Board of Selectmen |
January 4, 2010 |
Regular Meeting |
Selectmen’s Hearing Room, Town Hall |
Present: |
Robert P. MacKendrick, Chairman |
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Arthur J. Bourque III, Selectman |
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Al Merritt, Selectman |
Chairman MacKendrick called the meeting to order at 7:00 p.m.
Presentation of proclamation
The Board presented to John Caruso of Summer Avenue a proclamation honoring him for his heroism in rescuing a fellow citizen who had fallen through the ice while skating (see attached exhibit). The Board thanked Mr. Caruso for his actions.
On the motion of Selectman Bourque, seconded by Selectman Merritt, the Board approved the proclamation.
Signing of special state election warrant
The Board was presented with the warrant for the special state election for Tuesday, January 19 (see attached exhibit).
On the motion of Selectman Bourque, seconded by Selectman Merritt, the Board approved the special state election warrant. Board members also signed the warrant.
Signing of proclamation
The Board signed a proclamation honoring Fire Lt. Alan Macdonald on the occasion of his retirement (see attached exhibit). Selectman Bourque said Lt. Macdonald has been a tremendous resource to the Town as a firefighter and in an administrative role. Chairman MacKendrick said that you could not find a harder worker or more loyal person. While Lt. Macdonald will be missed, his expertise is just a phone call away.
On the motion of Selectman Bourque, seconded by Selectman Merritt, the Board approved the proclamation.
Septic loan management bond issue
The Board was presented with the septic management bond for it approval and signature (see attached exhibit).
On the motion of Selectman Merritt, seconded by Selectman Bourque, the Board approved the following:
- That the Town shall issue a bond or bonds in an aggregate principal amount not to exceed $300,000 (the “Bonds”) pursuant to Chapters 29C and 111 of the General Laws and a vote of the Town passed October 19, 2009 (Article 3) for a community septic management loan program (the “Project”);
- that the Bond shall be issued as a single registered security, and sold to the Massachusetts Water Pollution Abatement Trust (the “Trust”) at a price of not less than the principal amount of the Bond, less the Town’s allocated share of the costs of issuance of the Trust’s bonds, if any;
- that the Treasurer is authorized to determine the date, the form, the maximum interest rate and the principal maturities of the Bond, and to execute a Loan Agreement with the Trust with respect to the sale of the Bonds, such date, form and maturities and the specific interest rate or rates of the Bonds to be approved by a majority of the Board of Selectmen and the Treasurer and evidenced by their execution of the Bonds;
- that all action taken to date by the Town and its officers and agents to carry out the Project and its financing, including the execution of any loan commitment or agreement by the Treasurer, are hereby ratified, approved and confirmed; and
- that the Treasurer and the other appropriate Town officials are each hereby authorized to take any and all actions necessary and convenient to carry out the provisions of this vote, including execution and delivery of the Loan Agreement and the Project Approval Certificate and Regulatory Agreement relating to the Project.
Special legislation for special town meeting warrant posting
Town Administrator William Gustus explained that when the Board of Selectmen decided to hold a special town meeting on Monday, May 18, 2009, concurrently with the annual town meeting, which had been postponed to that date due to a lack of quorum, the warrant was posted at Town Hall on May 4, in time to meet the 14-day notice requirement. However, the warrant was noted posted at four other locations in Town, as required by charter, until the following day, May 5.
As a result, Article 2 of the special town meeting warrant, which would have amended the charter to reduce the quorum for town meetings to 100 voters, provided that this action was approved by voters at a town election, was disapproved by the attorney general’s office. As a result, Town Counsel has recommended that the Town petition the Governor and the legislature to waive the 14-day posting requirement by the one day (see attached exhibit).
Selectman Bourque commented that this is really an administrative issue, and that since the Board’s decision to add the special town meeting warrant and quorum issue came as a result of the failure to reach a quorum on May 4, it would have been impossible to have the additional postings unless a constable was on hand that evening.
