City Council — 2016-04-04

City Council Regular Meeting

Attendance

Robert A. Boisselle present · Ward 4 Alderman; Donald L. Conn Jr. present · President, Alderman at Large; 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 · Ward 6 Alderman; John N. Tramontozzi present · Ward 1 Alderman; Francis X. Wright Jr. absent · Ward 3 Alderman; Michael P. Zwirko present · Alderman at Large

Agenda

Minutes

CITY OF MELROSE BOARD OF ALDERMEN BULLETIN● APRIL 4, 2016 Aldermanic Chamber Regular Meeting 7:45 PM

ORDER-2016-136 Opening Statement Regular Meeting of the Board of Aldermen to be held on Monday, April 4, 2016 at 7:45 P.M. in the Aldermanic Chamber, City Hall, Melrose, MA Attendee Name Title Status Arrived Robert A. Boisselle Ward 4 Alderman Present Scott M. Forbes Ward 7 Alderman Present Gail M. Infurna Ward 5 Alderman Present Jennifer L. Lemmerman Ward 2 Alderman Present Mary Beth McAteer-Margolis Alderman at Large Present Monica C. Medeiros Alderman at Large Present Peter D. Mortimer Ward 6 Alderman Present John N. Tramontozzi Ward 1 Alderman Present Francis X. Wright Jr. Ward 3 Alderman Absent Michael P. Zwirko Alderman at Large Present Donald L. Conn Jr. President, Alderman at Large Present

ORDER-2016-137 Appropriation Appropriation in the amount of $55,706.41 from Account #620000-330001 (Mt Hood Reserve fund) to Account #620000-529000 (Mt Hood Professional Services). This appropriation is necessary to fulfill contract obligations. Assigned to Committee Finance Committee

ORDER-2016-120 Presentation Presentation by Raftelis Financial Consulting & Woodcock & Associates regarding water and sewer utility rate setting. Tabled Board of Aldermen

ORDER-2016-138 Amending Revised Ordinances Amending Melrose Revised Ordinances, Chapter 202 - Streets and Sidewalks, by adding Section 202-1.1: Reservation of space for city use; rights and privileges of city therein. Assigned to Committee Legal & Legislative Committee

ORDER-2016-139 Amending Revised Ordinances City of Melrose Page 1 6/3/2016 7:14 PM Minutes Board of Aldermen April 4, 2016 Amending Melrose Revised Ordinances, Chapter 177 Peace and Good Order by adding Section 177-15: Chronic problem properties Assigned to Committee Legal & Legislative Committee

ORDER-2016-140 License - Hackney License Application of Omar Yusuf & Faid Omar d/b/a Metroles Taxi LLC, for a Hackney Carriage License (l taxicab) Assigned to Committee Protection and License Committee

ORDER-2016-121 Acceptance Accept grant in the amount of $75,000 from the Executive Office of Housing & Economic Development Mass Marketing Partnerships/Office of Travel & Tourism Program. Funds are to be deposited into Fund #4022, Beebe Estate Improvements. Passed

ORDER-2016-71 Request Be it ordered that the Director of Public Works implement a program to monitor snow removal on residential sidewalks and design a city-wide sidewalk map. The Director of Public Works will report findings to the Board of Aldermen by April 4, 2016. Recommitted Public Works Committee

ORDER-2016-124 Transfer Transfer of $2,415.00 from Unemployment Expenses (019132-544400) to various Inspectional Services Accounts as set forth herein Passed

ORDER-2016-125 Appointment Appointment of Ward Hamilton, 87 East Emerson St., to the Historical Commission for a three-year term; said term to expire on the last day of February 2019 Passed

ORDER-2016-126 Appointment City of Melrose Page 2 6/3/2016 7:14 PM Minutes Board of Aldermen April 4, 2016 Appointment of Maya Jamaleddine, 10 Melrose St., to the Human Rights Commission for a three-year term; said term to expire on the last day of February 2018 Passed

ORDER-2016-127 Appointment Appointment of Ellyn Ruthstrom, 15 Vine St., #1, to the Human Rights Commission for a three-year term; said term to expire on the last day of February 2019 Passed

ORDER-2016-128 Appointment Appointment of Cathryn M. Mercier, 466 Pleasant St., to the Melrose Public Library Board of Trustees for a three-year term; said term to end on the last day of February, 2018 Passed

ORDER-2016-129 Appointment Appointment of Jessica Joy Buster, 164 Derby Road, to the Commission on Women for an initial term, said term to expire on the last day of February 2017. Passed

ORDER-2016-130 Appointment Appointment of Gail Marcia Cass, 10 Sunset Road, to the Commission on Women for an initial term; said term to expire on the last day of February 2017. Passed

ORDER-2016-131 Appointment Appointment of Mary Julie DeLillo, 13 Circuit St., to the Commission on Women for an initial term; said term to expire on the last day of February, 2018 Passed

ORDER-2016-132 Appointment Appointment of Lorraine DiCesare, 61 Willow Street, to the Commission on Women for an initial term; said term to expire on the last day of February 2018. Passed

ORDER-2016-133 Appointment City of Melrose Page 3 6/3/2016 7:14 PM Minutes Board of Aldermen April 4, 2016 Appointment of Katherine P. Kennedy, 103 Mt. Vernon Ave., to the Commission on Women for a three-year term; said term to expire on the last day of February 2019 Passed

ORDER-2016-134 Appointment Appointment of Kristina Pechulis, 46 Reading Hill Ave., to the Commission on Women for a three-year term; said term to expire on the last day of February 2019 Passed

ORDER-2016-135 Appointment Appointment of Lata Bhopale Williams, 24 Henry Ave., to the Commission on Women for a three-year term; said term to expire on the last day of February 2019 Passed

ORDER-2016-122 Grant Acceptance of FY2016 Traffic Enforcement Grant in the amount of $7,500.00 from the Commonwealth of Mass., Executive Office of Public Safety and Security's Highway Safety Division to Fund #4023. Passed

ORDER-2016-123 Appropriation Authorization to Appropriate $131,835.18 in Borrowed Funds from the High School Science Lab Project (Fund 3367) to the High School Interior Renovations Project (Fund 3372) Passed City of Melrose Page 4 6/3/2016 7:14 PM

Transcript

▶ 0:01 Okay, welcome everybody. This is the regular meeting of the Melrose Board of Aldermen on a snowy April 4th, 2016. Madam Clerk, could you call the roll, please? Alderman Boisselle? Here. Here. Alderman Forbes? Here. Here. Alderman Inferna? Here. Here. Alderman Lemmerman? Here. Here. Alderman McAteer-Margolis? Here. Here. Alderman Medeiros? Here. Here. Alderman Mortimer? Here. Here. Alderman Tramontozzi? Here. Here. Alderman Wright? all of them circle here yeah president Conn here we attend prison okay 10 constitutes a quorum could you all please rise and join me in saluting the flag of the United States of America to the flag of the united states of america and to the republic for which it stands one nation

▶ 0:52 under god individual with liberty and justice for all as with all of our meetings this meeting is being broadcast by local cable television and will be rebroadcast for your viewing pleasure in accordance with the melrose open meeting law mr. president make a motion to open the floor for public participation second when Mortimer moves to commence public participation I didn't catch you made who seconded the motion second mr. president seconded by alderman Forbes on the motion all those in favor right anyone opposed motion passes this is the portion of our meeting where any member of the public who wishes to speak on any order that is on our agenda can come to the center of the room identify themselves and they will be heard sir my first time on tv my name is phil taymor and i live

▶ 1:48 and own the residence at 44 larchmont road i attended and spoke at the water and sewer committee meeting earlier today i previously had sent members of that committee a letter containing a full discussion and 13 specific questions detailing my concerns about city water and and sewer rate matters. I will now relay these concerns to this committee as well in advance of tonight's presentation by the city's new financial rate consultants. As an introductory remark, the city's water and sewer enterprise funds, from my point of view, are best described as monopoly public utilities providing services to captive customers like me who can't go elsewhere. The enterprises are obligated to provide and economical services at a fair price to each and every customer the city's

▶ 2:40 operations have not and continue to not meet their obligations in several important respects my 13 specific questions are spread across three general areas of concern I will now discuss the areas of concern my first area of concern the city's tiered rate structure top rates are among the very highest of MWRA district cities and cannot be supported by either analysis or rational explanation as actually required by MWRA regulation. Specifically, Melrose has the 13th highest top tier water rate of the 60 MWRA cities. Melrose's top tier water rate is 38% higher than the simple average of MWRA top tier rates. As you know, Melrose's top tier water rate is 49 percent higher than its own lowest tier and its sewer rate is

▶ 3:35 similarly high MWRA rules state and this was provided to me by the city and I quote municipalities shall institute a water base rate for all users provided that such said base rate shall be increased at an increasing block rate to fairly reflect the resource demand and consumption of high-volume users and I I emphasize the words to fairly reflect the resource demand and consumption. Close quote. Even though Melrose has contended that tiered rates are mandatory, 13 MWRA cities obviously do not agree and indeed use flat rates instead. And importantly, it's a general law of economics that the unit cost of providing a service or manufacturing a product which is not in short supply, as is the case here,

