Town of Newbury
Finance Committee Meeting
Thursday Jan 10, 2007— 7:00 pm, Town Hall
Meeting Summary
In Attendance: Eugene Case, Pete Morse, Dave Newbert, Frank Remley, and Anna Tenaglia
Ex-Officio: Chuck Kostro, Finance Director
1. November 20, 2007 meeting summary (attached): Approved without further
discussion or change.
2. Potential expenditure of $9,000 in FY 08, and $9,000 in FY 09 to gain federal
funding for beach replenishment and rebuild of South Jetty: Mark Sarkady
of Plum Island and Howard Marlowe, of Marlowe & Co., a Washington DC based
consulting/lobby firm specializing in coastal management and beach reclamation,
explained the need for dredging, beach replenishment, jetty repair and the
challenges of obtaining federal funding for this purpose. Mr. Marlowe spoke
knowledgeably about the situation and his firm’s background in beach
reclamation. He described the PI beach as “terminal” without federally funding.
He said that the focus should be on the Energy and Water Appropriations subcommittees
in congress as well as the Corps of Engineers, who have recently
agreed that the situation is now serious but lack the funds to fix it. Mr. Sarkady
stressed the financial, property and public health risks to Newbury in not taking
action soon. Recent storms combined with a degraded South Jetty have caused
serious losses to mid-island beaches in particular. These beaches are shared
between Newbury and Newburyport. Their proposal consists of a $40,000 effort
over the next calendar year for Marlowe & Co. to promote this matter in
Washington with the purpose of securing federal funding for mitigation and jetty
repair. $36,000 of the contract would be split between Newbury and
Newburyport, while Robert Connors of Plum Island has already contributed
$4000 to the cause. While the Finance Committee acknowledged the associated
public and financial risks in not taking action, it also clarified the following:
a. That any funding for this purpose would have to come from the FY ‘08
reserve fund, which already has a number of priority needs to address;
b. That the Board of Selectmen would have to make a formal request for the
funds along with a decision to go ahead with the project;
c. That any current fiscal year funding would be limited to six months, or a
total of $9000, and the balance for calendar year 2008 would have to be
appropriated at Town Meeting in May as part of the FY ’09 budget;
d. That there would have to be an appropriate contract vehicle to
accommodate the expenditure with no financial or legal risk to Newbury
beyond the initial request;
e. That there would have to be a formal procurement process involving a
minimum of three interested bidders for the work.
f. That we needed to know whether or not Newburyport would participate.
See attached handouts from Mark Sarkady and Howard Marlowe.
[Note: the finance Committee has now received 137 cards from PI residents
supporting the proposed action to hire Marlowe & Co.]
3. TRSD FY’09 Funding process: Diana Sullivan of the Newbury contingent to the
TRSD school committee expressed an interest in maintaining regular
communications with the Finance Committee during the FY ’09 budgeting
process. The Committee acknowledged that communications had improved and
agreed that it was open to further updates as the budget was formulated over the
next three months. The Finance Director noted that a 5% increase in Triton’s
budget in FY09 would be on top of a 10% increase in FY07. The total increase
of 15% in Triton’s budget is during the same period when revenues have
increased for the town of slightly more than 5%.
4. Finance Director Report: (Chuck)
a. YTD Expenditure and Revenue Reports: Chuck Kostro briefly covered
the December YTD expenditure and revenue reports. There are no major
surprises as both are tracking well vs. projections. Discussion focused on:
i. The Public Building Maintenance is trending high due to the costs
associated with the operation of the Yellow School. This will be a
budget problem before the year is out unless some action is taken
to address the long-term implications of this arrangement.
ii. BOS Chair Vince Russo addressed the issue of selling the
Woodbridge School. The study committee decided that it would be
too costly to renovate as a Town Hall. BOS Chairman Vince Russo
attended the meeting and stated that there would be a warrant
prepared for Town Meeting to sell the Woodbridge School Building,
as it is costly to maintain and falling into disrepair.
iii. The December expenditure report shows the snow and ice budget
as nearly depleted. Due to the late December storm, additional
expenses were incurred in the first warrant in January. The snow
and ice budget is presently in a deficit of approximately $24,000.
iv. Through November 30, revenues are on track. December is
typically a slow month. Areas of concern appear to be related to
the economy. There is a tremendous slow down in License and
Permit fees and we will likely be well under projections in this item.
