ORDER-2016-158 : City of Melrose Operating Budget for Fiscal Year 2017 in the amount of 75,328,574.79 (Seventy-Five Million, Three Hundred Twenty-Eight Thousand, Five Hundred Seventy-Four Dollars and Seventy-Nine Cents)

Transcript (~21 min @ 26:11)

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

▶ 26:09 Peter D. Mortimer: for the last couple of months it is order 2016-158 city of melrose operating budget for fiscal year 2017 in the amount of $75,328,574.79. The first budget that we have before us tonight is budget department number 145. It is the treasurer collector in the amount of $377,100.41. There's a motion to suspend the rules by Alderman Tramontozzi. Second. Duly seconded by Alderman Inferna. All in favor, please say aye. Aye. Any opposed? Hearing none, we're under suspension. Mr. Flavin from the Treasurer Collector's Office has already joined us at the table. Good evening, sir. Hi. Would you like to make an opening statement?

▶ 27:07 Speaker 5: Sure. I mean, again, I say it every year. It's Groundhog Day, but it's not quite Groundhog Day this year. We still collect the money. we still put the money in the bank we still pay the bills there's a few changes in the contractual the tax title has been reduced by ten thousand dollars i'm sorry by eight thousand dollars pending your approval of the legislation that i asked that's part of that's coming up later i believe um what and what that does is create a revolving fund to allow me to use the funds to collect the funds put them back in and reuse them rather than have to have an appropriation and tie the money up for the year so it becomes a pool it's capped at twenty thousand dollars it'll never reach that um we need four thousand dollars for a couple of years in order to get it seated because there's no money in there now to pay the bills an instance would be is a um we we've done a bunch of tax takings and and started foreclosure proceedings this year and there's a law firm and they get their fees we collect the fees we have to pay them back we could not we can't be as aggressive as we want with that because of the budget limitations under the new scenario with this legislation we collect the money we put it into the fund we can pay the lawyer back for their fees so that's the reduction there you'll see contractuals gone up a little bit um in fact five thousand dollars that's been short for years um kind of supplemented that helped there's a lot more reporting requirements um disclosure stuff with bonds and also pay paying agent fees that have to be paid we issue a bond somebody pays the bond holders and they charge us a small fee and we tend to have a lot of bonds at this point so those numbers are going up so in order to cover next year i think i need ten thousand dollars instead of five we won't spend it

▶ 29:11 Speaker 5: if we don't have to postage um up a couple of thousand that's creeping up too i mean we're barely gonna make it this year uh i don't know if it's everybody uses our postage machine and that also covers all our bill bills um all the bills we mail out excise twenty thousand excise bills 18 000 tax bills all that situation so i mean that's basically all that's changed from year to year on this so if you have any questions president khan please and um mr flavin are all

▶ 29:44 Speaker 6: all of your positions for your department fully funded in your salary line here

▶ 29:52 Speaker 5: yes um no i have i have one unfunded but i we haven't funded that for three years okay you

▶ 29:57 Speaker 6: don't have anybody getting paid from any other source everybody in your office is being paid

▶ 30:06 Speaker 6: everything's paid out of the general fund um and you talked briefly about the orders uh to set up the new revolving fund and And philosophically, I intensely dislike revolving funds. And the reason I do is because it's not directed at your department. I don't know that I'd vote to support an establishment of any other revolving funds because it seems to take money. And it puts it beyond the purview of our oversight. The money passes in and out of the revolving fund. whereas if you were transferring the funds at least we would see it going on and you know maybe I'm wrong and I'm a dinosaur but it seems to me that really the only viable function that we perform anymore under the new charter is to to

▶ 31:00 Speaker 5: scrutinize financing with all due respect this was part of the financial the reform that Baker put in and the legislative passed. And what it does is allow us to be more efficient, rather than tie up $12,000, we're only tying up four this year. The pool, I mean, we can set the revolving fund limit at $10,000. I forget what number we put in there, but it's an arbitrary number. It'll never get there because the money comes in and out. We're not collecting money.

