HOLDEN BOARD OF SELECTMEN
MEETING MINUTES
NOVEMBER 29, 2010
7:00PM Memorial Hall
Present: Chairman David White, Robert Lavigne, James Jumonville,
Kimberly Ferguson, Anthony Renzoni
Others Present: Nancy Galkowski, Town Manager
Jacquie Kelly, Assistant Town Manager
Elizabeth Helder, Recording Secretary
The Chairman called the meeting to order at 7:00PM. The Board participated in the Pledge of Allegiance.
Public Safety Building Opening
The Manager announced that the Police and Fire Departments would permanently move into the new public safety building on 12/30. The Fire Department will have a new general phone number: 508-210-5650 and Animal Control will have a new phone number: 508-210-5649. The general phone number for the Police Department will remain the same: 508-829-4444 as will the FAX number to the Police Station: 508-829.9175. Further information may be found on the Town’s web site: www.townofholden.net.
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 or budget cut. The DOR expressed a
lack of confidence in the Town’s efforts to balance the account based on the fund’s history. Therefore, the DOR refused to certify the Town’s FY2011 tax rate.
The Manager put on a power point presentation to review the history of deficits in the water/sewer enterprise fund, unexpected bills from the MWRA, and the anticipated results of the commissioned rate study currently being conducted by CDM. She discussed the options facing the Town that included the impact on rate increases to water and sewer bills on homeowners, conducting a Town Meeting to make changes to the budget, costs to the taxpayers associated with delaying tax bills until May 1, 2011.
Senator Harriet Chandler addressed the Board. She explained that she conducted a lengthy conversation with Mr. Perry with the DOR. She said that Mr. Perry felt it was a very black and white issue: increase rates, lower expenditures or make a transfer from the general fund in order to increase W/S revenues to balance the budget. Senator Chandler said that Mr. Perry had the law on his side and as of 3PM on 11/29, he did not intend to approve the tax rate. She said the Town must comply with State law and no political maneuvering/ intervening could change this fact. She suggested the Board take Town Manager Galkowski’s advice and vote to approve the recommended rate increases.
Representative Evangelidis concurred with Senator Chandler’s advice. In his conversation with Mr. Perry, the DOR Bureau Chief quoted Chapter 59, which states the fund must be balance. Additionally, the Town has a history of an unbalanced Water/Sewer budget. He said there was no flexibility in the matter. An immediate transfer of funds from the general funds, rate increases, or expenditure cut would solve the problem.
Mr. Jim Dunn, Chairman of the Finance Committee addressed the Board. He said the DOR law and opinion were quite clear. He said based on the tax timeline and lack of expenditures, the Town’s only option was to increase W/S rates.
Chairman White opening the meeting up to comment from the public. No one from the public came forward to address the Board.
Sel. Renzoni asked what the average increase to W/S customers would be based on the recommended rate increases by the Administration? The average water ratepayer should expect to pay an additional $86.29 annually; the average sewer ratepayer will pay an additional $141.12 annually.
Sel. Lavigne said he did not like having to react so quickly with the State “holding a gun to our heads.” He said he would like to make a decision after receipt of the CDM study. He said he did not want to approve a permanent rate increase without reviewing all the CDM information first. He suggested approving a temporary increase until more information is provided to back up the decision. While the Town always finds a way to deal with the problems in the account, it always seems like it’s a shell game. He has no problem with an increase as long as he has the data to back it up.
The Manager said she received a recommendation for the proposed rate increases directly from CDM. She said the Town should expect the CDM study to recommend rate increases’ for both accounts over the next several years. She cautioned against setting temporary rate and then debating the issue all over again. Rate increases are inevitable.
Chairman White said the rate increases being discussed seemed extreme but are to recover $400,000 in deficit over a 5-month period. The Board has decreased rates in the past (HMLD) and things can go in the other direction. He said he supported Sel. Lavigne’s theory.
