Appropriations & Oversight Committee — 2015-06-04

Appropriations and Oversight Budget Hearing

This meeting starts at 8:46 in a recording that covers several meetings.

Attendance

Jaclyn L. Bird present · Vice Chairman; Robert A. Boisselle present · Ward 4 Alderman; Donald L. Conn Jr. present · President/Ex-officio Member; Scott M. Forbes present · Ward 7 Alderman; Gail Infurna present · Ward 5 Alderman; Jennifer L. Lemmerman present · Ward 2 Alderman; Mary Beth McAteer-Margolis present · Alderman at Large; Monica C. Medeiros present · Alderman at Large; Peter D. Mortimer present · Chairman; John N. Tramontozzi present · Ward 1 Alderman; Francis X. Wright Jr. present · Ward 3 Alderman

Agenda

Minutes

CITY OF MELROSE APPROPRIATIONS COMMITTEE CALENDAR● JUNE 4, 2015 Aldermanic Chamber Budget Hearing 7:30 PM The public should take notice that the Melrose Board of Aldermen may, on certain occasions, have a quorum in attendance due to standing committees of the Board of Aldermen consisting of both voting and non-voting members. Members attending this duly posted meeting are participating and deliberating only in conjunction with the business of the standing committee. Attendee Name Title Status Arrived Peter D. Mortimer Chairman Present Jaclyn L. Bird Vice Chairman Present Gail M. Infurna Ward 5 Alderman Present John N. Tramontozzi Ward 1 Alderman Present Monica C. Medeiros Alderman at Large Present Robert A. Boisselle Ward 4 Alderman Present Francis X. Wright Jr. Ward 3 Alderman Present Mary Beth McAteer-Margolis Alderman at Large Present Jennifer L. Lemmerman Ward 2 Alderman Present Scott M. Forbes Ward 7 Alderman Present Donald L. Conn Jr. President/Ex-officio Member Present In Attendance: Director of Public Works John Scenna, CFO/City Auditor Patrick Dello Russo, Financial Analyst Donna Cardillo, and Doug Gardner, President, Pioneer Consulting Group

ORDER-2015-143 Amending Revised Ordinances Amending Melrose Revised Ordinances, Chapter 228, Article II, Section 228-15 (Water Rates Established), for Fiscal Year 2016 as set forth herein. Recommend Passage Board of Aldermen

ORDER-2015-144 Amending Revised Ordinances Amending Melrose Revised Ordinances, Chapter 228, Article IV, Section 228-30 (Sewer Rates Established) for Fiscal Year 2016 as set forth herein. Recommend Passage Board of Aldermen

ORDER-2015-145 Enterprise Fund Water Enterprise Operating Budget for Fiscal Year 2016 in the amount of $5,189,331.83 Recommend Passage Board of Aldermen City of Melrose Page 1 Updated 6/25/2015 3:55 PM Minutes Appropriations Committee June 4, 2015

ORDER-2015-146 Enterprise Fund Sewer Enterprise Operating Budget for Fiscal Year 2016 in the amount of $7,508,664.93 Recommend Passage Board of Aldermen

ORDER-2015-147 Bond 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 Recommend Passage Board of Aldermen City of Melrose Page 2 Updated 6/25/2015 3:55 PM

Transcript

▶ 8:41 Peter D. Mortimer: Meeting adjourned, thank you, one and all. Good evening, ladies and gentlemen, it's June 4th, 2015. This is the second appropriation meeting for this evening. The other one started at 7.15 and adjourned around 7.26. It was just a little bit of housekeeping. This is the budget hearing for this evening. We have the water and sewer rates and other matters concerning water and sewer on. I am the chairman of this committee of the whole, all of the aldermen are members of this committee. I am the chairman, Peter Mortimer. Vice Chairman is Alderman Jacqueline Bird, other Aldermen on the committee, which is everyone, are Alderman Inferna, Alderman Tramontozzi, Alderman Medeiros, Alderman Boycelle, Alderman McAteer-Margolis, Alderman Lemmerman, Alderman Forbes, and President Kahn.

▶ 10:12 Peter D. Mortimer: Is there a motion to open the floor for public participation, please? Second. Was that you, Alderman Inferna? Yes. Alderman Inferna has made a motion to open the floor for public participation. Truly seconded by Alderman McAteer-Margolis, excuse me, Alderman Medeiros. Get all the Ms together here looking at the list. All in favor of opening the floor for public participation, please say aye. Aye. Any opposed, hearing none, public participation is now open. And may I also point out for the record that this meeting is being recorded. DVDs of the meeting are available and the meeting can also be seen at a future time streaming on the Melrose City website or on the MMTV website. We are open for public, did we take a vote, all in favor please say aye.

▶ 10:58 Aye. Any opposed, hearing none, public participation is now open. I see there are some people in the gallery who would like to speak on tonight's agenda items. At your will, please come forward. Whoever would like to go first, please step up, state your name and address, please. I'll go first. you welcome and I'm chairperson of the board of trustees at station crossing and that's a 48 unit building as you all know we just got a new water bill and I think it was nine thousand four hundred dollars that was for the quarter usually it's about six thousand we're getting killed with the water rates we had to do an assessment and I feel I'm the only one looking out for my residents I have 54% elderly I have five disabled five adjusted income apartments and it's

▶ 12:10 costing us now we project it'll be about $38,000 for water with the help of the water department we looked into sub metering all the units and that would be extremely expensive I think the city would provide us with the certain size meters but then we would have to have them retrofit to our piping and I think was about thirty thousand dollars to do the building and in addition um miss cardillo with the water department told me that each person would then have to be charged twenty dollars per quarter just to have the meter so it just didn't make sense to put all that money out and we looked at it and projected that it would take us about 14 years to make up the costs that we would be putting in so we did examine all that as the water department suggested and now

▶ 13:10 we're charged at this high tier rate and we're just people with a little small apartment most of them were elderly Melrose residents that gave up their units we just had another unit sell this weekend to a well-known veteran in the city and you know he's coming in cutting his costs for his home and he's coming to this big expense so as I said we did have to put in a new assessment part of it was for our winter cost which is non related of course but the other part is the high water bills we've cut down our electricity and our other utility bills by using alternative sources but it just seems like it's unfair and no one is really paying attention to these elderly residents and the rest of us in the

▶ 13:58 building they're in a little 1100 square from 700 square feet to 1150 square feet unit and we're being charged at not a residential rate like the little person down the street in a home that size that's it if anyone has any questions for me that's that's not the way public participation works we just listen to all the public comments at the beginning all right and then your comments may be be referenced or any questions you may oppose during your participation may be addressed and answered during the course of the meeting but it's it's not a discourse all right thank you for the opportunity to let me speak thank you very much thank you thank you other members of the public please seeing that motion to close thank you thank you good evening i'm back my name

▶ 14:57 is lewis franchi from town estate apartments on pleasant street i spoke the other day mr you live there no I don't we're the owners of the property okay and but what's your what's your home address well I'm sorry it's 16 Pilgrim Road in Newton 16 what route 16 Pilgrim Road in Newton okay thank you very much thank you just brief I'm gonna give you a little brief background on town estates town estates it was built in the early 70s it consists of 266 units there are 132 two-bedroom units 132 one-bedroom units and two studios the size of the units range from just over 500 square feet to 800 to 900 square feet there the there are 12 buildings that make up town estates and Each building has approximately 22 units in each building.

▶ 16:01 There is one water meter for each building, so we have 12 water meters that feed 22 units. We also have one, each building has one central heating system and hot water system that supplies the water and the heat to the residents there. it and that heat and water is included in the rent now because of the building system and the age of the building it is physically impossible to separately or sub meter this building like the newer buildings and new apartments that are being built today are required to do or recommended to be done it's physically impossible the buildings would have to be raised and rebuilt in order to accommodate this these units again one bedroom which may have one resident in

▶ 17:01 it or two residents but maximum of maybe four residents at the max we have approximately 20% of the units are senior citizens we have over 8% residents have been there for over 20 years actually we have five residents that have been residents have been there for over 40 years so they make this Melrose town estates their home and and 13% are 10 years or longer we are in the situation that we pride ourselves on keeping our units and accommodating reasonable rates if you look at our rental rates compared to the others in the area we find that we have been a very I think an important piece of Melrose that people can have an affordable place to live in 2000 from 2008 through 2010 when we knew the economy was in a tough situation we

▶ 18:14 didn't raise the rates at all we held our rates for two years 2000 at 2010 to 2013 we had a modest two percent increase in in our rental rates that was like $25 a month that we went up in the last since this new tiering system in order to we've had a rental water rates excuse me because I'm a little frustrated you know flustered here our water rates have increased for the same amount of usage because we track these and we track these for our own process almost $100,000 in that period same period of usage now we've had to do is now raise the rent rents dramatically in the last three years and we find that you know this is going to be a hardship to some of the residents that we have here we've spoken to our attorney about how trying to work

▶ 19:12 something out for some of the seniors that we have in our building and we're trying to work something out there but mainly we are you know we are put in the situation that the rate we have no way out we cannot change our building structure to accommodate the new tier system and we are stuck we were imposed with the new tier system and we without any recourse or any way out and they can impose any rate they like and we would have in the residence or ourselves which in turn would have to somehow get to the residents would have to pay that rate rate and we feel that an averaging if you average our units which we track on a you were gonna say something so no oh I thought you were about to say something

▶ 20:07 no sir we tracked us on a graphing program and we are on the average we are well below the the first tier level of water usage per unit and I just would just find it fascinating or just frustrating that we were put in this situation now we understand the budget constraints and the needs for the water department from other agencies to to have these tiered systems but a residential program that should be looked at in a different different light. We are not a car wash. We're not a commercial abuser of water. It's just as if we had 260 homes in that particular area. All the water pipes on our property are private, so if we have a break, we're responsible for anything that feeds from Pleasant street onto our property so we're responsible for that repairs so there's

▶ 21:17 not really an imp we're not imposing on the water department in that respect I have a few other notes and I think that's all I have to say I appreciate your time but again I would I hope that the board would look at this and in a different light that you know again it's it's it's we don't have a way out yeah to to solve the problem and and whatever rates the water department imposes where we're stuck unless there's some type of averaging thank you very much for your time thank you sir any other members of the public wishing to come forward good evening mr moroz hi boston rock road oh for mount vernon street what number please for the record 62 62 mount vernon street thank you hi as previous

▶ 22:19 speakers all spoke to the problem here didn't exist before two years ago and i sat here two years ago and said this is not an equitable way that was the word that was thrown out a thousand times in a couple meetings that that year that spring and it's not equitable to be charging some people in Melrose one rate for water and some people in Melrose a different rate for water. It's inequitable. The old system was actually a pretty good approximation of things. It could have been changed a tiny bit one way or another, but the truth is that the MWRA bills us by our unit of water. The more water we use, they don't bill us at a higher tier. They bill us at a flat rate it seems that underlying the whole change in the rate tier the introduction of the rate tiers

▶ 23:14 is an element to try to put more costs to put it bluntly on users like the hospital the hospital is using a huge amount of water there's some resentment that we don't get a payment in lieu of taxes from them that we feel is sufficient in some way and so we want to make them pay more so what do we do we have this tier where they pay a huge amount primarily at the third tier all of their the majority of their use but you're hurting all the little people in between time and it's not just the condominiums and the apartments it's also the families that have five or six people there maybe they have you know three generations living together you're hurting those people and you're hurting them directly and of course we need to pay for the

▶ 23:55 costs of our water and sewer enterprise in some part with the rates that come from water and sewer I do think that in principle that the city owes, or the city has some burden to pay for the infrastructure of water and sewer, at least in part, through our tax base. It's a public good to the city. It's not just the cost of people. And in fact, by apportioning it by the use of people, it makes it even further inequitable. We all benefit from the infrastructure of water and sewer, whether we use a gallon a quarter or whether we use, you know, two million gallons a quarter. We all benefit from the infrastructure, and that's not an equitable way. You're relying on, and you relied on two years ago, a study done by this pioneer consulting group.

