ORDER-2015-147 : Authorizing a Bond in the amount of $440,000.00 under the Water Enterprise System through the MWRA Local Water System Assistance Program for FY2016

Transcript (~1 h 21 min @ 21:52)

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▶ 20:58 Peter D. Mortimer: The second order is order 2015-144 amending Melrose revised ordinances chapter 228 article 4 section 228-30. Sewer rates established for fiscal year 2016 as set forth herein. The third order is order 2015-145. water enterprise operating budget for fiscal year 2016 in the amount of $5,189,331.83. The fourth order is the sewer enterprise operating budget for fiscal year 2016 in the amount of $7,508,664.93. And the fifth order is the authorization of a bond in the amount of 440,000 under the water enterprise system through the MWRA local water system assistance program for fiscal year 2016 and

▶ 22:08 Peter D. Mortimer: the orders are now before you in the adjoined state.

▶ 22:10 Speaker 4: Motion to suspend the rules.

▶ 22:12 Peter D. Mortimer: We have a motion to suspend the rules from President Kahn, Duly seconded by Alderman Byrd. All in favor of suspension, please say aye. Aye. Any opposed? Hearing none, we are under suspension. Gentlemen, would you join us at the table, please?

▶ 22:40 Speaker 6: Good evening, everybody.

▶ 22:52 Speaker 7: Good evening.

▶ 22:59 Speaker 7: Good evening, members of the Board of Aldermen and the citizens of this city. We would like to take some time this evening to discuss the proposed changes to the Water and or enterprise funds as we move forward into the new fiscal year it is very important that we continually monitor and review the components that make up both enterprise funds and the changing dynamics of each the city has an established committee made up of alderman john tramatozzi the dpw director john chenna myself the cfo the treasurer collector arthur flavin and the city engineer andrew street we also have engaged the services of pioneer consulting group under the direction of mr douglas gardner the president and he's prepared the proposal for you here this evening he's also present and if there's any questions feel free to ask for his input at any time i myself would like to specifically address the following budget impact factors for the upcoming fiscal year and then i will ask through this respect to the board to have mr john chenna speak to the other changes and there's a few of them that the committee has proposed first and foremost the massachusetts water resources authority or the mwra they have increased the water assessment to the city by 7.7 percent or over two hundred thousand dollars this assessment alone represents over 45 percent of the total revenue requirements

▶ 24:52 Speaker 7: for the budget for fy16 number two the mwra has also increased the soar assessment by 2.9 percent or over $171,000. This assessment alone represents 72.6% of the total revenue requirement budget for FY16. Those are extremely large numbers in each budget. That's something you don't want to see. It is there, and it's something we have to address each and every year. The combined rate increase, according to the MWRA, is 4.4% over FY15.

▶ 25:40 Speaker 7: The committee has proposed that for FY16, the way we would ask the board to address this and to consider it is the following. the following we would ask that for all users that fall into tier one which we'll get to the details of that as we get into the presentation that the increase be approximately 5.92 percent for tier 2 and for tier 3 identical 5.99 and 5.99 we believe and the committee felt that a uniform

▶ 26:22 Speaker 7: combined rate increase across the board would go a long way in realizing some equity among each individual tier. So that all the tiers, in essence, for the first time, would see an equalized rate increase, 5.9%, rather than one bear a heavier percentage increase than another. That's new this year. Next, I do want to talk specifically about where we stand as of April 30th of this year, relative to water and sewer revenue and expenses, because patents are very important to follow. They're telling. The water revenue is up 3.9% over the same time last year. However, expenses are also up 3.6%.

▶ 27:13 Speaker 7: The SOAR revenue is up 8.3% over the same time last year. However, expenses are up 6.4%.

▶ 27:27 Speaker 7: What does this mean? In both cases, it means that our revenues are exceeding expenditures compared to last fiscal year. This is a good pattern to have. Both positions have, if I check just before I came down here literally, to um to confirm the numbers that i had from last week both positions are a positive cash flow which is what we want the margins are still very tight which i think they need to be because we're trying to raise a certain amount of revenue and address expenses that we know we have and that are contingent upon uh running the enterprise and so i think we're doing the patent again as last year is good we still have eight weeks left in the fiscal year which is another good sign another full uh quarter in essence that we can collect so i anticipate that based on the patterns that i see today will have positive cash position at the end of the fiscal year so that is what i see today now that can change um based on consumption in fact is that none of us in this room know of as of tonight but i'm hopeful that it maintains that that pattern um next i i want to talk about reserves water and sewer water currently has over 241 thousand dollars in the reserve and sewer has over two hundred thousand dollars in the reserve this budget continues that same effort and the target being ten percent of the operating budget is our goal so ultimately we would like to see a budget that had a reserve level of $520,000 for water and over $750,000 for sewer. But that's what we're looking at over a five-year window. So we're trying to continuously make that effort. Again, this year, the budget you have before you, part of the program, is once again to raise $105,000 in the Water Enterprise Fund for reserves and $150,000 in the Sewer Enterprise fund for reserves so we're being very methodical and we're trying to manage it appropriately so that we can reach both of those goals having said that i'd like to ask john if he would have to input on the changes that we've made this year to the actual program but and also to second meters

▶ 29:49 Speaker 6: uh good evening everyone there are five major components of the presentation tonight there are five major components of discussion moving forward and they surround the five orders that are before this board this evening and for the next few weeks the first is the water enterprise budget totaling five million one hundred eighty nine thousand three hundred thirty one dollars forty five percent of that budget is the mwra assessment the breakdown of of the budget can be found in the rate analysis report that we provided you and along with this order that analysis was prepared by pioneer consulting together with the administration so page 12 of that report has the pie chart which breaks down the percentages but let me just briefly state terms of the presentation 45% of the water budget goes to the MWRA 15% of it is in direct costs 14% covers debt 20%

▶ 30:58 Speaker 6: goes to salary contracts supplies and then 2% is set aside for reserves and another 2% for abatements the second component component is the sewer enterprise budget totaling seven million five hundred eight thousand six hundred sixty four dollars again page twelve of the report has a similar percentage breakdown and pie chart of how that budget is crafted 73 percent of that budget goes right to the MWRA eight percent covers indirect costs seven percent covers debt salaries contracts and supplies make up nine percent two percent goes to reserves and one percent goes to abatements that is the breakdown from a macro perspective of both budgets the next two components of the presentation of discussion obviously the water rates that support the water enterprise budget and the sewer rates to support the sewer enterprise budget page 8 and 9 of that report have the breakdown of what eventually makes the rates that are before you this evening

▶ 32:16 Speaker 6: combined as the auditor has mentioned the increase is 5.92 percent to tier one five point nine nine percent to tier two five point nine nine percent tier three essentially it's a combined increase of five point nine percent to all three tiers water and sewer together the base fees that come along with the tiered rate increase there is a zero percent increase we're not changing we're not increasing any base fees that are associated with the tiered rates and there's a 30 percent reduction in the second meter base fee going from 50

