ORDER-2016-163 : Amending Melrose Revised Ordinances, Chapter 228, Article II, Section 228-15 (Water Rates Established), as set forth herein.

Transcript (~1 h 21 min @ 2:24:05)

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▶ 2:24:06 Peter D. Mortimer: thank you and we will now return to the regular order of business the next order we have before us is order 2016-163 amending melrose revised ordinances chapter 228 article 2 section 228-15 water rates established as set forth herein alderman inferno please thank you motion to

▶ 2:24:37 Peter D. Mortimer: recommend option 4b alderman inferno has made a motion to recommend order 4b at this time option Option 4B. Oh, I said order. Thank you. Option 4B. Thank you for that correction. At this time, is there a second?

▶ 2:24:53 Speaker 1: Second. Second.

▶ 2:24:56 Peter D. Mortimer: I'll beat you up by just a second. Alderman Zwirko has made a second to Alderman Inferna's motion to recommend option 4B. Said motion is before us for discussion. On discussion, I first see Alderman Forbes, please.

▶ 2:25:12 Scott M. Forbes: Thank you, Mr. Chairman. You're welcome, sir. As you all know, I am an advocate of Option 5. I think this is the appropriate forum where I can sit before my colleagues and basically state why I feel like Option 5 is the more favorable plan. Over the past several months, many of us have voiced our concern and displeasure at the water and sewer structure that we currently use in Melrose, and there has been an emphasis among many of us, if not all of us, that something needs to change. and we were optimistic upon the hiring of a new consultant that could provide us with new ideas new insight and a fresh perspective so I think all of us in this room can agree that some form of change is needed I believe our goal as a committee and a board is to select a water and sewer rate option that considers all of the city ratepayers not just the majority also to paraphrase President Kahn I have to give him credit one because he said at first we need to select a rate option that this board can defend and justify when challenged now he's 100% correct and that is the approach that I've taken over the months that I've spent as the automatic representative on the water and sewer committee in order to understand where we need to go moving forward it is important to remember how we got here in the first place during my lunch hour today I was able to put a couple of things together on a spreadsheet I passed amount to each and every one of you I am a numbers guy and working a CPA firm so forgive me for the spreadsheet comparisons we have here but first I want to just state that on page one you have a historical rate analysis of where the city of Melrose has been with our water and sewer rates starting up above waters on the left-hand side sewers on the right-hand side it's pretty self-explanatory fiscal year 13 you could see before we went to a tiered rate system water was $5.75 per 100 cubic feet sewer $9.90 okay now Mass General Laws chapter 165 section 2b states that the block rate must ink the block rate increase must fairly reflect the resource demand and consumption of high volume uses of water so as you can see as we move to fiscal year 14 15 and 16 I think it's pretty easy to see the appropriate tears that we put into place the percentage is the rate of percent that it went up or down per year if

▶ 2:27:46 Scott M. Forbes: option 4b passes the increase in tier 3 water goes up to sixty three and a half percent when compared with rates four years ago prior to the tears sixty three percent in fifty one point three percent in sewer now my question before this board is how does that fairly reflect the resource demand and consumption of high volume uses of water when you have apartment complexes condominiums and people that don't necessarily fit into the cracks that I think all of them in Lemmerman said it before in a previous meeting it kind of squeezing into a box that they may feel that they don't belong in in someone like the towers we

▶ 2:28:29 Scott M. Forbes: received a letter from Joan Leighton she's a resident and on average each one of those units use less than most water and sewer users in the city so who speaks for them I know we like to talk about the 79% and then we like to talk about the tier 1 users but what about the other 20% who's their voice you know I think this is the appropriate forum to discuss that now when you compare that rate to tier one users who actually had a rate decrease and I'm a tier one user I'm just trying to look at the numbers and justify what they are tier one users for water and sewer for the first two years of the tiered rate structure went down now the MW IRA assessment went up during those two years operating budgets went up during those two years yet tier one water rates went down so again I think it's important to know how to move forward it's important to know where we're coming from now on pages two and three that I gave you I put both of the options before us option 4b and option 5b so they're on the same sheet of paper so you don't have to keep flipping back and forth okay but most important is the last page you have the percent comparison between both plants and you have the dollar change between both plans and I know everybody likes to say that you know we have to take care of the tier one or the majority of people that are under you know 2500 CF because that represents 79% of our ratepayers but if you look at these numbers for water and sewer bills that are between 1200 and 2500 CF when comparing the two rate options side by side it is clear that option B actually benefits this group as a whole users that are between $1,200 and $1,800 CF represents 61% of the bills that we print out, and they will pay less money. Now, if you look at the annual increase, it's $2 per year, or $3.68 per year,

▶ 2:30:35 Scott M. Forbes: but it is a decrease. In addition, the $2,500 CF group, which is 18% of our bills, shows an increase of just $2 per year. So the point that I want to emphasize to all of you is that this 79% core that make up this tier up to 2,500 CF is going to be unaffected under option 5B. And actually, the numbers illustrate that option 5B is financially better than option 4B for tier one users. And these are the numbers that we all have here. This is the data that was given to us by the Water and Sewer Committee and by the consultant. So now we talk about the 79%. we have 20 percent of our bills remain which are at 500 cf and beyond and the one group that actually pays more opt in option 5b when you compare the two plans is the 5000 cf category that represents 16 percent of our bills now the payment is approximately 12.60 more quarter

▶ 2:31:35 Scott M. Forbes: which is 50 bucks a year as you continue down these groupings however you can see that plan 5b saves hundreds and in some cases thousands of dollars to the remaining 5% of our rate payers. Included in that 5% are condominiums, multi-families, apartments. During my time on the board we've listened to many condo owners and people have come in here during public hearings that have stated that they don't appropriately fit into the tiered system, yet time and time again we have done very little if anything to act option 5b at the very least would stop the bleeding on this group of rate payers who have experienced significant payment shock under the current system we have in place let me emphasize again 63 and a half percent in water 51.3 percent in sewer now 5b can accomplish all of this with no significant increase to the rate payers other than the fifty dollars a year that were increased in the 5000 cf group option 4b doesn't do any of

▶ 2:32:45 Scott M. Forbes: that so in conclusion when you compare the two rate plans option 5b shows an even or better comparison to 86 of the rate payers in the city of melrose again we have an opportunity here to choose an option that can benefit the city as a whole and not just the majority of people that that reside in the tier one category, which I actually showed, it benefits them too. That's why I support this option. Again, we have an opportunity to select a rate option that we can justify and defend the number when challenged. Option 5B provides a second tier. It is in compliance with Massachusetts general laws. And the 2000 CF cutoff can be explained using the conversion formula of two and a half people per household at 65 gallons a day. Everything over 2000 CF is billed another corresponding rate and that's it that's all we have to say the rate option is straightforward it's simplistic and it shows that less can be more sometimes also when you consider the fact that it saves most of our ratepayers in the process when care compared to the corresponding rate plan that tells me that 5b is the much better choice of the ones that we're considering this evening I do hope that you consider this information when you make your decision tonight like I said change is needed and this is at least a start worth of moving in the right direction I'm not saying that this is the most ideal plan but at least it moves us forward if we want to make a statement then let's make an actual rate change option instead of modifying the existing one that we already have in place in my opinion staying the course is not the answer moving forward Thank You mr. chairman Thank You alderman

▶ 2:34:23 Peter D. Mortimer: Alderman Forbes, next in queue, we have Alderman Tramontozzi, please. Thank you, Mr. Chairman.

