Appropriations & Oversight Committee — 2019-06-10

Appropriations and Oversight Budget Hearing

This meeting starts at 0:00 in a recording that covers several meetings.

Attendance

Manisha Bewtra present · Voting; Robert A. Boisselle present · Vice Chair; Scott M. Forbes present · Voting; Jennifer L. Lemmerman present · President/Ex Officio Member; Kate Lipper-Garabedian present · Chair; Shawn M. MacMaster absent · Voting; Monica C. Medeiros present · Voting; Peter D. Mortimer present · Voting; John N. Tramontozzi present · Voting; Francis X. Wright Jr. absent · Voting; Michael P. Zwirko present · Voting

Agenda

Minutes

CITY OF MELROSE APPROPRIATIONS COMMITTEE CALENDAR● JUNE 10, 2019 Aldermanic Chamber, Melrose City Hall Budget Hearing 7:30 PM 562 Main Street, Melrose, MA 02176 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 Kate Lipper-Garabedian Chair Present Robert A. Boisselle Vice Chair Present Peter D. Mortimer Voting Present John N. Tramontozzi Voting Present Francis X. Wright Jr. Voting Absent Monica C. Medeiros Voting Present Scott M. Forbes Voting Present Michael P. Zwirko Voting Present Manisha Bewtra Voting Present Shawn M. MacMaster Voting Absent Jennifer L. Lemmerman President/Ex Officio Member Present

ORDER-2019-85 Operating Budgets (City, School, Regional School) City of Melrose Operating Budget for Fiscal Year 2020 in the amount of $86,662,987.61. (Eighty-Six Million, Six Hundred Sixty-Two Thousand, Nine Hundred Eighty-Seven Dollars and Sixty-One Cents). Recommitted Appropriations Committee

ORDER-2019-109 Acceptance Acceptance of MGL Chapter 44 Section 53 F 3/4, establishment of a PEG Access and Cable Related Special Fund #2922. Recommend as Amended Board of Aldermen

ORDER-2019-88 Amending Something Previously Adopted AMENDING REVISED ORDINANCES Amending Melrose Revised Ordinances, Chapter 228, Article IV, Section 228-30 (Sewer Rates Established) as set forth herein. Without Recommendation Board of Aldermen

ORDER-2019-89 Appropriation An Appropriation from account number 6000-319000 (Sewer Retained Earnings) in the amount of $575,100.00 to various accounts as set forth herein. Recommend as Amended Board of Aldermen City of Melrose Page 1 Updated 6/13/2019 12:08 PM Minutes Appropriations Committee June 10, 2019

ORDER-2019-90 Appropriation An Appropriation from account number 6100-319000 (Water Retained Earnings) in the amount of $591,100.00 to various accounts as set forth here in. Recommend as Amended Board of Aldermen

ORDER-2019-91 Enterprise Fund Water Enterprise Operating Budget for Fiscal Year 2020 in the amount of $5,412,677.54 (Five Million, Four Hundred Twelve Thousand, Six Hundred Seventy-Seven and Fifty-Four Cents). Recommend as Amended Board of Aldermen

ORDER-2019-92 Enterprise Fund Sewer Enterprise Operating Budget for Fiscal Year 2020 in the amount of$8,199,171.51 (Eight Million, One Hundred Ninety-Nine thousand and One Hundred Seventy-One and Fifty One Cents). Without Recommendation Board of Aldermen City of Melrose Page 2 Updated 6/13/2019 12:08 PM

Transcript

▶ 0:00 Kate Lipper-Garabedian: 7 30 on Monday June 10 2019 the committee on appropriations of the Melrose Board of Aldermen is called to order. I am the chairwoman Alderman at Large Slipper Garabedian and I'm joined tonight by members Vice Chair Alderman Boisselle, Alderman Mortimer, Alderman Tramontozzi, Alderman Medeiros, Alderman Forbes, Alderman Zwirko, Alderman Bewtra, and President Lemmerman. Alderman McMaster had an unavoidable work obligation tonight. this meeting is being recorded and is being broadcast live on MMTV and available streaming on MMTV as well and it will be available on the City of Melrose website motion to open the floor for public comment madam chair second Alderman Mortimer has moved to open the floor for public comment seconded by

▶ 0:48 Vice Chair Boisselle all in favor any opposed this is the portion of the meeting where any member of the public can come forward to speak on any matter are on our agenda tonight good evening hi my name is jerry morrows i'm here to speak on a few issues regarding water and sewer tonight um before i talk about that though i do want to say that i i come here occasionally and speak with you speak to you because you won't speak with me um and i bring things to your attention that never even get acknowledged i brought issues about the school department mischaracterizing five million dollars of expenses over a number of years did anybody choose to want to find out more about that maybe you asked the city auditor or the school department i don't know nobody talked about it

▶ 1:53 here nobody asked me about it i gave you some details about it i'd like to believe that the elected officials of melrose care about what happens behind the scenes isn't that what's important that the city functions well and as as well as it can and that we do it so honestly and transparently all of you choosing to run for office this year everybody's talking about transparency you know transparency isn't let's bury something because we don't want to hear about it look into it something comes to your attention you should be looking into it you know year after year after year for a lot of years there's been this expression that all these indirect costs of the water and sewer department you know are legitimate somehow and a

▶ 2:47 few years it wasn't very long ago that the city solicitors budget was showing 50% applied to water and sewer I didn't believe it I don't think many of you did either but nobody sat here and challenged it nobody sits here and challenges what's going on what's being represented to you as the elected officials and how much is being hidden from you you know we talk about that oh the water and sewer has to pay these indirect costs to the city for unproven use of resources however all the departments are using water and sewer resources without paying for them how about the times when there's a foot and a half of snow in the ground in the water and sewer crews wrote doing snow removal do we see their timesheets and how much time is spent in snow removal

▶ 3:37 versus water and sewer, do the rate payers of water and sewer get a credit for those funds that are diverted to snow removal? Some of you have far more knowledge about the inner workings of the city than I do, to even probably can speculate on a lot more of maybe ambiguities, maybe misrepresentations. The thing is, though, is that our water and sewer, and I'll talk about the rates at the 8 o'clock meeting, hearing here, but our water and sewer is what's obvious because we put some of those things out how many things aren't obvious that i can't know about but that you don't know about but again i want to go back to when i make something i bring something to the table here and you do nothing about it

▶ 4:27 it doesn't give me confidence with you as elected officials that you're actually doing the job you're elected to do. Apologies for the city government aren't what we need. We need people to make the city government function better. On your agenda tonight is our expenditures of $1,166,200 that somebody just wants you to spend all this excess money that's been taken into water and sewer and spend it on things that aren't even delineated carefully. Equipment, $659,500. Really, what equipment is specified by that? I don't see any of it. Do we really need the equipment? By the way, given that water and sewer is a separate function, do we have an asset inventory of the water and sewer enterprise fund?

▶ 5:19 Do we know what actually belongs to water and sewer versus something else? Or is this going to be another example of water and sewer buying stuff for the city as an end run around the provisions of Proposition 2 1⁄2? Construction, $281,000 of construction. Really? What? Where? What's it going to be? A pump station. Now, I know a few years ago there was poor design, inattention. We ruined the pump station a few years ago because it went under water and nobody knew. I think we spent all kinds of money rebuilding that pump station. New pumps, new electrics, new everything. Why are we now spending $115,000 on pump stations? What's it about? What pump stations? What wasn't done before that needs to be done now?

▶ 6:12 What's the life span of what's there that we're replacing if we actually are? Why don't we hear about any of these things in a Water and Sewer Rate Committee meeting and only to find out they're buried in an Appropriations Committee agenda? You know, reserves, you know, the consultant was clear that we don't need these levels of reserves. And by the way, all of this $1 million, well, on the sewer side is $575,100. Melrose would be far better off applying $575,100 to inflow and infiltration mitigation than anything else that we do. That will give us the best payback, that will protect Melrose the most to prevent catastrophes from happening, to prevent revenue shortfalls, to prevent a lot of things.

▶ 7:01 I brought that issue here year after year after year. I know the first year, people are like, what the hell is he talking about, inflow and infiltration? But you certainly know what it is now. You know that we actually spent a little bit of money and got some benefit from it a couple years ago. But yet, we're dragging out now, not even intending to do anything now. Oh, maybe something in the fall we'll look at. Or maybe we'll just use the MWRA money, which doesn't put us ahead of the curve, and it hurts the citizens, the rate payers of Melrose. You know, I want to throw out there, I don't know if you actually have to act on these agenda items tonight. The water and sewer rate increases aren't going to go into effect until October 1st, on the prior quarter, I expect.

