Town of Hanson - Board of Selectmen
Meeting Minutes – Hanson Town Hall
April 5, 2011 – 7:30 p.m.
Members Present: Stephen Amico, Christopher Colclough, James Egan, Donald Howard and David Soper
Members Absent:
Others Present: Rene’ J. Read, Town Administrator and Executive Assistant Meredith Marini
I 7:30 p.m.~~~~~~~Chairman Colclough called the meeting to order. Chairman Colclough lead the Pledge Allegiance and read the announcements and upcoming meeting schedule.
II DANIELLE HENNESSEY ~ CONGRESSMAN KEATING OFFICE – Danielle Hennessey introduced herself indicating that she is a Hanson resident and is available to assist constituents regarding their concerns. Ms. Hennessey provided the Board with a list of contact information for Congressman Keating who has an office in Quincy and Hyannis.
III NEW BUSINESS
Dollars for Scholars Request – Michael Ganshirt was present and thanked the Board for its supports over the last several years. Dollars for Scholars has awarded almost $1.7 million to over 2,400 students. Mr. Ganshirt requested that Board declare April as Dollars for Scholars Month. He also requested permission to erect a fundraising thermometer on the Town Hall Green.
MOTION by Amico, second by Howard to allow Dollars for Scholars permission to erect a fundraising thermometer at Town Hall. Voted 5 - 0
MOTION by Amico, second by Egan to declare April as Dollars for Scholars month. Voted 5 - 0
Mr. Amico read the proclamation:
Whereas Dollars for Scholars of Whitman and Hanson has been awarding scholarships to deserving students from Whitman and Hanson for forty eight years; and
Whereas, Dollars for Scholars of Whitman and Hanson has awarded nearly $1.7 million to over 2,400 students; and
Whereas, Dollars for Scholars of Whitman and Hanson is a community-based, non profit organization which receives support from residents, businesses, and community organizations; and
Whereas, Dollars for Scholars of Whitman and Hanson offers non-restricted scholarships open to qualified secondary school graduates from both private and public schools living in the towns of Whitman and Hanson; and
Whereas, Dollars for Scholars is currently appealing to Whitman and Hanson residents through their annual fundraising campaign.
Now, therefore, We, Board of Selectmen for the Town of Hanson, hereby proclaim the month of April as Dollars for Scholars month and urge all residents and businesses to recognize and support Dollars for Scholars of Whitman and Hanson and the work that they do.
Hanson Little League Request – Annual Opening Day Parade Saturday, April 16th 12:00 p.m.
MOTION by Amico, second by Egan to grant permission to Hanson Little League for an opening day parade on April 16th with a raindate of April 17th. Voted 5 - 0
Green Hanson Request – Earth Day Event, Saturday, April 30th with rain date May 1st.
MOTION by Amico, second by Egan to grant permission to Green Hanson for an Earth Day event on April 30th with a rain date of May 1st. Voted 5 - 0
Haven for Healing Request – 5 Mile Walk/Run Saturday, June 25th 9:00 a.m. starting at
156 Liberty Street
MOTION by Amico, second by Howard to approve Haven of Healing’s walk/run on June 25th.
Voted 5 - 0
Vote the Audit Contract – Malloy, Lynch, Bienvenue, Norwell
MOTION by Amico, second by Egan to approve the three year auditing contract in the amount of $26,000, $26,500 and $27,000 respectively. Voted 5 - 0
Accept Gift Donations –Mrs. Marini explained that the Board is required to vote the acceptance of gifts. The current acceptance form includes of the gifts received through March 31st in the amount of $11,605.25. The Town Accountant recommends that the Board start voting the acceptances on a quarterly basis.
MOTION by Amico, second by Howard to accept the gifts totaling $11,605.25 as presented.
Voted 5 - 0
Reappointment of Registrar – Mary Puleio – Term to expire 3/31/14
MOTION by Amico, second by Egan to reappoint Mary Puleio to the Board of Registrars with a term to expire on March 31, 2014. Voted 5 - 0
IV TOWN ADMINISTRATOR REPORT- Mr. Read informed that Board that he has received notification from Department of Environmental Protection that they will hold an Enforcement Conference on April 14 at 10:00 a.m. to discuss DEP’s order of January 2008 to properly cap the landfill site at the Transfer Station. DEP requested that someone attend the meeting who is empowered to settle the matter. Mr. Read requested that the Board authorize him to act on the Town’s behalf.