On the motion of Selectman Merritt, seconded by Selectman Bourque, the Board approved and signed the petition for special legislation to be sent to the Governor.
Approval of minutes
On the motion of Selectman Merritt, seconded by Selectman Bourque, the Board approved the minutes of December 9, 2009; December 21, 2009 (regular session), and December 21, 2009 (executive session) as presented.
Fiscal Year 2011 Budget
Mr. Gustus noted that all departments with the exception of the School Department had submitted their Fiscal Year 2011 operating budget requests, and said the departments in general were very mindful of the charge given to them at the Budget Summit. Departmental requests as submitted are only $170,000 above level funding, which is a good starting point. He is already looking at ways to bring the requests into line.
When revenue projections are considered, the budget is showing a projected $90,000 deficit. Mr. Gustus said he had reviewed the Town’s debt service and amortization schedules. This figure is based on Mr. Gustus’ first cut at the budget requests and does not include the use of reserve funds. He said the budget is still a work in progress and all the submitted numbers must be verified. Health insurance costs should be known later this month and a bill is before the Legislature that would extend the amortization schedule for bringing pension funds up to fully funded status.
Mr. Gustus said it is clear that the use of reserves will be necessary to balance the budget. The Town is approximately $1.1 million in the Stabilization Fund, $541,000 in free cash. The Capital Facilities Fund, the Sale of Real Estate account and the enterprise funds for the ambulance and golf course operations are all designated for specific purposes, and not the type of funds that are traditionally used for operating expenses.
Mr. Gustus also said that bond rating agencies are very mindful about the Town’s reserve position, recommending that it keep in reserves an amount equal to or greater than five percent of the Town’s annual operating budget.
Mr. Gustus is recommending that the Town use $250,000 from the Stabilization Fund, $100,000 from the Capital Maintenance Fund, $180,000 from the Emergency Medical Services enterprise fund and all of the Town’s free cash to balance the Fiscal Year 2011 budget. He said that this would use about one-third of the Towns’ reserves, and that the Town has been building its reserves in recent months in anticipation of this need. The amounts remaining in reserve funds will total approximately five percent on the operating budget, as recommended by bond rating agencies. Committing any more reserves to the FY11 budget will create a structural deficit, he warned.
Looking at future budgets, Mr. Gustus is projecting an increase in revenues of about $1.2 million in Fiscal Year 2012, with a net revenue increase of 1.9 percent, due to the need to make up for the use of reserves in the FY11 budget. By Fiscal Year 2012, he is predicting a 2.8 percent growth in revenue. He is predicting a five-percent increase in state aid in each of FY12 and FY13, which he noted would only bring the Town to its Fiscal Year 2010 level. He is also projecting new growth of $250,000 in FY11 and $300,000 in FY12, some of which is attributable to the planned development in the rear of 525 Salem Street. Overall, revenue is expected to increase by 3.2 percent in FY12 and 3.62 percent in FY13, although the net revenue will be less due to the need to close the structural deficit from FY11.
Selectman Merritt noted that this budget model carrier the School Department at level funding. He said that the Town has seen major property tax bill increases in the last couple of years, and that he hopes that the Town will stay within the Proposition 2-1/2 limit this year, although it will be difficult. Each department wants to expand and improve services. He also warned against creating a structural deficit by using one-time revenues to pay for operating expenses, as the state has. He said he supports the addition of classrooms at Lynnfield High School, and would support funds for necessary studies for that purpose.
Selectman Merritt noted that employee contracts are up for renewal at the close of this fiscal year and that the Town must live within its revenues. He said the Capital Facilities Maintenance Fund is targeted to take care of infrastructure issues, including school buildings. He predicted that this year’s budget “battles” will be over the use of the Town’s reserves, which he said will be tapped in this time of need. He said he supports the general direction Mr. Gustus has outlined in budgetary matters.