▶ 7:51 It's nice to let people know what they'll be paying for water and sewer, although basically at the top level of water and sewer rates in MWRA, everybody just kind of like says, oh, well, what are we going to get this year? And by the way, I want to address the issue right here, right now, that holding the volumetric rates the same is no wonderful thing for Melrose. They've been overcharged. The rate pay has been overcharged by dollars per hundred cubic feet year after year after year. That's how we have the millions of dollars sitting there. To say you're going to just keep overcharging them as you've been, that's not doing a service to anybody. anybody that represents that somehow this is wonderful that we're only raising a little bit

▶ 8:34 on the fixed charges of the sewer costs a little bit and that's wonderful you know that's absurd we are mellows is paying way more than they should be what is it redding and belmont might be above us when will this board take responsibility for what happens in the departments of the city everybody's been far too willing for too many years to say oh well it's the mayor and the mayor did this the mayor did oh we can't fight the mayor the mayor has to do the mayor misrepresented it well you know you have a role to play here you're not just a rubber stamping body here you have a role to play you can actually say well let's hold on so why don't we hold on to the water and sewer operating budget why don't we hold on to the water and sewer rates why don't we hold on to

▶ 9:34 this $1,166,200 completely unsupported expenditures, you know, I hear far more contention talking to the fire chief about a ladder truck, which is open and obvious what it is, than I've ever heard about stuff like this. I've heard people complain about $100, $200 dollar items but all the 1.1 million dollar items we can just like go by right let's have some attention to what to what Melrose needs what the rate payers need and you know let's have real conversation and one last thing that I want to say in this element of the hearing of the meeting is that when I I mentioned infiltration and inflow I have pleaded with the city at every level from the DPW people to the mayor's office to you as a board that one of the

▶ 10:43 large improvements we can make an infiltration and inflow is actually a public education campaign it costs nothing virtually I'll write the stuff and in fact because the city hasn't done it I'm actually going to go out and I'm going to commit to this right now. I'm going to go out and do a public education campaign for the citizens of Melrose and what is appropriate for them to do with the water that comes out of their sump pumps, with the water that fills their basements when it rains out. And just so everybody that's listening can hear, it should not be going down the sewer system. I'm not looking to go and criminalize anybody for doing something wrong. I want the city to make an effort to help people

▶ 11:21 to do the right thing to benefit them and to benefit the city if there's nothing in the water and sewer operating budget for education of inflow and infiltration you know that it's an irresponsible budget you know that it is and these are not new issues and any of you aldermen that choose to vote again this year like oh well we have to trust the mayor we can't look at the data i'm going to end in a second that we can't look at the data that i bring to you that you can verify yourself. Every year you make that vote and you say, oh, I'm going to vote with this because we need to do what they say. You are undermining democracy here in Melrose. You're doing what the Republicans in Congress do about Donald Trump, even if you're a Democrat here in Melrose,

▶ 12:05 Kate Lipper-Garabedian: because you're letting go things that you know to be untrue. You won't look at them. You won't investigate them. Thank you. Any other members of the public wishing to speak tonight? Motion to close public comment. Madam Chair. Second. Motion to close public comment made by Alderman Mortimer seconded by Vice Chair Boisselle all in favor that concludes our public comment portion of our agenda and our first order on the agenda tonight is order number two zero one nine dash eighty five city of Melrose operating budget for fiscal year 2020 and the amount of eighty six million six hundred sixty two thousand nine hundred eighty seven dollars and sixty one cents and we have with us tonight several different departments with the first on our agenda

▶ 12:51 Kate Lipper-Garabedian: being human resources suspend the rules so we may marry and long second made by alderman Mortimer seconded by aldermen's work go all in favor opposed great thank you for joining us tonight if you'd like to provide some introductory remarks we be happy to hear them and then follow up with some questions I am here to seek approval for for budgets human resources unemployment compensation workmen's compensation and the benefits budget and I'm available to answer any questions you may have motion to consolidate said budgets second consolidate the budgets for what we list as departments 152 912 913 and 914 made by aldermen's work go seconded by alderman Mortimer all in favor opposed okay so those are all

▶ 13:48 consolidated now so we can discuss them any questions thank you I wanted to thank you first of all for your very detailed questionnaire about all the budgets in the department and and I am hoping that maybe you could just for the public just talk a little bit about some of the details that are here and what your office does and these sure that would be so the human resources department is responsible for everything related to employment within the city that includes all of the benefit budgets that are before you labor relations collective bargaining recruitment performance management etc there is my as HR director and also Pauline a lot of the HR manager who happens to be here tonight observing we work very closely with the city solicitors office Kelly

▶ 14:56 Monica C. Medeiros: Kagan assists us with workers compensation and we work very closely with the auditor's office as well the auditor and his staff and all of these budgets combined you have here in the memo at thirteen point five million dollars approximately yes this is a very large chunk of our city budget it is yes and and that's so that yes that's very large you also have the breakdown of the number of employees serviced is that the total number of employees in this in the city so when when we draft the numbers the the statistics it depends upon the month so this is a snapshot done in preparation for this budget at 261 employees are the city benefit eligible excluding schools 586 employees are city benefit and non-benefit eligible and those are our part-time employees who

▶ 16:05 work 18 hours or less and they do not receive any benefits they are paid hourly does that include the school non-benefit employee city that is simply the city benefit and non-benefit eligible and the 751 employees served our city and school benefit eligible does your office interact with the school non-benefit no we don't so our role the Human Resources Department's role with the schools is primarily around managing benefits the benefits for school employees are managed through our budgets and that's the extent of our interaction with the school department so your office deals with about over 13 hundred employees and then there are some additional and retirees and retirees yes and you are the liaison for the employees and in your memo you

▶ 17:12 talked a little bit about how you handle the transactions for the employees that are over-the-counter and can you explain what so we have approximately 45 retirees or survivors as we refer to them which is the spouses of retirees who have passed away they are eligible for health insurance but they're either the pension died so to speak with the retiree or there aren't enough funds in their pension monthly pension check to pay for benefits and they actually pay us what we refer to as over-the-counter they write checks to us either monthly quarterly sometimes annually for health insurance so and this this is retiree only retiree only so their their benefit doesn't cover it but it's probably beneficial for them too but they're eligible through our plan and that's

▶ 18:11 Monica C. Medeiros: beneficial but any time for them to be part of the big plan yes thank you for explaining that and I see that you said you handle we handling pet insurance we have we offer pet insurance the city doesn't contribute to it it's it's a voluntary benefit paid entirely by the employees but yes we do offer it I'm sure that's good I'm sure there's many employees that yes find that very beneficial yeah it's it's very costly yeah it's very costly and it's very emotional and having to make that choice of when your pet is sick and yes take away the burden of the financial burden that certainly helps one thing I was hoping you could also answer and many of the budgets if not almost all of them that we've gone through this year there's a sick leave incentive that's

▶ 19:01 included in the salary portion could you just talk a little bit about what that yes so the sick leave incentive has been in existence long before I was human resources director and essentially it is a financial incentive that is paid on an annual basis for sick time that isn't used and depending upon the bargaining unit it's a different incentive for non-union employees and you'll see in our budget for both Polly and I as as non-union there's a maximum amount of $600 incentive for not using your sick time and that's prorated based on the number of days someone uses and the numbers that we're seeing in the different accounts that's based on the actual employees that are in that budget yes and then I think my my last overall question is just sort of about some of

▶ 20:03 the indirect cost calculations and I'm not sure if you're involved with determining that but obviously you process the benefits for many of the different employees including those in water and sewer yes and so in terms of determining what's what's used out of your budget that is something that is you do you speak with the auditor's office on that I I have no input in the indirect cost that's determined by the CFO okay and I see our CFO here you'd like to answer that question that would be great i may sure of course thank you you do all right madam chair before we proceed i'd like to make a motion to add this to the record second we have a uh balderman mortimer has moved to add this packet of information entitled City of Melrose water and sewer indirect costs

▶ 21:57 allocation to services to the record seconded by Vice Chair Boisselle all in favor aye thank you very much and I appreciate the extra time I was able to put this together and I apologize for the timeliness but there's no more than why not one item I've been trying to put together for this evening and I know in past i had worked with alderman forbes and i indicate i think to the committee waterman saw through my liaison that i was going to have this together and i i beat the time i did have it done and i think what's important here is that it by the title itself city of murrell's water and saw indirect costs and again paraphrasing through the chair for alderman Medeiros if i may um where this information I believe the board has seen perhaps at different times in a

▶ 22:55 different setting but it's consistent with what is always been presented to this board and briefly but at your own leisure you can review the actual language if you so desire but there's an explanation of terminology there's a five-year history of percentages which we will talk about this evening there's the inclusion of my memorandum that I had prepared for the board and you see the date of June 6 2016 very very detailed and water and soil and direct costs probably answers any more questions one would have on what they are their origin in the nature and the second of interest is the signatory page of department heads so if you look in section 5 if you can come through that and you should see and now a department has signatures that proceed the

▶ 24:02 right here it's the acknowledgement form if anyone's on that page and acknowledging by the each office that they've sat and they review these indirect cost allocations if you look on the very next page you'll see a small table of the percentages assigned to each department person that's in the department and the allocation of percentage of time and if you proceed to the very next section you'll see each section detail that i think all the member deals was making a question regarding the actual activities within that department and by department i think you'll find it's it's um compiled quite nicely the kind of work that's done to support the water and so enterprise fund in a detailed fashion

▶ 25:09 Monica C. Medeiros: so i think that will help address issues as we go on this evening um relative to the how the indirect costs are derived how consistently we have been and how um each department interact with another to make um what i think is a very good end product but i appreciate the extra time but that was an explanation to the question that was asked to you Thank you. Thank you. Thank you. I'll be here all night. Don't worry. I'm sure we will discuss this again during water and sewer. So we're looking at, and just in terms of health, and Mr. DellaRusso's memo is talking about benefits administration through open enrollment, workers' compensation, lead management, life changes, performance management, grievance hearings, collective bargaining, and recruitment.

▶ 26:10 Yes. great thanks okay and then if we could since we're looking at all the department budgets we're looking at an increase in workers compensation a 20% increase in that line and I I know we you had come to us somewhat recently yes maybe you could again just talk about that I just want to um yeah keep up with which budgets you're referring to four different ones here so bear with me so with workers compensation the accounts have increased for two reasons as we discussed at the transfer hearing several months ago one is we have three long-term recipients as opposed to two a spouse of an employee who died on the job and is entitled to lifetime benefits, so that increased our indemnity and benefit

▶ 27:13 account in line item. And then medical expenses associated with that incident obviously increased that line item. But the other thing that occurred is on May 1st, the Human Resources Department was notified that Cook & Company, our third party administrator, they've been our TPA for approximately 30 years, was leaving the workers' compensation industry. So that was May 1st. I immediately contacted five other TPAs and asked for proposals, and we just made a decision a couple of days ago. and their annual expense, the amount that they're charging us is actually $29,995 a month. We didn't know what they were going, a year, sorry. Thank you, thank you. We didn't, at the time that this budget was submitted,

▶ 28:25 we actually didn't even realize that Cook & Company was exiting the field. And then when I informed the CFO, he added $10,000 to the expense line item as a placeholder. So we assume that that will cover the expenses related to the third-party administration. Is that the indemnity line or no, what's that? that is the expense yes so the the indemnity line five four three two zero zero the seventy thousand that was level funded that's for injured on duty for police and fire and again we're self-insured for all of these the workers comp benefits are the both the long-term benefits to those three recipients and they're also compensation benefits to employees who are hurt on the job and out temporarily and then the expense line item is is the one that we

▶ 29:39 Kate Lipper-Garabedian: increase to thirty six eight seven five did want to just note that is eight o'clock so we do have a public hearing scheduled at this time yeah motion recess second okay motion to recess made by alderman smirko seconded by alderman mortimer so we'll return to our conversation with you shortly but we just want to start the public hearing on time thank you you're welcome so as mentioned it is eight o'clock and we do have a public hearing scheduled at this time to review the fiscal year 20 water and sewer rates motion to open the public hearing second the motion to open the floor for public comment made by president Lemmerman seconded by alderman mortimer all in favor aye aye any opposed all right so we

▶ 58:11 have a motion to, or do we just automatically resume? Or I think we're back now live on our first order of the night. And so we can welcome Ms. Long back up. Thank you for your patience. Did you still have the floor? I think I, yeah, I think I still have the floor, but I pretty much, Which, if you could also just very quickly talk about the salaries in the department and how that works. I know they cross over different department lines. Yes, so Polly and I are the two salaries in the budget and 75% of my salary is within the human resources budget. 50% of polys is within the human resources budget and 25% of mine is within the health and 50% of polys is within the health budget. Great, thank you.

