Appropriations & Oversight Committee — 2016-05-12

Appropriations and Oversight Budget Hearing

Attendance

Robert A. Boisselle absent · Ward 4 Alderman; Donald L. Conn Jr. present · President/Ex-officio Member; Scott M. Forbes present · Ward 7 Alderman; Gail Infurna present · Vice Chairman; Jennifer L. Lemmerman present · Ward 2 Alderman; Mary Beth McAteer-Margolis absent · Alderman at Large; Monica C. Medeiros late · Alderman at Large; Peter D. Mortimer present · Chairman; 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 APPROPRIATIONS COMMITTEE CALENDAR● MAY 12, 2016 Aldermanic Chamber Budget Hearing 7:30 PM The public should take notice that the Melrose Board of Aldermen may, on certain occasions, have a quorum in attendance due to standing committees of the Board of Aldermen consisting of both voting and non-voting members. Members attending this duly posted meeting are participating and deliberating only in conjunction with the business of the standing committee. Attendee Name Title Status Arrived Peter D. Mortimer Chairman Present Gail M. Infurna Vice Chairman Present Michael P. Zwirko Alderman at Large Present John N. Tramontozzi Ward 1 Alderman Present Monica C. Medeiros Alderman at Large Late Robert A. Boisselle Ward 4 Alderman Absent Francis X. Wright Jr. Ward 3 Alderman Absent Mary Beth McAteer-Margolis Alderman at Large Absent Jennifer L. Lemmerman Ward 2 Alderman Present Scott M. Forbes Ward 7 Alderman Present Donald L. Conn Jr. President/Ex-officio Member Present In Attendance: Retirement Board Executive Director Adam Travinski; Melrose Human Rights Commission Chair Adam LaFrance; Beebe Estate Trustee Jean Gorman; Melrose Pubic Library Director Linda C. W. Gardener; Health Director Ruth Clay; Public Works Director John Scenna; City Auditor/CFO Patrick Dello Russo; City Solicitor Robert Van Campen; David Fox, Raftelis Financial Consultants, Chris Woodcock, Woodcock & Associates

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

ORDER-2016-167 Revolving Fund/Reauthorization Reauthorization of the Beebe Estate Revolving Account # 2750 for FY2017 Recommend Passage Board of Aldermen

ORDER-2016-169 Revolving Fund/Reauthorization Reauthorization of Health Department Revolving Fund #2659 for FY17 Recommend Passage Board of Aldermen City of Melrose Page 1 Updated 6/20/2016 7:33 PM Minutes Appropriations Committee May 12, 2016

ORDER-2016-159 Enterprise Fund Water Enterprise Operating Budget for Fiscal Year 2017 in the amount of $5,337,495.08 (Five Million, Three Hundred and Thirty Seven Thousand, Four Hundred and Ninety Five Dollars and Eight Cents). No Action Taken Appropriations Committee

ORDER-2016-160 Enterprise Fund Sewer Enterprise Operating Budget for Fiscal Year 2017 in the amount of $7,718,419.09 (Seven Million, Seven Hundred and Eighteen Thousand, Four Hundred and Nineteen Dollars and Nine Cents). No Action Taken Appropriations Committee

ORDER-2016-163 Amending Revised Ordinances Amending Melrose Revised Ordinances, Chapter 228, Article II, Section 228-15 (Water Rates Established), as set forth herein. No Action Taken Board of Aldermen

ORDER-2016-164 Amending Revised Ordinances Amending Melrose Revised Ordinances, Chapter 228, Article IV, Section 228-30 (Sewer Rates Established) as set forth herein No Action Taken Board of Aldermen

ORDER-2016-166 Amending Revised Ordinances Amending Melrose Revised Ordinances, Chapter 228, Article IV, Section 228-20 (Elderly Discount) as set forth herein No Action Taken Appropriations Committee

ORDER-2015-192 Amending Revised Ordinances Amending Melrose Revised Ordinances, Chapter 228-14 by adding paragraph C relative to Water Meters as set forth herein. No Action Taken Appropriations Committee

ORDER-2015-193 Amending Revised Ordinances Amending Melrose Revised Ordinances, Chapter 228-15 by adding paragraph A (3) relative to Unit Averaging as set forth herein. No Action Taken Appropriations Committee

ORDER-2015-194 Amending Revised Ordinances Amending Melrose Revised Ordinances, Chapter 228-15 by adding paragraph C relative to Water Proration as set forth herein No Action Taken Appropriations Committee City of Melrose Page 2 Updated 6/20/2016 7:33 PM Minutes Appropriations Committee May 12, 2016

ORDER-2015-195 Amending Revised Ordinances Amending Melrose Revised Ordinances, Chapter 228-30 by adding paragraph F relative to Sewer Proration as set forth herein No Action Taken Appropriations Committee

ORDER-2016-33 Request BE IT ORDERED that the City shall cause all water meters in the City to be read between June 15th and June 30th of each year for the purpose of issuing water and sewer bills for the quarter ending June 30th. No Action Taken Appropriations Committee City of Melrose Page 3 Updated 6/20/2016 7:33 PM

Transcript

▶ 0:00 Peter D. Mortimer: Good evening ladies and gentlemen, it is Thursday May 12th, order in the gallery please, order in the gallery please, it is Thursday May 12th at 7.30 in the PM, this is the Committee on Appropriations, it is a committee of the whole, all members of the Board of Aldermen are members of this committee. We are joined by Vice Chairman Gail Inferna, Alderman Michael Zwirko, Alderman John Tramontozzi, Alderman Jennifer Lemmerman, Alderman Scott Forbes, and President Donald Kahn. This meeting is being recorded by MMTV and is available for future viewing on their website and also on the City of Melrose website. You can get a DVD of it at MMTV as well, if you wish to, and they show it over and over again on MMTV.

▶ 1:12 Peter D. Mortimer: Motion to open public participation, Mr. Chairman. Alderman Forbes has made a motion to open the floor for public participation. Said motion was duly seconded by Alderman Inferno. All in favor, please say aye. Aye. Any opposed? Hearing none, public participation is now open. members of the public wishing to come forward and ask any questions or make any comments regarding any order on tonight's agenda may come forward now good evening mr. Tamar good evening for the record my name is Phil Tamar I live at 44 Larchmont Road this will be a little bit redundant but it's unavoidable today I expect that the water and sewer committee in the city will answer only a few of the questions long outstanding about water and sewer

▶ 2:00 rate matters based on the committee meetings i've attended in today's agenda materials distributed in advance those answers will be largely unresponsive i will discuss only three of these matters briefly because of the limited time available unavoidably i will have to repeat some of what i've said previously first city officials will now justify the change in city practice to build rate payers for its own internal water and sewer consumption several years back as adopting appropriate and good practice the city previously explained the changes required or recommended by best practice this change was never mandated or encouraged to discourage by the massachusetts department of revenue which governs here and it is that ch this change that

▶ 2:45 matters the change was unnecessary and shifted 270 000 of annual cost to rate payers an amount equal to two percent of the water and sewer budget and a two percent overall rate increase contrary to its stated position on the matter the city should either reverse this recently disclosed billing practice change or reduce its property tax funded budget as it should have in the first place in order to offset the costs shifted to rate payers and stay revenue neutral the correction can and should be absorbed within the city's broad 75 million dollar budget or with its free cash second this board will be asked to approve the 2017 water and sewer budgets as submitted on top of which additional amounts will be billed to rate payers for

▶ 3:31 allocated charges from the property tax budget and reserve and abatement provisions both 2017 budgeted mwra charges and the remaining city controlled spending portion of the budget are planned to grow at a reasonable three percent from 2016 levels however and importantly the 2016 starting level for city controlled spending actually has already grown by an average 14 per year over the prior two years as have the additional allocated charges and reserve and abatement provisions if approved the 2017 plan institutionalizes these large prior year spending increases without further scrutiny increases which would have been otherwise limited in a proposition two and a half restricted world third and most pressing the water and sewer committee

▶ 4:21 will present the board for its consideration 10 tiered water and sewer rate options which primarily just make small changes between base fee and variable rate billing components vary slightly the number and size of consumption tiers and reduce sewer charges for residents without second meters it will also present but recommend against a uniform flat rate option none of the recommended tier rate options change much if at all today's dramatically tiered rate structure which remains the big issue and source of inequity to residents today excluding mwra charges which are unequivocally constant per unit of consumption today's combined water and sewer rates require that top tier users be proven 93% more costly to service per unit of consumption than lowest-tier users,

▶ 5:11 a claim which seems outlandish on its surface and which has never been supported. The MWRA may or may not require increasing block rates. Interpretations vary, even though 13 MWRA cities continue to use flat rates today, and I assume they do so legally. Regardless, the MWRA allows increasing block rates only to the extent they fairly reflect the resource demand of high-volume users. And although conservation has its place, it should not drive the tiered rate structure, since MWRA district water is not in scarce supply. The committee has included one option in the rate consultant's technical memorandum attached to the agenda to narrow tiered rates somewhat, but only modestly, and then recommends against

▶ 5:58 its adoption. The committee has not considered collapsing rates significantly at all, primarily if not solely because that would require a significant increase in lowest tier rates. However, these lowest tier rates are low today only because of the huge insupportable subsidy they receive at the expense of higher tier users, including those people trapped in commonly metered multi-unit housing situations if the city chooses to adopt the uniform flat rate i stop here at a minimum the city needs to collapse its current rates by much more than any tiered rate option to be presented today basing new rates on provable unit service cost by tier i repeat what i've said previously after all this time and repeated questioning the water and

▶ 6:47 sewer committee still has not provided any explanations of support for its dramatically tiered rates. Either the city can't support them or the city doesn't believe it has to support them in compliance with MWRA regulations as described. Either way, I ask this committee this final, simple, four-part question. How have you computed rates by tier, one? Two, can and will you provide specific support by cost element for the differentials between these tiers three alternatively have you no support because you instead merely set the differentiated rates completely arbitrarily and four what are the logical and regulatory bases of your approach at the very least and once and for all i asked the board of alderman to force the water and sewer

▶ 7:37 committee to either answer this final question completely and clearly or develop tiered rates based on the provable unit costs of providing service or adopt the uniform flat rate option thank you mr taymor good evening mr morose hi i'm jerry morose um we start this process off here and now to get another year um my hope this year with the new consultant would be that we'd have real good data available to us to really understand the basis of the concepts and the quantify the numbers basically of what we have as costs for our water system I've been disappointed that in all the public meetings and in the public record there's been no presentation of the various cost of service in the city of Melrose to show what is the true cost of a household

▶ 8:49 with a meter and a service, you know. And according to what are the true costs of that, what costs of that are costs that are by meter by household versus costs that are volumetric by the amount of use that flows through somebody's home. These are significant issues in terms of establishing water rates because if one of your goals has to be revenue stability so that you don't get stuck in a year where you have too low revenue, in my view we ought to be identifying and I think we would identify if we did the analysis well that a significant amount of Melrose charges are fixed charges for cost of our infrastructure for our meter costs for our personnel costs for you know the the billing department all those different things that as I've said here

▶ 9:40 a lot of times if nobody used a gallon of water in Melrose we'd still have a significantly high cost of service to the city and the question is is how should that be born should people who happen to use more water when we only paid MWRA two dollars and fifty cents per hundred cubic feet should we should be charging some people nine dollars ten dollars a cubic foot of water to subsidize other people who are being charged less I don't I don't believe with that I think that we shouldn't have subsidies in the water accounts you know one thing that I've noticed in the process here over a number of years is that the Board of Aldermen is here to make a decision and you look for information to make that decision on and the information that you get tends to

▶ 10:23 come from the same sources it's coming from people who either work for the mayor or who are working for the people who work for the mayor and if the mayor wants a certain thing put out there he puts it out there and then you ask a question of his staff and they answer in a certain way I'd like to believe that this the mayor's staff is obligated to give you a fair and honest and accurate accurate representation of what the facts are, the underlying issues, but that doesn't seem always to happen here, and I want to be specific about saying that a flat rate is illegal, I believe is a falsehood. A flat rate can be certainly legal, and in Melrose, as in many MWRA communities, I can make a very rational, logical argument as to why we don't have any increased costs to

▶ 11:10 Melrose based on people's consumption do we all want to conserve everything in life so that our world is better absolutely but the way that's been done about here the way that's been proposed here isn't really about conservation it's about disproportionately applying higher costs to some people at the expense of at you know at the expense of them to benefit other people and I don't agree with that approach. I've asked the Alderman a number of times over the last few years, open this up. Let's have a public dialogue. Let's have the conversation. If everybody on the mayor's side is so secure in their position, why won't they open up to a public dialogue? Why don't you open it up to a public dialogue to let's have the issues aired out? I'm very comfortable in the

▶ 12:02 conclusions that I draw I understand the gray areas in here we don't even have a sophisticated discussion because it's somebody's are proposing an extreme thing and nobody wants to hear the gray area so you have to show the opposite of the extreme of what the other extreme might be well there's not rational discourse around these issues there I think you know all these rate tears like you know they throw at us ten different options here or twenty different options whatever it might be you know they're all similar flavors you know it's it's it's not it's not significantly different in fact the one thing that I would love to see would be as I talked about before I believe that we need higher fixed fixed charges per meter in Melrose to represent to more recover the

▶ 12:49 cost of the fixed charges of our system they're still trying to play around with keeping the fixed charges as low as they possibly can or maybe raising them by a two percent a year or something like that which isn't relevant if you really did a cost of service analysis which again we don't have in front of us here the proposal to give some seniors a discount and i'm just rattling through things because there's no time to talk about everything in the depth it needs to be the idea of giving some seniors a discount so that in a condo in melrose towers one person is paying you know i'm just going to make up a number 500 condo fee because a water and sewer charges largely and then the person next to them who happens

▶ 13:28 to be a senior is still paying the $500 condo fee but now they're getting a you know a little discount on their water rate that to me is absolutely unfair that two people in the same class of service in the same building and one of them is being reimbursed for their water use but I want to be clear that even the person is reimbursed it's still taxed on their water here significantly because that third tier rate that's applied to almost everybody in Melrose Towers the first 2,000 cubic feet, you know, is, you know, let's say that takes a few people, right? Then the next 8,000 cubic feet, I don't know their total billing, but all I can say is that I'm sure that a lot of people's use there is billed at the highest rate, and they all incur that cost. I don't

▶ 14:08 think that's appropriate. I believe that that is discriminatory, and it's not even justifiably discriminatory. The law does talk about increased blocked rates. There's very few people in this room that even understand what it means by to fairly reflect the resource demand in consumption of high volume users. That's a conversation that needs to be had if you're going to go and start to, you know, just throw out that that's not a proper thing to have a flat tier, a flat rate system. I believe we need a flat rate system. The issue of the municipal costs, we've heard it said here a few times that it's illegal for the city to pay its water and sewer bill to the enterprise fund. Again, I think that is a tax on the rate payers,

▶ 15:00 that city expenses are now being foisted onto the people who happen to be rate payers in the city, and they're not funded by the revenues that are generated through the legitimate tax base and funding system of the city. It's a lot of money. Basically, your water rates are higher. They're higher because those rate payers have to pay, as Mr. Tamor said, $270,000 more in the enterprise system to reflect that. Now, we've heard people here say before and read letters saying that, oh, it's absolutely, you can't do that, or you have to do it this way or that way. Well, I've looked at the DOR informational guidance release, 2008-101. I've read it. Item number 17 at the end, if you want me to specify it, talks about this particular issue.

