ORDER-2017-140 : City of Melrose Operating Budget for Fiscal Year 2018 in the amount of $77,397,009.19 (Seventy-Seven Million, Three Hundred Ninety-Seven Thousand, Nine Dollars and Nineteen Cents)

Transcript (~19 min @ 14:23)

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

▶ 14:13 Peter D. Mortimer: please say aye aye aye opposed hearing none that order will be recommended the pool I know you have business over at Memorial Hall fifth grade Horace man is it fifth grade Hoover tonight excellent thank you very much the next order we

▶ 14:33 Peter D. Mortimer: have before us is returning to the budget it is order 2 0 1 7 dash 140 city Steve Melrose operating budget for fiscal year 2018 in the amount of $77,397,009.19. This is the budget that we've been working on for a few months now, a couple of months now. And the first budget we will address this evening is budget 145. it is the treasurer collector in the amount of 407 296 dollars and 32 cents good evening mr flavin

▶ 15:21 Speaker 4: how's everybody good evening um this is my annual trip for my budget and at the risk of repeating myself um this is groundhog day it's kind of sorry for you guys they have to hear the same thing over and over again but this budget just doesn't change this is the operation budget we need in In order to collect all the money, invest all the money, just the day-to-day routine. There's nothing, there's no big changes. It's just, I'll entertain any questions, but we've been doing the same thing for years. Basically the same amount of money.

▶ 15:55 Peter D. Mortimer: Thank you, Mr. Flavin. First in queue, we have Alderman Forbes, please.

▶ 15:58 Scott M. Forbes: Thank you, Mr. Chairman. I just noticed the one item with increase in salaries, is that contractual?

▶ 16:08 Speaker 4: Yes, and also there's a, we re-institute, we have a clerk that we had taken off the roles four or five years ago because we didn't really, we did a consolidation with the advent of the monthly water sewer billing. We introduced an 18-hour clerk back in. If a 30 percent participation rate occurs on the monthly billing, it's going to result in over 25,000, 26,000 more bills that we'll have to process, more phone calls we'll have to deal with, more explanation we'll have to deal with. So rather than start with the whole new staff, we came in conservatively with the half person. There's no benefits involved with it, and they will go to help support the staff with the additional workload. MR.

▶ 16:55 Speaker 2: Thank you very much. Thank you, Mr. Chairman.

▶ 16:57 Peter D. Mortimer: Thank you, Alderman Forbes. President Kahn, please.

▶ 17:00 Speaker 4: Yeah, Mr. Flavin, are all of your departmental salaries reflected in your budget? Yes. So there's nothing that's budgeted anywhere else in the city budget off your salary and wages for the treasurer's office? This is all out of the- Correct. Okay, good, that's all.

▶ 17:17 Peter D. Mortimer: Thank you, President Kahn. Is there a motion, please?

▶ 17:20 Speaker 2: Motion recommended. Second.

▶ 17:22 Peter D. Mortimer: Alderman Forbes has made a motion to recommend this budget to the full board for passage. duly seconded by Alderman Inferna. Seeing no further discussion, all in favor, please say aye. Aye. Any opposed, hearing none, this budget will be recommended to the full board for passage. The next budget item we have before us is number 711, municipal debt in the amount of $3,734,909.00. Please continue, Mr. Flavin.

▶ 17:50 Speaker 4: This is the debt that is due on the exempt side, principal amounts to on the exempt in the regular general fund debt for all the projects that we've done in the last few years and past and these are the obligations that we committed ourselves to and you should have a detail that was provided with you that breaks out what projects they are and what the amounts