▶ 24:41 I don't even call it a study. I don't consider it a study. In fact, in what was produced this year, it just basically did a calculation. Oh, here's the rates. Here's what they'll produce. Here's the rates we propose next year. Here's what they'll produce. They didn't give you alternatives. It didn't say if we do a flat rate structure, at this level we'll cover the same costs. Versus a three-tier structure that they they put in there. There's no study involved. There's no thought involved There's no analysis involved. I believe that the board is relying on something that wasn't well thought in The tiered structure in the first place and that there's been After two years of it now and we know what happens. There's no analysis as to what we could do differently to make it better

▶ 25:24 The old system if I recall correctly assumed that everybody obviously used 100% of the water that came through their meter, and for the sewer part of it, we ascribed that they'd use 90% of that sewer. Whether the 90% was accurate or not, it's probably closer to 100% on average as people use sewer, except for the people that have outside water use for, you know, lawns, gardens, car washing, and pools. And this is another fallacy in the rate structure that I don't think should be there. You were charging people $50 per quarter to have a second meter. You were acting like it was a privilege for them not to have to pay sewer costs for water that they weren't putting down the sewer. If you're not using the sewer, and you can show you're not using the sewer, you shouldn't have to pay that cost.

▶ 26:17 I actually think that it was a fairly fair system where the people who had the second meters, the sewer deduct meters, were paying 100% of their water use because we were clearly showing their outside water wasn't getting sewerage at all. Whereas other people who didn't have the second sewer deduct meter were able to take a little percentage off. Let's say it was 10% off that we were assuming that they were putting in the sewer. That probably wasn't bad, it could be maybe 95% instead of 90% as we had it, but it wasn't far from real. What you have right now in apportioning the cost amongst members of the community is very far from the costs representing the real cost to the city of the people's water use.

▶ 27:06 I don't believe you should have this sewer deduct fee, even with the $35 reduced as you have it now. $50 was actually, I want to be clear. talk about annual rates you were charging people $200 a year just to have a meter that would show that they weren't using some water and putting it in the sewer now you're choosing to change that to $140 a year I still feel that that's an egregious amount of money now again I don't think that the board can make a decision an honest decision without having an alternative before it you've had one thing that you're considering either vote up or vote down and of course with no alternative you're probably going to vote it up but I think that the if you're going to hire a consultant and pay all these thousands

▶ 27:56 of dollars to a consultant they ought to do some analysis they ought to show you what the options are they ought to address the issues I know there was some I I'll tell you I try to go to water and sewer committee meetings but you know I'd almost have to be clairvoyant to figure out when they are and you know be able to look at the city exactly 48 hours or within advance to find the meeting and get to it. I've tried, I've been to a couple over the years, but I understand from seeing some of the minutes that they were talking about trying to do some kind of a procedure for some type of people to make it a little bit less onerous on them because of this thing. But if you do it for a few people in some circumstances, but don't do it for everybody, the whole class of

▶ 28:34 users, you're not doing it well. The old system wasn't broken. You wanted at some level to have the apparent water rates that you can show us, that tier one rate, look as low as possible, I believe, for relatively political purposes. You want people to think, oh, we have a good water rate, and oh, well, yeah, we have to pay more because we just have a lot, we're using a lot of water. And, you know, you act like you're trying to punish people. The presentation a couple years ago was that you were trying to punish people for being egregious users of water. Most people aren't egregious users of water. The people that use more water typically willing to pay for it the issue that you often respond to here as as aldermen is the fact that

▶ 29:19 people do get leaks in their house and their water use suddenly shoots way up and they think they haven't used any more water but it turns out their toilet was running or there was a hose faucet left open for four days in a row or something and that that that that's a real issue but a flat rate of water is a fine rate of water so that everybody uses water and pays the cost of the city and in fact if you keep a flat rate of water you actually still put a burden on the people who are larger water users if our water rate is apportioned that a lot of our infrastructure costs are covered in the water rate. The people who use higher amounts of water are paying proportionately more for infrastructure purposes than the people who use small amounts of water. I think that is still

▶ 30:14 inequitable. I think it would be better to have, as I said before, the city pay the city's portion of the infrastructure. You could certainly apportion some of the infrastructure costs into the Water and Sewer Enterprise Fund. But at some level, I think that a fee-based system ought to be charging people for the marginal cost of what they use. So for every extra hundred cubic feet of water you use, you pay the amount that it costs us from the MWRA almost for that extra hundred cubic feet of water. I'm not saying it has to be exactly that. We can certainly, you know, there's certainly things that can balance the equation on different sides. So the same things apply with sewerage, a little bit differently. Sewerage isn't a

▶ 31:00 flat rate from the city from the MWRA to the city but at the same time a large portion of our sewer costs are because we have inflow and infiltration that we don't manage or don't manage as well as we could or as effectively as we could as I've said before I think that we ought to be investing in in I&I work at a at a pace faster than other communities because that in and of itself will save Melrose and all of our citizens here more money than almost anything else we do and the savings that you could show by making investment in INI would bring those water well the sewer rates down certainly much that lower than they are now the three tiers of sewer is still a tax on the people who use more water I feel it's an unfair tax and I think that that could still be

▶ 31:55 a flat rate for all people in the city that you pay the same amount per 100 cubic feet of sewer whether you use 100 cubic feet or 200 cubic 200 hundred cubic feet or whatever it's not it's not an unfair system again to rely on the study that was done two years ago last year this year that wasn't a study you could have somebody even within the water department do a very competent study without paying separately for it to say that you know it's a simple spreadsheet this many cubic feet of water to cover this much cost this is the price per cube per hundred cubic foot now there's one other element that i'd like to address is the water and sewer enterprise accounts to me miss mr morose we we have a 10 minute limit okay you're getting close to that you have

▶ 32:48 it 11 minutes now okay i'll finish up i'm going to allow you to continue for a few more minutes okay thank you but please keep a view towards wrapping up thank you this is my last point it appears as if we're loading a lot of city costs into the water and sewer enterprise account now i know that you can say that certainly the public works director spends some time on water and sewer and the deputy does and other people do and the people that clearly work within the water and sewer department do when they're working on water and sewer but at the last meeting i think a couple meetings ago i heard you know that well the water and sewer guys were plowing snow and my question is did anybody account for the fact that was snow plowing rather than

▶ 33:25 water and sewer work and so is their salary still built into the water and sewer enterprise fund that's a small amount of it though a larger issue is i don't see anywhere that the city is actually paying from the city side its water and sewer bills it appears to me that the expenses of the city for all the schools for city hall for for the public works property the police station the fire stations are all put into the water and sewer enterprise account those expenses are all put in there there's no city funds from the tax base paying for them and you're relying on water rate users to do that that again is taking stuff that should be part of the tax base and apportioning it to people at an unfair rate you're basically taxing people at different rates on that city

▶ 34:08 use of water and sewer clearly let's add that in there that's the larger cost um for that the larger higher water rate users are paying more of what should be paid by the tax base than the lower water rate uses again that's a cost that's added into the water and sewer enterprise account that i don't believe should be there i think the city ought to be paying at the same rate and if so the city and where we all bear this is the burden is part of the tax base but we are the city is going to be paying a lot of water at the tier 3 rate and that's going to be a lot more money and maybe then you'll be more sensitive to the fact that maybe we the three tiers isn't quite so so rosy um another element about that is that it sounds as if there are more

▶ 34:50 positions you know i don't know why anybody would say that the recycling coordinator some of her salary would come out of water and sewer that the water users should be used and why the mayor's assistant salary part of that should come out of water and sewer and and i i looked and looked because i thought that there was going to be posted a um a listing of all the different salaries online and what proportion in the water and sewer account versus the city account i didn't see that is i can just ask the question is that posted because i thought that was requested at one of the meetings a couple a week ago and i haven't seen that but perhaps someone will answer your question during the meeting but this is not a conversation okay well it's just it's

▶ 35:29 just that i was hoping to have that information for tonight because i did want to address that directly so in summary the issue is is that the water and sewer account is paying for a lot of things that ought to be paid by the property tax base or the tax revenue not the water and sewer revenue and um and the idea of tiers just makes no sense you know you didn't have this issue of people years ago coming up and complaining about the rate tiers and the people had a hundred thousand dollars extra for a property you are putting you are treating different classes of citizens differently people who tend to live together who are living in a in a place with more people in one place you are penalizing them it's almost you know against the right of freedom

▶ 36:11 of association and so i wish that you would in this year correct this issue correct it now if somebody wants me to to give me the numbers i'll do the calculations and figure out what the rate should be for this if you'd like to make it a flat rate because it's not right that it has this three tiers without any support there's no support in that study at all justifying why three tiers is good and and you know the the the words that are thrown about equitable and conservation all these other things they don't apply all you're doing is taking more money from some people and and hurting them and hurting them thank you thank you mr morose any other members of the public wishing to come forward no no we don't i'm sorry no no you're good if you wish well am i honoring my

▶ 37:03 absolutely yeah one of the aldermen just didn't see you making your move she was ready to close public participation but you are more than welcome to speak okay well that's going to be a hard act to follow joan layton 49 melrose street number 5c i was here monday night i've also sent you written information and i'm not going to add a whole lot to what you already know but it occurred to me it's kind of odd we're 164 individual unit owners we get 164 tax bills real estate tax bills and just a guesstimate is we pay and this is just based on my unit which is a one-bedroom unit at least three hundred sixty thousand dollars a year in real estate taxes and it's obviously more because there is an equal number of two-bedroom units whose taxes are higher if there were two or

▶ 37:58 three single-family houses on this very same property you wouldn't begin to get that amount of money in real estate taxes so here we are 164 units and we're individual units but when it comes to billing us for our water and sewer usage because we have only one meter in each building 55 people in one building are considered one so we were billed as if these this group of 55 people was one individual consuming obviously 55 people are going to consume more water than just one so there seems to be some kind of disconnect or contradiction here and as i've said a million times this really isn't fair and as of the other people have been saying it's not fair to over bill i don't think some of us so that that's basically it thank you miss

▶ 39:04 Peter D. Mortimer: layton any other members of the public wishing to be heard i think we're ready now alderman inferno Motion to close public participation. Alderman Inferna has made a motion to close public participation, duly seconded by Alderman Boycelle. All in favor, please say aye. Aye. Any opposed? Hearing none, public participation is now closed. The first order we have before us is order 2015-143. Amending Melrose Revised Ordinances, Chapter 228, Article 2, Section 228-15, water rates established for fiscal year 2016 as set forth herein. Is there a motion to suspend the rules? So moved. Second. God bless you. Alderman Forbes has made a motion to suspend the rules, duly seconded by Alderman Lemmerman.