▶ 59:07 Monica C. Medeiros: Not part of the rate for health insurance at all. Yes. Entirely separate. The rate, completely separate. Now, thank you very much and I really appreciate all that and I just want to bring to the attention of the public as there is a document here that we really actually I'm not sure if these got added to the to the order your questionnaire the questionnaire and the questionnaire is there I'm not sure if the breakdown of the number of employees by department did get added I apologize we've been receiving some things by email and some things I don't know that I've seen the health insurance budget projection by department in the no so I'd like to make a motion to add the FY 20 health insurance budget projection by department document which is a report

▶ 1:00:02 Monica C. Medeiros: produced on 6 1 with 7 1 19 enrollment to the order second motion to add this document to the order made by alderman Medeiros seconded by president Lemmerman all in favor so we'll add that to the order thank you and I again I want to thank you very much for including this level of breakdown because otherwise we pretty much see just a big lump sum of health insurance and just so the public knows since it's not in online yet it's a total of 1260 people who are receiving health insurance with current opt-out at 124 total active employees 487 active employees and 739 retirees receiving health insurance benefits you do mention in here projected override opt-out is 14 and then the school override vacancies and I just wondering if you can sort of explain those two

▶ 1:01:10 line items sure so as you're aware now that the override has passed there are additional staff that will be hired by the school department in particular and as I understand it there is approximately 25.5 FTEs full-time equivalents and obviously we don't know what these individuals are going to choose in terms of whether they enroll in a health insurance plan or they opt out so the figures are actually for the school override vacancies the three hundred and three thousand eight hundred and twenty five it truly it's a placeholder once employees enroll in plans then we can have a better sense of what that overall number will be that the cost and I say something before this This report here that is produced every year, I just want to acknowledge the auditor's office

▶ 1:02:13 Monica C. Medeiros: and in particular Donna Cardillo, our financial systems analyst who happens to be here. It is primarily her work that produces this report. And then Kerry Golden, the assistant auditor, obviously in the auditor's office, she works very closely with Donna and I and also Polly so the this this is a group effort and primarily Donna's work thank you Donna we very much appreciate that I do in particular I think it really does help make sense yes this budget it does and and then the the projected override opt-out is the guesstimate is a guesstimate so it's kind of going on a little bit more than half and each option saying that we may be providing an opt-out yes and that figure represents those 14 people choosing a family opt-out incentive again we don't

▶ 1:03:08 Michael P. Zwirko: know whether they would choose an individual or a family thank you thank you very much thank you madam chair thank you for being here this evening ms. long thanks for your work throughout the year and all of the items that you and your staff go through as well as fielding some of our inquiries so appreciate that Alderman Medeiros alluded to a couple of the questions that I was going to ask and I did want to one of the questions was about enrollment the recent enrollment I believe ended on May 2nd May 3rd open enrollment open enrollment yes period that just ended so is the document that Alderman Medeiros is referring to the result of that open enrollment period ending yes so the the report this report that is before you was run on June 1

▶ 1:03:58 Michael P. Zwirko: with 7-1 enrollment based on what we knew as of June yes so we're I'm just we're focusing on health insurance that is correct yeah Mike my questioning is really going to be limited to nine one four okay so could you speak to if there were any changes in the open enrollment period between last year and this year meaning was there a jump in opt-outs was there a change in types of plan where kind of the the shifts occurred if any so what the trend that we've been seeing over the last couple of years you and I have discussed this previously one of the most popular plans was Harvard Pilgrim, which also was the most expensive plan. And the reason it was the most popular was because it allows our employees

▶ 1:04:58 to have a very broad network, including Boston doctors, hospitals, et cetera, Mass General, et cetera. The enrollment in that plan in particular has decreased by nearly half because our employees have chosen not to pay. They understand that the benefits are consistent across plans. The benefits are the same. The only difference between these plans are networks, whether they choose to have a very broad network or they are comfortable using their community hospitals, et cetera. So that's one example. The enrollment in Harvard Pilgrim has decreased. The second most popular plan, Tufts Navigator, that during the open enrollment period increased somewhat. Polly, do you want to add anything about open enrollment and the changes?

▶ 1:05:57 Michael P. Zwirko: There were approximately 75 transactions. It actually was a fairly quiet open enrollment. When we spoke about this in April of this year, open enrollment had just begun. Yes. that time memory serves me correctly I believe we had 106 opt-outs and we have a hundred and twenty four right so opt-outs have jumped again because I remember a couple of years back we thought it was actually gonna plateau somewhere in the 80s but it seems to be a very popular plan and and one of the reason no plan yes and one of the reasons that it's increasing is because we changed the policy to include new hires so originally when we rolled out opt-out it was only for existing employees who were in our plan for a period of time and then we began to offer it to new hires upon hire and

▶ 1:06:51 Michael P. Zwirko: that's where the jump occurred so when we're talking about so we're gonna have some new hires yes we are we're gonna have 25 in the school so when we're talking about the devising the health insurance 9-1-4 each fiscal year can you speak to and you did do this a little in April the process that goes behind and devising it because if we've seen a almost a linear progression in opt-outs as well as a decrease in some of the more Cadillac type plans I'm I'm curious as to how one devises that budget and and the allocations there too so here you're saying that you presume about half maybe a little bit more than half of the new hires will opt out so it seems here when looking at the line item you've increased the group health by about seven hundred and seventy three

▶ 1:07:48 thousand dollars and you've increased the opt-out by just under two hundred thousand so can you go to the process of formulating this so let me let me talk about this report by department for just a moment so you'll you'll see the by department numbers those are fixed numbers those that's actual enrollment in the various plans and actual rates the numbers below are our best estimate based on what we know today and again we we can't predict what an employee is going to choose or not choose so we have to have a certain criteria so that that's that but could you do educate them I'm sorry do educate them on the types of plans and yeah of course we have a new higher orientation that goes over all of their choices but I believe your question was how did we get to this

▶ 1:08:52 figure for the health insurance budget and again I want to ignite acknowledge the team that works on putting together the health insurance account in particular that is the assistant auditor kerry golden it's donna cardillo the financial systems analyst it's paulina lotta the benefits manager myself and the sign-off of patrick de la russo so the criteria we used for this this amount of money was 7-1 enrollment the at the time of projection the actives was 486 retirees were 743 the total existing actual enrollment was 1229 people so there's that cost associated with that actual enrollment then we had to review the unusual and truthfully this is the first time we actually did this with city vacancies because

▶ 1:09:57 we had during these transitioning months when we were building the budget we had a number of vacancies so we had employees that were enrolled in health insurance who either left our employee or they retired so that has an impact on the health insurance budget now we have people coming in and filling those vacancies the at the time that this budget was produced not all of these vacancies were filled so we had to use we made assumptions and the assumption is we use the Tufts navigator family plan because it's the most popular at this time so that's eighteen thousand three hundred and sixty dollars a year so as it relates to any of the vacancy that is the plan that we're using not the most expensive any longer which again is the Harvard

▶ 1:10:59 Michael P. Zwirko: pilgrim in addition now the that represents a change from the past yes yeah because the the vacancies exist right now to a large extent and we have not had this number of vacancies while building the budget so does that answer your question it does so let me just not necessarily question further but let me make a statement and correct me if i i have it correct so the assumption for this budget is of the 25 full-time employees we presume your office presumes we can expect potentially 14 of those new employees to opt out that's what we're projecting and then for the for the rest we presume that they will take some form of health insurance and that projection is based on the tufts plan yes exactly yes

▶ 1:11:56 Michael P. Zwirko: earlier this year we transferred out 169 000 from fund 549201 and i see here that we currently are projected this budget line is projected for just over 10 million but as of the printing of this budget which was May 1st so obviously two months we were at eight point one million will we hit do you know if we will hit the projection if we'll go over it or if we'll be under it will there be the funds left over so at the time of the printing of the budget we had not paid the final group insurance bill so right now as I understand it there's approximately two hundred and eighty thousand dollars actually that will be left in the health insurance budget and in let's look at actually the let's look

▶ 1:12:52 at the health insurance line very briefly I want to point out a couple of things so you'll notice second from the bottom the hiatus line item that is a a line item that we do not fund but it's there for us to track the expenses related to hiatus and what that means is new hires by gic rules can't enroll in health insurance until the first day of the month 60 days after employment we our pec agreement requires the city of melrose contribute to the to their health insurance costs during that 60-day period as long as they present us with receipts etc so we have no idea we we couldn't fund that that line item but we track it so the health insurance the funds that aren't spent in the health insurance account