▶ 18:18 Speaker 4: are for each one Thank You sir president Conn please yeah so mr. Flavin the the The general fund debt is in budget 711, 751, and 752, is that correct? That's the interest in the principal and- Yes. So what you referred to as general fund debt is- The muni debt part? Right, those three budgets. So the debt in the general fund is 5,597,145. But there's nothing else in the general fund debt other than those three items, is that correct? I'm not sure I get the five million. Well, what I did is I added up your municipal debt, 3734909. Debt interest 1491386, and projected debt- 370. Which is 370, which is short term borrowing. Right, but broken out general fund debt, but part of it is exempt debt for the tax exemption for the school when you did an exemption debt. That's the second line on each one of those reports, the first two reports. Okay, so well, maybe I mischaracterized it. So in the budget, we're funding $5,597,145 by my calculation. Correct. And then, if we go back to the cherry sheet, it shows us what our total debt is on the cherry sheet, which is $61,987,06.

▶ 19:54 Speaker 4: And my question was, for

▶ 20:00 Speaker 4: next year, the 5.5 million will be Added to the 61 million that appears in this year's summary, is that correct?

▶ 20:14 Speaker 4: I'm not sure what cherry sheet number you're talking, are you talking about this report? I'm talking about the last page where it says total debt, and it's $61,897,006. Last page of? Of the financial analysis from the Department of Revenue. I'm not familiar with that. But we'll be adding debt, we do every year. Okay, so if you accepted my hypothetical that the debt that's listed is $61,987,600. This new debt that's going to be part of the budget for this year will be added into that compilation for next year. Not the total amount, because the stuff falls off too. Okay.

▶ 21:05 Speaker 4: mean for the difference between 18 the difference between 17 and 18 will be adding 22 22 000 19 we take a hit we add 365 000 because the high school stuff goes on it's cumulative so from last year to this year we're adding 22 000 because some stuff the new stuff and we didn't really issue anything in november we're waiting till this year for the leds lights and those types of things we time this stuff right so now the three next on 19 because we'll be doing november we'll it'll be 300 it's anticipated 365 000 more will be added to that number okay so so the total city debt on that schedule will increase by some portion of this 5.5 million that's in the budget for this year yes and i would you're looking at the total outstanding debt inside the debt limit and outside the debt limit and there's a whole bunch of numbers there i can answer that yeah i mean you know you you know i like obstinately cling to this this concept and um but all right that's all i have

▶ 22:06 Peter D. Mortimer: thank you thank you president khan next in queue we have alderman Medeiros please thank you um thank

▶ 22:10 Monica C. Medeiros: you very much mr flavin you you mentioned that you had uh provided us with a uh breakdown is

▶ 22:23 Speaker 5: is that the statement of indebtedness that's one of the things no it's um you get it every year it

▶ 22:28 Speaker 4: looks like this okay it's uh it's the detail of it's the detail of the numbers it breaks

▶ 22:35 Speaker 6: everything out on that end which attachment is that mr chairman in the uh in today's agenda

▶ 22:40 Peter D. Mortimer: scan down i read them all but i was having a little difficulty finding it so in this particular

▶ 22:48 Monica C. Medeiros: uh department agenda there's two line items municipal debt and then exempt principal i'm sorry in this particular budget there's two line items uh municipal debt and exempt principal

▶ 23:04 Speaker 4: exempt from this particular one yes principal general fund principal exempt and so we're seeing

▶ 23:11 Monica C. Medeiros: a decrease in three point percent seven percent in the municipal debt but the exempt is has increased

▶ 23:22 Speaker 4: fifteen percent that's what if that's what it says i mean these are schedules that i mean these are obligations these are notes that we read right off of an amortization schedule and what it is is it 15 sounds high because i mean when you look at it yeah this is this is something

▶ 23:41 Speaker 4: that was voted that's right it's on the other thing yeah percent change i mean yeah it's a real one it went from 125 1125 to 1295. is this uh and that's you know what that is is that's because we use level debt this is on the principal side i think if we look at the interest side you're going to see a reduction of 21 percent i see because they group the payments it's like a car payment principal and interest and the oldest something gets the more principal you pay and

▶ 24:09 Monica C. Medeiros: the less interest less interest okay thank you that makes that makes a lot of sense and uh