▶ 40:01 Peter D. Mortimer: All in favor of suspending the rules, please say aye. Aye. Aye. Any opposed? Hearing none, the rules are now suspended. And regarding this order, we may hear from the appropriate city officials, please. Motion to join the first four orders on our agenda for the purposes of discussion. Alderman Medeiros has made a motion to join the first four orders on our agenda for purposes of discussion. Second. Alderman Boycelle has seconded the motion. On discussion? Seeing none. All in favor, please say aye. Aye. Any opposed? The first four orders are joined at this time. Gentlemen, please proceed. Good evening, everyone. Good evening. Just to give you a brief overview of the orders that are before you since our last meeting.

▶ 41:06 These orders come before you after an extensive year-long analysis and processed by the Water and Sewer Rate Committee. The process involved discussion, analysis, and input from members of the Department of Public Works, the auditor's office, the treasurer's office, our legal office, our consultant, high and air consulting group who's here this evening, members of this board, several of whom came to meetings and we had discussions with, and many numerous constituents in Melrose, some of whom are also here this evening. We reviewed options, we listened, we created new policy, we offered relief, and we feel, by unanimous vote of this committee, that a structure is proposed that is legal, financially sound, and in the best interest of Melrose.

▶ 42:01 the orders encompass six main things the general operating budget water enterprise operating budget for fiscal year 16 the general sewer enterprise operating budget for fiscal year 16 fy 16 water rates and sewer rates the proposed increase is 5.9 percent on every tear that's the combined increase on water and sewer rates base fees will remain the same there are no increases there is a reduction in the deduct sewer deduct from $50 a quarter to $35 a quarter also with the set of orders as authorization to borrow for continued improvements to the Melrose water system mainly on Tremont Street as we discussed in great detail the last meeting and the last portion of the orders before you is a proposed ordinance change that will essentially lift the moratorium placed

▶ 43:07 on second meters two fiscal years ago like i said we've discussed these items in great detail during the last meeting and we've provided some supplemental information based on questions from that last meeting rather than go into detail i just want to reiterate why the water and sewer committee decided to stay the course with this rate structure first and foremost tiered rates are the law we've provided the section of the general law and a review from our legal office in regard so when mention is made to remove it to stray from this the law requires mwra communities to have a tiered rate system with a base fee. Secondly, the rate structure resulted in positive cash flow both in fiscal year 14,

▶ 44:06 and you'll soon hear from the auditor that it should result in positive cash flow once again in fiscal 15. The structures provided financial stability to enterprise systems that were in deficit with no reserves. Today we can say that we will finish with positive cash at the end of the fiscal year and we can say that although we haven't reached our goals yet with reserves at least we can say we have some why why stay the course after consecutive years of seven percent increases this set of rates averages a 5.9 percent increase so we're trending the right way and the committee feels that through work with constituents members of this board and all these other departments we feel that introductions of policies have provided some assistance

▶ 45:04 and made some assistance available to larger condos and apartment buildings have provided those policies as supplemental information for you to review that is why we've decided to stay the course um before turning over to the cfo some more financial recap on our last meeting we we didn't speak to great detail about the meter replacement program i just want to introduce donna cardillo john is working with the department in the water sewer billing management capacity she manages the water replacement program she couldn't make it to the last meeting but she is here this evening we want to give you this information in great detail i know we've copied the board on a lot of information that's gone out the program is ongoing and i just want to turn it over briefly to donna and then

▶ 45:55 we'll pass it over to patrick for his review hi good evening ms cardillo thank you for coming so i'm here to talk about the meter replacement project we started it about three weeks ago we sent out about 150 letters to do a test we have about 7 200 meters that we're going to replace so we sent out the test each each resident will get three letters over a six-week period we're going to be replacing them by section so what will happen is we send a database of the section to the Bay State wind supply they're the ones replacing the meters we send them a database they send out letters over a six-week period the resident will get three letters an initial letter telling them to set up an appointment either online or by phone the appointment will take about 30 minutes to have

▶ 46:59 their meter replaced each section has about 1200 units meters in it so there will be two crews from bay state replacing the meters doing about 30 meters per day 150 a week 600 per month so each section is going to take about two months we have six sections in town that we build so it's a one year project um so we sent out 150 letters we're fine tuning that process right now making sure the two crews are doing what we want them to do making sure that we get the information back that we need to replace the meters it's all going pretty well we're finding out a lot of different information we're making sure our crews down at the city yard are are backing the two bay state crews up when they need the water turned off at the curb so we can make sure that the residents are getting their

▶ 47:54 meters replaced on time so it's all going pretty smoothly we're going to start with section c we thought we were going to start with section b but we're like 30 days behind schedule so we have to start based like right after we read and send out a bill is when we want to read that's the ideal time for us to read so we can get the meters replaced before we go back out and do another quarterly read so that's it we'll provide monthly updates to the board section c of the water reading system equates towards two one and two two ward two precinct one board two precinct two that's where the program is currently in the process of starting so one other thing too i guess i forgot we are advertising out on

▶ 48:46 the website we have frequently asked questions the nice thing about the website is we can continue to add frequently asked questions so if you have any ideas of things that we need to add i recommend that you go out and make sure that you check them out and tell the residents that they're out there they can also visit the city yard and we can give them the same information we've put something out on the mayor's blog and we'll try to keep that updated as to when we're moving on to from one section to another the meters do a lot more than the other meters that we had we can read the the meters remotely as we walk by we also have the ability to do leak detection which is a great advantage to the to the meters that we have now

▶ 49:30 because we can help people decide figure out if they have a leak we can go flash a meter and what that means is that we pull the data off the meter and it can give 90 day read prior reads by hour so if somebody's meters running through the night we'll know it and we can give that information we're also hoping to reduce the estimated reads this meter replacement project has been a long time coming and it was needed a lot of our meters and the way we read them now they put probes into the side of the house as quickly as we replace meters those old meters are breaking down so we have a lot of estimated reads so I'm hoping next year I can report that we have a lot less estimated reason we're reading

▶ 50:16 efficiently which will be a good thing thank you would you like to make any comments at this time good evening members of the board of all the men the citizens I come here particularly this evening to try to because I feel unnecessary I want to bring some focus on some of the comments that have been made and some of my own observations on the structure that we have adopted which I support 100% and I'm very very proud what the board and what the consultant has done that we have established a foundation we never had before one that we can monitor and one that we can manage in a way that was unheard of with this with the prior system that's the reality first I feel it really necessary to talk a little bit about the limitations imposed upon

▶ 51:24 municipalities within the MWRA district, for which we are one, and John Schenner touched on it. I want to emphasize the fact that we do not have unlimited flexibility to operate. We do not have unlimited flexibility to operate. We are mandated to conduct business according to the rules and regulations that pertain to communities within the district in order to comply with the law we are required to establish certain structures and systems which we have done secondly I would like to provide you with an update on how each fund is performing here today that would be the end of May the purposes of this evening and finally some observations on the future first it needs to be understood that there are restrictions on what we

▶ 52:23 can and cannot do there are some things we simply cannot do there is no magic bullet here to be found if anyone's looking for it they're not going to find it period I want to be very clear with that the system the city adopted to account for our water and sewer operations is required under Mass general law chapter 165 section 2b which reads in part all municipalities or water districts within the jurisdiction of the Massachusetts water resources authority shall shall 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's what the city of Melrose did we adopted a

▶ 53:28 tiered rate water and sewer billing system as required by state law that's the law there's no gray area here secondly we are required to follow directives from the Commonwealth of Massachusetts Department of Revenue Division of local services on when revenues are recognized on the books that's the law the treasurer collector's office follows all state mandated guidelines for purposes of revenue recognition this city has always and always will maintain a record of strict adherence to municipal finance accounting and auditing rules and regulations as promulgated by the Commonwealth of Massachusetts Department of Revenue there's no gray area here third we are required by law to make payment to the Massachusetts water

▶ 54:31 Resources Authority each year for the annual assessment for both water and soil cost that's the law all else being equal this means the rates must be increased each year just to pay this increased cost from the MWRA again there's no gray area here I'd like to take a moment now if I could to discuss the largest component of each budget and where we stand on revenue and expenses and if anyone wants to ask any questions obviously through the chair feel free at any point we happy to address them by far the largest cost component of each budget is the MWRA assessment for FY 16 the MWRA has increased the water assessment by seven point seven percent and it's now over two point eight million dollars this assessment alone represents almost half of the total

▶ 55:40 revenue requirement budget for FY 16 so the water budget alone almost half of that cost is just that one assessment period let's talk about sore the sore assessment also increased by almost three percent it's now over 6.1 million dollars and that is not any of the cost within the enterprise that's just the bill from the mwra alone this assessment hold on to your chair a loan represents close to 75 of the total revenue requirement for the budget for fy 16 75 just that one line these are very big numbers and the stock reality is they they are not expected to go down anytime soon as of may 31st 2015 consumption again within the city is down by 2.3 percent from last year it's something we cannot control

▶ 56:48 Consumption, as everyone knows, drives revenue, so we must watch this factor closely as our revenues are directly impacted. Water revenue in expenditures as of May 30, 2015, water revenue was up 1.9% over the same time last year, while expenses are up 4.7%. Revenue and Expenses as of May 30, 2015. Sewer revenue is up 7.4% over the same time last year, while expenses are also up 7.4%. Very interesting. Water and Sewer Reserve Current Positions. The Water Enterprise Fund has just over $241,000 in reserves, and the Sewer Enterprise Fund has just over $200,000. The results of the current fiscal year we are in will be realized in the fall when the Department of Revenue certifies the available funds.

▶ 57:58 It should be noted that allocations for reserves comprise approximately 2% of each budget, 2% of the water and 2% of the sewer for FY16. The five-year goal of the Water Enterprise Fund is estimated at $525,000, and for the SOAR enterprise fund it is $750,000, which means we have a way to go to meet our goals. In fact, we are less than half the way there for water and just 26% of the way there for SOAR. Therefore, we clearly need to stay the course and continue this multi-year reserve funding program. I am pleased to say that the FY16 Water and Soil Budget Program continues the effort at building our reserve levels. This is a critical component of both funds, and the Department of Revenue, Division of Local Services, is monitoring our adherence to these reserve policies.

