Date: June 19, 2006
Date Minutes Approved: July10, 2006
BOARD OF SELECTMEN MINUTES
Present: Elizabeth Sullivan, Chair; Andre Martecchini, Vice-Chair, and John Tuffy, Clerk.
Absent: No members were absent.
Staff: Richard MacDonald, Town Manager; and Barbara Ripley, Executive Assistant.
The meeting was called to order at 7:30 PM.
OPEN FORUM
No items were discussed.
INTRODUCTION OF FINANCE DIRECTOR
Mr. MacDonald announced that our Town Accountant, Mr. John Madden, was the unanimous choice of the selection committee to be the first Finance Director for the Town of Duxbury. The selection committee consisted of Town Manager Richard MacDonald, Selectman John Tuffy, Fiscal Advisory Chairman Frank Mangione, Finance Committee Member Keith Pratt, and School Business Manager Mickey McGonagle. Mr. Madden currently serves as the Town Accountant, but will become the Finance Director as of July 1, 2006. Mr. Madden was present. He thanked the selection committee, his colleagues in the Town of Duxbury, and especially his staff in the Town Accountant’s office for their support.
BLUEFISH RIVER FIREHOUSE
Ms. Nancy Bennett was present. She announced that the fundraising goal of the Bluefish River Firehouse Restoration Committee has now been reached, with the current donation of $500.00. She thanked the community for their support of the project, and invited everyone to the opening celebration on June 30.
Mr. Tuffy moved that the Board of Selectmen accept the donation of $500.00 made in honor of former Selectmen James Kelso by the Kelso Family. Second by Mr. Martecchini. Vote: 3:0:0.
TOWN TREASURER DISCUSSION OF TOWN’S INVESTMENT POLICY
Ms. Beth Conway was present and provided the Board with a draft of the proposed Town of Duxbury Investment Policy. This policy applies to the investment of government operating funds as well as pension, trust, and agency funds. (It is included as an addendum to these minutes.) Ms. Conway explained that the Town Treasurer, Finance Director, and investment advisors at Rockland Trust, will be meeting quarterly to review the Town’s investments.
After discussion of various components of the policy, Mr. Martecchini moved to adopt the Town of Duxbury Investment Policy as developed by the Town Treasurer in June 2006. Second by Mr. Tuffy. Vote: 3:0:0.
EMERGENCY PREPAREDNESS
Present were: Ms. Jennifer Dalrymple, Heath Agent; Mr. Scott Lambiase, Director of Inspectional Services; and Fire Chief Kevin Nord, Director of Emergency Management.
Ms. Dalrymple gave a Powerpoint presentation about the Town’s preparation for a possible flu pandemic. She reported that the Massachusetts Department of Public Health (MDPH) assumes that a flu pandemic is inevitable. The MDPH estimates that up to four million Massachusetts residents (37% of the population) could be infected by the flu and that up to 6,000 of these could die. Working with the MDPH, the Board of Health has made plans for Emergency Dispensing Sites at the Chandler Elementary School and the Duxbury Middle School. These sites would have the ability to medicate/vaccinate 100% of Duxbury’s population within 48 hours, if both clinics were operating sixteen hours per day. These sites would be staffed by the newly formed Medical Reserve Corps. So far, 135 medical professionals have
volunteered for the Corps, which was officially recognized by the US Surgeon General’s Office on April 14, 2006. Non-medical volunteers are also needed to serve as support staff.
Mr. Tuffy asked why there is heightened awareness and preparation for a possible pandemic at this time. Chief Nord responded that the strain of avian flu which has been identified is particularly virulent. Experts believe that a pandemic is inevitable.
EXECUTION OF LICENSES FOR TEMPORARY ACCESS TO THE ISLAND CREEK FISH LADDER SITE DURING CONSTRUCTION
Mr. MacDonald explained that these licenses are required in order to construct the fish ladders.