▶ 2:34:33 John N. Tramontozzi: I want to thank Alderman Forbes for putting this together. This comparison has really, I think, significantly helped me in reviewing those two options that

▶ 2:34:52 John N. Tramontozzi: we seem to be the board seems to be leaning towards that's option for being

▶ 2:34:58 John N. Tramontozzi: option option 5b I wish I'm too you know I was torn even before the this evening as to where I was going to go but I do appreciate all them in Forbes numbers thank you he's a numbers man in that the CPA comes through thank you and I'm impressed and I think you know that that does seem to be probably the closest option to the flat rate system that we once had which would fairly represent all the ratepayers including the high-end users of condominiums and

▶ 2:35:36 John N. Tramontozzi: multifamilies so yeah with that said I think I'm going to support you all them forbes i think um the um 5b is a better option and um and i think i'm going to head that that direction this evening thank you thank you that's all i have here thank you alderman chair matosi are there any other aldermen wishing to be president khan please yeah um i i don't want

▶ 2:35:56 Speaker 1: to i don't want to uh belabor anything that i've said before so i'll try to be uh i'll try to be

▶ 2:36:07 Speaker 1: brief here um and you know people in the public have come forward and asked us to attempt to justify our positions um i am and have been concerned about the affordability of our water rates um i i am going to ask again and i'm going to make a motion that in building the rates that we not set rates that would raise two hundred thousand dollars in surplus for each of the water and sewer accounts for the year ahead as we just heard we have in excess of four hundred thousand dollars in surplus currently in in connection with our water account and we have almost five $500 in our sewer account and it is my intention to make a motion before we vote on the whatever rate the board chooses to adopt that we set a rate funding at 25% factor for a surplus so there would be an additional $50,000 going into each of the accounts that would get us up to well over a million dollars in surplus with all due respect to other speakers who differ with me and have differed with me in the past I do not believe that we will spend a million dollars out of our water surplus this year or next year or over three or four years we have had years in the past where we had no surplus we've built a decent surplus and I cannot justify raising another $400,000 on the rates to boost our surplus to a million dollars I certainly respect mr. de la Russo's position it's his job to be conservative and I understand that he feels that you know he's committed himself to this position and he has but in the last analysis with the people who vote and I think that this is a way to provide great relief to the ratepayers and to do no harm this is not a situation which we

▶ 2:38:34 Speaker 1: confront when we're setting the rates or defining the tiers where relief to one party harm someone else i don't see this as doing any harm i would respectfully request that the board give great consideration to setting a rate which limits the contribution to the surplus for this one year uh to 25 of what's been requested and we can revisit this in in coming years but having a million dollar surplus here coming from five years ago where we had no surplus and we're in deficit uh i think is appropriate and i hope that you'll give that consideration

▶ 2:39:20 Peter D. Mortimer: for clarity's sake is is that a motion at this time president khan yeah i'll make it as a motion

▶ 2:39:27 Speaker 1: all right um that's probably going to want to explain what yeah

▶ 2:39:34 Peter D. Mortimer: we already have one motion on the floor it's it's a motion to amend

▶ 2:39:38 Speaker 1: Well, I was going to withhold my motion until there was a vote taken on the principal motion and then I was going to make it, but I wanted to get it out on the floor so that people, if they had any doubt, that I would reiterate it tonight, realize that...

▶ 2:39:51 Peter D. Mortimer: If you would like to make the motion at a later time, you can do it at your pleasure. You can either make it a motion to amend at this time, or you can wait and make it a motion at a later time.

▶ 2:40:02 Speaker 1: I think I'll withhold the motion until a later time, please.

▶ 2:40:05 Peter D. Mortimer: all right then um that that is uh what we will do then so uh we are still under discussion of alderman inferna's uh main motion to adopt option 4b duly seconded by alderman's worko is there any further discussion on the motion to adopt option 4b

▶ 2:40:38 Jennifer L. Lemmerman: at this time. Alderman Leibman? Okay, thank you. If you'd like. Thank you, Mr. Chairman. I also just wanted to take a moment to talk about the numbers that are before us, and I also do thank you, Alderman Forbes, for the work that you've done to do this, to put some of these numbers in a different light. But I did speak at the previous meeting about my concern about the multi-unit dwellings. I do feel that they're being put into a system that they don't necessarily fit in when you look at their usage.

▶ 2:41:17 Jennifer L. Lemmerman: I think that really neither of these options or any of these options still fully satisfy me in that way. think that I again would reiterate that I would like to see a little bit more information about the way this is being handled we've been told that there are lawsuits pending and that we should wait for that which I understand but I think when as I've looked at these two options that I think are the right two that we should be focused in on on those that are in front of us I do feel that 5b is the most equitable option looking at a range of residents and a range of water bills and sewer bills you know Alderman Forbes mentioned that he's a tier one and he's been looking at it and and still feels that way I can say that I'm both a tier one and it and a tier three I have both a single-family home and a condo that is being put in this you know there's a there's a lot of people that are looking at their their water bills in their various situations through each of these lenses and as I do that trying to take those various perspectives I do see 5b as as the one that will most equitably take the impact of this year's required increase to meet our budget and spread it among the city ratepayers so I just wanted to take a moment to mention my thinking on that so thank you thank

▶ 2:42:37 Peter D. Mortimer: you very much alderman lemon alderman's work oh please yes thank you mr.

▶ 2:42:41 Michael P. Zwirko: chairman I have a couple of questions I was I was hopeful that I could speak to mr. John Shen if he's available he certainly is and we're still under

▶ 2:42:48 Peter D. Mortimer: suspension mr. Shannon would you join the discussion please thank you mr.

▶ 2:42:57 Michael P. Zwirko: Shen I'm gonna try to be brief I've just a couple of questions this is regarding these multi-unit structures to your knowledge have there been buildings within the city of Melrose within the past three or so years that have been able to do individual metering within their buildings have there been buildings that you know that are impossible to be individual meter can you can you tell me about the the changeover from a one main to an individual metering and just your knowledge of what has occurred over the

▶ 2:43:31 Speaker 3: past three years within the city the answers yes to all of those questions there have been there have been a condo Association buildings that have converted there have been new consider has been new construction that is built and plumb their building and there are also some apartment buildings and condo associations that mechanically just cannot install the individual meters so answers to all three parts of your question is yes so there are all

▶ 2:44:00 Michael P. Zwirko: different circumstances so there are there are instances where some folks again using Alderman Lundgren's term kind of fall through the cracks it's just an unfortunate circumstance outside of their own control where they fall into default a higher tier because they're unable to individual meter their unit that group exists that group does exist the when a building or a condo owner or an individual has the opportunity to go into individual metering how is that cost born I guess when I'm going with this is that born by the the ratepayer themselves is that a discretionary tack that they employ themselves or is it something that you know the city helps subsidize a change or is it something that through the ratepayers there's some sort of a subsidy or is it does the cost borne on them no we provide the meter itself like