▶ 58:55 That's what we told the Department of Revenue we would do when we instituted those policies. In summary, it is my opinion that the community's collective energies need to be directed at the continual significant rate increases passed on to this community by the MWRA. There are multiple reasons for this. The most obvious is that there are no limitations on percentage increases passed on to participating communities by the authority for one. This fact alone creates a difficult environment in which to do meaningful long-term budget planning, and as a consequence, stressful budget deliberations for participating communities each year. Secondly, the Commonwealth of Massachusetts needs to consider true fiscal rate relief

▶ 59:56 for participating communities as the need for increased infrastructure costs are on the horizon by the authority. And unless something is done at the state level, the existing communities will surely bear the brunt of these new capital costs period and finally as i stated earlier if you held all other factors consistent with the previous year you must still raise the rates just to cover the increased cost placed upon the community by the mwra assessment and there have been terms this evening that you know people feel locked in and nowhere to go when we're in a corner Well, in many, many ways, the fact of the matter is, when they pass that bill on to us, we're simply a pastor as a community.

▶ 1:00:48 It's an obligation we're required by law to pay, period. We're a participating community. We have nowhere else to go, and they are providing the service. That's the reality. And finally, as far as Donna touched on it, and I think John did too, where we may end up this year, I would, all else being equal, we're hoping that water will come up with about $110,000 in positive cash. The water fund and the sewer, approximately $175,000. And this prior year, for purposes of reference, water actually came in at just over $160,000 and sewer at $194,000. And I want to really caution the fact that we are not at liberty to dictate what those dollar amounts will be. That is all dictated to us by the Commonwealth Department of Revenue Division of Local Services.

▶ 1:01:49 We provide the data, they certify what is available, period. Those are simply based on what we know today on cash inflows and expenditures. Thank you. Thank you, Mr. De La Russo. President Kahn, please. Yeah, I just have a few questions, Mr. Chairman. So the water sewer committee is obviously recommending that we continue on with a tiered rate structure, is that correct? That is correct. And why is it that you didn't consider going back to a flat rate fee structure? The commonwealth through the master and the law requires us to use a multi-tier structure, period. So it's not feasible or maybe not lawful to return to a flat commercial residential. Based on everything we know, that is absolutely correct.

▶ 1:02:45 And there's been some discussion by constituents about trying to average bills for larger residential buildings. Why isn't the commission making a recommendation for averaging of bills of condominium or apartment dwellings? Averaging is illegal. It creates a discriminatory rate. This case study and our attorney, Rob Van Kampen, helped us with this. Flatley v. The City of Melrose. Sorry, Flatley v. The City of Malden created the case study that pretty much pretty much dictated averaging of water bills is discriminatory this is a consumption driven tiered system bills are based on consumption not an average of consumption and has the city solicitor looked into the legality of an averaging he has in fact up this morning I

▶ 1:03:47 forwarded information along directly from the city solicitor that speaks to both i forwarded it to the board that speaks to both the general law that requires tiered rates for mwra communities and references the flatley case flatley versus malden and how averaging of water bills is not legal what other solutions has the commission to the committee looked at in terms of trying to address the problems presented by large residential buildings we've looked at various options with the tear this year we looked at an option that held the top tier at its current rate we looked at an option that spread the spread the increases a little differently than what was proposed ultimately we decided to go as a committee with

▶ 1:04:44 with an increase that's that's fair in each tier that's how we got to five point nine percent increase at each tier last year the increase is varied as a committee we've we've looked at adopting some policy within DPW that allows for condos to individually individually meter I know this evening you heard from two two condo associations that couldn't but I can tell you that one condo association has last year we did that was not our policy but this year we we do allow condo associations to individually meter we provide them with those meters we help them through the process we help them through the financial analysis with donna and i and our staff on whether it's worth the investment of them going in this route so that's one thing new that we do

▶ 1:05:41 this year that we didn't do last year we were also ready to start a program on July 1st in FY 16 it's it's a hardship abatement program in which condo associations and or apartment buildings can can apply for a hardship abatement abatement it's a four-quarter discount and and what it does is offers some relief to these associations to these businesses these apartment buildings that gives them a year of relief to whether it's make improvements to the building or whether it's to just restructure leases or restructure contracts to further adapt their business with our business both of those both of those policies I've provided yesterday to everyone on the board just to refresh our memories but the individual metering of condos was

▶ 1:06:43 something that was put in place in the fall by the committee and the hardship policy abatement is something that will start next month in the department now my understanding from reading the voluminous material that has been provided to the board relative to these issues is that you're recommending that we lift the moratorium on second meters or deduct meters or whatever you want to call them and in past years we've discussed that and we would told that we were losing large amounts of revenue if we didn't take some action to curtail the use of second meters can you explain to me what the rationale is of the commission as it relates to requesting that the moratorium on second meters be changed

▶ 1:07:31 i'm just going to find my notes regarding the second three years ago we basically put the brakes on everything a consultant recommended stopping second meters in its entirety we adopted put in the moratorium which essentially allowed people who had second meters to stay the course and continue with their second meter when the property sold the second meter went away We were dealing with an accounting system where we didn't know how many second meters we had in Melrose, to be perfectly honest. We were dealing with a lot of theoretical. We were dealing with a lot of unknown. And we were in a state financially in the audit this year where we were in a state of concern financially because we had two enterprise systems without reserves.

▶ 1:08:28 we we decided to adhere to the recommendation of our consultant at the time with three years removed from that with three years of we have three years of real information three years of data and how second meters are working in this tiered rate system we have three years of listening to people who don't have second meters we have three years of new homeowners coming into Melrose investing in their property say hey can i turn my second meter back on and we have to say no what we have right now is what is an inequitable system we have a situation with second meters where i can have one my neighbor to the left has one until he sells the house the neighbor to my right that can't have one because he bought it recently that's really not fair that's a very difficult

▶ 1:09:20 thing to to administer but in 2013 we made the decision based on everything that we spoke of right now i can tell you there are about there are just under 1200 second meter accounts in melrose 1196 to be exact donna knows where they all are we've requested all of these second meter accounts to upgrade their second meter at their own expense to so that second meter coincides with the new metering program people are doing this at the expense of 300 350 400 before it's all over said and done these people deserve the right to keep that second meter these people deserve the right to pass that meter on just as if they do their kitchen over if they do their bathroom the second meter essentially they're investing in their home and after three

▶ 1:10:14 years of of listening to several people and working with several of the aldermen we feel that second meter is an asset that should stay with the home and the current system doesn't allow that to happen what are the impacts what are the true impacts we spoke three years ago of second meters impacting sewer rates theoretically the second meter program and the sub and if the subsequent discount didn't exist with the second meter program we would have a greater base to charge sewer against we have a total water consumption and we take our costs and we spread it against that total water consumption if the second meter program didn't exist we would have a total sewer consumption which would equal water consumption because that's how we figure it out

▶ 1:11:03 we measure water used and now we say that's how much sewer cubic feet you use so if the second meter program didn't exist we would have a greater base to charge sewer against which would mean theoretically we would have a lower rate but at what expense people who use outside water don't impact the sewer system for the most part yes there's some III you can argue that but in all practicality if you're filling your pool with water if you're washing your car it's not going into the sewer system if you throw putting water on your grass it's not going into the sewer system the majority of outside water use through second meters doesn't impact sewer but there is the theory behind this greater base that doesn't

▶ 1:11:44 exist because of the program and and hence you have higher sewer rates because you have less of a of a consumption to charge against the truth in second meters is that the it impacts the water rate when you have second meters people will use more outside water because they don't have to pay the sewer pot that means we as a community use more MWRA water that means as a community our MWRA consumption is higher we take a larger part of this system and our rates can be slightly higher and what's this all mean we did a brief analysis and again it's it's a complicated subject to discuss we're trying to keep it as bland as possible to get the points through second meters account for seven and a half percent of our overall consumption so what we did

▶ 1:12:40 internally with daughter and her staff is we looked at these 1100 1200 accounts he says okay how much water that they actually use they actually used about seven and a half percent of our total consumption and this is we looked at real 2014 data seven and a half percent of the water budget let this and for fiscal 15 was 350,000 we brought in roughly 600 with the second meter program we brought in more than what that portion of water used so the system isn't the system is paying itself off we're not losing a lot of water because of it and so why have to administer a program it really isn't fair to all users of Melrose when financially it looks like because of this tiered rate and because people the more water they use they're getting up in the higher

▶ 1:13:39 rates so they're paying more for that water essentially it seems like we were covering our we're covering our expenses we felt as a department after talking to several people that this was the right thing to do we we brought this to the water and sewer committee we had several discussions many residents came forward also in support of this and we we feel that lifting the moratorium allowing second meters to be reinstalled allowing second meters to pass from owner old owner to new owner is the right thing to do and that's why we're proposing that ordinance change to the board unanimously this evening well you know mr mr chairman um i did support the moratorium when we put it in and uh i'm gonna say something that i've only heard me say in this horseshoe in the 16 years

▶ 1:14:33 that i've been sitting here and i had some reservations about it an aspect of it didn't make sense to me but i supported it and i was wrong to support it we made a mistake and I think we have to be willing to acknowledge when we've done something that needs to be fixed I regret that I didn't discuss my concerns more two years ago usually I do discuss most of my concerns but you know it's our responsibility to support this if in fact we are not losing revenue as a result of second meters so that that's one of the things I want from this water rate committee is if we need to fix aspects of this system we want to know about it and we want to correct it as it relates to the meter replacement program

▶ 1:15:31 what percentage of the city is gonna have new meters as of say Labor Day so So like 30%, we have 7,500 meters, so 2,400 will be replaced by then, hopefully. And what about end of calendar year? By November, we should have half done. And then by December, we'll have another 600, so yeah, 34,000 meters out of the 7,500 that we need replaced. It's a 12-month. For me, I see it as each section takes two months, and we have six sections, so it's a 12-month process. We just did the test in May. We're starting right now, June, with our first section, so it's going to take one year from here on in, and we're going to be doing 600 meters per month. I'll use a lawyer's term, the lawyer's term seems to be weasley and good to use in circumstances like this.

▶ 1:16:49 When are we going to be substantially complete with the meter replacement program? Okay, this year at this time, I hope to be sitting here and telling you that I have 90% of the meters done. There'll be 10% that we still have to- Next year. We won't, yeah, next year, a year from now. There'll be 10% that will have to send letters. We'll have to probably knock on their door to get into their house. Yeah, I think all people who are involved in municipal government know there's some section of the citizenry that it's difficult to get to cooperate relative to programs of this nature. So there's the 5 to 10% that you have to chase. So the three letter campaign, in six weeks you'll get three letters.