▶ 1:14:02 Michael P. Zwirko: oftentimes because it's all the same account it um it funds oh the increase in opt-out oh the expenses associated with the hiatus reimbursement so it you know we're very fortunate that we have those funds in that account as opposed to my coming to the board and asking for additional funds well we certainly me personally don't mind the transfer of the funds enter this 914 employee benefits line i think it makes sense if there's excess in the group health line for it to be paid hiatus or opt out or whatnot um or medicare for medicare part b where i guess i have a concern is um over the past four years at least and this year alone if there's 280 000 left over by june 30th of this year in addition to the 170 i'll round up 169 000 that

▶ 1:14:58 Michael P. Zwirko: that we've already paid out that equates to four hundred and fifty thousand dollars in which we had excess funds in that line over the past three years that well excuse me if I add this to the past three years that's 1.6 million over the past four that's a large figure and I understand it's a moving target but 1.6 million dollars of overages in the health insurance account which could have been probably better served in a general general fund you know it's just that's really tough for me to swallow so I appreciate the changes in the process you spoke earlier about how you're now using the 14 for the opt-out and the new hires but you're also using your kind of mark on the Tufts plan that wasn't

▶ 1:15:43 Michael P. Zwirko: previously what you have done so I know that you're kind of tweaking the projections so I appreciate the changes I know you have to be dynamic here so that was my question on the how you actually get to the health insurance line we've covered enrollment and opt outs the jump that occurred pretty significant jump just going through my notes I think those are all the questions that thank you Alderman Medeiros those are all the questions I had I just I'm hopeful that with a seven hundred and seventy three thousand raise in that line item from last year given the new hires any transfers out of this fund will be minimal at best so appreciate your work those are all the questions I had thank you I just had a few questions around the collective

▶ 1:16:45 Manisha Bewtra: bargaining process and some of these may be more appropriate for the city solicitor assistant city solicitor auditor but since you're first I'll start with you so earlier today I had sent you an email regarding the unions and just noting in the memo that you'd sent along it's actually six unions not eight and you mentioned there were the superior officers patrol officers fire local 1617 Melrose Public Library AFSC me 93 laborers local 272 clerical local 272 so I've gotten questions from the public on occasion regarding sort of our role as the Board of Aldermen in the collective bargaining process and you know and how that compares with school committee so I thought it would be just useful to use this opportunity to ask you you know what is your role and the

▶ 1:17:45 Manisha Bewtra: process and timeline in terms of the collective bargaining process and does that vary among the six unions who do who's who are some of the names of the unions are more obvious than others like fires obviously the firefighters but more specifically kind of department-wise who are served that kind of thing if you could sure so briefly the city's bargaining team the chief spokesperson is actually robert van camp in our city solicitor he and i um comprise of the bargaining team along with patrick delarusso chief financial officer of course the mayor is intimately involved however she doesn't sit at the table in doing the actual bargaining we report to the mayor's office and the local 272 laborers are the dpw employees

▶ 1:18:50 all of them other than the local 272 clerical which is the administrative group at dpw school nurses City Hall employees there are members of the engineering office that are within that unit as well the local 272 superior officers are the sergeants and lieutenants in the police department and obviously the patrol officer union nor the patrol, and fire is fire, library, librarians. And so when does that sort of process begin? And again, what's the timeline? And I got a little bit of insight in speaking with the school committee member in terms of the process on the school committee side, but just sort of, again, for, I guess, the public's benefit. Sure, so Local 272 Clerical, as an example, their collective bargaining agreement

▶ 1:19:57 ends on June 30th, 2019. All of our agreements are three-year agreements. So approximately six months prior to the end of the agreement, either the city will notify the union or the union will notify us, and we begin the process of meeting and reviewing whether it's the contract language, whether it's compensation, cost of living adjustments, benefit changes, whatever the union is interested in bringing and proposing, and then also what the city is requesting and proposing, and that's the bargaining process. There has to be agreement between both parties in order for the collective bargaining agreement to be signed and executed. Does that answer it? Generally, yes. Trying to think if there's any other,

▶ 1:20:57 Manisha Bewtra: I think again, because it's so different from what again, the school committee deals with, and that's not always clear to the public in terms of our role. It's helpful to have that explained and how to the extent that it is not our role as the Board of Aldermen to be involved in that, given our form of government. Yes, that is correct. Thank you. The funding order comes before the Board of Audit. Exactly, exactly. Thank you, those are my questions at this time. Thank you for all of your work. Sure, thank you. I might ask just one follow-up question to Alderman Bewtra line of questioning around collective bargaining. So you've mentioned an example of a contract that ends at the end of this month.

▶ 1:21:42 Kate Lipper-Garabedian: So presumably for the last six months you've been negotiating it. some point the general terms will be brought to our yes to approve the appropriation to cover those costs current I recall last year when you were with us you kindly provided maybe in a follow-up to a conversation to a meeting that we had sort of a breakdown of how much on average the city is covering for health insurance benefits compared to what we and we expect the individual employee to cover through a deduction from payroll for example and compared that to other municipalities around us and I'm wondering I think it's been mentioned probably in public at some of these meetings that those those breakdowns are always up for negotiation and revisiting and and at what point in

▶ 1:22:32 time will you be able to bring to us you know thoughts on that policy determinations related to that sure so the contribution split between the city of Melrose and the employees is actually not done through the collective bargaining process it isn't done Union by Union the city of Melrose adopted chapter 19 so we have a public employee committee and that committee is comprised of all the union presidents including the school department representatives from the school department and there I think there's approximately 12 unions that are represented and then the mayor the city solicitor myself the CFO we are usually the ones who make the proposals at that point um and they are generally cost-saving proposals for the contribution split currently

▶ 1:23:36 we're at 84 contribution for active non-medicare plans and 70 contribution for the medicare plans so that agreement runs through june 30th 2021 and how many years is that how many how many at At what point, how often do we renegotiate? Every six years. So we will begin negotiating the new GIC agreement probably in November 2019 for an effective date of July 1, 2021. And that's dictated by the GIC. They have an extensive process, a series of dates that we have to comply with. Thank you, so recognizing it's not part of the CBA or really even our budget review tonight. I still think it's helpful for the public to sort of see how these different processes have an interplay with each other. What is the will of the committee?

▶ 1:24:54 Monica C. Medeiros: Motion to move the bottom lines, and if you will bear with me. I'll attempt to read the numbers. In 152, human resources $143,980.69. I have them handy if you want me to read them workers compensation four hundred six thousand eight hundred seventy five dollars nine thirteen unemployment one hundred thousand dollars only employee benefits this is the big one twelve million four hundred ninety one thousand one hundred nineteen dollars and seventy sense motion on the floor second we have a motion made by Alderman Medeiros to move that up to recommend the bottom line for those departments 152 9 12 9 13 9 14 seconded by Alderman Forbes all in favor all right thank you thank you we'll make that to the board for being with us tonight up next we have department

▶ 1:26:16 Number 151, City Solicitor, and you may be also speaking to 165, the Labor Commission. Yes, good evening, Madam Chair, members of the committee. I come to you this evening seeking approval of the FY20 budget for the legal department. Just a quick overview, you'll notice that the budget remains relatively level funded from FY19. you'll note a 1.2% reduction in the salaries line that reduction is due to the fact that in FY 19 we had budgeted the assistant city solicitor for labor and school matters at 35 hours per week and determined during FY 19 that we weren't going to schedule that position at 35 hours a week so it's a 30-hour position hence there has been a reduction in the overall line item for

▶ 1:27:14 salaries expenses professional services books electronic mass general law that's our Westlaw online legal research subscription dues and memberships education seminars suits and claims you'll note are all level funded at 0% increases and the property insurance line is growing at a 2.5 percent rate that is subject to a rate lock agreement that the city of Melrose entered with trident i believe this is the final year of a three-year rate lock agreement so you can anticipate that the city of melrose for fy21 will be likely issuing an rfp for insurance services that's it happy to answer any questions thank you madam chair thank you for being here this evening nice to see you likewise I just have a few questions they may not well they

▶ 1:28:17 Michael P. Zwirko: derivatively pertain to this line item of 151 but you know I'm asked this a lot and I know your questionnaire didn't necessarily speak to it but over in the last year one of the changes was I think this past July you had a title change or an addition to your title I should say and I don't think that that came with any benefit of a compensation but could you explain what exactly that title means sure when Mayor Inferno took office her and I had conversations about me taking on an expanded role to assist her during this period of her administration and she designated me with the responsibility of serving as the deputy mayor which essentially involves overseeing day-to-day operations in the mayor's office when necessary I was happy to do it to help Mayor Inferna get

▶ 1:29:10 Michael P. Zwirko: through her tenure in office I appreciate the fact that you pointed out it went without a compensation increase but happy to do it yeah well thank you I think you're right to fit that role so I just you know it is a title change I don't think people are aware of it and I appreciate the explanation so I know know that you serve serve the executive office well the other question I had is on the suits and claim line I don't know is that for is that kind of an account that we have in the event that we need to pay out or is that something that we we fund for us going to litigation as a plaintiff and or or in the alternative defense could you just explain what that line is for sure so suits and claims essentially is

▶ 1:30:00 a cash account in the event there are claims or suits against the city for which insurance coverage is not available it's insurance on top of insurance it's a relatively small amount of money but i'll give you an example a um well we had one a pothole claim for example $280 pothole claim. There's liability and it doesn't proceed through the city's insurance company. In some instances, we would pay that claim out of suits and claims. We would pay for, I think, arbitration fees. We would pay expenses associated with non-civil court disputes that my office is handling, that type of an expense. So I know that, I guess, let me ask this question and then I'll get to why I just inquired about that.

