INFO-2023-12 : An Update on the Status and Usage of Free Cash in the City of Melrose

Transcript (~1 h @ 23:05)

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▶ 22:56 Speaker 1: crime s*****. Yes counselor bremski. Yes. Counselor Williams. Yes. President Grigoraitis. Yes. And chair Migliorelli. Yes, that's 10. Yes.

▶ 23:08 Leila Migliorelli: Es and we'll be heard at the next full council meeting.

▶ 23:13 Leila Migliorelli: So next on our agenda. We have three informational orders for the benefit of the public just revisiting these three informational orders that were first on our agenda in December 8th, as a co-filer of all three of these orders. I want to remind everyone that the intention here was to shed some light on how the administration prioritizes areas of funding across the city. There are many competing priorities but a finite amount of money at the city's disposal. We need a greater understanding of how available funding sources are being utilized. So that critical areas of need are being met at that meeting in December. We saw presentations from the administration on arpa the American Rescue plan Act and the overall state of the city's finances tonight. I suggest that we pick up where we left off and start with info order 2023-12 and update on the status and usage of free cash in the city of Melrose before I entertain a motion to take that out of order. I did want to point out to the public and my fellow counselors that there were several documents that were uploaded into our meeting agenda system. This afternoon. This includes a response from Mr. Delaroso regarding my email on 12:9 about the discrepancy between the city's approved school budget and the school's version as well as a memo from Mr. Delaroso regarding the overall status of the city's finances including information on the balances the stabilization funds. So I think after we have the info order given that there's some secondary information about the overall state of cities finances we can address that then so I will now entertain a motion to start to move info 2023-12 and update on the status and usage of free cash in the city of Melrose. So out of order second. Okay motion made by counselor sneller seconded by President Grigoraitis all in favor. and he opposed so now info 2023-12 is in front of us. There as we have mayor Broder here tonight, Mr. Delaroso anyone else you'd like to have joined the podium. Feel free.

▶ 25:19 Paul Brodeur: Good evening, Madam chair members of the committee. It's good to be with you this evening. I'm happy to take any questions you might have as the chair pointed out. Some information has been supplemented vis-a-v free cash. I think you'll know that Margaret Fleischman. My chief of staff is instrumental in both the arpa planning and the tracking portion of the of the free cash. So what you will what starting with our conversation or the conversation in December you now have a a small amount. I suppose a supplemental information in the form of a memo and a fairly extensive. Spreadsheet that tracks, I believe every precash appropriation as a proof by this body. So 20 since fy20, thank you. Thank you Mr. CFO and and the status of each of those happy to take any general questions or anything specific to any of the allocations. If you're looking for a I guess I'd say a higher level discussion on free cash. We are certainly prepared to do that as well from the perspective of how we plan and how certain DLS a division of local Services of the Department of Revenue suggests that it's the best way to handle free cash.

▶ 26:59 Leila Migliorelli: Thank you, Mr. Mayor. Right now. I have counselor Jamaleddine in the queue counselor. Jamaleddine and then president Grigoraitis. Thank you madam chair. Thank you,

▶ 27:11 Maya Jamaleddine: Mr. Mayor and Mr. CFO for being with us tonight.

▶ 27:16 Maya Jamaleddine: Now, how much do we have? How much money do we have in a free cash? But yeah

▶ 27:22 Speaker 3: through the genome we have not been advised yet from the Department of Revenue. We have been communicating with them over the last two weeks and we spawn into a couple of questions. I think I mentioned it before what they're working on now candidly is just so trying to finish up and I'm just talking Statewide. It's helping communities set the attacks rights as well as their schedule A's which is the summary of a revolution expenses for each community. So sometimes the free cash doesn't get the top of the totem pole and what they work with these other things to get down. Then they then they would spend more time on free cash determinations, but we're still waiting. Hopefully we'll hear shortly certainly

▶ 28:05 Speaker 7: as soon as soon as we know you'll know so do we

▶ 28:07 Maya Jamaleddine: have an expected time on when they would get back to us? It's just because we are receiving request, you know, like you you're gonna send us and requests for free cash and we want to make sure that we know we have the pool. Knowledge of how much we're gonna allocate versus how much we have sure I would defer

▶ 28:27 Paul Brodeur: to the master on the on the on the long experience. Yeah with this, but honestly we expected to have it by now. So it's just a little bit of a waiting game could be any time. I

▶ 28:36 Speaker 3: would I would be happy mayor to reach out to the Department of Revenue Division and local Services tomorrow and ask that they have some type of time for him. They can give us I'd be happy to do that again.

▶ 28:53 Maya Jamaleddine: this is a question that I believe we mentioned that before by just wanted to put the sake of the public the money that was allocated for departments had or commissions. That was not used and we know some of the commissions did not use their money because of the pandemic or because we had vacant vacancy in departments like vacant positions. Where does this money go? Where does it live?

▶ 29:23 Paul Brodeur: Try not sure again. I will defer to Mr. Della Russo in case I say it wrong but two things can happen to avoid money going back into free cash. It can be. Encumbered or essentially set aside for for later spending. We try to discourage that the pandemic notwithstanding. It's a little bit of a different set of circumstances, but we don't want to see folks, you know kind of hoarding money piling up money you all we propose and you guys authorize for a reason and we want to see that happen. As expeditiously as possible, but if ultimately if things don't get spent as a general proposition, they would go back into free cash to the

▶ 30:09 Speaker 3: next fiscal year. It's all right. Yeah exactly what happened. If in fact there was no outstanding contract. Typically that would allow for encumbering then we would close out over the project actually finishes and and this proceeds and maybe some proceeds at the end small amount. Typically, we would close that out to the general fund. So it becomes next to you as free cash or start the process. Okay, and

▶ 30:28 Maya Jamaleddine: so Just to give an example. For instance if Human Rights Commission did not spend all their allocated money for their commission, which is 3500. I believe they did not spend it the money that was left would go back to free cash.

