Board of Selectmen
March 21, 2011
Selectmen’s Hearing Room, Town Hall
Al Merritt, Chairman
Robert P. MacKendrick, Selectman
Arthur J. Bourque III, Selectman
Chairman Merritt called the meeting to order at 7:01 p.m. and announced that the meeting was being recorded for the purposes of transmitting via cable television.
Fiscal Year 2012 budget
Chairman Merritt said that in the preparation of the FY12 budget, some large surprises came late in the process. The Town’s current health insurance carrier is projecting a 16 percent premium increase next year and state aid has continued to decline, but 20 percent over the last four years. The snow and ice budget is $400,000 above the appropriation.
In recent years, the Town has been funded a budget that maintains the current level of services. The board decided that this year, it would draft a level-service budget and try to fund it. While no one wants increased fees or taxes, the Town must make up a $1.5 million deficit if it wishes to fund a level-services budget.
The Board is seeking to add revenue be putting charges on those who use specific services as much as possible. This approach will tend to work to the benefit of senior citizens. Approximately 75 percent of the deficit would be made up through charges to users of services, through having Town employees bear a larger amount of healthy insurance costs, which could make up 50 percent of the deficit; the imposition of busing fees for students not entitled to free bus transportation under state guidelines (15 percent of the deficit); adoption of the local meals tax, which several surrounding communities have adopted (9 percent of the deficit), and increasing some local fees (3 percent of the deficit).
The other item of the table is the “pay as you throw” (PAYT) trash collection system. Chairman Merritt said he was lukewarm about this a month ago but has since learned more about it. There are 132 Massachusetts municipalities that have adopted PAY, and another 80 charge a flat fee for trash collection. PAYT brings a voluntary change in residents’ recycling habits. Communities with PAYT generate, on average, 1500 pounds of waste per household; those without it generate 2000 pounds of waste per household.
The program is simple. Residents buy a Town-sanctioned trash bag at a local store and put their trash for collection in that bag. Chairman Merritt will provide a fuller explanation of the program for the public.
Town Administrator William Gustus said that the budget presented to the Board is in balance and adequately funds departments. It reflects a 2.5 percent increase in spending for Town-side departments and a 4 percent increase on the school side. It maintains the current level of Town services.
The budget makes some assumptions on revenue and cost-saving measures. This budget will be forwarded to the Finance Committee for its annual public hearing.
Changes for the previous budget model include the following:
A reduction in the health insurance appropriation by $750,000, under the assumption that the employees will approve an amended plan or the Legislature will pass legislation granting municipalities some relief;
Removal of $350,000 in the trash disposal line-item in the Department of Public Works (DPW) budget on the assumption PAYT is enacted;
Increases is estimated receipts of $50,000 through fee increases, $100,000 due to adoption of the local meals tax and $200,000 in school busing fees;
Reduction of $43,500 due to the elimination of one hired bus route in the DPW budget.
The proposed budget model shows a surplus of $69.73.
Selectman Bourque said he is opposed to PAYT and hopes the townspeople come to town meeting. He would prefer passage of an override to maintain current services. He believes voters should be provided the option at town meeting to direct the Board on their preferred funding and spending plan, whether it is PAYT, an override, or cutting the budget. He encourages employee unions to cooperate in efforts to reduce health insurances costs, noting that very few private sector employees are afforded such low copayments and deductibles and such a large employer contribution to premiums. He also encouraged employee unions to urge increases in state aid to cities and towns.
Selectman MacKendrick said he has not favored PAYT in the past, in part because local fees, unlike local taxes, are not deductible. He said he is willing to allow town meeting decide. Those who recycle diligently will have little trash to put out, he noted.
Chairman Merritt asked Selectman Bourque why he opposes PAYT. Selectman Bourque said that taxpayers expect this service to be provided for out of tax receipts. He would prefer mandatory recycling, as well as an override. If an override is not approved, PAYT may be the only option.
Mr. Gustus said that it is important for the Board to approve the spending plan tonight. He said the budget proposal and the town meeting warrant are drafted to give voters the greatest flexibility for making decisions. The revenue issues will be placed on the warrant ahead of the budget. If the budget is approved as presented and the revenue measures are rejected, the Board can seek approval of an override at a special election. If the override fails, a special town meeting can be convened in June to address the funding gap. Voters can be asked to revisit the proposed revenue measures, and if they again reject them, the budget can be cut with the attendant loss in jobs and services.
