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AVON TOWN COUNCIL
MEETING MINUTES
JUNE 5, 2003
I. CALL TO ORDER
The meeting was called to order in the Selectmen’s Chamber at 7:15 p.m. by Chairman Hines. Members in attendance: Messrs: Carlson, Shea and Woodford. Absent: Mrs. Hornaday.
II. POLICE AWARDS CEREMONY: 7:15 p.m.
Police Chief Agnesi reported we are going to have an Awards Ceremony, but prior to that we are going to conduct a Promotional Ceremony which is always a positive item for us to take care of here.
Chief Agnesi reported several months ago we began a testing process for the position of Patrol Sergeant, we had several of our officers involved with that, it is a very difficult and lengthy process conducted by an outside vendor. All scored very well, however, as with any process we have to pick one individual and the individual that was chosen is Officer Ronald Welch. Officer Welch is here this evening to be sworn in as Sergeant.
Chief Agnesi reported next is our annual awards ceremony, the Department over the past year or so has had occasion for our officers and members of the public alike to perform some exceptional services for us, they do exceptional jobs each and every day, however sometimes they go above and beyond what is necessary. We have several levels of commendations, and once a year our awards committee forwards them up the Chain of Command, and we determine what awards are given.
Chairman Hines presented the following awards: a letter of commendation to Records Clerk Aimee Page; two Police Merit Awards to Detective Timothy Casey; Letter of Commendation to Dispatcher Aimee Peloquin; a Police Merit Award to Detective Charles McDougall; a Police Citizen Award to Katie Graham; a Police Citizen Award to Nora Hampton and a Police Department Citizen Citation to Allen and Eileen Nixon.
III. PUBLIC HEARING: 7:30 P.M. NEIGHBORHOOD ASSISTANCE ACT PROPOSALS
The Town Clerk read the notice of the Public Hearing as follows:
“LEGAL NOTICE
NOTICE OF PUBLIC HEARING
Notice is hereby given that the Town Council of the Town of Avon, Connecticut will hold a Public Hearing on Thursday, June 5, 2003 at 7:30 p.m. in the Town Hall, Selectmen’s Chamber, 60 West Main Street, for the following purpose:
To consider participation in the Neighborhood Assistance Act in Accordance with
Public Act 95-268.
Dated at Avon, Connecticut this 27th day of May, 2003.
Philip K. Schenck, Jr.
Town Manager”
Mr. Woodford reported he is surprised that the Police Department is the only one involved. The Town Manager reported we have a list of all of the addresses that we sent them to, and the Police Department was the only one that responded.
The Public Hearing was closed at 7:40 p.m.
On a motion made by Mr. Woodford, seconded by Mr. Carlson, it was voted:
RESOLVED: That the Town Council approve and recommend two 2003 Neighborhood Assistance Act Program Proposals as follows:
“Are You O.K.?” Program. $ 3,550
“ Eyewitness In-Car Video System” $ 3,750
Messrs: Hines, Carlson, Shea and Woodford voted in favor.
IV. MINUTES OF PRECEDING MEETINGS:
On a motion made by Mr. Shea, seconded by Mr. Woodford, it was voted:
RESOLVED: That the Town Council approve the minutes of February 20, 2003, February 28, 2003 and March 6, 2003 as presented, the minutes of April 3, 2003 as amended, the minutes of April 19, 2003, May 1, 2003, May 19, 2003 and May 28th as presented.
Messrs: Hines, Carlson, Shea and Woodford voted in favor.
V. COMMUNICATION FROM AUDIENCE
Terry Wilson of Mountain View Avenue, reported she would like to give a quick update, a little over a year and a half ago she came in front of the Town Council to present the idea of a National Register of Historic District for the older center of Avon, and the Town Council approved of it. It has been moving along, and the Town Council got a letter from the State Historic Commission over this past week, announcing that they have accepted it, subject to a survey to be done by a private consultant, then a staff review, which is process, a bureaucratic kind of government process. It has to take a certain amount of time, public comment time, and once it is reviewed by the staff then a report is sent to the Board for the National Register for the State, they will meet in October. If all goes well, this
application for Avon should be on the October agenda, and if that board passes it, then it will be sent on to the National Board in Hartford, and once we go through that process, it should be by February or March of next year that we should get the formal designation. It is her hope that it will happen, so that by next spring, we will be able to announce that the Older Center of Avon is on the National Register. It takes a long time for these things, the person who went around photographing all of the homes and buildings had no problems at all.
VI. COMMUNICATION FROM COUNCIL
Mr. Shea reported he would like to say that we have made a very healthy change, and that change being that these referenda that we have had, not only the final one last year but the two this year have just been very well publicized, not only by the Town, but by the Town Clerk, the Town Manager, and the Hartford Courant. A lot of people knew that there was a referendum going on, and how it turned out and whether they voted or not is not what he is commenting about, and it has been a healthy change.
Mr. Woodford reported in line with that, it was interesting for him to find out that the area that had a lot of concern this year about the budget process, especially about the Board of Education, and it was interesting to find out about the Board of Education increases in the surrounding towns. Farmington being 2.2%, Canton 3.88%, Simsbury being 4.25%, West Hartford 4.98%, Granby 5.21%, and Avon at 5.57%. When you look at it in that respect, education was served very well through the budget process this year in these times.
Mr. Woodford reported, at some point there is such misinformation out there about zoning that one of our Town Newsletters should be devoted to that. On the Zoning Department about planned developments, how the Town was planned, why you cannot essentially confiscate property, or stop people from using their property. All of this information that people seem to be confused about, that it would be a good subject for a newsletter. Chairman Hines reported that needs to be done, not only by the Town Planner in supporting the Town Clerk, but with the Town Attorney involved as well, it is a very touchy issue, and the Zoning Board of Appeals as well.
Mr. Woodford reported he would like to speak on street sweeping as well, there has been a lot of interest in it this year. There are reasons for it, one is that it snowed very late this year, second the rain, every time it rains they cannot sweep the roads, it turns to mud.
Mr. Woodford reported next in the package it was interesting to read that the State has come up with an ordinance or law, that Volunteer Fire Department men can tie into the Municipal Health Insurance if they so choose, and pay for it. But that is an option that may be very important to some people, that have a difficult time securing health insurance, especially young people.
Mr. Woodford reported also in that same vein, he saw the Ethics Bill was killed. Chairman Hines reported Senator Herlihy called him to say that it was not but that what was passed involved the State, and the Town Manager has information on this. The Town Manager reported the Lobbyists that are lobbying municipalities have to register with the State as a Lobbyist and conform to the State requirements for Lobbyists. Chairman Hines reported he also heard from CRCOG, that what they looked at last week was not that bad for the Towns as the original ethics bill, where you had to divulge all of your financial situation, it has been improved but it was still not a good bill and it was killed.
Mr. Carlson reported he would like to comment on the referendum process, he believes that people in the towns did a very good job of turning out, and so did the appointed and elected officials and town employees that got everybody out, it was a good process in that respect. He unfortunately thinks that he witnessed something that in his 17 years of living here, and 13 years of serving on four different boards had not witnessed before and that was personal attacks. Attack the issues all you want, we invite that, it is healthy, and we should argue about issues, we should disagree with them, and we ought to say that reasonable people can disagree – but let us not attack people. I think the time to attack people, is in the voting booth – they have every right to go in there and vote us out.
My experience in serving this fine Town, is that I have never seen a town official, appointed, elected or an employee, do something for personal or political gain, they have done it for what they think is the good of the Town, and the good of the whole Town. So when I hear these things said, when I read them, or when I see signs, it is very disturbing because Avon has been a Town that I think has stood above the rest in that. And when I watch the public television channel that shows other meetings going on – we do not sit here and attack each other, even though we may be on different political parties, we attack issues and that is one of the good things about this Town, and I hope it continues that way. I hope that what we have recently witnessed is just an aberation to what has been just a great Town to serve for me personally and for most of the board members that I have worked with on the four different boards.