1) Mr. Tuffy moved that the Board of Selectmen execute a license agreement with Loring J. Nudd, Jr. and Robin L. Nudd for access over a parcel described as Assessors Lot Number 160-050-005, during the construction of the Island Creek Fish Ladder. Second by Mr. Martecchini. Vote: 3:0:0.
2) Mr. Tuffy moved that the Board of Selectmen execute a license agreement with Paul W. Duffy and Ms. M. J. Duffy for access over a parcel described as Assessors Lot Number 160-049-001, during the construction of the Island Creek Fish Ladder. Second by Mr. Martecchini. Vote: 3:0:0.
EXECUTION OF CONSERVATION RESTRICTION FOR THE JAYCOX CHRISTMAS TREE FARM
Mr. MacDonald explained that this is the final step in completing the purchase of the Jaycox property as authorized by the Special Town Meeting of June 14, 2004. The Town will grant a Conservation Restriction to the Wildlands Trust of Southeastern Massachusetts.
Mr. Martecchini moved that the Board of Selectmen execute the agreement granting a Conservation Restriction to the Wildlands Trust of Southeastern Massachusetts for the Jaycox Christmas Tree Farm Property. Second by Mr. Tuffy. Vote: 3:0:0.
TOWN MANAGER BRIEF
· The Council on Aging has agreed to fund the Outreach Coordinator, the Assistant Outreach Coordinator, and the Respite Coordinator again in Fiscal Year 2007. Mr. MacDonald said that he is extremely grateful for the Council’s financial support of these important Senior Center programs.
· The State Legislature has approved funding for improvements to the intersection of Winter Street and Route 53. Only the Governor’s signature is needed.
· Wright Building construction has been hampered by communication problems between the contractor and the architect. A meeting was held last week to bring all parties together. Several issues were resolved. More efficient progress is expected going forward.
· One more permit is required before construction on the Island Creek Fish Ladder may begin.
· Construction on Route 3A will not begin until after the Fourth of July holiday. Therefore, there should be no interference with those festivities. (Mr. Martecchini asked Mr. MacDonald to open additional lines of communication with the contractor for this State project, Aggregate Industries. The Town is in need of additional information regarding construction schedules, etc.)
BUSINESS
Gift Acceptance: Mr. Tuffy moved that the Board of Selectmen accept an anonymous donation of two Phillips Heart Defibrillators to the Duxbury Harbormaster’s Department. Second by Mr. Martecchini. Vote: 3:0:0. The Board expressed gratitude for the generous gift, valued at a minimum of $4,200.00.
MINUTES
Mr. Martecchini moved that the Board accept the Minutes of June 5, 2006 as written. Second by Mr. Tuffy. Vote: 3:0:0.
COMMITTEE APPOINTMENTS/REAPPOINTMENTS
Agricultural Commission: Mr. Martecchini moved to appoint the following members, with the following term expirations, to the new Town of Duxbury Agricultural Commission:
Mr. Richard Loring (6/30/07)
Mr. David Lowry (6/30/08)
Ms. Annie Eldridge (6/30/07)
Mr. Carl O’Neil (6/30/09)
Mr. Jeff Chandler (6/30/09)
Mr. Michael George (6/30/08)
Mr. Emmett Sheehan (6/30/07)
Second by Mr. Tuffy. Vote: 3:0:0.
Alternates to the Zoning Board of Appeals: Mr. Martecchini moved to appoint the following individuals to one-year terms (expiring 6/30/07) as alternates to the Zoning Board of Appeals: Mr. Martin Desmery, Mr. Vincenzo Giambertone, Mr. Y. Oktay, Ms. Mary Jo Pierce, Mr. Jonathan Tudan, and Mr. Alan Crandon.
Second by Mr. Tuffy. Vote: 3:0:0.
Conservation Commission: Mr. Martecchini moved to appoint Mr. Joseph Messina and Ms. Barbara Kelley to the Conservation Commission, both with terms to expire on 6/30/09. Second by Mr. Tuffy. Vote: 3:0:0.