▶ 15:47 and it says in that thing and I'd like to understand how this applies to a lot of departments here but it's not appropriate for one department in a city to charge another department in the city they aren't billing entities or billable entities it's the city versus the city and what they say is that under the uniform Massachusetts accounting system the accounting procedures say that you can't do it that way in the same paragraph they say however it is appropriate to reflect those costs within the budgeting process this is the budgeting process that you have today now the mayor doesn't want to do that because obviously we have a prop two and a half limit right and what's the goal of the mayor in general is to get as much money out of the tax revenue base

▶ 16:35 so that he can collect more money to do more things in the city not a bad goal necessarily right we want to do better and do more for the city but at the same time somebody ought to be having the conversation of is it appropriate is it appropriate to put costs onto the water and sewer enterprise that aren't the cost of the people who are paying the bill without the city funding that this is an issue now because we have an enterprise fund traditionally cities hugely subsidized water and sewer fund operations you know the water and sewer bills are so low they didn't recover infrastructure costs and and your personnel costs and lots of costs they were just assumed by the city because they've been there for a lot of years you know the the charges to residents

▶ 17:21 were basically for the for the marginal cost of water maybe a little bit more but right now in this thing if in this environment if we're looking to find every indirect cost that the city might expend on behalf of the enterprise fund and load those costs on to the enterprise fund it's disingenuous at a minimum for that city not to make good on the costs that it causes to the enterprise fund and reimburse the enterprise fund for those costs which is supposed to be done through the budget process so because it's not an open dialogue I have to come here and make these statements because it's not an open dialogue I have to preempt what may come behind us from people who will say something different and you don't give typically an opportunity for anybody to

▶ 18:04 come and rebut what we might hear that might be based on an opinion or a foundation that is political in nature not factual in nature I've asked a number of times to find an open public process and I want to say right out front because we've heard it asserted that somehow the water and sewer rate committee was an open transparent public process it was not there was an opportunity for open dialogue discussion the open water and sewer rate committee It did not address the issues that Mr. Taymor and I have repeatedly brought to them. The Water and Sewer Rate Committee, I assert, basically violates the Open Meeting Law because all those people, not all of them, I shouldn't say, not Mr. Forbes here, but four of those

▶ 18:51 people are working here in City Hall discussing water and sewer issues all the time. Mr. Moroz, the ten minutes that you're allotted has passed. You may take a minute and please wrap up and summarize. What I'd like to say is clearly there is more to say than I can say in 10 minutes. Clearly there's more to decide than the information that's brought to you to decide upon. Now, my challenge to you is, will you open up a process to have a fair hearing of all the issues and let people have an opportunity when somebody says something to show why that may not be the case, may not be desirable and to let people have an open discourse so we can actually get to some what we want to get to is we want to get to a place where the city of melrose

▶ 19:38 has a water and sewer system that supports itself honestly fairly and this is another big issue and my last statement is that it's time that we do the right thing so that 5 10 15 20 years from now the Board of Aldermen then isn't suffering through the issues that you're suffering through today because of the inaction of a Board of Aldermen 5 10 15 20 years ago thank you Thank You mr. Moroz are there any other members of the public here in attendance who would like to come forward seeing none motion to close public participation Alderman Alderman work always made a motion to close public participation duly seconded by Alderman Inferno all in favor of closing public participation please say aye aye any opposed hearing

▶ 20:28 Peter D. Mortimer: none public participation is now closed we continue on with order 2 0 1 6 dash 1 5 8 it's the city of Melrose operating budget for fiscal year 2017 the first apartment we have before us this evening is department 9 1 1 it is the pension department in the amount of $5,685,984.95. Motion to suspend the rules so we can hear from the appropriate officials. Second. We have a motion to suspend the rules from Alderman Forbes, duly seconded by Alderman Zwirko. All in favor, please say aye. Aye. Any opposed? Hearing none, we are under suspension. Please proceed, sir. Good evening. Good evening. Do you have any other questions in regard to the appropriation? You would, no opening statement, proceed directly to from the horseshoe.

▶ 21:26 Alderman Medeiros by a hair, veto President Kahn. Go ahead, please. Thank you. I'll defer to President Kahn and go second if that's- If he wishes. Wishes. Thank you. How did you come, is your appropriation a budgeted item this year based on the numbers that you gave? received from the state how did you how'd you build your number our actuarial consultant larry stone we have we're required to do a new uh schedule every two years on a funding schedule and where are we right now on our state funding schedule when when will we uh when will we fully funded 2038 and is that the is that the maximum that we're able to go 2040 by law is the maximum 2040 so we're two years early two years early okay and um we have we have one non-contributory

▶ 22:22 pension left yes and how from what year does that pension come that i don't know he's in his 90s though i know that okay so so that that's got to come from the 70s or 60s yes and that's still being paid correct for life that's all i have right now mr chairman thank you president khan alderman Medeiros please thank you um i'm wondering if uh you know this may be a better question for mr delarusso i think he's in the hallway um in regard to we've seen that some of the indirect costs that are alderman Medeiros excuse me please would you like him to come into the room we can arrange that for you well let's see if uh all right sorry to interrupt we've seen that some of the indirect costs that are coming uh being paid through the water and sewer rate are going

▶ 23:20 Monica C. Medeiros: to pay pensions are they in this line item the 5.6 million yes yes this is for the city's appropriation to fund future salaries in the long haul so do you know how much of this is being paid from the water and sewer fund no I wouldn't know that perhaps I I do see mr. de la Rousseau sorry I know you just just walked into the room literally if perhaps he may be able to answer my question certainly mr. de la Rousseau would you join us at the table please and this is something that I'm sure I might ask later on in our discussions but i know we've seen that some of the indirect costs that are coming and paid through the water and sewer rates are paying a portion of that is for pension costs um we're in the pension budget do we see that in this line item and if so how much is that

▶ 24:26 Monica C. Medeiros: do it okay um and you know we could revisit that if we need to but yeah right um oh both in water and saw on the a2 form through the chair it indicates the pension allocation for both the both funds by year you're absolutely right for fiscal 16 you'll see if you look at the a2 form um the allocation for uh pensions for uh food water so enterprise applicable to each fund correct and and is that from uh that's the the fy16 a2s is that the number that we're using for the fy17 budget or are we using a different number for fy17 um each year will be different each year year it will be different so um perhaps we could get a breakdown of what that is for the anticipated fy17 certainly thank you thank you alderman Medeiros are there any other alderman wishing

▶ 25:30 Michael P. Zwirko: to be heard on this budget seeing none oh Alderman work oh please thank you mr chairman i'm just curious how many um we pay pensions every month they're correct is it a monthly payment excuse me the pensioners are the payments monthly this payment is a one-time payment at the understood when we pay out pay out yes monthly it's monthly yes and how many folks exactly pensioners do we have currently approximately 400 right now 400. and just for my own i know that there have been some changes in the laws i'm not too familiar with them the amount of excuse me for full vesting and um for one to reach you know age what are those statistics is it 20 years and so in a specific age is it broken down differently for public safety versus other areas how does one

▶ 26:21 reach and attain not only full vesting but in order to enact their benefit so employees hired prior to april 2nd of 2012 you needed 10 years of service at age 55 or 20 flat years at any age new employees hired after april 2nd 2012 have 10 years of service at age 60. that's the minimum 20 years goes away so that's the new legislation that came into play okay and on i don't know if you know this figure but how much if we have approximately 400 pensioners per month what is that across the bottom line what does that cost comes out to about 700 000 gross per month yep appreciate it those are all the questions that i had thank you Alderman worker seeing no further alderman wishing to be heard is there a motion please

▶ 27:13 Peter D. Mortimer: motion to move the bottom line alderman inferno has made a motion to move the bottom line for budget number 9 11 for pension budget second duly seconded by Alderman workout seeing no further discussion all in favor please say aye aye any opposed hearing none this budget will be recommended to the full board for passage the next budget we have before us thank you very much for Coming. The next budget we have before us is budget 544. It's the human rights budget in the amount of $3,000. Good evening. Good evening. Would you like to make an opening statement or proceed directly to questions and answers? Just briefly, thank you for this evening. We tend to operate within our budget and maximize and

▶ 28:08 Michael P. Zwirko: fully utilize our budget and respectfully request level funding. and if you have any questions please feel free thank you very much sir are there questions or motions Alderman worker please thank you mr chairman i do have a couple of questions first i would like to say i attend many of the events that the meros human rights commission puts forth and i always look forward to the work that they do so um i'm greatly appreciative of the fact that they not only exist but also kind of help buttress a lot of the um community events and issues that we deal with day to day across the state but also here in the city of Melrose so I appreciate all the outreach that you and the members do so thank you for that I I know that the

▶ 28:52 Michael P. Zwirko: Commission's been around for a long time and you you are it's a small line item it's only $3,000 but I'm wondering if at least in your tenure have there been years we haven't actually spent all three thousand of those dollars if you ever left a little bit in the kitty so to speak to my knowledge in the short time that I've been involved no we spent up to and tapped into a separate donation fund in the last year only in the amount of approximately $50 beyond the thirty to three thousand so my understanding is we tend to utilize the entire budget each year would you mind just kind of explaining a couple of those those functions that actually have a cost I know there are some that don't but you know I'm sure that having a booth at the Victorian Fair isn't free

▶ 29:47 Michael P. Zwirko: you know I'm sure that there's a cost to the community Martin Luther King Day dinner things of that nature but if you don't mind just kind of rifling off a couple of the the events that do at least have a cost sure and you've listed two right there that that do the Martin Luther King events tend to consume a fair amount of the budget I'd say approximately 30 percent at least in the prior year between the dinner the facility that we the food the publication and the materials for the for the events both between the day of service the dinner and there was a film series in that last round that incurred a cost including a facility fee other events include the Victorian Fair the international welcome reception often involves in this past year approximately

▶ 30:43 14% of our budget the Victorian fair plus materials associated with the fair at that in that year were about 17% there's miscellaneous items between materials for the reading conversation program supported and assisted and facilitated by the Human Rights Commission other community building and in partnership activities in which we participate have various entry fees things of that nature and thank you for that and essentially where I'm going here is you're a well-established well-known Commission and again I I'm in unison with its charge but we do have other Commission's here that haven't received as much funding and also in the newspaper today and was brought up at our meeting on Monday we don't have funding for police departments budget

▶ 31:38 Michael P. Zwirko: with respect to Narcan and you know my fear is is that you know there might be a little wiggle room to equitably fund the Commission's that money could then may be directed towards the purchase of additional doses of Narcan which were at about halfway through we were told it's just a lot of the events do get good free media. They're very well attended. You've been well established for a long time. I'm just wondering if there might be, you know, if a thousand dollar haircut wouldn't be too much to ask and that could be redirected to maybe bolster some of the Narcan doses should we need them. I know that the police department expressed favorability towards maybe being able to have those donated like they were through other organizations like Hallmark Health. You know,

▶ 32:27 Michael P. Zwirko: just I was taken aback by by not only the comments that were made at our last meeting but just knowing that there is a thousand dollars more than another Commission and I feel that that would be equitable and maybe a better use of the funds for the city considering the longevity that the Human Rights Commission has been around for in the job that they do so those are all the questions that I have I certainly will make a motion at this moment I don't know if other members would like to speak and have any questions for the gentlemen but um that's all that I had mr. chairman Thank You Alderman work up any other alderman wishing to be heard seeing not president Connolly yeah this I harken back to a discussion we had when I was popping off earlier

▶ 33:14 this week and you know we have many Commission's in the city that are made of hard-working volunteers who do a lot of good work this is an important commission it's made up of hard working volunteers who do a lot of good work people should understand that that's the model that we've been using for a long time and it's been work it works well we don't need to designate large amounts of funding to volunteer boards or commissions for them to work effectively city has priorities that they have to serve we have to provide public safety we have to provide schooling we have to provide sanitation we have to plow our streets we have other things that we can do for less cost but this is a good example of a commission that is funded at a very low level so

▶ 34:09 that it can function and it has worked for a long time and this is the kind of model that i support relative to volunteer boards and commissions in the city thank you president khan are there any other aldermen who wish to in in be involved in discussion i'll make a motion at this time motion to move the bottom line second alderman inferno has made a motion to move the bottom line duly seconded by alderman lemmerman i just have a parliamentary inquiry if you don't mind to the the chair point of order from Alderman work oh please continue so apologies for not knowing proper protocol here so I'm just curious if I were I understand that there's a motion on the floor correct if I were to make a motion to strike

▶ 35:02 Peter D. Mortimer: thousand dollars from the bottom line that's before us would we have to allow the motion that's on the floor to proceed first yes that that is a main motion a substantive motion in its own as it works out alderman inferno beat you to the punch so to speak there was a little lull but i think the discussion has been fair and forthright and if people want to vote alderman inferno's motion down to allow you to make that motion that could occur but they're both they're both main motions and so there was a main there were other motions which would be intervening but a motion to cut the bottom line is not one of them understood thank you for that mr chairman you're welcome of course so alderman inferno's motion is on the

▶ 35:55 Gail Infurna: floor duly seconded by alderman lemmerman is there any further discussion at this time alderman inferno please thank you very much mr chairman and just i just want to explain um and all due respect to alderman uh zorko's uh motion that he wanted to do while i really understand that i i get the drug problem i get the narkin and whatnot i think um to what um alderman uh president khan was saying i i truly believe in that and i think somewhere along the line we can be very creative and try to get some sort of funding for the knock in as we proceed forward but um i i will stick with the bottom line on that but i absolutely understand where you're coming from um with that but thank you very much alderman inferno president khan please yeah i'm sorry

▶ 36:44 this is kind of a sticking point with me people who are watching at home and people who are in the chamber need to understand that we cannot take money from one department and direct it to another person we cannot do that we can cut any budget that we want to but we can't we are we have no authority to make a cut in one budget and transfer money to another budget we can not do that it is an executive function we can cut the budget but we cannot reallocate monies from one budget to another so i understand we heard everybody the other night indicating they were concerned about narcan they're still concerned about narcan it's a 70 plus million dollar budget here but we cannot move money around it's it's it's not within our purview

▶ 37:33 Peter D. Mortimer: that that is uh quite and i get concerned president connor concerns when we have these discussions because it causes people who are watching at home to misunderstand the process uh well said president khan uh that's absolutely correct we could make cuts in various but then that money would revert back uh to the mayor and the administration and they would have to make a decision where they would like to apply it is there any further discussion seeing none the motion from alderman inferno seconded by alderman lemmerman is on the floor to move the bottom line for the human rights budget number four five fifty five forty four all in favor please say aye aye aye any opposed hearing none uh this budget will be recommended to the full board

▶ 38:20 Peter D. Mortimer: for passage thank you for your attendance and your presentation this evening thank you thank you The next budget we have before us is budget number 540. It is the budget for the Beebe Estate. The Beebe Estate will be represented by Mrs. Gorman on the Board of Trustees of the Beebe Estate this evening. Good evening, Mrs. Gorman. Good evening, everybody. Hello. I guess for an opening statement, what I'd really like to do is tell you what we're doing at the Beebe right now. where we received a grant from the state and it enabled us to paint the building. So some people are noticing that the color is a little creamy there. And what that is, they also think it's the primer for the building. That is not the primer.