Mr. Carlson reported on the correspondence from Woodhaven, is there anything we can do to help them, it is a piece of property that needs to be cleaned up, and we need to be good neighbors to those around us. The Town Manager reported we referred it to the Town Attorney to research, at the moment it does not appear that we would be able to do anything with the signage, the only thing we might be able to do is with the trash receptacle if it is too far out in the road. The only other thing we could do would be to adopt an ordinance that would stipulate the distance from the street and the paved area that a trash receptacle could be, but then we would have to enforce that throughout the whole community and that may not be the way we want to go. Mr. Carlson reported he appreciates that everything that can be has
been done, and that it has been turned over to the Town Attorney for investigation and that is all we can do at this point.
Chairman Hines reported the Landfill Flyer was excellent and questioned whether it would be passed out to all residents. The Superintendent of Public Works reported it is not, but it is available at all of the public buildings and at the Landfill area.
Chairman Hines reported he wants to talk a little about the CRCOG Comprehensive Development Plan, which they have been working on for a couple years for the entire 29 towns. It was approved recently at a CRCOG meeting, but we had a lot of time to look at it, and the Town Planner went through it in great detail, asked for detailed plans and received help from CRCOG and made changes to be consistent with what we wanted. The reason this is so important, is that if you go for a federal grant today, even a state grant, they will tell you that it has to be consistent with the CRCOG plan, and if you are not you may not get it. Our Town Planner’s efforts were very helpful, and he heard there have been only three towns that did provide information, Avon, Farmington and Manchester, other towns may not realize the
significance of this. The next problem is if we have major changes to it, one was the Buckingham area which they did not have, they had it all as open space which would have been inconsistent if we needed help with anything there such as for fields. It was suggested that the towns, on a once a year basis, look over any major changes, then voluntarily give those changes to CRCOG, and he would suggest that our Town Planner do that to make them aware, so that they have the option to change the plan, which they have agreed to do for us. Chairman Hines reported CRCOG just approved their budget, it went down 5%, no increased assessments for the Town, they laid off one part time worker, and took one full time employee to part time and are living within the means in this difficult year.
VII. OLD BUSINESS
02/03-59 Fisher Meadows Lease
The Town Manager reported this item was on the May agenda, but concerns were raised and a copy of the Farmington Lease modification for the property was requested. Mr. Simmons, the farmer who leases the properties located in Farmington and Avon, is present to answer any questions about their lease agreement. Mr. Simmons reported he appreciates everyone’s cooperation, the farm is now coming together and even though the buildings and cattle are on the Farmington side of the farm, Avon people come to the farm to visit it more often, the Cubscouts were there last Saturday, and everyone is welcome to come and enjoy the farm. It is important to continue agriculture in Avon, and the other day the State called him in order for their inspectors to come out to the Farm to practice their ‘homeland
security measures’ by testing the milk which they have been trained for to look for the existence of radiation and different types of chemicals on a dairy farm. This is the only dairy farm left in Avon although it is actually in Farmington and Avon, and Simsbury will only have one twelve cow herd farm left after another farm is sold next week. It is important to keep agricultural products in the area. He would also like to thank the Town of Avon for helping put the whole thing together and allowing the modification of the Lease.
Chairman Hines reported one of the things that came up at our last meeting, which is why we did not approve it then, was that we needed to get more clarification as to when you put two people on a lease one can always leave then the other one can be held responsible, which we felt was an added risk. We asked our Town Attorney to look into this. The Town Attorney reported the effect of adding Mr. Simmons’ son to the lease would be that the Town now has a contract, which is binding upon each of them. He would suspect if Mr. Simmons and his son had originally asked to both be put on the lease the Town would have agreed to that.
On a motion made by Mr. Shea, seconded by Mr. Carlson, it was voted:
RESOLVED: That the Town Council authorize the Town Manager to sign on behalf of the Town of Avon the Lease Modification Agreement with Mr. Ronald Simmons and Mr. Francis B. Simmons for the use of the Fisher Farms area in Fisher Meadows for agricultural purposes.
Messrs: Hines, Carlson, Shea and Woodford voted in favor.
02/03-67 Review and Discussion: Senior Center Sprinkler System
Chairman Hines reported this item should be tabled we are in need of additional information. The Town Manager reported the Public Works Superintendent was able to obtain a copy of the RFP for the project, but we are not under as much pressure with the sprinkler system as we are with other projects of concern. If the Town Council is interested in expediting this project we may need a special meeting later this month, for discussions on the sprinkler system, the M H Rhodes building regarding the internal hazardous materials removal process and also to approve the RFP on the demolition of building. One of the things we are looking at with the Senior Center sprinkler system is using the Aztech Engineering firm as kind of a construction manager on the project, which is the firm that prepared the plans for the
sprinkler system and they would manage the contracts, with the inspections, to make sure that it was installed correctly in accordance with their plans. As part of the RFP, we would have restoration work that would have to be done. Chairman Hines questioned whether any legislation passed lately that might change this State Statute. The Town Manager reported not that he is aware of, unless it happened within the last few days, we will have that researched. It was the consensus of the Town Council to have a special meeting on this.
On a motion made by Mr. Woodford, seconded by Mr. Shea, it was voted:
RESOLVED: That the Town Council table this item to the next meeting.
Messrs: Hines, Carlson, Shea and Woodford voted in favor.
02/03-72 Status M. H. Rhodes Building
a. Internal Environmental Assessment/Remediation
The Town Manager reported the report from Eagle Environmental Services, Inc. contains their internal environmental assessment on the M. H. Rhodes building, which is the same firm we retained to do work on the assessment of Town Hall Building #7. We are now ready to go out with an RFP, also enclosed, for the solicitation of the actual contractor to come in and do the specific work. The Public Works Superintendent reported the RFP was reviewed by the Town Attorney, who added some pertinent language, as well as the RFP for demolition work. The Superintendent reported his biggest concern is the time frame that we will be dealing with to try and get it done. It is more involved than first thought, even the utilities removal takes more time. Chairman Hines questioned whether a perimeter fence will be
required while the work is done. The Superintendent reported that is in the RFP, the safety items must be in accordance with State and OSHA regulations, we will probably block off that rails-to-trails entrance as well for that period of time. The demolition does not include the storage building, but it includes all of the main building including the footings, building foundation, and anything that is in the ground, including the electrical utilities, gas and water that run from the street to the building.
Mr. Shea questioned, if you had to speculate, can we get this done before the school opens up in late August early September. The Town Manager reported the calendar shows us doing it, and that is our plan as well to do just that. The Superintendent reported it is in the calendar and if all goes well he is hoping the deconstruction crews will be out of there by the second week of September, with a finish grade of topsoil so that all we have to do is go in, seed it, rake it and let it go, then we will have a nice winter rye or at least a grass start in the fall. The Town Manager reported there may be need for special meetings to move it ahead rather than waiting for regular meetings. The materials provided tonight are rather lengthy, go through them, any questions can be addressed by phone. The
paperwork including the RFP’s have been screened Eagle Environmental Services in terms of the environmental aspects of them, and also by the Town Attorney, in terms of language and form. Attorney Platt, Environmental Attorney with Murtha, Cullina, reported with regard to the schedule, one of the issues that was highlighted when reviewing that with regard to the RFP, was this issue of bringing in top soil after the demolition, and the fact that Mr. Shanahan needs to get in there beforehand to do some samplings. He questioned whether the schedule takes that into account. The Superintendent reported in the RFP, a one week opening in the demolition schedule was requested for that purpose between when the building comes down, prior to any work with the foundation, flooring or footings where they can go in and drill test wells, then get out without disturbing any of the soil underneath. Our environmental specialist said that would be more than enough time to
accomplish it. Attorney Platt reported that would certainly be enough time to do the sampling but if he finds something they would not be able to alleviate it, just confirm it by the sampling. The Town Manager reported we will clear that aspect of it before we put anything out.