▶ 4:23 actually decrease at higher volumes and not increase as the city's top tier rates reflect. All high volume water and sewer users, including but not limited to multi-unit tenants trapped in commonly metered buildings, are being onerously penalized to unfairly subsidize other users. My second area of concern and what really brought me here tonight, Melrose Free Press reported earlier this year that the city also changed its method of billing the cost of its own internal department water and sewer consumption a few years ago. It used to charge the cost of that consumption to the city property tax funded budget. It changed to charge that consumption instead to the city water and sewer rate payer,

▶ 5:07 thereby shifting hundreds of thousands of dollars annually from its property tax budget to rate payers. I find the city's decision to stop charging its own internal departments or users at complete odds with its decision to charge residents for their usage at dramatic tiered rates in order to encourage their attention to consumption and conservation. My third and final area of concern, I've heard city officials repeatedly blame NWRA charges for the city's water and sewer rate increases. In the face of essentially flat consumption, city combined water and sewer rates have increased an average of 7% a year over the past two years. MWRA charges have increased by only a much lower 4.5% a year, but city-controlled expenses

▶ 5:56 have risen over twice as fast at over 10% per year, in fact, I believe, closer to 14% a year on average over the same two-year period. And this is before the incremental impact from the city's change to start billing rate payers for its internal consumption. The city-controlled spending increases have been spread across all of its spending areas personnel insurance allocations indirect cost allocations debt service and abatement and reserve expenses I've yet to see any savings from these ramped up expenditures I'll now read the 13 questions from that letter I sent verbatim one is the city's position still that tiered rates are mandatory and if so how does it justify its interpretation of MWRA regulations cited above

▶ 6:43 2. Does the City believe that the 13 MWRA cities which use flat rates are not complying with regulations? 3. How does the City explain and what calculations and data does it have supporting or demonstrating that the higher tiered rates meet the MWRA requirement to fairly reflect the resource demand and consumption of high volume uses of water? Four, even putting the regulations aside for a moment, how does the city justify its top-tier rates as fair, equitable, and supportable in any way? Five, will the city now either eliminate the tiered rate structure or alternatively dramatically narrow or collapse the rates? Six, does the city contend that it is mandatory to charge its internal water and sewer consumption to the water and sewer rate payer?

▶ 7:36 And if so, what are the governing regulations? 7. How much water and sewer costs actually would have been charged to the property tax budget for 2015 had past practice been in place and then current rates been used? 8. Although as to the date of this yet letter, I have neither completed my discussions with the Mass. Department of Revenue nor completed my review of available data for many MWRA cities with enterprise funds. It does appear to me that the DOR allows cities to, and at least some of the cities indeed do, charge internal water and sewer consumption to their property tax-funded budgets. What do you believe the DOR allows, and how many cities do you believe have enterprise funds which charge thusly?

▶ 8:24 Nine, if the current charging method, that is, charging the town's internal consumption to the ratepayer, was not the result of a mandatory change what compelled the city to make the change and upon reflection will the city now change back to its original method using the same tiered rate structure it imposes on its residents 10 did you use the spending freed up by eliminating water and sewer expenses from the city budget in that shift to fund other city expenses 11 how does the city justify its huge city controlled spending increase of the increases over the past two plus years and where is the savings payback 12 how much of the money's charged the enterprise funds are judgmental allocations and how much of

▶ 9:12 those allocations increased over the years and includes overhead insurance shared services etc 13 why do city officials and various forums replete repeatedly blame the MWRA charges for overall water and sewer rate increases when rate increases have been driven more by city control spending rising at over twice the rate in conclusion it's time for the city to answer these questions clearly and correct its errors and now is the time to have a new rate consultant focus on those questions in areas specifically the city should one eliminate or greatly collapse it's unsupportable tiered rate structure to return to charging its own internal usage back to its departments and therefore its property tax funded budget and three critically review is city

▶ 10:08 controlled spending especially that put in place over the past several years the opportunity to reduce this spending increase is at least as large as the city's new focus on water and sewer leakage and infiltration these issues have been under discussion for far too long and need resolution now and i would be more than glad to answer any questions that the committee would like to ask me i find it a little bit unproductive to make these comments one way and not have an iterative discussion that tries to draw these to conclusion i understand the robert's rules of order but if they can be suspended they have have a productive discussion of these issues and bring them to conclusion that would be a good thing

▶ 11:01 thank you for your time thank you anybody else who wishes to speak hi i'm jerry morose it's not my first time on tv here all that he said i want to incorporate into my comments as well i probably should have stopped there but i won't you know we've had these issues for a long time and actually the last point that he made is that there is a large conversation to have about this and Mr. Taymor and myself both attended the water and sewer committee meeting today and the committee there doesn't have any opportunity for the public really to have an interaction with the committee to talk about the issues that the public might have sensitivities about that the committee doesn't seem to understand at

▶ 11:59 some level so as I said to you two weeks ago I appeal to you you know perhaps some form of a round table discussion that we can have with the consultant with the public you know for those people that want to engage deeply in these issues you know please find a way for that i i think that would be very helpful for the city in terms of highlighting the underlying issues and of having people understand that there is a fair basis for coming to whatever decision you make if the decision is made without discussion people just react to the final thing and say this is no good and if they can see the process understand it understand why certain things need to be and why certain things are fair and other things aren't there

▶ 12:39 if you could do that this year I know time is short right now you know we've been again last year I think I was here on the end of June and I said please let's start this process in July so we can get the philosophical the structural the political issues understood before we just deal with what the rates are and And, you know, it's too late for that this year, I'm going to state it now, you know, July 1st, can we start looking at this issue for real next year? Hopefully we'll have a real good model to work with that the consultant prepares. One key element underlying a lot of this here is what I believe is a misconception of what the state law requires around block rates for water and sewer.

▶ 13:28 As he quoted, I'm going to quote it again, there shall be a base rate for all users provided that said base rate shall be, quote, increased at an increasing block rate to fairly reflect the resource demand in consumption of high volume uses of water. I want to point out first, high volume is not defined in that term. I don't believe there's any user of Melrose that's a high volume user of water. I'm familiar with chemical plants that use millions and millions and millions of gallons of water a day. They would be a high-volume user of water. Atlantic gelatin over in Woburn has been a high-volume user of water. There are plants all over that are high-volume. So that's number one. Nobody defined high-volume. You don't have to define it as 2,000 cubic

▶ 14:13 feet per quarter. That's an arbitrary thing that's come up from here out of nowhere. The second element is the idea that there needs to be a, quote, conservation rate. We need to somehow force people to conserve well the truth is is that there is no additional cost to melrose no no in a short time frame it's hard to give all the qualifications behind a statement but melrose does not suffer at all when people use more and more water because number one what the mwra charges for us is essentially a flat rate based on last year's consumption. And it's a flat rate. The MWRA does not at all care to give us a conservation rate of water. Why would we choose arbitrarily to create one of our own and pass it on to people to say

▶ 15:03 that we need to do something? The reality is that we are not in Nevada or California or Arizona. We don't have water supply issues that are structural here. We don't have a well that will run dry if people use too much water. The Quabbin Reservoir has been closed to capacity for a number of years now and if it wasn't the summer years we saw last summer we had huge increase in in summer use a water ban in the summer would easily solve any interim problem that might happen with a carbon reservoir our distribution system does not suffer because people use too much water even at the peak times a day we aren't reducing we don't have low pressure because too much water is being drawn through and the pipes can't handle it there is not a basis an

▶ 15:48 a rational basis for what we call a conservation rate here the american waterworks association is looking nationally at these issues and so when people go and refer to their manuals and the manuals that chris woodcock has even right written he's one of the consultants with raftellis you know it's looking at a larger issue it's not looking at melrose and if the mwra doesn't care about it i think it's disingenuous for us to act like oh we're somehow more pure because we have have a conservation rate in our city here. The other issue in that statute, it says if you had an increasing block rate, it would use the word fairly, as Mr. Tamor pointed out, but it would fairly reflect the resource demand and consumption. Define that for me. I know you won't right now,

▶ 16:37 and I know it's hard to do, but what does that really mean? The resource demand, it doesn't harm it doesn't hurt us it doesn't put any stress on our system for people to use a lot of water for their irrigation system it's not a resource demand that's harming us in any way i do want to challenge this issue that the statute requires an increasing block rate i would be glad to have a conversation or if need be a formal debate about that issue i'd be happy to do that because i think that if we tease out the underlying issues we're going to find that a flat rate pomelos works fairly well having said that let me go one step further we have a lot of fixed costs for our water system the only way we that we drive revenue toward those fixed costs right now

▶ 17:27 let me restate that the only fixed charge we make on our customers right now that we get applied toward fixed costs are the 15 base water meter per quarter and the five dollar base sewer meter fee per quarter so we basically charge each customer 80 a year for fixed costs the consultant will have a spreadsheet that if you asked him could probably show what exactly is the fixed cost of our water system and how much of that is attributable to an individual user in melrose and i would guarantee that that number would shock you the marginal cost of the water if and let me say another in other terms if nobody in melrose used any water and it's a little bit complicated as a as an example because our rates are based on last

▶ 18:18 year's consumption what we get billed by mwra but let's ignore all water costs from mwra they charge us nothing nobody uses any water we still have to pay to keep our infrastructure up we have to keep the pipes going we have to prepare the leaks we have to have the staff on hand we have to send out the bills we have all these different costs of service that are unrelated to use of water of the demand of the people in the system we want fire protection in our city if nobody uses water those are huge costs and right now those costs are being born not only by people who have high use of water but even more so because you're charging them a higher rate if you charge a flat rate across the city for water and sewer and you don't make the fixed