▶ 39:08 That is going to be the color of the building. We are not going back to the white that it was in the past. And the reason for that is we had a paint consultant come in and they went up in the rafters they went all over the building got samples of the paint even the nails and what we're going back to is the paint for the year 1848 and in 1848 the cupola was added to the top and the balustrade around the top of the roof so and at that time paint was made in a different way it had to be hand-mixed and and was a different kind of thing so these were the colors that they used at that time and what it what they went for was light and bright so what we're going back to even every part of the cupola we know what color was there before and it's

▶ 40:05 going to be put back again but it's all shades of the cream and the white and so I hope you've all had time to go by and check it out and the contractors were working with doing a really quick and good job and we really think the major part of the painting is going to be done by this weekend or early next week and we have a few details for instance the windows the storm windows all of those are going to be trimmed in black so we have the creamish color of the white color the black and then the shutters are going to be something called chrome green and it's not the deeper green we're used to on shutters because they didn't have that particular color in those days so people are asking and so I

▶ 40:56 Scott M. Forbes: thought this was a good opportunity to let everybody know what we're doing there thank you very much mrs. Gorman I neglected to mention the amount of this budget which is seven thousand nine hundred dollars at the outset are there any questions or comments or motions from the floor alderman Forbes please thank you mr chairman i know this is a level funded budget from uh from last year i do thank you for your dedication and your hard work thank you um just uh just a quick line item just the the two thousand dollars for the building repair i'm assuming that's just maintenance throughout the course of time and if you look at our budget it basically is gas and electric yeah so that's the two big chunks of it and then the two thousand dollars allows us to have a cleaner that can come

▶ 41:41 Peter D. Mortimer: in and maintain the building also some of the smaller things that we have to do there um which there are always many of those um so that's a basic and the only other one is 200 for supplies which is base supplies for restrooms and things like that again thank you very much for all the work you do a budget i think i appreciate it if there's no more further discussion on the item i'd make a motion to move the bottom line second alderman forbes has made a motion to move the bottom line duly seconded by Alderman Medeiros is there any further discussion at this time I've seen none all in favor of recommending this budget to the full board please say aye any opposed hearing none this budget will be

▶ 42:24 Peter D. Mortimer: recommended to the full board for passage thank you very much for your volunteer service to our community mrs. Gorman I think I think Alderman Medeiros has aptly and intelligently noticed that there is a revolving fund yes like to move to take that order out of order is order number 2016 dash 167 second the motion alderman Inferno has made a motion to take the revolving fund for the BB estate out of order said motion duly seconded by alderman Forbes all in favor please say aye any opposed hearing none that order will be taken out of order would you like to say anything about the revolving fund we'd like to keep it at the same amount this year we don't know where our costs are coming from and going to so we'd like to keep the amount that's there now thank you

▶ 43:14 Monica C. Medeiros: very much mrs. Gorman Alderman Medeiros please thank you just on discussion I have the memo here that mentioned that the limit on this this account is 30,000 yes it is and so this does include a lot of funds that are taken in from rentals of the we have rentals coming in we have two groups that rent in the upstairs part so that is what we use um for some of the major things for instance the balustrade a couple of years ago was really costly that's why we had to raise it to 30 000 that year so we're just sort of keeping our options open right now thank you very much thank you beautiful place thank you thank you Thank you very much, Alderman Medeiros. Is there a motion to recommend this order regarding the Beebe Estate Revolving Fund for passage?

▶ 44:03 Peter D. Mortimer: So moved. Second. Alderman Inferna has made a motion to recommend the Beebe State Revolving Account number 2750 for fiscal year 2017 for passage. Said motion was duly seconded by Alderman Inferna. Seeing no further discussion, all in favor please say aye. Aye. Any opposed? Hearing none. This revolving account order will be recommended to the full board for passage. Again, thank you for your volunteer service to our community, and have a wonderful evening. Thank you all. The next budget we have before us is the library in the amount of $970,610.62. Good evening, Mrs. Gardner. Nice to see you this evening. good evening happy to be here if I could say a few words the library strives each year to serve every demographic in the city of Melrose in this fiscal year our

▶ 45:14 library services have included over 320 events for children teens and adults we had a total attendance of over 7,000 attendees. We have circulated almost 240,000 items from the library in this fiscal year. And in addition to that, our museum passes circulated another 1,700 items in calendar year 2015. Increasingly, we also serve patrons in-house who use our wireless internet access with their laptops to do research and work. We're still working on how to find statistics on that. I consider them sort of a hidden segment right now. They come in, they use the services, they use our books while they're there, but they're not necessarily checking them out. Last fiscal year, we did have over 180,000 visits

▶ 46:17 to the library, and we expect similar numbers this year, if not an increase. When I talk about what we are doing and what we've done, I should really say the library staff. The staff in our technical services department who worked tirelessly to ensure that the roughly 100,000 items in our collection are entered correctly and accurately so that you can find them. The staff who work behind the scenes to ensure that our museum pass system, our event calendars, and our room reservations are all running seamlessly for the public. Our assistant director, Diane Wall, who works magic every day to make sure that everything comes together. And the frontline staff, who a lot of you know, who not only look up and check out books,

▶ 47:09 they take time to organize and implement all of the programs that I mentioned. They offer local history assistance. And they also, most importantly, form relationships with our patrons that allow them to serve each patron as an individual. And we're really proud of the welcoming atmosphere that we try to provide. We are open 61 hours per week to the public, and they do phenomenal work to serve the community. I am the lucky person who gets to work with them. As we look towards fiscal 17 and the budget, I'd like to point out that the increase in salary and wages, as I think you've heard before. Sorry, I don't know what happened. Sorry about that. The salary and wages increase is due to the 53 week fiscal year,

▶ 48:05 as well as contractual increases. And the expense portion of the budget will ultimately be level funded. Currently, you may notice that the books and periodicals line is low, and that's because we'll be transferring $15,000 from our fines account, as we do in September each year, to make that line item accurate. Thank you very much, Mrs. Gardner. Are there any aldermen wishing to make a motion, or ask any questions? President Kahn, please. Yeah, could you talk about your staffing at this point in time? How many part-timers, how many full-timers, what vacancies you might have, and whether there's been any change in staffing levels from last year. We have had our full-time numbers remain the same.

▶ 48:52 We have 12 full-time staff members, myself included, one benefited part-time staff member, and we have, right now, eight part-time staff members. staff members it's the part-time numbers have changed slightly but not the hours we did have some turnover so there was some slight change there but the overall hours of the part-timers did not change during the course of the year and all of your full and part-time employees fully paid from the salary and wage line of your own budget yes okay so everybody's salary is accurately reflected in the in the budget yes that's all thank you Thank You president Kahn we have a motion to move the bottom line from alderman Lemmerman duly seconded by alderman Inferno seeing no further discussion all in favor please say aye

▶ 49:49 Peter D. Mortimer: aye any opposed hearing none budget number 611 for the library will be recommended to the full board for passage thank you for your presentation the next budget we have before us is budget number 511 it is the health department budget in the amount of eight hundred and sixty two thousand seven hundred and twenty one dollars and eight cents good evening this is the health director mrs. Ruth clay good evening mrs. clay good evening please proceed if you like I don't have prepared remarks we have I think you guys all know what we can go directly to questions if you like it yeah the only thing that's different this year or coming up for next year in our in our department is that finally after 20 years all of the school nurses will work for the same

▶ 50:52 department which is the health department the last school nurse that worked for the school department changed jobs this year so the new person the new employee will be with the health department and you'll see that obviously reflected in the budget thank you very much mrs. clay president Khan please yeah um can you describe how you arrive at your in this department since we're under the regionalized scheme can you tell me how many people are salaries and wages are fully set forth in your budget and if people are paid from other budgets where they're being paid well you asked us every year so I do tend to be redundant no that's cool I know when it's coming let's see in the budget that you have everybody is paid entirely out of

▶ 51:58 there's a few that are have mixed let's see the public health nurse is paid partly through the budget partly through emergency preparedness funds and partly through the revolving fund the administrative assistant is paid historically has been paid a combination of budget revolving fund tobacco grant DFC grant excuse me in the upcoming budget it's proposed that she would be paid only five hours off budget and the rest of it will finally be on budget and And the substance abuse prevention coordinator that's been paid through grants will be paid by the grants through September 29th and then will go on budget and the assistant substance abuse prevention coordinator position will end. And then we have people that you don't see on the budget at all because they're 100%

▶ 53:17 paid by grants, which is our Regional Tobacco Control Coordinator, our Regional Substance Abuse Prevention Coordinator, and our Mass in Motion Part-Time Coordinator. Do you have a document that's a salary schedule that reflects what everybody in the department has paid from all sources? I can make one. Would that be onerous for you to do that? I've been asking everybody if we could get an accurate break out of all salaries. So I'm not singling out the health department, I'm being a nuisance to every department on this. No problem. Okay, that's all I have right now. Thank you, President Kahn. Alderman Lemmerman, please. Mr. Chairman, thank you, Ms. Clay, for being here this evening. Just one quick question.

▶ 54:05 Jennifer L. Lemmerman: I know last year when we had your budget in front of us, the animal shelter was zeroed out at the time. we came back and funded it later with some other funds and I'm noticing it zeroed out again is that something that you are hoping to fund in another way or yeah what we did is we had a couple of expense items that were going to be new in this year's for this fiscal year so one of them was the increase in the medical supplies from the middle school nurse that had historically had been in school department budget so we added that now and then the plan is to put the animal control money back into the budget in the fall okay do you have a source identified for that um yes great great thank you very much thank you

▶ 54:59 Michael P. Zwirko: mr chairman thank you alderman Lemmerman Alderman work oh please thank you mr chairman thank you thank you for being here tonight i um so the previous alderman actually asked both of the questions so i do just have one i know that um the previous substance abuse prevention coordinator jen uh had recently left and i'm just curious um you know without getting into the details uh how is the search going we're interviewing so you anticipate hiring one of the candidates in the near future i presume um or a candidate a candidate all right well i i support that line item in the budget uh very strongly so thank you very much that's all very much Alderman worker see no further alderman wishing to hurt be heard alderman lemmerman has made a motion to move the bottom line

▶ 55:48 Peter D. Mortimer: duly seconded by alderman forbes all in favor please say aye aye any opposed hearing none this budget will be recommended to the full board for passage we also have your revolving revolving fund account number 2659 would you explain briefly what that is sure this has been a long-standing revolving fund it's primarily used for the flu clinics in the fall we we have to pay for the vaccine and we bill insurance for the administration and the vaccine so it's it's a it's a true revolving fund the income that comes in pays for the vaccine that we actually buy now and then we get reimbursed you know over time and that's mostly what it's used for it's used I think that's three hours a week of the public health

▶ 56:45 Monica C. Medeiros: nurses salary is out of there and then we do some smaller programs like CPR classes and bike helmets and again it's you know we buy the bike helmets and then we charge for the bike helmet so very good thank you Alderman Medeiros please thank you I just want to point out we have the memo from you from I think it's it's dated on our end on April 26 but just to go over it's a $60,000 limit and that's no change is that correct and the current balance as of that date was two thousand eight hundred fifty seven dollars and twenty five cents so just we're in between we've paid all the vaccine and we're haven't really started getting the checks back from the insurance companies there I know we did the clinics in October I know Gail you know long time

▶ 57:39 Peter D. Mortimer: to get those checks back from the insurance companies even though we submit them within 30 days but they'll come in over the summer very good thank Thank you. Thank you, Alderman Medeiros. Seeing no further Alderman wishing to be heard, is there a motion to recommend this order containing the Health Department revolving account, please? So moved. Alderman Forbes has made that motion, duly seconded by Alderman Inferna. All in favor, please say aye. Aye. Any opposed? The Health Department revolving account will be recommended to the full board. Thank you. Thank you very much, Mrs. Clay. The next order we have, number four on our agenda tonight. Is order 2016-159. It is the water enterprise operating budget, and next is the sewer enterprise operating budget.

▶ 58:35 Peter D. Mortimer: We have no less than ten orders regarding water and sewer tonight. We've already had an introductory presentation from the city's consultant, Ralph Tellis. There will be, in the upcoming weeks, another public hearing on the water and sewer rates. So I would respectfully recommend to the board, we're probably not going to pass anything this evening. We're going to have a good presentation, I'm sure, from our public works department and from our chief financial officer. So, let's keep in mind that we are in the relatively early days. President Kahn, please. Yeah, I'm going to make a motion for concurrent action. And I'm making the motion for the purpose of having all issues relative to water and

▶ 59:25 sewer budget and rates be able to be discussed in one discussion this evening. Moving for concurrent action on 216.159, which is the water operating budget. 216-160 which is the sewer enterprise operating budget 216-163 which is the water rate water and 216-164 which is the sewer rate operating budget and finally 216 166 which is a proposed ordinance change to create a discount so I'm moving that all of those orders which is submitted by the administration relative to the water and sewer budgets and rates and ordinances relative there to be consolidated for the purpose of having a discussion with the consultants us and other city officials who wish to come forward tonight to discuss these issues.