b. Environmental Insurance
The Town Manager reported the environmental insurance is the next item, we spent much time going over this in terms of what was covered and what was not covered, the price, the length of the coverage and so forth. The Human Resources Director reported we did provide detailed background information, as well as some proposals we received from two environmental insurance agencies, as well as an outline that was put together by Mr. Falcigno of Falcigno Group, LLC Insurance/Risk Management, comparing the two proposals, in order to give us some options, and he has brought an outline to guide us through the process in detail. He is acting as our agent, in order to find out what type of environmental insurance products are out there. The Town Manager reported our Insurance Agent deferred to the Falcigno Group who
specialize in this. Attorney Platt reported we have conferred with the Town Insurance Agent, but technically the Town now owns the property, and in connection with buying the property Avon essentially bought the liabilities associated with the property. The memo briefly outlines where we are at this point, quite simply we are at the point where we need to look at the risks posed by the property, and figure out what if any environmental insurance should be purchased, or alternatively just self insure some or all of those risks. There are several different kinds of products available from different companies, the prices are a little different, and it is not necessarily comparing apples to oranges between the two proposals from AIG & Seneca.
Mr. Falcigno reported with these pollutants you could be facing claims that arise from bodily injury or property damages, with someone on site that is exposed to these pollutants and brings a claim against you. The second category is that a claim could come at you from the migration of these pollutants off the site and someone off site is bringing the claim back against you for bodily injury or property damage. Chairman Hines reported people will be doing demolition there, do we have to worry about covering them insurance wise, while they are doing that? Mr. Falcigno reported that has to do with the construction activities, and is one of the things of concern about that particular period of time when there is some construction and demolition activities, probably the period of time where the Town risk may
be at the highest because while all of that activity is going on onsite, if someone alleges – which you will have construction workers on site covered by their employers workers compensation – but then if their workers compensation carrier subrogates back against you and says we are going to go after the responsible party. The construction workers on site could say – I was exposed to this material and you are partly responsible for this. Therefore, when all of that activity is happening on site the Town definitely has some exposure. That is the identification of the exposure – again you must assess the probability and the impact as to how severe.
Mr. Shea reported having the Town as an additional insured on whoever the preferred contractor is, that would cover us pretty well from a general liability standpoint, and workers compensation standpoint, and the contract can be structured in such a way where the contractor is responsible while it is going on for all that goes on there. Mr. Falcigno reported that is correct, and if we provide coverage for new conditions, that would be an underwriting requirement of the carriers, because they also are concerned about the heightened exposure. One of the things that you surrender when you rely on someone else’s policy and being named as an additional insured on that policy, is you are basically relinquishing control of the insurance and there is a certain element of risk to that. He has offered
his services to the Town, and can write or construct specifications for environmental insurance of the contractor. Now because it is such a highly specialized area, there are many ways where the contractors insurance can fail, most environmental insurance written for contractors is on a covered operations basis where they submit to the underwriter what their qualifications are to perform certain activities, and the underwriter approves this. There is coverage written on claims made basis, on an occurrence basis, there is a whole bunch of issues as opposed to fairly standardized marketed general liability where you see with general liability insurance, however, with environmental insurance we really do not know what we have until you get that policy in hand and you review it. Mr. Shea reported is it fair to say that with Mr. Falcigno overseeing this and his providing some wording to our Town Attorney as far as specifications of the contract go that risk would be
greatly diminished? Mr. Falcigno reported yes. Mr. Shea reported he is going under the assumption that it is going to be a qualified bonded contractor who has pollution coverage, and to get pollution coverage, as you know, you need to have certain requirements, as in you have attended certain seminars, you have certain licenses, you cannot just go do this kind of work therefore not everyone can bid it. Mr. Falcigno reported the other two things we have to consider also with an additional insured, is the protection under the additional insured is not going to cover your primary liability exposure which is these pollutants exist, it is going to cover your liability exposure that may arise vicariously from the contractors activities. So if the contractor does everything according to plan, and does everything in a manner where there is no negligence on his part, the additional insured status on your part does not help. Mr. Shea reported our risk of having the
contractor there, obviously whoever our pollution coverage is with they are going to want to know what kind of requirements we have for the contractor, but he is assuming they will then step up, if there is a problem, and we adhere to the deductible, then they would step up and do what their job is, and that is to indemnify the Town.
Mr. Falcigno reported it breaks it down into whether the coverage responds to conditions that preexisted your purchasing the property, or whether the conditions are new. We have basically in our offers coverage for preexisting conditions, your exposure as far as new pollution conditions pretty much boils down to the demolition process, if there is allegations that dust which possibly contains asbestos, possibly contains lead, is blowing off premises during the demolition, that is an excellent example of where the additional insured on a contractors policy would probably be primary if they were negligent in that situation. It seems like you have a low risk type of exposure going forward, once that is complete, there does not appear to be any activities going on after that which would give rise to the release of
new pollution conditions. So that is a decision which has to be made as to whether there will be any new pollution or just the preexisting as well. Mr. Carlson questioned when that decision is going to be made, and how is that decision going to be made, and do we have a cost difference. Mr. Falcigno reported yes. The Town Manager reported the Town Council will make those decisions. Mr. Woodford reported we are not reinventing the wheel here, this has been done before. Mr. Shea reported the reason we are having these discussions, is that you can end up with gaps in coverage, and it needs to be clearly and thoroughly discussed, and everybody needs to understand, we do not want to make a mistake.
Mr. Falcigno reported the next step deals with cleanup, and in the environmental arena cleanup is different than property matters. With cleanup we get involved with what may not be property damage, but you have to meet certain environmental regulations, you have to get it cleaned up and test for and monitor it into the future. There are unknown conditions and then the cleanup of known conditions. Mr. Carlson reported he would like to hear the scenario regarding asbestos in light of it flying around as a result of the demolition, and which policy would it be covered under. Mr. Falcigno reported that would be if the allegation was that “I am ill because I inhaled asbestos” that would be a bodily injury claim, so it would go to the bodily injury coverage part, if the allegation is
“that the top three inches of my yard needed to be excavated and hauled off site and refilled” that would be a property damage type of claim.
Mr. Woodford questioned it says AIG offer pending, are they not sure they want to sell coverage? Mr. Falcigno reported that was on the new conditions but they are offering the preexisting, and since this was printed we received an offer for a two-year period under the new conditions from them, subject to some negotiations.
Mr. Falcigno reported when we get into the area of cleanup, you have the cleanup of the known conditions. What could happen when we get involved with the cleanup, is that you just run into cost overruns because the cost projections were not – there was a change and costs escalated, or there is higher quantities of the known conditions. Within that remedial action area, that is defined, that we are going to clean up this area, you could also start to discover unknowns within the remediation area, and you could also run into known conditions – but keep in mind that with any type of insurance, insurance has to be a fortuitous type of event, so that if you know that you have got this type of loss it is going to be excluded, so that the known conditions are excluded. What can be insured is that – we think it is this cost, you can insure those type of fortuitous events which basically boil down to more than we knew about – the discovery of additional stuff that we did not know about –
or with the known stuff. So those are basically the issues that we are dealing with when we are dealing with the cleanup of known conditions. That is a different part of the premium, when getting into the premium section.
Then you get into the discovery of unknown pollution conditions - we do not know about these things at the time of the purchase and then during the course of construction activities or other activities on the site, things show up in the ground water, monitoring wells, or this previously being a farm we start digging up tanks, or buried sacks of pesticides. Those are the kinds of things that can happen as far as the discovery and the requirement placed upon you by the DEP to clean up these previously unidentified known conditions. Those again can be on site or off site, they could be identified on site but then migrating off site. It is a complicated area, but we are trying to keep it simple.