▶ 19:08 charges any higher somebody who uses 400 cubic feet per quarter they're not paying anywhere near what their you know percent share of the system is in terms of by the number of meters even or by the number of people they are way under funding the fixed cost of the system the political reality is is that you don't believe that you can charge the actual true fixed cost of the system in a fixed per meter charge i mean i i'm going to make up a number here and please don't go with it but let's say that it was 300 a year for the fixed costs would you charge people 300 a year for fixed costs and then charge what the marginal operating costs are separately because our marginal operating costs are really not a whole lot more than what the mwra charges us and it

▶ 19:57 might be about 2.45 right now per 100 cubic feet for water there are a lot of issues within this rate setting process that even in the water and sewer committee aren't coming becoming present there there are a lot of unstated premises even in you know mr woodcock who's one of the consultants again he's he i read a textbook article that he wrote a textbook chapter that he wrote and he talks about you know they can do a great analysis they can look very quantitatively at what every cost of service is in whether it's a fixed cost or an operating cost what class of user you can apply this cost to versus that cost to they can do a great analysis but in the end their analysis is premised on what the priorities are that they're given if they're

▶ 20:51 given a priority saying oh we need to conserve water somehow they're going to come up with a the conservation rate for you. If they're given a priority that, oh, we can't charge the mom and pop store on Main Street that's using 400 cubic feet of water a quarter, you know, any more than we're charging a residential person using 400 cubic feet a quarter, they're going to come up with something that shows that. I would argue, as another premise that I'd like to put out here, that somebody who's making money off of water is not a sustenance use for water. The average thrown out today is 65 gallons per person per day of what people consider like an average sustenance use of water. And that would be people in a residence living at home that they need 65 gallons per day on average.

▶ 21:42 Some people have issues that require them more. Some people can get away with far less, right? but a commercial use of water with somebody's making money in that water I don't believe that we have an obligation to provide that water at the same cost to them as we do to people for their basic living needs another premise that I want to get out there or you know the premise that underlies everything now is that oh we can't charge commercial more than residential well of course you can just comes to mind I want to get out there there's some talk about that we need a new ordinance to enter premises to change water meters and I don't believe we do you know this I in all my research I've come across you know Mass

▶ 22:28 General Law chapter 165 section 11 D which basically gives any person who is a worker for a water utility with a identification badge the right to enter a premises to change a meter among other things so I don't think you need to construct a whole ordinance to do that in the state law basically already are already controls that um this issue about condominiums and apartment buildings a flat rate would make it all go away there is an issue that came up today at the meeting that i heard that you know when i talk about fixed costs of the system we basically you we apply fixed charges to people through this base meter rate and right now the residences from five days three quarters and one inch meters all pay the 15 water base rate as a fixed cost and the five dollar sewer

▶ 23:30 base rate is a fixed cost there's a proposal to make you know anybody above that have to pay a lot higher and a significantly higher ultimately fixed rate which i would ask again the question what does it cost the city more because somebody has a larger meter we're billing them for all the water that's going through it and if you do if and why i bring this up and this is one of the issues that you know was apparent to me today was that these condo if you have a two inch meter why should the condo have to pay this huge amount for a two inch meter when they're already paying for all the water they're using um now obviously the two inch meter could be spread amongst the people but you know at some point the best rate is the simplest rate that allocates the costs

▶ 24:20 in the best way that we can allocate them to make them proportionate to what our costs are and i say fixed as separate from operating in that way and i understand that there's a political reality that you're not going to be able to assess all the fixed costs to let's say this you know 10 000 users in melrose you're not going to take the fixed costs and divide them amongst 10 000 users i know politically you're not going to do that but moving toward that target is a fairer way to go than than just saying oh we can't charge people more money I'd like to just um again I guess I'll close by saying I have faith that these consultants are qualified what I what I'm concerned by though is that they

▶ 25:20 They come here into this rate setting process with some preconceived ideas that aren't based on quantitative analysis or qualitative analysis of the rate structure itself, but based on what they think Melrose will accept or what Melrose can handle. And I would argue that it would be important for you to ask them to give you what would be a rate structure that would absolutely apportion all costs of service to the people who benefit from that service, number one, and amongst the different classes of users, and I would say commercial and residential, I don't think we have a high-volume user in Melrose, including the Melrose-Whitefield Hospital. Thank you. Thank you, sir. Motion to close public participation, Mr. Kressel.

▶ 26:13 Second. Okay. to be heard this evening. Alderman Mortimer moves to close public participation. The motion is seconded by Alderman Boycelle. On the motion, all those in favor? Aye. Anyone opposed? Public participation is concluded for this evening. Mr. President, I have before me the minutes of our meetings from February 1st and February 16th. I move that they be accepted without reading. Second. Alderman Mortimer moves to accept the minutes of our February 1st and February 16 meetings without reading the motion is seconded by Alderman Boycelle is there any discussion on the motion all those in favor of the motion anyone opposed motion passes the minutes are accepted order 2016-137 appropriation in

▶ 27:02 the amount of fifty five thousand seven hundred six dollars forty one cents from From account 620000-33001, Mount Hood Reserve Fund, to account 620000-52900, Mount Hood Professional Services, this appropriation is necessary to fulfill contract obligations. This order will be referred to the Committee on Finance. Tabled Order No. 2016-120, presentation by Raftelis Financial Consulting and Woodcock and associates regarding water and sewer utility rate setting motion to remove from the table second alderman Medeiros moves to remove order to 2016 120 from the table the motion seconded by alderman Mortimer all those in favor of the motion indicate by saying aye aye is there anybody opposed motion passes the order is removed from the table the chair would welcome a

▶ 27:58 motion to suspend the rules so moved second alderman Medeiros moves to suspend the rules. The motion is seconded by Alderman Inferno. On the motion, all those in favor? Aye. Anyone opposed? Motion passes. The rules are suspended so that we can hear from the appropriate parties who are here to enlighten us this evening. As we begin the FY 2017 discussion of the water and source service program of the city, I'd like to give a brief recap of where we have been the past few years. Three years ago, the board of aldermen unanimously voted on two important initiatives which have been carried out one was the creation of a water and soil committee that included a member of the esteemed board today president Kahn alderman Tramontozzi and

▶ 29:09 now alderman Forbes have been participating in voting members of this important committee this committee meets periodically and that meeting is open to the public all votes are taken in public each member is invited to attend the goal is that the automatic member of the committee keeps the board abreast of issues pertinent to the city in your constituents secondly we were called upon to hire a consultant to offer independent professional analysis of best practices as well as water and sewer enterprise fund finances pioneer consulting was hired over the last three years and a new firm Rift Ellis financial consulting and wood caulking associates was hired this year after careful research that culminated in a vote from the water and sewer committee

▶ 30:13 and again Alderman Forbes is now on the committee we appreciate that thank you with us this evening is mr. David Fox who is here to make a presentation regarding their background experience and approach we're pleased to have them thank you again to the board and mr. Fox does anybody need a copy of the presentation before we get could you also make the some available to members of the public if they don't have them thank you for having me this evening my name is dave fox i work with raftel's financial consultants i lead our new england office based out of worcester massachusetts chris woodcock is my associate from woodcock and associates he was unable to be here this evening due to whether he apologizes he will be here at a future meeting and i will let him answer

▶ 31:47 all your questions to make up for me having to be here tonight by myself so can we maybe move on to one more one more there we go great thank you I've been told that we don't have a whole lot of time this evening so I will get through this presentation as efficiently as possible really all I wanted to do tonight was to come here introduce myself introduce Chris Woodcock I give a brief introduction of what we've been hired and what we've been brought in to do and then go through kind of at a very high level what that process entails from start to finish not speaking anything tonight on specifics or actual recommendations for fiscal year 17 just speaking at a high level some of the things that we're going to be analyzing we already are analyzed we're in the

▶ 32:32 middle of analyzing and we're going to provide over the next two weeks of water and sewer committee with a document of recommended rate structures some of those being recommended so those being rate structures that we just analyzed and the pros and cons of them and whether or not we recommend those rate structures and hopefully the water and sewer committee amongst themselves can go through that excuse me and and it pick out the best rate structures that they feel for Melrose based on our expert opinions and and bring that forward to you I believe by the end of the month or early May for formal recommendation just to give a quick quick background again my name is Dave Fox reptiles financial consultants I my company is the largest company in the

▶ 33:21 country doing solely water sewer and stormwater work it's all we do we have offices and individuals all across the country doing this work Chris Woodcock Woodcock and Associates he has been doing this for over 40 years longer than I've been alive he is a world-renowned expert in water and sewer rate consulting he has primarily over the last 30 years or so been contained to New England and so what you get with it the package of me and my firm and Chris is my firm has that national experience we know what's going on not only in Massachusetts also what's going on in Southern California what's going on in Western North Carolina so we we have a lot of breadth of information of what's out there what's being done what's new what's fresh and possibly something that could be used