▶ 1:00:30 Peter D. Mortimer: Second. Second the motion on concurrent action. President Kahn has made a motion to take orders four through eight on our agenda this evening concurrently. Those five orders were a motion to be taken concurrently by President Kahn. I think Alderman Lemmerman, by a thousandth of a second, made the second in front of Alderman Forbes. All in favor of taking those five aforementioned orders concurrently, please say aye. Aye. Aye. Any opposed? Hearing none, those five orders will be dealt with concurrently. There has been already made a motion to suspend for this committee for the evening by Alderman Forbes earlier. we were we are under suspension and with the appropriate city officials please come forward to

▶ 1:01:30 address us regarding those five concurrent orders before us good evening mr shenna this is mr shenna the director of public works for the city of melrose good evening good evening everyone i just want to give a brief summary of of the orders that are before you and some of the major topics that we'll be presenting on and that are also open for discussion as Alderman Mortimer mentioned this is the first of possibly two to three nights of water and sewer discussion so if there are any questions that come out of this evening please feel free to forward them so that we can address them as well the the the water and sewer committee which consists of Alderman Scott Forbes this year in the past has consisted of alderman don khan alderman john tramitose also on the committee

▶ 1:02:26 treasurer art flavin our new city engineer elena proakis ellis our cfo patrick del rosso and myself we respectfully submitted the five orders that are here before you this evening in fiscal 16 the committee contracted the services of rap tellers financial consultant and chris woodcock and associates to assist in preparation of these five orders and the backup and analysis that went into it they conducted a very extensive review of three fiscal years of budgets including revenues expenditures existing policies and billing history and most importantly three years of tiered bills every every year we distribute 25,000 to 30,000 bills in our department and they took nearly 100,000 bills and put them in a

▶ 1:03:25 spreadsheet and analyzed it to determine customer classes customer groups and exactly how water is used and consumed in Melrose the orders before you address several issues first of all think it's important to to state right up front that the all of the options that are in the report that we forwarded to you have water our adjustments for water beginning water used beginning on june 27 2016 however these fy17 rates will not appear on bills until october 1st 2016. october 1st 2016 is the effective rate increase date that's very different than anything that we've proposed in the past so although you use water in july the water used in july will be at the new rates we'll be discussing this evening however you won't see a bill for that until

▶ 1:04:28 october we'll continue to bill at the 16 fy 16 rates through the summer uh secondly the water enterprise operating budget is before you in the amount of 5 million 337 thousand four hundred ninety five dollars and eight cents and that includes all debt and interest that's owed the sewer enterprise operating budget is before you as well for fiscal 17 in the amount of seven million seven hundred eighteen thousand four hundred nineteen dollars and nine cents once again that also includes all debt and interest that's owed the rate options that are before you also account for the practice of not billing individual departments within the city for water and sewer consumption and included in your package is an updated opinion from

▶ 1:05:27 powers and Sullivan date dated April 28 2016 provided to city auditor and CFO Patrick Del Russo which defines this policy as appropriate and a good practice part of the orders before you respectfully requests amending revised ordinances chapter 228 article 4 section 228 20 the elderly discount the intent of this order is to propose language so that the program is inclusive for all senior property owners throughout the city including those residing in individually owned condo units lastly the rates before you do not propose a number or a percent increase in general all things the same there is a five percent rate increase in water and sewer this year it's the lowest proposed increase in the last four years however there are several options there are

▶ 1:06:39 seven groupings of options that were analyzed by a consultant they include up to ten individual options which are both legal and meet the financial commitments required in fiscal 17 inclusive of indirect costs direct costs MWRA debt interest reserves in the offset of starting the rate on October 1st so I would like to turn it over at this point to raft Ellis and associates the Dave Fox and Chris Wilcox from Wilcox and Associates to give a brief overview of of the technical memorandum that was circulated some of the proposals the budget that the rates will support and other members of the administration and myself will be here to answer questions after that thanks Thank You mr. Shanna good evening that while they're setting that up let me start off my name is

▶ 1:07:51 Christopher Woodcock I'm the president of Woodcock and associates with me is Dave Fox, who you met, I think, earlier in April, senior consultant from Raftelis Financial Consultants. I understand that most of you were here for the initial presentation. For those that weren't, that are watching on television, I thought I'd give a brief introduction as to who we are. As I said, I am the president of Woodcock & Associates. We're a consulting firm that does just water, sewer, storm water rates, done them all over the world, but primarily here in the Northeast. I've done about 500, more than 500 water and sewer rate studies. It's included probably half of the MWRA communities and about two-thirds of the population of

▶ 1:08:42 Massachusetts, so it's been very concentrated in the Northeast and in Massachusetts. Dave Fox, who's with Rafteles Financial Consultants. Rafteles Financial Consultants is the largest firm in the world, I believe, that does just water, sewer, and wastewater rates. They have over 50 consultants in probably 10 or so different offices throughout the country. Again, the largest one that focuses just on water and sewer and stormwater rates, financing and management of the water systems. For nearly a decade, George Raftelis, who was the chairman of Raftelis Financial Consultants, and I have been friends for 40 years. We've worked together. We've worked against each other reluctantly, but we have in the past. But for the last 10 years or

▶ 1:09:30 so, we've actually had a formal working arrangement, an agreement whereby we work together on an awful lot of jobs, primarily in the Northeast, but some throughout the rest of the country. With that, the next thing I really wanted to talk about is why we're here tonight, talking about water and sewer rates. And I think sometimes in the discussions of these, the fact that we're talking about water and how important it is gets lost on people. Aside from air, water is the most important thing that you have. None of us are here if we don't have water. It's essential to health and public safety. In fact, the city of Melrose doesn't exist without the water system. You can imagine what the schools would do, what the fire department would do,

▶ 1:10:14 what the larger buildings would do if there were no water system in Melrose. It's absolutely critical. We're also very fortunate that we end up in Melrose. I live in a community that gets MWRA water, too, that gets MWRA water. It comes from the Quabbin and the Wachusett Reservoirs. There's treatment in Marlborough. It gets distributed to communities throughout the eastern part of the state. And I'm pretty sure that most people don't realize that the MWRA water is among the best in North America, and I think in the world as well. Several years ago, there was a convention of the Water Works Association. They have a taste test every year, bringing water from all over Canada, Mexico, and the United States.

▶ 1:11:01 and the MWRA water won as the best tasting water in North America. So the water you're drinking is not just good water, it's great water. I'll also mention that MWRA water has never, never lost a taste contest with any bottled water. It's not just some bottled water, but any bottled water. It's better than any bottled water that you can get. So we're talking about really good water involved here too. there's this slide here has a little bit of a showing of you know the value of water and it shows the the cost of different things that you can buy the water one you can't see because it's so small it's less than tenth of a cent a gallon and it compares it to other elements gasoline and Starbucks coffee

▶ 1:11:48 things like that and I think sometimes we lose track of how inexpensive water is to people and sewer service that it goes along with it I used to be president of the New England Water Works Association and gave speeches all the time and one of the things that I often challenged people about was what the cost of water is asking people what their water bill is how much do you pay for water surprisingly very few people know what they pay for water and in a part it's because it's inexpensive in part it's because it's built quarterly Unlike anything else, you pay cable, you pay electric, you pay gasoline, you pay telephone, all of those things monthly. You pay water quarterly. It's starting to change, and there's starting to get to be some more that are being billed monthly.

▶ 1:12:35 But for the most part, people get water bills quarterly on this. And I think as you start to look at the cost of water and what the value of water is, one of the things that I often mention is if you could go ahead and put an ad in a local newspaper and say what you want is somebody to deliver water to you not just any water good water drinking water last thing a surgeon touches at Mass General Hospital or the hospitals here in Melrose before they go into surgery is tap water rinse off with tap water after they've washed and cleaned it's so good you feed it to the baby as I said the water we have here in Melrose is among the best in the in the world there but you put an ad in the paper saying you'd like that

▶ 1:13:17 delivered to you in quantities up to 20 gallons a minute that's what most meters will give you do it 24 7 365 days a year Christmas New Year's everything you do it during power outages the water still gets to you in power outages and deliver it to just about any room you want in your house on top of that have a large quantity of water 500 gallons a minute in a residential area more than that 2,000 3,000 gallons per minute in commercial areas of water available again anytime 24 7 to put out a fire and your ad asked to do that for about a dollar a day you couldn't touch that nobody would pick up on that ad but your public works department does the cost of water to a typical Melrose resident is

▶ 1:14:05 about a dollar a day for water if you think about that again we're talking for about something that's essential for life. On the sewer side, you can put the same add-in. An add-in that says I want somebody to come and take away all the wastewater, all the sewage that I have in my house, all the garbage that I grind up and send down my garbage disposal, whatever quantities I do it, again 365 days, seven days a week, 24 hours a day, and take it and dispose of it in an environmentally sound way so that the sludge is treated, that the wastewater is treated and you're basically coming up with something that's nearly tap water by the time it's discharged into Boston Harbor and do that all for about two

▶ 1:14:44 dollars a day that's what you get in Melrose it costs about two dollars a day for sewer service for the typical resident in Melrose to get service it's an amazing deal it really is and as I said I've traveled around the world of traveled around the country and parts of the world it's a it's frightening that they don't have the service that we have in parts of this country I've done a lot of work in Southern California and I think many of you probably seen heard about the droughts in Southern California they just don't have water we're very fortunate here in the Commonwealth of Massachusetts we do have pretty good water there's some comments earlier about the MWRA having extraordinary amounts of water there's no need to conserve water let me put

▶ 1:15:28 that to bed right now that's not necessarily true it is true that today here in 2016 there is a lot of water the MWRA has but in 1980 early 1980s it didn't and some of you may be old enough to remember in the 1980s what was happening with all the headlines in the Globe and the Herald were the MWRA city of Boston everybody inside 128 is going to take all the water from the Connecticut River the Merrimack River and put it all into drinking water in Boston because the MWRA was at its limit at its capacity for its reservoirs so selling more than 300 million gallons of water a day. What happened in the early 1980s, and it started with the city of Boston, was people started putting in new rate structures

▶ 1:16:13 to encourage water conservation. Boston Water and Sewer was one of the first to put in an increasing block system of water rates and sewer rates to encourage water conservation. And it succeeded. It succeeded very well so that the amount of water that's now pumped out of the MWRA system is in the order of 200 million gallons a day, far less than that 300 million gallon a day capacity that they were at in the early 1980s. And that's despite adding a number of communities to the MWRA system since 1980. In those 30 years, there's been a number of communities added and the consumption has dropped. And I think a large amount of that is due to the rate structures and the discouragement wasteful water use that water agencies the cities towns communities in the

▶ 1:17:03 Commonwealth have done as well as the MWRA it's not just a matter of conserving water it's a matter of conserving capacity in the system the capital to build that capacity and the capital to build capacity in the wastewater system again I'll hearken you back to the turn of the century when Boston was not cleaning up its wastewater and had to put in a huge sewage treatment plant and hundreds of millions of dollars were built to put in treatment plants and there's capacity in the wastewater system the MWRA to take care of all that water that costs money and if we use water indiscriminately if we use it wastefully there's a lot more money that will need to go in to pay for the wastewater treatment so it's not just a matter of water saving it's not

▶ 1:17:49 just a matter of wastewater saving the amount of energy it's used in producing water and treating water is extraordinary the carbon footprint is something that you need to be aware of I think everybody is basically in agreement the fact that we have a problem with climate change and we need to look at energy consumption and energy reduction as well and reducing water consumption reduces energy use in Commonwealth of Massachusetts and everywhere so this isn't just a simple matter of saving water it's saving an awful lot of things that saving energy it's wastewater capacity water capacity And I think that the institution of the different rate structures that encourage water conservation since the early 1980s, the proof is what's happened at the MWRA, where the water consumption has dropped from 300 million to 200 million gallons a day.

▶ 1:18:38 I'm not going to tell you it's all from rate structure, but some of it certainly is. And I think there's no denying that a good chunk of it is. So that's something you do need to be aware of. There's also been a lot of discussion about costs. what is involved with costs what are they and how do they drive rates and every rate needs to be cost driven. Costs are just one element of what goes into setting water rates. I've sat on a board in the commonwealth that sets water rates I understand what you're doing is you're sitting here setting water rates and it's not an easy thing to do but there are a lot of different elements that go into it. I think one of the earlier speakers mentioned something about

▶ 1:19:18 revenue sufficiency you have before you an ordinance of two different budgets you need to have enough money from your water and sewer rates to increase to recover all of those monies and they need to be make sure that it's sufficient even if it's a cold rainy summer or a hot dry summer the economy goes up the economy goes down all things that drive water consumption you need to have enough money so the availability to have sufficient revenues and predictability in those revenues are very important considerations it's not just a cost basis. Conservation is another huge element, and don't kid yourself that conservation isn't something that you shouldn't be thinking of as a policy consideration. It's something that's critical that you think

▶ 1:20:00 of. The Department of Environmental Protection mandates that you do. There are conservation standards in the Commonwealth that say what kind of rate structures you have to have. Conservation is a very important thing. It's not just cost. Conservation and setting rates that set conservation is an important consideration. It's an important public policy consideration. Affordability. You've heard a little bit from your director about the program for the elderly for affordability. You may not think, some people in this room think that affordability is not an issue that should be considered, and that's fine. People all have a difference of opinion that we live in a democracy and people are allowed to have a difference of opinion. But I will suggest to you that this is

▶ 1:20:39 an issue that has gotten considerable debate in open discussions for decades about looking at the affordability of utility services and water and sewer utility service. The U.S. Congress has stated, has decided that making water and sewer affordable is a national issue. It's not just one in the state. It's not just one in the city of Melrose. It's one that applies all over the United States. The U.S. Congress has said setting sewer rates and taking affordability into account is an important thing and it's something that you should be doing it's a policy consideration that you should consider it's got nothing to do with costs and yes anything where you provide something that at a more affordable lower rate does involve a subsidy

▶ 1:21:20 and there's no question it involves a subsidy subsidy but it's something that again i think this country has decided on we certainly decided on it uh with rural electrification we certainly decided upon it as a country with making phone service available when when people didn't have cell phones you have to run wires to people's houses to have cell to have telephone service and providing that telephone service in rural places and people that can't afford it is clearly there the Department of Public Utilities has made it very clear that in setting rates for a lot of utilities that affordability is is something that that is done it's done in this state and it's a consideration it's not a cost consideration there is a subsidy in it

▶ 1:21:59 but it's done you can get an electric rate that provides a discount if you meet certain income requirements in the Commonwealth, and that's pretty much universal throughout the country in all 50 states. This isn't something that's just Massachusetts. It's not something that's just Melrose. It's something that goes throughout this country that does that. And I can tell you from having worked in a number of other countries, it's prominent throughout other countries. So when somebody tells you that the only thing you should be looking at is costs, that the only thing you should consider when you're looking at rates is costs, they're wrong. They're absolutely wrong. There are a number of different factors

▶ 1:22:33 and they're policy considerations. They're not policy considerations I make. They're policy considerations that you as a Board of Aldermen make on all of this. But they are considerations that you should be making and they are considerations that are common throughout the country and required, I think, throughout the country, certainly in the terms of conservation. DEP requires that in the conservation standards and setting permits for water withdrawals in the country. That's what I had for an introduction. I know it's getting late, and I don't want to take up too much of your time, but I wanted to set the record straight on some of these things that you've been hearing, and we have had dialogue, despite what you've heard, too, at those sewer committee meetings.