▶ 33:07 Speaker 6: to 30 50 to 35 sorry the fourth part of the discussion is relative to a borrowing for some water system improvements and the last part is an ordinance change in the sewer ordinance in the rate section of the sewer ordinance that will read that could reintroduce the second meter program back to Melrose I just want to step back a moment to talk a little bit about the rate structure and the discussions that took place in the water and sewer committee and why ultimately a decision was made to stay to stay the course number one I believe in the fall we passed along some information that the committee became aware of tiered rates for MWRI communities of the law it's Mass General Law 165 s to be essentially it requires all municipalities or water districts Institute water charges and fees that incorporate a base rate for all users provided that said base rate shall be increased at an increasing block rate to fairly reflect the resource demand and consumption of high volume users of water that was amended in 1994 basically replacing the word district with communities that participate in the mass water resource authority if anybody wants to see that again let me know and i'd be more than welcome to forward that along we we have to apply by by this our legal office reviewed it and it is applicable to melrose secondly why stay the course this rate system this rate structure has resulted in positive cash flow and reserves it's created reserves in fy14 that's fact that's in the books and it's projecting to do the same for fy 15. that's why a decision was made two years ago to switch to this system and that's why the committee decided to stay the course again it's producing the results that we were looking for the structure also provides a benefit

▶ 35:24 Speaker 6: to those who seek to conserve if you don't want to use water if you look to save on water obviously you'll keep yourself in the lower rates and you'll pay less than those who you may consider a wasting water basically the more you pay the more you use the more you pay approach it's a conservation type of approach and it's something that benefits those who conserve after consecutive years of seven

▶ 35:58 Speaker 6: percent increases in the rates although we have to increase them again this proposed increase is only five point nine percent so we seem to be trending in the right direction lastly

▶ 36:11 Speaker 6: throughout the course of fiscal 15 the Warren sewer committee members of the Department of Public Works actually together with several members of the sport at various times throughout the fiscal year work with various accounts that struggled at times with the implementation of this new race system with the introduction of new policies and how we do things in DPW today we feel confidence that assistance is available to allow larger condo and apartments the ability to adjust to the system we now have a policy that allows

▶ 36:56 Speaker 6: condos to individually meter and we also have put in place a new program that will be implemented in FY 16 which is a hardship program offering owners of

▶ 37:09 Speaker 6: multi-unit residential buildings and condominium associations the ability to apply for a one-time discount that will be distributed over four consecutive quarters if they meet certain conditions of the certain conditions set forth the

▶ 37:29 Speaker 6: The Water and Sewer Committee are very well aware of these two policies that we now operate within with the department. If you need copies of that, I can gladly forward those along to you as well.

▶ 37:46 Speaker 6: So the budgets and the rates are once again, as Mr. Del Russo indicated, are driven by the MWRA combined water and sewer assessment. It's an increase of 4.4%. The average increase across all MWRA communities was 4.1. And last year, our increase was 5.3. Overall, our MWRA consumption is roughly the same. I've provided three years of consumption, a chart with three years of consumption, along with the water budget order as well for you to study.

▶ 38:30 Speaker 6: if there are questions please feel free to reach out our build consumption is slightly down people are continuing to use less water and it's becoming more and more obvious by what we're bringing into Melrose and what we're building that people are using considerably less water than we were four

▶ 38:50 Speaker 6: to five years ago the impacts of the rates as proposed before you were found on page 10 of

▶ 39:07 Speaker 6: the report page 10 looks at consumption in cubic feet the current fiscal 15 cost of that consumption the proposed fiscal 16 cost of that consumption and

▶ 39:16 Speaker 6: obviously the dollar increase in the percentage increase that's associated with it again the hour the average user in Melrose let me remind everyone users between 1,800 and 2,200 cubic feet of water so it's shaded and on page shaded on page 10 and that impact analysis is where the majority of Melrose Falls when I say the majority I believe that's close to 70 to 80 percent of Melrose

▶ 39:51 Speaker 6: Falls in that range in terms of some of the detail involved with the sewer budget I just like to mention one item in particular included in the budget is funding in the capital equipment line item this funding also comes unanimously recommended by the water and sewer committee as well our current back truck it's the big white truck that many of you have seen around town was purchased and it's been in use since 1997 it's nearly 20 years old in the last two fiscal years has averaged twenty five to thirty thousand dollars of repairs per year if you recall in the fall we actually uh the dpw myself and the auditor had to come seeking a supplemental appropriation to the sewer budget to make additional repairs to this truck the truck allows the department to respond to immediate emergency sewer overflows and blockages that obviously in the worst case can lead to backup into people's homes and buildings reliance on mutual aid which we've had to do at times during this year and on contractors which we've also had to do is not only costly but it's time consuming at times when you have to reach to your neighboring dpw and they have to find somebody to get in their truck to come to a community that they don't even know where they're going to um contractually you have the same logistical issues of people not knowing where they're going but you also have an 800 to 1200 per event cost we average 30 to 35 of these blocks a year between the repair

▶ 41:34 Speaker 6: costs we're putting into the truck and the costs of providing the service when that truck is out

▶ 41:40 Speaker 6: the time has come to replace it unfortunately the price of this um piece of equipment is in excess of 350 000 what the department has proposed is a is to purchase

▶ 41:58 Speaker 6: this equipment through a five-year lease the first of which the first payment of which is proposed

▶ 42:07 Speaker 6: in the fy16 budget in terms of the order relative to borrowing i've also attached some backup to

▶ 42:23 Speaker 6: that order is for your review the majority of the funding is will be applied to upgrades on tremont street uh tremont street was identified in 2013 as an area of high need however recent

▶ 42:42 Speaker 6: recent leaks as many as as many as four in the past 18 months have risen the need to replace

▶ 42:50 Speaker 6: this main most recently a leak located near our own building was discharging directly into an underground culvert and subsequently into El Pond it went undetected for several months this winter it resulted in an approximate increase in our consumption of 8.8 percent that's water that came into Melrose which unfortunately we have to pay this leak did not surface to the ground we couldn't see it was going into the box culvert that's over by the skateboard park which written right into the pond it wasn't after several weeks of aggressive leak detection that we were able to confirm its location and ultimately fix it and

▶ 43:31 Speaker 6: our consumption dropped immediately that evening the pipe continues to deteriorate

▶ 43:39 Speaker 6: and the leaks continue to get worse fire flows are also an issue along this corridor and we provided backup from our consultant tater and howard but basically the fire flows in this corridor are below normal and need significant improvement and lastly we there is a water quality

▶ 44:06 Speaker 6: issue now along this corridor most recently some reconfiguration of the system in order in order to avoid further leaking and deterioration has dead-ended components of of that pipe dead-end pipe is not good for water quality it's it impacts long term it will absolutely impact the water quality in that corridor and that's why we've made the recommendation this year to borrow against the MW IRA zero interest LWS AP program so that we can make these improvements improve the car of Tremont street which has been recently overlaid in terms of zoning the the improvements will

▶ 44:51 Speaker 6: make this car to safer and ultimately more attractive to potential developers so the backup to everything i briefly summarized is provided and i also provided a photo

▶ 45:08 Speaker 6: the condition of the inside of that pipe on tremont street this was taken during one of the leaks it wasn't the most recent it was the leak last fall the last component of the presentation

▶ 45:29 Speaker 6: and the discussion surround second meters and a potential ordinance change that's being proposed that will reintroduce the program to its full extent as some may be asked wondering why

▶ 45:46 Speaker 6: one of the main reasons we're having this discussion today is because we've listened to the community we've listened to the constituents of melrose over the last two years that keep asking why why is it that i can have a second meter but my neighbor across the street can have his but when he sells his the new person can't and the one to the left who just moved in can't because the program's over those are very difficult questions to answer however we we've We've done it diplomatically, but these questions keep coming back and back and back. In 2013, we all made a difficult decision. The Water and Sewer Committee, the mayor, and this board all decided together to put a moratorium on the program.

