Board of Selectmen Meeting
by Jay Shenk
January 25, 2010
Memorial Committee, DPW and Fire Department Budgets
This meeting lasted about three hours, and the most interesting parts happened towards the end, so even if you watched the meeting on TV, you might have missed it.
The meeting opened with housekeeping type motions, which included my watching the Selectmen each sign multiple original copies of a bargaining agreement for about five minutes. Then, since the Massachusetts Department of Revenue has finally approved our property valuations, but requested that the Selectmen vote again on accepting it, even though they’d been proactive and accepted them ahead of time, they voted again, same result.
They also added a new name to the list of part time police and fire dispatch, Nathan Hawkins, which isn’t the same as hiring him. It simply makes him available to be called in if needed and is not a benefited position. They also accepted two more members for the committee to find a new building commissioner.
Next up was the South Street reconstruction project, which looks like it is finally going to start this coming May, with the possibility of being pushed to the fall. John Fairbanks noted that after being talked about for years, the fact it was actually going to happen made him think that “miracles never cease”. This is a state project, and as part of it Westminster is purchasing two adjacent properties, the Morris Property and the not-so-beautiful ex-garage located at the corner of Main and South Streets, although neither is necessary to complete the project. Lorraine Emerson pointed out that Westminster would not be reimbursed for the cost of these properties, mainly for emphasis, which the Selectmen did already know, as apparently the money has already been approved to purchase these properties.
Next up was Tony Roselli, a partner with Roselli, Clark and Associates, a CPA firm from Woburn, MA specializing in city and town auditing and accounting services. Being that this was an executive summary of the results of a financial audit, and accounted for a good bit of the three hour long meeting, I’ll just hit the highlights.
• We had to do an additional audit for the federal government because we received in excess of $500,000 from FEMA as a consequence of the ice storm. In fact, we received in 2009 between $700,000-800,000, and will receive more in 2010, requiring a special audit next year as well.
• Westminster continues to be in much better financial shape than most towns in MA, as we have about $3MM in stabilization funds and an additional $1.9MM in “not specified” funds—I’m not exactly sure what those are, but perhaps they are the ‘enterprise funds’ that were brought up in the DPW budget presentation.
• The auditors recommended we begin to fund the health insurance due town retirees, which right now is an unfunded liability of about $6.5MM. If we don’t begin to fund it, the town will face a major financial burden in 10-15 years, as more people retire. Retirement pay itself is already funded, as that is mandated by the state.
• The auditors pointed out the necessity of being alert for fraud, as in these tough economic times it has become more prevalent.
• They had some structural recommendations, which sometimes mirrored the DOR audit recommendations, including making the collector/treasurer an appointed rather than an elected position.
• They singled out the DPW and Josh Hall for having done an excellent job during the ice storm (my note: probably from an administrative as well as performance standpoint), as apparently some other nearby towns did not fare as well.
Next up was the Memorial Committee, which had found a snag in their plans to centralize all activities concerning memorializing parts of town with the Selectmen, after review and recommendations by the Memorial Committee. At some point in the past, the power to name streets, bridges, and that sort of thing had been transferred to the DPW. The recommendation was to simply proceed with the prior plan, so at least a procedure would be in place, and deal with this situation afterwards.
Next up was presentation of budgets by the DPW, followed by the fire department. The fire department presentation was rumored to be a major conflagration, but was the opposite, while the DPW presentation was pretty interesting and involved big sums of money.
The DPW budget came in meeting the 2% reduction requested by the Selectmen, but a number of questions came up. Keith Harding, reviewing the expense budget, noted that that our costs for water and sewer from Fitchburg went up 5% for sewer and 11% for water, while our bills for water and sewer went up 84% last year. There was quite a bit of dispute then about whether in fact water and sewer bills did go up 84%, with the DPW people saying they did not, although no one knew the actual number. I did some research, and it appears that what happened was the base rate, for the first 40,000 gallons, did in fact go up 83.3%, although the charge for excess water usage above 20,000 gallons per 6 months only went up 10%. The chart below illustrates how much rates increased from fiscal year 2008-2009 vs. fiscal year 2009-2010.
This seems somewhat backwards (although good for me personally), as many of our senior citizens are on fixed incomes, and also don’t use in excess of 40,000 gallons a year in water/sewer, yet they saw their rates nearly double. For our family, which fluctuates between five and eight people (when all the kids are home), and uses about 70,000 gallons a year, our rates actually increased considerably less that 83%, although they increased plenty.
This of course led into the question of where the money from the rate hike went, since the rates charged Westminster residents went up considerably more than the rates Fitchburg charged us.
Turns out they went to what’s called an “Enterprise fund”, which is somewhat analogous to ‘retained earnings’ or a stabilization fund, and it is generally used to fund capital projects. There is a lot of money in these funds--for instance, the Water Stabilization Fund as of 12/1/2009 had $381,000 in it, while the Sewer Stabilization Fund had $1,194,000 in it, so just water and sewer have nearly $1,600,000 in non budgeted funds in their particular ‘enterprise’ account. We’ll look more into enterprise funds in a future issue, as although common they are also somewhat controversial, primarily because they bypass some approval processes for funding capital improvements, and because they leave large sums of money under the control of specific town departments.
