HOLDEN BOARD OF SELECTMEN
SPECIAL JOINT MEETING MINUTES
JUNE 24, 2008
6:00PM Senior Center
Present: Chairman David White, James Jumonville, Kimberly N. Ferguson, Kenneth O’Brien, Joseph G. Sullivan
Finance Committee: Alan Berg, Paul Challenger, Maria Dell’Ovo, James Dunn, Marilyn Foley, Peter Lacey, Robert Ripley
Water-Sewer Advisory Board: Scott Carlson, Brian Forts, John Michalak
Others Present: Brian Bullock, Town Manager, Jacquelyn Kelly, Assistant Town Manager, Randy Swigor, Water-Sewer Superintendent, Lori Rose, Town Accountant
Chairman White opened the joint meeting of the Selectmen, Finance Committee, and Water-Sewer Advisory Board at 6:00PM.
Budget Progression Spreadsheet
Town Manager Bullock presented a spreadsheet showing how the Water- Sewer 2009 Budget document had changed over the past few months as new information was received. Ms. Rose reviewed the spreadsheet pointing out major unanticipated charges such as the MDC transport charges, MWRA maintenance and the Worcester Totalizer adjustment. Mr. Swigor said that the City had notified the town that the computerized totalizer had not been programmed correctly when it was installed. The City claims that the Town owes $74,000 in under- credited charges. The Town is reviewing this claim and its responsibility for paying it.
There was extensive discussion about the FY2008 Water-Sewer budget. There was consensus among Finance Committee members that they were not presented with enough information about the town meeting warrant article that balanced the FY2008 Water-Sewer Budget. They were under the impression that the balancing was to cover the “fifth” quarter Worcester Sewer Transport billing.
Town Meeting Warrant Article(s)
Mr. Bullock explained that there were other bills received, that were far in excess of what was originally budgeted and available in the Water-Sewer Budget that were addressed by the town meeting warrant article. These added expenses were in addition to the “Fifth” Quarter MDC Disposal Charges. The issue of whether the Town had to appropriate and pay the additional quarter in FY2008 was still under discussion at the time of town meeting. In the last few weeks, after an exchange of telephone calls to the Department of Revenue, it became apparent that the Water-Sewer Budget would be required to appropriate and allocate approximately $220,000 more than what was appropriated for expenses at town meeting.
MDC Disposal Charges – “Fifth” Quarter
The Town Manager and Town Counsel have discussed this issue with representatives from the Department of Revenue, Division of Local Services. The town has always been billed months after the end of the fiscal year for charges in the last quarter of the previous fiscal year. The bill has been paid in the year it was received. In the past it has been the town’s policy to pay only four quarterly payments in any one fiscal year. That has now changed. The Department of Revenue representative deemed that the Town/ Water-Sewer Fund is required to raise and appropriate an amount (approximately $220,000) to offset a fifth payment. The Department of Revenue had agreed to give the Water-Sewer Division three years in which to collect the revenue needed to provide the offsetting entry.
Sewer Surcharge
The proposed sewer rate increase was in the form of a flat surcharge of $1.53 per meter per month (over three years) to collect revenue for the MDC Disposal charges, called the “Sewer Surcharge.”
Selectman Ferguson asked about strategies in place that would reduce the Town’s reliance on Worcester water. Mr. Swigor responded that two short-term steps would be to redevelop the Mason Road well and to promote and educate concerning water conservation. The acquisition of the former ECC property and wells has also been discussed. Selectman O’Brien supported developing financial reserves within the Division to enable the town to pursue these and other measures that would strengthen the infrastructure. Mr. Swigor stated that the Division had close to $1.0 Million in free cash at one time. However, all that free cash has been used to offset the operating budget and consumer rates.
The 2006 Report from Camp, Dresser, and McKee was discussed. There was frustration expressed that the Selectmen had not received the Report until 2008. The Report details a capital improvement program for the Water-Sewer Division. Mr. Swigor suggested that Camp, Dresser and McKee (CDM) attend a Selectmen’s meeting to discuss and review the report.
After further discussion, Selectman Sullivan asked for the Finance Committee’s recommendation on the proposed sewer surcharge. The Finance Committee members present took a vote and said that they would support the flat monthly $1.53 surcharge for the next three fiscal years: 2009, 2010, 2011. Then, on a motion by Sel. Sullivan, seconded by Sel. Ferguson, it was UNANIMOUSLY VOTED TO APPROVE AND IMPLEMENT A SEWER SURCHARGE IN THE AMOUNT OF $1.53 PER METER PER MONTH FOR THE FISCAL YEARS 2009, 2010 AND 2011. Mr. Bullock stated that the revenue from the surcharge will be accumulated and brought to a future town meeting for appropriation.
Proposed Water Rate Increase
Mr. Swigor presented a proposal to increase the water rates to balance the FY2009 budget in the face of unanticipated increased expenses. There were two alternative increases provided. Selectman Sullivan explained that Alternative 1 was a flat rate increase of about 8.1% to all rate payers. The “progressive” rate increase (Alternative 2) would charge high water users more per HCF (hundred cubic feet). Mr. Bullock explained that the progressive rates give the low and average water users a break and charge the higher users more, thus shifting the cost burden to the higher users.
Chairman White asked about water conservation programs to educate consumers, especially important in the event of raises in water rates. Mr. Swigor said that the Sewer Division’s Web site contained information about water conservation, and the Division has free water reduction devices available for consumers.
Mr. Berg said that the Finance Committee has previously voted to support the recommended increase in water rates (only). On a motion by Sel. Sullivan, seconded by Sel. O’Brien, it was UNANIMOUSLY VOTED TO APPROVE THE WATER RATE INCREASES AS RECOMMENDED BY THE TOWN MANAGEMENT UNDER THE ALTERNATIVE 1 SCENARIO.
Future Meeting
Mr. Bullock distributed an updated list of capital projects based on the 2006 CMD Report. Chairman White asked that the CDM report be distributed electronically, if possible, to the Finance Committee and that the FinCom, Water-Sewer Advisory Board, and Selectmen meet again in August to review the report. The Selectmen asked for an update on the status of the ECC property, plans to reduce reliance on the purchase of Worcester Water, water conservation, and a plan to further define the cost allocations between the water and sewer functions within the budget. Chairman White said that Sel. O’Brien would be attending future meetings of the Water-Sewer Advisory Board as the Selectmen’s liaison.
Adjournment
On a motion by Sel. Sullivan, seconded by Sel. Jumonville, it was UNANIMOUSLY VOTED TO ADJOURN THE JUNE 24, 2008 MEETING AT 8:10 p.m.
Prepared by: Jacquelyn Kelly
Assistant Town Manager
Approved: July 14, 2008
| 