▶ 1:17:34 You get an initial letter, two weeks later you're going to get a second letter reminding you to sign up. And then two weeks later, you're going to get a final letter saying, please sign up. Or we'll come knocking at your door, I'm sure we'll have something that we're going to say. But I think the schedule's going to fill up quickly and I think we're going to be busy over the next six months. We're going to be replacing meters too on Saturday, so it's Monday through Friday and then all day Saturday. And the replacement, most of the work is being done per contract with a third party contractor. So we're not going to have public works employees out on weekends working overtime replacing meters.

▶ 1:18:20 No, our crew assists occasionally, but it's all during the week. They don't have any assistance from us on the weekend. Now, if I could move on to another issue. Mr. Mraz and I have talked for many hours about I&I. And I agree with him that the more I&I we do, in the long run, the better off we're going to be. But in terms of how much money we devote in a given year to I&I, I think it's a question of allocation of resources and what the city wants to do, in the rate setting commission wants to do relative to how much we want to devote in a particular year. Now I know last year we had a million dollar loan that we devoted from MWRA that we used for INI, is that correct? That's correct. And what, and I'm throwing around jargon and

▶ 1:19:12 I apologize because there may be people at home watching us that are actually listening to what we're saying. INI is inflow and infiltration and that is water that's getting into our system, that we have to pay for when it goes out and it's metered by the MWRA, so that's what I&I means. So we did a million dollars worth of I&I with the loan from the MWRA in the fiscal year we're in right now, correct? Correct. And what are we going to do relative to I&I in this budget and this fiscal year? So I&I, that million dollar investment, which is about 90% complete right now, I provided some charts of where we worked in the city with that. I also want to say that our engineering team that worked in Melrose just nearly four or five months on I&I in Fiscal 15

▶ 1:20:04 reports that the project will probably remove about 123,000 gallons per day of I&I. So assuming the current rates, MWRA rate structure, this results in a rough savings of about 490,000. I provided that as follow-up supplemental information yesterday. does that mean we say four hundred ninety thousand dollars on the rate no that doesn't mean but the amount of I&I that the project took out based on what it costs to take that out of Melrose that's about four hundred ninety thousand that now that obviously has to be put in that's only a portion of the MWRA calculation on how they address sewer and it's obviously part of a three-year average but you can see that you invested a million dollars and and

▶ 1:20:53 we're saving 400,000 towards that assessment we're taking this information the last part of the work that needs to be completed as a post flow analysis we measure the flow in these sewer mains before we start the project we measure the flow after we start after we complete the project once that information is ready I felt it will propose another program and it's our Our goal to propose a new three year CIP for I&I the latter part of this fall, early part of winter, so that we can quickly go back to work next year. There is MWRA funding available, same grant loan type of program. We're not in a place right now to propose a new program, but we will be within six to eight months. As soon as we get the true results from this program.

▶ 1:21:43 And is the I&I work that you're contemplating going to be through the water sewer enterprise system and borrowing from the MWRA, or is any of it going to be part of the general budget? Well, I think right now we're going to stay the course, and we're going to continue to invest like we always have on our sewer system from our sewer enterprise system. okay and I guess I'm gonna talk about something that nobody wants to talk about but it is a bit is it an issue what I would like to know is what do other municipalities in the MWRA do relative to use of water by the municipality itself and I don't expect you to answer right now but I would like to know whether other communities approach this the way we do here in

▶ 1:22:38 Melrose where it's traditionally been done and I don't know the answer that's why I'm asking and okay maybe I don't want to know the answer but I think it's something that we have to grapple with you know do other municipalities essentially pay for the water that they use or not and I you know you may think I'm trying to set up a stocking horse here but I do not know the answer so I would like I would be interested in that certainly well I limited my question to MWRA when I started but then I I pontificate it so I think you'll ask the question in the- Mr. Gardner, you have something to- Most do not. Most do not. It's absorbed by the . Yeah, if we could have some kind of survey information or something, that would be something that I would want to see.

▶ 1:23:35 Jaclyn L. Bird: I at least want to know what we're dealing with here. I've talked more than anybody else here probably wanted me to, but I'm done for now, Mr. Chairman. Thank you, President Kahn. Any other Alderman wishing to be heard? Alderman Byrd, followed by Alderman Lemmerman. Thank you, Mr. Chairman. One of the things that I'd like to hear about, I understand that the proposed, I don't know if it would be solution, but proposed idea earlier about averaging for large residential properties, for condos, apartment buildings that that idea that that's been we've been told it's unlawful okay do we know of other cities and towns that have faced this besides the situation in Malden I thought some other communities that we talked about

▶ 1:24:28 Jaclyn L. Bird: in the past were looking into something similar Natick or Newton one of them and I'm just curious as to was this a single case that came about recently that changed that conversation and just I'd like a little bit more information on sort of what other communities have tried and where they were successful and where they were not successful I'm just wondering if averaging is the only thing that they've looked at if they've looked at other issues as far as like condo discounts anything like that I do want to stress I am fully aware of the fact that if we give some sort of offset to one particular tier or group it's going to affect it someplace else I get that but I also want to just make sure

▶ 1:25:06 Jaclyn L. Bird: that we have enough information to make good decisions about this and I I'm you know I understand the concerns of those who spoke earlier tonight and used to live in one of those buildings and I you know I understand that they feel trapped by this particular system and I want to make sure that we have as much information as we possibly can about what some of these other communities are doing in the MWRA area condo issue it's a very valid question and it's something we looked into in the fall I'm gonna have Doug join us because he did that analysis of what other communities are doing hi good afternoon good evening um would you introduce yourself oh sure i'm sorry doug gardner pioneer consulting group uh i'm the

▶ 1:25:50 city's consultant for the water and sewer rates and this is water and sewer enterprise fund thank you um thank you uh so in terms of averaging um when you there are two methods of charging for water consumption you have the meter method that is the water travels through the meter and regardless of um the type of structure you pay for what goes through that meter you have a three-step rate so if everybody pays the same for the first two thousand cubic feet and then for the next eight thousand cubic feet there's a second rate and then anything anything in excess of the ten thousand cubic feet is at the third rate what flatly versus malden addressed and i was involved with the case i set the rates in malden or the firm that i worked with at the time set the rates

▶ 1:26:47 in malden we were heavily involved in the case flatly and a couple other developers sued the city for uh discriminatory discrimination in terms of rates and what they wanted to do is move to what is known as the unit method so that regardless of what size meter you have in your property if you have for example a 25 unit apartment building you would receive 25 minimum bills and then all consumption would be divided by the number of units so the 25 and you would come up with an average and so if you allow 2 000 cubic feet in the first step and i picked 25 because it's easy it's easy math that i can do in my head so if you have 25 units and you're allowing 2 000 cubic feet you multiply the 25 units by the 2 000 cubic feet

▶ 1:27:58 and you your first step consumption would be up to um whatever that is 50 50 000 cubic feet you would not hit the second step until that meter reading exceeds 50 000 uh and it works for the next two steps as well you cannot set the unit method for only apartment buildings or only condominiums it would have to apply to two family homes three family homes four family homes however many units are in a building is how it would be calculated it's a tremendously time consuming and difficult calculation you have to work closely with the assessor's office if building codes change you go from a multi-family home to a single-family home the whole rate structure so very labor-intensive and what ultimately ends up happening is those units the apartment

▶ 1:29:00 buildings have the larger meter they have additional infrastructure that's required to get the water to that building all the costs that come with that the larger infrastructure are now shifted from the higher rate back to the lower rate so you're shifting a vast um you're you're shifting all that revenue or all that usage from the third step back to the first step so what's going to happen is you will see your first step rate increase greatly and you'll see your third step rate drop so you're going to be shifting the burden to the homeowners away from the the user that places the burden on the water and sewer system if you could talk a little bit just and I know we've talked about this in the past but it's probably been a

▶ 1:30:00 Jaclyn L. Bird: years since we talked about this in depth besides a few committee meetings here and there um can you talk about the cost associated and analyzed with the use of the third tier structures like why why the infrastructure costs are so high at that you know that they fall into that um sure you know burden on on the uh on the system the reason and you know i don't know if burden is necessarily i use that word a lot but it they place additional costs on the system and the reason being if you only needed water to go to homes and if the hospital or other larger users only use small amounts of water well you could run a six inch line down the road and everything would be great but because you have the hospital you have other higher users

▶ 1:30:50 instead of that six inch line you may have to run a 12 or an 18 or 24 inch line those pieces of infrastructure cost more money not only to purchase but to install and also to maintain their additional personnel costs or additional treatment costs additional mwra costs so the the larger the infrastructure the higher the cost you could think of it as a car If you could get by with a four-cylinder, your gas mileage is probably going to be better than if you have an eight-cylinder vehicle. There are additional costs with the larger infrastructure. Okay. And then do any of the communities in the MWRA offer any kind of condo or apartment complex discount, the way that we have a senior discount? No.

▶ 1:31:43 Jaclyn L. Bird: Do they do something, or do they offer? Not that I am aware of. i i would believe that that would be illegal okay based on other opinion other legal opinions i've received are those fairly recent legal opinions because that look it's from research that i did it looked like at least newton and natick had talked about some of these things as options and i'm wondering if because a lot of these changes have just happened in recent years if those things were thrown out as suggestions and then found to be illegal or how that worked um that i don't know but as your as your consultant and i am the consultant to the city and my recommendations are what i believe are going to be in your best interest i would not

▶ 1:32:21 Jaclyn L. Bird: recommend that have we looked into though any options like that and as far as what the impact would be for instance you know as president khan mentioned you know we this isn't this isn't something that is a perfect system over the last couple of years you know we there were questions raised last year about the second meter program um you know many of us had concerns about that it turns out it was probably a good thing to hit the brakes to get more information on it but it turned out that the information surprised us a little bit and i'm just wondering do we have enough information to know whether or not something like that would be a detriment in this case to the city or do we not know uh are you referring to the to the water like to a um condo or apartment

▶ 1:33:05 Jaclyn L. Bird: discount something like that i'm just curious if that's something that's been discussed over the course of i'm not the member of the the water and sewer rate committee and i understand i've probably missed many discussions that have gone very in-depth on some of these things but i'm just curious as to whether or not i believe we have discussed that with attorney van campen and he advised us that that would not be legal because you would be granting a discount to one class the customer but not to the other and our current senior discount does not apply to these it does not thank you alderman bird next we have all the one lemon please Thank You mr. chairman thank you for all of this information

▶ 1:33:48 Jennifer L. Lemmerman: and with regard to the the condos and the multi unit dwellings I know that when we were here last year this was something that was a large concern for a a lot of members of this board and we talked about you know looking into ways to address this and I and I know that the committee had done a lot of work to look at it look at the various options do a lot of analysis and has has come up with some some progress in that area in in the way of these two new policies around offering to help these buildings install individual meters and also the abatement or I'm sorry the hardship abatement a couple of questions I had do you know how many buildings qualify based off of the criteria to do the individual metering we don't you don't know okay but you said one so far has