▶ 30:48 Speaker 3: If in fact with the chair for clarification if it's in their budget, if it's in the regular operating budget and they don't spend it then we would close that would be What's called the turnover or turn back we would turn that over. So that would become free cash for the next year. Go to go towards that don't spend it. Yeah.

▶ 31:06 Maya Jamaleddine: Thank you and How are we tracking the money that we allocate to different departments from free cash. Like do we have any? due date for those like where if they didn't spend the money or if they didn't do the project we get the money back or anything. That's an

▶ 31:28 Speaker 3: excellent question because one of the things that we always struggle with is that sometimes if a project isn't completed it's not because of lack of effort or will it's maybe be due to the fact that they can't get contractors to come in and do that particular service at that time or they're waiting for materials and there's a delay. So but we try, you know, the great thing would be to to say that after by the end of the year if you don't if you haven't spent it or you know, there's no Commitment to spended in that sense that we would close that out to the general fund again. So it becomes free cash for the next year. But typically we try to discourage like the mayor Des indicated people just getting free cash up, you know approvals and not using the money timely. We don't want that either. So there's going to be a balance here. So we always strive to encourage them and then at the end of the year candidly we go through those that are outstanding and we actually we try to check them off to say which ones really haven't had any activity and why and make a determination from then it could be one of the above factors could be a number of items as to why this money has not been expended. So we make that that knock on the door for the Departments to see where they stand because again, we discourage them carrying over money that doesn't have to be carried over.

▶ 32:52 Maya Jamaleddine: Eat that means your department. Yes, that's correct. Okay, so if that's for departments, that's right and about for commissions who would do that. Is it still you or again? If

▶ 33:05 Speaker 3: it's a free cash item? It would be us if it's a department and we typically if they're not if they haven't spent their money. Again in any any department or they haven't spent the money they had it be a reason as to why they didn't spend it and if it's just sitting idle that's another question altogether because as we go it's funny you said that because as we look forward to 24 right now and reflect on what's going on in the year, we're in 23. So if we find that we're not expending to the level or the growth that we anticipate in the department. We would ask them. Is there any reason why is there timing problem? Sometimes if you look at some of the budgets that we have on the detail? The munis right now, which should be about at the Midway point if sometimes you see a higher number say it says 70% instead of about 50% It may simply be because of timing not everything is 112 salaries typically are in that sense. But when you have some items like Insurance, you may pay the insurance bill right up front in the first couple of months and it looks like you've exceeded at 50% and that's not the case at all. So timing plays a big role in that so we're sensitive to that but that should not be the rule that should be the exception.

▶ 34:24 Maya Jamaleddine: So are we expecting when you have you know, you will have The number of how much money do we have in free cash. You would be able to give us some reports about what department have some money left or what money we're gonna reallocated to free cash.

▶ 34:41 Speaker 3: Well, Monday determination comes that we the amount of free cash that we have then what would happen is the mayor would send down his ideas on where he'd like to see that money allocated an actual program. And in that case he would make the tremendation as to which departments he wanted to prioritize and provide that free cash too whether it be the school department Etc. We have some obligations that we have to pay which free cash. I don't want to lose sight of that the most important one of the most important ones is in school and I I'm sorry. It's no one ice deficit. We don't want to go into the next year with the deficit and snow and ice which means you owe money for this year's storm activities because that automatically takes dollar for dollar away from what you can raise in the next year towards your regular budget. So if you have a million dollars deficit in snow and ice at the end of this year and you have a news free cash with some funding to dissipate it you're going to start the new year losing a million dollars towards your budgets just because you have to take care of that first. You have stabilization funds you want to make sure your contract stabilization funding particularly the capital fund of funded properly. You have police and fire overtime. We may see a need to supplement that given the fact that it's been very difficult and both Chiefs can tell you that to hire new Public Safety offices. But in the meantime, you have to provide the service that technically drives an increased usually in overtime.

▶ 36:07 Maya Jamaleddine: Right, so I understand that and I just you, you know going extra money to explain that to us, but I wanted to have a clear answer of when we would be able to have a full report on what is what money was not used and the decision was made to reallocated to free cash. Like when when does that

▶ 36:29 Speaker 3: happen? That would be that would be at the year and fiscal year and probably I would guess. The end of August you'd be able to provide you some type of report like that because we have to do the closing entities. We have to be running addressing entries and sometimes candidly when make sure all the bills are paid within 30 day time frame. Okay.

▶ 36:48 Paul Brodeur: Thank you sir that you I think it's another part of the discussion tonight. You're going to be doing year today. Yes. Yeah that's certainly gives you the trend in spending it with all the caveats and Mr. Della Roots mentioned around some things you spend a lot of front some things you settle up at the end of the year personal costs outside of overtime or fairly regular little bit more predictable.

▶ 37:15 Speaker 3: Thank you. Thank you.

▶ 37:17 Speaker 4: Thank you Vice chair Jamaleddine president Grigoraitis and

▶ 37:21 Jen Grigoraitis: then councilor Williams. Thank you madam chair. Thank you. Both for being here tonight. My questions on free cash are definitely more. High level and I'm recognizing that in all of these conversations that we're having for pretty much everyone on the council with the exception of our Elder Statesman counselor McMaster all we know in governance in the city of Melrose is a global pandemic, right? Whatever the heck this now is and I know Mr. Mayor that's all you really know very good

▶ 37:46 Speaker 7: months.