▶ 1:23:15 Alderman Forbes knows about that, having been at those meetings afterwards, where there's been discussions afterwards, either formally or informally, too. Thank you, Mr. Woodcock. Mr. Fox, would you like to proceed? Yes, please. That's going to be very hard to follow. I apologize in advance. Thanks, Chris. I'm sorry. It's okay. That's why I like to go first, usually. You all have a memo in front of you that summarizes all this information that we're going to go through. So I'm going to go through it as quickly as we possibly can, just to open the floor for discussion. I think that's going to benefit everybody a lot more than just having me sit here and spew all this stuff to everybody in the room.

▶ 1:23:53 But just real quick, just an overview, all the rate structures that are in front of you, all the options, they are meant to fund approximately $6.5 million from water rates and $8.7 million from sewer rates. That includes the operating budget that you heard about earlier on both the water and sewer side, but it also includes indirect costs. It includes the additional reserve funds that we're going to put into our reserves in fiscal year 17. Now, what that means is in order to fund those revenue requirements for fiscal year 17, we need approximately a 5% rate increase on water and sewer. This chart is basically showing, making up the 5%, what makes up that 5%. You can see on both water and sewer, a good chunk of those costs are MWRA costs.

▶ 1:24:45 The next chunk is, next biggest is reserves, adding to your reserves. You are about to enter your fourth year of a five-year plan to get to 10% reserves. A quick note on that, one of the questions that we were asked last time was, what are other MWRA communities doing in terms of reserves? Now, we don't have information for every single MWRA community. We do have information for a good number of them, especially those that we are consultants for. and when we looked into this we saw a wide range of reserve levels but one thing that struck stuck out was that on both the water and sewer side on that you took on the municipalities that we looked at there was never less than 20 percent of reserves for either water or sewer interestingly enough on the sewer

▶ 1:25:35 side it went up to 250 percent for one of the municipalities I'm not saying that's what we need to get to here that's for saving long-term savings for a big capital project that the municipality know they're gonna have to spend down the line it's just fiscal responsibility you're in a plan to get to ten percent and what you see here the reserves getting you know building up that five percent it's just one year closer to getting to ten percent so you know we spoke at length about the importance of reserves I'm not going to that again but you know I just wanted to bring to the table some of the information that we brought that we found we did not find a single community with less than 20 percent on water and sewer in terms of reserves and right now

▶ 1:26:20 you're at less than 10 on both moving in the right direction though what I want to do quickly I know everybody has had a chance to read the memo you went through the rate options but I want to go through them just quickly at a high level open up the table for discussion for these the water and sewer committee actually presented to the Board of Aldermen as recommendations from the Water and Sewer Committee. But we thought it was important to provide all of the options to the Board of Aldermen. Some of these options came about from recommendations from this Board. Some of them came from things we heard from the public. Some came from Chris and I sitting around a table and discussing. Some came from the Water and Sewer Committee.

▶ 1:27:02 We thought it was important to present all of these options to you. We really left no stone unturned in this process, and you'll see that from the different options that are on this and you have the impacts here from that one quick note all of these rate options will generate a the same revenue on the water and sewer side you can think of them as a revenue neutral zero-sum game really what you're looking at is the rates and the impacts do not concern yourself with the revenue all of them are going to generate the exact same amount of revenue and be able to fund the utility in fiscal year 20 or both utilities in fiscal year 2017 i'm going to run down the options quickly option one is maintaining the status quo it's

▶ 1:27:44 basically taking your existing rate structure and increasing it by approximately 5% on both water and sewer to fund the revenue needs in fiscal year 17 the next two options 2a and 2b or something that we heard from both the public and members of the Board of Aldermen was looking at what a uniform rate structure would look like we ran both options two options one with uniform rate structure with a fixed component that you currently have and one without a fixed component just a solely volumetric uniform rate structure it is our opinion that neither of these options are viable because we think that they are they go directly against mass general law option three is increase the first tier cut off so right now the first tier is is cut off at 2,000 cubic

▶ 1:28:37 feet a question was asked by one of the Board of Aldermen what would the the impacts look like if we were to increase that first tier cut off so we increased it from 2,000 CF to 2,500 CF and left everything else status quo you can see the end you have the impact schedules within the memo so you can see what the impact there that is option four and we actually have four a through four D we recalculated the fixed charges first thing we noticed when we came in and started looking at the existing rate structure was that the existing fixed charges were seemingly arbitrary in terms of how they were calculated and then also the differentials among the the meter sizes why you know a three inch meter was charged a certain amount more than than a five inch meter so what we did was we

▶ 1:29:31 recalculated those to be more cost of service justified based on some awwa recommendations in addition to that we also noticed that the amount of revenue that the water and sewer funds were collecting from fixed charges was in our opinion too low currently water is recovering approximately 10 of all revenues through a fixed charge sewer is only about two percent um we went through a process of allocating costs to the fixed components and we determined that those percentages were much too low even the 10 on the water side they were much too low probably you know eventually you would like to get to somewhere maybe in the 20 25 range um to be a little more revenue stable to uh offset or mitigate the risk of a very cold and and wet summer um so but in order to get there

▶ 1:30:33 uh if you were to get there in one fell swoop just a band-aid approach from from where we are now to getting to that 20 to 25 percent in one rate year it would cause what i would refer to as rate shock the impacts would be too large specifically on low volume customers from going from that low of fixed charge to that high of a fixed charge in that quickly quick of amount of time um so what we're recommending is excuse me um on the water side to hold steady at about 10 but recalculate the fixed charges to be more cost of service justified um but then on the fic on the sewer side start inching that up right like i said you're about two percent um we're recommending to get to about four percent in fiscal year 17 to increasing by two percent um go from two percent

▶ 1:31:18 to four percent for fiscal year 16 to 17 the amount of revenue that you're recovering from fixed charges from the sewer utility so every rate option that you we're going to discuss from now on 4a through 7 includes those components of the fixed charges on both the water and sewer side so now just quickly the differences on 4a through 4d 4a leaves the volumetric rate structure exactly the same with the exact same tier cutoffs it just recalculates the fixed charge option 4b recalculates the fixed charges it maintains the exact same rate structure on the volumetric side but what it does is it assesses sewer rates based on 90% of water consumption rather than the current policy of a hundred percent of water consumption right now anybody within

▶ 1:32:07 Melrose that does not have a second meter pays sewer rates on a 100% of their water consumption in when in reality not all the water that comes into a property leaves that property in terms of sewer so that 90 percent more accurately reflects the amount of flow that's leaving a property in in terms of sewer option 4c again recalculates the fixed charges maintains the exact same volumetric rate structure on the water side the same tiers but it calculates a uniform sewer rate there are no tiers on the on the sewer side it's just a uniform rate no matter how much you are assessed on in terms of water usage you pay one rate for the sewer and option 4d is similar to option 4c except it assesses sewer rates on

▶ 1:32:56 90 percent of water consumption rather than 100 option 5a and 5b excuse me um Again, we're recalculating the fixed charges, as I mentioned, and options, the four options. But we're decreasing the amount of tiers that you currently have from three to two. And we're leaving the first cutoff at exactly the same cutoff that it is in the existing rate structure at 2000 CF. It would just be up to 2000 CF is one rate, everything above 2000 CF is another rate, that's it there's not a third cutoff which there is in the existing rate structure the difference between 5a and 5b is in 5b the sewer rates are assessed on 90 percent of water consumption rather than 100 percent option six maintains the exact same rate structure recalculating fixed

▶ 1:33:52 charges maintain the exact same rate structure that you have on the volumetric side but what it does is it collapses the differentials among the rates on the on the tiers it keeps the three tiers but it collapsed the differentials this was another um question or recommendation or inquiry that we heard from the board of alderman what if we were to do this we calculated what the rates would be and what the impacts would be of decreasing the differentials among the tiers and then option seven is uh what we're referring to as customer groupings um this was actually something that chris and myself brought to the table as another option something to consider basically what we did here is we thought of two different customer groupings i'll go with a simple

▶ 1:34:37 nomenclature of small customers and large customers small customers or any customers that have five eighths and five eighths inch three quarters or one inch meter large customers are considered anybody else that has greater than a one inch meter um under this rate structure maintaining like i said before maintaining the fixed charges that i spoke about earlier but under the structure the small customers five-eighths inch three-quarter and one inch would have a two-tier rate structure similar to option 5a and everybody else would have a uniform rate if you have greater than a one inch meter you would have a uniform rate structure now what this does is it really segregates out better than looking at residential and commercial

▶ 1:35:17 it segregates out by meter size which is a typically a better indication of water consumption characteristics or water demand characteristics uh your five inch inch three quarter and one inch customers are going to get your typically your single family residential homes but it's going to get a lot of your mom and pop shops downtown melrose things like that it segregates out the much larger users and it assesses them a uniform rate structure um When we first brought this to the committee, I was asked, is this your recommendation? Is this what you would go with? And my first answer was yes, but I asked some follow-up questions in terms of the timing, implementation, how long is this going to take to implement a rate structure like this,

▶ 1:35:58 because it is somewhat significantly different than what you currently have breaking out customer groupings. Secondly, past implementation and the administrative burden, how comfortable do we feel about those customer groupings? How comfortable are we to feel that we're going to group the customers appropriately into the meter sizes? You're currently going through a meter replacement program. It was determined through some dialogue that it's probably not appropriate for this fiscal year, fiscal year 17, to implement a rate structure like this, given that you are going through a meter replacement program, and there's such a short period of time, and we're not going to be fully done with that meter replacement program.

▶ 1:36:36 This should be something that definitely keep on the table. Keep it in our back pocket. about uh hopefully you know after this year we can do a full audit of uh after the meter replacement program is done do a full full audit of our customer groupings uh clean that up make sure that um you know all customers are categorized appropriately and then also with the meter replacement program do a an updated billing analysis to know how those customer groupings are using water and look at the characteristics and see if we need to make any changes so it is something that we're recommending we think would be good for melrose but But at this time, I don't think it's viable for fiscal year 17. We can certainly discuss it at length if you'd like to.

▶ 1:37:14 I wanted to bring that up initially, though. I had intended to leave 4A, 4B, and 5A, and 5D, but I went through them already, so I apologize. But what I have here is exactly what you have in front of you for the four options that the Water and Sewer Committee put forth as recommendations from them. it's option 4a i'll go through this again recalculating the fixed charges maintaining the the same volumetric rate structure in both water and sewer option 4b and we can come back to this talk customer impacts in a second option 4b same rate structure but we're going to set sewer rates on 90 of water consumption rather than sewer rather than 100 excuse me option 5a reduce the tiers from three to two and option 5b reduce tiers from three to two but assess sewer rates on

▶ 1:38:21 Peter D. Mortimer: 90 of water consumption rather than 100 at this point uh i'd like to just open it up for discussion in q a just because you have had an opportunity to go through this memo and we are running a little over time and i just want to make sure we get enough time to have a full conversation thank you very much mr fox thank you we have before us from our agenda orders number four through eight inclusive are there any questions comments or motions from the alderman regarding those orders Alderman workout please thank you mr chairman um so uh i have a lot of questions uh but i do want to say first of all thank you very much for your work and this report um and also uh to those that served on the water sewer committee as well

▶ 1:39:19 Michael P. Zwirko: um so i don't quite know where to begin i'm probably going to have to ask questions more questions later but um so i do have a couple of um a couple of questions so we in in melrose we do it's all we we only have residential rates correct we don't have a residential and commercial rate set it's just residential no matter if you're in melrose you're paying that you pay the exact same rate no matter what type of customer you are that's correct okay um and of the menu of options that you provided us with I don't know if this could be done but I'm wondering if I'll use the term a la carte but I don't mean option eight would we be able to kind of take like a hybrid approach would say we like some things in option

▶ 1:40:09 Michael P. Zwirko: for a and couple that with up something in option six I mean is that something that's possible would that require additional study if we were to do that because i've noticed for example as my my colleague just pointed out only option three moves the tier cubic foot so the others don't so i'm just wondering like we might find something that that works in one option but don't like a part of it and then maybe take something from another that does i'm just is that possible i mean i guess essentially it would be creating a new option yes that's absolutely possible something as simple as just increasing a a tier cutoff from, say, 2,000 CF to 2,500 CF on, say, option 5A, rather than leaving it at 2,000.