▶ 24:20 Peter D. Mortimer: perhaps uh mr chairman did you have the i was just looking through the documents i mean you

▶ 24:22 Monica C. Medeiros: can look through them as well as i can yeah so i don't i didn't see it i know he had referenced it so i was hoping we could make that part of the record if it isn't already here all right um

▶ 24:34 Speaker 5: page 91 in the packet page okay yeah today right now yep but thank you i was looking

▶ 24:42 Peter D. Mortimer: page 91 in the package attachment packet page 91. thank you very much alderman forbes you will

▶ 25:20 Monica C. Medeiros: you know i of course can't seem to find a page number here in my look at the one alderman's

▶ 25:27 Michael P. Zwirko: worker please on iqm2 i believe it's uh letter d page 13 of 15 if that's helpful thank you

▶ 25:40 Monica C. Medeiros: alderman's worker letter d seems to be the statement of indebtedness if you go to page

▶ 25:43 Michael P. Zwirko: 13 that shows all long interest debt thank you long term excuse me yeah okay good so if anybody

▶ 25:57 Monica C. Medeiros: watching at home very good thank you you can catch right along with us thank you so much thank you

▶ 26:04 Peter D. Mortimer: are you really pushing the floor yes i am thank you thank you very much alderman Medeiros i'm seeing no further alderman wishing to be heard is there a motion motion to recommend so we we have a

▶ 26:13 Peter D. Mortimer: a motion to recommend this portion of the budget. Second. Duly seconded by Alderman Zwirko, made by Alderman Forbes. All in favor, please say aye. Aye. That budget will be recommended to the full board. The next budget we have before us is budget 751, municipal debt interest in the amount of $1,491,386.84. Please continue, Mr. Flavin,

▶ 26:46 Speaker 4: we can proceed to the colloquy this is um the interest associated with the principal payments

▶ 26:53 Peter D. Mortimer: represented in the previous budget it's a it's an obligation thank you very much sir any alderman

▶ 26:58 Speaker 5: wishing to be heard on this item signal is there a motion just a quick question yes go ahead since

▶ 27:04 Michael P. Zwirko: this is um the interest obviously as you mentioned just your analogy which is easy to understand like a car payment or a mortgage is this generally our this is so this is our annual interest payment on the debt that mr alderman khan referenced earlier on the total correct even though it's a sliding scale because there's various uh it's the interest on the general fund debt and the exempt debt that 56 million or 60 million may include water and sewer which ultimately are obligations of the city but they're in a different budget understood thank you thank you alderman Zwirko motion to

▶ 27:38 Peter D. Mortimer: recommend we have a motion to recommend the municipal debt interest portion of the budget by Alderman Forbes duly seconded by Alderman MacMaster Margolis all in favor please say aye aye any opposed hearing none this portion of the budget will be recommended to the full board for passage the next item we have before us is budget seven five two it is projected debt in the amount of three hundred and seventy thousand eight hundred and fifty dollars this is debt

▶ 28:06 Speaker 4: that hasn't this is temporary debt that's been issued for previous projects

▶ 28:13 Speaker 4: we typically will temporary borrow for a while to see how it spends or so and in other times we'll borrow to take advantage of the rates at the market but these are bands for the high school interior construction of window replacement renovations and a number of other smaller things the LED streetlights are still on here as a band this is a band we took out last November that comes do this November when we'll bond it that's one hundred and sixty seven thousand six hundred dollars when we bond in November we owe an interest payment in May every six months we have to make a payment on the right is I mean there's projected interest bond payments in May of two hundred and three thousand two $850 on all of these same projects that comes to the total of three hundred and seventy thousand eight hundred and fifty dollars

▶ 29:03 Peter D. Mortimer: Thank you. Mr. Flavin Alderman Forbes, please. Thank you. Mr

▶ 29:05 Scott M. Forbes: Chairman, so in essence these that this is just a placeholder for the projects that have come down the line Am I correct in saying that almost like you'd say like a deposit on the work that's going to be done in a future date So you can secure the money and then go to bond later on. It's it's borrowed with an obligation

▶ 29:18 Speaker 4: And it's a temporary one year note, and then in November it becomes whatever maturity the different project has. Sure. Some will be 15, some will be 10, some will be 20. Okay. And so it's, yeah, it allows us to do the work before we make the long term commitment to the bond.