▶ 37:48 Jen Grigoraitis: So I'm I'd like to get a sense of you know, we did a look back of three years. But you know, what is typical? What is normal? What do we need to kind of recalibrate the way we do things so based on my back of the napkin math. It looks like we currently have I'll use the language used here a balance of about three million in free cash. That is again. It says like balance meaning that project is still in progress how I read all the chart. So whether that's yeah encumbered whatever is that in your both of your experience, is that typical is that Lower than normal higher than normal.

▶ 38:27 Paul Brodeur: I'll take the first and then and then defer to him on the on the longer Trend because to a point this is the only Universe I've kind of lived in in terms of City free cash and I wouldn't say this as a general proposition, but it's a review the voluminous spreadsheet some of the some of the pieces are obviously covid related like I would just looking to Vehicle procurement who you've seen there are some pieces in there that haven't come to fruition yet. And that is absolutely a supply chain thing that we see not just in free cash. We start with both our most recent fire truck procurement as to some of the other pieces some of the softer pieces. I would defer to Mr. Della Russo on the trend over time versus what we've kind of experienced in in this current kind of challenging procurement and spending environment.

▶ 39:24 Speaker 3: Yeah, if I made this look at some of the vehicles I think that are in there too. They're high ticket items police Public Safety delivery dates have always become an issue. I don't I don't really believe there's any hard podcast rule on that again. It's just a matter of just like we're doing this evening is follow up stay on top of it. Make sure everyone not only the person or the department that's be small. So for the project understands, there's a lot of eyes on that because the worst thing you want to do is provide Revenue in my opinion to a purpose for which it's not going to get addressed and there's so many other needs that we have in the city. You would hope that those that you know are able to to receive funding would really push his eyes. They can't to make sure that gets spent and spend time.

▶ 40:15 Jen Grigoraitis: and I think you both and I I don't in any way question the department heads pushing to get projects that I'm sure when you're told that something you've been waiting for is going to be funded that's you know, the people there's a desire to protect that money understandably. I guess I just the vehicles delays with the turf field delays with the Memorial Hall all of which are related to supply chains to the huge backlog in the construction industry like at some point do we just say? We can't do as many things as quickly as we once were able to do or because if I mean I have to say looking at a spreadsheet saying that we're gonna have a turf field redone by September when it's January and we don't have a bid out yet feels unlikely based on the other things that we've heard here over the past two years sure.

▶ 41:06 Paul Brodeur: No and a very fair point and another challenge that we have. To be perfectly candid in terms of both the supply chain and really our institutional capacity to manage projects is a big deal. I only mentioned that because of the opportunities and challenges in the inflation reduction act principally, which is really a climate bill. It's not really it's all due respect to the folks that name these things. It's a climate bill that has been described as a tsunami of money coming to State and local government. It was your hardcore government Geeks. It was a huge topic of conversation at MMA and it's some other meetings because really no one at the municipal level as any confidence that they have the skills ability resources to go kind of treasure hunting for those kind of things because the it's really insanely robust. So beyond the obvious Climate initiatives. I've got to believe there's money out there for things like Energy Efficiency when we do a renovation or a rebuilding project, but it's in particularly given the fact that it's the federal government. It's a much more challenging layer of bureaucracy and not a chain and things like that so that it's it's another thing to think about as we as we think about our our free cash for sure.

▶ 42:42 Jen Grigoraitis: Yeah, and I would hate to see us leave money on the table, right? There's only so many bodies to do so many things and it feels like we're getting to that point where we almost can't dig out of the backlog just a few quick more administrative questions does the city after offer a prompt pay discount to vendors? Is that just something that happens at the state level? Where if you're there able to get a slight reduction on their bill if we pay the bill within a certain number of days I'm surprised at it's if I'm reading this correctly and I don't quite know what balance means that it seems like there's many things. We don't pay any portion of the bill until the project is fully completed is that am I misunderst like it says Memorial Hall 1.5 million and that the balance is still 1.5 million. So does that mean we haven't paid any portion of that project to date?

▶ 43:33 Speaker 3: if we haven't received an invoice for the I have to make that we could find that out is to

▶ 43:40 Paul Brodeur: why I was to take a little bit of a guess on that because people call that they were kind of two tranches of funding from Memorial Hall, and I don't know if The 2.5 and I also don't off the top my head remember the source because one was free cash and I think one was oh and

▶ 43:54 Speaker 3: in free cash. The other was the note, correct, you know, it was a boy.

▶ 43:58 Paul Brodeur: So that that piece of the billing? Wouldn't show up in this paperwork because it doesn't touch okay.

▶ 44:04 Jen Grigoraitis: So when it says like $400,000 awarded in free cash for the generator 400,000 is the balance project in progress. Does that mean we haven't paid a single invoice related to that project?

▶ 44:18 Speaker 7: I assume so but I don't know. Yeah.

▶ 44:21 Jen Grigoraitis: And so we don't we do have a prompt pay discount

▶ 44:25 Speaker 3: or that's not something that you know, I haven't I don't believe we have this.

