ORDER-2018-169 : AN ORDINANCE AUTHORIZING REVOLVING FUNDS IN THE CITY OF MELROSE

Transcript (~15 min @ 1:12)

Speakers identified by voice; unnamed voices are numbered within this recording. Auto-caption text — verify against the video.

▶ 1:05 Jennifer L. Lemmerman: we have a motion to close public participation by alderman Letter garabedian second by alderman tram and tozy all in favor aye aye any opposed public participation is now real

▶ 1:20 John N. Tramontozzi: yes thank you um at this time i'd like to make a motion to take order number 2018-169 and ordinance authorizing funds in the city of meadows uh out of order uh for the purpose of uh calling forth uh auditor mr delarusso uh to uh to give us some explanation on that before we start

▶ 1:40 Jennifer L. Lemmerman: our budget hearings thank you very much alderman Tramontozzi makes a motion to take order number 2018-169 out of order uh seconded by alderman mortimer all in favor aye aye any opposed to

▶ 1:52 Speaker 1: taking the order out of order motion to suspend the rules we have a motion to spend the rules

▶ 1:53 Jennifer L. Lemmerman: by president's work second second uh seconded by alderman mortimer all in favor of suspending the rules any opposed mr de la rusa would you come forward please and speak to us on this order

▶ 2:21 Speaker 2: good evening good evening thank you um the order they request before you this evening is a result of a change due to the Municipal Modernization Act and the Departmental Revolving Statute General Law is Chapter 44, Section 53E and 1 half was amended again by the Municipal Modernization Act, Statute 2016-18-86. These amendments eliminated the caps on the amount that could be spent from revolving funds authorized for a particular department and in total from all authorized revolving funds in addition the revolving funds are to be authorized by bylaw or ordinance rather than an annual legislative body vote the legislative body must still vote on or before july 1st on the amount that may be spent from each fund during

▶ 3:26 Speaker 2: the upcoming year and that's from sean cronin the senior deputy commissioner of local services the department of revenue and what that means for us the change that we're seeing is in the past we would actually have departments come before you individually and we would vote each fund generally at that evening or that time under before you like this evening well I believe you'll have at least one to talk about what this does is requires us to adopt it an ordinance we

▶ 4:04 Speaker 2: chose the table format which i believe you might have in your packet for the public to see what it does is in one place in one place it lays out each fund that we're asking to be reauthorized it asks it identifies the body that or the commission etc that's authorized to spend from the fund the purposes for which the fund money can be expended and in short the limit that you may that body may spend during that year from that fund you cannot exceed the amount voted by the Board of Aldermen unless you come back mid-year or at some point during the year and ask for it to be increased oftentimes a

▶ 4:53 Speaker 2: question surfaces which is probably a good time to talk about it what happens if i take in more money than i anticipate well that's okay that's perfectly fine you just cannot spend more than was approved by the board of aldermen on the fund unless you get their authorization to do that so if the fund takes in more money because they have more activity than they anticipated there's nothing wrong with that just that they can never spend more than they

▶ 5:27 Speaker 2: actually take in in each fiscal year so the other part that's changed is typically this was reported by me on the tax recap sheet the department of revenue no longer requires that and in place of that they're asking that we take this new approach set up in a table format for everyone to see and

▶ 5:49 Speaker 2: vote accordingly so I'll ask I do ask your support it is something that they look for communities to do between fiscal 18 and now 19 is required they considered fiscal year 18 a transition year for a lot of communities so they said this year coming up 19 will ask that all communities follow this protocol so respectfully I'm here tonight to ask that we do just that

▶ 6:21 John N. Tramontozzi: thank you thank you just a couple questions so if we enact or approve this order all we're doing is establishing an ordinance in pursuant to the Massachusetts general laws is required for us to do correct the spreadsheet the Excel sheet that you showed us shows existing revolving accounts yes not anything not no new accounts but um revolving accounts that have are in current existence now that's correct so um so all this order does is just uh authorizing us to um to continue with these accounts and then if if some future time a new revolving count is requested we just go through the process of approving it as we normally do that's a great question because um

▶ 7:15 Speaker 2: all of them that's a great question because um oftentimes or in some communities what happens and i've had it happen to me in the past during the year that you're in you the community has decided to set up a new program and they want to use the revolving fund under this statute in order to do that they would have to come to the the body the legislative body get their approval to set that fund up and use it because even it could happen mid-year for example there's nothing wrong with that it's just they still have to go through the same process and get your authorization to do that and the same protocol regarding spending limits caps applies to that as well so you're absolutely right any right now there are no new funds being requested but but quite frankly you know there's nothing wrong with that if someone did request a new fund

▶ 8:12 John N. Tramontozzi: and if and if the um uh the department whose revolving fund uh has been pre-approved is expected to expend some money from that account they have to come before us for approval

▶ 8:25 Speaker 2: correct once it's yeah once you want to approve the the spending cap it's done for the year right the money stays with that fund if at some point during that the lifetime of that fund that the the fund's no longer necessary, then typically what would happen is that fund would be closed out to general fund and those proceeds is turned over to the general fund. It doesn't happen often, but that's typically what you'd see.

▶ 8:48 John N. Tramontozzi: But my question is, though, that the department has the authority to spend the money from that revolving account without coming before us to get prior approval.

▶ 8:56 Speaker 2: Yes, they do. Now, first they have to have approval for the spending cap. From that point on, correct, they can spend it without having to come back. You're right.