We asked for feedback from the DPW, and Josh Hall responded promptly. Concerning how approval of CapEx projects is handled re the enterprise fund: The budgets as well as any capital requests are approved at Town Meeting. There is no bypass for approval, Town Meeting approves these budgets and capital items like any other department and capital expense. As to leaving the control of the funds to specific departments, the Public Works Commission reviews all budgets and capital requests presented by the Director of Public Works, which are reviewed by the Board of Selectman and Advisory Board prior to being placed on the Town Warrant. Enterprise funds are set up to be self sustaining and to operate on their own based on user charges. Thus the users and not the Town, unless asked at Town Meeting to fund a portion of a project, pay for the operating/maintenance of the systems and capital projects
There were also some major CapEx requests from the DPW, foremost among them $4.5MM to rebuild the Whitman River Pumping Station, which is at capacity, and $190,000 for a new street sweeper. The Whitman River Pumping Station alone will require a loan that will result in a ‘betterment’ fee of $500 a year for the next 15 years for all Westminster residents on town water and sewer, if the article is approved at town meeting, or unless some other method is devised to pay for it.
The DPW is also planning to replace the piping where the South Street Reconstruction Project will be done this summer, at a cost of about $500,000. The piping does not currently need replaced, but this will prevent having to dig up the new road if something does go wrong.
Regarding the $190,000 for a new street sweeper, the cost has dropped to $170,000 since the budget was done. There were numerous questions about whether we couldn’t fix the one we had or buy a refurbished one, and the answer was that the wear and tear on a Street sweeper is such that the ongoing maintenance would be too expensive on either the one we have or a refurbished one, and that the current one is unsafe because the sealant around the windows is bad and cannot be fixed.
There actually was a question about whether the driver could wear an oxygen mask of some sort, which happily wasn’t actually considered, although the driver does have to drive with the window open to get fresh air. I don’t know whether it’s possible to get a refurbished model with a maintenance contract, or how many quotes were solicited, so as it stands the request is for a $170,000 street sweeper.
Josh Hall from the DPW also filled in some details regarding the street sweeper, which answered some questions in the above paragraph: Because of the age of the machine, the floors have deteriorated and patches have been made. This is caused by the rough environment that the machine works. We have lost cabin pressure because of these issues. Thus, dust is a problem, and our drivers wear dust masks. This is one reason for the capital request.
I do not believe that one could get a refurbished model with a maintenance contract. We did solicit three quotes, prior to meeting with the Board of Selectman and Advisory Board, from three different contractors for contracting out street sweeping. The costs ranged from $95 to $110 per hour for sweeping. It does not include the disposal of the sweepings. We would still have to handle that. We on average sweep around 500-600 hours per year, based on the hour meter of our sweeper. Using $100 per hour (average) at $500 hours (average), it would cost $50,000 per year. The maintenance costs of these machines increase with the life of the machine, i.e. we spent $6500 last year and will spend over $10,000 this year. The machines last generally anywhere from 8 to 10 years. Having this machine is not a luxury, it is a requirement. We are required to sweep our storm water areas twice a year by the EPA, i.e. areas around the lakes. We recover approximately 2/3 of the sand we place down on the roads in the winter. We try to get out early, late March, to pick up the sand before it gets into the drainage system or off the road into resource areas. And there is a safety aspect, with sliding or slipping on the sand
Just as a side note, apparently the snow removal budget is chronically under budgeted, just as it is virtually every year, no doubt in virtually every town in Massachusetts. That’s why you so often hear about towns exhausting their snow removal budget after one or two storms. Ours, for instance, is budgeted at $140,000, yet averages $200,000 or so annually. Unless global warming happens fast, we will probably have to use stabilization funds for snow removal.
Next up was the Fire Chief Brent MacAloney, a presentation expected to be controversial because he was unable to meet the 2% reduction goal to his department. According to a recent Gardner News article, the Chief was (paraphrased: “ignoring the directive, refusing to make the cuts requested, and was prepared to bring the matter to a town meeting, as opposed to the DPW, which made $20,000 in cuts”). From the reaction of the Selectmen to the Chief’s presentation, it appears something was lost in the translation.
There weren’t a lot of questions, Chief MacAloney explained that his budget consisted primarily of salaries to which the town was contractually bound, and in fact he had cut non-salary/benefit expenses the requested 2%. There was some questioning of his having cross trained firemen/EMTs, but he explained that this setup allowed him to use two instead of four people to man the station, saving considerable money. At the end of his presentation, John Fairbanks thanked him for “as usual having such a clear and easy to understand budget”.
At that point, 9:50 PM, the Selectmen moved on to new business, but you’ll have to watch cable access to see what happened, as I went home.