▶ 46:36 Speaker 6: At that time, we had enterprise systems that were in deficit. We had no reserves. We didn't understand the volume of the program. we didn't know where these accounts were for certain we didn't know the impact that it had on the end user nor on the enterprise so the natural decision at the time is to put the brakes on the program basically stop the pleading the bleeding our consultant at the time recommended to stop the program we listened sat back and started to evaluate at the time we were dealing with circumstantial data hypotheticals but today we have one full year one full fiscal year of rail data and actually a second summer so fiscal 15 data was which was captured last summer on this

▶ 47:33 Speaker 6: program in 2013 we determined we had 1426 accounts in the system second meter accounts today we have 1196 a significant drop off we have a much better understanding of the impact of this program this

▶ 47:48 Speaker 6: program even if you looked before the moratorium was put in place and actually after roughly

▶ 48:01 Speaker 6: accounts for seven and a half percent of our overall water consumption from a practical sense

▶ 48:13 Speaker 6: there is no impact to the sewer rates from second meters people use second meter consumption for outdoor use with the massive vast majority of that water

▶ 48:31 Speaker 6: going not going into the sewer system that's the practicality behind the program you put a second meter to use your outside spigot to wash your car fill your pool to water your garden that water isn't going back into the sewer system and ultimately to the MWRA but from a

▶ 48:54 Speaker 6: theoretical sense the second meter program and obviously it's subsequent sewer discount if the second meter program weren't there there would be an ability to raise more revenue for sewer because people would still use outdoor water people would still wash their cars except people will be charged sewer for it we would raise a significant amount of more revenue on the sewer side the more units of of sewer that we have to charge against obviously the lower the unit cost of sewer hence the lower the sewer rate practical part of it and the

▶ 49:34 Speaker 6: part that we have to discuss is people who are using this outdoor water they're really not contributing to the sewer and that's been the dilemma that and the discussion that's been happening for the last two years so the impact on the

▶ 49:45 Speaker 6: program is really on on the water rates second meter the second meter program promotes outdoor water consumption it doesn't promote conservation it results in an overall higher water consumption for Melrose so why does this come

▶ 50:05 Speaker 6: recommended for its full return aside from the equitable issue if we go back on the on the fact that seven and a half percent of overall water consumed by Melrose is accounted to the second meter program take out our overall budget cost seven and a half percent of overall budget cost is roughly three hundred and

▶ 50:34 Speaker 6: fifty thousand dollars we through our second meter program in FY 15 we're schedule to raise 600,000 so the program because of the tiered rates because of

▶ 50:44 Speaker 6: how we've now positioned the tiered rates and how we run this program the program covers the costs being borne by the enterprise on the water side so that's why this is back before you by unanimous vote of the committee because because the financial data from FY14 and the projected data from 15 indicate that the tiered rate system can adequately cover these expenses.

▶ 51:21 Speaker 6: In summary, those are the major components and we're more than willing to dive into anything in particular or take the discussion any place you wanna take it.

▶ 51:36 Speaker 8: President Kahn, please.

▶ 51:37 Speaker 4: Yeah, I'm gonna limit my questions to just a few tonight. So, the reserves that we're talking about in the presentation are the reserves that were certified for Fiscal 14, is that correct?

▶ 51:57 Speaker 7: That is what was certified through the chair for F14.

▶ 52:01 Speaker 4: 241 and approximately 200 for 14.

▶ 52:06 Speaker 7: In total is what we have, correct.

▶ 52:11 Speaker 4: And we, I would assume, have no reason to expect that we're not going to have a similar surplus in this year, is that correct?

▶ 52:20 Speaker 7: Yes, it's one point to clarification, the gross number I gave you represented fiscal 13 and 14.

▶ 52:27 Speaker 4: Okay, so 241 and 200 is based on the first two years. Correct. And we haven't got the data for this year yet.

▶ 52:34 Speaker 7: No, but if you did it by a single year, which I think is what we're talking about, just that one year. And the number that we realized for that one year was just over 160,000 in water. And 194,000 in SOAR, that was just for that one year, FY14, that was certified.

▶ 52:54 Speaker 4: Okay, so it would be fair to assume that we may have $400,000 in the surpluses for each account as we wrap this year.

▶ 53:03 Speaker 7: Yeah, that's a fair assumption.

▶ 53:07 Speaker 4: And you're seeking to raise another 225,000, I think, with the reserve factor that you have in this budget. Is that correct?

▶ 53:17 Speaker 7: In total, it's 105,000 for water and it's 150,000 for sewer.

▶ 53:25 Speaker 7: Excuse me.

▶ 53:30 Speaker 4: And I'm jumping around here. I'm just gonna ask a few questions and then move on and let other people speak.

▶ 53:39 Speaker 4: What is our total bonded indebtedness for our water and sewer debt, do you know?

▶ 53:45 Speaker 7: I'd have to ask Mr. Flavin.

▶ 53:47 Speaker 4: And if he doesn't know, maybe he could let us know prior to the next meeting.

▶ 53:59 Speaker 9: It's in the-

▶ 54:00 Peter D. Mortimer: Mr. Flavin, would you mind coming to the table just so you could be heard on the microphone, please?

▶ 54:09 Speaker 8: It's in that report, the statement of indebtedness.

▶ 54:13 Speaker 8: The last, the outside section, the last time I was in for debt.

▶ 54:17 Speaker 4: Okay, so if I go back to the report that you gave us last month-

▶ 54:20 Speaker 8: As you can see, the outside debt stuff is usually sewer and water.

▶ 54:25 Speaker 8: I can also give you a copy of all the schedules of sewer and water that is currently owed.

▶ 54:32 Speaker 4: If I can find it myself, I don't want you to waste your time. If it's in the material that I already have, I'll find it, and if not, I'll let you know. Okay. What is, do we have an estimate as to what the cost of the senior discount program is? Do we know what the cost impact that is?

▶ 54:50 Speaker 6: I don't have it with me, but we do know that number, I can forward that along.

▶ 55:08 Speaker 4: I have a couple of questions about the second meter program.