▶ 1:40:57 Michael P. Zwirko: Something like that would be fairly simple to run. It would require additional analysis, but that wouldn't be of any length of time that it would take me to run that. I'm not saying that anything that you would come up with, I couldn't do in the amount of time, but I think most everything that you could come up with in a hybrid approach we probably could do in a reasonable amount of time to get you turn something back around to look at I appreciate that it's good to know and you had made a comment I don't have this verbatim but you said something along the lines of and this I believe this had to do with reserves you want to mitigate the risk of a cold and wet summer so the way I interpreted that is as much as we

▶ 1:41:35 Michael P. Zwirko: probably wouldn't like to have a cold and wet summer that'll mean I don't have to water my lawn and my shrubs as much so essentially what that means is water usage theoretically would go to her consumption would go down and and but so that leads me to believe that a drop in water consumption is a bad thing it's probably not it one of the the features of having a conservation rate and use that in the broadest sense is what you're trying to do is discourage non-essential use and there's probably 20 different definitions of non-essential in this room but it's generally use that's not public health and safety my lawn and shrubs are not essential though my wife spent a lot of time today actually planning a garden and maybe it's somewhat essential but

▶ 1:42:34 they're not really essential for public health and safety and so the idea behind a conservation rate is to try to discourage that with a higher charge for those those uses that aren't as essential the problem with that is by charging that higher rate you get more volatility in the revenue so if as you said we have a cold wet summer people aren't going to water their lawns as much and it's the expensive water so a a five percent drop in consumption might mean an eight percent drop in revenues or a ten percent drop in revenues and so one of the things that you really need to have as I said there's a lot of different factors in there the stability of the revenue the sufficiency of the revenue conservation they often fight against each other and to to be able to

▶ 1:43:26 have a conservation rate and stable revenues one of the best ways of doing it is establishing some sort of a stabilization reserve you can call it whatever you want but something there that's to do that now the reserves are also used for capital projects as dave said earlier there's some towns that are saving up for large amounts of capital that they know are coming and so they don't have a big bump in the rates at some point and they can start to phase them in in your case it's probably more related to having enough to for that cold rainy summer thank you for the clarity and you know i understand the volatility because uh regardless you know the comment was made earlier regardless of if we never use a gallon

▶ 1:44:05 Michael P. Zwirko: we're still going to have an assessment so I understand the need for you know a portion of our bills being fixed that way we have more ability to accurately forecast where we need to be and build reserves I just the way it came out I just wanted clarity so I appreciate that and then also in this study you had mentioned that you did a review going back the previous three years and that I I believe, annualized, the consumption has dropped in Melrose about 3% on average a year. Residential consumption, which makes up the majority of your customer classes is residential. It dropped by about 3% for the past three fiscal years annually. We know if you buy appliances these days, washer and dryers and washing machines,

▶ 1:44:52 Michael P. Zwirko: obviously they tend to be more efficient than they were 10, 20, 30 years ago. you know low flow toilets low flow shower heads things of that nature so to a certain extent the market is actually reducing consumption in the products that are available for purchase as well as you know all these lead buildings and things of that nature in addition I think that most residents are aware of the need to conserve I guess I don't want to be wasteful at this point but I just want to stress that you know it we actually do need usage for revenue as well and that's you know part of what we're building into this these rate structures as we go forward so I that you know that is an important point and I think that you know usage conservation is important

▶ 1:45:44 Michael P. Zwirko: But at the same time, we can't deny the fact that usage is as well. And then I did, so I had raised earlier that we only have a residential. So did we ever look into, or has it ever been brought up, potentially having a commercial and a residential rate? I don't think it's addressed in this plan, but in the meetings that occurred or any? We looked into establishing a residential and commercial rate structure. Historically, within municipalities, if they're going to break out different customer classes, you will see that sort of breakout or that nomenclature, residential and commercial. What we're finding is that that's not the best determination of customer demand characteristics. We're finding a lot of miscategorization within customer classes, a commercial customer being

▶ 1:46:37 Michael P. Zwirko: categorized as residential. It's not the best indicative measure for breaking out customers. That's why the one rate structure, option seven that I spoke about, where we did break out, we looked at the customer demand characteristics and found that meter size was actually a better characteristic to look at and parse the customer classes out by rather than the typical residential commercial. Just to expand on that a little bit, I think when you look at residential, clearly you've got single-family homes, probably got duplex, triplex, that type of thing as classified as residential then you get into a large apartment building with 20 units in it privately owned in there for profit for business the cost of water and sewer is

▶ 1:47:22 treated differently by the owner of an apartment than it is a person in a single-family home you can't deduct a single-family home from your taxes for example your your cost of water and sewer if I own an apartment building I can and so there's a different net cost to me as a commercial owner than a residential owner you've also got the issues of buildings perhaps up and down Main Street where you have commercial space at the bottom and residences up above is that residential is that commercial and then within the commercial there's huge variations imagine the water use differences between a bank where it's probably close to zero or a restaurant or a car wash or a laundromat where within that commercial class there's huge variations

▶ 1:48:04 Michael P. Zwirko: and use and are they really all the same as a bank the same as a restaurant you know single-family home is probably much more like a two or three family home that a bank is like a restaurant and that's why we it gets to be difficult doing those classifications as residential commercial and doing it more on large small as measured by meter size is often better no and I and I do appreciate that and you know we hear this term all the time then we're 96% residential and 4% commercial so by all means if we were to you know create a split in the the rate structure I mean it's one isn't going to necessarily subsidize the other or if anything it would probably fall on the backs of the residents so I understand that it's just I know that other communities do have

▶ 1:48:46 Michael P. Zwirko: them I mean we certainly do that with tax rates I didn't know why you know we differed for water and sewer rates it's certainly something to think about the The other thing I did want to mention, I guess what I will do is I will just, it is broken down and all the options that you've laid forth in your memo, when it gets to the table on the extreme left-hand side, you have the increments of the cubic footage of water. And I just want to note for the record, approximately, if you look at the first four and you total those up you're looking at just over 79 percent of the bills fall into that category that is a significant amount of the percentage of bills that's almost 80 so four out of five bills fall

▶ 1:49:40 John N. Tramontozzi: into either 2500 cubic feet or less that's correct those are all the questions i had at this time thank you alderman Zwirko alderman Tramontozzi please thank you mr chairman ago um were you asked to or have you um done a calculation on what the municipal use of water cost would be do we know what you know what that figure is yes and what is that figure in total in terms of lost revenue or the the billing to the municipality the municipal use means the city approximately 270 280 thousand dollars okay i don't have the exact figure from it all right um and and the rate structure um that it isn't calculated with a reduction of that amount uh from the uh from the budget is that fair to say that is fair so um if if we were to go with

▶ 1:50:41 John N. Tramontozzi: the tier system um you're uh say 5a and 5b could you recalculate uh to the tier from 0 to 3 000 cubic feet for each of those and then greater than 3 000 feet is that something that could be easily done yes okay i think because that would bring more uh consumers into the first tier anyways so if you could do 3 000 i know my colleague suggested 25 let's see what 3 000 does i can run that and uh provide that to you as quickly as possible okay thank you that's all thank you alderman Tramontozzi alderman medeiros please thank you um i know i'm going to have some more questions and i'm not sure if those will later be better for um mr del russo and some of our in-house staff or not but in terms of this stuff um i i do want to sort of echo some of the things that

▶ 1:51:34 Monica C. Medeiros: alderman Zwirko mentioned in terms of commercial and residential rate and you know point out that we in melrose up up and you know to fy14 when we adopted the tiered rate system had had in fact a differential for residential and commercial usage and you know one of the things that i'm personally pretty concerned about and i've heard from you know a lot of residents um who are residents who live here and you know i mean as as we heard you know water and water is precious it may be kind of relatively inexpensive compared to that Starbucks coffee but we don't have to have the Starbucks coffee we have to have water and it is a utility so it's it's a utility for the people who who live here and who are our residents and so you know they're certainly some of my prime

▶ 1:52:23 Monica C. Medeiros: concern I I you know I appreciate all these different options I am particular I kind of liked the thought of option 7 until I really looked at, you know, we're looking, to me, when we're looking at meter size as the sole factor, I think it really does make a difference about whether or not people are living in the building and their residence, whether they be, you know, condo complexes and we have some units and buildings that are in the city that just, you know, economically it's not feasible for them to rewire their, you know, replumb their buildings that are, you know, concrete and, you know, 55 units. in a building we've got several you know I don't know if you've seen these if it matters but we have several you know correspondence from some of these

▶ 1:53:08 Monica C. Medeiros: associations where you know we see the individual usage of those units is really on average about you know I'm estimating but it's really about average about half of what we're using in a single-family house and so to say that their high volume user you know I I can't put them in the same kind of classification on that meter as you know as a laundromat and who can have an opportunity to recoup those costs so you know I I would like to see and I know there's a lot of options here so in terms of which one I'm you know I'm not sure at this point I think I'd like to see you know what some of the other options that the committee would like to see but maybe on the ones that you recommend an option that does split off commercial usage and residential usage

▶ 1:54:04 Monica C. Medeiros: you know it's it's something to me to you know we we switch to this system from what was you know to two flat rates one residential one commercial I'd like to know if you know if even just doing that as residential commercial would that satisfy the legal requirements to have increasing block rate and you know I'm I'm curious I know like you've said that in the the to the option number twos which are more uniform rates or alcohol and flat rates that uniform rates that in your opinion it's not in compliance with the law have you consulted with any one besides your organization to determine that like with the state at all yes I've talked to city solicitors in town attorneys and countless communities the wording of that section of the mass general laws is

▶ 1:55:08 plain simple and clear there's no doubt what it says the implementation of it isn't that clear to reflect the higher cost of larger volume users that's sort of ambiguous what that does mean what and I've talked to the MWRA about this too the to be very frank with you the issue is one of political expediency the The Attorney General is the one that must enforce that element of the law. The Attorney General was running for Senate several years ago and wasn't in a position to want to enforce that law against anybody, and I don't blame her for not wanting to do that. I don't think there's an awful lot of interest in the current Attorney General to be enforcing it by anybody. It would probably take some sort of a citizen suit or a community suit to go ahead and do

▶ 1:55:59 that. is not going to disenfranchise any of its communities by doing that. Their position is it's up to the Attorney General, not up to us, to enforce the laws. But the fact that there is a law, it's clear that it's there. And one of the places that did have an increasing block rate said, gee, the Attorney General is not enforcing it, why don't I go ahead and do it, I think is almost inviting a lawsuit. it's sort of a slap, go ahead, see if you can enforce the law type of thing. If that's the druthers of the Board of Aldermen, you certainly have the right and perhaps even responsibility to go ahead and do that if you feel strongly that you shouldn't have it and that the law is wrong and not evenly enforced to go ahead and do that.

▶ 1:56:54 Monica C. Medeiros: There's a cost to the people of Melrose to do that, and you'd have to talk to a city solicitor about you know the chances of winning something like that and the propriety of going ahead and doing it no I asked because when I had reached out to the MWRA and asked them that question they had said that that would would be acceptable so I you know obviously it's somewhat in conflict so I figured I would follow up on that I was also you know we've had some discussion about cost and I know that you know there was discussion you've mentioned that the previous base rates that we've had have been somewhat arbitrary I mean obviously these are these are fees this is not tax that we're doing and we have to make

▶ 1:57:40 Monica C. Medeiros: sure that we're not overcharging anybody you know we're charging them for the service that we're providing so you know with that in mind have we in could you perhaps break down what the cost is you know I know you said about a dollar and about two dollars but but maybe more specifically what the cost is per cubic unit you know to deliver the services the fixed rate cost so we at least have some kind of you know understanding of what that is I think that would be helpful to us and you know in in your opinion you know is there really a significant difference in the cost to deliver water to some of these more higher volume users I mean in the past the idea was if if there was a higher larger meter size that there was more strain on the system is that really true

▶ 1:58:37 and and if so it you know how much is that and yeah it's a great question um and I'm probably gonna give you an answer that's not gonna satisfy you in terms of really answering your question because it's difficult to answer it in In terms of somebody that uses 10 times as much as a single family home, there's probably not as much in terms of piping to get it there. There's bigger pipes to get it there as there is for an individual home versus the business, let's say, that's 10 times as much. But the other factor is fire protection, which is a huge factor in this. the insurance agencies say you need 500 gallons a minute. A small commercial area, 1,000 gallons a minute. A large apartment, it's probably

▶ 1:59:30 2,000 or 2,500 gallons a minute. A big warehouse, 3,500 gallons a minute. And it's generally the larger users, the larger structures that have the higher water use, generally. Not always the case. And they have a higher fire protection demand. Fire protection is an extraordinary portion of the costs of your local costs, put aside the MWRA, but the local costs of the pipes in the ground. Instead of eight-inch pipes, you'd have four-inch pipes if you weren't doing fire protection. Instead of pumps that would do 200 gallons a minute, it might be 100 gallons a minute if you didn't have fire protection. So fire protection is a large chunk of the costs. And up until, oh, maybe 30, 40 years ago, there used to be fire protection charges where the water department would charge the municipality

▶ 2:00:20 Monica C. Medeiros: for fire protection, it'd be recovered through property taxes. The idea being property taxes were a reflection of the value of your property that was being protected from fire. So in that sense, yeah, there's certainly a lot more costs to provide water to those larger structures because of the fire protection cost element of it. The meters cost more and may cost more to maintain, but that's really a small portion of the whole thing. okay and um a lot of the bigger buildings are mandated to have sprinkler systems also so this must sort of mitigate in some ways that probably costs more in other ways maybe it mitigates um i also uh one last thing i appreciate the well i want to point out to the to the public that

▶ 2:01:11 Monica C. Medeiros: although your i don't think your presentation exactly is those slides were exactly uh in our iqm2 but this technical memorandum uh preliminary rate options which includes i think all the info almost all the information that was on your rate structure is uh we do have and it's on iqm2 available if you look up this order um i think it's under 2016-164 you can for 163 sorry you can it starts around page one for people at home if they look it up if it's the same as our computer starts around page 125 in the agenda packet and goes to about page 140 and that this is available for the public and we are going to have a public hearing on the water and sewer rates this coming monday the 16th at 8 p.m may 16th and so you know i just like to ask everybody at home to please you

▶ 2:02:09 Monica C. Medeiros: there's a lot of options here for us and I personally would like to have as much input as possible from the public into what options that they you know their concerns and I hope that they can attend and or you know email us or call and and let us know take a look at it and then one last thing is I do appreciate that there are different graphs that show the effects of each of the options they're or towards the end of this memorandum um with each of your proposed options and i was wondering if you if it would be possible to do a graph of this nature i know you've looked at the bills for the past um three years three years yeah uh over three years over three years three and a half years if if you can look at the the you know put something together from what what the effect has been for

▶ 2:03:03 Monica C. Medeiros: the these different groups of usage groups over that time period from you know maybe the last five years the last three and a half years and so the rate increases rate structure changes over the past three years what the impact has been because i think it's important to look at that you know we we've gone to um this you know progressive tiered rate system and we do have you know one group of users right now that is certainly subsidizing another group of users and i think you know we see that in in order to to equalize that rate if we want to it it will cause you know uh an impact on the the lower tiers and you know it's i think it's important to show what's happened to the people in the the higher tier so i would say actually since before the

▶ 2:03:51 uh implementation of the tiered structure to now what what how that's impacted them that would be thank you thank you alderman Medeiros next in line we have president khan please thank you so if if i were if i myself were the water sewer rate setting commission um my priorities would be obviously we must recapture the cost affordability that would be my number two And also conservation, I was on the rate setting commission at one point but I'm not anymore, so I don't know what philosophy they were operating under. And my philosophy always tends to be somewhat different than most other people, but that's how I would attack things. I don't know how much of the history of what's going on here you folks know about,

▶ 2:04:45 But one of the things that we have as a problem here is we've rolled out this tiered rate structure a couple of years ago. We had all kinds of discussions and we've had a very low level of support in terms of being able to technically answer questions relative to issues. And I'm going to tick through issues that have bothered me, but over the last couple of years, our support from experts has not been good in terms of giving any kind of logical rationale for some of the issues that have cropped up I'm heartened by what you folks have done so far. And what I'd like to do is, what we have to do here is we have a significant level of the population in Melrose as this is rolled out. who have lost confidence in the rate setting process.