Economic Advisory Committee: Mr. Martecchini moved to appoint the following individuals to the Economic Advisory Committee, for terms to expire on 6/30/09: Mr. John Bear, Ms. Sara Wilson, and Mr. Andre Martecchini (Board of Selectmen representative). Second by Mr. Tuffy. Vote: 3:0:0.
Local Housing Partnership: Mr. Martecchini moved to appoint himself as the Board of Selectmen representative for a three-year term on the Local Housing Partnership. Second by Mr. Tuffy. Vote: 3:0:0.
Nuclear Advisory Committee: Mr. Martecchini moved to appoint Ms. Millie Morrison to the Nuclear Advisory Committee, for a term to expire on 6/30/09. Second by Mr. Tuffy. Vote: 3:0:0.
Cultural Council: Ms. Sullivan moved to appoint Ms. Rebecca Chin, Ms. Barbara Kiley, and Ms. Mary Beth MacQuarrie to the Duxbury Cultural Council, all for terms to expire on 6/30/09.
ADJOURNMENT
Mr. Tuffy moved to adjourn the meeting at 8:47 PM. Second by Mr. Martecchini. Vote: 3:0:0.
See next page for an appendix to the minutes:
TOWN OF DUXBURY INVESTMENT POLICY (JUNE 2006)
TOWN OF DUXBURY
INVESTMENT POLICY-JUNE 2006
I. Scope
This policy applies to the investment of government operating funds as well as pension, trust, and agency funds.
II. Objective
The primary objectives, in priority order, of investment activities shall be:
1. Safety
Safety of principal is the foremost objective of the investment program. Investments shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. The objective will be to mitigate credit and interest rate risk.
A. Credit Risk
Credit Risk is the risk of loss due to the failure of the security issuer or backer. Credit risk may be mitigated by:
Limiting investments to the safest types of securities
Pre-qualifying the financial institutions, broker/dealers, and advisors with which the Town will do business,
Diversifying the investment portfolio so that potential losses on individual securities will be minimized
Collateralization of public deposits through pledging of appropriate securities is the only way to fully guarantee the safety of such deposits.
B. Interest Rate Risk
Interest rate risk is the risk that the market value of securities in the portfolio will fall due to changes in general interest rates. Interest rate risk may be mitigated by:
Structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations, thereby avoiding the need to sell securities on the open market prior to maturity, and by investing operating funds primarily in shorter-term securities.
2. Liquidity
The investment portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated. This is accomplished by structuring the portfolio so that securities mature concurrent with cash needs to meet anticipated demands (static liquidity). Furthermore, since not all possible cash demands can be anticipated, the portfolio should consist largely of securities with active secondary or resale market (dynamic liquidity).
3. Yield
The investment portfolio shall be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the investment risk constraints and liquidity needs. Return on investment is of least importance compared to the safety and liquidity objectives described above. The core of investments is limited to relatively low risk securities in anticipation of earning a fair return relative to the risk being assumed. Securities shall not be sold prior to maturity with the following exceptions:
a. A declining credit security could be sold early to minimize loss of principal or to lock in investment gains:
b. Liquidity needs of the portfolio require that the security be sold.
III. Standards of Care
1. Prudence
The standard of prudence to be used by investment officials shall be the "prudent person" standard and shall be applied in the context of managing an overall portfolio. Investment officers acting in accordance with written procedures and this investment policy and exercising due diligence shall be relieved of personal responsibility for an individual security's credit risk or market price changes, provided deviations from expectations are reported in a timely fashion and the liquidity and the sale of securities are carried out in accordance with the terms of this policy.
Investments shall be made with judgment and care, under circumstances prevailing, which persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived.