Selectman Bourque said he agreed with Selectman Merritt’s points, and said that one needs only to look at the state’s issues when contemplating spending reserves instead of taking a tough line on spending. He said the Town will be paying for the state’s mistakes in the form of reduced local aid. The Town would be unwise to spend all its reserves in a single fiscal year, and predicted there may be a town meeting floor debate on the issue. He said even ion Mr. Gustus’s plan, it will take the Town two years to recover from the structural deficit created by limited use of reserves in FY11. He also said that predicting five-percent increases in state aid in each of FY12 and FY13 is extremely optimistic, and said the Town should not count on any increases in revenue it cannot generate locally. He said he
believes that Mr. Gustus has done a great job in preparing the Town for the current economic and fiscal realities.
Chairman MacKendrick said the eloquence of his colleagues left him little to add. He said that early on he had stated that the primary focus for FY11 would be maintaining needed services and avoiding layoffs. He agreed that Mr. Gustus’s predictions on state aid are optimistic. In the long run, the Town’s future is good if it can increase its commercial tax base, on appropriate sites. He agreed that spending one-time revenues on operating expenses is short-sighted, as it builds the base budget in future years. The Town must hold a hard line on expenses, and the decision ultimately comes down to voters at town meeting. He thanked Mr. Gustus for his efforts, and noted that Selectman Merritt is a successful financier and Selectman Bourque is a successful local businessman, both of whom bring their skills to the Town’s budgeting. As a taxpayer who recently received his tax bill, he said he is looking forward to receiving only the standard 2.5 percent increase next year.
Remarks from the public
Patricia Campbell of Patrice Lane said that in the past three years, the total tax increase was about 25 percent. Mr. Gustus and Selectman Merritt said it is closer to 20 percent. She questioned whether the School Department will, or should, lay off teachers instead of cutting elsewhere. She also questioned the need for an addition to Lynnfield High School. Selectman Bourque suggested she go to the School Committee with her concerns and said he would listen to both sides on the high school expansion issue. Selectman Merritt said that the School Building Committee (SBC) will be working with the state School Building Authority on that issue.
Mrs. Campbell asked about the Town’s debt schedule. Mr. Gustus said that the FY10 debt service is on the school building projects is approximately $3.2 million, which will be reduced to $2.9 million in FY11 and will not be paid off completely until 2023. The original principal was $24 million, which will be paid over 20 years with constant principal and declining interest payments.
Mrs. Campbell asked about a proposed salary of $58,000 for the assistant to administration, recalling that the line item for this salary was reduced to $50,000 at town meeting. Mr. Gustus said that since the position was not filled until September 1, the appropriation will not be exceeded. He said this rate is equivalent to a $58,000 salary annually. Mrs. Campbell said this would result in an $8,000 increase in spending. Chairman MacKendrick said that the former employee was earning $58,000. Mrs. Campbell deplored the practice of hiring new staff members at the same rate as was paid to those departing after years of service.
Mrs. Campbell also asked about security and fire protection issues at the Meadow Walk development. She said having the developer present a security plan to the police chief is not sufficient, and said the plan should be approved by the Board and the chief. She said the security consultant hired should not be a firm related to anyone in Lynnfield.
Selectman Bourque said the security plan will be developed in accordance with accepted principles and practices, and said this is in the best interest of the developer, in order to avoid tort claims. Selectman Bourque said he had no involvement with National Development or the Meadow Walk project, and had no intent of becoming involved. He said for the Town to dictate the security plan for the development could place the Town in jeopardy in terms of liability.
Chairman MacKendrick said that he spent 12 years on the state Fire Prevention Code board and said sprinklers will be required at the site for all but the small clubhouse building, and buildings would have fire alarms throughout.
In other business
Chairman MacKendrick announced that he will seek re-election to the Board.
On the motion of Selectman Merritt, seconded by Selectman Bourque, the Board adjourned the meeting at 8:07 p.m.
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