▶ 1:30:53 Michael P. Zwirko: At this time, it's June 10th, have we heard back from Mass Housing regarding the Swains Pond development? We have not. As the members of the board know, we submitted a response letter to the project eligibility letter application of the developer. We submitted a comprehensive response in opposition to that development. I believe we are waiting now for a determination from Mass Housing. Yep. So we're still waiting? Correct. So the reason I ask that is, have we, and I don't see it here, and I don't know, again, maybe I'm missing it, but have we, in anticipation of possible litigation, have we set aside some funds for that? Yes. Yes. And you will see, I believe, on Thursday, there is a request to appropriate $50,000 from our available free cash

▶ 1:31:44 into our suits and claims stabilization fund that will give us what i think is sufficient funding to bring in outside assistance bring in professionals who are expert in 40b opposition to allow the city to defend very aggressively against that what we consider to be extraordinarily irresponsible development on swain's pond ave and do you know the balance in that fund as of now mr de la russa do you know the balance in the suits and claims stabilization fund well if it could be available for thursday that'd be fine thank you and my probably north of a hundred thousand okay but i will i will tell you uh for the benefit of this board and the members of the public watching that a 40b opposition is an expensive undertaking it will cost the city

▶ 1:32:30 Michael P. Zwirko: uh several hundred thousand dollars over several years yeah certainly i work in a corporate financial uh law department and i've seen some pretty hefty bills pretty hefty bills some larger than this budget um so my last question is i don't i don't know if it falls under supplies and materials if it's books or or even expenses but is there any um line item or funding for for training and continuing education i know that attorneys in the commonwealth of massachusetts do not have to have continuing legal education credits there are resources available for attorneys but I'm just thinking of your staff any professional development opportunities any line items for that in your budget yes if you look at dues and

▶ 1:33:18 memberships education and seminars those are interchangeable line items we for example pay for my membership in the Mass Municipal Lawyers Association the Massachusetts Bar Association I believe the Boston Bar Association I may not be don't quote me on that but I believe the Boston Bar Association so there are a number of associations that we belong to as does the assistant city solicitor in the school department and we as much as our schedules allow for the lawyers on the board who understand and appreciate time and you know workload as much as time allows we'll take advantage of those seminars and presentations and of that nature well it's just always good to cultivate our own employees and foster them and

▶ 1:34:03 Michael P. Zwirko: i'm glad that the the internal budgets are um malleable that you can move funds around and i just 990 um just seems paltry for any continuing education the um i've asked for more in the past but i'm under strict instruction to hold the line oliver twist um so i guess i so and we also pay your license right your annual bar yes my bar license as well as uh miss lindquist's bar license great okay uh appreciate your time and the work of your staff throughout the year uh you are harangued by me personally a lot so i greatly appreciate all the responses and time that you dedicate to your responses to the board of alderman myself included thank you thank you madam chair thank you motion to recommend department 151 city solicitors motion to recommend the department 151 and the

▶ 1:35:02 amount of eight hundred and forty six that wait that's right okay eight hundred forty six thousand five hundred dollars and thirty three cents made by alderman our vice chair boys out seconded by alderman trim and tozy any further discussion all in favor aye opposed we'll make that recommendation recommendation the full board and then did you want to speak to 164 sure thank you madam chair so 165 is the Melrose Liquor Commission which handles all licensing of liquor establishments in the city of Melrose Kelly Coggan who is the executive assistant in my office handles the clerical responsibilities the administrative support responsibilities associated with the Commission's work and this budget is essentially intended to assist with the

▶ 1:35:55 compliance checks that the Melrose Health Department conducts on a unscheduled obviously on an unscheduled basis and the professional services line that you see there for $1,000 that is for mailings or any other types of professional services that the Commission would need throughout the year and they seem to have had a relatively quiet year in FY 19 which is a good thing motion to recommend the bottom line of $2,000 madam chair second the motion to recommend the bottom line for the liquor commission of $2,000 made by alderman Mortimer and seconded by vice-chair Brazil any discussion all in All right. Any opposed? We'll make that recommendation to the full board. Thank you. Thank you. And I think we're going to hear from you in just a minute again.

▶ 1:36:47 We have a million papers here. Our next order on our agenda is order number 2019-109, acceptance of Mass General Law, Chapter 44, Section 53F and 3 quarters, establishment of a PEG access and cable related special fund number 2922. nine two two we're under suspension of rules so if you'd like to tell us a little bit about this that'd be great sure uh if i make the chair i did said correspondence dated june 3rd 2019 relative to acceptance of the peg access fund that we're now going to give it the fund number 2922 and in essence this change is all about is that as we enter this new fiscal year we are required to establish this fund which is now going to be called the cable television public educational and governmental access special revenue fund

▶ 1:37:53 and again effective fiscal 2020 July 1st of 2019 we're required to reserve cap cable franchise fees and any other cable related revenues for appropriation to support the peg access services the Department of Revenue has provided guidance and its issuance of IGR informational guideline release number 16-102 which I believe you may have in your material and again it simply provides guidance and an understanding of how in fact this needs to be set up and how the revenues and expenses are required to flow through the city currently has an agreement with both Verizon and Comcast an establishment of this fund does not impact either agreement it does impact how we account for the revenues and expenditures and it puts a requirement on the community to

▶ 1:39:00 appropriate the funds by approval of the board each year. Currently MMTV receives these funds directly from the carriers and the city receives its share directly from them. This change would require that all distributions come into the new special revenue fund now this is not a revolving fund this is not an enterprise fund this is a special revenue fund by law which has been established for this particular purpose and right now the agreement stipulates that approximately five percent is provided each year the majority four point two point point five percent um receipts um to the mmtv and the other 75.75 to the actual city of melrose so all this does is create a new accounting mechanism that takes effect quite promptly so that as revenues

▶ 1:40:03 come in which they do right now each quarter they'll be deposited into the fund and prior to any use of of these revenues will require an act by the board of aldermen and just to add very briefly to that what currently happens is that the cable providers who have these franchise agreements with the city they make these they make these contributions these distributions directly to four and a quarter goes directly to mmtv from verizon and from comcast and 0.75 goes directly to the city which is then deposited into an account to the benefit of the school department and the and the technology and the audio visual needs of the school department so essentially what the result here is is for essentially giving the board the ability on an

▶ 1:40:55 annual or even a more frequent basis to approve appropriations out of this special revenue fund for those end users and to add to that through the chair um this may mean appropriation can be made every quarter or you know twice a year um depending on the the needs and etc but um again it would require an actual order of the board each and every time period motion to recommend for passage second the motion recommend for passage made by alderman mortimer and second by Alderman Tramontozzi. Before we get to that, City Auditor, were you reading from a memorandum? I'm not sure if it's part of our public record. No, just some notes I had made relative to, but the information that is available to you, which was on the original correspondence to me,

▶ 1:41:49 it does give you the same citations. Right. And I did enter the same section of the informational guideline release pardon me so it is there okay yes no was this in the record besides just this one line i i do see in the public i believe well i'm not logged into the public view um so forgive me but i do see in my view both um an attachment to the relevant section of mass journal law as well as a fairly brief memorandum maybe two paragraphs uh from mr della russo you see both of those now let me get this straight verizon right now there's a franchise fee on the bill that we get that money is going oh sorry i'm i'm so sorry please continue okay that money goes directly to the school and to MMTV on a yearly basis no through the chair on

▶ 1:43:00 Robert A. Boisselle: a quarterly basis right they will get a report and again as mr. van Kampen alluded MMTV money sent directly to them and the city of morrow's gets a check from them from the front from the From both providers, and then we provide the school department with the revenues. Okay. From there. Now, the Board of Aldermen will have extra money now that we're talking about? There's 0.75, I'm sort of confused here in the point in the past that there was money associated to MMTV and to the school committee for purchasing of equipment and everything else. now the board of aldermen will be doing the allocation the board of all the men rather than and again through the chair rather than the um providers cable providers sending the money

▶ 1:43:57 directly to mmtv they will send their money directly to the city of melrose the uses and the purposes for which that money is for hasn't changed but it's going to now require and probably Probably for good purposes of transparency, that money has to go through the city. At that point, an appropriation request will be made, and it's really not that more complicated. But you mentioned the use of buying white boards and other types of technology. That's not with the aspects of the cable network. this is for the peg access component of the of the franchise fees we're receiving to support public educational and governmental access in both the school department and in the community through MMTV these funds which are

▶ 1:44:50 Michael P. Zwirko: currently being paid directly to MMTV and to the city of Melrose for the benefit of the schools now are being it's required going through a special revenue fund to give this board greater control over the disbursement of those funds we're here as an administration to represent to you that the four and a quarter percent and the 0.75 should continue to go to the penny to mmtv and to the school department and nowhere else okay nothing changes there the agreement hasn't changed okay thank you thank you thank you madam chair um Interestingly enough, I know a little too much about this stuff. I studied the 1996 Telecommunications Deregulation Act back in college, and then when that trickled down into Massachusetts, the then DTE further deregulated the cable market.