▶ 44:27 Paul Brodeur: I think we go. I think that when we do things like that and it's more of a a stick than a carrot that account I will say if you don't part of the part of the higher level discussion we need to have is really about Capital planning and how we go about it as I think you all know we have the Collins Center helping us look into that and take a more. Rational a little more long-term view of how we address our Capital needs which we honestly I think we all know sitting where we are looking out the window where we are. We don't always do historically haven't done a necessarily a terrific job on that and that's both the big ticket items and some of the and some of the smaller things building that into a, you know, a true regular routine Capital plan recognizing there's always going to be bigger kind of outliers potentially if we build the new school that's a little bit of a different animal than maintaining a cruiser Fleet say but we need to do a better job with that because if we do it in a routine way as opposed to a little bit of an opportunistic way in terms in terms of free cash. I do think it leads to these kind of potentially. Anyway these kind of delays or irregularities in the process.

▶ 45:51 Jen Grigoraitis: I could not agree more. my final question is just Mr. Del reuser. Can you just remind us what's the cities procurement policy? What are the thresholds at? Wish it triggers like three quotes versus putting something out to bid. Is there an ability to do sole source on contracts where you don't have to competitively bid it. I'm not I'm not familiar with

▶ 46:14 Speaker 3: what the city's procurement policy is. Yeah all the about the 0 to 10,000 is good business practice. 10 10 and up and then you would want to get at least three quotes. Hopefully you'll get three responses just because you put it out and you ask for three doesn't necessarily mean, you know, and I get through you might get too you might get one and then the higher obstacles into the total lump. It depends on what the project it is construction was related, whatever the case may be, but I would go to the higher levels. But yeah, we fall master and large Chapter 30 B, and we expect that. The contracts that come to the my office to be approved signed fun number Etc that they all check off that they have complied on the phone and signed off. I'm the mirror and I have to initial it as well myself in the city solicitor that they did comply with dirty B. We don't sign it.

▶ 47:01 Paul Brodeur: There are some sole source exceptions like the state bid list and then some they're just some things under Mass law that just don't have to be procured. Thank you. That's helpful.

▶ 47:12 Speaker 2: Thank you. Those are my questions at this time. Thank you. Madam. President

▶ 47:15 Speaker 4: up next is councilor Williams then councilor Karamcheti.

▶ 47:20 Ryan Williams: Here. Hello. Thank you all for coming here tonight. I wanted to follow up a counselor Gregoire said because it was very similar to question that I wanted to ask you. I want to take the opportunity to dig in a little bit. So she was mentioning delays. Right and we hear a lot that projects are ready to go and then you know a month two months three months a year counseloritis and I both have a crosswalk that goes from seven to six that's like three years on the list of projects to be completed. It still isn't painted by the way. And so I can't it's hard to it's hard to believe it's money problem. Right? Sometimes it says you have pointed out both of you. It's a staffing problem procurement problem. Yeah, but we've got a lot of these things piling up the Lebanon Street project the tip project which has been perpetually almost ready to submit for like five years or six years, you know, we learn that the sidewalks on Bay Street are gonna get completed on schedule because we don't have this curved curbing for the road. So I heard you that we don't want project leads and department heads to execute the project. We don't want I'm sorry. We don't want them to ask that's exactly what projects we don't want them to ask for money for projects. They can execute. What I want to know is is there a formal process wrapped around this so and I want to give you an example. I have worked with municipalities where they have a form that everyone hates which just is fair. It's very dense and it has these checkboxes have you contacted the vendor and do they confirm materials or available within you know 90 days? I don't know if that's even realistic anymore. Maybe that number is long or maybe it's six months from now. What stage of design are we in? Is it 25% 50% you know and you justify. Yeah, right you justify the funding request in part by having this form that says we've done all this work and we For sure that these things are ready to go and and for internal accountant controls it helps you to sort through these projects and you know, what's a wish list and what something that really needs a little bit more due diligence before it's ready to be executed. So I'm curious and I it's bureaucracy, right and bureaucracy is kind of the death of innovation sometimes but it also protects the public interest, you know, so it's like Balancing Act. So is that something that we're doing now? Is it something you'd be interested in doing or thinking about doing? What are your thoughts on this?

▶ 49:51 Speaker 3: I guess just in my perspective. I think anything we can do to particularly come and forward with any new initiatives. I think it's going to be really telling that we put another layer on top of it and I'm not exactly sure how much form that should be. This is an interesting concept, but I really believe that given the fact that we have a limited management at times to handle multiple projects that if it can't be entertained that this will either be done promptly internally what we have to go out to a third party and get a Venda then so be it but I think we should we need to know that type of information up front before the project actually gets approved that we might thought I think

▶ 50:30 Paul Brodeur: formalizes that is essentially what we do for our part. Yeah,

▶ 50:33 Speaker 7: right. Yeah. It's that kind of process. Those are

▶ 50:36 Speaker 3: great points though. Thank you.

▶ 50:40 Ryan Williams: I only had one other thought a little bit of semantics but I I think it's I think it's important, you know, so we have in the free cash request. We have a line for traffic calming. and I want to retail very quickly what our friend Pete buttigieg who I know you're a fan of