A key is how the excise tax revenue does. A major drop in excise
revenues will be a problem for the town. Everything else appears
on track but things are extremely tight and there is no margin for
error.
v. There is a minor issue with the commitment for the sewer
betterment interest in FY08. The Assessor’s Office is working to
correct the matter and developing a solution to the problem.
5. FEMA and Chapter 90 Collections Status
All FEMA funds have been collected except for the $15,000 due for the
state share of the May 2006 floods. The $7,000 deficit for the PI drainage
work has been addressed through the approval of Chapter 90 for the
town’s share of the project.
6. Reserve Fund Summary: Currently at $135,000, the following requests for
funds transfers were advanced by Chuck Kostro:
i. 3% Wage Increase ($21,406): Chuck submitted a request for a
transfer of $21,406.28 to cover a 3% increase for eligible town
employees. Separate transfers will be made to various
departmental accounts totally this amount. Request APPROVED
by a 4:1 vote. (Anna Tenaglia voted against the 3% compensation
increase at this time because, although merited, it may be unsustainable in
current difficult economic times. She expressed concern that the increase
is beyond prop 2 1/2 [plus growth] within which we need to live, and the
State's current economic crisis may make any legislative increase in local
aid from the State unlikely for FY 09.)
ii. Office space rental agreement totally $12,210 for rent and
moving costs: Due to overcrowding at Town Hall, Chuck Kostro
requested a transfer of $12,210 to support the renting of 500 sq. ft
of nearby office space across the upper Green. The purpose of this
would be to move the Town Engineer, ConsCom agent and Harbor
Master to the new space, while expanding the space needed by the
Finance Department to the room vacated by the Town Engineer
and ConsCom agent. This would also eliminate the need for the
Harbor Master and Board of Health to share the same small
cubicle. Questions arose regarding the exact cost of such a move,
the implications of having three departments isolated albeit across
the Upper Green, and the longer-term implications. The Finance
Committee put this decision on hold until further analysis of space
needs, ramifications of such a move, and the full cost of it could be
accomplished. No action taken.
iii. ADA Compliance Proposal for Town Hall (vote to transfer
$7,500 for ADA ramp upgrade): Chuck explained the need to
improve the handicapped access to Town Hall. It is currently not in
compliance with state regulations and Newbury risks being cited for
this. He requested $7,500 for a contract for Charles Bear & Co. to
make the improvements. The contract was selected out of three
proposals received to a town solicitation. The selected vendor was
the low bid by a substantial amount. Request (unanimously)
APPROVED.
iv. Computer Replacement for Building/Conservation failed computer
($895): Chuck Kostro requested $895 to be transferred from the Reserve
Fund for replacement of a failed computer for the Town Engineer.
Request (unanimously) APPROVED.
v. Cost of bonding ($1945.78): Chuck Kostro requested the transfer of
$1945.78 from the Reserve Account to the Cost of Bonding, Account No.
100-700-5900-000 for additional short term bonding costs. Request
(unanimously) APPROVED.
vi. Potential Departmental Transfers (update – no vote needed)
a. Legal Department: Chuck Kostro had no request at this time,
but estimated that a $20,000 transfer may be eventually needed to
cover the cost of legal defense in the T-Mobile cell tower siting suit
(i.e. location on Iron Moon Farm on Route 1A) in Federal Court.
NOTE: Policy on Hiring Counsel: The Board of Selectmen has
adopted a policy requiring all town departments and committees to
submit requests for counsel services to Town Counsel.
b. Finance Department
- Liebman Unemployment Claim: Sandy Liebman has filed an unemployment
claim as a result of leaving the Finance Department. This is being contested as she
wasn’t fired but officially resigned. Her request was originally denied but was
granted on appeal. The town is now appealing the decision. If granted, a Reserve
Fund transfer will be necessary to pay this expense.