▶ 1:34:51 Jennifer L. Lemmerman: agreed to do it and have others contacted the office to ask for help we know of two existing buildings that have contacted us and all of the new building condo type of buildings that are being built throughout the city this is some this is a discussion we have right in the onset when we start to review their building on how to meet our buildings now whereas you know before it was one meter it was it was a mute discussion we have this discussion right up front with anyone new okay so for the older buildings where this remains an issue there is the the second portion of this which is the hardship abatement equal to a seven percent discount on their bills for years that that's right the seven percent was that a number that the committee felt would help offset based

▶ 1:35:44 off of what it might cost to do some retrofitting or can you talk a little bit about that policy and that we looked at various amounts so what to do is a seven percent discount off their top tier usage and that essentially puts a sailing on how much we can seven percent is roughly the differential between tier two and tier three in the existing fiscal year so if we take that top that tier three consumption put a seven percent discount essentially we're never charging these apartment buildings over tier two that's the magic between seven i mean mean it's roughly seven six point nine three or something like that so that that's how we that's how we came up with the seven percent that's something we

▶ 1:36:24 want to put in place for next fiscal year okay so for one year essentially these these buildings that do apply and are approved would be essentially tier two users it's yet another option to provide these entities these accounts that last year didn't have either one of these you know we realized that for putting meters is a hardship for some of them for some of them they can do it away some need a little bit of work some may never be able to do it so we we paralleled the individual meter policy with this hardship policy you know to provide a little bit of relief maybe people can take that money make some changes and then put meters maybe they just take it oh you know or maybe it's just it's just a way to to provide a little bit relief so that contracts

▶ 1:37:09 Jennifer L. Lemmerman: would have to be friends don't have to go up right away or don't have to go up high right away in apartments that was the that was the intent that was the mindset of the committee when we we went ahead with these two policies and then you mentioned there are some buildings that just won't be able to do it that for structural reasons they no matter how much money they could put toward it no matter how much hardship abatement the city could could offer it's not physically possible is that right that could be the case okay well I you know I really appreciate the the progress made on the on the condo issue I think that you know these these two will help for a lot of residents I I would echo some of

▶ 1:37:56 Jennifer L. Lemmerman: what alderman bird has just mentioned that you know I would I would like to know what other communities are doing I know when we were here last year we asked that same question what are some other communities doing we can't possibly be the only MWRA community that's grappling with this issue and trying to find solutions within our legal restrictions which we are learning really are restricting some of the things that we are able to do to help I think the way that the law is written for the tearing that that you all read to us you know it shows what some of those restrictions are but it does mention specifically high consumption users and these individual homeowners, I would argue, are not necessarily high consumption users and so they're getting sort of put into a

▶ 1:38:48 Jennifer L. Lemmerman: category that because of the way it's written and because of the restrictions that we have around us, you know, I'm not sure that they all should technically be in there. So I would definitely like to know if there are other communities who have found additional solutions in dealing with some of the people who will not be helped by these helpful new policies that the committee has come up with. So thank you very much. Thank you, Mr. Chairman. Thank you, Alderman Leveman. Alderman Boisselle, please. Thank you, Mr. Chairman. A number of questions have been answered, but I have one other question concerning the meter replacement. Was there any clause that was put in for if they put in more than 600 per month they would be an incentive to get this done or this job done quicker?

▶ 1:39:41 Well, there isn't an incentive in the contract, but they've expressed to us a sincere effort on their part. They want to move on. They don't want to be in Melrose. The 600 is a conservative average. In fact, I believe now they've even added a third technician on Saturdays to try to expedite the process. Because that test run we did showed that a lot of people liked the Saturday as opposed to the weekdays. So they've added additional resources to it. My professional opinion, I think they will get to substantial completion before June of 2016. And I think their estimate, I'm hoping, that as long as the community cooperates, It's just community has always cooperated in anything that DPW has done,

▶ 1:40:29 Monica C. Medeiros: whether fixing water on a street or rebuilding playgrounds. It's a very good community to work in, and I think they'll respond well and cooperatively to this program. I think we should hopefully finish ahead of schedule. Very good, thank you. Thank you very much. Thank you, Mr. Chairman. Thank you, Alderman Boycelle. Next we have Alderman Medeiros, please. Thank you, Mr. Chairman. By way of some background history of how we got here, this board adopted this tiered rate system in 2013. I was very much opposed to it at that time because one of my concerns was just in fact at the time I was the War II Alderman, I was very concerned about the Melrose Towers and how this would affect them we unfortunately you know that went

▶ 1:41:28 Monica C. Medeiros: through because as soon as we go from what we had before which was a flat rate system despite this law being on the books since 1994 we had had a flat rate system for the whole time I had been an alderman at least up to that point which is probably about so six years so I know five six years and as soon as you we have a set amount we have budgets we have to collect enough money in order to to pay that budget and as soon as we set up this tiered rate system we're charging some users more and those who use more are paying and to some degree subsidizing those who use less we've been defining users as meters and therefore we're not talking about individual homeowners we're talking about these meters as our unit users as a definition and we've heard clearly

▶ 1:42:38 Monica C. Medeiros: that it's put you know many homeowners and residents whether it's through their rental rates or you know through their actual water and sewer bills in their condo assessments into second tier rates and and many into third tier rates and I and we've heard that despite the fact that many of these users are individual homeowners and building owners haven't done things like installed low-flow showerheads have installed aerators in their faucets and have taken steps to reduce their water usage and actually to conserve yet these have been going up I was concerned about this last year again when we discussed the budget alderman Lehman pointed out that we did in fact ask for this information last year we

▶ 1:43:40 Monica C. Medeiros: had the first meeting we came back the second meeting thereafter and I had asked if there was any kind of update to find out what other communities were doing I was told hey we've only had a week that's not enough time so this went on and passed being approached at the Victorian Fair by some of the residents of the Melrose Towers to say Jesus is really killing us and we want to come before you the Board of Aldermen to talk about this I filed an order to let people come in because I thought certainly perhaps people didn't realize the real impact this was having not just on condominiums but on two families and I've been hearing from many people throughout anybody who's on a shared meter is at risk very easily of going at least into the second tier and many as

▶ 1:44:38 Monica C. Medeiros: we heard into the third tier unfortunately there was some political maneuver maneuvering by some of my aldermen to send that order immediately to be placed on file without any discussion it was my hope that that would have been the beginning of a discussion so that we wouldn't be sitting here in you know June 4th having to set rates and a budget by June 30th and be rushing into this obviously I was told that this would be discussed in the water and sewer rate committee meetings I was hoping that we would have some kind of resolution when this came before us which was supposed to be in april by our ordinances it's really closer to may and there's nothing you know we're really no further along in this process

▶ 1:45:31 Monica C. Medeiros: i've been to one of the water and sewer rate commission meetings unfortunately they are usually during the day working hours and it's frustrating at our last meeting here our president mentioned hey if any alderman has an idea submit an order and we'll be happy to talk about it so with that in mind I come up with four orders I've submitted them unfortunately they've been moved to the legal and legislative committee I had hoped sincerely that they would have been heard in this committee so we could discuss that together one of them does involve averaging not really so much by unit but by individuals that are identified in households by our census because I recognize and I've done that we can't

▶ 1:46:27 Monica C. Medeiros: treat condominiums differently than we treat apartment buildings then we treat two family or three family houses or then we treat single-family houses my hope is that that will have a full discussion i was hoping that that would be the beginning of a discussion without with the whole board hopefully keeping an open mind to look at how we could this could address even you know there's some comments that the system you know doesn't encourage conservation at all but certainly you know we've heard I've heard speaker after speaker from some of these multi-unit buildings, condominiums, and apartments talking about how when they average out their usage, they're well below that 200 units per month that puts you into the second tier.

▶ 1:47:28 Mary Beth McAteer-Margolis: These are not high users of water. So I'm proposing to look at the word user as individuals in a household other than simply by meters. Thank you, Mr. Chairman. Thank you, Alderman Medeiros. Any other aldermen wishing to be heard? President Kahn, please. Oh, I'm sorry, I might apologize. And did I just see your hand? Yes. Alderman Mary Beth McAteer-Margolis, please. Thank you, Mr. Chairman. I think we all feel a certain level of frustration behalf of the residents of of the multifamily units and and I know from having attended the couple of the water and sewer committee meetings that that board also felt a level of frustration and and tried within the limits that have been placed upon them to to find some kind of solutions you know I think

▶ 1:48:33 Mary Beth McAteer-Margolis: the abatement issue I think the offer of helping for the city installing the meters correct but they would have to pay their own plumbing was that it so you provide the meters provide the meters and install them right I mean it's it it's you know I'm sure to some of those communities it's you know it's it's a small acknowledgement of what they're dealing with but it is it is something if there is something more that we can do you know I'm not sure with the people that we have on that board and the experts that we have had looking at this why you why it would not have been brought to us but one of the things that I was that I was thinking was where so back in the day before we started the tiered rates did we not have a residential and a commercial rate on

▶ 1:49:31 Mary Beth McAteer-Margolis: this we did we did and were condominiums or multi-families uh charged at a commercial rate then commercial they were so um has that rate actually then in that rate has the actual rate not the usage but the rate has the rate actually increased for them when versus the commercial versus the tiered commercial versus tiered right it's like rate is tier three higher than what our commercial rate would have been back in the day tier three was very similar to our our old commercial rate fell in between two and three i see doug looking for some information i'm sure you can back that up analytically but old commercial promises old commercial fell into somewhere in between two with right but do i understand that there were some condominiums in melrose that were not

▶ 1:50:28 Mary Beth McAteer-Margolis: charged at the commercial rate there were a few that we found mistakenly were not charged at the commercial rate and was the towers one of those that was was one of those the towers was one so from the time the building was built until we changed over to the tiered rate they were being charged at the residential level i can't say from the time well whatever from from you as far as we can tell in munis they were on a residential they were on a residential rate and and you know and but some of the other condominiums were on a commercial rate and some other multi-families were so i mean hard to say that you know to the residents who are there now that you know at some point there was a benefit that was provided to them and perhaps that was

▶ 1:51:19 Mary Beth McAteer-Margolis: not an equitable thing but it was and so now unfortunately they're kind of bearing the brunt of having to absorb that new designation if you will where we go to the tiered rate but you know I know they have not only the the towers but some of the other multi unit dwellings that we've been discussing have a fair amount of oh Doug did you have that information I do have it okay back in 2013 you had a residential water rate single step of I don't have my reading glasses on looks like 575 and for the commercial accounts seven dollars and ten cents per hundred cubic feet there was a single sewer rate of of nine dollars and ninety cents that applied to both residential and commercial the rates recommended back in 2014 that was the first year of the tiered system the highest rate