▶ 50:58 Speaker 7: At the US voter form and he wasn't even a candidate

▶ 51:00 Ryan Williams: anymore him former mayor now ahead of us Department of Transportation. Here's what they say about the definition of traffic calming. Vertical deflection which means that something causes vehicles to move kind of up or down or side to side that speed humps, raise tables raised intersections horizontal shifts where the sidewalks kind of crowd the street in a little bit enforce people to slow down roadway narrower narrowing. These are things that passively reduce the speed. Excuse me actively reduce the speed and enhance Street invite environment for non motorists. Okay. So when we when we look through this website nowhere on here, do we see rapid flashing beacons traffic signals pedestrian crosswalk buttons? We don't see speed feedback signs. Although those are a little bit of a gray area. Okay, I can I could be argued a little bit in the favor of the speed feedback sign, but then when we look at the free cash requests and the way that they're described these are exclusively those things. They're rapid flashing beacons. There are a few speed feedback signs and a lot of signal upgrades. So my feedback is that I am really excited that we're spending money on these things and I want us to keep spending money on these things. Okay, but we don't want to call them traffic calming because it's confusing and you know, if you had a line for two hundred thousand dollars for planting trees and you came back to the council and said we're happy to inform you that we have planted flowers around all the trees people would kind of go. Well, that's not what we intended at money to be spent spent for so since we have a traffic calming program in the works, which I'm very excited to hear more about in a few minutes. I would recommend that when you talk about the signals anything that a person has to touch or that has to you know, use electricity to be activated. That's not traffic calming. That's just signals signals are great, but they're not traffic calming. So and that can help us think more clearly about what money is being spent on traffic calming and want money is being spent on signals.

▶ 52:58 Speaker 3: fair enough absolutely

▶ 53:00 Speaker 6: I have nothing else. Thank you.

▶ 53:02 Speaker 4: Thanks councilor Williams counselor Carm Shady.

▶ 53:07 Speaker 5: Thank you. Thank you both for being here tonight. So much about free cash. So I think

▶ 53:16 Manjula Karamcheti: Some of the questions the other counselors asked I just want to sort of say back to make sure that I'm understanding and sort of I'm able to synthesize what you've said. So in terms of the free cash that we have and what sort of been earmarked for certain things. some of the reasons why that money hasn't been spent yet are sort of the ability or time available of staff to manage those projects and see them to completion. So that's one of the issues that why we have that three million dollar balance on

▶ 53:57 Paul Brodeur: free cash. It's I don't think it's the premiere issue.

▶ 54:00 Manjula Karamcheti: Okay, so that is one another is sort of the issue of a vendors and timelines changing related to availability covid and that kind of thing. But when it comes to like is that the same for things like tree planting traffic calming and just like Paving the streets and the potholes and those kinds of things and why I'm asking is and I will give one specific example. So in word one, we have the beautiful new accessible playground, but the crosswalk to get to the accessible playground. Doesn't have a ramp. It is a curb so Wheelchairs and whatnot cannot access access your playground because they can't get there. And so I think I'm just trying to understand even within the projects that we have. How are we prioritizing to make sure some of that stuff gets

▶ 54:57 Speaker 5: done?

▶ 54:59 Paul Brodeur: sure, I mean specific to that project, you know, we had a decision to make about whether or not to essentially soft open or hard open that the street and access Improvement into the park itself with the last things to to go and that's what we said at that time. This is a soft opening and in the spring. We will be able to do kind of the full complete what really truly will make it much more accessible. And that was just Germaine to that project and the time and we certainly were to a certain degree. I don't want to say hemmed in because I don't think it was that big a deal but that was definitely going to happen last after you know, DPW did the prep then the install some of the finished work and then that and you know, sometimes it's sometimes it's seasonal for sure which is what we ran into to a certain degree in this case and it's a very specific example, but sometimes multiple players have to kind of be in on the project and if one of them Doesn't do a good job, then that affects all the downstream work.

▶ 56:11 Manjula Karamcheti: that is one example, and another one that I'm sort of wondering about was there is free cash a lot at an fy21 for Di work and In looking at sort of I you know, I was on the Dei task force. I don't think that task force has met in about a year. And so I don't

▶ 56:30 Paul Brodeur: know why you think that that is incorrect. Well, I haven't been invited then for whatever. Well our memories that you resigned you thought you couldn't meet those commitments not I mean that is an accurate as an accusation literally haven't

▶ 56:42 Manjula Karamcheti: gotten an invitation for meeting but that is it right asking about why like what is happening why you know only $10,000 of that money has been spent and again just in the examples of the managing of the projects and moving things forward and my question is really around. Is there a time limit of the free cash like Things appropriated at why 21 fy22 at some point does the Free Cash become like not accessible anymore or do we look at it and say well that project isn't gonna happen and we're not and allocating it elsewhere a different

▶ 57:23 Paul Brodeur: Patrick to make sure I get the technical people. It's an

▶ 57:26 Speaker 3: excellent question. The reality is that we it doesn't vanish. It doesn't disappear. We don't close it out unless we have real gun justification for doing so Typically we again as we see here when you start to look at 20 21 you start to say I'm going to fy24 now. Why are these ones these older ones still there? Is it something I'm missing. They not being it's not being closed out for a reason. So those things become harder to answer the long ago longer it goes on. So you absolutely right. That's why I am really all up and and forward and indicate in that, you know as an indication of some of these and again these a lot of these are not the department heads doing there's you know, supply chain the whole nine yards, but for the ones that we think may not be the case then I think in the future just to ask a few more questions as counsel Williams in the cave right up front before we approve it to make sure it's going to get done in the time frame that we anticipate is reasonable. It becomes unreasonable. You say why we're doing this. It should be a reasonable expectation that kind of thing. I think we're all intelligent enough to know what's reasonable. What's unreasonable. So that's a great question. And again, it's something that as they age out we get we get more thoughtful on clearly.