Mr. Woodford questioned Seneca is not involved in this part of bid at all? Mr. Falcigno reported Seneca withdrew, we went to four insurance companies that provide this type of insurance, and basically three of them withdrew from even offering coverage for cost overruns related to the cleanup of known conditions.
Chairman Hines questioned whether it is possible that after we do demolition that we may want to take out some policies at that time. Mr. Falcigno reported if you do it after the demolition - if you can get an offer of coverage now, you always want to buy insurance for this type of coverage with the underwriter having the least amount of knowledge, because we are transferring the maximum amount of risk at that point. The more knowledge you have about it, if there is a higher up side of risk, they are going to want a lot more premium or they may not be willing to give it to you, and if there is little, you are not going to want it.
Attorney Platt reported the proposals show the cost overrun side, shows coverage for $500,000 worth of coverage, and the whole question is at what point does that coverage attach. In other words, you have your $200,000 in the bank, how much over $200,000 would you have to spend before you start being covered by the insurance policy, and with these quotes it is $420,000, so you would have to spend an additional $220,000 before you would start tapping into that $500,000 of insurance coverage, and for that privilege you pay $50,000. This is the lowest they quote at this point, but the insurance companies do not charge anything to offer a quotation, but they are incurring a lot engineering expenses evaluating this, so they have gotten to the point where they have pretty much said that without additional
information we are here, this is the ballpark that we are comfortable with, we do not want to incur additional expense chasing something that you may not be interested in at all, if you are interested and you want to pursue it, we can see how they can tighten it up. This is the start of negotiations; this is where we are at.
Attorney Platt reported in his experience this is kind of small for a cost cap overrun, however, and the reason why three companies walked away, is that it is the small ones because of the lack of investigation that can just escalate quickly. You have to remember we have some dry groundwater, and we have to start drilling down to see what is in the groundwater if anything. The underwriter is sitting there saying, one of the first things that is going to happen is that there is going to be an active investigation of the site, so there is going to be exposure when we actively start looking for stuff. On the other side of the table, the risk transfer – the person to whom you will be transferring this risk to – is looking at it and saying look at what I can wind up with, assuming what can be in
the dry wells. On the back end of that, on these small projects, once this site gets investigated and we get down the line and we show for sure that there really is a small problem, then it is not worth buying the insurance. That is why the small projects get caught, and why you do not see a lot of cost overrun policies for cleanups that are estimated to be in the $12,000 to $46,000 range. Remember this would only cover cleanup costs, not investigation costs, we know we have to go out there and drill more wells, and do more soil sampling. This overrun policy does not count towards the overrun, just the cleanup costs. From the impact of the loss, basically what we are looking at here is the preliminary offer on the table is a retention of $420,000, so the Town will have to retain that first amount, then to insure $500,000 above that would cost $49,000, therefore you are looking at $470,000 out of pocket costs.
Mr. Falcigno reported one of the first things that need to be determined is if we want to go to that coverage, if that is a strong consideration, that only leaves AIG as a market, Seneca is not willing to offer that coverage nor Zurich or Chubb. That is the almost the first qualifier, the other coverages fall pretty well in line, they pretty well match, using his best effort to make sure they match carefully. Then it boils down to AIG and Seneca, in evaluating those two, and the primary consideration there is the financial rating of the two companies in relation to the difference in the premiums. AIG is as big as they get as far as domestic insurance carriers, they are A++ rated carrier with a financial size 15, and Seneca, which is part of the Fairfax Financial Group, is an A- rated carrier with a
financial size 7, so although they are an A- rated carrier they are rated excellent in terms of their ability to meet their obligations, although their financial size is 7 and AIG is 15, and an important consideration if you are buying a ten year policy. This is a one-time premium for a ten-year term, against which a claim may be made in the year 9 or 10, and is the carrier going to be there? He was much less concerned about this as an issue until the last couple of years when we have seen reliable insurance companies go into insolvency, so that is a consideration. Mr. Carlson reported when looking at the limits, he questioned under AIG you have each incident coverage of $2,000,000, policy aggregate of $4,000,000 and that is apples to apples with Seneca, but what is the coverage section aggregate for $4,000,000. Mr. Falcigno reported AIG’s policy has many more insuring agreements in it, there is A through L as far as insuring agreements, so you have to
pick the coverages that you want. The Seneca policy is basically 3 or 4 insuring agreements, and if they want to take something out, they take it out by exclusion. So what AIG does is that they offer a limit for any one occurrence which is basically one continuous related event of a pollution condition, in multiple claims arising from one incident, then there can be as far as the aggregates are concerned multiple claims against the policy for different incidences.
Mr. Woodford questioned what does known conditions mean. Mr. Falcigno reported when you are doing these coverages with the known conditions you have to define them, so you have to define where the costs depart from what the engineer was planning to do, the definition of the remediation needs to be clarified more so that he can effectively identify what a claim is to define the parameters. Mr. Woodford reported therefore someone has to go out to the site and do some testing. Mr. Falcigno reported that is the first task, but the Engineer has to tell us where he wants to take the samples and how many in each place, and what he is going to test for and what all of that is going to cost. That can be done relatively quickly, in terms of grabbing the samples and getting them to a lab and getting the data
back. The other gap out there with respect to this site is that the ground water data is inadequate at this point, the nature and extent of any groundwater contamination is not well defined so there is going to have to be wells added in new locations, and at new depths to complete the characterization of the groundwater quality on the site. Mr. Woodford reported so really these sheets and these quotes are meaningless at this point. Attorney Platt reported they are an indication to try to get the ball rolling because there is not enough data. Mr. Woodford reported if Shanahan goes out there and does all of the testing, and everything is fine, then we would have bought insurance for nothing. If he goes out there and comes up with a lot of problems, then this is out the window and we are going to be paying many times what is on here. Attorney Platt reported that is why the timing of everything is important, what this note refers to is that when
Shanahan writes out his scope of work, and states he will do this, this and this, but not the actual doing of those tests or getting the results. Chairman Hines reported that would be his work plan. Attorney Platt reported it will be quantifying what he foresees to be costs, that gets underwritten and reviewed and his advice is if you are going to get the coverage that absolutely has to be done before any of the investigation begins because once it becomes known that these conditions exist, again insurance is a fortuitous event, you cannot insure a known loss.
Mr. Shea reported he does not see how we can make the decision at this point. Attorney Platt reported the best way to make the decision is to segregate the exposures and make the decisions one at a time, probably the big first cut in making the decision is whether insurance for cost overruns is something that you do or do not want to do, and once that decision is made, then it boils down to AIG or Seneca, and then what limits and what terms. Mr. Falcigno reported it may be helpful to actually take these two sheets of the Chart, and put the one that relates to cost overruns totally off to the side, and take these two sheets and let us put four different examples down covering these boxes right here, so that we are understanding exactly what is covered. For the bodily injury and property damage claim on
site, that means - say somebody comes on the property with their car and crashes it, and blames it on environmental conditions, then if they bring a suit for bodily injury because they got hurt and for property damage because their car got damaged – then this would cover that. Mr. Woodford questioned how they would blame it on environmental conditions. Chairman Hines reported because it has environmental conditions unlike our other properties. Mr. Falcigno reported it is open as a public green area, you have the public on and off the premises, and somewhere down the road it becomes publicized that this was a manufacturing site, there were contaminants in the ground, and you opened this up as a green way, people are recreating on it, picnicking, and now all of a sudden the person has asthma and thinks it is because he spent every weekend in the summer laying on the grass there, and am now being billed because of his exposure to this stuff. Again you
have construction people, on the site, that is going to be pulling up the slabs, they get exposed to something that was there. Chairman Hines questioned whether the employing company covers them. Attorney Platt reported that is correct, their workers compensation will cover it, but their workers compensation company will turn around and say that we are the responsible party, and going to seek recovery of their claim against the Town. Chairman Hines questioned whether we could get that kind of condition in the contract. Attorney Platt reported it depends on what we want to do, and this gets back to the specifications, we can write out a waiver of subrogation and workers compensation and that kind of precludes that, there are a number of different strategies, but where the claims are going to come at you from with this particular type of problem.