▶ 34:10 here in Melrose that's not typically used in Massachusetts Chris brings the expertise of knowing everything there is to know about water and sewer rate consulting in Massachusetts in New England he like I said he's been doing it for over 40 years now I can't wait for you to speak with him and hear him talk as well so we go to the next slide some of these slides are fillers so i will just skip over them quickly uh all this is saying is this is what we do we are not engineers we are not water sewer gas and electric consultants we are water and sewer consultants sort of bread and butter it's what we do day in and day out um and no engineering it's just water and sewer rate finance finance and and rate consultant i like this little slide

▶ 34:56 we have literally written the book on this uh here's four publications that either uh member of myself or other members of my firm or Chris have written chaired I believe Chris is the longest standing member or longest standing chairman of the m1 manual which is considered to some as the the Bible of water and sewer rates or the water rates are not sewer rates water rates he's the only person to ever chair that for three times so we know this is what we do again it's it's only water and sewer rates map here again we are a national firm but we also have that local and regional presence we've provided assistance over 500 utilities across the country serving more than 25% of the population and

▶ 35:50 within Massachusetts alone we've served over two-thirds of the population you when we first came in here it was easy enough for us just to look at Melrose's current rate structure and just say okay this is where you are but it's interesting to hear where Melrose has been and how you have gotten to the place that you are now we obviously want to take a fresh look at rates that's what we were brought in to do not just continue on if you wanted to just continue on with the same rate structure to be very easy just to calculate what an across-the-board rate increase would be to get you from fiscal year 16 to 17 and say this is what we need to do we were brought in to look a cost of service study a fresh look at what the rates need to be to suffice a few things

▶ 36:43 and we'll get into that a little bit financial sufficiency being the most important you need to be able to pay your bills to be able to sustain a an operating system that provides safe and clean water to your residents but also we wanted we need to create a structure that uphold some of the the pricing objectives if you if you will of Melrose's of Melrose so there are a few things as we're going through our study that we know we're going to tweak but I wanted to focus today since I'm not providing any recommendations I don't know exactly what those tweaks are yet I wanted to provide some of the recommendations that I know right off the bat are some great things that I think the City Department of Public Works and the water and sewer utilities

▶ 37:31 have done over the last few years first and foremost is establishing a plan to build up operating reserves I know you're still in in year three of a five-year plan I believe you're going into year four right now and as a conservative financial consultant I can't harp enough how important operating reserves are so I I commend Melrose for establishing those reserves and I and I hope that can continue further into the coming years of continuing to build those up we're not exactly what the targets need to be yet but we're going to continue to move forward with them establishing base charges up until fiscal year 14 all your charges were volumetric establishing base or fixed charges are incredibly important for a couple of reasons one it enhances

▶ 38:26 revenue stability it allows the system to be mitigated some or mitigate some of the negative impacts due to revenue volatility if there's a very cold and wet summer consumption is going to decrease and hence so will your your revenues building up that fixed revenue stream that is there whether anybody uses a drop of water or not is incredibly important for that that stability also it's good from a cost of service standpoint the majority of your costs are fixed and whether anybody uses a drop of water or not Melrose the utilities still have to pay their bills and so by establishing some fixed income it's dipping into or it's eating into some of those costs that are there no matter how much water Melrose's residents use you have implemented an

▶ 39:21 increasing block rate structure and there is some debate here I think this is a great thing I think it's the only thing that you can do I am NOT a lawyer I'm a rate consultant but is my understanding that the Massachusetts general law states that utility must have an increasing block rate structure Again, I'm not a lawyer, I'm a rate consultant, but that is my understanding and my interpretation of the law. So for that reason, I think it's a great thing that you have an increasing block rate structure. I also think it's a great thing if the city's, one of the city's objectives is to promote conservation and demand management within its community, an increasing block rate structure will do just that.

▶ 40:06 incentivize conservation and allow for demand management uh the city has been engaging in a meter replacement program all meters do as they get old they slow down and all that does is they misread and the city dpw is not getting a good read of the amount of consumption that people are using within the city and more importantly you're not charging fully on that consumption there is revenue loss there so by going through this meter replacement program you are recognizing the full amount of consumption that is in your system and you're able to charge for that the city is pro is is actively addressing infiltration and i i issues within the city the city has made great efforts doing this thus far and also has a plan in the coming

▶ 40:57 years to continue those efforts and i think that's a great way to spend capital dollars And also doing the best that the city can or the utility can to minimize costs. In fiscal year 2017, MWRA's projected system-wide cost increase was 3.9%. Melrose's share of that, Melrose's increase was only 3.5%, lower than the 3.9%. I believe water was 2.6% and sewer was 3.9%. If we go back to the bullet point up, one up, the infiltration inflow issues, I&I issues, if we continue proactively addressing those issues, all that's going to do is help us with our assessment and our increased cost from the MWRA as well. Some just preliminary observations and really what we are tasked to do and what we're going,

▶ 41:58 we are currently doing and what we're going to continue to do over the next few weeks to be able to provide you with some recommendations um we right off the bat based on my prior slide i think it's smart to continue charging a base charge um again this enhances the revenue stability and it eats in it it recovers some of those costs that are there no matter how much water anybody uses um so what we're doing we're not analyzing whether or not a fixed charge should be recovered it should be recovered you should charge a fixed charge what we are analyzing is how much revenue should that fixed charge recover and how should it recover those those costs should everybody get charged the exact same fixed charge should a six inch customer be charged more than a one inch

▶ 42:41 customer for this fixed charge that's what we're in the process of doing right now and in the next few weeks we're going to provide you with some recommendations on how best to set those rates again we maintain that you need to continue to have an increasing block rate structure this law it's on this slide it's been stated twice here tonight I don't I'm not gonna read it again for time-saving purposes again this is our interpretation that the city must have an increasing block rate structure to abide by this law little background the state has not historically been very strict in its enforcement of this law but nonetheless it is a law and is our recommendation that you abide by it even if no other even if some other utilities

▶ 43:24 do not abide by it is our recommendation that you do um and again in addition to that it provides for conservation of demand management incentives which um i will allow the board of aldermen to discuss if that is a an initiative of the city it has been our understanding that it is at least for some folks um so if if that is an absolute uh driver and an initiative of the city to promote conservation demand management and increasing block rate structure incentivizes that so what we're doing right now is we're in the middle of analyzing we know we would like an increasing block rate structure we're analyzing where those blocks should be set right now you have a three tier system so you have three different rates no matter depending on how much water

▶ 44:11 you use or assessing is it appropriate to have three tiers should it be two tiers is you know the first tier cutoff is at 2000 CF is that appropriate that's the process we're going through now looking at years three years of detailed billing data looking at every single bill that was sent out over those three years looking at the distribution of consumption how many customers are using less than two two thousand CF in a year how does that fluctuate based on seasonal demands you know is there a justification for charging very large volume users that highest rate that third tier I'm not here to give you an answer to that yet but those are the things that we're asking ourselves is it justified to be doing that if not what's the proper justification what should

▶ 44:57 those customers be charged we are taking a very leave nothing off the table approach at looking at these rates when we're doing this one of the things that that came up when we had our initial meeting with the city was the idea of unit averaging for apartment complexes rather than just charging an apartment complex for all the consumption that they use and send all their consumption through the blocks can you take the number of units that are in an apartment complex average that the total consumption among those units and then take those averaged and and put them through the tiers accordingly as if they were individual single-family residential homes rather than one large apartment complex it's funny this issue comes up in almost every single meeting

▶ 45:48 recently that I've been to and my answer has been this there is pending litigation within Massachusetts I'm not going to get into specifics but there's pending litigation on this issue exactly it is our recommendation at this time to for the city to hold off making any decisions based on this until that litigation is resolved and we can make it a more educated decision going forward on how best to handle it in Melrose. Also in for the sake of time and data there are also you know even if the litigation comes back and says that a Melrose can do unit averaging there are a lot of complexities that need to be considered when doing when thinking about this what do you do with vacant units how many time you know how often do you check how many units are vacant

▶ 46:43 in an apartment complex how often is that audited things like that that the data that needs to be available to be able to do those things right now you build quarterly it there are more complexities that need to be considered I'm not saying that we cannot consider it but I think the underlying thing at this point is to focus on the fact that there is pending litigation on this exact issue and it is our recommendation that things be held off until we can recognize some resolution to those we were also made aware of an issue with the proration of bills because you do bill quarterly there is oftentimes you know the rolling billing there is a gap between when the rate is implemented in and 20 say fiscal year 2017 in july 1 um billing some consumption that happened uh prior to that

▶ 47:34 and so fiscal year 16. um i recognize uh with just having discussions with the city that prorating bills has become an administrative hassle it's time consuming it costs a lot of you know money and time to be able to do that it is our recommendation that you adopt rates to go into effect you adopt the rates July 1 but you don't actually start billing on those rates until October 1st so any consumption that you do bill on fell within that fiscal year you were legally able to charge that consumption now what's going to happen is you will have a slight revenue loss in the first year that you're doing this by not having that full year of the rate increase you're gonna have those three months we're gonna have the prior years rate

▶ 48:19 we're in the process of coming up with exactly what that that revenue loss would be and how best to to fund it I don't think it's going to be a significant revenue loss that we don't make this one-time adjustment it will be a one-time adjustment and then every year going past that it will all just be another 12 months I'd also like to touch on this further but continue to develop strong reserve funds and again this is the conservative financial consultant coming out in me but I preached to all my clients to you know to build up their savings account I wish I could build up my savings account more I think everybody in this room does it's it's very important for a number of reasons your current target is getting to 10% of operating expenditures like Patrick said