▶ 1:45:42 Michael P. Zwirko: And what that did was that allowed communities to actually invite competition, which I was glad when I moved to Meadows in 2006, we had competition. We have two providers, which is great, not only from a PEG fee access standpoint, but also for consumers if you only have one game in town generally you're not going to get great services or responses from those providers so I was very pleased in 2006 that I learned of this this actually is really all that's happening is the vehicle the mechanism in which the funds are going flowing rather from the cable company we now go to the city so it's it's actually I'm surprised it hasn't existed before I will state that you referenced what was it an IR 16 and

▶ 1:46:29 Michael P. Zwirko: that informational guideline release IGR that is not actually attached to this order and I would request that it be attached to the order what is attached to the order is it's sufficient but I think that that would help and kind of clarification as to how a municipality is able to set up this account I'll also note to not only the public but also this board that earlier in this calendar year actually I think it was December of 2018 we filed a resolution to the FCC with respect to peg access grants because these are currently being debated right now at the FCC they actually could end so these funds these funding mechanisms could potentially end and that would decimate which is why this board thank you unanimously supported the resolution being sent to the FCC in

▶ 1:47:20 Michael P. Zwirko: opposition to that proposal the point seven five that of the five percent that is funded to the the AV Club we have all seen I think they won two awards this year we've seen the facilities in the new Learning Commons which are really state-of-the-art these and again because we have two providers we're able to get more funding so I think that the city of Melrose has kind of been ahead of the curve other municipalities in Melrose have not if you are a municipality that has one provider believe you me that company that holds a monopoly fights very very hard to prevent competition from coming into their municipality and that doesn't happen here in Melrose my questions about this and I am supportive

▶ 1:48:06 Michael P. Zwirko: of it and I appreciate you bringing it before us have to do with I wonder what MMTV thinks so you know do we know do we have an opinion from MMTV I know that their structure they are a non-profit they do have a board that is their governance structure you know if I'm a non-profit and I have four point two five percent whatever that figure is coming to me quarterly and now it's going to come to me annually and also remove you know I would have concerns about that so we've met we've met with yes we met with Mary Beth McAteer my goal is and Pat Doyle made them aware of this this mandate that the city is under we met with them to ensure that the timing of payments from the city which means the appropriation vote of this board didn't disrupt their cash flow

▶ 1:49:01 operation so they could continue to do their business and pay their staff and meet their expenses so we have met with them and i think the auditor's office is worked out or is working out the timing of disbursements to mmtv so that it doesn't uh dramatically drastically affect them the school department's less of an issue because they're um they can run deficit spending until the end of the fiscal year and we can just essentially fill that account we've never done that before correct correct but they can they could essentially well they could overspend the line item and we could just backfill it and in this particular case here with this fund um you'll see they talk about anticipated receipts only the actual receipt can ever be appropriated

▶ 1:49:44 Michael P. Zwirko: so we can't if you assume you're going to get in 200 000 you can't make a request an appropriation of 200 000 if you only have 100 in there it has to be only what is in the fund and not in anticipation of which is which is um important to know you know another um the creation of this this um special fund you know it begs it begs to question whether or not the city needs a cable commission um certainly to be an advisory board on contracts and contracts negotiations other municipalities have them um you know query how long cable is actually even going to be around right and maybe uh it morphs into some type of information technology who knows but um it may benefit the city to have a cable commission um but that has nothing to do with

▶ 1:50:41 Michael P. Zwirko: the order before us i'm more thinking out loud so i uh i'm i'm happy to know that mmtv uh doesn't have an opposition here i i still i wonder how it's going to affect their governance structure if at all it certainly would put i would feel a little bit more oversight of their governance under us now the board of aldermen seeing as where the appropriating authority certainly could leverage them i further speak out loud um those are all the questions i had on this item um appreciate you bringing before us it's interesting um and it's actually uh it's it's a movement that i i support yeah thank you thank you alderman Medeiros uh thank you i thought i heard you say Mr. De La Rosa that you sent something down on June 3rd and it seemed to have more detail than

▶ 1:51:28 Monica C. Medeiros: than what we have in the packet but no I'm through the chair I just said that uh we just dated the memorandum June 3rd um but the section of the law is actually um here we go again 53 f and three quarters so we go from 53 53 e 53 f and three quarters I mean it's interesting for sure Certainly. And I know that you mentioned that this is a requirement. And what had been included, the reference to the law, seems to say that the municipality that accepts this section may establish in the Treasury a separate revenue account to be known as the PEG access and cable-related fund and so on. but it says may rather than shall so i i know you said this is a requirement um who is requiring this of us and

▶ 1:52:27 and when does that start again it starts july first department of revenue is requiring us to do this i've spoken with the idea department of revenue representative as well as um dick Sullivan outside auditor on both on this item and that's it is required for July 1st okay and so that's uh is that in this in this memo that you that are the augments well well I can it's right here here's the idea if you'd like you can just make a copy but it's pretty straightforward um and in fact here's a notice of acceptance that the city has to comply with if in fact the board proves this that we have to submit very timely hopefully before july for us to demonstrate that we did act on it so required to do that um if you look at the igr all the medeiros yes we don't we

▶ 1:53:20 don't have that which we can make part of the order but under guidelines transition to special revenue fund it says as part of the certification general fund free cash the director of accounts will close any reservations of cable franchise fees or other cable related funds that appear on a city or town balance sheet on or after june 30th 2016 unless one of two things happen either we create this special revenue fund that it coins with the statute or we um i believe create an enterprise fund right which is certainly not no i'm not going to do no and how much money are we talking about for calendar year 18 it was amounted to over 215 000 from verizon for mmtv and over 38 000 for the city um again in calendar year 2018 the distribution amounted to just under

▶ 1:54:17 330 000 for mmtv from comcast and over 58 000 for the city so in total again calendar year basis over 545 000 um from mmtv um and calendar 218 and over 96 000 um for the city and combine them both so it's a significant revenue um and again uh now it will all be subject to approval by the board of alderman providing this order passes for any expenditures going forward and for fy19 that we're we're in if where would we see where we would we have seen that would we see that on the cherry sheet or would we see that like coming into the city in any of our budget documents or anything from last year would would the board of aldermen or the public have been able to see that money well if on the mmtv portion with the money sent um directly to them then you

▶ 1:55:23 wouldn't but on the other side of the table you'll see a school fund that would be set up for to take those revenues in that they receive for this effort so you correctly find on the school side on the school side you might see it listed as an account okay thank you you're welcome thank you thank you madam chair sorry uh one question i forgot yeah what's the derivation of the 4.25 to 0.75 breakdown why that why that ratio and and would that ratio be um uh could that ratio be changed by agreement um so we had negotiated yeah we had negotiated the the verizon contract the franchise agreement has been in place since before my time it's a 15-year contract it expires in 2021. um so the the split would have been

▶ 1:56:18 negotiated at that time i presume the reason for that was because the needs of the public educational of the public government access television station were proportionally larger than the needs of the school department's i hate to say audio visual because that's probably not the right term but the school department's audio visual technology needs at the same time so what happened in i believe it was 2011 or 12 11 we renegotiated the contract with comcast and essentially made the split identical to the verizon contract when we negotiated the comcast agreement in 2011 we also realized a substantial investment by comcast in allowing the city to upgrade to a fiber optic network which meant we were able to decommission the inet these are all

▶ 1:57:15 terms that are way above my pay grade i just remember it for some strange reason right now um and we were able essentially to make an investment that the city desperately needed to give us the sort of fiber technology that the former i.t director saw as the way of the future so so the ratio the split rather is by agreement correct and you you stated that the every payment is by agreement obviously and you stated that the verizon contract expires in 2021 they both expire um i believe at this roughly the same time it's roughly the same time okay all the questions with that thanks again for the second time madam chair sure we do have a motion on the floor to recommend this for passage and duly seconded can we also amend the do we need can we i'd like to

▶ 1:58:02 Kate Lipper-Garabedian: add the um documents that have been referenced second okay so we have a motion to add to the order that these particular documents we've heard about tonight checking it all in favor of that aye opposed and now the order is before you as amended all in favor I motion to recommend for passage the order as amended thank you motion to recommend the order as amended be by alderman Mortimer seconded by Alderman Tramontozzi all in favor aye opposed okay thank you very much your time next order on our our agenda is order number 2019-88 amending revised ordinances amending melrose revised ordinances chapter 228 article 4 section 228-30 sewer rates established as set forth herein and we're still under suspension of rules i believe so maybe we could have mr shenna come up and yep that would

▶ 1:59:17 Monica C. Medeiros: be very helpful if our dpw director could talk a little bit about this order so the order um the order amends the sewer rates and it's um the presentation i gave before is relative to this order we're up we're here um between patrick and i we can absolutely try to answer any questions you may have relative to the order of how we set it or the budgets that ultimately support that these rate support I'd like to move to include with this order the memorandum handed out today from mr. Shana the FY 20 public works water and sewer budget presentation and also the memorandum from mr. de la Rousseau that he handed out earlier today the city of melrose water and sewer in direct cost allocation to services second

▶ 2:00:44 Manisha Bewtra: second so we have a motion from alderman Medeiros seconded by alderman Zwirko to add to the order these two documents that we've received tonight all in favor aye opposed thank you um thank you both for being here tonight um i wanted to first ask sort of uh how you go about determining when you um raise the base fee versus the volumetric um sorry i just need to pull up in my notes i'm like looking in too many places but um flipping back and forth in this very thick binder right so i guess um with regards to our sewer rates um the decision was made to increase the base fee this year and um and there have been questions that have come up as to that decision making process around um base fee versus um like how do you go about making that

▶ 2:02:05 decision sorry starting there so the consultants and the committee agreed that we were looking to capture 10% of fixed operating costs through our base fees and that protects the system against the volatility that volumetric rates tend to create mm-hmm that's just how about that's how we go about it been adjusting sewer to get to that level so that we and uh water was already at that level those are the adjustments that we've made against the base speeds are guaranteed and the volumetric rates depend on consumption and i think again just to add that if i may um through the chair is that and the memorandum from uh our consultant on the second page he talked about how that was a goal established by the city as the second during its rate study in

▶ 2:03:09 Manisha Bewtra: 2016. so that's been a a goal of the city is to bring that up to to match the water at 10 percent um and that would be it so this would be the last lego that um lab they both be at 10 watering so excellent um and can you also speak to um again in the water and sewer rate committee we spoke about um discussions that have been had previously about uh residential versus commercial rates and I think to me when we were having that conversation um and again I think I'm sort of mashing together water and sewer uh even though I know our order specifically about sewer rates but when we had that conversation it sort of struck me as some of the same conversations we have on our on our city operating budget in terms of because we are

▶ 2:04:10 95 percent residential the um splitting the rate uh and the impact of um splitting the rate when we have such little commercial like what impact that might actually have and and how that decision making process has gone i think that you know that's when we look a little bit at the makeup of our top users and a lot of our top users are residential properties they may not be single family or multi-family homes but it's the um it's oak grove village it's the steel house um i'm just grabbing a few of the examples from the top 10 of 15 at franklin condo franklin manor condos um the coolidge um the congregational retirement homes i mean those are our top users i'm switching to commercial isn't going to really first of all it doesn't incentivize the more you