The Town Manager reported other options to consider are what are the future uses of the property in terms of looking at your risk and liability. If you go to the Seneca quote, we have $1,000,000 incident limit, and we do not know what the premium impact would be if that were reduced to $500,000, and maybe the policy aggregate limit was $1,000,000 instead. Mr. Falcigno reported we have a number of different quotes from Seneca. The Town Manager questioned if we are going to use that for very active intensive uses, such as athletic events, the fire department has indicated they have an interest of putting the carnival there, leasing it out to Mr. Simmons to cut hay off of, adjacent we have a parking lot and a driveway there for the rails-to-trails, so that there will be people coming in and out. We still have a
steel building on the site that Town employees will be coming in and out, potentially community groups from time to time if we were to store things at that particular location. We understand that the underground bigration is from northwest to southeast, in other words from the Thompson Road area towards the railroad track, which has apparently been identified through the testing. It is away from abutting property owners with wells and that sort of thing. If we were to use it as a future school site, put a parking lot on top of it, these are all different things that have come up that would mitigate to a certain extent the future type of liability that we would have. It is a very complex issue, and it is taking time to work it through but it is important that we look at it that way. We can restrict its use, in the sense of even; if we did not mow it we could not use it for recreational activities. Mr. Falcigno reported if this property, except for
the area that is going to be cleaned up as part of the remediation project, if the rest of the property was never going to be touched because it is going to be a forever wild area, the chances of finding other contaminants if they are out there are probably pretty small, if on the other hand you are going to be out there poking holes for fence posts or building baseball fields, doing earth work for various purposes, then in some way that increases the risk that you may find something.
Mr. Shea reported let us remember that the DEP has identified this as not being a clean site, they have not indicated that they anticipate any major problems here, and we did a lot of due diligence prior to buying it, we minimized the risk in the purchase. Mr. Falcigno reported the DEP has not actually looked at the site. Chairman Hines reported there have been a third party doing the evaluations there, and that has led us to believe that it is probably not that high a risk, if they found a lot of problems there, they would have done it themselves. Mr. Falcigno reported he would just not want the Town to rely on what the DEP has or has not done, with respect to this. Mr. Shea reported we are not doing that, but one of the reasons we made the purchase was it was deemed that there could be houses
there, and our consultant looked into what the DEP had checked into. Chairman Hines reported with all of the follow up testing, after the original work and cleanup, the DEP is allowing an outside consultant to do it, and we were lead to believe that shows lower risk, and if it were higher risk the DEP would be doing it directly. Mr. Falcigno reported absolutely, when a form 3 was filed years ago, DEP looked at the filing and said, go forth and do the testing yourself, but they do this with 90% of their sites, many times the reason they do that is because they are so undermanned there. That said nothing that we have seen here indicates that this is a big problem and that was what DEP was looking at too, but he would rather the Town look at the data and what your professionals are telling you, rather than what the DEP did or did not do. Mr. Shea reported our professional told us that is why there were other bidders on this property because it was thought to be
useable for housing. We may be spending a lot of time taking this to a level where we do no have to take it to.
Mr. Carlson reported now we have come back to saying on the other coverages, what would we feel comfortable with having you take a look at? What he heard from the Town Manager, and he agrees with, that ten years is a more comfortable number than five, and would like to look at an increase in the deductible. Attorney Platt questioned to what level, we are at $100,000 now. Chairman Hines reported we would like numbers for $250,000 and $500,000, it would be interesting to see a couple of numbers. Mr. Shea reported we discussed $500,000 per incident and $1,000,000 aggregate. Mr. Woodford questioned whether there was a major impact if you go on those limits, with those numbers. Mr. Carlson questioned what is driving the costs, is it more the deductible or the limit. Mr. Falcigno reported he
would rather get the quotes and give the Town the options. The Town Manager reported if you could give us, and this is quite a bit of work, but it is the type of thing that if you could go with, maybe with a $2,000,000 limit and a $4,000,000 aggregate with a $500,000 deductible, and that premium, and maybe better off than going with a $100,000 and $500,000 and $1,000,000, if they are about even, he would much rather trade off the deductible for more coverage, and the term the ten years. Mr. Carlson reported one way of looking at it is to take, in the Seneca quote, the option C and D, increase your retention to $250,000 in both cases, and then increase your retention to $500,000 in both cases, that would give us a fair amount to look at, in addition to what we have in front of us, four more options. It was the consensus of the Town Council to have those four additional options quoted by Seneca and AIG.
Attorney Platt reported then the next issue we need to answer as well is new conditions. Do we want coverage just for preexisting or for new conditions as well. Mr. Shea reported can you show what it would cost if we added new conditions under the same scenario? Chairman Hines reported that would be the way to do it. Mr. Falcigno reported yes, but it increases expedentially. Chairman Hines reported that is the kind of coverage he would like us to have if we could afford it. Mr. Shea reported the new conditions may be expensive.
Attorney Platt reported there is an important distinction between new and unidentifieds, if it was in the ground before the policy went into force, it is preexisting but unknown. That is the difference between discovery and new, new is new activities – the demolition, the dust; that is the new. Chairman Hines questioned whether that is unlikely. Mr. Falcigno reported depending upon the use of the property, if it were just an open space piece of property with nothing on it ever, the chances of a new polluting event are pretty small. The Town Manager reported a good example, would be if you went in there post demolition and regraded the whole thing to meet some type of soccer, baseball or other requirement, and you scraped things off, moved it around, and done some new type of use; or you
go in and are excavating a building foundation, by putting in a new school or something else in there. Attorney Platt reported if while you were doing that work, and let us say, the policy goes into force today, tomorrow you start construction and discover something, if that discovery was something that was in the ground before today, it is a preexisting condition that was discovered in the future, but if during the course of demolition, tomorrow and after, you actually create a new pollution condition, like a gas tank from one of the demolition vehicles ruptures, or the dust is loaded with asbestos and the contractor moves it off site. Chairman Hines reported the contractor should cover that. Mr. Woodford reported any contractor in the world should cover that. Attorney Platt reported if that is what you feel, and if we can write the coverages tight enough, and this is what he is asking, he can write the coverages for the preexisting and will volunteer to
write the specifications for the remediation contractor and we will try to write them in such a manner as that the best we can their insurance is not going to fail, but you always have the possibility of their insurance failing for any number of reasons.
Attorney Platt reported he has one final thing. The future uses is very important in the underwriting, because the more probing and prodding activities going on, creates the possibility of discovery. Right now, AIG has underwritten this where the future use is a greenway, but if you know that there are going to be construction activities for future uses other than greenway? Chairman Hines reported the Town Manager has developed that, and can give you that list. The Town Manager reported the most probable use is what you are already underwriting it for, he does not anticipate anything else. Attorney Platt reported make sure it is for active recreation purposes, that is a limitation right now, if you suspect it could go beyond that, we should address that now. The Town Manager reported a
school use is an outside chance, but probably not within the ten year period. Attorney Platt reported he will say it is a greenway plus public recreation. The Town Manager reported you will have a small parking lot for the rails-to-trails, and the steel building that is there will remain and will be used for cold storage, bleachers and such.
c. Demolition
The Town Manager reported we need to schedule a Special Meeting for discussion about the insurance, the RFP’s which need to be presented by the Public Works Superintendent, in terms of the demolition contract and the internal hazardous materials RFP. Chairman Hines reported we want to try to get as much coverage by the Contractor as possible. Mr. Shea reported with a waiver of subrogation of additional insured and all of that. The Town Manager reported if you have them all done, and the Attorney and consultants have updated them, then we can go ahead with the draft version handed out tonight. Attorney Platt reported the contracts should be ready by then, and he wants to make sure that no activities take place on the site before everything is signed and the insurance coverage is in place.