2. Ethics and Conflicts of Interest
Officers and employees involved in the investment process shall refrain from personal business activity that could conflict with the proper execution and management of the investment program, or that could impair their ability to make impartial decisions. Employees and investment officials shall disclose any material interest in financial institutions with which they conduct business, in which there is a conflict of interest. Employees and officers shall disclose when undertaking personal investment transactions with the same individual with whom business is conducted on behalf of the Town. This does not limit employees or investment officers from maintaining personal investment accounts with the same financial institution.
3. Delegation of Authority
Authority to manage the investment program is granted to the Treasurer or the Assistant Treasurer. Responsibility for the operation of the investment program is hereby delegated to the Treasurer or the Assistant Treasurer, who shall carry out established written procedures and internal controls for the operation of the investment program consistent with this investment policy. No person may engage in an investment transaction except as provided under the terms of this policy and the procedures established by the Treasurer or the Assistant Treasurer. The Treasurer or the Assistant Treasurer shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinate officials.
IV. Safekeeping and Custody
1. Authorized Financial Dealer and Institution
All financial institutions who desire to become qualified bidders for investment transactions must supply the following as appropriate: Audited financial statements, Proof of National Association of Securities Dealers (NASD) certification, Certification of having read the Town of Duxbury’s investment policy. The financial condition and registration of qualified bidders will be reviewed periodically by the Treasurer or the Assistant Treasurer.
2. Internal Controls
The Treasurer or the Assistant Treasurer is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the Town are protected from loss, theft, or misuse. The internal control structure shall be designed to provide reasonable assurance that
a. The cost of control should not exceed the benefits likely to be derived; and
b. The valuation of costs and benefits requires estimates and judgments by management.
Accordingly, the Treasurer or the Assistant Treasurer shall have an annual review by an outside auditor to assure compliance with policies and procedures. The internal controls shall address the following points:
1. Control of collusion. Collusion is a situation where two or more employees are working in conjunction to defraud their employer.
2. Custodial safekeeping. Proof of securities purchased from any bank or dealer shall be provided to the Treasurer and recorded on the Towns books.
3. Clear delegation of authority to subordinate staff members. Subordinate staff members must have a clear understanding of their authority and responsibilities to avoid improper actions. Clear delegation of authority also preserves the internal control structure that is contingent on the various staff positions and their respective responsibilities.
4. Written confirmation of fax or telephone transactions for investments and wire transfers. Due to the potential for error and improprieties arising from telephone transactions, all telephone transactions should be supported by written communications, recorded on either a report of receipt or journal entry, and approved by the Treasurer or the Assistant Treasurer. Written communications may be via fax and the safekeeping institution has a list of authorized signatures.
V. Suitable and Authorized Investments
1. Investment Types
Municipal monies must be invested in accordance with M.G.L. Ch. 44 §55; trust monies must be invested in accordance with M.G.L. Ch. 44 §54, unless otherwise provided or directed by the donor. This statute calls for funds be placed at interest in savings banks or trust companies, invested in a combined investment fund, such as the Massachusetts Municipal Depository Trust, or invested in bonds or notes which are legal investments for savings banks. The Massachusetts Legal List, maintained by the Commissioner of Banks, sets out a list of legal investments for savings banks.
Consistent with the GFOA recommended practice on State Statutes Concerning Investment Practices, the following investments will be permitted by this policy and are those defined by state law where applicable. Bank deposits including Repurchase Agreements, Certificates of Deposit, and Demand Deposits may be made in a bank or a Savings and Loan Association with a Moody’s rating of A-3 or above, a Standard and Poors and Finch rating of A and above for amounts above the FDIC (Federal Deposit Insurance Corp) insured amount (presently $100,000). A Thompson Bank Watch rating of A or B will also meet the minimum standards. The cost of obtaining a Thompson Bank Watch will be borne by the institution seeking to conduct business with the Town.