▶ 31:27 Speaker 6: Just so people understand, what happens in the tax title world is you engage private attorneys who specialize in tax title matters and they handle the cases for the city.

▶ 31:36 Speaker 5: And we expend other monies, advertising in the paper, recording fees, those types of things. When we recover those, now they go back into the general fund. So every year I need to have a sum of money to be able to draw around for that. Now that won't be as necessary because we'll have this pool of money and we'll deal with it on that end.

▶ 31:56 Speaker 6: But that's all I have right now.

▶ 31:58 Peter D. Mortimer: Thank you, President Codd. I'm seeing, oh, Alderman Medeiros, please.

▶ 32:03 Speaker 7: Thank you. Thank you, Mr. Flavin.

▶ 32:07 Monica C. Medeiros: I guess maybe keeping on the tax title, well, I'll come back to that in a minute. Can we talk about the, kind of get an idea of how the indirect costs work that come out of the various funds, and in particular, water and sewer. And we had a memo from Mr. De La Russo saying that your office's spending, you estimated, I think it was you that had estimated about 35% of your time on water and sewer. Does that sound right? So, do you know... More lately. More than that, yeah. And do you know how much of a dollar amount is allocated to the funding source?

▶ 32:52 Speaker 5: You'll have to ask Mr. DellaRusso. It's shared employees. I think I may be 20% and one of my employees out of the four is there. So, I mean, we're not quite at the 35%, but we do provide it. The services and what's important to understand is if we didn't provide them and the Water and Sewer Department had to use them, it would be more expensive. We're getting economies of scale using it, doing it the way we are, but we are certainly serving the Water and Sewer Department.

▶ 33:23 Monica C. Medeiros: under the shared employees and then so you're doing things like excise tax we

▶ 33:28 Speaker 5: do all ahead we collect every dollar and we pay out every dollar and how are you

▶ 33:34 Monica C. Medeiros: involved with the ambulance enterprise collections or we're using a separate form firm they come through up they come through so there's a lot of activity

▶ 33:45 Speaker 5: there's no the ambulance is a revolving fund so that's separated out and that's more booking we don't collect the bills that we have an outside company that handles that for us so it's not that much of a burden on it but we still have to maintain the integrity of the banking system and the payment and the receipt the receipt system okay uh and then i wanted to

▶ 34:05 Monica C. Medeiros: ask you in regards to tax title collection and again this may be a better question for mr del ruso later but i saw that out of the indirect cost in the water and sewer the the legal amount has gone down a bit this year and i'm wondering you know are water and sewer collection bills included

▶ 34:34 Speaker 5: in tax titles yeah but we don't charge them i mean if if a tax title account has water and sewer liens on it we collect that as a result of that but we don't make any that's to that gratis i

▶ 34:44 Monica C. Medeiros: guess okay just i wasn't sure if one was tied to the other possibly a little bit no i mean it's

▶ 34:48 Speaker 5: apples and oranges my legal fees are different than what water and sewer

▶ 34:54 Peter D. Mortimer: would have thank you Thank You Alderman Medeiros is there a motion motion to

▶ 34:58 Robert A. Boisselle: move the bottom line the department number one four five treasurers and collectors three hundred seventy seven thousand one hundred dollars and forty

▶ 35:07 Peter D. Mortimer: one cents second Alderman Boyce L has made a motion to move to recommend to the full board for passage department budget number 145 in the amount stated Duly seconded by Alderman Zwirko. All in favor, please say aye. Aye. Any opposed? Hearing none, that department budget will be recommended to the full board for passage.

▶ 35:33 Peter D. Mortimer: If it's the will of the board, would we be interested in taking Orders 2016, 176, and 177 now for the tax title? Alderman Inferno has made a motion that we...