On a motion made by Mr. Shea, seconded by Mr. Woodford, it was voted:
RESOLVED: That the Town Council schedule a special meeting on June 24th.
Messrs: Hines, Carlson, Shea and Woodford voted in favor.
02/03-102 Appointment: Zoning Board of Appeals
On a motion made by Mr. Woodford, seconded by Mr. Carlson, it was voted:
RESOLVED: That the Town Council appoint Pamela V. Samul to serve on the Zoning Board of Appeals for a term to expire January 1, 2004.
Messrs: Hines, Carlson, Shea and Woodford voted in favor.
VIII. NEW BUSINESS
02/03-107 Review and Discussion: Revisions to Ordinance #46:
Set Public Hearing: 7:30 p.m. July 1, 2003
The Town Manager reported the Town Attorney informed us of a Supreme Court case regarding hawkers and peddlers, which sparked his concern that our ordinance may need to be updated. He sent Ordinance #46 to the Town Attorney for review and any revisions as needed. The Town Attorney made necessary revisions to it, which was reviewed by the Chief of Police. The Town Attorney reported we tried to maintain as much of the existing ordinance as possible, in addition to correcting some of the constitutional issues, we have tried to simplify the language, as staff commented they found it difficult to understand. We eliminated the concept of a license and a registration, and now have two types of licenses, those for nonprofits which are less expensive and those for everyone else. One change is with the
concurrence of the Police Department we have provided for mandatory photographs and finger printing for licensed applicants who are 18 years of age or older.
We have deleted the reference in the old version of the ordinance to ‘no loud noises’, and we did that because it is inconsistent with Connecticut Law. There are some things you can do on noises but not as much as you would like to do and you have to do them carefully under the Statutes. Mr. Carlson reported should we then follow up, although he is not pro ordinance, but in light of that should we have an ordinance addressing noise. The Town Manager reported on noise ordinances in general, we have tended to stay away from them and use the nuisance provisions of the State Statutes, if it becomes excessive in terms of duration or pitch or anything of that nature, we do have some relatively narrow provisions in the zoning ordinance on noise. We have been reasonably successful, and most of
complaints that we get in about noise would never pass the decibel test as being in violation, the noise would have to be really loud to get to that point. Chairman Hines questioned whether we are in need of a noise ordinance. The Town Manager reported when there is a complaint about a company, we send the police to check it out, and if it is determined there is a problem we ask them to correct it or be cited under the Statutes, which has been successful.
On a motion made by Mr. Carlson, seconded by Mr. Woodford, it was voted:
RESOLVED: That the Town Council schedule a Public Hearing for July 1, 2003 at 7:30 p.m. for revisions to Ordinance #46.
Messrs: Hines, Carlson, Shea and Woodford voted in favor.
02/03-108 Review, Discussion and Approval: Agreements with Town of Canton
Assessment Services Agreement
On a motion made by Mr. Woodford, seconded by Mr. Shea, it was voted:
RESOLVED: That the Town Council authorize the Town Manager to sign on behalf of the Town of Avon the Assessment Services Agreement with the Town of Canton for provision of Assessment Services for the sum of $37,440, payable in monthly installments of $3,120, plus mileage reimbursement at $.38 per mile, postage and the cost of reasonable supplies not provided by Canton for a period to commence July 1, 2003 and cease on June 30, 2004.
Messrs: Hines, Carlson, Shea and Woodford voted in favor.
Revaluation Services Agreement
On a motion made by Mr. Woodford, seconded by Mr. Shea, it was voted:
RESOLVED: That the Town Council authorize the Town Manager to sign on behalf of the Town of Avon, the Revaluation Service Agreement with the Town of Canton, for provision of Revaluation Services for the sum of $56,400 plus mileage incurred in performing services at $.38 per mile, postage and the cost of reasonable supplies not provided by Canton for a period to commence May 1, 2003 and cease May 1, 2004.
Messrs: Hines, Carlson, Shea and Woodford voted in favor.
The Assessor reported this is a joint contract with Canton, we are moving forward, the new revalue date is October 1st, we are looking at a complete project and send out notices in the middle of November. Between now and then we have quite a bit of work to do, what we have completed already is our construction cost study, later this month we are going to complete the commercial portion of the cost study, so that by the end of this month residential and commercial cost studies will be completed. Land value studies have already been completed, we have established land values, for each street in Town, and depreciation schedules have been established. With those three components being completed we applied them to a test file of all the residential properties, and now we are in the process of taking the
estimated values and comparing them to sales that have happened in the past 18 months as well as asking prices for properties on the market today, to see how our estimated values are stacking up. We hope to finish this initial testing of our values by the 15th of this month to reprice the entire residential file and move forward on July 1 with actual field reviews of the residential properties. Chairman Hines questioned whether that was inside and outside. The Assessor reported no, exterior from the street. The only interior inspections we are doing are the ones that have sold in the past 18 months, we are verifying that the purchase was for either what we see, what improvements they have made to the house, since they have purchased it or what condition the house was in when they purchased it. We are finding in some cases there may be air conditioning that was added, or a finished recreation room that was added since the purchase, so it is
validating sales that are ultimately going to be used to validate testing and the criteria that we have established. We hope to finish the review in six weeks. Mr. Woodford reported the only difference being that if this were a complete revaluation, you would be going into the houses. The Assessor reported that is correct, and you do have to go into all the houses over a 12 year period of time, so quite frankly if we implement this and continue it the way we have been there will never be a revaluation where we have to go into every house, and then the likelihood of going into even 75% of the homes is becoming slimmer as time goes on, and quite frankly he would be surprised if we were able to get into 50% of them if we were trying to do this now, and if we wanted to get into more than 50% the cost would be outrageous to go visit some of these homes, or set up appointments and have people go out on evenings or Saturdays, and for what – in most of these cases
the newer homes are being built with the air conditioning, with the finished attic, and with the recreation rooms, so what else are we going to pick up. By going in and inspecting the sales, every time we do a revaluation, and by going out and doing the permanent work, and visiting the new homes when the CO’s are issued, after being contacted by the Building Department that there is a CO inspection scheduled we go out, over the course of a year there are a number of homes that we are getting into. We go out on all roof permits, even though it may seem just a replacement of the roof, he would say that at least half of the time we go out on a roof permit we come back with a patio, central air conditioning, we come back with something, so it gives us a chance to familiarize ourselves with the property, in long term by doing it this way there is also a cost savings.
The Assessor reported for commercial values, we will be sending out the income and expense requests within the next two weeks, hopefully to get them back by the middle of July, start to review in August of commercial properties. The way it is structured Canton is running 30 days behind us, so we have done our test modeling here, and are now moving to Canton to start establishing land values, testing those, and we look to probably start the residential review there in the beginning of August. -We do not want a lot of people doing the review, we just one or two individuals doing the reviews so that there is consistency in thought and value, and it looks like it will be two individuals who have been working for us in Avon already, so that they are familiar with the Valley, with the values. The other is we
are not chasing sales, we are applying these formulas across the board, tweaking the depreciation where we need to but his feeling is that we cannot chase sales to have a fancy nice looking ratio, the ratio is going to be nice, it is going to a tight assessment sales ratio/somewhere below the 15% level that is acceptible by the International Association of Assessing Officers, which is what the sales price is as it relates to the assessment. There are some properties that we think might be worth $800,000 but are selling for $650,000, in doing the research we find out that there is a condition factor, and the person bought it for a discount and admittedly they will say that they got it at a discount because it is dated on the inside and they are in the process of renovating it. So we are not going to chase that sale, we may leave it at the $800,000 because we know a year from now; it is going to be worth it. We are feeling very comfortable moving forward and we feel
that we will make the middle of November for notices, have the hearings in December and have the Grand List completed pretty much on time.