▶ 58:52 Manjula Karamcheti: And then my last question is sort of regarding. The amount of free cash that we end up with every year. I know it hasn't been certified for this year yet, but generally speaking. It's a plethora of money and I know we get excited about free cash and thinking about how we're going to spend it. And we have even a three million dollar balance right now according to president Grigoraitis math for us. So it's not lost on me that the school committee is looking for a 2.5 million for the school budget and we have a three million dollar balance of funds. We haven't we haven't spent over the past few years. So I get I've asked this question before and I'm going to ask it again. At what point? Is free cash too much free cash. And what amount of money can go into our operating budget? So we're able to pay for staff. We're able to pay for things in a planned and purposeful way as opposed to waiting for the free cash to come along. I'm just sort of Curious about that and would love to like hear a little more about your philosophy on it. and because it it just brings up questions for me and I use the example of Maslow's hierarchy of needs if we need money for foundational stuff. Why do the self-actualization we need a solid foundation first? And so just would love to know more about that.

▶ 1:00:35 Speaker 3: all valid questions and if I may to the chair, but the product good best practices that you want to have five to seven percent of your operating budget and free cash. Assuming operating budget is a hundred million just in theory. So you're talking five to seven million dollars. That's those of the Department of Revenue Division and local Services guidelines. They actually update used to be three to five percent now they've increased it. I'm sure there's a lot of reasons for that. the the Melrose case which I call it the Melrose case is that The city at one point had I think I mentioned it before 2.9 Million negative of free cash. 2.9 Million negative you had no money in stabilization of any kind. So in order to make the budget work for fiscal year you ended up often times reducing staff and making some real bad decisions at the time that nobody wanted to make so the the change from then to now is dynamic. We consider around here and actually talk about Doing projects and the like and providing Capital Equipment that likes we've never had before in the history of the city. Also. You also have over eight million dollars in stabilization fund. You didn't have that before you had no recourse to go anywhere for anything free cash. Originally was designed it was the only only opportunity a community had to fund something after the budget was set you set your budget you go into the fall now, it's January. Yeah crisis occurs. What do you do? Where do you find the money free cash typically was the only Avenue for that to happen. So the Department of Revenue said hold it we want to ensure that communities keep it in mind that this is their gent a lot of them a lot of money, but some communities don't have stabilization funds believe it or not. And don't I don't know why I'm glad I don't work there but having said that So they're mindful of that. They want communities to have an opportunity to have a revenue Source once the tax rate is set. So that's the purpose of it. As far as Melrose goes. It's always too high. No, of course, it's not you could take away from you could increase your local receipts contribution. Typically, it's about 75% of the prior actual. That's the standard. We've always used here. Say you go to 80% or 85% now, so using more of those local receipts. Um, what you're doing is you're going to be do share of Precast clearly, which we're going to talk about tonight with the loss of cannabis revenue, for example, that'll play well. But you're also exposing yourself in a way. You don't want to be exposed. And I tell you what that means. when the state aid declines media We've had that happen multiple times. Where do you go? Do you open your budget up and say now? We have to cut we don't have that problem here. Do you know why we have another problem here since I was back in 2004 because we budget so conservative and in that sense, which is conservative is a good word for me. I love that word that I don't have to come back to you or say we have to lay out three or four people in mid year. We're gonna make these terrible decisions because we were so tight and when the state went down and they pulled it away even mid year like they've done we have enough Revenue to sustain the operation without having to reduce staff there's value there because people want to know that the trash is going to get done things are going to get done regardless because they're paying for it. So you provide a cushion that other communities don't have so once you pull that cushion low make it lower now you exposing yourself to potential that, you know, negative consequences Financial. You don't want to undertake. Look what's happening in the economy. Overall we talked about it probably later on. You know, there's something some say this recession now with the will be shortly. Well, if you think it's not going to impact us trust me you will. Motor vehicle exercise gets hit males people don't go out as often to eat. They cut back. We see reductions in building permits because people put off that porch that they were going to put on this year in addition to the house. So all those things play into this. so and again some things like that. We can't control that. Mom cannabis, which we'll talk about, but I guess I'll bring it up. Now. We took in almost a million dollars in the end. FYI 22 Right. Now the way works. I'm I can't count on any money whatsoever. For that to happen now that that crisis which it is at financial and it's own way. Occurred mid-year I would just found out about a month ago. Not even well, I've been I had budgeted 650,000 in cannabis Revenue. What do we do now? Is have I raised my hand am I in my concern? No? Because I know the way that I budget book will cover and what the city will be. Okay. However, it doesn't take away from the fact that we just lost potentially unless the legislation changes in the summer. We leave a million dollars and in total revenue, I mean that was on you know to a local receipts that that's a lot of money to the city and that's a significant hit to free cash going forward. So again you position yourself to win you position yourself to be financially stable and to all honestly to take on these negative downturns. There's one right there. You have the economy on top of that. And you have to really be sensitive as to what you could potentially do by reducing your your margins to the point where they're just too thin.

▶ 1:06:43 Manjula Karamcheti: so just and so I think what I'm hearing you say in your expert opinion as someone who has really turned around the city in terms of what the finances were you feel pretty strongly that free cash and sort of stayed the way that it is the amount we have is the right amount and shouldn't be shifted.

▶ 1:07:01 Speaker 3: The I think the I think it's a great question. I think the percentage allocation that we utilize of local receipts towards the budget which we can talk about tonight is important you can if we're using 70 not higher than 75% of local receipts of the previous receiving fiscal year that closed if you want to in a year or two say that they can use 80% or 85 because they want to get through a rough time that we're going through with the knowledge that you're going to build that back down to the, you know closer to the 75 Mark again over time. That's fine. But you have to make a commitment to do that because once you draw down it's gone. To apply that block for any budget it's gone. So unless we have a new Revenue, so it's coming in to take its place you just diminishing your capability to fund your city, which you don't want to do. That's why you have a double A Plus.