Chairman Merritt asked about the impact of such a decision to cut the budget. Mr. Gustus said the revenue plan depends on the cooperation of a number of constituencies, including service users and Town employees. No one constituency wants the responsibility having the Town budget balanced solely on its back. If either the taxpayers or the employees balk or the Legislature fails to act, the willingness of the other groups to address the budget issue will evaporate. Employees will not agree to reductions in health insurance benefits if they cannot be assured that jobs will not be lost.
But if all revenue and cost-cutting measures proposed fail, the only alternative will be to cut positions. Over the past four to five years, expenses have been level-funded and cannot be cut significantly. The Town could be forced to cut up to 50 jobs, because the Town is self-funded for unemployment compensation, and will not realize the full savings of job reductions as a result of incurring this expense. He said the schools could lose 29 teaching and professional staff positions, and the DPW could lose up to nine positions. Vacant positions in the police and fire department would not be filled, and programs would be reduced or cut in other departments.
Mr. Gustus noted that in Fiscal Year 2009, the state aid received by the Town was $1 million greater than the Town’s health insurance premium. In Fiscal Year 2012, the health premium cost will be $1 million more than the Town receives in state aid.
The Town used money obtained from the development agreement on the Market Street development to add to reserves and pay for capital items. Reserves were used to supplement recurring revenues during periods of declining state aid, but it was believed that the Town would soon be realizing significant tax payments when the Market Street project was finished. Economic conditions, however, have delayed that event. Now the Town has only the minimally acceptable amount of reserves to maintain its bond rating and address any future emergencies that may arise. Federal stimulus funds have been eliminated and the Town has used $900,000 in reserves and $500,000 in stimulus funds in the past two years. For the following fiscal year, the Town will have the customary 2.5 percent increase in taxes under Proposition 2-1/2, some new
growth, level local aid, hopefully, and a modest increase in local receipts.
This year is a “repair year” for the budget, Mr. Gustus said, and future years should be less difficult. Chairman Merritt said that town officials are tying to find the appropriate solution to a difficult set of circumstances.
On the motion of Selectman Bourque, seconded by Selectman MacKendrick, the Board voted unanimously to approve the Fiscal Year 2012 operating budget as submitted.
Chairman Merritt said that the Town’s capital budget proposal recognizes that equipment has broken down over the past few years. DPW equipment especially took a beating this summer.
Mr. Gustus reviewed the capital budget as presented (see attached exhibit), and said that as the needs are great, it is important that they are prioritized. It has been difficult in the last three years to fund a full capital program within the Town’s revenue stream. The cost of the proposed program is significant and represents capital spending that has been deferred. This will be the final year in the technology replacement program in which the items purchased during the school building project are replaced. The replacement program, however, will continue, at approximately $250,000 per year.
The police and fire department have a number of needs, mainly consisting of vehicle replacement. The Fire Department will also be getting protective gear and radios, as well as funding a South Fire Station renovation.
The library has submitted a small request for furniture, furnishings and a security system for its digital collection.
The DPW will receive four trucks, including one large loader and one small loader; radio upgrades, tools; parks and playground improvements; minor repairs for the Senior Center building due to flooding issues; a lift to change lights at school buildings; $50,000 for drainage system improvements; $25,000 toward continued improvements at Pillings Pond.
Information technology funding would allow for the implementation of the first phase of the virtualized network plan, which would include building server capacity. This would allow for savings in later years by replacing desktop computer units with terminals.
There would also be a small appropriation from the Emergency Medical Services enterprise fund for laptop computers for ambulances.
The total appropriation would be $1,162,037, which would be funded through $1,147,037 in borrowing and a $15,000 appropriation from retained earnings from the EMS Enterprise Fund.
Rather than waiting another year at a great disservice to Town workers and residents, the project can be funded this year with no financial impact in Fiscal Year 2012. The first payment would be due in Fiscal Year 2013. The debt would be funded over ten years for items that qualify; over five years for those that do not. The cost would be $120,000 to $130,000 per year. There is other existing debt, some of which retires every year.
Selectman Bourque noted that it seems unusual to seek a $1 million-plus capital program in a very difficult fiscal year. But he said that there is a point at which the equipment cannot be kept in service any longer due to its age and condition. The school technology program is critical, and if the plan isn’t implemented this year, it will have to be done this year. He noted that replacement of police weapons was not in the capital budget. He said the Board cannot keep saying no to capital requests and must left the voters decide.
Mr. Gustus clarified that bulletproof vests would be purchased through a federal grant, as long as the chief will make wearing of the vests while on-duty mandatory. Funds appropriated at a previous town meeting for the purchase of a fingerprinting machine will be available to be transferred for the purchase of weapons. A portion of the fingerprinting machine purchase was funded through a grant.