The Assessor reported as far as any type of change or increase in the Assessments, it is a very healthy real estate market right now, he is not looking to anticipate further appreciation, but rather look at say June 1st as our value date, if we can come in at 95% of the June 1st value, he will be very happy. Some will be at 90%, and some will be at 97%, but if we can come in overall somewhere around 95%, he will be happy, so if the market continues to escalate we have a cushion, and if it continues or just holds, we still have a small cushion, taking a conservative approach, as we have done the last two times, and it is a good policy to have. As we get closer we will know what the impact is, at the same time we are running parallel lists, we have a 2003 Grand list which is
predicated on the 1999 revaluation, and we are making changes to the file as if there was no revaluation, and at the same time we have the 2003 revaluation file, which is predicated on current values, so we can at the end of the day we have the new values, and we can also tell you what the assessment change or growth would have been had we not had a revaluation lists. Typically a question which is asked of him when we have a revaluation is – if we did not have it, what would our growth be – 1, 2 or 3% - so we are structuring our file so that we can have that answer for you. Land for example, if we are putting an excessive amount on the residual that land that is left over and above what is required by the zoning, if we have a very large sum of money on it, then it looks suspicious, because it does not contribute proportionately to the overall value, so that is one thing that we look at when it comes to land. The other is we look to see what the
relationship between land is to the total value, if you have a $300,000 house, it does not make sense to have $150,000 or $175,000 on the land. And what it also does is it limits your growth in the non revaluation years as people build add on, because you have so much value in the land which stays constant.
The Town Manager reported one other thing – the last case that we had from the 1999 revaluation up on the mountain, has been resolved so we are all set with that as well.
c. Animal Control Services
On a motion made by Mr. Woodford, seconded by Mr. Shea, it was voted:
RESOLVED: That the Town Council authorize the extension, for a period of one year, as authorized in the current existing contract between the Town of Avon and Town of Canton, for Animal Control Services.
Messrs: Hines, Carlson, Shea and Woodford voted in favor.
02/03-109 Review, Discussion and Approval: CCM Funding of State Lawsuits for PILOT and Town Aid Road Grants
The Town Manager reported we need to send in that we want to participate, then we will receive the cost figures back, then we can decide as to whether we want to continue. This is worthwhile as it basically moved them to get this straightened out as the Governor basically encumbered the money.
On a motion made by Mr. Carlson, seconded by Mr. Shea, it was voted:
RESOLVED: That the Town Council express interest in participation in the State Lawsuits for PILOT and Town Aid Road Grants by CCM, but without financial consideration at this time.
Messrs: Hines, Carlson, Shea and Woodford voted in favor.
02/03-110 Review, Discussion and Approval: Pension Investment Advisor Request for Proposal
The Town Manager reported our Investment Advisor, Watson Wyatt Investment Consulting, has indicated they are no longer going to be taking municipal business, municipal pension plans, they have extended their agreement with us until we get another advisor. The RFP that you have was developed by the Director of Finance, and requires Town Council approval, because of the increased cost of the pension plan, particularly during the budget process this year, the Council has taken more of an interest in the pension process. He reported we will be putting the ad in the newspaper as well as sending it to the people that are included on the list of contacts for RFP pension investment advisor. Mr. Carlson questioned how that list was derived. The Town Manager reported basically people that have shown interest
and contacted us. The Finance Director reported when people heard that Watson Wyatt was pulling out from several clients, we started getting a series of phone calls. The Town Manager reported there is a Pension Management Committee which deals with just the oversight of the funds and investment and performance of the pension plans, they would be the preliminary selection vehicle, they would then recommend to the Council a final firm and that would come back to the Town Council more than likely in July or August. Chairman Hines reported when the Committee is going to have a meeting send the schedule to the Council. The Town Manager reported the Town Council is the one that controls the various aspects of the Defined Benefit and the Defined Contribution pension formulas for the plans. Mr. Santos has done a lot of analysis and has come up with some models which are quite intriguing, and for informational purposes he would like to be able to provide them to a
new advisor that we get and also to the Actuaries to get their feelings and opinions. One other thing that did come up, as we are not the only community that is going through this pension realignment issue because of the equity markets. We have asked the Actuaries to look at different methods of determining how we pay for our pension contribution and liability. They have come up with some preliminary findings on alternative methodologies, namely the percentage based methodology, which would probably lead to a significant immediate reduction in our pension contribution, but would probably lengthen the time of the contribution and would provide an upward slope in terms of how we pay for that liability rather than a declining balance basis which is based upon the amortization of that liability which is the current system. He asked the Finance Director to take those preliminary findings and to run them by Moodys and Standard & Poors to get a feel for whether
they would be looked upon favorably or unfavorably in terms of the analysis of our credit rating. If they are looked upon either neutral or perhaps positive and not negative it may be appropriate for us to come forward and have the actuaries make some presentations to the Town Council as to exactly what we are doing now, what the differences are, and educating us and then you can make a decision as to whether you want to change the method in which we are funding our pension liabilities. Because it is such a visible part of the budget, and because the length of this down turn, it has caused a significant deviation from the normal methodology of funding these pension, it has a lot of peoples attention and we need to be educated in what has happened, why it has happened, and part of it is due to the methodology that is being used that is causing the increased cost on our part. Milliman is still the Actuary, and at some point they will have been the Actuary with a
continuing contract through 2004, and we may want to look at going out and soliciting for a new Actuary at that point.
Chairman Hines reported you need our approval to go out with this RFP. The Town Manager reported that is correct.
On a motion made by Shea, seconded by Mr. Carlson, it was voted:
RESOLVED: That the Town Council approve and authorize the Pension Investment Advisor Request For Proposal, RFP, process as presented.
Messrs: Hines, Carlson, Shea and Woodford voted in favor.
02/03-111 Support for Town of Watertown Council Resolution
Chairman Hines reported he received this information from Watertown, and our Human Resources Director did a review of the Interest Arbitration Process, which was helpful, then he modified it further to show the difference between the municipal governments and state government, which is what this resolution is recommending. Mr. Shea questioned whether the interpretation is correct that it would just work towards changing the arbitration process. Chairman Hines reported yes, right now we do not have the same opportunity as the State. Mr. Shea reported then that is a great idea, as we have such frustration in trying to communicate to the citizens that we do not have as much control over the salary process and they think we do, and that is a very large portion of the budget. Chairman Hines
reported at a meeting with several other towns, many spoke about this binding arbitration problem, and now cities are starting to get concerned about it. The Town Manager reported what is interesting is that the system that is set up with the step and range type of things is really an industrial era compensation model, that is based upon a five year experience factor where you get an increase each year automatically for five years unless there is something major wrong, that you are not growing in the job, it is assumed that in the fourth or fifth year when it ends that you are competent, at 95% to 98% so you no longer get any increases after that, and then you just get the across the board increases. But while you are in that first five years you are getting those step increases plus you are getting your across the board increases, primarily based on the industrial era compensation which was prevalent in the mid 20th century and is extended, and while
there is nothing that says you cannot change it trying to change it is a major problem. What is interesting also, is on the ability to pay factor, that was added to the criteria in which the arbitrators have to take into consideration, back during the Weicker Administration during the last recession, and it was put in mainly to soften the blow of the large unions in the urban cities, so that it helps the cities out if they are running deficits, with bad bond ratings and so forth, in order to moderate the wage gains of the urban workers, and what it does obviously on the other side is aggregate our situation. Now what is beginning to happen is that we are seeing wage disparities developing between the urban centers and the suburban areas where the suburban areas are paying much higher wages than the urban centers. So you are now seeing a flight of experienced people like police officers from the urban areas that are interested in transferring to the suburban areas
because over this ten year period that this has been in place, we now have higher salaries and more benefits because we have a higher ability to pay, and the cities have lower wages and lower benefits in some cases. One way of attacking the ability to pay issue that is what effects us more is to throw up the urban problem that they cannot retain qualified people because they are leaving to go to the suburbs.