▶ 1:52:27 that is the third step for all consumption over ten thousand cubic feet for water was seven dollars and ninety cents so that was an increase of about eighty cents but the first 10 000 cubic feet that they um that they receive was at a much was at a lower rate and then for wastewater the uh as i mentioned the single step rate for both residential and commercial was nine dollars and ninety cents uh the highest step for wastewater was eleven dollars some 34 cents so you know fairly significant increase I don't I'm sorry what a significant increase a significant increase in that right but a dollar 44 right so so I mean I guess my my thought process was that in some ways some you know we have benefited by going over to the tiered rate system for lower

▶ 1:53:36 end users let's say residential users who use yes it's all based on consumption right one of the points that was discussed at length was that it doesn't cost any more to deliver 100 cubic feet of water to a resident as opposed to a commercial account in that we implemented a an increasing meter charge so that those with smaller meters would receive a smaller charge those with the largest meters the two four six inch meters would receive a higher base charge so are there any communities in the MWRA system now or is there any kind of what did they call it in music a mashup where people have a tiered rate combined with a commercial rate the only one I've been involved with was the town of Canton they had five different rates they had a rate for residential they had

▶ 1:54:48 rate for condominiums they had a rate for nursing homes they had a rate for commercial and they had a rate for industrial maybe another one or two that I can't think of offhand and they found that it was very cumbersome to not only project revenue and project consumption but it led to instability in their enterprise fund they moved to a I can't recall if was a three or a four step rate and there were changes certain customers that had had been receiving lower bills but use much higher consumption nursing homes saw a significant increase but they felt that that was if they're placing the demand on the system in terms of high water use that they should be paying the same as any other customer that places a high demand on the water system so it was

▶ 1:55:48 kind of tried but it wasn't successful they were looking to simplify it was very difficult to not only implement but project what your revenue was going to be if you had a nursing home for example closed down suddenly you're losing a significant piece of revenue from that tier and if that's a high rate tier it's going to affect your funds so they just they believed and I went through hours of meetings with their committees and with their selectmen that they wanted to simplify and it's led to a much steadier stream revenue stream and able to project rates okay so one of the other areas that I was thinking about was that many of these larger complexes have a fairly significant amount of common area

▶ 1:56:45 Mary Beth McAteer-Margolis: that they are using you know water for pools or landscaping are any of those complex is eligible for like a second meter on any of that kind of outside use type if they can meet the second meter criteria they could obviously that would require plumbing that goes directly outside the plumbing inspector would have to confirm that that's done according to plumbing code and then we would obviously go in and inspect it once that plumbing inspection in place but if I mean there are condo and apartment units right now that have second meters but it has to be done correctly it has to be done according to our criteria inspected by the plumbing inspector and then Donna will set that account up so that is one area that maybe you know they could explore to

▶ 1:57:42 Mary Beth McAteer-Margolis: perhaps save a little bit of money or even if some if they could retrofit like at the towers if they could I think someone said they could retrofit maybe two of their buildings or half of their buildings but not all of them and that could drop help help in dropping them down somewhat anything helps right right anything helps the bottom line one of the common themes tonight is um everybody in the commonwealth who's um and it's not just mwra communities it's it's other cities that have their own water systems they're all struggling with how can you know yes this apartment building their residents they're not a i mean they are a commercial customer but they're not a commercial customer how can we lower their rates unfortunately with the way the laws are written and the various

▶ 1:58:29 ordinances that exist in different towns it's we're limited in how we can assist you've taken a step this year that you're allowing uh apartments condos to to put in their own meters if possible many communities don't allow that many communities that surround Melrose don't allow that so it's not perfect but it's a step in the right direction and yes these community or these these businesses are gonna have to do a cost analysis and find out what the cost is versus what they're gonna save and and we have people in the Department of Public Works who can help assist them with some of those those projections in terms of what they would say. Absolutely. You've met with their boards or whatever. Donna is wonderful, our administrative staff is great.

▶ 1:59:27 Mary Beth McAteer-Margolis: We can go out and we'll do weekly reads, we do monthly reads to try to give them an average consumption. The operations group that we have is great at that. I mean, we'll help people and give them as much real data as we can and help them through their analysis. At the end of the day, that's a business decision. business apartment whether it's an apartment building or a condo association they have to administer this impact within themselves um one just one other thing i wanted to touch on we've we talked a little bit about conservation and um the usage actually going down um can you just remind us about why even though we're trying to conserve our bill is still high Well, we've gone down slightly in terms of consumption.

▶ 2:00:15 We're relatively flat. Okay. Our consumption. But if our consumption's the same and everyone else's consumption is the same, we don't get ahead. When I say everyone else, everyone else in the community. If our consumption goes down significantly more than others in the community, then we jump ahead. always compared to our peers in the community when they go to pass on the expense or the added expense and that's what makes it very difficult because in today's world everyone is conserving everyone uses less water the entire throughout the entire district everyone puts low flow toilet sides really not an option now especially with stretch code and other building requirements everybody puts you know aerators in their faucet everybody looks to um you know not take long

▶ 2:01:04 showers mwra rates are not all the impact of that isn't alone to melrose it's it's everywhere in the in the mwra district which what is which is what makes it different difficult to um so so the mwra right they need to generate x amount of dollars and even if we're saving money or saving water we're not we still have to contribute to that to their operating costs and the mwra has been selling less water for years they have a surplus of water in a deficit of takers which results in higher rates for all the member communities so the auditor said it perfectly in his opening statement it puts a puts a it puts us in a difficult position the mwra and their race put us they puts us in a corner every year all right and then okay how are we going to pass this

▶ 2:01:57 what can we do and we control very little of the budget once once they're in it we control very little well thank you and thank you for your work on this and I look forward to hearing about the efforts that you're able to offer the things that you're offering to the multi-family communities and how we can help them within the structure that we have the committee isn't deaf to the concerns they're just limitations legally what we can do and what we can't do and we'll keep searching and looking for all sources to lower those rates I think city audit Adela Russo was indicating that he'd like to respond to your comments I think if I may just gonna put my committee member hat on this is I mean I of course I know these people they and the good people they've

▶ 2:02:56 We've come to our meetings, this is not new news to any of us here. This is not something that all of a sudden the light come on, wow, we didn't know that. This has been something we've been working to for years now. And we are doing everything we possibly can within the limits of the law to provide relief, period. We understand, we get it, we live it. There's nothing here that I have not heard multiple times before. Neither John Chenna, nor the consultant. And I want to make that clear because I don't want anyone to think for one moment that we have bypassed or disregarded anyone that's come before the committee. We have not. We've let people work it through because we understand. It's a hardship.

▶ 2:03:40 And sincerely understand the stress because as I said earlier, I mean, we feel the stress as a community. One of the issues we have, talk about I.I., and of course, you want to raise your hand, let's do some more I.I. Isn't it someone telling me what the rates are going to be next year for the MWRA, the year after that, the year after that? Before you commit to major expenditures like that, you have to understand there'll be other cost increases guaranteed from the authority. Are you going to be able to absorb new costs for debt plus their new bill? What's going to happen to the rates then? Because they're so unstable, it creates a horrific environment for any type of long term planning. So I think we're trying to be conservative, we want to be respectful.

▶ 2:04:22 But again, we have very little control over the assessment they send us. That's the end of the day, that's really the way it is. And the committee's not over by any means. I mean, September, October, we'll start again. We'll open the door, we'll invite people, we'll listen. But at the end of the day, the committee's going to do what's right for Melrose. What's legal, what's financially sound, and what's right for Melrose. And we provided an expanded impact analysis. And that's something that I urge all of you, if you're going to look of all the information that we provided, look at that impact analysis. 96% of our accounts never get to tier three. 75% of our accounts never get to tier two. Look at that analysis and study it.

▶ 2:05:06 Scott M. Forbes: This is an analysis of over 30,000 bills that go out on a yearly basis. I want to thank Alderman Forbes that urged us to expand that a little more to see where everyone lands. that's something that at the end of the day that is what we look at the most we look at what melrose this impact is and that sheet shows it thank you mr shenna um parliament if you're ready to yield the floor oh yes mr chairman thank you very much alderman mcateer margolis next in queue we have alderman forbes please thank you mr chairman uh and i did appreciate the expanded analysis but i just didn't want to echo uh what uh lewis frankie was talking about here tonight and buildings that are older in age and they just have one pipe in his case there are 12 buildings and because of

▶ 2:05:56 Scott M. Forbes: the age you can't sub meter um you know is there any option for him or is just what he has as far as the tiering system it is when he says that you know they don't have any way out or they don't have any options is he correct in saying in in saying that as far as what their water bills are going to be from here moving forward is there any relief for a building that really doesn't have the option of metering but you have 20 single unit owners that you know use the minimum amount of consumption mr frankie's we we've we've met with him we've met with him um we met with him with the committee we met with him personally um he doesn't have 20 owners he has 20 apartments sure which is totally different than 20 owners that aside i believe that he is stuck from everything

▶ 2:06:58 that he said and i believe him he's professional what he does we've offered the one-year hardship policy that's something that he could apply for that's something that he would most likely qualify for it provide them with a little bit of relief to adapt but on the flip side if we were to accommodate that type of account there are consequences every action has a reaction and that's why that impact analysis is very critical because when we start to tinker with the system and we tried and we tried to carve out a system that works for everybody we don't get places I mean mr. Gardner offered the his experience in Canton where they had multiple tears for multiple people you get into a potential legal issue

▶ 2:07:45 because you might miss somebody and then the rate becomes discriminatory I mean I've had I've had several discussions with attorney van Kampen and he's looked into this several cases in terms of what's discriminatory what's not when you start simple simplicity is what's best we have a rate that's based on consumption unfortunately it does increase as you use more water but we feel as a committee that this is the best way to proceed right now financially where it's producing the results the auditor is looking for it's giving us the ability to protect most accounts against higher mwra rates and things could change and i think we've proven as a committee that we're not afraid to change again even if it means going against something that we did three years ago you have

▶ 2:08:34 to continue to change to stay up with the times and we have a process to do that and in september october we'll start again and we'll start to listen at the end of the day we want to do what's right for all of those accounts okay we've also addressed we've also looked at uh changing the tiers uh instead of three maybe four or five uh what happens if instead of the first step being zero to two thousand cubic feet what happens if we take that up to twenty five hundred or three thousand and these are all scenarios that we have gone through and ultimately you're seeing wide swings in customers that are seeing their bills go down and certain customers seeing their bills go up and it was the decision of the committee that um you know because we're only

▶ 2:09:22 a few years into this new rate structure and you know what we can't forget is this rate structure works it's provided stability to the enterprise funds um dor when i in the first year of the study i was speaking to the director of accounts which never happens um and his His exact words were, to me, they better be positive in terms of surplus. He said, I don't care if it's a penny or a nickel or whatever. They better be in the black. And his threat was he will not approve the tax rate of the city if the enterprise funds are not in the black. So that's a few years ago, but that was the basis for our rate structure. in the first year of the rate structure we had a surplus not a not a huge surplus less than I

