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Meeting Minutes
Minutes Accepted and filed with the Town Clerk on 2/05/2013 by a vote of 3-0-2
(Selectman Hebert absent from 2/5/13 meeting)
7:00 p.m. – January 22, 2013
Sutton Town Hall, Selectmen’s Meeting Room
Members in Attendance:
Chairman Michael Chizy, Vice-Chair John Hebert, Selectmen Richard Hersom, Ken Stuart and David Hall
Also in Attendance:
Town Administrator James Smith & Debbie Jacques, secretary
Chairman Chizy calls the meeting to order at 7:00 pm followed by the Pledge of Allegiance.
No comments under Public Forum
Selectman Hersom motions to accept as presented minutes from January 8, 2013 meeting; Selectman Stuart 2nds passes 5-0
Selectman Hall motions to approve but not release at this time, Executive Session minutes from January 8, 2013, and Selectman Hersom 2nds passes 5-0
Senator Richard Moore and State Representative Ryan Fattman: Chairman Chizy begins by thanking both individuals for attending tonight’s meeting. Senator Moore defers information on the Governors budget which is due to be released tomorrow. Under non budgetary are signs that represent the Sutton Soccer team to be placed at town lines at no cost to the Town of Sutton. Moore goes on to say Local Aid is always a concern and he continues to advocate for it. Enrollment has dropped in the Sutton school system and that will be factored into what the town receives. State Rep. Fattman says the governor’s budget is reliant on new revenues, the state needs to focus more on reform especially with the unemployment rate, Fattman states he is pushing for the rules debate which guarantees a minimum amount for Chapter 70 and
local aid. Selectman Hebert states Sutton is frugal and we have a very good financial team, we have 1.8 million dollars in the stabilization fund, a lock box to fund projects, a new school being built but any cuts really hurt us. Selectman Hersom says what prompted the invitation was the announcement of cuts in local aid as well as the Governors wish to grant in state tuition to illegal immigrants. Hersom states our town does a very good job cutting fat in the budget but problems need to be solved at state level, don’t mess with Chapter 70 and Local Aid and by adding additional taxes to our residents creates a burden. Sen. Moore states we are not where we were in 2007/2008, it is never a good time to revise taxes but Sutton is not as poor as some other parts of the state. Rep Fattman talks about issues with the adoption law and reducing the large number of pension boards. Selectman Stuart says that we as a town appreciate what has been done for our town such as the
school project and the 146 project. We are lucky to have our Town Administrator and the financial team that have had to make some tough cuts. We have a beautiful school being built; if we receive more cuts in local aid we will not have teachers to fill the classrooms. Sutton is known to have some relatively well off residents, we have a Food Pantry that we have a hard time keeping stocked due to the increased need by our residents. Sen. Moore says he has heard of several commercial businesses showing interest in relocating on 146. Rep Fattman says that the state needs to discuss the unfunded liability OPEB and the Vesting bill which will help by changing the 10 year employment status to 20 years. Selectman Hall begins by saying it is a difficult time at state level with the falling revenues but any cut to Local Aid or Chapter 70 impacts the Town of Sutton, future cuts will result in cutting staff, reforms are good but in regards to the Circuit Breaker issue, SPED
costs and the way they are mandated make it very difficult for us to fund. Chairman Chizy asks what the towns share is of return on the State Lottery, Senator Moore states the towns get 40% back in local aid, 15% goes to administrative fees and the remaining amount goes to pay the prize money. Chizy asks for clarification on the Gas Tax. The BOS offer thanks to both individuals for taken time out of their schedule.
Bowditch & Dewey/ Beaton property update: TA Smith states this is not a public hearing; it is strictly informational for the Board of Selectmen to gain a better understanding of what is being proposed. ATTY. Robert Longdon (Bowditch & Dewey) is present and represents the College of the Holy Cross, along with him is Mike Lockhead, Treasurer & Financial director of Holy Cross, Ed Augustus, Director of Community & Government Relations for Holy Cross, Scott Merrill, Physical Planner for Holy Cross and Architect Mike Pagano. Atty. Longdon states some portions are under 61A, there are 5 separate parcels 4 in Sutton and 1 in Douglas. Two are under 61A, 2 are not. The agreed purchase & sale is for 1.9 million dollars. Mike Lockhead says Holy Cross is a private college that teaches a Jesuit
education. Besides their Liberal Arts, they also teach spiritual development and education. They are looking for a property that would house a retreat facility. The Beaton property offers the beauty and nature they are looking for. If approved they are looking to develop a 30,000 square foot, 2 story high retreat center. Scott Merrill states all parcels combined totals 100 acres with a beautiful site overlooking the lake. Mike Pagano states there is adequate open space to utilize which means they do not anticipate the clearing of trees. Selectman Hebert mentions the PILOT program Holy Cross has with the city of Worcester ($80,000. Book mobile) would they consider a $5,000.00 donation yearly to the Food Pantry. Also mentioned was the access road for various individuals to access the pond, would there be something in the deed or an easement on the property to ensure this still exists. Selectman Hersom has no specific questions but is concerned with the traffic load on this narrow
winding road. Selectman Stuart says this is the most beautiful place in Sutton; the Beaton’s have been very generous over the years to the town. Will the beautiful view that now exists be obstructed? The presenter’s state there is plenty of land, the retreat center is proposed to sit in a knoll, and you would not even see the building so the view would not be obstructed. Selectman Hall questions the long term use of the buildings; they may consider selling house at some time down the road but at this time not sure. Dave also asks how much traffic on a daily basis? They respond that it may not be daily, only when a retreat is scheduled and they typically travel in 10-12 person vans. Chairman Chizy feels this is a good use of property; his only concern is the narrow road.