MOTION by Egan, second by Amico to authorize Mr. Read to attend the meeting and act on the Town’s behalf. Voted 5 - 0
Moody’s report – Mr. Read informed the Board that the report from Moody’s has been published and the Town’s bond rating is Aa3 with the negative outlook removed. Mr. Read indicated that this is very good financial news for the Town and Mr. Read credited the financial team for its hard work in maintaining the Town’s financial health. Mr. Amico also thanked the Finance Committee for its work as well.
Mr. Read provided the Board with an updated budget and revenue forecast. He pointed out that there is currently a $198,000 deficit and the amount increases to $411,849 when $213,000 of free cash taken away as a funding source. Mr. Read indicated that the use of free cash to balance the budget is not sustainable. Mr. Read read the following statement:
Proposition 2 ½ - Why Does the Town of Hanson Need an Override?
The most basic budgeting concept is that budgeted expenditures should not exceed budgeted revenues.~ The reason for this is that if one-time revenues or reserves are used to balance a budget, a community is automatically faced with an unsustainable budget.~ One time revenues are just that and repeated use of reserves will cause them to dwindle.~ The question becomes - what does a community do when those items disappear?
One time revenues: In FY08 - $250,000 was received for a wildlife deed restriction – this entire amount was used to balance the budget.~ More appropriately, these funds should have been allocated to reserves since this was obviously not going to be available for FY09.
In FY09 a “miracle” of sorts occurred and the Town received $678,655 in MTBE funds – the Town used $374,686 towards the FY10 budget.~ Again, a more appropriate use of these funds would have been to allocate them toward reserves (i.e. Stabilization) since it was not a repeat source of revenue.~
Reserves: Free Cash Many Towns in the state use Free Cash to balance their budgets but this is not the preferred method.~ Free Cash is the amount available to spend after the Town Accountant closes the books.~ In very basic terms, it is the close-out of revenues that were not budgeted (a bonus) and expenditures that were closed out (the full budgeted amount was not spent).~ While there are many other factors, this is essentially the fundamental idea.
As a result, free cash is a VERY unreliable figure and a Town should never count on using these funds towards the operating budget.~ Why? ~Unanticipated revenues may not come in (as they are unanticipated) and some years may work out well for expenditures but there could also be other years when departments will overspend due to emergencies.~ The new Mass. General Laws which now allow for year end transfers greatly increases the risk of having less to close out at year end.
We envision the Town of Hanson, over time, moving away from our reliance on the use of Free Cash to balance the budget with the understanding that our ability to do so will not occur overnight.
Stabilization - Stabilization should be considered a sacred source and used only in the case of a dire emergency.~ The use of Stabilization is an extremely dangerous practice as this is one of the first items that financial institutions review and the frequent use of Stabilization can easily lower a Town’s bond rating.~ As you know, the town has been taking a very conservative approach to how we now prepare and implement our budgets and the improvements to our bond rating are a direct, positive reflection on this new way of doing things.
Unfortunately, during fiscal years 2004 to 2007 when the economy was good, the Town frequently used Stabilization - and for large amounts.~ That practice has halted in recent years, but the damage has been done.~ As a result, the Town’s bond rating was reduced and during the years Stabilization was used, a completely unsustainable budget was created.~ When the economy turned, what was left was a budget that could not be balanced.
Please see the attached Prop 2 ½ analysis - As you can see, for fiscal years FY07-FY09 (trend actually started in FY05), the Town was using almost half a million dollars from unsustainable resources to balance the budget.
Decreasing revenues - While the Town was balancing the budget with one time revenues and reserves, some very key revenue sources were also decreasing.
New Growth - If new growth decreases, it creates a “double problem” as the decline in new growth decreases the current year’s tax levy, but it also indicates that future years will be correspondingly lower.~ Whatever amount constitutes new growth in a given year, that year is rolled into the basic tax levy for all future years.~ In FY07, new growth was $261,773, for FY12 it is projected to be $100,000.~ Dollar-wise the amount is not substantial however, it represents a 61% decrease over those years and also points to a tax levy that is not growing correspondingly with increased budget demands.
Local Aid - Local aid has been decreasing steadily since FY08.~ At the peak, the Town’s state aid was $1,756,961 in FY08 (and constituted 10.5% of the total budget).~ For FY12, it is projected to be $1,091,849 (now only sustaining 5% of the budget).~ This represents a 37.8% decrease in state aid since FY08.