▶ 2:44:51 Speaker 3: we do to all new residential homes that are constructed if condo Association decides to go individual meter we provide them with them with the meter we provide them with all inspections we assist them in the process we assist them in the analysis to see when the return on that investment comes but the actual plumbing costs are a born by the Association okay and and then my final

▶ 2:45:23 Michael P. Zwirko: question you may not know the answer to this but the individuals that are unable to individually meter their units or within their building do we know that population size about do we know the impacts roughly as to the folks that are just in an unfortunate circumstance of having the I know of two that have come

▶ 2:45:40 Speaker 3: forward to associations that have come forward that physically without gutting all their walls could not individually meet up but um you know we're willing to help yeah anytime we can with the analysis and I've heard through the

▶ 2:46:01 Michael P. Zwirko: weeks and months of going through this rate discussion that because of our

▶ 2:46:07 Michael P. Zwirko: billing program or the way that we bill there's nothing that the city or the water and sewer department can do for that small group of individuals they have this they have to be within the system that we're going to set the rates that we're going to set so there's this this the small population is again unfortunately burdened by this this rate structure correct thank you those are all the questions I have for you I do have a short statement and then I think I'm through but I do appreciate your time and giving me clarity on that piece

▶ 2:46:47 Michael P. Zwirko: thank you so and I alluded to this when we met on Thursday that I was in favor of option 4b I do also want to make say thank you to Alderman Forbes for the paperwork that he provided us tonight I have spoken separately with Alderman Forbes on numerous occasions regarding these water and sewer rates and he has been a valuable resource not only on the committee which he dedicates a lot of time to but also informing me you know the rookie of this whole structure so I do want to also say thank you I myself tried to come up with a plan that I thought was going to be helpful in this discussion I put together two proposals they both came back with results that were not favorable but to the extent i thought that they they would be favorable and would actually move this discussion along they weren't but i did try to open up this menu of options before us i do think that in the if we were to change the structure that we have now going from a three tier to a two tier that will be the third time in the past five years that we've actually changed the structure here we've gone from a flat rate to three tiers and then to two I know that with you know consumers especially myself it's nice to have consistency in the program that you're going to when we made the jump from the flat rate to the tiered rate you had individuals that you kind of can't untie that knot you're gonna throw people into situations that previously they weren't in and then when you change it on them now it's difficult for them to kind of forecast and judge where they will appear to be and I think when we're moving the change again in such a short period of time I don't like the uncertainty that comes with that I will also add that I do feel that Alderman Forbes is correct that change is needed I do believe that 4B is addressing that change it is allowing consistency for the ratepayers and a structure that they are aware of previously at our Thursday meeting mr. Shana stated that our usage is actually down I think that the imposition of these this three-tiered structure has slowly been working to reduce the use on the higher end I'm looking at some of these increments and I would find it very hard-pressed that there is a large number of residents that are falling in the very top usage amounts I would think that those would be other commercial properties versus a resident I don't think and many people here have said this themselves that no matter what option we choose there's going to be pain associated with it I I think for the program that we have been trying to build and that the folks in the water and sewer are going to be employing this next fiscal year I feel that the 4b plan is the plan that should work out for our city going forward um we always reserve the right to change and tinker these i do appreciate the work of everyone here i know that they're going to do what they feel is right

▶ 2:50:02 Speaker 1: uh for myself it's option 4b i i'm i'm complete uh no more questions or comments thank you very

▶ 2:50:07 Speaker 3: much alderman's worker you're welcome alderman MacMaster my goal is um thank you could i just ask

▶ 2:50:16 Peter D. Mortimer: Mr. Shenna to come back yes most most definitely Mr. Shenna if you would

▶ 2:50:25 Mary Beth McAteer-Margolis: please so both of these plans Mr. Shenna the the fixed charges are the same is that correct on the like the meter charges per quarter for like the water

▶ 2:50:41 Speaker 3: and the sewer the am I reading that when when you compare a 5a and 4 a 5a they are 5 4 B 5 B they are they are there is a difference between a and B right so

▶ 2:50:52 Mary Beth McAteer-Margolis: if we're looking at the one with the 90% sewer which I think is something that we

▶ 2:50:57 Speaker 3: the base fees are the same and they include a reduction in the second meter

▶ 2:51:03 Speaker 5: of base fee as well as well to be options so what people do need to

▶ 2:51:06 Mary Beth McAteer-Margolis: understand is whichever one of these if we're leaning towards one of these we decide on if it's 4a or 5 the 4b or 5b we're looking at the 90% bill on the sewer so the sewer in essence you'll be billed a little bit less can from a

▶ 2:51:24 Mary Beth McAteer-Margolis: consumption perspective a consumption perspective okay so then my other question and I'm I'm not really a numbers person but I I did go home the other night afterwards and well not that night because it was a little late but the next day and look at the numbers again and kind of crunched them a night I didn't do this nice spreadsheet but I do have lots of numbers written down and you know I was surprised and and Alderman Forbes did sort of prove it out in a in a nice order more orderly fashion than my scribbles but the thing I wondered is all of the charts that we have are showing the break between 1800 and twenty five hundred but yet our tier goes to two thousand is that right that's right it changes it after two thousand correct so how many people do we have or how many how many accounts I mean why did we choose twenty five hundred for that break then it's just it's just the frequency that the

▶ 2:52:20 Speaker 3: consultant decided to run his charts and his numbers okay and you know it does have the charts to show the percentage of bills is the third column right and if you're looking to convert that into number of bills he looks we put out about eighty eight thousand to eighty four hundred bills per quarter so that

▶ 2:52:47 Mary Beth McAteer-Margolis: times four so that's why he did the percentage I see yeah because it would sort of be interesting to know I mean what I what I found and what I see all and Forbes has sort of shown us is that the under under for B it's those to me the percentages of increases are more equitable across the board with the three tiers but when you look at the two tiers I'm concerned that that middle tier that we're missing where you know I don't know how many people are between 2,000 and 2,500 that those are the people between like the 2,000 and and 15 or 10,000 that are really getting the brunt of the increase again he created

▶ 2:53:29 Speaker 3: this chat for comparison purposes when you look at the windows of comparison they're really windows of comparison right between 1200 and 1800 the next one looks at that window between 1800 and 2500 it's an analysis just meant for

▶ 2:53:50 Mary Beth McAteer-Margolis: comparison purposes and do you feel confident that either one of these first of all that either one of these would fund your operating budget adequately and they both would they both quit and I had one of the question do you think

▶ 2:54:13 Mary Beth McAteer-Margolis: that there I forget my other question I guess for maybe for mr. de la Russo or for you um do you think one would be more complicated in terms of switching the billing over to the two tiers as opposed to the one tier well i think i can speak to the billing function of it

▶ 2:54:35 Speaker 3: um option b both instead of a will require a reformatting of the bills in terms of internally because we take the hundred percent consumption and so we have to drop it to ninety percent right there's a data entry process with the first round the bills in the fall that that portion of it encompasses changing the base fees changing the base fees of the second meter that's another function of the billing process that has to be changed if we drop the tear there will be yet another function of the of the billing function that up front has to be changed so the difference between four and five you'd add another layer of change initially and

▶ 2:55:16 Mary Beth McAteer-Margolis: and then once it's changed once we can move forward and do you would you feel that um option 5b satisfies the mass general law that requires us to have tiers that are differentiated and based on you know consumption and that the higher users are billed at a higher rate it does it does Okay. Thank you very much, Mr. Chairman. Thank you. Thank you very much, Alderman

▶ 2:55:40 Peter D. Mortimer: McAteer-Margolis. Alderman Medeiros, please. Mr. Chenow will stay for a minute. Thank you.