▶ 2:05:41 And I think a lot of it has been because of poor communication and responses to some of the questions that they've asked and we have not done a good job answering. The other thing I need to point out, because I don't think anybody else is going to point it out, but the tiered rate structure is subsidizing the people who were in the first rate and if you went to a unitary rate structure and maybe we would or maybe we wouldn't but everybody needs to understand that that subsidy is going to go away and people who are being billed in that tier are going to have a fairly large increase whether we do that or not you know is for discussion but let's let's be open about the the people in the in the first tier are benefiting from that and I believe it's and I

▶ 2:06:41 haven't reviewed all the stats but I think it's more than 55% of the rate payers are in that first tier did you gentlemen know off the top about 70% of your residential customers fall within the first year under 2000 CF and I I believe it's a little above 50% or right about 50% the entire city as a whole. Yeah, so there's a huge percentage of the rate payers. So we're in the lowest tier, and the lowest tier is benefiting from the tiered rate structure. So I think it's fair that people know and understand that. Our commercial base here is minuscule. I mean, do you see any major impact on the rates if we were to go to some structure that broke out a commercial rate? I think we're 4% commercial.

▶ 2:07:33 Probably not. We just went through this in another community in central Massachusetts where a large beverage manufacturer obviously had a very high water and sewer bill and complained. The impact on most non-residential users is not that critical. I can get a little long-winded here. When Boston Harbor cleanup started, a lot of bonds had to be issued. Standard & Poor's and Moody's, the two big rating agencies at the time, were very concerned about the impact on commercial users. Is this going to drive commercial business out of the greater Boston area? And did a big study for them at the time, and the result was no. Water and sewer bills are a tiny, tiny portion of almost every business. Now there's certainly exceptions, car wash, laundromat, something like that, beverage

▶ 2:08:35 manufacturer. Again, it's a big one, though I would say even a beverage manufacturer, the cost of water in a bottle of coca-cola is a hundredth of a penny and it sells for what two bucks or something I mean so the cost of the product is of water and the product is irrelevant frankly out of the whole thing and the impact on commercial users is big in terms of dollars but in terms of total budget for the the business it's not usually a very big expense and as I said earlier you also have the tax advantage of it to the net impact on the commercial ones are user the the the notion um you had said before and i'll respectfully disagree with you on the the notion of the the people in the first block getting subsidized

▶ 2:09:22 i think it comes to a question of fairness equity uh and again you and i might have a different i understand there's an argument that they're putting less demand on the system than somebody who's in who's in a larger volume user right well it's not even so much that it's what it's being used for if it's being used for uh residential consumption uh cooking cleaning health that type of thing um usually under 2 000 cubic feet in a home it's essential use is that more essential than the water that goes into a bottle of dasani water from coca-cola for example which is more essential is that really a subsidy and again there's not an answer there's not a right answer like that and the answer may very well be yeah it is a subsidy i pay more not using it in a

▶ 2:10:06 a pejorative sense i know i understand understand what's going on yeah um it but it really gets into a a value of thing of what use of a public resource a public good tap water drinking water is the most valuable use of that resource is residential health and safety a higher value than i don't know making pancakes or bottles of coke or cleaning laundry you know and again that's a a value judgment and everybody's got a different answer to that and I only mention that in response to your saying there's that subsidy that happens automatically out of a tiered system and I mentioned because not everybody would agree that there is a subsidy in fact Connecticut there's a big fight down there just recently about not providing water to a bottling company was making

▶ 2:11:02 bottled water. That's not an essential use. Why are you taking Connecticut's water, putting it in bottles of water to ship off to somewhere outside of Connecticut? That's not as valuable a use as bar resources feeding people that are thirsty or want to cook. Again, that's a value judgment, and I'm not trying to say which one is more or less, but I'm not advocating that we scrap the tiered system and go back to a unitary rate. We've had some recurring issues that have come up year after year since we started this that haven't really been well dealt with one thing that's been bothersome is an issue of the prorating of the bills and the paying and my understanding is that this is going away in this structure by setting the rate in

▶ 2:11:45 october we won't ever have to grapple with that again so when we get to it mr chairman i'm going to ask you to uh i'm going to make a motion to ask that my order be placed on file but that's been a problem one thing that i'd like to just see discussed is people have expressed concern to us about the city not not paying for the city water and and i'm not expecting to discuss all this tonight but i'm just kind of going through my laundry list of of grievances relative to water and sewer issues i just want to have a full discussion on it i want to know how how other communities handle it you know whether other communities actually actually back their own water and sewer usage out of out of the budget somehow and i'm not going to i'm

▶ 2:12:40 not going to be governed by what the majority of communities do but i i want the public just to understand what the what the backdrop is here relative to that yeah it's um i haven't got them in front of me um as i recall it's about 50 50. the communities that do in the communities that don't charge themselves for water and sewer service and then there's some in between um lexington i don't know if this is still true lexington um charged itself um the cost of mwra water but not its local costs that type of thing but But there's probably 48% that do, 48% that don't, and 4% in the middle that do something, sort of charging themselves, but not the full amount. Are you gentlemen going to be with us at our public hearing next Monday?

▶ 2:13:27 I hope so. And, you know, you don't have to answer. Yes, we will be. One thing that people have questioned in the past, and, you know, I'm just a lawyer. i can't answer these questions um what is the methodology to set the tears what's the methodology i and it would seem to me that that's not a difficult question and it's been asked a lot in the past and we've gotten you know we set and and then this is i'm not directing this at my uh members of the uh of the administration here but we've we've had well you it's fair and equitable to do it this way and i would like somebody to explain if you're doing a a block rate system as a person with a with a background in science or engineering how you how you come up with the

▶ 2:14:23 figures and i'd like to present that to the public in a way that even i could understand sure there's um that's a great question um sort of a mystery i'm going to expose the mystery of the answer to that there are a number of ways of doing it one of the ways is generally to set the first tier at what the essential use is for a typical home Commonwealth has said that nobody should use more than 65 gallons per person per day if you look at the census data for Melrose of how many people per household in a single-family home it turns out that it's I think it's just under 2,000 cubic it's about two thousand right about two thousand about two and a half hours per two and a half people were home at two

▶ 2:15:08 thousand cubic feet that's one of the blocks um that starts to make sense to do that because you're saying okay the the state has said don't use more than this um so i'm going to try to set up a block that says if you use more than this i'm going to charge you more because it's it's now wasteful it gets into a problem about what do you do with a family of seven versus a family of two um type of thing and the problem with Lot of these things is how do you actually go ahead and administer a really fair system? Los Angeles they do but they haven't got any water in Los Angeles Los Angeles The rate book is this thick I mean it depends on how many people in the house the tiers change monthly for every account

▶ 2:15:51 Not just for everybody every account tiers change monthly the rates change by season summer winter They change by zip code, which seems crazy, but high in the mountains get more rain, low in the valleys get less rain type of thing, and how much water you need for reasonably to maintain a garden or a lawn, that type of thing. Something like that gets to be really, really difficult and really, really expensive to administer. If you have no water, it's worth it, and that's why they do it in Los Angeles. We're fortunate. We have water in New England. The MWRA has water now. And I don't think it's worth the cost, frankly, of doing something that will look at how many people are in each household.

▶ 2:16:35 How often do you do it? Do you do it just at the beginning of the year? What happens when people are born, people die? What happens when kids go off to school? What happens when grandma comes to visit for three months? That type of thing. When there's moving within a household, property changes, hands from a family of seven to a family of two, that type of thing. The administration of it gets to be very costly and expensive. And it gets to be a tradeoff as to how fair it is versus how expensive it is to be fairer. And generally what happens with water, because it's not that expensive, a dollar a day, is we try to lump them somewhat into groups. Residential is an easy group. Single-family homes is an easy group.

▶ 2:17:18 It's a dominant group. And you can look at 65 gallons a day and 91 days in the quarter and 2,000 cubic feet to set that. The other tiers then get to be set on different ways normally. And you look at the sort of a frequency distribution of consumption. And the ultimate had asked earlier about having just one rate, it's just one class of customer, where you used to have several classes up until several years ago. what block rates really try to do is set different classes of users there's non wasteful residential users and wasteful residential users above and below 2,000 cubic feet again in general understanding that seven people two people difference is going to there's a problem with that but then you look at

▶ 2:18:09 the the non residential uses and you sort of look at a frequency of their consumption and you can see where the peaks are and where the the curve sort of changes its slope and you say okay now I've got a different type of use and that's where I should be setting a block a lot of art a lot of art in terms of looking at grass a lot of science in terms of getting all that consumption looking at it every quarter your quarterly consumption isn't the same every quarter of the year it differs I would imagine every quarter so that gets to be a problem too in doing it but that's generally how blocks are set is looking at changes in the frequency distribution of curve I don't want to get too technical but generally what you do is a log curve percentage of people

▶ 2:18:58 but at or below a certain level and the curve it's sort of a sine curve and you can see where the changes and slopes are and those are generally where you would look to to make the changes in blocks because that's a change in in groupings if you will or classes of customers again not residential commercial or five-eighths inch meter two-inch meter but in terms of just volume of usage is where those happen it's sort of a long answer to your question but it's it's not it shouldn't be just pulled out of the air yeah you know at the end of the day we're gonna have we get paid the big bucks here to make determinations on on these rate setting issues, and we'll make them, but we haven't had a good airing of some of these issues.

▶ 2:19:42 And it's been frustrating, and I want to at least have the public get a good sense of what is behind some of these decisions. Another thing, and I don't even want to ask you to comment on this tonight, but we've been back and forth and back and forth about what to do with large multi-unit buildings. And I haven't even been able to get the answer to the question of what other solutions are there that are out there? And we really, it's been a frustration. What if anything do other communities do differently relative to large multi-unit buildings than we do? And essentially have been told you really can't do much of anything and there's case law out there. But, and if that's true, then we'll accept it.

▶ 2:20:36 But I just want to make sure that on some of these issues which are of concern to the constituents, that we get the info out there in a way that people can understand it. And that we can understand it, and if we vote on it and people think we're wrong, then they can toss me out of office. But I at least want to make sure that people understand what's going on. I'm sorry, Mr. Chairman, I do tend to go on. Do you want me to touch on that briefly? I think Alderman Medeiros sort of raised that issue of multifamily, too. I mean, I can briefly. Yeah, if you could. It's, let me start off this way. Your attorney, you said, right now there is a lawsuit that is about to start in the Massachusetts community on this very issue.

▶ 2:21:24 and on that alone the advice that we gave the water and sewer committee was don't do anything until that's resolved don't don't be a guinea pig and don't do something that you know six months from now is going to be overturned in court let that run its course it hasn't been filed but it would be at the trial not the appellate level um but it's about to be filed um what other communities do um vary somewhat most of them do nothing just what you have um some of them will look at condominiums um and owner occupied homes that are not for profit different from an apartment building that i own an apartment building rent it out and that's that's my business it's a business expense and i talked a bit about that but but pure residential like a condominium

▶ 2:22:20 a condominium association or a two three family home something like that what some people have done is break it into number of units i'll take your consumption and if you're 18 100 cubic feet and there's three units it'll be 600 i'll assume 600 each unit and then run those through the blocks or increase the blocks by three the same thing do that um some of them have done that that's that's probably the is the focus of this lawsuit that I've mentioned is doing that some have done it just for that as I said the condominiums the residential some do it for everything including apartments I think that's where you get into some problems it's not always the the the benefit that you would think of and if you look at it this way if I have a three unit home and

▶ 2:23:12 rent out two of them and i live in one of them and i have just one meter for the whole thing and i come to you and i say this isn't fair i've got two other units there's all these people of course i'm going to go above 2 000 cubic feet that's based on 65 gallons a person two and a half people i've got eight people in my three units i can't possibly i'll always be in that second tier that's not fair um i want to be treated like a single family home or three single family homes and if you want to be treated like saying three single family homes um that's not an unreasonable request but understand that each one of those single family homes also pays a base water and a base sewer fee and so you might have a one inch meter at your apartment with with

▶ 2:23:51 three units in it but if you want to be treated like a single family home i'm going to treat you like a single family home i'll find 600 cubic feet in each one of you but each one of those units is going to pay as if they have a 5 8 inch meter as a single family home would as three single family my homes were and when you start putting that base charge into the the total bill all of a sudden it did the extra cost of the being into the second block is way overrun by the cost of the base charge which offsets that more than offsets that in a lot of cases you have to be a very big apartment to have that not offset and even in those cases it doesn't offset to do it so a lot of them that do do it will do that base charge same base charge as if you had a five

▶ 2:24:35 inch meter in every unit so it's not really the big savings that you want a lot of them are saying no no I want to have just the one five-eighths inch meter or one one inch meter and then divide it by the number of units I sort of have your cake and eat it too and most communities don't do that they will say okay you want to be treated as single-family home will treat you as three single-family homes and bill you like three single-family homes it is is the element said replumbing is the big problem in doing that I mean you think it you usually have one hot water tank maybe for the the building and putting in three hot water tanks and we tried to solve this on an ad hoc basis by suggesting to everybody who could that

▶ 2:25:13 they go out and remeter their buildings and as you might imagine most of them are resistant to this yes yeah anyways you didn't want an answer but i i really thought i should give you something since the two of you had really sort of brought it yeah and i mean just having a couple of options relative to that because to be honest with you i understand there's a senior discount proposed that's supposed to kind of take care of this and i'm not really all that keen on that as a solution to this issue i i think i've gone on long enough for now mr chairman thank you president khan next in queue we have alderman forbes please thank you mr chairman i appreciate the comments from all my colleagues here tonight i want to thank you for your presentation i know