▶ 35:50 Peter D. Mortimer: I think you have the other, but I think we have municipal debt and a few others first, which would you would rather proceed to that? That's fine. We're a working committee. That's fine. Yeah. All right, we can wait the next department Budget that we have before us is number 7 1 1 it is municipal debt in the amount of 3 million 659 thousand nine hundred and nine dollars and thirty-five cents

▶ 36:17 Speaker 5: mr. Flavin please there are obligations that we owe for previous debt incurred to build schools to roads anything you've authorized over the last few 15 or 20 years is the paying down the debt on it and this represents that there's two pieces as you can see the exempt which is a debt exclusion and then there's the regular stuff that comes out of the general fund that we talk about about whenever an authorization comes up these are obligations that we have to

▶ 36:44 Peter D. Mortimer: pay Thank You sir president Kahn please so the exclusion principle is the

▶ 36:48 Speaker 6: reduction on the middle school it's the principal payment on the middle school

▶ 36:57 Speaker 6: okay and you know I do this every year I know you're probably tired of hearing me but so we talked frequently about the 5% the 5% and it's important that people People who are watching at home understand that 5% of the municipal general budget pays the items that we're going to talk about tonight. But the overall municipal debt is not 5% of $72 million. I think the overall, by my math and by the docs that were provided to us if we had school debt, the ball field debt, bonding and everything else, I believe is $64,195,093.

▶ 37:46 Speaker 5: It's in that ballpark, I mean, including water and sewer, there's different

▶ 37:53 Speaker 5: divisions of the city that are responsible for their own debt payments, and they're segregated out. The amount Hood pays for the ball fields, that was made a few years ago. That's in this number, but we received that on the back end. Water and sewer is on their own, and you'll see that later tonight. I don't think there's anybody else out there. I mean, it's exempt, the only ambulance has its own debt, which is minor. But yeah, it's outstanding principle, yes.

▶ 38:25 Speaker 6: And I just get concerned that if somebody's watching at home, they're going to think, gee, the city has $6 million of debt, that's great. the city really has 64 million 193 thousand uh 93 dollars of debt no and you've seen the schedules

▶ 38:40 Speaker 5: i mean you can look that mr de la rusa provides i mean right now for the next 17 18 and 19 it's going to be about close to 3 million dollars in debt principal and interest payments not just this side right um and then we have a drop off after that yeah and a lot of this stuff go has

▶ 38:58 Speaker 6: gone to you know well needed projects the middle school and things of that nature but um i just think it's important for the public to understand you know what what our position is that's all i

▶ 39:19 Michael P. Zwirko: have right now thank you president khan alderman's workout please uh thank you mr fleming for being here this evening just uh i wanted to build off of the point that president khan raised so again it's more uh explanatory given up prevailing market rates right now which are generally at historic lows and we do have a significant amount of debt i think it's something that certainly the city can handle and even our our rating rating agencies have said the same we can't take these things in in lumps just due to the nature of a bond and actually like refinance these given market rates right i mean it doesn't work like a consistently do that when that opportunity

▶ 39:50 Speaker 5: arises we've saved a lot of money in the last five or six years refinancing these types of things i can't give you a specific but if you want them later i mean we've that's created a lot of opportunity for us to do other things right and we one of them was the middle school so um which was good and bad because then the state got their piece of what they gave us towards it because it wasn't that the percentages went off but we got we refund these whenever the the opportunity presents and I we've done probably four out of the last five years certain issues I thank you that's the only question I had Thank You

▶ 40:35 Peter D. Mortimer: alderman's worker Alderman Medeiros has made a motion to move the bottom line second duly seconded by Alderman Boycelle for the municipal debt department number 711 in the amount of three million six hundred and fifty nine $1,909.35 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 number we have before us this evening is municipal debt interest in the amount of $1,747,143.52

▶ 41:13 Speaker 5: Mr. Flavin please again this these are the interest and coupon payments due with the principal payments you just approved they're not movable they're when we when they issue us the bonds that we get a schedule and this is what's due this

▶ 41:29 Peter D. Mortimer: year on these thank you sir saying no questions there's a motion we have a motion from Alderman McAteer-Margolis to move the bottom line on debt on budget number 751 municipal debt interest in the amount just recently stated all in favor please say aye any opposed hearing none this budget department will be recommended to the full board for passage the next apartment budget number we have is seven five two projected debt in the amount of two hundred and five thousand four hundred ninety five dollars and forty two cents mr. Flavin