▶ 2:55:45 Monica C. Medeiros: Thank you very much. And I just want to clarify a couple of things. The rate that we had prior to FY, that, you know, prior to FY14 was actually, we often refer to as a flat rate system but in actuality there were two tiers one residential and one commercial just no base charges and it was just you know looked at a little bit differently but I also I have a number of a number of

▶ 2:56:24 Monica C. Medeiros: items that have been presented either tonight or at the last meeting I think you know didn't quite make it into the record so right now we have something on the table i don't want to make motions to add all that to the record at this moment but through the chair to the clerk of committees i'm not sure what the best way to handle all those are some handouts

▶ 2:56:56 Speaker 3: from the administration and from members of the board um i would say that they are motions on

▶ 2:57:00 Peter D. Mortimer: their own and when we are concluded with this motion um you may make that motion okay if that's if that's your satisfaction do you find that to be uh appropriate that should be fine okay thank

▶ 2:57:10 Monica C. Medeiros: you very much so uh mr shenna in talking about some of the buildings that that can or can't

▶ 2:57:19 Monica C. Medeiros: meter and how that affects some of the large multi-unit or sometimes smaller multi-unit dwellings and i consider those to be both condominiums and apartment buildings where you have residents there i know there are some apartment buildings that have individually metered sort of sub metered their own units but that doesn't they're still receiving one master bill from the city that's just so they could break down the charge that's correct okay and then i i thank you i just saw that um i think you had sent this chart to to i think to me and i believe

▶ 2:57:58 Speaker 3: the other members of the board um do i have a copy if anybody doesn't have it i'd like to see

▶ 2:58:01 Monica C. Medeiros: about i think four this afternoon so i appreciate that i know we just met on thursday night late

▶ 2:58:09 Monica C. Medeiros: and that we had you guys had mandatory training on friday so there was not a lot of extra

▶ 2:58:16 Monica C. Medeiros: you know manpower time to get that done but this would be one of the things that i'd be moving to add to the record but i just want to point out and i know we've talked a lot about it i've talked a lot about it and i've heard a lot from so many residents that are sort of stuck in this situation

▶ 2:58:33 Monica C. Medeiros: and i just want to point out now this is a breakdown that compares uh residential commercial And actually, I was looking for, you know, I'd love to see us have a rate that broke out and treated commercial residents separately.

▶ 2:58:49 Monica C. Medeiros: But nonetheless, this chart that you've provided, I just want to point out a couple of numbers.

▶ 2:59:03 Monica C. Medeiros: And from FY13, which was the last year that we had the old system, the average bill here for the highest group, user group, of consumption, The average bill at that time was $36,650 quarterly.

▶ 2:59:27 Monica C. Medeiros: Now, as of FY16, so the year that we're currently in, the highest bill is $55,232. and I see that as a you know eighteen thousand five hundred and eighty two dollar difference quarterly on that tier that in my calculations comes to fifty one percent increase just since that change which I think is very significant

▶ 2:59:49 Monica C. Medeiros: and as comparison the eighteen hundred the consumption of eighteen hundred we

▶ 2:59:58 Monica C. Medeiros: said is the average the average household from what we heard before the

▶ 3:00:08 Monica C. Medeiros: 65 gallons per day per household per person per household that bill in FY 13 was 264 dollars in FY 16 the current year that we're in it's 313 dollars so that is an increase of 49 dollars per quarter per quarter which is still a lot of money which means almost two hundred dollars per average home but that's only a 19% increase in in the rate over those years and you know it's hard to say that that's only a 19% increase but 19 compared to 51 you know this I can't I

▶ 3:00:45 Monica C. Medeiros: can't justify going to option 4b because to me it's the same system that we have slightly different base charges for the same three tiered rate that isn't addressing this problem at all in at least and I'm you know I don't think

▶ 3:01:04 Monica C. Medeiros: these any of these options are honestly perfect but I do believe that 5b somewhat addresses this and gives you know some of those people in the highest tier a little bit of relief just this year and by a little bit of relief I mean it's the difference between at that highest tier level a 57 we'll call it $58,000 bill per quarter versus a $55,000 bill per quarter I mean these people have already seen that 51% increase and that will still be on whatever rate we choose but that increase has already come and gone and they've already borne that cost

▶ 3:01:53 Monica C. Medeiros: and you know I can't justify increasing that I think 5b does the best to sort of recognize that and you know again that doesn't take away that increase that they've already seen and they've already born in those highest here so I know a lot has been said and done and I appreciate also alderman Forbes and his time on the water and sewer rate committee in this time putting this together as well so thank you Thank You alderman Medeiros are there any other

▶ 3:02:21 Peter D. Mortimer: aldermen wishing to be heard for the first time we have alderman Forbes please right and I am NOT going to also labor this we had a late night last week

▶ 3:02:30 Gail Infurna: and we could be in the same position tonight and be here at a quarter past eleven still come out without a vote I so I'm not going to repeat it but I thought alderman as work oh did a nice job of summarizing how I feel I do like still seeing the three tiers I think tier three protects the people in tier one tier one are the people of the majority of the city and sometimes when issues are tough we have to look at the greater good and do what's what's best for the greater good of the population not to say that I don't feel bad for the people in the condo units I too am a single homeowner as well as a condo owner so it affects me in both ways but I think once again I'm not going to be repeat what Alderman Suarco said I'm still going to support 4b I think it is the least amount of change and I I do believe it will still work out in the and we have made a lot of headway on this there's been a lot of effort on a lot of people Thank You Alderman Forbes being the number person but I I just kind of feel that I'm going to stick with 4b and and hopes that the alderman will will also do that thank you Thank You alderman Inferno we have for the

▶ 3:03:59 Peter D. Mortimer: Any other aldermen for the first time? Coming around for the second time, we have Alderman Forbes first, and then Alderman McAteer-Margolis.

▶ 3:04:11 Scott M. Forbes: Thank you, Mr. Chairman, for allowing me to speak for the second time. Mr. Shenna, I know we had a conversation today, and I said I was going to bring this up, but last Thursday when asked if you thought which plan was more beneficial, either 4B or 5B, You said 4B because it manages, it best manages to increase, the increases to over 80% of your accounts, your customers. It meets the fiduciary responsibilities this board has to meet. I looked at the numbers this weekend, and I had a difference of opinion with you. I called you today, and I was wondering if you were able to look at the data that I talked to you in comparing the plans, and if you thought that 5B was actually more beneficial to the 79% rather than 4B.