▶ 49:10 we're entering into our fourth year of that we're getting close I don't think we need to if I were making a decision now I'd say let's target something more in the 20% range rather than 10% just to allow ourselves to have a rainy day fund. Infrastructure is getting very old. It's failing. For purposes of the perpetuation of the system, it's nice to have that cash on hand to be able to make capital improvements when necessary. I'm not making the recommendation at this point to go to 20%. All I'm recommending is that we continue the path to get to 10%. It's going to be another two years. Let's see where we are at that point we can reevaluate i don't want to more aggressively target anything higher than that within the two

▶ 49:53 year span all right i'm gonna i know i've spent a lot of time on that which i think was the most important part so i'm gonna go through this very quickly um and then at the end we can have some q a and then hopefully everybody can get home safely um what i wanted to do is just put together a quick package on a rate setting 101 a very high level not too incredibly detailed on what the process we're going through on what exactly is the process that we're going through and we're going to continue to go through over the next few weeks our goal is to devise and calculate a rate structure that obviously generates sufficient revenues we need to Melrose needs to pay their bills so no rate structure that we will propose to you will not do that it also

▶ 50:47 needs to accomplish utility and stakeholder objectives what are the objectives of DPW what are the objectives of the alderman what are the objectives of the city as a whole and that where you know some of the things like conservation demand management come into play revenue stability and we're continuing to work through that is consistent is consistent with industry best best practices like I said before we wrote the book on this we're not to provide you anything that's not consistent with industry best practices but there is uh this is not a complete science there is an art form to this um you can there's the old saying is there's many ways to skin a cat and i think that's especially true with water and sewer rates

▶ 51:29 we know what our outcome and what our goals are there are a lot of different ways to get there so that's what we're working through right now and we need a rate structure that is defensible of challenge. We're not going to propose and recommend any rate structure to you that would fail in court. Rate setting process, we're going to go through this quickly, we'll go step by step. So can we move on to the next slide, please? Thank you. Step one is usually sitting down with the utility and saying, what are the objectives here? What are the objectives of the rate structure? Obviously at the top there, and these are in no particular order, but financial sufficiency just happens to be at the top.

▶ 52:07 the most important we need to pay our bills rate stability revenue stability um customer understanding we don't want to devise a rate structure that's going to have customer service on the phone all day long trying to explain what the heck a rate structure means we want to you know somebody to look at their bill and understand what it is and it'd be meaningful to them conservation demand management we spoke about a little bit affordability is it a priority of the city and the utility to provide an economic um some economic help to economically disadvantaged customers is that a is that a priority or an objective um minimizing customer impacts things like that so you know this all these things will allow us to formulate a rate structure that will

▶ 52:54 best meet the needs of melrose for example increasing the fixed charge even further flies directly in the face of conservation and affordability i think it's very important to increase your fixed charges but if conservation affordability were important to you there's some things we can do to balance that out um again just nope you're fine thank you uh real quick so step two is building up our revenue requirements what do these rates need to how much do these rates need to recover to pay all the bills what goes into that is Operating maintenance expenses, electricity, salaries, MWRA costs. We need to make sure we keep the development and perpetuation of the utility system. Keeping up with the infrastructure of the utility.

▶ 53:46 We don't want just, you know, as a rate consultant I see it all the time, utilities putting off rate increases because it's not politically acceptable, even though the infrastructure is failing and they need to replace the infrastructure they just don't feel like they can get a rate increase through and infrastructure starts failing and that flies right in the face of getting or providing your customers and your residents with clean and safe water so we want to rate structures to be able to pay for these these capital these necessary capital improvements to continue to do that we need something to we need a rate structure that's going to generate enough revenue to meet debt service recovery coverage requirements and to

▶ 54:27 continue to build up our reserves again what goes into this operating expenditures pay go capital cost any cost any capital costs that are not funded through debt service so any cash funded capital any additional reserve requirements to build us up to that 10% and possibly further after year two and then the current debt service any proposed debt service that is going to go on into effect by by funding the capital plan just a few things to consider when we're going through this financial planning process and building these revenue requirements again maintaining adequate reserve levels debt service coverage things like that low income discounts by increasing our fixed charges is it negatively affecting

▶ 55:12 low-income users if so is there anything we want to do to be able to mitigate that or minimize that for low-income customers and there are programs that we can enact or enable to be able to do that but if that's the case how much are those programs going to cost and who's going to pay for it policy to deal with mwra costs like i said the city's and making you know great taking great efforts to fix her i i things like that that's you know one portion of something we can do to control our mw mwra costs and the capital program financing again there's no uh there's no denying that there are a lot of capital funds coming down the pike that need to be paid for to perpetuate a safe and clean water system for your residents which means rate increases but what we can do

▶ 56:02 through financial planning and capital financial planning is spread those costs out through a mixture of of debt and capital and pay go to minimize the impacts on the rate payers and make those increases as palatable as possible the next thing that we do is after we have all those those costs build up as we go through a cost allocation or cost of service study um now this can mean a a wide array of of things um really in in general all this is saying is that each customer grouping or each customer type should pay for the cost that they incur on the system now on one end of the spectrum you could say cost of service is taking your entire budget or revenue requirements in one year dividing it by the number of customers you have that's your

▶ 56:53 charge and you charge it to everybody the other end of the spectrum is saying let's look at every single account that you have individually and give them their own individualized rate it's something that happens in southern california they're called individualized or budget rates it requires a ton of data on a monthly basis looking at how much they used on the month beforehand i don't remake i don't recommend any of those spectrums we're going to fall somewhere in between but that's the the process and what we're looking at um this is these are two of the more detailed slides uh up top again we just start with our the cost of providing the service um then we're going to allocate those costs to the function that they serve so as a pumping cost is

▶ 57:37 it a meter cost a fire protection cost down from that we allocate those cost to cost components is it a meter component does it does it is a cost that relates to providing just base water consumption and demand or does it attribute to peak hour demand your 7 a.m is when everybody's taking showers that attribute to that and then taking that a step further and allocating those costs to fixed cost components like a billing a meter cost and then possibly even customer classes or customer types that doesn't need to be your traditional residential versus commercial it can be small customers versus large customers and we can differentiate there between custom by meter size so again this is the entire process that we're working through now don't have any

▶ 58:22 results as of now we're working through this process um the next time you you see us we'll have some some firm results for you uh same thing this is another sewer um it's basically the exact same process just for the the sewer components for time saving purposes let's skip over this once we have those costs allocated the next step in the process is designing a rate structure we talked a little bit about fixed versus volumetric rates you have both right now conservation versus pre conservation rate designs we'll talk about those in a minute what are those means and then just evaluating alternative rate structures again not leaving any stone unturned we want to evaluate a bunch of different rate structures and if it doesn't work here

▶ 59:03 this is why it doesn't work we don't we don't recommend this rate structure for these reasons and allow you to make a decision based on those again fixed charges variable charges we talked about this you know a lot fixed charges does not matter how much if any you know a customer uses they're getting charged that same fixed charge a variable charge is you know completely dependent upon how much water somebody uses for customer uses typical fixed charges there can be a customer charge where every single customer no matter the meter size the size of the customer they're charged the same so five dollars bill say no matter if you're a one inch customer a six inch customer a minimum charge can be a

▶ 59:47 component of the fixed charge but you get some sort of allocation of usage so if you pay five dollars a quarter you get say a thousand cubic feet of usage within that and then anything above that you'd start paying a volumetric rate for the service charge and the capacity charge by meter size similar to what you have now we're looking into how to best allocate those costs and charge them based on meter size but they they escalate by meter size so a six inch customer is going to pay more than a five-eighths inch customer so variable charge overview oftentimes the way that it happens is you know I talked about the two ends of the spectrums and the one was just dividing all the costs by the number of customers that would lead to a very high fixed charge for all

▶ 1:00:35 customers and disproportionately affect low volume customers versus you know high volume customers so we typically can't set our fixed charge at that full amount so we set it to something lower to recover a target of how much we think we need to recover in terms of fixed charges and then everything else gets recovered from the volume metric of the variable charge typically not typically sometimes wastewater consumption is based off of a percentage of water consumption to reflect water that comes into the home but is not sent back through the sewer system good water put on dirt for irrigation purposes or washing cars things like that okay conservation verse pre conservation rate designs if you would have you know take a poll of all the rate structures across

▶ 1:01:27 the country say maybe 25 30 years ago even 15 20 years ago you'd see a lot of flat rates where no matter how much water you use you use the you get charge the exact same amount per unit and even declining so the more water use the less the less you're charged over the last 10 years or so 10-15 years there's been a trend towards conservation rate structures the increasing block which you have currently seasonal rates so a chart you'll charge customers more for using water during the summer months and say that the winter months and individualized which is the budget rates I was speaking of where each individual customer has their own bill not recommending that certainly can't do it on quarterly billing you're gonna need

▶ 1:02:09 monthly billing a lot of data and given that you are not running out of water like Southern California it's not something I would recommend anyway but again just to reiterate on the bottom here is what I'm interpreting as the law saying that Melrose has to have an increasing block rate structure so we design a rate structure we design many rate structures maybe six seven options what do we do with them then how do we assess them how do we assess the effectiveness the number one assessment that I go through is what are the customer impacts how do you take what a customer is currently paying whenever you make rate structure changes they're going to be customer impacts different costs are going to be affected differently so how do you look at what