▶ 1:07:54 Paul Brodeur: So a couple things that's we kind of started the marijuana story in the middle. Yes, everyone know what's going on with that. It's for real quick for the folks at home. Marijuana essentially delivers two pots of money to the city one is an excise tax piece, which will continue the other is through a community host agreement and through some legislative reform and some other potential actions that money we can no longer expect to rely on because of again because of certain acts of the legislature and reconsideration of what the true impacts are so we cannot count on that money anymore to the so the bigger kind of philosophical picture, you know, it it is a choice, you know, what we do in and how we do it and part of the piece of with the delays to one side, even though they are relevant and important to think about in terms of ability. To use that cash most effectively in real time when you take a look at what we do with the free cash over the last three years and really historically over the life of the city. It is not too much. Aspirational stuff or that the top of the pyramid stuff. It tends to be things like vehicles or in the case of the schools some of their upkeep. You know about over three years a half a million dollars. Plus I want to say on curriculum materials to You know help the school meet that color a semi-capital expense. It's kind of a it's kind of a tweener. You always need to renew curriculum materials, but that was just a big hit that they can't solve or we can't solve within our current budget so free cash becomes a place to do that, you know, we can we can definitely put more into operating we could conceivably I suppose put less into operating but the downstream impact is less flexibility a little bit more risk aversion. Let's say as we think about the capital site ideally again going back to that whole idea of low level anyway Capital procurement reform ideally that becomes less of a factor because you see that as part of a different operating plan. Does that make sense?

▶ 1:10:36 Speaker 4: Okay counselor, Gary.

▶ 1:10:39 Mark Garipay: Thank you. Thank you all for being here quick couple quick questions the delay in the in the school budget finishing the 2022 school budget. Did that have any impact on the certification of free cash this year? Did that delay the certification at all? No. okay, and I don't know if you have the answer for these two questions or if you can get them if you don't. One is regarding the Sylvan Street projects that it says it's going to be done by the end of 2023. It looks like. Did we get the FEMA grant for that? Because that was the grant that we applied in 2017, I think.

▶ 1:11:22 Speaker 7: 2018 piece right? Okay the tip

▶ 1:11:25 Mark Garipay: I think I was the one that was going through the cemetery connecting in over the pine Banks.

▶ 1:11:30 Paul Brodeur: I mean be confusing with a different product because there's one that is in. that what I believe will run we're looking for reconsideration because we had a an issue with the feds

▶ 1:11:42 Speaker 7: on that and a bloated change of shows if

▶ 1:11:45 Mark Garipay: we don't get the FEMA Grant which was a larger cost. Right? Well this free cash money come back to us. I assume so, but I

▶ 1:11:52 Paul Brodeur: want to check with the lane know about is there some kind of other thing that needs to be done something, you know, a lower level of mitigation or Improvement that we might use that money for I think

▶ 1:12:02 Mark Garipay: there's other thing other projects down the road in the cemetery for expansion. Yeah, which is other things going on down, right?

▶ 1:12:11 Speaker 1: and then

▶ 1:12:13 Mark Garipay: president Grigoraitis brought up the turf field Fred Green. And in here from the notes. This Fleischmann said that it should be going out to bid looks like the beginning of December. Did that did that go out to bid?

▶ 1:12:31 Paul Brodeur: So it's kind of a two-piece thing that the design has to go to bid. This is a little bit of an unusual project because of memory serves you the materials might be available on state bid list, but the install has to be procured don't hold me to that. But I know there was the issue there is an issue with delay in speaking to miss Bell and she has made it abundantly clear to the folks. They're doing this work that it has to be done. In the summer, we're not interested in a spring or fall project. We need the fields to stay online. During fall and spring Seasons. So my concern is

▶ 1:13:12 Mark Garipay: with that in the in the bid that goes out. Can we make sure that there are some sort of penalties if they do not like we had a lot of trouble with some Paving issues this year that would delayed. because if this does get delayed

▶ 1:13:31 Speaker 1: We have a school budget. That's

▶ 1:13:36 Paul Brodeur: Balanced we have a strong enough real impacts in terms of finding alternative

▶ 1:13:39 Mark Garipay: sites, and I'm assuming that this will increase our transportation costs for any usage of that field if it gets delayed.

▶ 1:13:46 Paul Brodeur: That and I would expect. Unless our Middlesex League friends are quite. Generous, I would assume that we would have to pay something for access to Fields off site as well particularly with Stoneham already. offline hopefully that won't line up perfectly if there's

▶ 1:14:04 Mark Garipay: any way you can get us an update on on that and Just make sure that we are covered for any penalties in that because we can't absorb any additional costs because of delays, especially in the school budget. So, that's all that's all my questions. Thank you.

▶ 1:14:23 Speaker 4: Okay, anyone else for the first time? I have President Grigoraitis and Q.

▶ 1:14:30 Jen Grigoraitis: Thank you madam. Chair. Um, I I just wanted to follow up on Council Carm Shady's questions, which I really appreciated you asking and the conversation about, you know, free cash versus no free cash. And I know it's a conversation I've had with both of you and appreciate especially you Mr. Delaroso and your service to this community and recognizing where you took us from and I think there's a universal agreement that no one ever wants to go back there. I just want to acknowledge that there's it's a Continuum of risk right in all of these decisions that we're all getting paid big money to make and there is zero risk, and there is way too much risk and anything along that Continuum comes with consequences and I I very much hear we want stabilization accounts. We want to be fiscally prudent and fiscally conservative to use your words. I also know we are all very much feeling the repercussions of a lack of sustained investment in our community. We have school buildings that are you know, 100 plus years old. We have the fire station that's making TV news. So I I just would like to see us get to a place where we're taking the totality of all of that knowledge and expertise and thinking about what do we do now in this moment and do we need to recalibrate or rethink how we do things not go from Being completely risky and crazy but is there somewhere along the Continuum that feels like the better place to be for today's problems for today's challenges and I appreciate that you're both here having this conversation. I know we don't need to have like a large philosophical discussion on a free cash info order. But I I just I know I can say that's what I really want to get us to because I feel like those are the questions that are coming from the community and quite frankly from within my own home about kind of what is the trajectory for this community and how do we get to a different place?