OPEB Update: Town Account Tim Harrison and TA Jim Smith will present. Tim begins by giving some background information beginning with GASB which was established in 1994 and OPEB which the town started funding in 2009. GASB attempts to create financial transparency, clarity to our unions to show the true cost of benefits over a period of time as well as the long term liabilities. OPEB is part of the compensation employees earn yearly but is not received by employees until the employee retires. The Town currently pays 70% of health insurance until the employee turns 65; at that point the town pays 50%. The Town hired an actuary, Segal & Co. to perform an actuarial valuation. In the report by Segal, if the town reduces the current retiree contribution of 70/30 to 50/50, the town would save over 1 million dollars in
our actuary liability. Tim goes on to explain the definitions used when discussing OPEB. Actuarial Accrued Liability (AAL) which is the amount expected to be paid to a current retiree & current active employee (future retiree), already earned at today’s dollar value. The Unfunded Actuarial Accrued Liability (UAAL) which occurs when a plan does not have sufficient assets to cover earned liabilities. The Annual Required Contribution (ARC) the annual amount needed to fully fund the AAL and Net OPEB Obligation (NOO), the cumulative difference between the annual OPEB cost and the actual employee contributions. The annual OPEB cost is the ARC and amortization of the NOO. Currently there are 188 active employees that could retire in the future. The Actuarial valuation assumes a 4.5% rate of return, the OPEB Trust’s actual investment rate of return as of 12/31/2012 was 4.74%. Rating agencies analyze OPEB liabilities, bond ratings and the cost of borrowing may be
impacted by an unfunded OPEB liability. As of 6/30/2012, the UAAL for Sutton was $17,261,853, if the contributions remain at the current $50,000.00 per year, the UAAL will increase to $93,386,354 by June 30, 2041. There have been 2 changes that will decrease the liability, a change in the Medex plans for retirees 65 years old and over to Medex II and secondly, the Town created an OPEB Trust. Selectman Hebert talks about his past 37 years of employment to the Town of Sutton as a faithful servant. A 70/30 health Insurance was what was promised to him as well as other retirees. To change now is not fair to those retirees under 65. John feels some type of gradual step increase would be the way to go. TA Smith informs the BOS he is working with the unions to implement changes to the health insurance, currently they are discussing a gradual implementation as well as a 1 year moratorium. Selectman Hersom is all for fairness, it is always tough when you have to change benefits. Rick
goes on to say it is loud and clear that the path we are on is not sustainable. Changing the insurance from 70/30 to 50/50 is sensitive to people but when we hit the wall there will be some very scary propositions we will have to make. Selectman Stuart says we have had conversations about fairness, but we have to look at the big picture and what is best for the town. Ken does not want to have to fund OPEB with “Pay as you go”. We need to find ways to fund this as aggressive as possible. Ken does agree with Selectman Hebert to look at some sort of grandfathering clause for going from 70/30 to 50/50 for retirees under 65. Selectman Hall begins by saying that GASB has done us a really big favor by forcing this liability to the forefront. When benefit packages were promised to employees many years ago, the insurance premiums were much smaller then today; the cost increase has made the liability much greater. As far as fairness, changes are already
underway; benefits promised 25 years from now will be less then today. Dave says it seems intuitive to fund as much as we can with our current budget issues. It makes sense, it all makes sense but he does not see where current funding of old liabilities gives tangible benefits. Sacrificing today helps 2 years from now. Dave says the level of funding we are talking about is a fund that stays so small we will never get the real world value back to us. TA Smith agrees that what is being funded now does not seem like a lot but because of the changes we made over 2 years, our liability has gone down 10 million dollars. Our goal is to get us to where we do not have to fund an unfunded liability. Chairman Chizy says we are on the right track. Reality is we have to do what we have to do to be sustainable. In the private industry employees work until they are 65, we will have some hard decisions to make. Selectman Hersom asks which would benefit our outstanding
liability more, making a payment 2X the annual level of our contributions now or reducing the current cost by 50%, TA Smith believes it would be better to reduce the current cost. Selectman Hersom would like to see some snapshot examples. Rick goes on to say over the next 5-10 years when negotiating labor contracts, if no one is willing to give something’s up, the only place to go will be to cut budgets. Tim Harrison states our only other option is do nothing, and that is not an option. We are at least trying to address the situation rather than leaving a huge liability for our children if they stay in town. Selectman Stuart stresses that if we do the pay as you go the numbers will get bigger and bigger.
Town Administrators Update:
- SRECS- the town sold 172 SRECS on 1/17/13 for $205.00 a piece ($35,260.00)
- Boat Excise Tax- TA Smith would like to split the boat excise tax between Lake Singletary and Manchaug pond
- Net metering offers-TA Smith has received 2 net metering offers, 1 being built in Sutton on John Road and the 2nd in Spencer. Jim is negotiating that we receive 30% off NGrids price and a floor of .08 per kilowatt hour.
- Heat Recovery system- to begin within the next few weeks at the town hall MPC has been contracted to do the work. This is a $50,000. Project being paid for through the Green Communities.
Announcements: N/A
Round Table/Old Business:
- Chairman Chizy reminds all the need of food for the Food Pantry as well as monetary donations for fuel assistance
Correspondence:
- Selectman Stuart reads a letter from Mass DOT in regards to the Median Barrier Replacement on 146
Selectman Hersom motions to adjourn, Selectman Stuart seconds passes 5-0 Meeting adjourned 9:40 pm
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