▶ 55:14 Speaker 4: And before I ask the questions I'll, not that anyone cares, but I care I guess, so when I look at the water and sewer enterprise fund, my goal is two-fold, I want to pay the bill.

▶ 55:35 Speaker 4: I want the lowest possible water and sewer rates so what I'm trying to do is

▶ 55:42 Speaker 4: to meld those two probably inconsistent goals and come up with the best rate we can as long as we pay our bill it seems to me that no matter how you slice it if

▶ 56:00 Speaker 4: If we reinstate the second meter program, it's going to lead to more consumption, and more consumption is going to lead to higher cost, and higher cost is going to lead to higher rates.

▶ 56:18 Speaker 4: So that's my concern about reinstating that program. And the second thing that I have a question about is what are we going to do with the people who gave up their meters because we indicated that you know we were raising rates and that we had a moratorium I mean what's gonna happen to

▶ 56:43 Speaker 4: those people if I let my account go when I come and I want it it's big it will be fair game now for anybody who wants to have a second meter to have once if they

▶ 56:50 Speaker 6: could reenter it they could ran to the program if they want and do you have any

▶ 56:53 Speaker 4: idea as to what might happen I mean are we gonna get 300 more second meters

▶ 57:03 Speaker 6: 400 more second meters the majority of the people that have left the program don't use anywhere

▶ 57:12 Speaker 6: near the amount of money um don't don't use anywhere near the type of consumption to see the benefit of the investment because everybody right now on a second meter the investment is born strictly 100 by the homeowner they have to up upgrade the meter to meet our new radio read system that cost is 250 to 300 as high as 250 to 300 plus the cost of a plumber so that sometimes that you don't use enough water sometimes there are people or there are accounts whose household has changed kids have gone pools have closed too old forgotten those are the type a lot of a lot of the people that have closed their accounts have closed it for those reasons the majority of the people have left all the actual hardware in place and we've just deactivated the account so there are some of those as well and I can't tell you everybody's going to be come back but there's a there is a good chance that a majority of the people that left may not come back because it's just not worth the

▶ 58:17 Speaker 4: investment well if we if we made a mistake and we shouldn't have eliminated the second meter program I'm all for admitting that we we didn't have full information I'm not sure that I'm going to support this now I'm gonna have to think about it I'm not sure that if we reinstate this program that it's not going to drive up overall rates and that's something that I have concern about the other thing that I want to talk to talk about over the next couple of meetings under the heading of back to the future is I always get back to how

▶ 58:54 Speaker 4: much in reserve is enough I think we're doing pretty well we're certainly doing a lot better than we did in the past I want to think about whether we should scale back our reserve goals to try to buy the rate down but I'm not really ready to get into specifics tonight relative to that but I did say I was going to be brief and I guess this is relatively brief for me thank you very

▶ 59:29 Peter D. Mortimer: much President Kahn next we have Alderman Medeiros please thank you and I

▶ 59:34 Monica C. Medeiros: will try to be relatively brief but my relatively brief in comparison is

▶ 59:43 Monica C. Medeiros: usually a little bit longer. I think President Kahn touched upon a few things that I had some questions about and since we're kind of on the topic of reserves. Mr. Del Rosario, you had said that this plan provides for a goal of reaching 10% of our accounts over the next over five year period and which

▶ 1:00:06 Speaker 7: we're already kind of into. Is that correct? That's correct. We're into it. first year i believe was technically 13 then then 14 obviously is there and then now we're sitting in 15. so that's the goal would be 10 over the five-year period so the goal is to now get to

▶ 1:00:17 Monica C. Medeiros: the point of 10 correct in the next three years to reach the five-year total to reach the five-year

▶ 1:00:26 Speaker 7: total because i think we had talked but previous that there was uh we had talked about having a three-year timeframe then the board voted to expand it to cover five years so that it would wouldn't impact the races significantly in the early years so we did that so we have three more technically to go and what I was

▶ 1:00:46 Monica C. Medeiros: confused about is that the presentation I just see my screen timed out on me over there but luckily I have some of it printed out is that the the presentation that we have here on page six it's the very bottom line number nine it says we recommend that the reserves be increased to twenty percent of the total budget in the next five years so is this the plan is the recommendation for mr. Gardner's firm was for twenty percent but the water and sewer rate Commission has decided to go to 5 to 10 percent and that's what's in the rate that we're

▶ 1:01:33 Speaker 7: voting on not 20 percent and through the chair that was voted by this board was

▶ 1:01:37 Speaker 6: 10 percent mr. Garner is consistently for three years now proposed 20 percent as his guideline however the committee is always gone by the vote of the board

▶ 1:01:46 Monica C. Medeiros: and I know we've been referring trying to get interchangeably between the the water and sewer committee's recommendations and Mr. Gardner's recommendations. The orders before you

▶ 1:01:54 Speaker 6: come out the water and sewer recommendation to the mayor and ultimately the mayor has sent the report is the recommendations from the consultant so as you're reviewing things just

▶ 1:02:09 Monica C. Medeiros: keep that in mind. Okay and I know we we did get quite a bit of information just before five o'clock today which is you know so some of it we haven't really had a chance to digest. Back to

▶ 1:02:23 Monica C. Medeiros: this report and there was a question about debt and although it doesn't have the gross number of debt it does this report that we have does mention the percentage of debt service that

▶ 1:02:38 Monica C. Medeiros: we have in I think it's on page three kind of in the middle that is saying that water there's 11

▶ 1:02:50 Monica C. Medeiros: water bonds outstanding seven of the eleven bonds are the zero percent interest mwra bonds and the fy 16 water debt service accounts for 14.5 percent of the total fy 2016 water budget on the next line is about sewer which is 6.86 percent of the total fy 16 sewer budget so that does that include the bond that's before us for the tremont street work no that bond will impact

▶ 1:03:28 Monica C. Medeiros: fiscal 17. fiscal 17. if passed okay and now obviously i mean this is something that you know we we struggle with uh in in this account tremendously because you know the mwra one of the reasons our rates are so high is because their debt service is so high uh we know that in the regular operating budget of our city the the goal is to keep the debt service payment at five percent so obviously both of these account with sewer at six point six percent and and water at fourteen point five is considerably higher i just wondered mr del russo could talk about that a little bit like we don't have any policy to keeping the debt in this account down right two different

▶ 1:04:11 Speaker 7: so everyone's clear there's two different um funds one is again the general fund and our goal has always been under five percent um these funds water sewer mount hood and the emblems are self-supporting enterprise funds by design they do not fall in the same category as my general fund accounting statistics because i have limited resources and i have a whole protocol that's It's totally different. Having said that, what we have to do here is what we always do, is historically look at what we're carrying for debt. Make sure it's manageable and it's supportable. Most important in both of these funds, ensure that we monitor the level of debt service that we're carrying. The nature of the debt service is also not the same as the nature of the debt service in general fund. These, principally, the debt service we carry here is for 0% interest. There's value that exceeds having a 10% or 8% debt level service by getting a 0% interest note. So that is really taken into consideration here. I have less stress with that than I would if I was paying interest on these notes. And I also know, and I think everyone here knows that, if we don't take advantage of this debt service at 0%, other community is going to grab it then we're going to have to go out and actually get our own debt with interest to do our own repairs so i mean this it's a great question but that's really the analogy is we have to take advantage when we can of the environment and the environment says this is advantageous then i'm going to i'm going to ask that the board accept it so i'm okay with these