- Other Expense Items: Public Building and vehicle maintenance budgets may
each be $10,000 short for the year, but no request is currently being made. There
is a growing concern about the on-going liability and expense of maintaining the
Yellow School in Byfield.
c. Expense Item Policy for FY08: Chuck stated that the budget process
would begin at the end of January. Initial projections show a very tight
FY09. To balance increases in salaries, there could be reductions in
department expense items. Chuck suggested that departments might be
given bottom line totals for their expense item at the start of the budget
process as a method of controlling costs. This is still being developed at
this time.
7. Police Department Updates
i. Police Detail Fund Status: Chief Mike Reilly and Officer John
Lucy attended the meeting and explained that the Police
Association has now filed a grievance in an effort to resolve this
situation. John Lucey estimated the cost to be $11,900 to
completely recover all monies claimed by officers who covered
requested details and still have not been paid. The FinCom
expressed its concern about basically underwriting businesses,
which didn’t pay, or the Police Association’s apparent mishandling
of accounts payable prior to Officer Lucy taking over. The
committee needs more background and justification to resolve this
situation and especially before spending taxpayer funds to cover
unpaid private details that was handled by the police association.
Chuck Kostro and Chief Reilly have met numerous times to try and
develop a solution to this problem which pays the officers but does
not adversely affect the finances of the town. Both commented that
the filing of the grievance changes the nature of the situation.
Chuck and the Chief suggested that we treat this as a “friendly
grievance” and allow it to run its course. The Association can
prove, through the grievance process, why the town should be
liable for this cost. Now that a grievance has been filed, however,
the burden to prove the town’s liability has shifted to the
association. Everyone wants the officers to be paid but the town’s
financial rights need to be protected as well. Discussion also
focused on possible compromises that might be reached during the
grievance process. Chief Reilly and Officer Lucy stressed that the
new policy now included obtaining advance payment from smaller,
riskier companies before assigning the details, and to charge a
10% administrative fee to all solicitations.
ii. Police Station Refurbishment Grant Status: It was determined
that it was not in the best interests of the town to pursue this grant
at this time. Restrictions on the grant, particularly requiring that the
money be spent and the project completed by June 30, 2008 were
too difficult for the town to achieve. In addition, there was some
question about spending nearly $250,000 on upgrades that may
need to be ripped out in a few years when a new station is built. In
the final analysis, it was not practical for the town to spend the
money required by this grant in the time frame specified.
8. Other:
• Plum Island Land Sales Status: Chuck indicated that no significant action had
been taken on this matter. Next steps are to obtain appraisals and solicit possible
offers.
• Free Cash Certification Letter: Certification letter has now been received from
DOR. Free cash now available is nearly $93,000.
• Capital Planning Committee progress: Dave Newbert has established January 24 at 7:00
pm for the initial meeting.
Town of Newbury
Finance Committee Meeting
Tuesday Nov 20, 2007— 7:00 pm, Town Hall
Meeting Summary (DRAFT)
Committee: Eugene Case, Larry Guay, Pete Morse, Dave Newbert, and Frank Remley
Ex-Officio: Chuck Kostro, Finance Director
2. October 25 meeting summary: Approved with no further discussion
3. Issue with Lower Green School House project: Judy Tymon summarized the
results of the maintenance project on the Lower Green, historic school house. The
project is complete except for painting, which will be done in the spring with
donations for paint and volunteer labor. With two additional grants obtained by
Vince Russo from the Newburyport Five bank, and Judy Tymon from the Bushee
foundation, the total out-of-pocket cost to the town will be just $405. The
committee decided to wait until the project is entirely completed before
transferring funds to cover the town’s share.
4. October Expenditure YTD Report: Chuck Kostro walked the committee through
the Oct. YTD expenditure report. There were no new surprises or reversals.