▶ 1:02:53 the current rate somebody's paying the current bill somebody's paying and how does that compare to what we're proposing in terms of the new rates also competing objectives like I said before high fixed rates fly in the face of affordability for low-volume customers and conservation as well price elasticity of demand if we decide to possibly go up higher on the volumetric rate than we do on the fixed charges is that going to negatively if negatively affect demand do we need to factor in some sort of price elasticity to factor in additional demand reductions due to that comparison with other utilities I will caveat this with to be very careful when comparing yourself to other their communities in terms of rates it's not as easy as saying well our rates are

▶ 1:03:38 higher than this community's rates or it's a very apples to oranges comparison for a lot of different reasons the age and the size of the system whether they are an MWRA community how their rates are set on the sewer side for example are they based 100% on water consumption they 80% of water consumption there's a lot that plays into this side I'd caution it's not that you cannot do it just I'd caution you to to make sure that as best as you can to look as apples to apples comparison which is oftentimes very difficult to do and then again the affordability of service we proposing anything that is going to be unaffordable to our to our residents specifically economically disadvantaged customers is that something that we want to to tackle one of the things that

▶ 1:04:17 we've done recently in a community was recommend an affordability program where there are if you bring in say an electricity bill that says you're already getting some low income discount you automatically get a discount here in Melrose there are costs to that the other customers are going to pay for it but it's it's something and you know what we can say is your fixed charge goes away and then you're gonna pay for every drop of water that you use but your fixed charge is going to go away or possibly discounted not sure if that's something we would like to look into but it's an it's an option so it's there if want to got through it um questions please thank you for coming in um if the if the committee would

▶ 1:05:05 indulge me for just a minute um i i actually filed the order that that passed this board that required that we have a consultant to assist us in setting our rates and i also made the proposal that required that we have a board of alderman Representatives on the rate setting committee I know you're just in here for the first time tonight but a couple of points one alderman's perspective conservation is not the only driver of these rates nor should it be that's that that's not my intention here financial stability some stability in terms of rates from year to year and non fluctuation of rates obviously sufficiency of rates is important and this board has passed rates to fund this system affordability for our customers is important all of

▶ 1:06:07 these factors from my perspective are things that need to be taken into consideration in setting the rates so and I'm sure members of the water and sewer committee have indicated to you that conservation although an important factor should not be the preeminent and predominant factor in terms of uh setting these rates one of the things that's a problem here as you can see and you'll see more as you come to more of our meetings is um going to your presentation is are the rates defensible if challenged we have some issues that you've heard discussed tonight we as a or i and i presume the rest of of the board of aldermen want to make sure that whatever we vote on from here on in uh would be defensible and we're looking to your company uh to make sure that um you know another one of your

▶ 1:07:01 bullets was customer understanding we want to know how these rates that are being proposed to us are defended and we want to make sure that our rate payers uh understand them so um and and we want some of these problems addressed and we could differ with you relative to recommendations but we want issues like unit averaging for multi dwelling unit dwellings to be addressed and discussed so those are some of the perspectives that we're looking for that we felt we haven't gotten in the past and we're hoping to get more information and a dialogue on these issues going forward this year. Are there questions from members of the board, please? Alderman Tramontozzi. Your report and analysis is a fresh

▶ 1:07:52 John N. Tramontozzi: look, as you say, so I assume you're not coming here with any preconceived ideas as any suggestion might be, so I do appreciate the fresh look you're going to give us, and I do agree with President Kahn regarding that conservation issue. It's not the most critical, but I do have three areas that I hope that your analysis and report will address. And that is the first one, is I do want an analysis on the block rate structure and a flat rate structure as it applies to the cost of the consumers. I know even though, in your words, you think the block rate structure is a good thing, you are not an attorney, as you suggested in that I don't need a legal analysis of Massachusetts general laws from you but I think this board is well served and can deal with that issue but

▶ 1:08:51 John N. Tramontozzi: if we can get an analysis of the the block rate structure along with the flat rate structure I think that would be a go a long way in providing us areas of analysis that we best can approve the second area that I think your report should address to give this this board the best practices as you say in making our decision is the just shifting of the cost from the city departments to the ratepayers I'd like to see the analysis as to why the city departments I should not be billed on their budget as to the the use of water and sewer rather than sending it off to the enterprise funds the third area that I want to see some significant analysis is the city's use in the practice of billing the indirect

▶ 1:10:01 John N. Tramontozzi: cost to the enterprise fund for example the cost for various the different departments for wages salaries utility costs whatever I want to see those indirect costs and I'd like to see how that might we maybe have have some savings to the enterprise fund if some of those indirect costs if they're legitimate indirect costs relating to water and sewer I can understand that but I want an analysis of all those indirect costs to be including the report is that something that you guys can do I think we hired you well we're hiring you for a fresh look and what the industry best practices are and I think that will be included with that typically looking at an internal evaluation of indirect costs and how much of those indirect costs should be

▶ 1:11:02 Monica C. Medeiros: associated to enterprise funds is outside of the scope of work of a typical rate study we can look at what the impacts would be if some of those costs were to shift say they were increase or decrease what that would mean on rates that's an analysis that we can run all right that sounds good okay so I appreciate that and thank you look forward to your analysis in that report thank you thank you thank you yes I'm very pleased to have you here I'm glad that you're bringing so much experience to the table from not just within Massachusetts but you know I mean that we really want I think at least I really want a consultant who's going to actually you know consult and really bring not just say well this is what this other town does so that's what you

▶ 1:11:56 Monica C. Medeiros: should do too but to look at a kind of an individualized approach for Melrose you know we are you know I don't know I'm pretty proud of the city I think we're a great city where we've been a leader in a lot of areas and done things that are different than many other communities and um so you know i would very much welcome a look at something that might be a hybrid of what many communities do um some of the areas i think have definitely been discussed tonight in terms of objectives and i just want to stress you know some of my concerns too certainly the proration issue which i i'm making sure that we're not retroactively charging people i think that's that's very important i'm glad to see that here

▶ 1:12:44 Monica C. Medeiros: in terms of figuring out i i asked the consultant that we'd had previously in the beginning of this like did we know who was using the water and and it wasn't exactly so and i think maybe at the time we as a city didn't have necessarily the tools to really kind of determine who our users are and I say this because we we know we have so many households that are maybe single-family and so many that are two units and so many that are condominiums only their apartments so many that are commercial what we don't know is the impact of how many household members there are in that that house and how does that affect them so It's not necessarily that a home with five people in it, maybe two parents and three children, are exactly wasting water.

▶ 1:13:41 Monica C. Medeiros: But at the same time, under the system right now, they're getting charged as high billing. So I do have some orders that I've submitted last year that have actually gone and have been sort of waiting in the Water and Sewer Committee. So I do hope that they, for your opinion, as a matter of fact, I don't think that they're necessarily the perfect be-all, end-all, but they were meant to be a starting point and to look at some things. looking at averaging by person per meter for instance and I actually have a little formula in there what to do with the vacant unit based off the census which I thought at one point was maybe not possible but we just had a presentation last week from our city assessor we have a new program called I

▶ 1:14:32 Monica C. Medeiros: guess Melrose maps where he said very clearly we could anything if we have an address we can tie it into that system and you know certainly we have that with our water and sewer billing we have that with our census I think you know we have that with with obviously the assessor's office it might open up some more opportunities that maybe even some other communities don't have in terms of your assessment so I'd like to see you know how are we affecting our senior citizens how are they affected by this how are large families affected and versus you know because I think that's important we're looking at how we stretch to the rates you know it's it's really important overall that our residents feel like they are getting paid they're paying fairly for their use of the water

▶ 1:15:26 Monica C. Medeiros: and you know obviously that means that we should have a fair system but it also means that it should be something that they understand and that what doesn't like have one group I'm gonna say unfairly paying you know higher share of the water which it seems like we had a system where I think especially when Alderman Tramontozzi referred to a flat rate we're not necessarily talking about a flat rate in you know there's 8,000 units and we're just going to charge you per 8,000 units we're saying this is how much each unit of water is going to be not usually so you know can we do some kind of hybrid I know this law has been on the books I don't advise anybody do anything illegal of course but there's

▶ 1:16:15 Monica C. Medeiros: many different interpretations to this increasing block rate and I've spoken to some of the people at MWRA and said if we have this base rate charge which we do per meter meter size if that's increasing doesn't that satisfy our requirement in the law and they said yes but you know obviously we want something that's defendable and I think you know we want something that's clear and that people can understand because I get I don't know how many times I interpret water bills but you know that's that it should be more clear to the people okay I think that that also involves how we present our budget and especially all the chairman Tosi mentioned you know some of those indirect costs making sure

▶ 1:17:06 Michael P. Zwirko: that those are clear in our in our budget and how we're proposing them and you know that that people understand what this this charge is made up and how maybe it's increased year-over-year certain line items and things like that that's really clear thank you anyone else with any comments or questions from mr. Fox Alderman's work oh thank you mr. president and thank you mr. Fox for showing up today appreciate your preliminary report here and looking forward to some of the work that will come from this so I do have just a couple of things come some of them are comments others are suggestions you know I've this is my first time going through the water and sewer rate issue as a member of this board you know the one thing in studying the issue over the