Selectman Bourque said that there are needs the Town cannot put off any longer. If the equipment doesn’t work, the employees cannot work either.
On the motion of Selectman Bourque, seconded by Selectman MacKendrick, the Board voted unanimously to approve the capital budget as presented.
Annual town meeting warrant
The Board took up the proposed annual town meeting warrant (see attached exhibit). Chairman Merritt thanked Moderator David Miller for working closely with other Town officials on town meeting preparation, and the Finance Committee for its involvement in the budget. He noted the Finance Committee’s annual public hearing on the budget would be held on Wednesday, March 23 at 7 p.m. at Town Hall. He said voters will understand the budget situation when they become involved and when all the pertinent information is provided.
Mr. Gustus reviewed the warrant articles, noting that articles 1-3 are routine articles acting on reports of Town departments and boards, electing officials not chosen by ballot, and setting compensation for elected officials.
Articles 4-7 are those that generally appear on the special town meeting warrant. The include an article allowing for transfers and appropriations within the current Fiscal Year 2012 budget, appropriations from receipts from the golf and emergency medical services enterprise funds for indirect costs related to the golf program and the cost of operating the ambulance service; and payment of overdue bills from a prior fiscal year.
Article 8 would accept the local meals tax of 0.75 percent. Article 9 would authorize and set up an enterprise fund for the pay as you throw (PAYT) operation and appropriates money from the funds for the incineration costs. It will not cover the collection and transportation of trash nor will it cover the recycling operation cost, which will be borne by the regular budget.
Article 10 is the operating budget article, placed on the warrant after the revenue-related articles. If Article 9 is defeated, the budget will have to fully fund trash disposal costs. Article 11 is the capital budget article.
Articles 12-17 are the usual revolving fund articles for the library, health department, recreation department, and Council on Aging, as well as the authorization for the golf and EMS enterprise funds.
Article 18 authorizes the spending of so-called Chapter 90 highway funds from the state for local road projects.
Mr. Miller said that he had worked with Chairman Merritt and Mr. Gustus on town meeting issues and thanked them. He said that the aim is to help voters make informed decisions.
On the motion of Selectman Bourque, seconded by Selectman MacKendrick, the Board voted unanimously to approve the annual town meeting warrant as presented. Board members signed the warrant.
Renewal of seasonal licenses
On the motion of Selectman Bourque, seconded by Selectman MacKendrick, the Board voted unanimously to renew the seasonal wine and malt beverage licenses for Sagamore Golf Club, Main Street, and Reedy Meadow Golf Course, Summer Street as presented (see attached exhibits). Board members signed the licenses as well as the renewal forms and certification for the state Alcoholic Beverages Control Commission.
CodeRED emergency notification system
Fire Chief Thomas Bogart reviewed the status of the CodeRED emergency notification system. An automated caller dialed Lynnfield home phone numbers to validate those in the database. Residents can visit the Town website and enter alternate phone numbers, including cell phones, and e-mail addresses. Residents have begun availing themselves of that system. Those without computer access can ask a friend or relative to assist them or got the library and use the computers there. They also come to the Fire Station during regular business hours and fill out a paper form.
Board members asked several questions about the use of the system. Selectman Bourque said he believes it should only be for emergency notification. He also said that the Town could do a mailing or have people, go door-to-door to finish out the registration process for those addresses that haven’t been successfully entered into the system. He suggested using the Senior Center to dispense information. Chief Bogart said he will also visit senior housing sites for this purpose.
Mr. Miller said he thinks the notification system should be used to remind residents of town meeting. If people object, the decision can be revisited.
On the motion of Selectman Bourque, seconded by Selectman MacKendrick, the Board unanimously approved the minutes of the February 22, 2011 meeting.
On the motion of Selectman Bourque, seconded by Selectman MacKendrick, the Board unanimously approved a request from the Lynnfield Public Library to use the Common for a traveling exhibit on German prisoners of war in the United States during World War II, subject to Library Director Nancy Ryan, Police Chief David Breen and Public Works Director Dennis Roy working out the specifics.
Selectman MacKendrick read a notice of an upcoming Casino Night to be held at the Wakefield Elks to benefit the Monkiewicz Children’s Fund and announced a Lynnfield Historical Society program of veterans’ experiences to be held on March 22 at the Meeting House. He also congratulated the Lynnfield teams that participated in the regional Destination Imagination competition this past weekend, noting several have qualified for the state finals.
On the motion of Selectman Bourque, seconded by Selectman MacKendrick, the Board unanimously voted to adjourn at 8:25 p.m.