Benchmark costs should generally be at 33.33% YTD after four months.
Highlights included:
a. Finance expenses are at 48% due to early acquisition of new software
b. Legal expenses are at nearly 45% for YTD due to cost of cell tower
litigation and cost to defend library boards dismissal of the director after
one month of service
c. Public Bldg maintenance expenses are at 42% due to the Yellow school
costs that have not been reimbursed as yet.
d. Insurance expenses are at 42% due to upfront payments already made.
e. Town Library expenses are at 47% due to upfront $20,000 payment to the
Merrimac Valley Library consortium.
f. Certain other line items are high because of seasonality. These include
Harbor Master wages and expenses; life guards; road maintenance; long
term debt expense (payments in August and February); greenhead
control; Whittier assessment (paid twice per year); Essex County
Retirement.
g. Despite the above overages, numerous items were below budget YTD.
The total town budget is currently at 32.26% expended YTD, which is
below the benchmark of 33.33% YTD after four months.
5. Status of Revenue Collections, YTD: (See Recap summary below)
6. Status of FEMA collections: FEMA collections will be a minimum of $7340 short
of costs. Chuck explained that this could have been a lot higher as the DPW
authorized contractors to perform clean up and road repair work before knowing
whether or not FEMA or other funds would be there to pay for it. Apparently some
of the work was even done six months after the storm damage was cleaned up,
which further risked non-payment. This prompted a discussion of the inherent
financial risk in committing to contract work before knowing if and where the
money to pay for it will come from. All agreed that better controls are needed in
order to avoid painting the town into a financial corner by incurring costs that are
not budgeted or available. The FinCom also concluded that even the current
$7340 overage might not be covered from existing accounts.
7. FY 08 Recap for submission to DOR: Chuck Kostro summarized the draft
Recapitulation Sheet about to be submitted to the DOR. He explained that certain
revenues are falling short of the projections at the Annual Town Meeting (ATM) in May.
Changes from the ATM and the current Recap Sheet are summarized in the attached
presentation. The largest shortfall appears to be a negative projection of -$161,674 in
motor vehicle excise tax collections (probably due to a slowing economy). These
shortfalls will be covered by higher than expected Cherry Sheet reimbursements, a
FEMA fund transfer from FY07; and a revenue sharing fund surplus, all totaling
$274,818. If accepted, the Recap will yield a net, positive free cash of $101,271. Other
anticipated revenues in FY08 include continued collection of back taxes, excess town
land sales, and an estimated free cash certification for FY 07, all totaling a minimum of
nearly $600,000. The Recap Sheet, submission letter and Finance Director’s
presentation are available on the Town’s web-site at
8. Update on PI Land Sales: Chuck Kostro is working with Tony Penski, the Town
Counsel to properly affect the sale of the first property by sealed proposal. Other
sales will follow once this one is completed.
9. Update on Library expenses: David Newbert met with the Chairman of the Library
Board and ascertained that any severance due the recently dismissed librarian will be
covered by a delay in hiring of a new Librarian. He also was informed that the overage in
early spending was due to an annual fee of $20,000 that is due in July to the Merrimac
Valley Library Consortium.
10. Potential changes to Capital Planning Committee: Bill Cooper has regretfully informed
the FinCom that the pressures of his new business will prevent him from devoting much
time as Chairman of this committee. Dave Newbert agreed to take over chairman’s role at
least on an interim basis.
11. Other:
a. After a brief discussion about approving a 3% increase for employees
beginning in January, it was decided to delay this decision to make sure
that the Recap sheet is accepted by the DOR.
b. Judy Tymon distributed copies of the latest financial impact analysis of the
Village at Little River project. This was done by the town’s financial
consultant, Judy Barrett, working through Taintor Associates. Current
projections show an annual net income of $442k, and a one-time, up front
revenue of $744k to Newbury. A copy will be available through the
Planning Board’s web-page.
Next Meeting: tentatively scheduled for Thursday, Jan. 10, 200
| 