▶ 29:40 Scott M. Forbes: Right, money out and then money back in. Right. Okay. Yeah, it's in and out. Yep, thank you Mr. Chairman.

▶ 29:44 Speaker 5: Thank you Alderman Forbes.

▶ 29:46 Speaker 3: Motion to recommend the bottom line.

▶ 29:48 Peter D. Mortimer: We have a motion to recommend the bottom line on projected debt by Alderman McAteer-Margolis, duly second by Alderman Forbes. Seeing no further discussion, all in favor please say aye. Aye. Any opposed? The projected debt portion of the budget will be recommended to the full board for passage. The next budget item we have this evening is 916. It's the Medicare City portion in the amount of $680,000. Mr. Flayman.

▶ 30:13 Speaker 4: This is another Groundhog Day item. We talk about this every year and we hear it, this is the obligation, this is our obligation to the IRS.

▶ 30:24 Speaker 5: 1.45% of all salaries that we have to match, we take 1.45 out of the employee. We have to match it, it's an IRS obligation, we have to do it.

▶ 30:34 Speaker 4: You'll see there's a $30,000 increase from last year. You'll also see the agenda for Monday, we're coming in, we need 42,000 more for this year.

▶ 30:46 Speaker 4: We try to put a number on it based on what the salary is, projections are times 0.0145%,

▶ 30:53 Speaker 5: but we can't control things like excess overtime, contract settlements and

▶ 30:57 Speaker 4: retro payments, those things can't be anticipated, so we end up in that situation where we have to. I end up here every year looking for that money, because it's not something, we know we're doing that, but I don't want to overload it and not have the money be spent somewhere else where it needs to be. So this is our best guess of where we'll be next year for this.

▶ 31:17 Peter D. Mortimer: Thank you very much, Mr. Flavin. Alderman Medeiros, please.

▶ 31:20 Monica C. Medeiros: Thank you, and I see we previously had salary, active salary in this line, and now it's no longer there. Could you talk a little bit about that? I don't know what that means. I think we had a position funded last year. We had $23,846.95 funded in this budget, and this year we have zero.

▶ 31:47 Speaker 5: I'm not familiar with that. This is usually just one number.

▶ 31:52 Monica C. Medeiros: It looks like the actual 2017 actual was $18,255.86 spent.

▶ 32:01 Speaker 5: Are you looking at 916?

▶ 32:08 Monica C. Medeiros: I'm a maybe I'm it's been one of those days no that's that's that's one it's from one of these days today that I forgot about everything since I lost myself out of the office and out of my car so this is just another one of those things so thank you very much okay that's why that doesn't make sense thank

▶ 32:29 Peter D. Mortimer: you Thank You alderman Medeiros alderman

▶ 32:32 Mary Beth McAteer-Margolis: MacMaster my goals please and mr. Flavin just to clarify this is just municipal employees it does not include the teachers and it doesn't it doesn't include the teachers so even though the teachers have their own retirement plan we are still obligated to pay this is this is Medicare oh it's not so scary so

▶ 32:52 Mary Beth McAteer-Margolis: it is Medicare so it includes all employees in the cities even the

▶ 32:59 Peter D. Mortimer: teachers absolutely great Thank You alderman MacMaster my goal is seeing no further alderman wishing to be heard alderman's work oh has made a motion to recommend this budget to the full board second we seconded by alderman Forbes all in favor please say aye any opposed hearing none this budget will be recommended to the full board I think your business with us this evening is concluded mr. Flavin thank you thank you for your attendance Have a good one.