▶ 1:17:53 Michael P. Zwirko: past couple of years I found out that there's no silver bullet and that there's a pro and a con generally with every proposal that could be brought forth you just have to kind of weigh well are the pros better than the cons and etc so what I would like to see is a wholesome menu of options and services that we can provide because I do think that some may work some may not or others will cast off immediately but still I like having that spectrum of options available to us you know it seems to me and this has been brought up a little bit tonight with respect to the idea of a flat rate for example whether or not we're going to agree on the interpretation of the Massachusetts general laws I still would like to see that as a menu of services you know

▶ 1:18:37 Michael P. Zwirko: that's kind of our risk-based analysis should we choose to take that so you know leave that to us we'll take that risk I know speedings against the law I frequently do it so you know you take that chance at times but I would like to see the benefit if any to a flat rate structure I do think that in with our current tier I'm looking at the 2016 water and sewer rates right now we do have a three tier structure for consumption I believe that the first tier is much too small in terms of its cubic rate cubic foot rate it's from 1 to 2,000 the second tier then jumps and it's 8,000 it goes from 2 to 10 that I feel is a little bit misleading to users I think that they would find themselves jumping into that second tier quite quickly and I think that a way to kind

▶ 1:19:24 Michael P. Zwirko: of ease the burden is to increase that first tier again when you're doing a menu of proposals I'd like to see some tier rate structures that maybe are a little bit closer in the increments of the cubic footage that we are allowing per tier another thing I would just like to mention and I don't know if this would come into your study so apologies in advance but we're determining whether or not it would be worthy to bill more frequently part of that is from a customer use standpoint that's easier for budgeting obviously if you get a bill per month versus per quarter or annually my concern with that is is the costs associated with mailing those can be quite high so if those costs are going to in some way increase the amount of the water rate I would actually

▶ 1:20:09 Michael P. Zwirko: prefer maybe semi-annually billing or stretching it out I understand that could be a burden again pro and con you have to weigh them so that's just something that I hope you could consider and then the last thing I wanted to mention I have seen this in some other communities and these are MWRA communities those are the only the ones that I have concerned myself with at least in my studying of this issue and I know that some towns and cities I don't think we have a lien problem when it comes to our water and sewer bills I think people generally pay on time so we don't have many a large figure that's in arrears so I know that some communities do offer incentives for paying within a certain amount of time of their bill being sent to them I don't know exactly

▶ 1:20:54 Michael P. Zwirko: and I don't want to speak out of turn but there are incentives for paying early paying on time paying in full I'd like some of those incentives to be looked at those incentives can go across the spectrum whether you're high income or low income granted generally higher income will be able to pay in full ahead of lower income people but those are incentives that are helpful so with respect to incentives again a whole suite of services whether it's benefit for lower income people whether it's incentive for paying earlier and on time any of those those programs would be appreciated Thank You mr. president Thank you. Anyone else on this order this evening? Alderman Forbes. Thank you, Mr. President, and thank you, Mr. Fox, for being here.

▶ 1:21:39 Scott M. Forbes: I know I was at the commission hearing today. This afternoon has been quite a first day for you. I know in attending that meeting today, I know that you're not done with your analysis as of yet. I know we were presented with a spreadsheet that had many different data tabs that went from billing to percentages of volume, frequency revenue cash flows reserve funds and then moving over into calculating rates and design models so I was impressed with your your presentation today there's a lot of data that's involved I think here's a board we're concerned because we have to make the right decision for our residents and so we do rely heavily on the consultant in in your professional opinion in order to

▶ 1:22:24 Scott M. Forbes: get us to the right place I think I can echo some of my colleagues here when I say that affordability and being able to defend the rate is is really what we're what we really need to prioritize here I know that you said that you'd be presenting up to five or six different models for us to take a look at I applaud that because it gives us a variety of choices in which to in which to kind of think whether we're in the box or outside the box we can make the right decision for the residents of Melrose I think we all have that in the forefront of our minds it's never easy to set these rates we all have to pay our water and sewer bills we're all residents of Melrose so I hope that moving forward and I know that you're going to be presenting that to us in a

▶ 1:23:10 couple of weeks I look forward to seeing those thank you very much mr. thank you all them anyone else okay the orders before you what's your pleasure okay why don't we go one at a time motion a table okay there's a motion to return the order to the table is there a second second that motion is seconded by alderman Forbes motion to table is non-debatable therefore I'll call for the vote all those in favor of placing the order on the table indicate by saying aye aye anyone opposed motion passes the order will be laid on the table thank you gentlemen for coming in this evening thank you thank you very much thank you very much if we could move on to a new business place order 2016 dash 138 amending Melrose revised ordinances chapter 202 streets and

▶ 1:24:14 sidewalks by adding section 202 dash 1.1 reservation of space for city use rights and privileges of city therein that order will go to the committee on legal legislative matters. Order 2016-139 amending Melrose revised ordinances chapter 177 peace and good order by adding section 177-15 chronic problem properties. That order will also go to the Committee on legal and legislative matters. Order 2016-140 application of Omar Yusuf and Fayyad Omar doing business as Metrolis taxi LLC for a Hackney carriage license for one taxi cab that order will go to the Committee on protection and license we have any orders out of order this evening are there any orders from committee what is from committee Alderman's work Oh motion to remove

▶ 1:25:24 order two zero one six dash one two one from committee second Alderman's work Oh moves to remove order two zero one six dash one two one from from committee that is the acceptance of a grant in the amount of $75,000 from the executive office of housing and economic development as marketing partnership funds are to be deposited into fund number 402 to BB estate improvements on the motion to remove the order from committee all those in favor aye anyone opposed whatever is removed from committee and it is before you motion to recommend second all the most about that section alderman's worker moves the passage of the order the motion is seconded by alderman mortimer alderman medeiros i believe we have mr shenna in the audience i believe we do and we're under

▶ 1:26:17 suspension of the rule so maybe we could hear from him thank you mr shenna could you address this order please good evening everyone um melrose uh received a grant in the amount of 75 000 from the executive office of housing and economic development it's part of the mass marketing partnership an office of travel and tourism program the mmp-mott program we're requesting that those funds be deposited into fund 4022 which the auditor's office has created for the bb estate improvements the public works department has worked with the bb estate trustees and we intend to use these funds to make improvements to the exterior of the building mainly repainting but obviously this scraping and some miscellaneous woodwork that

▶ 1:27:13 has to happen as well any other repairs that we we see on the exterior we will proceed with as well our engineering office went through a dirty bead process to procure a painter he was supposed to start today but didn't for obvious reasons um so the intent is to is is to paint the exterior make improvements to the exterior with this grant once we expend the funds they will reimburse them fully does the city have any financial responsibility in terms of this grant no it does not any questions alderman zorco i said question is any discretion allowed within the use of this money or is it only for exterior painting and rehab no it's for improvements to the building and actually we got a very competitive bid with the timing that and there are some there's

▶ 1:28:05 contingency obviously in the budget but there's some there could be some surplus funds that we identified to even make some interior improvements we're in just last week we had a discussion with the trustees so they're mulling some options over at this point in time right so will the color be bright yellow in fact it's historic the building is obviously historically well aware of that um and there is there are some heavy restrictions on the means and methods so we included those all with our with our bid and the vendor that we selected has a lot of experience doing these types of historical buildings we met with them last week we all feel comfortable so you should see the building being painted hopefully as soon as the weather warms up

▶ 1:28:51 Monica C. Medeiros: Thank you. That's all I have. Thank you. Thank you. To the naked eye, I guess $75,000 for painting seems low, but because this is a historic building and there's many repairs in terms of the wood and stuff like that, I imagine that goes up very quickly, the price. Do you think that this is an adequate amount to cover what's needed to be done? and do you you know do you think that we will need to do to expend more money we feel very comfortable that the money that the grant is going to bring in fact that's why we bid it first to make sure that we were in the right price range before we proceeded but we have an actual bid we have contingency and I said we actually have some additional funds as well so we're very comfortable

▶ 1:29:45 Mary Beth McAteer-Margolis: the grant will cover it we think it's we might have a little leftover possibly we're not like leftover but in addition to what we thank you thank you all the McAteer Margolis thank you I just wondered mr. Shannon will this impact the use of the building at all we're working with the trustees right now may they're not that busy so their rentals pick up in the summertime so we're working with them at trying to try to not impact them as much and along the questions of Alderman Medeiros if as they're you know doing their work they find you know rot in a gutter or what have you there is sufficient funds to do those kinds of repairs the way we crafted the bid is there is a there's a lump sum to paint it there's a there's a line item that sets up contingency to

▶ 1:30:36 deal with woodwork and framing and and then there's some change order work that could be applicable as well we'll have one of our engineers managing it on a day-to-day basis so as those issues come up we can we can deal with and figure out how to compensate them and have the trustees or have you consulted with the Historical Commission on it so the trustees have been very involved and we're very grateful there's a lot of talented great people people on that board they assisted us with even writing the specification and there's a lot of historical experience on that board so we seem to be okay and ready to go thank Thank you. Thank you. Anyone else? Ms. O'Shea, could you call the roll, please?