▶ 3:04:55 Speaker 3: oh again speaking as speaking personally speaking as the director of the department a director who has substantial institutional knowledge in the makeup of the system I still stand that 4b is the is the right and it's such slightly ahead of 5b I think there are other things that have to be taken into account other than the percentage of this year's increase it's the ability in the future to sustain the increases in that first tier it's the you know three tiers were put in place for a reason it's the it's the comment that all of ins work or made again they both work financially the impacts between the different between the two was a very minimal your numbers are not skewed they're correct and although I didn't see the presentation but they come right out of the book but again when I was asked personally which one would I favor and it would be for be just slightly above 5b because I think the picture is sometimes greater than just the number it's the ability of the purpose the stability of the system it's it's we're not changing every two years there's a lot that went into my thought process when answering that that's not to say that your numbers are incorrect by any stretch of the imagination but again

▶ 3:06:20 Scott M. Forbes: that's that's why I answered the way it did okay I just want to just reiterate that if we're concentrating on people who are in tier one when we talk about the majority 5b is more beneficial than 4b at 1200 CF and at 1800 CF which makes up your tier one users at 2500 CF the difference is two dollars a year and that represents the 80% of our base so again this is not going to affect 80% of our bill payers it is going to provide relief for the 5% that have been down the bottom that experienced this new rate structure and it's putting and when you talk at commercial buildings or buildings like the Melrose Towers it's putting a square peg in a circle hole it doesn't fit yet we're forcing them to fit into the system that we put in place and Melrose Towers uses over a half a

▶ 3:07:28 Scott M. Forbes: million cubic feet of water a year and just on that analysis alone if you just look at the hundred thousand dollar a hundred thousand dollar hundred thousand cubic feet model at tier 4b at a hundred thousand cubic feet a quarter that rate is or that dollar amount is going to go up by over a thousand bucks right in 5b

▶ 3:07:50 Scott M. Forbes: it's $100 so for the hundred and fifty some on owners at the Melrose towers I think they know I think I know what option they would want and again we've talked this is my third year on the board I wasn't I wasn't a member of this board when this rate structure was put in the place but I do know that we have these public hearings and we hear these people talk about their situations that they just feel like they don't fit into a certain place and they are correct and this option would at least reshuffle the deck a little bit and bring the numbers back into somewhat of a more realistic approach that I think we can work with moving forward again the the job here is not done but we need a starting point point and if everyone acknowledges that we want to talk about why we're changing the tiered rate system the reason why we're changing a tiered rate system is because over the past three fiscal years it's gone up 20% across the board in each tier and everybody doesn't like the yeah we expected modest increases but I don't think we expected six and seven percent increases and a five percent increase compounded it's 20% across the board so I think we had expectations but But I don't think the expectations were met, which is why we're discussing these options, which is why we hired the new consultant, which is why we had ten plans put before us. So for me, if we're going to make an actual change, and a change that will do better for every rate payer in Melrose, then it's something that we need to do that's a little bit different than what we're doing now. And I just feel that option four is the same rate, the same structure, with a base charge.

▶ 3:09:33 Speaker 7: Thank you, Mr. Chairman.

▶ 3:09:35 Peter D. Mortimer: Thank you. Alderman Forbes. Alderman McAteer-Margolis, please.

▶ 3:09:42 Mary Beth McAteer-Margolis: Thank you, Mr. Chairman. Mr. Forbes is very articulate and has really, I think, hit the nail on the head in many ways. If we're going to make a change, I think we need to really change it up, which isn't to say that we can't go back and change it again. I feel like last year during election season, we heard so much about the water and sewer rates. Personally, I think the increases in water and sewer really led to the failure of the override to pass in many ways because people were feeling hit in that pocket and really didn't feel like they could handle it in the other pocket. And I know that many of my colleagues didn't necessarily support that but some of them may have had an easier time thinking of it in a positive way if you know the public was not so vocal in in the fact that they had had to absorb these big increases in the last few years in water and sewer um you know the other night i was really pretty convinced that 4b was the way to go but after running some of my numbers and hearing from you tonight mr. Shana I feel like if we are gonna you know want to make a change and try to make things better and really affect more of the ratepayers in a better way that maybe it's maybe it's time to try something new and try the two tiers if it's satisfying the regulations if it's meeting the budget I personally don't want to have to cut the reserve funds I know Alderman Kahn is going to make that motion later I think by accepting for 5b perhaps and lowering the increases across the board it won't be you know quite as pressing an issue with with the reserve funds and I think I'm gonna have to change my mind

▶ 3:11:48 Peter D. Mortimer: thank you thank you very much alderman McAteer-Margolis are there any other aldermen wishing to be heard at this time we have a motion on the floor to recommend option 4b to the full board for passage all in favor please say aye Aye. Aye. Aye. We'll see a show of hands on the aye, please.

▶ 3:12:15 Peter D. Mortimer: Three in favor. All opposed?

▶ 3:12:18 Speaker 7: Opposed.

▶ 3:12:18 Speaker 3: Opposed.

▶ 3:12:20 Peter D. Mortimer: The motion to adopt option 4B fails. The order is back on the floor before us.

▶ 3:12:28 Scott M. Forbes: Mr. Chairman, I'd like to motion that we accept option number 5B.

▶ 3:12:34 Peter D. Mortimer: Second. Alderman Forbes has made a motion that we accept option 5B. That motion was duly seconded by Alderman Lemmerman. Is there discussion on this motion? President Kahn, please.

▶ 3:12:47 Speaker 1: Yeah, I move to amend the motion to include language indicating that in building the rate that we would establish a surplus that would be 25% of that which has been proposed.

▶ 3:13:03 Speaker 1: And in support of that, one point I want to make clear.

▶ 3:13:07 Peter D. Mortimer: can we can we wait for a second please president second okay a friendly amendment to the main order has been made at this time that we reduce the amount contributed to the reserve fund by 75% and give only 25% I'm sure somebody can quickly work out those numbers tonight or if not before our next full board meeting president Khan's motion for that reduction to the The donation to the appropriation to the reserve fund was seconded by Alderman Medeiros. So that motion to amend is before us, and President Kahn, you had the floor and began to speak when I called for the second, so please continue.