Sel. Ferguson concurred with Sel. Lavigne and Sel. White saying that the process seems “backwards.” Water Rates have been increased by 92% since 2007. She said the increase should be deemed “temporary” until the CDM report is made available. Taxpayers are absorbing costs for the high school project and the new public safety building and cannot pay anymore. She said she was uncomfortable with all the options being presented but understood she needed to pick one.
Sel. Renzoni discussed a possible transfer of funds. He asked how much it would cost to put out a temporary tax bill and then pursue a town meeting to transfer funds. He said he was frustrated by the position the Town was in. He acknowledged problems with the account but did not feel comfortable making a long-term decision with all the facts from CDM. He said he was very upset to be in this position again.
Chairman White commented that the 1.2M in free cash in the general fund was money from the tax levy. There are customers who do not use water and sewer and their tax money would be used to pay for a product they do not use. He said he had a philosophical issue with using this money. Discussion was held regarding $45,000 that was transferred from cash at the Town Meeting in November 2010 to offset a deficit in the Water/Sewer fund. The Manager said that the money was refunded from costs expended during the December 2008 ice storm. Sel. Ferguson said that money was taxpayer money that should have been returned to the taxpayers and was instead used to bail out the W/S fund.
Chairman White acknowledged that while the Town has issues with the progress of CDM, the fact remains that the anticipated report will recommend the town raise rates. He said he takes his responsibility to the citizen’s seriously – the increases taken tonight will only lessen or forestall the eventual rate increases. He said he would rather make the recommended 16% and 20% increases and then cut the increases in half in FY2011 when the budget ends the fiscal year in the black. There is a significant structural problem with the W/S fund; however, this is the cost of business to run this account.
Sel. Renzoni said he agreed with Sel. White’s statement; however the Town needs to fix this problem. The Town needs to do better by the ratepayer and the Town is not doing its job.
The Manager said the Town was eventually going to end up in the same place: the fund needs more revenue coming in to make it solvent and it will take several years to accomplish this through a succession of rate increases.
Sel. Jumonville said the Town is dealing with something the DOR perceives is going to happen and is putting a metaphorical gun to the Town’s head.
The Manager said that several years ago, the Town used a surplus in the W/S fund to prevent the Town from raising rates. She said that never should have happened. The surplus should have been used for emergencies and rates should have been increased on a smaller scale.
Sel. Ferguson asked if the School District had contacted the Administration to discuss how the rate increases would affect their budget? The Manager said she had not heard from the District or any business owner on the subject matter.
Motion by Sel. Renzoni, seconded by Sel. Lavigne, it was VOTED 4-1 WITH 1 OPPOSED THAT ALL WATER USER RATES BE INCREASED BY 16% EFFECTIVE WITH ALL BILLS ISSUED ON OR AFTER JANUARY 1, 2011 AND THAT ALL SEWER USER RATES BE INCREASED BY 20% EFFECTIVE WITH ALL BILLS ISSUED ON OR AFTER JANUARY 1, 2011 IN ORDER TO PROVIDE AN ADDITIONAL $400,000 IN REVENUE FOR FISCAL YEAR 2011, AND THAT SAID RATES WILL EXPIRE ON JULY 1, 2011. (OPPOSED: JUMONVILLE.)
Executive Session
The Manager informed the Board it was necessary to enter into Executive Session to discuss a pending legal matter.
Motion by Sel. Renzoni, seconded by Sel. Lavigne, it was UNANIMOUSLY VOTED TO ENTER INTO EXECUTIVE SESSION TO DISCUSS A PENDING LEGAL ISSUE AT 8:05PM AND RETURN TO OPEN SESSION FOR ADJOURNMENT PURPOSES ONLY. ROLL CALL: Jumonville: yes; Ferguson: yes; Lavigne: yes; Renzoni: yes; White: yes.
4. Adjournment
Motion by Sel. Jumonville, seconded by Sel. Lavigne, it was UNANIMOUSLY VOTED TO ADJOURN THE NOVEMBER 29, 2010 MEETING AT 8:35PM.
APPROVED: December 6, 2010
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