▶ 9:06 John N. Tramontozzi: they want to spend over the cap and then they have to come before they have to

▶ 9:08 Speaker 2: come before you you have to provide authorization for them to do that thank

▶ 9:17 Michael P. Zwirko: you thank you thank you thank you madam chair thank you mr. Del Rosario for bringing this to us so essentially this doesn't seed any authority that the Board of Aldermen previously had under this new municipal modernization what it's really done is kind of made the process more efficient And so it takes care of it in one swoop, as opposed to kind of a whack-a-mole approach with the existing—

▶ 9:37 Speaker 2: MR. Absolutely. And it's all, quite frankly, it's all in one place now. MR. Yes.

▶ 9:43 Michael P. Zwirko: MR. It's a table everyone can look at whenever they need to. MR. And the other thing is it removes the caps, as you aforementioned, right? And just for the folks that are watching, and it's in the materials that you provided, could you just give a brief summary of what exactly a revolving account is?

▶ 9:57 Speaker 2: MR. Certainly. um typically and we'll use recreation because that's the one i think people are most familiar with um different programs and activities are set up for for uh you know for the youth and they participate in these programs they pay a fee for the people that support the program the coaches etc the money would be deposited in this fund for that purpose for that to to operate that program to hire that coach and any expenses related to that um and then what would happen is that during that the year uh you know quite frankly you would have an uh people sign up for the program on a regular basis um they'd come in they would uh you know i'm sure enjoy the program in their own way look forward to it the next year right but the the the key is that there's money is segregated just for that purpose it's not tax money it's strictly from receipts from the program period and the program quite frankly has to be able the revenue has to support the program or it's not going to be effective in it but uh typically that's what it is it's just i think a convenient way to want to say that to run programs that help and benefit people thank you for that and um you know this is

▶ 11:13 Michael P. Zwirko: one of the uh many pieces that we've seen across this body from the municipal modernization act which has been very helpful there's a slew of items I want to say somewhere around 300 actually when they passed it so this is and I know that and I read your bulletin thank you for the one that was written by Sean Cronin and I know that he essentially directed cities and towns to hold off a little bit after the Municipal Modernization Act came through so they could give a little bit of guidance here so appreciate the patience to bring this forward but I think it's appropriate and with that I would like to make a motion to recommend for

▶ 11:46 Peter D. Mortimer: passage of this ordinance second the motion to recommend for passage

▶ 11:48 Jennifer L. Lemmerman: We have a motion to recommend for passage by Alderman Search, seconded by Alderman Mortimer on discussion. We have Alderman Medeiros.

▶ 11:55 Monica C. Medeiros: Thank you. Thank you. And actually, so this, how we would usually have dealt with this in the past is either we've had one large order that's had each one of the revolving accounts, and as we've gone through our budget deliberations we would put the order on hold and put a taste you know put it on the table and take it off the table and discuss it with that department head or we would just have individual orders that would reauthorize the cap correct correct and so this would eliminate that this is obviously an ordinance change would require eight votes if if a department had found that something new had changed throughout the year if they had a new program we would give authorization by changing the ordinance

▶ 12:49 Speaker 2: but what would happen if in fact and through the chair if it was a different activity from the scope that was originally approved by the board so say for example it's tennis instead of you know basketball or both now they add another one if they still fit that you know activity mode they would probably be fine provided that they didn't exceed the limit because oftentimes you have to they may have to have different programs they didn't think about today maybe in six months or three months they say geez you know i should have put this program in place but they still have to stay within the scope of what the activity is here that you have voted if it falls out of activity then they would have i would suggest they would approach me and we would actually if it need be set up a brand new fund just for that particular activity okay which we have to go before you which would again be an

▶ 13:37 Monica C. Medeiros: ordinance change of some kind or if there was some reason that they wanted to raise the cap it would be an ordinance change if it was something that was temporary say a one-year program or something

▶ 13:52 Monica C. Medeiros: like a special event of some kind we might get you know ticket fees or something um we could could we do something that was a temporary change in the cap?

▶ 14:02 Speaker 2: Again, I think you want to try to keep it broad in the sense that you want to give that program director the flexibility to work with their program and not feel that they're restricted in some way. But if it became something that I thought was sensitive, then obviously the board should hear it.

▶ 14:32 Monica C. Medeiros: and so now you said these are currently reported out on the tax recap sheet is there any place that moving forward is there any public you know this is something we obviously we're giving the the department heads the freedom to to raise this revenue and to spend it on within these caps that are set correct which we've been doing right along is there any any public uh documentation of you know what the spending activity has been in these revolving accounts well we have to report

▶ 15:05 Speaker 2: them through the chair and our uh financial statements and but that's just the fact uh outside of that unless there's some independent reporting outside of the schedule a for example for your schedule a and expenses i mean it would typically be a number but it wouldn't have the description that you have here we just show activities uh but this is nice because it breaks

▶ 15:34 Monica C. Medeiros: it down by by function okay um you know these are not changes i don't believe are any of these

▶ 15:38 Speaker 2: changes from what we have yes i believe you'll see that recreation is when looking to increase the cap to 450,000 I think we'll speak to that and again that far as my know

▶ 15:51 Monica C. Medeiros: that's the only change so I you know I don't think this is a huge change and I know there's already a motion on the floor now to recommend the ordinance change and set up this new table in our ordinances I would recommend since we have we are going to go through the process and having the different department heads here you know that perhaps we may want to hold this and revisit it as we talk to those department heads about this initial set above the cap just for a public discussion and and to speak with them since we have the opportunity thank you thank you other comments or questions

▶ 16:32 Jennifer L. Lemmerman: we do have a motion on the floor to recommend for passage it's been made and seconded all in favor all right any opposed thank you very much that order