▶ 1:16:20 Speaker 3: Point will take and that is a yes.

▶ 1:16:24 Paul Brodeur: There's a lot of layers right to that question and The history of the community I think over the long term is doing that is living in the moment. Oh my God, you know, where is the if that were not the case keep gesturing at the fire station. We wouldn't be having this conversation about the fire station because there would have been some kind of routine investment over time or a replacement plan over time and that is just not the way we've done business and in certain respects for good reasons because of the money because of the revenue and it is part the we always try to do I think with maybe a little bit of a different approach exactly what you're describing but

▶ 1:17:11 Speaker 7: was starting to hit some walls, right? Thank you. Thank you for those comments. Thank you.

▶ 1:17:18 Speaker 4: Mentor thank you anyone else?

▶ 1:17:21 Leila Migliorelli: I have some questions before we close out. There's just one point of clarification fellow counselors. Ask this question a number of different ways, but just to clarify. So if we're looking at the free cash spreadsheet over the last three years has been about 15 million dollars of fifteen point four five million dollars of free cash allocated and remaining a total of almost like 5.2 million dollars. In those funds when we make those free cash transfers into certain funds those funds are specifically caring forward for the the prior year or if those funds are unspent. Let's say FY 21 fy20. Does that go back into free cash? I feel like that question was asked number of ways, but I'm not sure that I got the answer. I was looking for the value. Yeah,

▶ 1:18:07 Speaker 3: the great question. The two things one is what it says complete the projects complete. It means if there was a few dollars left over in that fun. It would then close to to become the next choice. Next year's free cash. But as you go along here FDA, we don't close those funds that have free cash Appropriations assigned to them period and obviously if someone tells me is dissolved, they can't do it because of some logistic reason and that's a different story. But typically we don't they go year after year until they close out

▶ 1:18:42 Speaker 4: by my office. Okay, that's good to know. So they're caring for that's not part of bucket. know you would

▶ 1:18:48 Leila Migliorelli: Go back into free cash with I think what's helpful to hear, you know is the the I think it's the state's recommendation for free cash has gone up from three to five percent to now five to seven percent. I think when we originally started having this conversation a few years ago and over the past three years. We've pretty much done six percent that seemed on the high end where it seemed like it was a good question to ask why not. See if there's you know, could we shoot for five percent and yeah, but now it seems like we're in a different environment. I think the public had some questions about this last year a couple years ago why so much money going to stabilization. It seems like the target for the six six percent the last few years make sense. I think to president Grigoraitis this is point. You know, there are only so many levers we can pull in terms of how we make these decisions. It seems like after getting all this information. And the recommendations the state that we're on Target in terms of where we need to be with free cash. But that being said, it doesn't mean that there's not other places we can look for that funding I think. My life final comment on this is that as last to do I think with either one of you necessarily but the information we've requested. For these orders for free cash. For example, if we take the Dei Initiative, for example in the spreadsheet, it says that so it's I think it was order 2021-31 in the spreadsheet that it says that you know, we had approved a hundred thousand spent or completed was was 90,000 and remaining was 9,000. But then when in the today's answer to my questions Miss Fleischman had provided I asked for sort of specifics on what that you know, 90,000 was spent on and it looks like what was invoice to date was 10,000 and that perhaps the remaining 90,000 is part of this number two, it's Equity assessment. It's just to highlight here that I think. When we're pulling together. When I understand is probably spreadsheets from hard information. So we had this with free cash. We have this from arpa and these are extracted data that when we're looking at it just to be really consistent with the information provided it it creates more questions and we're probably needed. I think the first time when we got the information on free cash and arpa it wasn't as detailed the second time around it is detailed. I just think that for the public for us, especially 11 counselors have to make hard decisions just having more confidence in that the numbers are correct. So when I see those numbers are just raises more questions doesn't mean there's anything an Affairs going on but it's just how we present the information that I think is equally important as information itself. So that sort of my my final comment less of a question on that and we can follow up I when I spoke with Miss Fleischman, and she was unable to be here today. She said that you know if we have questions Apartments, we can continue those questions and we'll do that on a couple of these orders. I know councilor pay already mentioned that piece on Fred Greenfield too so we can kind of see where they're at. That being said I'll entertain a motion for what folks want to do with this order placing it on file. Or something else or holding it?

▶ 1:22:21 Maya Jamaleddine: I'm making motion to play some file second motion

▶ 1:22:24 Leila Migliorelli: to place on file made by counselor Jamal advice chair Jamaleddine and seconded by President Grigoraitis all in favor.

▶ 1:22:33 Speaker 4: Aye you opposed.

▶ 1:22:38 Leila Migliorelli: My suggestion in leading this meeting is that we've given that we had I feel like we fully covered the arpa. Peace. Although I'm happy to entertain questions on that. I think that let's start with the state of the city financial since Mr. Della Russo put together a detailed memo on that that's in our packet now. so