▶ 2:05:12 use the more you pay conservation approach that volumetric rates have and secondly there aren't a lot of heavy commercial users the commercial users are already paying the top user of water is the hospital and they're already at the top of the list even with the current rate structure i mean this is a great structure that we feel confident in and consistently consistency helps the community the ability to only have they know okay two thousands might cut off when i'm over it that type of consistency i think helps the end user it helps your consumer and that's why straying from it isn't something that i don't believe the committee would recommend actually we haven't recommended and the more you study these top users the more you realize well it's working this type

▶ 2:06:05 Manisha Bewtra: of rate structure works for the for our type of users we're over 95 percent residential in this community maybe even higher and we have a volumetric rate which is again simple straight to the fact and is easy for people to understand um apologies i've jumped back and forth so many times in my notes um tonight and i'm a little out of sports but um uh well a couple other things that have come up i think that frequently come up and if you address some of these in your presentation but i wanted to just take another moment to um i guess spend another minute on on our rates as compared with other communities um in this memo that you had passed out earlier i think it was exhibit 10 which will be attached did we already make the motion to attach those

▶ 2:07:26 Manisha Bewtra: um will be attached to the order exhibit 10 community comparison average yearly household usage um it shows melrose um in the middle of the listed communities and i think another thing that that folks don't always know is that we're this is more of an apples to apples comparison correct compared to this is this is average water use this is average water use um so i guess my question is sort of can you elaborate on this perception that we have one of the highest water rates um or water and sewer rates in in the mwra system i mean this is we don't make these this information up it's right in the mwra um information that's available to everybody and when you apply our average use to everyone to our

▶ 2:08:23 rates and everyone's average use to their rates you can see we fall in the middle of the pack very close to it slightly above it but nowhere near the top belmont mill belmont milton lexington stonem reading newton winthrop brookline and chelsea are all above us and our ability this year to maintain our rates will hopefully push us even further down this list next year as other communities rates are continuing to increase i'd also like to offer all the way on the right of that column is senior discounts our senior discount program has always existed and and we'll continue moving forward in fact we even expanded it a few years back to include seniors and condos of the group above us one two three four five six of the nine don't offer discounts

▶ 2:09:24 Manisha Bewtra: to their seniors as well so not only does it cost more for average use they also don't offer any type of relief to seniors so those are those are all things that come into play and and that's what this demonstrate this um this graph demonstrates um i guess going back to my earlier question regarding i guess why is this particular list of communities versus this is not the full list of communities in the mwra system correct this is a hundred percent water and sewer right that's that's when i was an apple to apples versus some communities only use some partial sewer some of partial water some of partial both not everybody relies on the mwra 100 for both so when we're comparing our rates we should be looking at it in kind of again with these

▶ 2:10:15 Manisha Bewtra: comparison communities and for those who can't see the the memo that we're looking at um communities that are it's a list of like about 20 plus communities um and we're literally smack in the middle um i think you addressed what you've been doing with regards to ini quite well another question that came up consistently was around the reserves and the recommendation from various consultants in the past to have a higher rate of reserves and how we as a city have chosen to keep our reserves at 10 um can you speak to that decision-making process as well as concerns from the community about why not dip into that 10% a little bit further yeah a couple of things what one is that we going back as far as fiscal 2013 when we first embraced on the water

▶ 2:11:25 and sewer needs of the community and what we needed to do to restructure it determination was made that at 10% for reserves both water and sewer the consultant at that time recommended 20% I think if I recall correctly which we did not embrace we have been working with the 10% we met that goal we our objective was over a five-year period to reach that goal so when the rate increases were seen they incorporated a segment for the reserve requirement that is there's no longer necessary we've met our ten percent on incremental basis now we do reach that a very small margin that is provided from available funds and that is something that both the outside auditors and the employees are certifying Bank they embrace that because as I said before that type of

▶ 2:12:21 of reserve provides some assurance a level of assurance that in the event that you don't take in the revenue anticipated for water or sewer you're not going to harm the city's general operating budget to have to compensate for that loss that's not that's not what they want to see they want to see they have it's no different than quite frankly the ambulance or mount hood they don't want to see those funds that you know if you don't address them properly and manage them properly that the city begins to start to have to um you know pick up for their deficit so you need those reserves it's exactly we did the right thing um in fact right on the letter from uh david fox uh refer tell us financial consultants he says right here that

▶ 2:13:16 the fact that melrose has been able to increase its revenue from fixed charges while at the same time maintaining moderate to no great revenue increases adequate reserve fund levels insufficiency renewal and replacement of the city infrastructure is applaudable um so we can again consistency we have our target thank goodness to this board they adopted the 10 percent and we've reached that and that means a tremendous amount um to both the rating agencies as well as the outside auditors because it's the right thing to do and it's a level that they feel is reasonable and right now i see no reason to change that just to follow up on our auditor a little bit there are two orders before this board this evening that look to reappropriate

▶ 2:14:08 Manisha Bewtra: retained earnings so we're fortunate we've reached up we've reached a plateau we were at 10 we still have retained earnings that we've collected and we're very excited to present a program where we can go back and invest in infrastructure and equipment without borrowing money so we've reached we've we've we're at our reserve amount and now we still have some funds available to uh to reinvest in the and and that's what we can talk about a little more detail we'll get to those words great thank you um i wanted to know one more thing that i in the um the information presented by the mwra they also had noted um when they came to do a presentation to the water and sewer rate committee and again this is in the packet of materials is that

▶ 2:14:58 Manisha Bewtra: um they used to spend a lot of time in melrose due to flooding because we're a topographic bowl that creates hydraulic hydraulic challenges but again they acknowledge all the work that's been done over the last several years to more aggressively address our flooding ini issues leak detection etc so um i just want to thank you for your work uh it's obviously under a lot of public scrutiny and um it's a tough uh tough position to try to set these rates and i think you've done so in a way that um looks at both uh kind of how can we have modest increases while also um being responsible about maintaining some reserves so thank you president thank you thank you very much for this information um just to go back and address a few um or i think

▶ 2:16:07 Jennifer L. Lemmerman: there's only two more questions that we heard this evening um that i wanted to from in our public hearing um so you did provide information in the attachments regarding how many employees are paid um from this budget by department which is very helpful so appreciate that um could you take a moment to just talk about how that percentage is determined so i could speak to the public work side patrick will speak to the other the other departments um the public works are in that master list and we we look at the workload and what they do where by no means are we in a legal consulting firm or a consulting firm that tracks every hour of every day but for the most part we have we get a good feel of what they're working on what the project workload is and we make adjustments on

▶ 2:16:58 a year-to-year basis for instance if you look at last year's records and compare them to this year's records my percentage percentage of the director of public works onto water and sewer has gone down because i feel that my workload projecting forward is going to be more on the administrative side and with other budgets and facilities and highways and other agenda items that are coming forward then with water and sewer this fiscal year so we adjusted that down there may be others we adjust up depending on the workload and who's doing what but that's what we do on the public works side and i've provided this breakdown on on on the public works administrative side on a yearly basis this way we can start to establish records and start to see how we

▶ 2:17:46 transform yet a year publicly the other departments are addressed in patrick's um indirect um information and if i may in particular i would really as a point of information if people would look at the memorandum that was dated june 6 of 2016 i think it's every telling on how these indirect costs for water and sewer have been determined in their percentages. And I think that the detail included every single form that I filed with the Department of Revenue on each fund for those years. But what's important on top of that is that if you look on Section D, which is in this handout under fourth index, It says combined indirect costs as part of total waters or enterprise fund expenses. Since fiscal 2013, you'll see those percentages for 13, 14, 15, 16, 17.

▶ 2:18:52 The average was 11.2%. If you take what is in the packet now that I just gave you, this evening for the average. Right now, for this year, we have, for purposes of information, the five-year average is 11.12. So going way back then to now, you'll see that we don't, you don't see those spikes, which would be an indication that something's not right or out of balance you don't see the the down all of a sudden down and it goes up for some unreasonable reason um we've been very consistent here um this year five-year average from 16 to 20 will be the lowest indirect cost in the city over the last five years you see that the cost on total for indirect is down forty seven thousand two hundred and forty eight dollars from last year

▶ 2:19:53 and my own allotment of time is down by five percent because i have a structure in place now that have much more confidence in and if you go back to this memorandum here which a lot of people unless you're inside the building and work as you know in the capacity that we do i wouldn't understand that in order to get where we are it took a tremendous amount of time to comply with the department of revenue requirements i indicated before as i indicated in here they actually wanted We wanted to see reports from us on a consistent basis. We showed we were adhering to what we had indicated we were going to do after we sent those to them. And it takes time to develop policies, procedures that are effective.

▶ 2:20:38 As you do new enterprises, you bring in, for example, you install new meters, that takes an extra effort. You do monthly billing, that's an extra effort. Whether you pay someone on the outside to do that and set that up, or you do it, it's not for free. If we identify what those costs are in this packet, I think I'm very proud of the fact that the consistency and the detail that we provide, my opinion is second to none. Every year since we started this practice, the Department of Revenue has approved our tax rate. The year they came out where we did not follow practices that were consistent and that did not have the reserves that we have today, thank God. They said that if we didn't change, if we didn't bring in a consultant in, if we didn't establish reserve funds,

▶ 2:21:28 Jennifer L. Lemmerman: if we didn't set up new structure and new programs which we have done successfully, that they would not set our tax rate. And again, for the purposes of the public, it's in the law that in the event that they have any sense that indirect costs are not being appropriated to apply, they will not set the tax rate. each and every year we submit all the detail to them they've they have approved that tax rate each and every year I don't need anyone else to tell me that what we're doing is right or wrong they are the experts and I go by their side thank you yes the information provided certainly does show consistency across the years and an individual yearly basis for each department it sounds like based off of how mr. Shannon described his process and if it's the

▶ 2:22:16 Jennifer L. Lemmerman: same throughout that the department heads being the people who are creating the budget along with you and who are you know closest to and have sort of direction over the individual employees are able to kind of look at how much they believe those employees will be spending on these tasks specific to these budgets is that correct correct that would be my me like I trying to critique the indirect cost for say the town of Saugus if I didn't work there And if I was an employee, if I wasn't in finance, and assuming that I understand how they allocate cost, that would be the same thing. I'm inside here. That's what we do. And we have our own Department of Revenue rep who's specific to Melrose, and that's what they do.