On a motion made by Mr. Shea, seconded by Mr. Carlson, it was voted:
RESOLVED: That the Town Council authorize the Town Manager to send a letter referencing the Watertown Resolution, and our support of it, to our Legislators.
Messrs: Hines, Carlson, Shea and Woodford voted in favor.
02/03-112 Review and Discussion: Information Technology Policies for Boards and Commissions
The Town Manager reported this item came up because of the increasing use of information technology particularly E-mail but also the power point presentations and so forth at the budget public hearing. There is background information, and we need to be thinking about what we want to do and where we want to go, and we get into issues of public access. Chairman Hines reported let us put this on the special meeting agenda, other than just a brief review from you right now. That Town Manager reported we can do that. He further reported a good example is as all of you know, we have had problems transmitting materials to the Council, the same problems with the Board of Finance. Should we be moving that way with the Sewer Authority – with the Planning & Zoning Commission, the Parks &
Recreation Commission, if so if we are moving more and more towards a paperless type of environment – what is the Town’s responsibilities to the boards and commission members? On one extreme we can go in and install a complete set up in somebody’s home and provide 24 hour maintenance of that system, when they are on a board or commission, and then we remove it and give it to the next person that fills that position. Or do we let people use their home computers, but we provide software and software maintenance so that we have a standardized platform for distributing material – where does FOI fall in and out? Where are our liabilities? Mr. Shea reported he gets about 90% of the materials sent, but the point is - take the information we received this evening – he is not comfortable getting all of that over the computer – having to rely on the fact that his computer is up, that his computer is not down, and that he now
has to print all of this, while he realizes it is a burden for the Town, but the strategic plan about how we address technology and communicate it to the masses, put things on our website - but our present system is not really broken in relationship to the boards and commissions. He does appreciate and does think we should help out board members that are receiving information technologically and need help. Mr. Carlson reported he takes a different tact on this – what he would like to see what the proposal of what you think is the right thing here – then let us react to it. He read through the proposals of what other towns have done; there is not one that he is particularly comfortable with. He is not comfortable installing PC’s, because it is not just PC’s it is printers then, then the question becomes, tonight is a ream of paper, and is the Town going to buy him a ream of paper? By the way if that PC is in his house and he goes
off to some website that he should not go off to – or his child goes out there, what does the Town know about where we are going with that PC – and he has three PC’s in his house, and does not need one more. Mr. Shea reported how much time is an elected official supposed to spend at their computer printing all of this? He does not have a lot of time to just sit there and deal with the technological aspects of the Town trying to communicate with him, and then have to wait, if it is not coming up or not, then if it is not done properly then we have to do it all over again. He does not have a problem with us sending somebody to the Chairman’s house to try to help out on a technology problem. In his case he shares a printer with 8 other people, so we are going to tie up his printer, based upon what has been going on this past month, for a large portion of the time, so that we can save what? Chairman Hines reported we just
cannot do that. Mr. Shea reported he does not mind not being paid, and does not want to be, but he does think that – how much time is he going to spend on just trying to advance ourselves technologically?
The Town Manager reported another whole thing – We have moved our whole budget presentations, a good part of them to power point, and have had at least three requests this year from individuals to want to make power point presentations at the public hearings. We informed them that they cannot do that, but if they want to make a copy of their handout, they can, and put it on the table and everybody can look at it, but that the power point is reserved for the official bodies, the Town Council, the Board of Finance, the Board of Education, to make their presentations to the public. So do we want to move on a broader basis to allow citizens to utilize these methods of technology in presenting their points of view at public meetings? Mr. Woodford no. Mr. Shea, no, first of all when we present
information there is no spin on it, it is the facts. Mr. Carlson reported even outside the spin factor, the bigger issue for him is the time. Our Moderator was very generous in giving three to five minutes, whatever it was, therefore he does not believe we should allow power point presentations.
Chairman Hines requested before our next meeting, the Director of Finance put together a one page outline of some key questions and things that you would like us to discuss, and try to get some resolution on the whole subject.
02/03-113 Review, Discussion and Approval: IRS 125 Plan Document
The Human Resources Director reported this is a simple matter which was previously discussed during Public Works contract negotiations, where the employees had agreed, at least for the older employees, to increase the premium co-pay to mitigate the costs to them, we said that we would put in a choice of an IRS sanctioned125 plan. It is a plan that in most municipalities is already in place, one of the reasons it has not been in place here for a while is that the contribution level of the older employees is so low, it really did not make that much of a difference. But all new employees that we hire pay 15% of the premium, and public works people are moving up to that level. The Town Attorney’s office put together a plan that has to meet all of the IRS legal requirements, but in short what it does is
make all of the contributions pretax for the employees. The Town Manager reported we would need authorization for the Town Manager to sign the documentation in order to move ahead with this plan, and this would be an incentive in our negotiations for them to move ahead this coming year.
On a motion made by Mr. Carlson, seconded by Mr. Shea, it was voted:
WHEREAS: The Town Council has agreed in negotiations to provide an IRS sanctioned 125 plan for Public Works employees effective July 1, 2003.
WHEREAS: the Town Council has extended this benefit to non-organized employees.
RESOLVED: That the Town Council adopts the Town of Avon Flexible Benefits Plan effective July 1, 2003.
FURTHER RESOLVED: that the Town Manager of the Town of Avon be, and hereby is authorized, empowered and directed to execute said Plan on behalf of the Town and to take any and all additional action which is deemed necessary or appropriate in order to implement the same.
Messrs: Hines, Carlson, Shea and Woodford voted in favor.
02/03-114 Sign Rate Bill
On a motion made by Mr. Carlson, seconded by Mr. Shea, it was voted:
RESOLVED: That the Town Council sign the 2003/2004 Rate Bill, for a tax levy of 28.30 mills on the dollar on the grand list October 1, 2002.
Messrs: Hines, Carlson, Shea and Woodford voted in favor.
IX. TOWN MANAGER’S REPORT/MISCELLANEOUS
The Town Manager reported we had a report that was included in the materials from the Town Planner on all of the development that had taken place this year. The Building Department report is in for May, with only 7 as opposed to 31 last month, so we are up to 121 single family homes through the end of May from last July 1st, so it is still a busy year.
We received a check for the roof in the amount of $98,000 for the Roaring Brook School, which we are putting aside.
The Town Manager reported there is a continual dialogue going on the Metacon Club noise issue, and he will keep the Council updated on that situation.
The Town Manager reported the last thing, is that he has not been able to take all of his vacation days, and the Town Council will need to approve his extending 10 days beyond the end of the year, in order for him not to lose them. It was the consensus of the Town Council to allow the Town Manager to use 10 vacation days in the next fiscal year.
X. EXECUTIVE SESSION: Litigation/Negotiation
On a motion made by Mr. Woodford, seconded by Mr. Shea, it was voted:
RESOLVED: That the Town Council go into Executive Session at 10:40 p.m.
Messrs: Hines, Carlson, Shea and Woodford voted in favor.
On a motion made by Mr. Woodford, seconded by Mr. Shea, it was voted:
RESOLVED: That the Town Council come out of Executive Session at 10:45 p.m.
Messrs: Hines, Carlson, Shea and Woodford voted in favor.
ADJOURNMENT
The meeting was adjourned at 10:45 p.m.
Attest:
Caroline B. LaMonica
Town Clerk
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