HOLDEN BOARD OF SELECTMEN
MEETING MINUTES
NOVEMBER 23, 2010
6:30PM Senior Center
Present: Chairman David White, Robert Lavigne, James Jumonville
Absent: Kimberly Ferguson, Anthony Renzoni
Others Present: Nancy Galkowski, Town Manager
Elizabeth Helder, Recording Secretary
The Chairman called the meeting to order at 6:45PM. The Chairman announced that Sel. Ferguson and Sel. Renzoni would not attend the Selectmen’s meeting due to prior commitments.
Water Sewer Rate Increase
The Manager reported that after the Board approved the FY2011 Tax Rate on November 15, 2010, Principal Assessor Beverly Kinniston met with a local representative of the Bureau of Accounts, Department of Revenue regarding the calculation of the tax rate. On November 17, 2010, the Town received notice that Department of Revenue officials in Boston would not approve the tax rate. On Friday, November 19, 2010, the Town Manager, Ms. Kenniston, Jim Shuris, Director of Public Works, and Assistant Town Manager Jacquie Kelly conducted a conference call with Mr. Gerry Perry, Director, Bureau of Accounts to review the Bureau’s concerns.
Mr. Perry stated that the Bureau was concerned that the estimate of revenues for the Water/Sewer Enterprise Fund could not be supported without a rate increase and that the DOR had a lack of confidence in the Town’s efforts to balance the account. The Manager said she explained to Mr. Perry that the Town was in the process of auditing the W/S budget and creating measures to correct any deficit the account might incur. Actual revenues from user fees for FY2010 were $4,049,084. Estimated revenues from user fees for FY2011 are expected to be $4,419,014, which is a $400,000 increase. The Town’s contention for the increase from FY2010 to FY2011 is supported by a notable trend in the utilization of water by existing customers and by a projected increase in new customers.
The DOR said the Town had operated the W/S fund at a deficit for multiple years. They stated that the Town had two choices: raise rates or cut the budget. The Manager said the budget was mostly fixed costs and cutting costs would be impossible. The budget is not padded and is not flexible. She said the only option the town had was to raise rates. Ms. Galkowski told the Selectmen that there was nothing that would affect Mr. Perry’s perception of the W/S fund.
The Manager consulted with Camp, Dresser & McKee, the Town’s water engineering consulting firm who recommended increases of 16% in water and 20% in sewer. She said these increases were projected to collect an additional $400,000 in revenue for FY2011. The fund cannot fund itself. Rate increases are eventually going to happen. The average water ratepayer will pay an additional $86.29 annually and the average sewer ratepayer will pay an additional $141.12 annually. Ms. Galkowski explained that timing of the DOR’s approval of the tax rate was critical. Tax bills must be sent to residents by December 31, 2010. As the Bureau is currently reviewing and approving tax rates across the Commonwealth, the Town is in the cue to have its tax rate reviewed now. The earlier the Town can fix the concerns
of the Bureau, the less likely the Town is to lose its place in the review cue. The Town runs the risk of not having its tax rate approved prior to 12/31/10.
Sel. Jumonville said the Town was currently operating the fund in the black, has an A bond rating, and one million dollars in free cash. He said it was not fair that the DOR was making a projection on what might or might not happen. He said he would like to wait to make a decision with a full board. He suggested meeting on November 29, 2010. Additionally, he said he would like to invite Rep. Evangelidis and Senator Chandler to the meeting. He said that the proposed rate increases would have an affect on the school district. He said if the Town had a window of time to make an informed decision that they should take the time.
Sel. Lavigne said the Board has always conducted a public hearing when increasing fees/rates. He said he wanted to keep the process as transparent as possible. He asked if the Town could create a temporary increase to the fund that would retire at the end of the fiscal year. This would allow the Town to thoroughly plan a permanent solution to the problem. He said it seemed the Town was always putting a band-aid on this problem.
The Manager said that while it has been the Selectmen’s practice to hold a public hearing prior to increasing rates, it is not a policy. The Board does have the authority to increase rates without holding the public hearing. Cuts to the budget would involve a Town Meeting. She added that the DOR is an independent agency that would probably not be influenced by Rep. Evangelidis or Senator Chandler.
Chairman White said that he felt that the Town had notified the public via the Town’s website and media the best it could in the short amount of time it had. The Water/Sewer Study that CDM was currently preparing would include rate increases. The very worse case scenario would be to raise rates and then have the money being surplus in the W/S fund at the end of the year. While it is distasteful to raise rates so quickly, the CDM study is going to show the town needs to raise rates. The Town must make the rate increase to stabilize the account for the DOR in order to send out its tax bills by 12/31/10.
The Manager said it was her plan to address long term solutions of the W/S fund in January/February 2011. The proposed rate increases are enough to balance the W/S fund to satisfy the DOR. She concurred with Chairman White and said she fully expects the CDM study would recommend smaller incremental rate increases for the next several years. The last increases to the Sewer Account were made in 2007.
Sel. Lavigne said he would like to hold a public hearing on December 6th prior to increasing rates in order to follow past practice to allow public comment. He agreed that rates would have to be raised eventually. However, he would not approve a permanent increase at this time.
The Manager reiterated that waiting to approve rate increases until December 6th would jeopardize the Town’s ability to receive approval from the DOR, print the tax bills and send them out by 12/31/10.
Sel. Jumonville suggested holding a meeting on November 29th with a full Board in order to conduct an extended public comment session. He said he was not interested in raising rates tonight. The remainder of the Board agreed to hold an extended public comment session on November 29th.
2. Adjournment
Motion by Sel. Jumonville, seconded by Sel. Lavigne, it was UNANIMOUSLY VOTED TO ADJOURN THE NOVEMBER 23, 2010 MEETING AT 7:30PM.
APPROVED: December 6, 2010
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