▶ 1:05:52 Monica C. Medeiros: percentages for that reason and then obviously with this proposal for the work of tremont street you know did did we consider using some of the reserves for capital expenditures in this regard

▶ 1:06:06 Speaker 7: no I'm not right now through the chair I'm not intending on using any reserves at this point until long we reach the position that we all collectively feel it is adequate and we're not

▶ 1:06:20 Speaker 5: in yet okay and i know we recently uh got a grant to study some of the water quality

▶ 1:06:24 Monica C. Medeiros: in the l pond area and watershed does this does does this leak that we had have anything to do with that grant is there anything

▶ 1:06:39 Speaker 6: no that grant is storm water it's drained and this is water drinking water and i know

▶ 1:06:43 Monica C. Medeiros: Don't, you know, we've said in the past that when water comes in and goes out, you know, you get an idea about when we have a big jump in, or a big surge. Did we have a surge and we just didn't know where it was?

▶ 1:06:59 Speaker 6: We had a surge, we worked with the MWRA throughout that stormy month of February looking for a leak. And we found several leaks in the Harvard Street area, we found leaks in the Lyon Street area. time we thought we had it and the next morning it the consumption was still there and we can we check mutual aid gates with neighboring communities thinking maybe some water is getting into another community we checked our pump stations thinking that maybe water is being circulated somehow from one we we exhausted every avenue possible until one day we started the whole system over again and we found the leak right in front of our front door frustrating as can be if you can't tell by the tone of my explanation of it but we chased the leak for a long time and and i reported it to the water and sewer committee numerous times but eventually the minute we found it the consumption went away but we do we do have measures in place and the mwra does help us in

▶ 1:08:00 Monica C. Medeiros: that regard and you mentioned a little bit about dead end pipes can you kind of explain that could

▶ 1:08:05 Peter D. Mortimer: i just can't that we're talking about water leaks water supply leaks not not water getting into the sewer line sorry to interrupt alderman i just want to be clear okay what i mean by dead-ended

▶ 1:08:15 Speaker 6: water water is looped which means it's intended systems are are designed and constructed and intended for water to flow it's not intended for water to come and find a dead end essentially and then bounce back the other way there are segments of tremont street which are dead-ended right now so water comes hits a closed part of the system and then reverses and that causes tuberculation and that causes some discoloration that I put in the picture that is part of the package that's what I meant by dead end that's not good for water quality that's not good for fire flow it's not good for the system okay

▶ 1:09:00 Monica C. Medeiros: And in regard to, again, some of the debt and this work, when we take on debt in these circumstances in order to repair pipes, we're actually in some ways, sometimes we're actually saving some money. Is there any kind of calculation that is out there? Can we speak with our engineers, maybe possibly before the next meeting, see if there's any kind of calculation that can show you know if you fix a leak in a pipe how much water flow that would save and then how much perhaps money that might save us in terms of mwra assessment by you know if we're degreasing that leak i can work with them put something

▶ 1:09:50 Monica C. Medeiros: together i don't want to do something like that um the discussion you know obviously i have not been a fan of this tiered rate system i feel like it's very much has affected people unequally i'm glad to see that this proposal at least does try to raise all the tiers equally um i'm hoping you

▶ 1:10:12 Monica C. Medeiros: know i had really hoped to see something in the material this this evening in regard to the condominiums and apartments and multifamily homes I had tried my best to have a discussion here on this board which was shot down and I was you know sort of unpleased about it but I think this is the time that we should be looking at that and I didn't really see anything about that in in the paperwork that we received relative to these five orders tonight you know you mentioned an abatement program and I've seen it in some of the draft minutes that Alderman Tramontozzi it passed on to us but is that taken to account in this budget those

▶ 1:10:58 Speaker 6: are policies and do not require ordinance changes but I can draw I can

▶ 1:11:05 Speaker 5: send the final policy associated with those policies there are costs

▶ 1:11:09 Monica C. Medeiros: associated so and they are incorporated in into the into the structure it would helpful to have that um for our next meeting yep definitely um and lastly i know you talked a lot about this being an enterprise account this is something that only only funds that are relative to water and sewer expenditures can be spent on each of the water and sewer budgets right nothing on nothing unrelated to water and sewer general fund through the chair can support

▶ 1:11:48 Speaker 7: can support the general fund can support this right not the other way around any enterprise

▶ 1:11:52 Monica C. Medeiros: fund by vote of the board but not the other way around so in the um the actual budget documents that we have this evening um in the salary section i saw that we have the recycling coordinator is in has a piece of salary in both of these budgets could you speak to the

▶ 1:12:19 Speaker 6: kinds of duties that that position she assists in our waters of conservation

▶ 1:12:26 Speaker 6: programs that's we've expanded her recycling rules into that conservation approach whether it's most recently I know we we put a bubbler here in City Hall water bubbler in City Hall that well you know we've done some bubbles in

▶ 1:12:40 Speaker 6: schools which reduce the water consumption at the same time help the environment because people are filling bottles so that's the type of programs and we're looking to take that even further into the next fiscal year where maybe she can begin outreach programs to residents and to condos and apartments and schools about water conservation that's why she appears on those that's

▶ 1:13:03 Monica C. Medeiros: why she appears what percentage of that position's salary is the water and sewer

▶ 1:13:13 Speaker 6: i can provide you the breakdown i don't i don't believe it's large i don't have it with me but i can provide you the breakdown of that position okay and i if you have the numbers right in front

▶ 1:13:27 Monica C. Medeiros: of you i'll calculate it for you if you want i don't have the entire budget numbers before us

▶ 1:13:37 Monica C. Medeiros: for the rest of the budget all right um and i see in both of these the water and the sewer enterprise

▶ 1:13:45 Monica C. Medeiros: um i see five thousand seven hundred and eight dollars for the mayor's administrative assistant in the sewer enterprise fund and salary and for that same position in uh water i believe it was pretty much a similar number can you talk about the duties at that position what i'll do actually it's eleven thousand yeah seven hundred no no i'm sorry it's five thousand

▶ 1:14:16 Monica C. Medeiros: two hundred and eleven dollars in the in the water budget and about five hundred dollars more than

▶ 1:14:22 Speaker 6: that in the sewer budget for that what i can do is provide you with a listing of all of the salaries the breakdowns and the duties i think i've done that before in the past i can do that again so

▶ 1:14:32 Speaker 5: any idea what kinds of duties we're seeing definitions do the mayor's office the mayor's

