOWN MEETING WARRANT ARTICLES
Mr. Ciccariello reminded the Board that articles for Spring Town Meeting had to be submitted by 5:00 p.m. on February 11, 2005.
SOUTH AVENUE STUDY: TASK FORCE
Deputy Town Administrator Stephen Lisauskas noted that before the Board was a memo requesting the appointment of an oversight committee and the appointment of a selection committee for the South Avenue study. The Town received a grant from DHCD for $45,000 to conduct a master plan for the Town’s property behind Police and Fire on South Avenue. The request was that the Board follow the same structure and format as the Armory project and appoint a selection committee to develop an RFP, advertise, and recommend a consulting firm to conduct a study and then appoint an oversight committee. It was suggested that the selection committee consist of: a member of the Board of Selectmen, the Town Administrator, Deputy Town Administrator, Community Development Director, and the Procurement Officer. The proposed
composition of the Oversight Committee was: a member of the Board of Selectmen, a member of the Planning Board, a representative of the Natick Center Association, a representative of the Library, a representative of the Finance Committee, and two residents with preference to someone with experience in architecture, planning, or
SOUTH AVENUE STUDY: TASK FORCE (contd)
landscape design. Mr. Lisauskas noted that he was not requesting action on the oversight committee tonight, just the Board’s thought and direction with possible approval on February 7.
In response to Mr. Hughes’ query of who applied for the grant, Mr. Lisauskas explained that it was part of a two-piece application put forward when the Town started looking at the Armory. It had been hoped that one single grant would be received because the two parcels being studied had some linkage, but DHCD approved the first piece and then followed with an approval of the second.
Mr. Hughes questioned if there was some preconceived idea of what it (South Avenue) would be used for, noting that there was a downtown parking problem and this was a planning grant. Mr. Lemnios doubted that the consultant would just say the parking garage and would probably look at a parking/housing option that would make some sense. Mr. Lemnios also noted that last week Mr. Ciccariello, Mr. Lisauskas, Mr. Sarkisian and he
met with representatives of the MBTA and one question posed to them was air rights over the tracks and how to go about using those. The MBTA said they were interested in looking at air rights and viewed this grant as an opportunity to explore that possibility.
Mr. McKinley noted that the grant had made reference to being consistent with the principle of ‘smart growth’. He had attended a seminar on it, but had no idea what was said and he would like a definition of what it (smart growth) was. Mr. Lisauskas offered to provide information on the definition of the 10 principles of smart growth, but Mr. McKinley felt that that was the same stuff he heard two weeks ago. The question relative to this project was what option in the context of smart growth the Town was willing to consider for behind the Police & Fire stations.
Mr. Lemnios replied that in part that was what the grant was to consider. The original contemplation was a parking garage funded by the “T”. The smart growth concept was to develop close to large transportation modes and to get housing close to the commuter rate. The idea was to develop the infrastructure to having housing around large transportation centers and limit the sprawl. The other focus was to encourage affordable housing and the HOOP coincides with those principles.
Mr. Ball noted that in the spring of 2001 the Town and Natick Center Associates jointly commissioned a study and he would urge whoever was going to study this again to please read the study. A lot of this was plowed ground. He didn’t mind studying it again, but let’s build on what was done. That precise area was studied with this precise objective in mind and the study dealt with the possibility for funding.
Mr. Lisauskas noted that that study would be a requirement for whoever was the selected consultant.
On a motion by Mr. Hughes, seconded by Mr. McKinley, the Board unanimously voted to establish the selection committee for the South Avenue consultant as proposed – a member of the Board of Selectmen, Town Administrator, Deputy Town Administrator, Community Development Director, and Procurement Officer.
With regard to the Oversight Committee, Mr. Connolly said he would like to see somebody appointed who had a business on South Avenue.
Mr. McKinley moved that the Board designate Mr. Ciccariello as the Board’s representative on the Selection Committee. Seconded by Mr. Ball and unanimously voted.
SEWER BILLING AGREEMENT: JAMES FREER
Mr. Lisauskas distributed an updated copy of the agreement previously given to the Board between the Town and James & Karen Freer on the issue of past due sewer charges for their property at 40 Upland Road. He noted that none of the changes were substantive and this agreement was identical to the other homeowners in the same situation.
SEWER BILLING AGREEMENT: JAMES FREER (contd)
Mr. Lisauskas pointed out that the second paragraph under Section 2 was new and described how any partial payments would be applied. He also noted that the Town was responsible for recording the lien and would pay the cost of recording. The Board would be required to pass something that releases the homeowner from the lien when the back debt was fully paid.
Mr. Hughes moved that the Board enter into the agreement with James & Karen Freer whereby Mr. & Mrs. Freer would pay the Town $2,305.33 payable in 24 equal quarterly installments with the first payment due on February 28, 2005 in payment of sewer service at 40 Upland Road for the period of July 1, 1998 through September 30, 2003. Seconded by Mr. McKinley and unanimously voted.
PROPOSED AMENDMENT TO LIQUOR RULES & REGS: DEFINITION OF MANAGER DESIGNEE
Due to the lateness of the hour, Mr. Ball suggested tabling until the February 28, 2005 meeting.
MEETING WITH STATE LEGISLATORS – PREPARATION
Mr. Ciccariello informed the Board that the annual meeting with the State Legislators was scheduled for February 28, 2005 and if anyone had specific items he would like to have addressed to please forward them to Ms. Challis. The Board agreed to invite the School Committee to participate in the meeting with the Legislators.
SELECTMEN’S CONCERNS
a. 56 Everett Street Property
Mr. Hughes advised that he had called a friend who was a developer with regard to the 56 Everett Street property and the lack of interested bidders. In order to set a fair value, the developer felt that it would be worthwhile to spend a $1,000 for a botanist and to get the extent of the wetlands determined. If the Town was marketing the property as a buildable lot, the Town needed to find out if it really was buildable.
Mr. Lemnios stated that he would have the Environmental Compliance Officer investigate the cost.
Mr. McKinley suggested it also be run by the Conservation Commission.
ADJOURNMENT
The meeting was adjourned at 11:15 p.m.
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Charles M. Hughes, Clerk
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