▶ 3:13:51 Speaker 1: I want to make it clear, this is not a motion to cut reserves, as it's been characterized. It is not a motion to cut reserves. a motion prospectively not to collect as many dollars in reserves if this motion passes by the end of this next fiscal year we're going to have at least one million dollars in our reserves five or six years ago we had no dollars in our reserves one million dollars is a healthy amount it will sustain us it will not be spent this year this this doesn't involve any

▶ 3:14:33 Speaker 1: pitting of one tier of rate payers against another it is simply our decision not to collect reserves from the rate payers at the amount that stated again mr. de la Rousseau has appropriately calculated the rate based on our past votes but what we need to do is get a handle on our water and sewer rates not be amongst the highest in the MWRA system and this would be a step in that direction I've been here for over seven sixteen years I believe I've always acted prudently and fiscally responsibly I don't think that this is any kind of a gamble or a dangerous move I don't see any downside to this motion and I would ask that you support the motion please thank you very much

▶ 3:15:31 Peter D. Mortimer: presently we are discussing a motion to amend the main motion which is to adopt option 5b and the emotion to be amend would be that in the water rate order that the contribution to the reserve fund would be 25% of the amount that presently is slated for contribution to that reserve fund next in queue we have aldermen's work Oh followed by alderman inferno alderman right and alderman Tramontozzi ozi alderman's work Oh please proceed Thank You mr. chairman I'll be

▶ 3:16:07 Michael P. Zwirko: very brief here I just wanted to say I will be supporting the amendment as proposed by alderman Khan I do think that it is prudent and I do think that the reserves at the end of this fiscal year will be adequate so I appreciate his amendment and I will be supporting that furthermore I'm also going to be supporting 5b I just wanted to be clear that my preferred rate structure was 4b I put my best foot forward I supported an argument to defend that it failed we still need to establish a rate structure here the next best option in my opinion

▶ 3:16:45 Michael P. Zwirko: is 5b I will be supporting that here so this is not a cake and have it and eat it too this is just based on sound policy I put the argument forward it failed you move on thank you for your time Thank You alderman's work up alderman

▶ 3:17:01 Gail Infurna: in front of please thank you very much mr. chairman in the spirit of tough issues once again and for a number of years when I first came on this board I sat next to the ultimate award six who was known as the great compromiser so I'm that's not you his picture up on the wall that's right that's right so I have

▶ 3:17:22 Gail Infurna: learned to compromise when the issues get tough and I will certainly support 5b and and that's fine I wonder if with all due respect to President Khan's amendment if and I know it's probably kind of in there without Rick saying the words but I think I feel better saying the words and having the words written in the amendment that a sunset clause to expire for just you know for one for this one year only I am a firm believer in having great reserves I think we've put them to great you know we can put them to great use of god forbid something happens we have done lots with our money and how we pay our debt for all the projects that have been spent in probably just about every part of the city and every Ward so even though because it's a budget thing it's probably written there without the words but I would like to see the words to say

▶ 3:18:26 Peter D. Mortimer: to you know expire at July it would seem and mr. de la Russo and mr. Shana can I can bring this to make sure it's correct, but it would seem that the rate and the contribution to the reserve fund would be for this year's budget only, as it exists.

▶ 3:18:42 Gail Infurna: I guess I would just like to see the words, because I think it will set a precedence for next year that we're just not automatically going to do this, that we kind of are hoping that it was a one-year thing.

▶ 3:18:51 Peter D. Mortimer: Next year would be a whole new ballgame, if I can use the vernacular. Could I be correct in that statement, Mr. DelaRusso? Next year's contribution and next year's rate is a clean slate. Just to allay the concerns of Alderman Inferna, just so we're all clear.

▶ 3:19:09 Speaker 1: Mr. Chairman, maybe I can, if I restate my motion is that the water and sewer rates for the fiscal year 2017 contain language so that the surplus collected would be 25% of that proposed by the administration.

▶ 3:19:25 Peter D. Mortimer: yes yes sir uh and that's that's how i understand it does uh does that assuage any concerns uh you may have alderman inferno would you like to hear more from our city officials sure always thank you very much would you please elucidate us thank you to the chair um again the program

▶ 3:19:42 Speaker 4: in front of us and it is a program was predicated on five years at two percent per year voted by this board should the board vote to deviate from that that's the board's

▶ 3:20:00 Speaker 4: decision and I leave it up to the boards and obviously from where I my vantage point and all the McConaughey's was so correct I may be conservative in my respect and I personally prefer to stay with the 2% plan for five years personally I feel it shows a confidence and a dedication that we take it serious um having said that whatever the board like i will do if if i could and i i um i understand

▶ 3:20:26 Peter D. Mortimer: what you said but would you more specifically address uh what alderman inferno saying that this would be this would be a one year yeah that's fine and then what we would do is

▶ 3:20:37 Speaker 4: reevaluate next year and if there's any adjustments we'd make it appropriately then

▶ 3:20:44 Peter D. Mortimer: is is that uh satisfactory alderman inferno hearing that it's for one year from our city

▶ 3:20:53 Peter D. Mortimer: auditor sure i'm still in my compromising mode though all right thank you very much uh alderman inferna uh next uh in line we have alderman wright thank you mr chairman uh patrick can you stay put

▶ 3:21:12 Francis X. Wright Jr.: um this reserve would be for necessary work potentially that might come up unexpected

▶ 3:21:20 Speaker 4: costs um is that correct yes correct particularly during the year when um We don't have anywhere to go when things happen, not should they happen, but when they happen, that's correct.

▶ 3:21:30 Francis X. Wright Jr.: And we have flooding issues that goes into the sewer system, or they did, is that accurate, John?

▶ 3:21:38 Speaker 3: Storm water isn't covered by the sewer improvements. Sewer improvements, I&I improvements could be an eligible expense towards the sewer reserve.

▶ 3:21:47 Speaker 1: Could be. Yes.

▶ 3:21:50 Francis X. Wright Jr.: Okay. we've had storm water issues in the past and Ward 2 we've spent how much money about 10 years ago about 5 million dollars okay and what about the Melrose Towers issues um that was part of Ward 2 okay that included that that project was the same and is that El Pond as well El Pond no El Pond was

▶ 3:22:11 Speaker 3: separate there was about another three million uh sewer force main most definitely helped the and that was another 1.8 million so there's been a lot of projects that have

▶ 3:22:25 Francis X. Wright Jr.: helped that area okay and I am NOT an accountant like Alderman Forbes but by my math to reduce both of these by $200,000 well I guess that by 25 if you were to reduce the by a total of $200,000 by my math you would reduce the water came up we're approving as far as the water rate bottom line figured by point zero three seven percent from the sewer by point zero two six percent so I don't know what the number is as to what the savings will be for each rate payer

▶ 3:23:11 Francis X. Wright Jr.: or on average or but I'm guessing it's not going to be much and we've had major projects in the past since I've been on this board and I don't want to be penny wise dollar foolish so we did as you say mr. de la Rousseau make a commitment at least the members of who are on this board when we entered into this and I intend to keep my commitment I think it's in the best interest of everyone in the city we've had projects in the various parts of the city that benefited from from well thought-out policies and I would like that money to be available should other parts of the city or even those parts of the city need them again in the future so I look forward to seeing what the savings will be on the

▶ 3:24:00 John N. Tramontozzi: proposed cut thank you thank you thank you alderman right alderman chairman Tosi please thank you mr. chairman I am gonna I am going to support president khan's amendment i think one million dollars in the reserve is uh is prudent and reasonable and and i think giving back even a little bit of rate relief to the rate payers is is what we owe to the the public um we we do have other orders on the table and i think we are going to address the infiltration and inflow issues through a separate order so i don't see where we're going to have to necessarily dip into these reserve accounts to take care of those problems since we're already going to be addressing them through other orders so i think it's a prudent amendment to uh the uh the order and uh and i will be voting in favor of that amendment and lastly i just want to uh say thanks to alderman's work call and alderman inferno and um alderman's work will never consider uh any suggestions uh and recommendations uh that you might have i think it's always good to bring alternative discussions to this board and he did a fine job in presenting your uh viewpoint uh so uh so i i respect that and uh and i appreciate that