▶ 1:14:39 Speaker 6: office sees a lot of phone calls relative to water and sewer especially with second meter changes and changes and master meters and changes in policies they do generate a lot of phone calls out of that office relative to water and sure and i think that's the intent of this board

▶ 1:14:58 Monica C. Medeiros: but but we have uh usually a volunteer that mans the phone in the mayor's office and then it sends it to the water to the water department of public works right no not necessarily most of those water

▶ 1:15:16 Monica C. Medeiros: calls end up with bridget alvison okay i would be interested to see the uh some details on that

▶ 1:15:25 Peter D. Mortimer: thank you thank you alderman medeiros um next in line we have alderman inferno please

▶ 1:15:32 Gail Infurna: thank you very much mr chairman um i actually can remember the days where we sat here and i we didn't have the water and sewer enterprise so when we're talking about reserves i i really fully I really support having a reserve. I know my budget and my household, I always leave money for any emergencies. And I really feel we should really be doing that. To kind of maybe help us understand the reserve and knowing that they can't be used for anything else in the general budget. Could you compose a list for the past year of some of those emergency jobs that were done? suspect probably that money was spent somewhere in every neighborhood in the city of melrose at

▶ 1:16:15 Speaker 6: some point the water budget and you know when there's a water break where the money goes you

▶ 1:16:20 Gail Infurna: know like i said i had one out in front of my house so you know i'm sure that money came from you know that enterprise because it was an emergency water break and and i suspect there are many neighborhoods throughout melrose that can attest to we have had a piece of that reserves

▶ 1:16:37 Speaker 6: money we can use it we can provide you a snapshot of where we've worked in the past right and i

▶ 1:16:41 Gail Infurna: understand there there may be some you know there is still more money there but i mean like i say we run our bud uh household budgets with some reserve and and just to go with that and i think it will just help us understand that and if we didn't have this reserve or this excess and reserves as someone might say where would this money come from and how would these how would this go about getting repaired or our infrastructure being repaired i mean i i did sit here for years when you know no one ever even paid attention to the word infrastructure um we never talked about infrastructure here and you know for the past 10 years i think we have and we've made great improvements so um i think to help us understand that if you could just give us a list of the jobs that some of this reserve money has paid for i just said you didn't i'm sorry the city auditor

▶ 1:17:32 Monica C. Medeiros: just said he didn't he hasn't used any of it what you said you haven't used any of the reserve no

▶ 1:17:40 Speaker 7: no i didn't say that i i said we'll get whatever information she was looking for nice i i what do

▶ 1:17:48 Monica C. Medeiros: you mean for this year since we've started i didn't say anything in your previous uh discussion with i think with me a minute ago you said that you have we haven't used any reserve and i'm sorry

▶ 1:17:58 Speaker 6: it that's okay i think the list i can provide is for the work that we've completed the majority if if not all of the work that we completed we completed through the operating budgets and through bonds um i could provide you with a list that delineates both we haven't touched the reserves for anything but that one time in the fall when we needed a um an appropriation

▶ 1:18:21 Speaker 7: to fix the sewer truck but but to build on that if i may the the danger that and we saw already materialized once, was if either fund is short at the end of the year, there's no provision for relief from the Commonwealth. That has to be paid by the general fund in the fall before we set our tax rate. It's a very- Could you repeat what you're doing? If either fund has a deficit at the end of the year- I missed a word in it. That we have to make that up on the general fund side in the fall prior to setting the tax rate. The Department of Revenue is very sincere in enforcing that requirement, but having said that, it makes it, again, to the point of the reserve, very important that we have something as all the new furnaces so that doesn't happen, so we can draw on something to offset that cost because that is very, very negative and very disruptive to the budget you've already essentially passed the budget by the fall and if all of a sudden you have a large shock fall you have to make up something's going to have to be cut or if you don't find the additional revenue so that's a real issue whether it's water sore or mount hood or an ambulance service that's always out there and i think we have to be reminded every once in a while that that uh that's a sincere obligation that we have to those funds we have to make that difference up

▶ 1:19:53 Gail Infurna: thank you I didn't thank you thank you are you yielding the floor are you finished thank you

▶ 1:19:59 Peter D. Mortimer: very much very good next in line we have Alderman Forbes and then Alderman McAteer-Margolis and

▶ 1:20:11 Scott M. Forbes: President Kahn Thank You mr. chairman I know earlier you mentioned that about 70 to 80 percent percent uh fall under the first tier for water usage would it be possible for you to maybe provide us uh with some figures maybe of where that other 20 percent fall within the other two tiers for just to provide that to the board good you know we always we always concentrate on where they fall under that first tier because it's the it's the cheapest rate but I'm just curious to where the other or where the other 20 or 25 or 30 percent fall we could do that is that possible

▶ 1:20:52 Scott M. Forbes: yep that's absolutely not we'll do that okay and now i know this is uh this is our second rate change correct or we're resetting the rates we have this is a 5.99 percent change for this year correct when we're talking about our water rates and our sewer rates who rates for the next fiscal

▶ 1:21:11 Scott M. Forbes: year correct is this our second this is our second rate change no it's our first rate change for the

▶ 1:21:19 Scott M. Forbes: next fiscal year for the new fiscal year but we had a rate change last year for this fiscal year yes but what i'm saying is we have in terms of the system yes this is the second this is the second

▶ 1:21:31 Scott M. Forbes: change change for the system all right now last year what was the increase last year last year

▶ 1:21:35 Speaker 6: the increase was i have that we're 7.2 percent average so i guess just the question i have is

▶ 1:21:55 Scott M. Forbes: that you feel comfortable with the increase this year i'm just thinking like trending forward if we're at seven last year a little bit over seven i look at it as it's six five point nine nine i just look at it as a six percent increase but you know is this something that we see as sustainable moving forward at seven and six is this something that we feel feel comfortable with with this tiered system is this something that you know we we look at as as as a as a modest increase as an increase that we feel comfortable with with residents because the just because of the phone calls that i've been receiving and the letters that i've been getting the emails that i've been getting i think people thought that the increases would have been a little bit more more modest or a little bit less so they find themselves a little bit surprised when they see something at seven or at six so i just don't know if if you can just discuss that just a little bit my my position

▶ 1:22:55 Speaker 7: would be that i was shocked when i saw the mwira assessment at 7.7 just for water and i was really

▶ 1:23:11 Speaker 7: taken back um the next year and i tell you why because that we're hearing and obviously uh we're not the only community that's hearing it is if that's right now and they're still talking about the additional work they have to do on deer island and all the improvements they have to make which is like phase two and this is 7.7 percent just right now i mean and that's totally out of our of our control, where were the rates going to be when they actually start to build on that debt service for the next phase of the work they're doing? So I wish I could give a better answer than that, but I think the long and short answer is unless the commonwealth can determine a better way to allocate that cost, this may not be a number that we're not going to see in the future, the 7%, 8%, 9% range. I mean, I would not put it past the MWRA to continue practice and pass those types of increases. I don't see any reason to not believe that, and it's very bothersome because I don't see any action, at least from my perspective, at the state level that would change that. And I want to see something, but I don't see it. That's just my personal perspective. Sure.