▶ 1:31:18 Alderman Boisselle? Yes. Yes. Alderman Forbes? Yes. Yes. Alderman Inferna? Yes. Yes. Alderman Lemmerman? Yes. Yes. Alderman McAteer-Margolis? Yes. Yes. Alderman Medeiros? Yes. Yes. Alderman Mortimer? Yes. Yes. Alderman Tramontozzi? Yes. Yes. Alderman Zwirko? have any unfinished business this evening order 2016-71 be it ordered that the director of Public Works implement a program to monitor snow removal on residential sidewalks and design a citywide sidewalk map the director of Public Works will report findings to the Board of Aldermen by April 4th 2016 Altman Inferno thank you very much mr. president I've been in touch with mr. Jenna and very appropriate that this order should come before us this evening

▶ 1:32:20 Gail Infurna: but the good thing is mother nature really hasn't provided us with a lot of snow this winter for them to get a lot of data but they have gone out twice and he hopes to have somebody going out again tomorrow to assess this and he will give us a report after he gets through hopefully this is the last snowstorm of the season and he is doing it ward by ward so when he does come before us will really actually have a word by word report on this so I would ask that this be remanded back to the committee of Public Works second the motion Alderman Inferno moves to remand this order to committee the motion is seconded by Alderman Mortimer is there discussion on the motion all those in favor anyone opposed that order will be

▶ 1:33:04 returned to the committee on Public Works okay are there any reports pursuant to rule 53 from outside committees this evening Alderman Forbes Mr. President, I believe that any and all of my notes were clearly stated here today. We had the consultant, we had the billings, we had the rate increase, and we had the increase to the City of Melrose. So I have nothing, therefore, left to report. Thank you. Thank you. Anyone else? If we could turn to the calendar now, please. 2016-124, transfer of $2,415 from unemployment expenses, account 019132-544400, to various inspectional services accounts as set forth herein. This comes to us from the Committee on Finance with a recommendation for passage. Motion for passage, Mr. President.

▶ 1:33:58 Alderman Forbes moves for passage. The motion is seconded by Alderman Boycelle. Is there discussion? Would you call the roll, please? Alderman Boycelle? Yes. Yes, Alderman Forbes? Yes. yes Solomon Inferno yes yes Solomon Lemmerman yes yes Solomon McAtee Margolis yes yes Oliver Medeiros yes yes Oliver Mortimer yes yes Oliver Tramontozzi yes yes Oliver Zwirko yes yes President Conn yes yes 10 yes that order passes order 2016-125 appointment of Ward Hamilton 87 East Emerson Street to the Historical Commission for a three-year term said term to expire on the last day February 2019 by the committee on public service motion for passage I'm gonna make it here Margolis moves to for passage most is seconded by Alvin

▶ 1:34:48 Boyce L is the discussion all those in favor of passage of the order indicate by saying aye aye anyone opposed that order passes order 2016 dash 126 appointment of Maya Jamala Dean 10 Melrose Street to the Human Rights Commission for a three-year term said term to expire on the last day of February 2018 this order was recommended by the Committee on Appropriations motion for passage second Alderman Tremont ozi moves for passage of the order the motion is seconded by Alderman Boyce L is there any discussion all those in favor of passage of the order indicate by saying aye aye is there anybody opposed that order passes order 2016-127 appointment of ellen ruthstrom 15 vine street number one to the human rights commission for a three-year term said term to expire on the last

▶ 1:35:42 day of february 2019. this order comes also from the appropriation committee with a recommendation for passage motion for passage mr jacket alderman mortimer moves for passage of the order the motion is seconded by alderman Boisselle is there any discussion all those in favor of passage please indicate by saying aye aye anyone opposed order passes order 2016-128 appointment of catherine and mercier 466 pleasant street to the melrose public library board of trustees for a three-year term said term to end on the last day of february 2018. public service committee recommended this order for passage motion for passage second alderman inferno moves to passage the motion is seconded by alderman boycelle is there discussion relative to this order all those

▶ 1:36:31 in favor of passage please indicate by saying aye aye aye is there anybody opposed that order passes order 2016-129 appointment of jessica joy buster 164 derby road to the commission on women for an initial term said term to expire on the last day of February 2017 Alderman Inferno moves for passage the motion is seconded by Alderman's workup the discussion relative to this motion all those in favor of passage indicate by saying aye anyone opposed that order passes order 2016-130 appointment of Gail Marsha Cass 10th sunset row to the Commission on women for an initial term said term to expire on the last day of February 2017 AGW recommended this order for pass motion for passage Alderman Lemmerman moves for passage the motion

▶ 1:37:26 Scott M. Forbes: seconded by Alderman McAteer-Margolis is there discussion on the on this motion I do mr. president just have a quick statement as you know I was the one no vote on this order at the public hearing I believe I clearly stated my reasoning for the decision as I wasn't a hundred percent confident at the time when the order was taken to a vote however after looking at the appointment process made by this administration any concerns I have relating to these orders have disappeared in order for this commission or any commission for that matter to be successful it must be inclusive to all I think there is such a broad range of knowledge and perspective on this commission where all points of view will

▶ 1:38:04 Scott M. Forbes: be welcomed so I applaud the administration for listening and taking the appropriate action with its appointments I applaud Alderman Emmerman who has take who has been at the forefront of this process from its creation as well as that all the appointees who will be giving their time effort and experience towards making Melrose a better community than it is right now I fully support these orders and will cast my votes tonight with a hundred percent confidence I do look forward as the father of a 13 year old daughter seeing the positive impact this Commission will have for all in the city of Melrose Thank You mr. president anything further on this order all those in favor of passage of the order please indicate by saying aye. Aye. Is there

▶ 1:38:43 anyone opposed? That order passes. Order 2016-131 appointment of Mary Julie DeLillo, 13 Circuit Street to the Commission on Women for an initial term. Said term to expire on the last day of February 2018. Motion for passage. Second. Alderman Medeiros moves for passage of the order. The motion is seconded by Alderman McAteer-Margolis. is the discussion on the motion all those in favor of passage please indicate by saying aye is there anyone opposed that order passes order 2016 dash 132 appointment of Lorraine to Caesar 61 Willow Street to the Commission on women for an initial term said term to expire on the last day of February 2018 okay due to my advanced age if we could kind of relax a little

▶ 1:39:33 bit on the rapid-fire everybody in the board trying to move in second things it would greatly assist me motion for passage mr. second alderman Mortimer moves for passage of the order the motion is seconded by all the boys hell is there any discussion relative to this order on the motion all those in favor anyone opposed okay that was very good motion practice order 2016 dash 133 appointment of Catherine P Kennedy 103 Mount Vernon Street to the Commission on women for a three-year term said term to expire on the last day of February 2019 motion for passage second Alderman Inferno moves for passage of the order the motion is seconded by Alderman Mortimer is the discussion on this order those in favor of passage please indicate by saying aye aye anyone

▶ 1:40:26 opposed that order passes 2016-134 appointment of Christina patchouli's 46th Redding Hill Ave to the Commission on women for a three-year term said term to expire on the last day of February 2019 this order also comes recommended by the committee on health education for passage second Alderman Boyce-Elmoose the passage the motion is seconded by Alderman Lemmerman any discussion all those in favor passage of the order please indicate by saying aye. Aye. Anyone opposed? That order passes. Order 2016-135, appointment of Lata Bhopali Williams, 24 Henry Ave, to the Commission on Women for a three-year term. Said term to expire on the last day of February 2019. This order was recommended by the Committee on Health Education and Welfare. Motion for passage.

▶ 1:41:15 Second. Alderman Tramontozzi moves to passage. The motion is seconded by Alderman Zwirko. Is there discussion relative to the motion? All those in favor of passage of the order, please indicate by saying aye. Aye. Is there anyone opposed? That order passes. Order 2016-122, acceptance of fiscal year 2016 traffic enforcement grant in the amount of $7,500 from the Commonwealth of Massachusetts Executive Office of Public Safety and Securities Highway Safety Division to fund number 4023. This order was recommended by the the committee on protection and license motion for passage I'll then make it here Margolis moves to passage the motion seconded by Alderman Boyce L is the discussion relative to the order so shake could you call the roll please

▶ 1:42:04 Alderman Brazil yes yes Alderman Forbes yes yes Alderman Inferno yes yes Alderman Lemmerman yes yes Alderman McAteer-Margolis yes yes Alderman Medeiros yes yes Alderman Mortimer yes yes Alderman Tramontozzi yes yes Alderman Zwirko yes yes president khan yes yes 10 years that order passes order 2016-123 authorization to appropriate one hundred thirty one thousand eight hundred thirty five dollars eighteen cents and borrowed funds from the high school science lab project fund three three six seven to the high school interior renovations project fund three three seven two this order was recommended for passage by the committee on appropriations motion for passage mr president second alderman mortimer

▶ 1:42:50 moves for passage of the order the motion is seconded by alderman porcel is their discussion so shake could you call the role please alderman Boisselle yes yes salomon forbes yes yes salomon inferno yes yes salomon lemmerman yes yes salomon mataki margolis yes yes salomon medeiros yes yes salomon mortimer yes yes salomon trima tozi yes yes alderman Zwirko yes yes president khan yes yes Mr. Cheney, yes. That order passes. Motion to adjourn, Mr. President. Second. Alderman Mortimer moves to adjourn the meeting. The motion is seconded by Alderman Forbes. All those in favor of adjourning the meeting, please indicate by saying aye. Aye. Is there anyone opposed to adjournment? Motion passes, the meeting is adjourned.

City Council — 2016-04-04

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