Local Receipts - This encompasses all licenses, permits, fees and fines that are assessed at the local level.~ The main decrease over the years is attributable to building permits but it is also reflected in many categories across the board.~ At its peak, local receipts were at $2,064,852 (12.72% of the budget).~ For FY12, local receipts are projected at $1,361,917 – these revenues will only support 7.45% of the budget.~ The drop in revenues from FY07 to FY12 is a 34% decrease.
So in sum, while the budget was being balanced with one-time revenues and reserves, there was a corresponding decrease in revenues and increases in certain critical budget expenses. ~This created the worst of all possible scenarios.~ In FY11 and FY12, the budgets were NOT balanced with one time revenues or reserves but in FY11, it became apparent that the budget could not continue to be balanced and as a result, there were layoffs and reductions in hours.~ These kinds of cuts also are clearly not sustainable as it adversely affects the quality of service to the taxpayers of Hanson.
A new approach is needed – one that offers the critical services and does so in a responsible and sustainable manner.~ This is the goal of a Prop 2 ½ override.
Notes on the removal of Free Cash from the operating budget
It is important to note that moving toward a direction that will reduce our reliance on Free Cash in future years will be a permanent fix only if:
State aid stays level or increases
Health insurance stays level or decreases
School assessment stays level or decreases
If any or all of the aforementioned variables change, there is little question that we will need to use free Cash to balance the budget in FY13.~ Nonetheless, this is an extremely important objective on which to maintain our focus for future years.
That objective – removing our reliance on Free Cash from the operating budget – is important for a number reasons including but not limited to:
Using those funds toward capital projects (many of which have gone un-funded for a number of years)
Upcoming retirements – prior year contractual obligations (such as sick time buybacks) and we have no other way to budget for these items.~ Saving Free Cash for these purposes is going to help keep the town from future crisis scenarios.
Bond Rating - I have discussed the potential impact of an override on the Town’s bond rating in future years with our financial advisor noting that it was my understanding that an override could be viewed as a positive factor since it could illustrate that the taxpayers are willing to do what it takes to keep the Town solvent.~ They have concurred and also noted that an override is a positive bond rating factor since it demonstrates support of the taxpayers and willingness to pay for all the services necessary.~ Additionally, another important point to provide to everyone is by achieving a successful override the Town is more likely to leave its stabilization fund intact, which further helps sustain our credit rating.
The need for an override is not solely due to the school assessment and should not be characterized as such.~ It is due to decrease revenues and a variety of unsustainable factors all of which are playing a part in this years (and future years) budgeting process.
Mr. Read explained an override would cost the average home ($325,000) $190.02 per year.
Mr. Amico questioned the increase in hours for the conservation agent at $6,800 and the town planner of $9,800. Mr. Amico feels if the office is running o.k. then there is no need to increase the hours.
Mr. Colclough is concerned that the additional hours look like very big increases when the town is looking at an override.
Mr. Read indicated that 3% increases have been included. He pointed out that police and fire have not received any increases in 4 and 3 year respectively.
There was lengthy discussion on increases for department heads and the increase in hours for the planner and conservation agent. Mr. Soper does not favor increases for anyone.
Comments from the audience were heard from Laura Kemmett of Community Preservation. Mrs. Kemmett pointed out that the conservation agent’s position is not tied to growth. Most of the work the agent does is related to people working on their properties. She pointed out that the talent level of the individuals currently in conservation and planning could not be replaced.
Indian Head School – Mr. Read informed the Board that he received an e-mail from the Town Engineer who indicated that the cost to replace the Indian Head school roof would is approximately $800,000 if the Town used SBA funding. The cost has risen several times. If the town chose to repair the roof without SBA funding the amount would be $520,000. Mr. Read indicated that the superintendent is looking into the matter. There was brief discussion relative to broadening the scope of the Maquan School project and combining the schools. There is a question as to the significance Memorial Auditorium. The building was renovated just eleven years ago. School Committee Chairman Bob Hayes pointed out that a new school is 3 or 4 years down the road and the roof is leaking
now. The roof still needs to be addressed. The Board tabled the discussion of the debt exclusion question until next meeting.
Steve McKinnon of the Finance Committee requested the objectives of planning and conservation and evidence of where the offices are falling short. The chairman of the two committees was unable to provide any. Mr. McKinnon inquired why the overtime lines were not reduced if new people are being added to the fire and highway department. He questioned why we are bringing back a person at the senior center when they only have 5 or 6 people in the program. He does not feel that additional hours in the Town Clerk’s and Town Accountant’s offices are sustainable. Mr. Amico supports adding hours to the Town Clerk’s office.