▶ 1:24:26 Scott M. Forbes: Especially when 76% and 24% are allocated specifically towards the MWRA, and the rest is for city.

▶ 1:24:33 Speaker 7: So I mean, I wish I could speak in a more positive way, but not what I've seen, no, I can't.

▶ 1:24:39 Scott M. Forbes: Sure, okay, just switching gears in regards into the report, we talk about unallocated water, and I see there's been a good improvement in that since fiscal year 2010. I think it went down from 23.5% down to 18.5%. Can you talk about the measures that we've taken in order to increase that or improve on that figure?

▶ 1:24:59 Speaker 6: We're investing in our infrastructure. We're aggressive with our leak detection. When we find leaks, we repair them right away. We have a very good in-house crew that is capable of not only doing maintenance but also doing repairs. So we have that ability of, as we find a problem, we can quickly resolve the problem. and i think last year in 2013 i unaccounted for a water i think was 16.7 i believe 2014 came in closer to 16. so again we're trending in the right direction even in terms of finding

▶ 1:25:38 Scott M. Forbes: the water that isn't being built okay uh and then finally for me uh is there any other areas in the in melrose i know you talked about specifically tremont street are there any other areas of melrose that you consider problem areas or areas of concern that you would like to try to address in the upcoming fiscal year I know looking at your budget I know this you really don't have a lot allocated to things like repairs or pipes and fittings you may already have certain things already in mind and I know it's kind of early to to maybe project those things the department never really had

▶ 1:26:11 Speaker 6: the intent to borrow again this fiscal this coming fiscal year the intent was to sit back this fall and create another three-year program I think the situation has worsened on tremont street yeah to the point where we have no choice but to act right now and tremont street is the highest priority in melrose right now that's not to say that there aren't other priorities in melrose we have a cep report by tater and howard that our engineers are working with right now that easily identifies 15 to 20 million dollars of improvements throughout the whole city sure so to say that this is the only issue is is absolutely untrue this is the highest issue because it's a major corridor and it's a very important part of the distribution system yeah and it's deteriorating and if we don't continue to fix it we'll have more leaks and we'll lose more water which ultimately we have to pay we already took a big hit so we're trying to be as perfect as we can the balance of the year my fear is that these temporary reconfigurations won't make it into next year and that's why we've decided to put this order before you

▶ 1:27:23 Scott M. Forbes: um this fiscal this coming fiscal year okay uh i know the reason why i asked i know i talked to uh andrew street about the corner of uh sylvan street and lebanon street i know you know that area very well it's a area that's constantly flooding during uh periods of inclement weather i know i'm probably going to be talking to you about that in the next couple of weeks so

▶ 1:27:42 Peter D. Mortimer: yeah all right thank you very much mr chairman thank you alderman forbes next we have alderman

▶ 1:27:46 Mary Beth McAteer-Margolis: mcatea margolis please thank you mr chairman um so thank you gentlemen um and mr gardner and i just wanted to clarify in my mind the percentage of the increase so um i i thought i had written down the tier one was 5.92 and two and three were 5.99 and is that the combined water and sewer increase okay because when I looked at mr. Gardner's report it looks like the water is like 7.5 but the sewer is 5 so that is what evens it out in terms of the tears okay now this year mr. De La Russo you indicated as of right now we're a little bit ahead yes so with we're a little bit ahead in water but it looks like we have a little more substantial cushion in sewer if we end the fiscal year with that similar type of scenario will those will those funds go into the respective reserve accounts

▶ 1:29:02 Speaker 7: Yeah, once the Commonwealth certifies those funds and we would go before this board and ask that those funds or whatever percentage of those funds get put into the respective enterprise, correct?

▶ 1:29:19 Mary Beth McAteer-Margolis: And so is that what you're, is that like basically that's where we're getting our reserves from every year is what's left over at the end of the year?

▶ 1:29:30 Speaker 7: Correct. And again, the difference, I think, being that we have actively, since we implemented this plan, have actively designed the rate structure to provide for a reserve outside of the fact that consumption can go down and that can change that, that alters that. But for the information that we have, that's exactly why we designed the rates this way, to provide for a reserve.

▶ 1:29:55 Mary Beth McAteer-Margolis: So basically, we have already in water, we have about $240,000. for the past two fiscal years and then this fiscal year you said maybe average a year is about one you thought maybe 160 yeah we were able to yeah correct

▶ 1:30:14 Speaker 7: based on what we did last year we did it was 164 thousand for water 160 and then approximately 190 for saw so if things go on a relative basis everything else being equal consumption being equal you may end up in that same position or close to it that would

▶ 1:30:35 Mary Beth McAteer-Margolis: be a great event that would be great because that would put us at like 400 000 and then if we do another hundred thousand next year which would really be year four we would almost be meeting our goal in four years for the water fund correct so then my question is if that were to happen would would we be able to take any reserves like the following year that went from water would we be able to put those in the in the sewer fund to help that to build that up no they each each one has to stay within itself okay so you know I mean it's it's really we don't know but if we do reach it in fiscal at the end of fiscal year 16 we may not be seeing we may not need to put in as much of an increase to build up a reserve for water that's absolutely we may need to do it

▶ 1:31:32 Mary Beth McAteer-Margolis: more in sewer or vice versa because sewer where it looks like sewer we we may uh at the end of next year still only have you know maybe 600 000 and you're looking for 750. and remember the

▶ 1:31:42 Speaker 7: budget is a moving target so that the five percent figure is also a moving target but in relative terms we want to always show that there's providing we're being progressive and that there's growth in those reserves each year right um and again um the rating agencies love to see that because we're consistent and what we say we do we do and that's what they want to say each and every year make that effort make that effort make that effort and you can never fault it for

▶ 1:32:13 Mary Beth McAteer-Margolis: making the effort and i think as um alderman inferno has alluded to you know back in the day when we had no you know it was always one crisis to the next so i think um you know this gives us a cushion it gives us an opportunity perhaps going forward if there's a project and we don't have to borrow um you know we can we can do that i certainly um support uh taking care of the issue on tremont street mr shenna it seems like we've always um in my 15 14 years of working with the we've always had issues on tremont street um whether it's down at the end by the football field or around the corner near melrose street um i think we all i think in terms of

▶ 1:32:57 Speaker 6: putting that into perspective we are we should all remember what tremont street was at one point in time it was the pond that's right and that backfill material is peat and cast iron pipe doesn't go well in peat and i think a lot of that deterioration has been accelerated because of the soil conditions and what that was at one point in time so the section that you're um that you

▶ 1:33:19 Mary Beth McAteer-Margolis: want to address from union street to lake ave um has never been addressed except for emergency patches or repairs okay and do you know like when it was originally done i don't um yeah okay um

▶ 1:33:44 Mary Beth McAteer-Margolis: So, with the new overlay rezoning that we have recently done, I assume we're already seeing some new development along that corridor. Do we charge large buildings like that a fee to tie into the system when they come online, so to speak?