▶ 3:25:30 Peter D. Mortimer: uh both you and alderman infern is uh coming around to the uh the other order but anyways thank you thank you alderman chairman tozy alderman boisselle please just for clarification

▶ 3:25:41 Robert A. Boisselle: you're taking money from one account and putting it into the reserve water retained earnings and sewer retained earnings what is that account what what are they

▶ 3:25:56 Robert A. Boisselle: or just that's the free cash in other words the cash that you're collecting is just sitting there

▶ 3:25:59 Speaker 4: that's the results of fy 15 right retained earnings through the chair so after this year we'll turn through and next year we'll be sitting here talking about fy 16. if it just sits there what does it do it'll turn back if we don't allocate it prior to um july 1st allocated to water and sewer a water or reserve fund the respective fund it will simply roll over into

▶ 3:26:28 Speaker 4: the next fiscal year but it'll stay in that fund it'll stay in that fund um unless you know it you

▶ 3:26:32 Robert A. Boisselle: got it it's voted on before july 1st so if you move that money out into the reserve funds what's

▶ 3:26:37 Speaker 4: the that that all right let me back up a minute um what happens is that you're dedicating that money now to a reserve so you've taken it from the stream which is called pool cash you've dedicated Now you've set up a fund, that reserve fund, that will hold that money. So that as we go forward into next year, we'll have a resource to go to for when something happens in the middle of the year. You don't have free cash in the middle of the year. What you have is whatever's in the reserve fund. Okay, so that- And that's where the money comes from.

▶ 3:27:11 Robert A. Boisselle: Okay, so it has double purpose in the point that you have an emergency fund to work with. you also have a financial the brokerage houses are looking at these funds also that you're saving is that correct sure so that's the second bonus that you're getting out of that all the time okay so

▶ 3:27:33 Robert A. Boisselle: at a 25 percent you're you're tying up another 330 534 dollars in that account in the retained earnings and you're putting just about 41 thousand seven hundred seventeen dollars into the water and seventy three thousand three hundred eighty three dollars into the sewer retaining uh funds and so forth so you you have a lot of money it's just going to sit there and not do any be invested and used properly uh i've i'm i'm supporting 5b but if the amendment to only put 25 percent is attached to it i will not support 5b i'll stay with 4b thank you very much mr chairman thank

▶ 3:28:24 Peter D. Mortimer: you gentlemen thank you very much just just um so you understand alderman boycelle 5b has already

▶ 3:28:36 Peter D. Mortimer: has passed you're right you're right my mistake my mistake it has not and thank

▶ 3:28:47 Peter D. Mortimer: you for your comments thank you next I have Alderman Medeiros and then we'll go

▶ 3:28:55 Monica C. Medeiros: to you Alderman Medeiros please thank you although it's been this board that voted to adopt this reserve system at the time I did not support that my feeling was that this you know especially where I've been hearing for many years that people want lower rates and we had many many years of good fiscal management in the water and sewer funds without ever having a deficit until I think it was FY 12 FY 13 sorry we had a deficit of about a hundred and fifty nine thousand dollars in the sewer account only since then we've had no issues we have not taken anything out of the reserves that have been built up is

▶ 3:29:40 Speaker 3: that correct mr. Shannon very little I think we took 30,000 out of sewer and then this past fiscal year we took very we took small amount for contractual

▶ 3:29:54 Monica C. Medeiros: obligations new CBA agreement right and in those those moving the money out those did require a vote by the board of alderman absolutely absolutely and anything moving forward would require a vote from the board of alderman correct for those for the near as uh president khan has has rounded up say a million dollars that will be there at the end of this fiscal year i think that that's sufficient i i feel like you know we've got now we have new consultants who are here who consult for many many many from the biggest water and sewer rate consultant in the world I think I heard or at least in the United States during the discussion these new rates whatever they shall be I think you're going to be I'm pretty confident they're going to justify funding the system mr. So I asked Ms. Long and probably took her by surprise about indirect costs and I guess it's because we don't necessarily always see the breakdown of what's projected versus what actually is. And normally there's no savings in health insurance because it just goes up and up and up. But this year we've seen some savings in health insurance, not necessarily as it relates to water and sewer. But if, for instance, when the reconciliation takes place at the end of this year, if there are savings maybe due to people opting out in water and sewer to the city plan,

▶ 3:31:31 Monica C. Medeiros: and we do a reconciliation, I assume, at the end of the year, if what's been spent is less than what we budgeted for indirect cost, would we see that turned over as part of the retained earnings into water and sewer? Or does that stay the same?

▶ 3:31:46 Speaker 4: no it it's a it's an allocation for water and sewer um and again um it is i.e a moving target at times and no one in this room can control that including myself but i'm not strictly water and

▶ 3:32:05 Monica C. Medeiros: sewer strictly water okay so uh i thought i was gonna make a point but i guess i'm not but uh in this in this you know what's planned and what I've heard is planned I hear we have a program rather than a product you know a project we had one of the things that I'll be moving shortly to add to the order includes the presentation we had from our city engineer last week but in it you know the proposed next steps include funding authorization from the MWRA which went for grants and loans it it doesn't include from what's here taking from capital reserves at least what's been presented to us so far and I see the city engineer shaking your head now so I believe that this is sound and prudent and would you know I kind of look at this as you know here's our constituents money and you know we've got in one case we've got a high interest credit card debt it's not a

▶ 3:33:10 Monica C. Medeiros: debt it's just it's just as this bill that they have to pay and on the other hand you know that's it's saving and it's always good to save but sometimes sometimes you just need to pay the stuff that's in front of you at the time so I don't think it does anybody any good just sitting in a bank doing nothing I'd rather either see it put to use to fund some improvements in projects that might help fix the leaks in our system or stay with the residents and not be put to sit in a bank account.

▶ 3:33:45 Peter D. Mortimer: Thank you. Thank you, Alderman Medeiros. Alderman McAteer-Margolis, please.

▶ 3:33:51 Mary Beth McAteer-Margolis: This is one thing I'm not going to change my mind on. I remember when we established this fund it was a very difficult thing it was a very difficult vote for many of us to take and I do think that was the year that we lowered the rates and ended up having to come back after July 1st to reset the rates and I believe we made a commitment to achieve 10% of the water and sewer budget in reserves is that not correct mr over five years i opted for three but i was

▶ 3:34:24 Speaker 4: outvoted it's okay five years is fine at five years at two percent right that's correct right

▶ 3:34:35 Mary Beth McAteer-Margolis: and so um and and i fully admit i'm i'm not a math person but i i did take out my calculator and um the water and sewer budget combined is approximately 13 million dollars so that what 10% is 1.3 million that we should have in reserves at the end of year five which is two years away two fiscal years away based on that each individual budget our contribution this year for the water would be approximately a hundred and seven thousand dollars and for sewer approximately a hundred and fifty four thousand dollars 25% only funding it at 25% is only going to save us a combined total of about $55,000 I see the accountant over there with his numbers going am i right am i right anyways I think our consultant our new consultant on his in his you know preliminary observations said continue to develop strong reserve fund balances the city's current target is 10% of its annual operating budget, but it should be striving for 20% to 25%. I think that's maybe a little bit overkill, but I'm not a premier water analyst, and I think that when you even take advantage of these MWRA grants to do I&I, you never know what you're going to find, and you never know what's going to blow down the line. And we've seen it before. I'm sure that we'll see it again. And I feel confident that saving $60,000 is not going to affect the rate significantly enough to reduce the good things that we can achieve by establishing and continuing to donate to this fund. So I'm not going to support this amendment.