Governmental Operating Funds:
a. U.S. Government obligations, U.S. Government agency obligations, and U.S. Government instrumentality obligations
b. Repurchase agreements
c. Certificates of deposit
d. Savings and loan association deposits
e. Demand Deposits
f. Investment-grade obligations of state and local governments and public authorities
g. Money market mutual funds regulated by the Securities and Exchange Commission and whose portfolios consist only of domestic securities
h. Statewide investment pools (MMDT) and others that meet the Town of Duxbury’s requirements
Pension, Trust, and Agency Funds:
a. U.S. Government obligations, U.S. Government agency obligations, and U.S. Government instrumentality obligations
b. Repurchase agreements
c. Certificates of deposit
d. Savings and loan association deposits
e. Demand Deposits
f. Investment-grade obligations of state, provincial, and local governments and public authorities
g. Money market mutual funds regulated by the Securities and Exchange Commission and whose portfolios consist only of domestic securities
h. Statewide investment pools (MMDT) and others that meet the Town of Duxbury's requirements
i. Stocks and Bonds
h. Mutual funds that derive their value from any of the investments listed above.
VI. Investment Parameters
1. Diversification
The investments will be diversified by security type and institution.
2. Maximum Maturities
As required by Mass. General Law Chapter 44: Section 55, operating funds shall have a maturity from date of purchase of one year or less. The Town of Duxbury limits their maximum final stated maturities for other investments to ten years unless specific authority is given to exceed. To the extent possible, the Town of Duxbury will attempt to match its investments with anticipated cash flow requirements. Unless matched to specific cash flow, the Town of Duxbury will not directly invest in securities maturing more than ten (10) years from date of purchase. The Town of
Duxbury shall determine what the appropriate average weighted maturity of the portfolio should be.
Reserve funds may be invested in securities exceeding ten (10) years if the maturities of such investments are made to coincide as nearly as practicable with the expected use of funds. The ability of investing these types of funds should be disclosed to the Town Manager and Board of Selectmen including appropriate time restrictions disclosed, if any apply.
VII. Reporting
1. Performance Standards
The investment portfolio shall be managed in accordance with the parameters specified within this policy and state law. Portfolio performance should be compared to appropriate benchmarks on a regular basis.
2. Marking to Market
A statement of the market value of the portfolio shall be issued annually in conjunction with the annual audit. This will ensure that the minimal amount of review has been performed on the investment portfolio in terms of value and subsequent price.
VIII. Policy
1. Exemption
Any investment currently held that does not meet the guidelines of this policy shall be exempted from the requirements of this policy. At maturity or liquidation, such monies shall be reinvested only as provided by this policy.
2. This policy shall be reviewed on an annual basis.
Any changes must be approved by the Town Manager and The Board of Selectmen as well as the individuals charged with maintaining internal controls.
IX. Investment Pools
Massachusetts maintains and operates a government investment pool. The purpose of the Pool is to allow any political subdivisions to pool investable funds in order to achieve a potentially higher yield.
X. Interest Allocation
1. The Town of Duxbury shall maintain a pooled investment account for its trust funds. Each month after the bank statement is reconciled; interest will be allocated on a pro-rata basis based upon month end balances to each fund entitled to interest earnings. This allocation shall be approved by either the Treasurer/Collector or Town Accountant. Additionally, the interest allocation for June 30th will be reviewed by the Treasurer/Collector after all closing entries have been made to insure no other fiscal period adjustments are required.
2. The Town of Duxbury may use a pooled account to track interest earnings for such investments as the Performance Bond Fund and other funds as deemed appropriate. The interest earnings will be distributed to the sub accounts by the Investment Pool Manager.
3. Other funds that require interest allocations on an immediate basis will have interest earnings allocated based upon the Average Daily Rate of the Class Pooled Account. GFOA (Governmental Finance Officers Association) Recommended Practices:
The Town of Duxbury shall adhere to Mass. General Laws and GFOA recommended practices unless specifically addressed in another section of this policy document.
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