▶ 2:25:57 Scott M. Forbes: know there's a lot of information here to take in a lot of the questions I had were already were already mentioned by my fellow aldermen so I'm just going to concentrate on one area since I have the experts in the room in your opinion does a single tier for residential and a single tier for commercial satisfy the requirements state of the Massachusetts general laws because I think the problem here is that it's the interpretation of the law and we have all the Medeiros says she spoke to somebody from the mwra and says it does satisfy that requirement we could talk to whether you know any municipal official whether it's a city solicitor or an attorney that does where and they they may have a different interpretation of the law i think what we all want is to make this

▶ 2:26:42 Scott M. Forbes: decision a hundred percent confident that what we're deciding is going to be the right decision for the ratepayers so i guess that that's why you are here you are here to guide us and kind of steer that ship so i think it's it's important for us to know before we make a decision um what that interpretation of that law does yeah whether that satisfies the requirement whether or not that option uh out of the several options we have on board is the one that we're going to decide that remains to be seen but in order for to take an equal and and fair approach I think that does have to be answered I'm not sure if you could answer that tonight or if you would have to reach out to somebody because my next question

▶ 2:27:26 was do you represent any MWRA communities that in fact have a fixed rate or a single tiered system I'm trying to think of the second one if there are any Medford did until just recently they changed this year can't think of one now I'm in Forbes that that does but as soon as I leave here something will probably come to me as I said we do about half of them as far as the legality of it we're not lawyers we can't I think Alderman Khan would tell you we're not allowed to give legal opinions and you should really be going to the the city solicitor for that though I can say in talking to attorneys for a number of communities I don't think I've heard any ever say no you can't you can just ignore this law you have to have a tiered system the

▶ 2:28:25 question you asked about if I have a rate of a dollar for residential a hundred cubic feet and two dollars for non-residential would that satisfy it I I think it might. I think it might. The question becomes whether you want to be the test community if somebody says, I don't think it does, and brings Melrose to court, whether you do it. And I hate to pass the buck on you on this one, but your city solicitor is the one you really should be asking the legal questions to on whether you should do that or not. um option seven sort of does that um option seven what uh it had in there is to say okay we'll break out the residential we'll have a tiered rate for those that are wasting water that are residential

▶ 2:29:08 Scott M. Forbes: we can identify those fairly easily over 2 000 cubic feet and then break out the commercial separately without any tears i think that would probably satisfy it if that commercial rate were higher at least in the first tier of the residential if you had to but i you know i'm thinking that as a non-lawyer right i know our city solicitor is in the room i know that this is going to be the first couple of meetings so i know yeah and i i think that is it say almost the elephant in the room everybody wants to know the answer or the interpretation of the law so we could either take it into consideration or just completely take it off the table because we don't want to put ourselves into non-compliance if that in case is in fact uh you know the law of the land

▶ 2:29:51 uh you did mention something about forbes uh before you proceed if you'd like uh to be thorough at your option of course sir we do have the city solicitor would you like to hear from him at this time or mr chairman that that would be great thank you um one of the things i would just add tonight is we're having this discussion and sort of beginning the discussion is that the statute alderman forbes that i think you're referring to contain some and i want to read it so that the public watching at home also is familiar with the language we're talking about this is general law chapter 165 section 2b and it states all municipalities or water districts within the jurisdiction of the mwra shall institute water

▶ 2:30:45 charges and fees that incorporate a base rate for all users provided that said base rate shall be increased at an increasing block rate to fairly reflect the resource demand and consumption of high volume users of water so i have had conversations with mr shenna i've had a phone conference with mr fox and mr woodcock the other day i had an hour-long meeting with Mr. Mraz in my office and my conclusion is that there's some mandatory language in this statute and what I mean by that is as you consider adopting rates for FY 17 those rates have got to in the words of the statute fairly reflect the resource demand and consumption of high volume users of water so if a single rate, what I refer to as a flat rate, and I haven't considered your question about a

▶ 2:31:44 single residential rate and a single commercial rate for purposes of our discussion tonight, but if a flat rate is considered, my view would be, based upon the information I'm given by the consultants, by public works staff, is that it would not fairly reflect resource demand and consumption of high volume users, because the statute is intended to incentivize greater conservation by high-end users, high-volume users, if you will, and to impose a flat rate would not effectuate the purpose of the statute. I don't know if that answers your question, but that's my belief tonight. Okay. And I know you said you've had several conversations with people within the administration. Have you talked to anybody at a state level?

▶ 2:32:32 Scott M. Forbes: I have not. I don't know if Public Works staff has. don't know if mr fox and mr woodcock have i have not okay all right that's all i have for that thank you i appreciate that thank you city solicitor van campen welcome back mr woodcock thank you i do have uh still have the floor alderman thank you mr chairman i do have a couple questions in regards to the reserves you said that um and let me just make sure that i'm not quoting you incorrectly um other mwra communities i think this is a question i i proposed at the committee meeting just comparing what other reserve levels were out there and i think you said there was not one community that was under 20 percent was it their goal being 20 percent or they've already achieved 20 percent they've already achieved 20 they've already

▶ 2:33:18 Scott M. Forbes: achieved 20 percent that's correct are there any mwra communities that have no reserves uh that you in that study everyone had something that was over 20 which means that yes us with our goal of 10 percent we are the lowest community that's striving for that goal of reserves there was a small sample of uh 20 i think maybe we had information on to get quickly to get that information so it's not all of them have 20 percent it's the ones that we have information of so out of all the ones that we see that you looked at we were at the lowest yes correct okay All right. I know I have some questions about the municipal water usage, but I know that that's something I can ask at a later time. So I'm just going to yield back to Florida, Mr. Chairman. Thank you.

▶ 2:34:07 Gail Infurna: Thank you, Alderman Forbes. Alderman Inferno, please. Thank you very much, Mr. Chairman. It's always interesting following President Kahn because he seems to be always a good voice to get the words out to the public. and I think he was really cheating and looking at my notes because I had some of the same questions. But I do want to have two of the things, and I know the hour is getting late, so I'm going to have one question that's probably more for Mr. Schenna so he doesn't have to come up tonight, but maybe at the next meeting if you could have this. Could you explain to the public how you determine the shift that the residents pay going into the water rates? I think that's a question that kind of comes up,

▶ 2:34:51 Gail Infurna: And I think we heard from the public also on that. So if you could really explain how you determine that shift, maybe Mr. DellaRusso too is in on that. But like I say, you don't have to get into it tonight. We'll be back, it's getting very late. Also on the senior discount, I'm a little puzzled by it. I do certainly support helping out our elderly or those who aren't elderly but on a fixed income and need some assistance with this. But I'm confused as to if you were in a condominium, 30 units in a condominium, and three of the residents fit the criteria of the elderly discount, you pay an association fee that actually pays for your water, how is that gonna be working out in those condominiums?

▶ 2:35:53 Am I paying 300 and the person next door to me who will fit that criteria, pay 200? Is that just maybe a problem for the association? I'm not sure. I was just kind of curious by it. I guess John's coming up anyway. I can speak to that because I think it's important for everyone to understand how this portion of the proposed change and the discount is going to work. The water bill for whatever condominium association that the elderly person lives in isn't impacted by this. The discount will go to the qualified customer through their tax bill. and it's it's not consumption based it's based on the average of what the program the average of the prior years use so we take all the custom all the customers that were in the program the prior figure out the average discount of

▶ 2:36:56 the program and then if someone in a condominium Association qualifies they get that discount on their tax rate that's how that's how the discount would end up going to elders and condo associations so it doesn't impact the the water bill of the association and I can't speak for the condo fee within the association but the discount gets to the elderly customer who lives in a condo within an association through that person to that individual customers tax bill and then the budgets would be adjusted internally between the auditor's office and the treasurer's office in that regard okay I was really kind of puzzled by how that would really work out so and then like I said next time just come back and give us a nice simple layman's term of about the shift

▶ 2:37:47 Gail Infurna: determination how you go through that and other than that most of my questions have been answered I think you've done a great presentation tonight and I do think it's really important to simplify and get the word out to the public because I think that's where the problem is there is a breakdown somewhere and it sounds like this is a nice opportunity we're having lots of dialogue and hopefully we can get the information out there so everybody has a clear understanding of how this is being done and we're just not doing it on any sort of willy-nilly and and and whatnot so thank you very much for all your information all set Thank You alderman Ferna alderman Medeiros please thank you um everybody's a chance to go through once here I yeah

▶ 2:38:33 Monica C. Medeiros: But I did want to follow back up on the senior day elderly discount that is being proposed. And maybe Mr. Shana and Mr. Van Kampen might be able to come back. I'd appreciate that. So, Mr. Shana, you said that this is not going to be based on consumption? because it looks like there's a consumption component in this it's for single family two family doesn't 2500 changed so section 228-20 which we drafted together with attorney van kampen um is for is the program throughout the entire city number five is what addresses an elderly customer in a condo association the rest is all existing language that exists in the program today okay and I guess so then my my questions really for mr. van camp and we had spoken on the phone about something

▶ 2:39:52 Monica C. Medeiros: like this a couple of years back and I had asked if you know if in order to kind of alleviate some of this if we could you know offer a discount to senior citizens living you know just a senior citizens and at the time you had said you know that wouldn't be an option because we wouldn't be able to determine how much that individual used for usage and that that wouldn't be legally allowable so I'm wondering if something has changed since that time to make this allowable now sure well first of all I again I'm not suggesting you're misrepresenting a conversation I just don't remember it so I want to just say that out front as far as what's in front of you by way of a senior discount the view here is that this is a reasonable exercise of the city's power to afford

▶ 2:40:48 essentially a benefit if you will a discount to a class of citizens they have to meet certain criteria they have to be a certain age obviously they have to be owners of property they have to receive a property tax bill so in that respect it's similar to the trash fee discount I can't think of other programs off the top of my head but property work off probably not a good good analogy but in that respect it's a reasonable exercise of the city's power to afford this now I understand your question to be that you're treating the senior in the condo differently than the non-senior yeah I mean that was that was the when when we had had the discussion for that it would be would be treating people differently who lived in condominiums than we were who lived in

▶ 2:41:35 say to sure I and again I I remember conversations with folks about water and sewer ad infinitum and I would only say that we would be viewing seniors who own condos in the same way we would be viewing seniors who own single and two-family homes in the community so in that respect we're treating the same class of citizen the same I can't comment on our prior conversations all because I don't recall them but that's what I can offer you tonight so you feel that this is you know legally defendable I mean that's one of you know one of the things yeah and the reason I say that is it's designed to be as objective as possible there's no wiggle room in the discount in terms of the number there's no wiggle room in the discount in terms of who is actually entitled to apply for

▶ 2:42:36 it so in that respect my view is as long as we're staying as objective as we can we should be on sound on solid ground and so is everyone getting the is the 20% the 20% discount in a single-family or two-unit home would be 20% of their actual bill consumption consumption 20% of the bottom line of their bill okay and in the economy it would be the average use will be a lump sum based on the average of the program the prior year one lump sum issued on either the third or fourth quarter tax bill property tax bill okay and are these would would the if you lived in a single or a two-unit home would would this be on the real estate tax bill or on the water button you on your water but just like the program is right now I think that's all my questions right now on

▶ 2:43:52 Scott M. Forbes: that Thank You alderman Medeiros very quickly Alderman Forbes Thank You mr. chairman I did change my mind I see mr. de la russa I was in the room I just have a comment or maybe a request for him regarding at the one of our previous water and sewer committee meetings we had a letter from powers and Sullivan that was actually pretty dated dated back like I believe is 2009 and we used that letter as the justification for recovering water and sewer costs through its respective enterprise funds as appropriate and considered good practice I know in our agenda we had an updated letter that was dated at the end of April of this year in a similar from Powers and Sullivan that basically was a similar decision saying that it did

▶ 2:44:43 Scott M. Forbes: describe this method as appropriate in good practice so I know you had some dialogue with with Powers and Sullivan I did look on their website because I was just interested in some things I want to do a little research it says that they one of the leading professional firms providing accounting auditing and management consulting for over 80 government entities in Massachusetts they're actually hired by the Department of Revenue when they were transitioning accounting systems and they were hired to implement a conversion model and they did presentations and seminars for the Department of Revenue helping all municipalities get in line with the conversion so the question that I have or maybe the request that I have is this Department of Revenue frequently asked

▶ 2:45:29 Scott M. Forbes: questions number 17 where it says that it is not appropriate for a town department to charge another town department or for an enterprise fund to charge another fund for goods and services because the department operating the enterprise fund is not a separate and distinct legal entity however it is appropriate for those services to be taken in account into the budget process given their good standing and their experience in over 80 municipalities or 80 government entities and in the fact that they do provide services for us is it possible to bring that question before powers and Sullivan and get a response on how they interpret that for us through the chair I'd be more than happy to win that I believe is number 17 on page 37 37 yes I'd be happy

▶ 2:46:24 to do that all right I just think in in order to cover all our bases dot our eyes and cross our T's I think we need to have you know questions questions So I would appreciate that response at our next meeting or any future meeting before we bring this to a vote, I appreciate that. I'd be pleased to. Thank you. Thank you, Mr. Chairman. Thank you, Alderman Forbes. Next in queue, we have President Kahn, please. Thank you. Mr. Chairman, at my advanced age here, I tend to make less sense as the night goes on. So in view of the fact that we're going to be discussing these issues on Monday night at the public hearing, In a minute, I'm going to make a motion to adjourn the meeting for this evening.

▶ 2:47:09 But I always cannot hesitate to ask one last question. Mr. Del Russo, what do we think the senior discount is going to cost? If we know, or the change to the senior discount. I'd be happy to get that to you. I do not have that with me this evening, sir. Okay, I'd appreciate that. Mr. Chairman, I would move at this time that we adjourn the meeting for this evening and that, again, point out to the public that water and sewer public hearing will be held on Monday evening at 8 PM. Anybody who wishes to address the board relative to water and sewer issues is welcome to come to that meeting and speak to us. Second the motion. We have a motion at this time from President Kahn to adjourn the meeting.

▶ 2:48:03 Peter D. Mortimer: Said motion was duly seconded by Alderman Forbes. All in favor, please say aye. Aye. Any opposed? Opposed. We have one opposed, the motion carries, we are adjourned. Thank you, one and all.

Appropriations & Oversight Committee — 2016-05-12

Attendance

Agenda

Minutes

Transcript

Original documents