▶ 1:34:02 Speaker 6: types of we have a permit process obviously and through developments contribute to our I&I fund for sewer on the water side we don't have such a fee schedule but typically we require the development to come and connect to our main at their own expense even the portion in the street typically homeowners are only responsible for the private portion to the sidewalk but in developments like that we always require them to come all the way out but we don't have any type of connection fee per se and it's it's something we've discussed for the past couple of years in engineering as they mull over maybe permit changes throughout the whole city that's something they're considering but

▶ 1:34:48 Mary Beth McAteer-Margolis: it's not something we have in place right it's not uncommon I think in other communities to have a tie-in fee for development I believe there are

▶ 1:34:53 Speaker 6: communities in the north and over and over range where that connection fee is

▶ 1:35:01 Mary Beth McAteer-Margolis: it is very substantial yep and um and what did you say for sewer we require them to to contribute

▶ 1:35:06 Speaker 6: to the ini fund yeah we look at what the property is contributing pre-development to the sewer system we look at what the property will um will contribute post-development by looking number of bedrooms or the the use is at a restaurant how many seats we figure out how much sewer flow will come out and then they contribute so much per gallon of increase we look at the differential and that's what they that's what they contribute to an INI fund that we reinvest back into the system typically somewhere in that area

▶ 1:35:41 Mary Beth McAteer-Margolis: okay so not to belabor the point and not to certainly you know put any excess burden on any of the new developers that are coming in or new developments that we're going to see but i do think it's something that we should consider when we're reviewing our rates and also when we're reviewing just the system in general and the additional stress perhaps and usage that it's putting on the system as a way to sort of prevent or perhaps recapture some of that up front and be able to use it on things like tremont street repairs and whatnot

▶ 1:36:22 Speaker 6: that's that's a comment that i will gladly bring back to my engineering group and and work with

▶ 1:36:29 Mary Beth McAteer-Margolis: the planning department on it would just be interesting to know uh the surrounding communities and the that also are mwra communities that have that type of a um that have that type of a system um i think um that was all that i had at them oh the second meter i think um i'm glad to hear that you have sort of been able to find a solution with because we I have had a lot of constituents in the past year who have called on that I'm glad to hear that the what we're saving on it we are making up in in addition and more with what we're getting in in the rate so in the consumption so I do think if there are people who I'm sure if there are people who elected to eliminate it and and now want to go back, that you will find a way to work with them on that. Absolutely. Great, thank you Mr. Chairman.

▶ 1:37:22 Peter D. Mortimer: Thank you Waldemar McAteer-Margolis. President Kahn, please.

▶ 1:37:25 Speaker 4: Yeah, I just have one thing I want to talk about a little bit. The issue as it relates to reserves is not whether reserves are good, and whether it's good to have reserves. It's always good to have reserves. That's an oversimplification of the issue. The issue here is that we're charging people a lot of money, the rate payers, for water and sewer use. And we factor in a figure to establish and beef up a reserve. And the issue is how much do we want to charge the rate payers in any given year, not whether a reserve is good or bad. And by my calculation right now, the overall budget of both systems is about 12.6 million. In my very simple and probably not very accurate math, $126,000 is a percent of that budget. We probably have, as we sit here today, and nobody's going to say it, but I'll say it, we probably have about 4%. We know what we've already certified as of last year, and I think we know what we're going to get this year. We're exceeding our goals. When we built the rate last year, we built in a percentage for reserves. Next fall, we're going to get a certification that's going to show that we have about $480,000 in total reserve, 4%. So the issue is not whether reserves are good, whether we should have no reserves. We have $480,000 more than we had four or five years ago. The issue for the board, and the issue that I'm going to bring before the board, whether the board likes it or not, is whether we want to raise another $210,000 in reserves on our rates this year. That's the issue. But do we want to give our rate payers a little bit of relief and not raise as much money as we might think? That's an important issue to think about. That's the real issue to think about, not whether reserves are good or bad, whether we want them, whether we don't want them. Whether we want to pay our bills, whether if we get sick at home, we want to make sure we have a bank account. We want to factor in the interest of the rate payers, and this is one thing that we have discretion over. It's something that we can control, and we might want to look at it. The collective, we might want to look at it. Me, I definitely want to look at it, and I'm going to bring it before the board, and we will look at it whether we like it or not. But that's the issue, and we had zero reserves three years ago, and now we have about 4%. The other thing to keep in mind is, I've been sitting in this horseshoe for a long time, And I don't remember a litany of horror or problems relative to water and sewer shortfalls. I remember one year where we had a budget shortfall. And after we had that budget shortfall, we implemented the structure that we have here today, and we established a system that raises reserves. So we've made significant progress. The issue is not whether to have reserves or not, it's how much we want to put on the rate payers in this given year. And if we can cut the reserves and knock down a rate increase from 5.999% to 5.5%, that might be something that we might want to consider. So let's look at the real problem, let's view it the way it should be viewed, and let's talk about it. And as it relates to other issues, if Alderman have solutions to very difficult problems like what we should do with condos, They should bring realistic, viable solutions to the board, and we should talk about them, and we should vet them. That's all I had tonight. I never intend to speak again, but usually I can't help myself. I'm sorry, Mr. Chairman.

▶ 1:41:02 Peter D. Mortimer: Quite all right, President Kahn, and thank you, President Kahn. Seeing no other aldermen wishing to speak at this time.

▶ 1:41:12 Speaker 4: Motion to adjourn, Mr. Chairman. I'm sorry, actually, I had a question.

▶ 1:41:14 Peter D. Mortimer: Would you withdraw your motion? It has been accepted.

▶ 1:41:17 Speaker 8: Somebody wishes to speak, yes. Yes. Alderman Bird, please.

▶ 1:41:19 Jaclyn L. Bird: going to wait until um our next meeting but actually i just one one question and one concern uh mr shenna if you could get us a breakdown of why i i was just looking simply at fy 15 salaries for the fine accounts water and sewer budgets and the fy 16 water and sewer salaries um and it looks like there's a 50 000 increase in the salary and wages line items for the two for the totals i just like an idea of why we're seeing that increase and if there's new positions added or or positions that have been broken up between the two before our next meeting and the other is more of a comment of a concern of mine and i'm going to be looking keeping this in mind as i look through the changes for this year i'm glad that we're addressing some of the concerns that that some of us brought up last year with the changes that we made i just want to make sure that we're being responsive and not reactive with some of the changes that we have going on so you know I certainly want to address the issue you know that the condo owners face I want to address the issues that concern our constituents that had second meters have now decided to take them out but I don't want to be short-sighted about it either I want to make sure that we're doing the right thing by the city over the next you know three to five years and not just for the next six months that we're making people happy in the short term and then being caught off guard in the next couple of years with much higher rate increases as a result, so I'm going to look at that through that lens going forward. And I'm sure we'll have additional questions at our next meeting, so thank you, Mr. Chairman.