Mr. Amico suggested looking at Hanover with respect to senior center services. Mr. Read indicated that closing the senior center would save approximately $60,000.
MOTION by Amico, second by Egan to open the Annual Town Meeting warrant. Voted 5 - 0
MOTION by Amico, second by Howard to place an override question on the May 21st election ballot. Voted 4 – 1 (Soper)
Mr. Read asked Mr. Soper why he wouldn’t support placing an override question on the ballot. Mr. Soper indicated that he didn’t think it was prudent. Mr. Amico explained that the vote was to allow the ballot question on the warrant, not to support the override.
MOTION by Egan, second by Amico to reconsider placing the override question on the ballot.
Voted 5 - 0
MOTION by Amico, second by Howard to place an override question on the ballot with an amount to be determined. Voted 5 - 0
MOTION by Amico, second by Howard to close the Annual Town Meeting Warrant. Voted 5 - 0
V OLD/UNFINISHED BUSINESS -
Review Warrant Articles - Mrs. Marini indicated that three additional articles need to be added to the Special Town Meeting Warrant.
MOTION by Amico, second by Egan to open the Special Town Meeting Warrant. Voted 5 - 0
Additional Articles:
Selectmen – to replenish the utility line for $25,000.00
Selectmen and Assessors – implement quarterly tax billing
Water Department – transfer from iron study article to expense line.
MOTION by Amico, second by Egan to place the three articles on the Special Town Meeting Warrant. Voted 5 - 0
MOTION by Amico, second Howard to recommend the utility line article. Voted 5 - 0
MOTION by Amico, second by Egan to recommend quarterly billing for discussion.
Mr. Amico questioned whether there were any costs associated with quarterly billing. Mr. Read indicated that he would check. Mr. Read pointed out that quarterly billing will give a better measure on data points with respect to revenue forecasting.
Mr. Amico withdrew his motion and Mr. Egan withdrew his second.
MOTION by Amico, second by Egan to Hold the quarterly billing article. Voted 5 - 0
MOTION by Amico, second by Howard to recommend the water expense article. Voted 5 - 0
MOTION by Amico, second by Egan to close the Special Town Meeting Warrant. Voted 5 - 0
Community Preservation Article – Laura Kemmett was present to address questions the Board had regarding the Bonney House article. Mrs. Kemmett reported that the three projects approved at the October 2010 Special Meeting – Bonney House Roof, Two-Holer and hearse house were completed under budget by $12,000.00. She indicated that when the roof of the Bonney House was replaced they realized that the rafters were damaged and needed to be replaced. The proposed article for $11,000 funds the additional work. Mrs. Kemmett indicated that the committee will avoid “band aid” approaches and has now required proponents provide master plans and due diligence for all projects.
MOTION by Egan, second by Amico to recommend Article 10 of the Special Town Meeting.
Voted 5 - 0
VI ONE DAY LIQUOR LICENSES
Teresa Harling, Dorchester, Saturday, April 30th 12:00 p.m. to 3:00 p.m. 1st Communion
MOTION by Amico, second by Howard to approve the one day liquor license as presented. Voted 5 - 0
VII COMMITTEE REPORTS – Mr. Colclough reported he attended the DARE graduation along with other Board members. It was a great event. Mr. Soper complimented Mr. Colclough on is speech. Mr. Amico acknowledged Sgt. Nawazelski’s efforts on behalf of Hanson’s students.
VIII EXECUTIVE SESSION – Chairman Colclough announced the Board would be going into Executive Session for the purpose of considering the purchase, exchange, lease or value of real estate since an open meeting may have a detrimental effect on the negotiating position of the Board of Selectmen. The Board will return to open session only to adjourn. So moved by Amico, second by
Egan. Roll Call Howard Aye, Amico Aye, Colclough Aye, Egan Aye and Soper Aye. Voted 5 – 0.
9:20 p.m. Brief Recess
9:54 p.m. Returned to open session
IX --ADJOURNMENT
MOTION by Egan, second by Amico to adjourn. Voted 5 - 0
9:54 p.m. Meeting Adjourned
Respectfully submitted,
Meredith Marini,
Executive Assistant
Approved and Voted 4 - 0
April 12, 2011
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