▶ 42:08 Speaker 5: please once again these are I mean part of the bond issuance process when you when you authorize something we go through a process we temporary borrow we borrow for a year or maybe two years it's it saves us it's one-third the interest rate it gives us time to build out the project can see exactly what we need to build and it allows us to manage the budget or manage the 5% putting everything out all at once could croak a year and frankly the last five years years they've been given this money away um these are all items that are due except for the street lights and we're just issuing that now that'll be doing november and we'll bond that in november and that's the estimate so that the other numbers are cold thank you mr flavin motion to move the

▶ 43:03 Peter D. Mortimer: bottom line second we have a motion to move the bottom line from alderman inferna seconded by alderman boyce l for budget department number 752 in the amount recently stated all in favor please say aye aye aye mr president no sir no i'm fine um all in favor please say aye aye aye any opposed hearing none uh the projected budget will be recommended to the full board for passage the next budget we have before us is budget number nine one six the Medicare City portion in the amount of six hundred and fifty thousand dollars mr.

▶ 43:45 Speaker 5: Flavin please this is our share of the Medicare tax that everybody is paying you're paying I'm paying it's our piece of it it's up twenty thousand dollars as you'll recall I mean the salaries go up this number goes up I was in here a couple of weeks ago for ten thousand dollars I apologize I have to come back for another 10 000 because we can't really put a number on this because details and overtime and those types of things we can't project and know so um i'll probably see you next spring even with this number but this is this is a break even compared to last year so maybe we don't work as many details as much over time and we hit the number but this is a number it's a it's an irs

▶ 44:32 Speaker 6: obligation thank you sir president khan please and this covers everybody in the city both on the

▶ 44:40 Speaker 6: city and schools yes and you you probably don't know the answer to this question but i'll ask it anyway um what percentage does the school workforce compose of this obligation i mean if you

▶ 44:51 Speaker 5: took the school salaries against the city salaries i mean that's a tough question because you know your water and sewer salaries um whatever the school payroll is do 1.5 1.45 against it and

▶ 45:06 Speaker 6: that's the number okay so you you don't really have a sense of the breakout between the school

▶ 45:10 Speaker 5: and city it's not no we we just pay my payrolls don't yeah and again mr chairman this is just a

▶ 45:18 Speaker 6: rerun of something that i say every year i think maybe you should just play back what i what i've said and do not come down and you guys would probably all be happier um

▶ 45:29 Speaker 6: so so this is a large chunk of several hundred thousand dollars that the city subsumes of school operating costs and i'm not making a value judgment on it but people who are looking at the school budget right you need to understand that things like this are being paid on the city side of the budget and they add up to many millions of dollars i cannot that's all

▶ 45:53 Peter D. Mortimer: Thank you, President Kahn. Alderman Medeiros, please.

▶ 45:56 Speaker 7: Thank you.

▶ 45:58 Monica C. Medeiros: Somewhat related, we sometimes see that we have some salaries that may be paid through grants and so on throughout the city in various departments. If we have employees that are paid through grants, are we paying them?

▶ 46:14 Speaker 5: We recover that money.

▶ 46:16 Speaker 7: We recover that money through the grant.

▶ 46:18 Speaker 5: Through the grant, and we put it back into this fund.

▶ 46:20 Speaker 7: And put it back, yeah. Okay. Thank you.

▶ 46:22 Peter D. Mortimer: Thank you, Alderman Medeiros.

▶ 46:25 Michael P. Zwirko: Alderman Suarco please it's just to clarify your comment so essentially what you're saying is is these Medicare tax payments run in tandem with any type of employment changes as well I just I mean essentially so if we hire $10 raise it

▶ 46:42 Michael P. Zwirko: costs us another and that's on the flip side of it if we lose an employee there could be you know for whatever reason there could be you know unemployment costs associated with losing employee but essentially this follows employment

▶ 46:56 Speaker 5: trends and hours and salaries wages occurred whatever you pay for salary dollars okay thank

▶ 47:03 Speaker 5: you Thank You alderman's worker I think motion moves the bottom line we have number nine one