▶ 3:36:29 Peter D. Mortimer: Thank you. Thank you, Alderman McAteer-Margolis. on the amendment we next have president khan and then alderman wright president

▶ 3:36:44 Peter D. Mortimer: khan please i'll pass mr mr chairman thank you sir alderman wright please very briefly

▶ 3:36:49 Francis X. Wright Jr.: patrick when we took that vote three years ago and it was a difficult vote is it fair to say

▶ 3:36:58 Francis X. Wright Jr.: that the bond rating companies relied on our our vote and and that the expectation as all as Alderman Boisselle indicated is that we were going to reach a goal of a million dollars which would be a little less than ten percent and as a result we've benefited from that financially yeah it through the chair

▶ 3:37:21 Speaker 4: the bond rating but out but but also the Department of Revenue is expecting us to

▶ 3:37:28 Francis X. Wright Jr.: do that and if we don't do that is the possibility we could see a bond rating

▶ 3:37:37 Speaker 4: decrease they would ask why the change in policy and I would have to explain

▶ 3:37:43 Francis X. Wright Jr.: why I mean you can't predict what Moody's or Standard & Poor's is going to

▶ 3:37:49 Speaker 4: do but were they to do that that would be yeah that would create an unstable situation which then could possibly lead to a minimally but negatively impact

▶ 3:37:56 Francis X. Wright Jr.: potentially our bond rating which would cost us a little bit more to borrow money yeah absolutely and John I and I we getting grants or interest-free loans

▶ 3:38:08 Speaker 3: I think it's a 70-30 split grant loan zero interest loan thank you thank you

▶ 3:38:17 Peter D. Mortimer: Alderman Wright president Conn please yeah I really wasn't going to speak

▶ 3:38:24 Speaker 1: again whether it's $50,000 or $250,000 it's rate payers money and it matters to them so that's something to keep in mind mr. Del Russo yes sir the bond rating agencies evaluate us every year is that correct every October based on our current event when we do bond that's correct based on our current financial condition and projected

▶ 3:38:50 Speaker 4: they ask us for projection for the next year and they ask some very probing questions okay

▶ 3:38:56 Speaker 1: and you're not telling the board that if we fund 25 percent instead of if we make a 150 000 variance in a reserve that we're going to be downgraded in your opinion as a result of that

▶ 3:39:10 Speaker 4: action i i can't i can't say that um it's not gonna um look negative because i think it would they will look negative because there's no basis for which would decrease in the contribution

▶ 3:39:24 Speaker 1: because we haven't met a requirement we make all kinds of votes all the time about all kinds of reserve funds is that correct that's correct um however and i just want to be clear are you

▶ 3:39:32 Speaker 1: telling the board that you believe that our bond rating would be downgraded if we took this vote

▶ 3:39:38 Speaker 4: no what I'm but I am telling the board respectfully is that when you change position and if they ask it's not going to be a positive it's not positive for

▶ 3:39:51 Speaker 1: us to in their eyes no and I understand and I respect your position and I can't

▶ 3:39:58 Speaker 4: make that call I'm not in a position to to evaluate what S&P will do I'm I'm in a position to advise you that it's not a positive thing when you reduce it.

▶ 3:40:08 Speaker 1: Oh, I understand that. And you have great experience in your field, and I respect your experience.

▶ 3:40:13 Speaker 4: Almost 25 years now.

▶ 3:40:15 Speaker 1: Yeah, and I respect that, and I respect your opinion. Thank you. And I don't believe you're telling us that this vote would result in a downgrading in our bond rating.

▶ 3:40:27 Speaker 4: I can't make that statement. Okay.

▶ 3:40:29 Speaker 1: That's all.

▶ 3:40:31 Peter D. Mortimer: Thank you, President Kahn. Are there any further all the motion to be heard? Seeing none, we are ready for a vote on the amendment to the main motion which is to adopt option 5B. And the amendment would be to adopt option 5B but adjust the rate commensurate with a decrease in the proposed amount for the contribution to the reserve fund by 75% so it would only be 25% of what it is now all in fit does everyone understand once again it's not to be didactic it would reduce it would adopt the main motion is to adopt 5b the motion no amend by President Kahn is that the currently contained

▶ 3:41:29 Peter D. Mortimer: contribution to the reserve fund would be reduced to 25 percent of what it stands now reduced by 75 percent to 25 percent we're voting on the amendment we are voting on the amendment only okay we are voting on the amendment only the amendment would come first are we all on the same page not to be pedantic but I want to make sure we we all have this all right all in favor of the amendment to reduce the contribution to 25% please say aye aye may I see a show of hands on the I please one two three four five the motion to reduce the contribution to the reserve fund fails that amendment fails the main motion is before us which is to adopt option 5b is there any further discussion on the main motion alderman

▶ 3:42:37 Monica C. Medeiros: Medeiros please at this time I'd like to move to amend the order to include various communications I'll start with adding the city of Melrose infiltration and inflow reduction program PowerPoint presented to us last Thursday

▶ 3:42:58 Monica C. Medeiros: mr. Shenna's summary of water and sewer bills by consumption categories FY 12 through FY 17 as emailed this afternoon I have comments from mr. Philip Taymor

▶ 3:43:10 Monica C. Medeiros: which were read into the meeting it was read by Miss Cork and Ellis in public participation on June 9th and then he subsequently has emailed this to us in regard to these orders the three pages as presented by alderman Forbes tonight city of Melrose historical rate analysis alderman Forbes 613 2016 the three page that I handed out at the last meeting on Thursday indirect costs kind of what starting with what are they indirect costs how do they compare this year to last and the page that starts with water and sewer and direct costs total from schedule a to 12 to 2016 and I think that that is the oh and one more sorry uh from mr shena summary of residential bills from fy12 to fy17 as presented to us

▶ 3:44:17 Peter D. Mortimer: at the last meeting last thursday night thank you very much alderman Medeiros alderman Medeiros has made a motion to include the aforementioned documents into the record that motion was was duly seconded by Alderman Zwirko. Seeing no discussion, all in favor please say aye. Aye. Any opposed? Hearing none, those documents will be included in the jacket, in the record of the deliberations on this order. We will now proceed to the main motion, having no amendments at this time, to be voted, upon which to be voted. All in favor of the adoption of option 5B to be recommended to the full board, please say aye. Aye. Any opposed?