▶ 2:10:22 would have liked to have seen but it's a step in the right direction and you know we're keenly aware that you know there is some I don't know what the right word is but some people pay higher bills who are part of a residential multi-residential community than if they were single homeowners and we're willing you know and we want to we don't take any pride in you know having them have larger bills we want to help them lower the bills and do whatever we can but within the letter of the law because if we pass a rate that's illegal that's that's worse so we are continuously looking at solutions and alternatives and it's not my decision it's the committee's decision I'm not a voting member I'm simply an advisor and that's

▶ 2:11:18 Scott M. Forbes: how we've proceeded okay and I do apologize I misspoke it was 266 rental units not condo units but whether they rental or condo units because I know know even at station crossing in order for them to in order for them to get meters there's going to be about a thirty eight to forty thousand dollar projection so whether it is a condo or an apartment there's still being taxed or being you know charged at that same level so I guess my question is is was the discussion of maybe and I'm not even sure if this is something that's even could be on the table was that the possible option of maybe a condo tier or condo apartment tier ever something that the commission ever considered well the to have a

▶ 2:12:02 condo tier you would have to have all your condos within a certain level and the condominiums if it's a smaller unit they're going to use less water if it's a larger complex they're going to use more water and to come up with a rate strictly for one class of customer that's going to be deemed illegal okay now if you treated every condo the same way and they had their own rate again the way canton used to calculate their rates and you had a separate rate for the residents and separate for what you deem commercial that would be acceptable but just to to isolate one group of users would not be uh would not be legal in my opinion okay and i believe uh i don't want I don't want to speak for Attorney Van Kampen, but I believe he weighed in on that as well.

▶ 2:12:56 Scott M. Forbes: All right, and then my final question, you mentioned that we are required by law to have a tiered system in place. Is it true that all MWRA communities have a tiered system similar to our community? Or is there any MWRA communities that have a fixed rate system? In 2014, 34 communities had the tiered rate system. But there are communities in the MWRA that have single step rates. Right, they have single step rates. But isn't it the law to have a tiered rate system? Absolutely correct. So are they breaking the law? It's not for me to say. Again, that would be an office not of our office, but it would be through the common law. The Office of Inspector General would have to time it on that. But they are required to have a tiered system.

▶ 2:13:48 not operating under the law then that's the risk that they're taking not us so when we change from it from when we were in a a fixed rate system a few years ago and changed into a tiered rate system did we change because we weren't following the law or did we change because we thought that the rates were going to be better for the community it was the fiscally responsible thing to do and we and then we discovered that it was also the law it should be you have to be you shall be the law is very clear and um there's no mincing of words here when they said you shall um let me get it right here what's that lock what what is right here 65 it says mgl 165 2b it says right here all municipalities or water districts within the jurisdiction of the

▶ 2:14:38 massachusetts water resources authority but not including communities serviced by the connecticut Valley adequate, aqueduct, I apologize, shall institute water chargers 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 uses of water. And again, that's Alderman Robert Enkamp, and he says that it has a pine, And again, he brought up the Flatley case in his letter, that that is the law, and we're required to follow that law, period. Okay, would it be possible to get a list of all the communities that have the- I could provide you with that, but I just want to, if I can retract.

▶ 2:15:28 34 communities have blocks with minimum charges like us. An additional 12 have just blocks. So there are 46 of the 60 communities. I could provide you with that information of who has what. Okay, thank you. Thank you, Mr. Chairman. Thank you, Alderman Forbes. President Kahn, please. Yeah, actually about 45 minutes ago I had some intemperate remarks that I was going to make, but as the conversation meandered on, I think I've elected not to make them. I move to recommend the joint orders, Mr. Chairman. Second. President Kahn has moved to recommend the joint orders. Said motion was duly seconded by Alderman Inferna. On further discussion, we have Alderman Medeiros, please. Thank you. I have a motion to amend one of these orders here.

▶ 2:16:31 Monica C. Medeiros: We've got 228-15A, Number one, tiered water rates per 100 cubic units. There's been a move to change this to effective June 29th, 2015. I am moving to change that to July 1st, 2015, to match the fiscal year. The fiscal year is last June 21st. That previously had been July 1st prior to last year. The change I did not notice at the time. say that fiscal year this year through the chairs is um 29 june not july first so the fiscal year is going to start on july june 29th on the 29th correct and is that because of a holiday or is that because of the weekend that's because that's when the fiscal year starts i'll withdraw that motion mr chair very well i have another motion however motion that motion is withdrawn I would like to move to cut from the

▶ 2:17:51 Monica C. Medeiros: sewer salaries line the salary for the administrative assistant which is the mayor's administrative assistant five thousand two hundred eleven dollars and $5,296. Which order is that in, please? Excuse me, Madam, what? Which order? It's on the budget. From the budget. It's on the budget. And it appeals that motion fails for lack of a second. I move to cut the same amount from the salary and wages line from the water budget, $5,211.97. cents it appears that motion has failed for a lack of a second as well i would like to also move to reduce the line from the recycling coordinator's salary in the sewer budget from four thousand four hundred thirty dollars and eleven cents and reduce that to one thousand so that

▶ 2:19:15 Monica C. Medeiros: So that would be a reduction of $3,430.11. It appears that motion has failed for lack of a second as well. Thank you, Mr. Chairman. Furthermore, in keeping with, first of all, I'm going to say that none of these are personal. These are, I just think, inappropriately placed salaries that don't belong in the water and sewer budget. And reduced from the water budget, the recycling coordinators reduction in that salary line item from $4,430.11 to $1,000, therefore a reduction of $3,430.11. It appears that motion has failed for lack of a second. Thank you, Mr. Chairman. I have another motion. Seeing that, we heard during the mayor's budget that his assistant was added newly to this water and sewer budget for the purposes of helping making phone calls and doing administrative items while they were going through the transition to meter replacements.

▶ 2:20:50 Monica C. Medeiros: you know every bit that goes on to this budget is paid by the ratepayers which are already pretty high I think a reasonable amount to be paid to assist with telephone calls to set up water medium replacements would be $20 an hour Therefore, $20 an hour, seven and a half hours per day is $150 times 52 weeks in a year is $7,800. Half of that in each budget would be $39,000. You're meandering into discussion on motions that have not been seconded. Oh, I haven't made this one yet. I know you haven't. That's my point. therefore i am making a motion to reduce that line item to 39 hundred dollars in the sewer account budget it appears that motion fails for lack of a second thank you i will make the same

▶ 2:21:57 Monica C. Medeiros: motion to reduce that line item to reflect a twenty dollar per hour salary in the water account to thirty nine hundred dollars and that motion fails also for lack of a second thank you mr chairman while i still have the floor i mentioned that there are four orders that i have filed in an effort to have a discussion relative to these water and sewer budgets which have been sent to the legal and legislative committee i would like to have them be heard before i make a decision on these four orders so i will be abstaining from this vote mr chairman has nothing to do with any personal conflict but i'd like to explain that thank you thank you alderman medeiros a motion has been made to recommend the four joint orders the first four

▶ 2:22:53 Peter D. Mortimer: orders on the agenda tonight for passage to our full board that motion has been duly seconded all in favor please say aye aye any opposed hearing none the order passes and we have one abstention so that order passes and the first four orders on our agenda tonight will be recommended to the full board for passage the next order we have before us is order 2015-147 authorizing 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. Ms. Shannon, please, if you'd like to say a few words, or I'll proceed with the questions. I can give a brief summary again. This is to continue system-wide improvements, but the majority of this funding is focused on Tremont Street.

▶ 2:23:55 I provided a detailed package on the condition of Tremont Street, the hydraulic analysis performed by our engineering team, and even a few photos of the most recent water breaks out there. And please let me remind you, Tremont Street was the location where a significant amount of water was lost in January and February that, unfortunately, at this time will impact our rate for next year. this project will eliminate his debt issue will bring better fire flow to that to that corridor and improve our water quality Thank You mr. Shana any questions or comments from any members of the board please alderman right please mr. sheriff thank you for that explanation this board along with the administration took the forward-thinking step in my opinion of approving

▶ 2:24:52 Francis X. Wright Jr.: transit oriented development and in doing so we see development going up along the Tremont Street corridor currently that development is of a scale like we haven't seen down there before are they being asked to invest in the water and sewer system and maybe pick up some of this cost I know that they weren't responsible for it but I assume we have to allow for the fact that we're gonna have certain amount of development down there that might require a water service and I'm way out of my league here as far as knowing what what's needed for a water and sewer system but I'm just presuming that this system might require to be upgraded anyway based on the type of development than we anticipate, and was it anticipated that the cost of doing so would be passed on to these developers?

▶ 2:25:52 Francis X. Wright Jr.: I certainly don't think the building that's going up there and that developer should have to absorb this cost. But will those developers present and future be expected to incur any of that cost? 100% of their service connection costs will be borne by the developer. That's the cost to get water from the building out to our system. Okay. system has to be operable and right now we have a system that's that's broken and that's not by anything that they cost that being said the system will be to the standards that are required for development and whether we consider a connection fee in the future it's something that i need i need to work with my engineering team and obviously work closely with planning there

▶ 2:26:37 Francis X. Wright Jr.: are communities that do that that offer connection fees that help the community pay off some of the the investment in the system on the suicide they do pay they'd pay an INI connection fee so developments do do assist and do pay to connect into our system but the system has to work okay and so there's no additional cost for expanding our system to to absorb these larger developments down as it is not right now for existing development but in the future that's a discussion that Okay. We'll have what the planning would. And if we do that, then I assume that you would anticipate that, or the administration will anticipate that some of that cost at least will have to be borne by the developer. That's correct.

▶ 2:27:21 Francis X. Wright Jr.: Okay, and if I may have a little bit of latitude, Mr. Chairman. Please. The new development that's going up there and future developments that may go up there, are we at least urging them to individually meter the units? Yes. Thank you. All condos. Anything that's condo, whenever they say the word condo, that's where we go. And we actually urge apartments too to individually meet it, or at least plumb for that in the future. Thank you. Thank you, Mr. Chairman. Thank you, Alderman Wright. Seeing no other Alderman wishing to- Motion to recommend. We have a motion to recommend this order to the full board from Alderman McAteer-Margolis, duly seconded by Alderman Byrd. Is there any further discussion?

▶ 2:27:59 Peter D. Mortimer: Seeing no further discussion, all in favor please say aye. Aye. Any opposed? Hearing none, this order will be recommended to the full board for passage. Motion to adjourn. motion to adjourn from alderman inferno duly seconded by alderman boyce all in favor please say aye any opposed hearing none we are hereby adjourned thank you one and all frank i had a

Appropriations & Oversight Committee — 2015-06-04

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