▶ 2:22:58 Jennifer L. Lemmerman: They monitor. They guide us. They help us. And that's why it works. Thank you. You're welcome. One more question. um you addressed the usage of the various city buildings the the water usage which is very helpful information that will be included when this is all attached um can you address um the question was made about the decision to move water usage by the city out of the departmental budgets can you address that i certainly can it's actually in this packet as well um It's relative to powers in Sullivan, it's April 28th, 2016, and what I'll do is I'll just pass this out again, another copy, to make it a little easier for everyone. Thank you, sir. Thank you, Pat. One more? Pat, one more?

▶ 2:24:08 Yeah, I was going to give it to him. Thank you. and just to go on this this again is from dick sullivan he's uh the partner of the firm of powers and sullivan and this was again april 20 2016. um we we asked we inquired about what would be best practices in water and so in fact i could read this if you'd like into the record sure sure this is dr mr delarusso you have inquired as to what would be considered best practices and water and so enterprise funds as it relates to the cost of water provided to city departments specifically u.s whether or not an individual department should have a line item within their respective appropriation reflecting the estimated cost for water and source services or should such

▶ 2:25:07 costs simply be recovered in the respective enterprise funds while there is nothing to prohibit charging departments for water usage it has been my experience to see such costs recovered in the respective enterprise funds and not and not at the individual department level this accounting methodology is also consistent with what we see in our other municipal clients in summary i believe the city's current system of accounting for city usage of water and sewer to be appropriate and considered good practice sincerely richard l sullivan cpa mba partner so again as i had indicated uh previous uh it was last week this is who i work with these people uh the people that i value the judgment i specifically asked him what was um best

▶ 2:26:03 Monica C. Medeiros: practice and he responded in writing and it's part of the record thank you and this was in 2016. can you remind me excuse me what year we made that change um i actually kind of have to go back and check the exact date okay for you i will do that that would be great thank you very much absolutely thank you thank you thank you yes i think so unless maybe yes i think next i don't know. Could you perhaps take a look at the memo that was included with this order from yourself, Mr. De La Rosa to the mayor. And I this is in what is that? Well, we're in discussion of the sewer rates right now. It's 2019 dash 88. And so it's the uh oh on the rates itself and i think there's some perhaps some some typos here because uh it

▶ 2:27:11 Monica C. Medeiros: is talking about the proposed fy19 sewer rates and then later on the proposed fy19 water rates and um in particular the proposed fy19 sewer rates and i believe that probably should be fy20 sewer rates So I'm wondering if you can just go over what the actual changes are. May I ask what the date is? It says for meeting date June 10th, 2019 at the top. Oh, meeting date June 10th? 2019. All right, the different, I don't have that one here. I'm sorry, I don't have that here. Okay. The changes are in the base fees. The changes are in the base fees? The changes are in the sewer base fees. So, okay, so if you can see what the old base fee and the new base fees are Up to one inch meter is going from $19 and 95 cents to $24 and 90 cents

▶ 2:28:22 One inch to one and a half inch meter is going from seventy eight dollars and forty eight cents to ninety seven dollars and eighty cents Two inch meters are going from $122.37 to $152.43. Three inch meters are going from $224.76 to $279.99. The base fee for a four inch meter is going from $371.07 to $462.18. cents and the base fee for a six inch meter is going from 736 dollars and 83 cents to 917 dollars and 67 cents no change is proposed but the first or second step of the consumption rates and and you have the consumption rate at eleven dollars and sixty two cents and the uh force the first step up to 2 000 cubic feet and the second step over 2 000 cubic feet to be 14.64 cents correct okay so those uh numbers are correct on the memo it's just that it is showing as proposed fy 19

▶ 2:29:38 Monica C. Medeiros: sewer rates and so i have to go check that memo i'll have it with him sorry so i believe that should be updated and then the fy 19 water rates is on the same same memo and showing an old base fee and a new base fee yes okay so that's what's in our order for iqm2 and and since that's there and i i mean i'm i'm anxious as i'm sure my colleagues are to uh you know move this on and so on but since that's there and that you know we've just received new documents that are about half inch thick at least tonight and i think that it's you know we really honestly have not had a chance to fully digest this and certainly i don't think the public has and there is the typo in the memo um that i don't know where that memo came from

▶ 2:30:39 Michael P. Zwirko: i don't have that memo i don't need it i don't need a point of order yes so this is what i have so the point of order i wanted to raise is that um the memo that's being referred to is attached to the order in iqm2 however there was a packet of materials that were provided to us by uh mr shena this evening exhibit one proposed sewer rate changes um is a memo to mayor galen ferna from john shenna the director which is essentially a cut and paste of the memo that's attached to the order however i will point out that the memo that is in iqm2 alderman medeiros correctly states that there does seem to be a scrivener's error in the top line of each table where it says proposed fy19 that should read proposed fy20 but the remainder of the memo both in iqm2 and the one that was

▶ 2:31:37 Monica C. Medeiros: provided to us this evening is correct for for sewer for sewer but unfortunately it does have an entire order table that says that the monthly charges are going to change the water for water rates yes which is not correct uh on the lower table correct but they when they were red i i apologize so when they were red they are the rates themselves were correct thanks for the clarification thank you for that clarification alderman Zwirko and alderman medeiros you were saying thank you and so yeah so we since obviously we did get this tonight and and yes there's a correct memo in the in the documents that were handed out tonight you know that's not available to the public and um you know i i think we should continue to have our discussions we're all here ready and prepared to

▶ 2:32:25 Monica C. Medeiros: have this discussion but at the same time i i think it would be wise of us to perhaps hold this order from a final vote to another night or move it forward without recommendation just for the purposes of you know allowing the public and and us to to digest this a little bit more um in the in the meantime um i was hoping i know you did mention and i'm sure it's in one of these um you pulled out a map about how much has been done in ini and i know we have our city engineer here who's i believe been working diligently on that and i was hoping that perhaps she could give us an update on that and um what that means for things like come up and walk you through the present the information that's here what that means for unaccounted for water and how

▶ 2:33:16 you know that factors into our our rate setting because the more we can do to reduce some of the leakage thank you sure so could you just talk a little bit about uh what's happened this past year and and what you're planning for next year and sure and kind of where we stand as a whole sure so um i won't walk through the whole presentation but just on the first slide if you have it in front of you um you'll note that we're now into spending what's considered phase 11 money from the mwra um what's available to us right now is phases 11 and 12 and we we can access phase 12 as soon as we've spent 50 of phase 11. so we're quickly working our way through the phase 11 money and then we'll have uh just over a million dollars um plus some interest to apply

▶ 2:34:13 for for the next phase as soon as we're ready and what we're using that phase 11 money for right now is we're finishing up the work that we started in the first five sub areas um it might actually be the most helpful to just go to that second to last page with the map and then the last page which is the ongoing and next steps the second last page shows the areas with the shading that's not quite as dark the five areas looks like four but two are adjacent to one another those are the areas that we started in we spent the phase nine and ten money investigating those areas and then and then doing rehab in those areas and we've almost completed the sewer lining that we identified needed to be done and the

▶ 2:35:12 open cut repairs in those areas but the open cut is carrying over into that phase 11 money so with the phase 11 money we're finishing the open cut project which has four locations left four larger locations left and then a couple spot repairs and then we're now starting our investigations in the next area which is the four sub areas all contiguous sub areas right in the center of town where we'll be starting over with the camera inspections nighttime flow isolation and then manhole inspections and smoke testing and then we aggregate all that data to determine again what needs to be lined what mantles need to be lined what pipes need to be replaced dug and replaced um and that should that will likely consume all of that phase 12 money to perform the actual repairs and like john

▶ 2:36:09 had said earlier if you look at the map at just how much of it is now shaded you know we're approaching 50 of the of the community um where we've done our investigations and our subsequent repairs and then if you look at the table on the last page that just shows the timing of what we're doing um just to point out the the sub areas that we started in are in the top half of the table and then the new sub areas are in the bottom half and i just want to stress that just because we're we've made it through those first five sub areas we're not done in those areas we identified other problems that require going back and revisiting some of them are private inflow connections and then there's also sub area 15 which was one of the first

▶ 2:37:02 five areas had the greatest inflow so rainwater coming into the system of anything in the city 23% or so of the inflow in the entire city comes into that one sub area so we presently have five flow meters that we've deployed in that sub area to try to hone down on where those problems are what neighborhoods uh swains pond have penny road um dexter road that whole corner of the city it's actually a pretty big sub area it's that whole area on the bottom and you said 23 of of inflow which is rainwater induced I and I and can you speak to how inflow affects our rates sure so it affects it in two ways one just on a gallon per gallon basis just like any infiltration or any wastewater we pay per gallon a large component of the MWI assessment

▶ 2:38:03 for sewer is just per gallon and then on top of that there's a surcharge for the peak month and so the rainfall rainfall is really when we see those spikes in our peak month so it impacts that as well so if we can get that down it's pretty good bang for the buck to get that down we do intend to come back at some point this summer to request additional authorization to borrow additional funds so we can continue the program moving forward both water and And do you have any kind of estimate of, you know, how much a reduction will be from the work that's planned for FY20? Yeah, we have the reduction from the first portion. And this is the same information that we would have presented previously,

▶ 2:39:05 because the tough thing is you don't know how much you took out until you do the pre-flow isolation, and then you do post-flow isolation. Until you do that, you really don't know how much you took out, because sometimes the problems are not in the sewer mains themselves. They're coming in from people's private laterals, and you can't really control that. You can encourage people to replace their laterals, but you can't force them. So we had showed previously that in the first five subareas, we estimated that on an annual basis, we've removed between 202,000 gallons per day and 303,000 gallons per day. We will have similar estimates for the next areas after we've conducted all of this work right now.

▶ 2:39:53 Monica C. Medeiros: Thank you. Thank you very much. I appreciate that greatly. And I know that really is the right thing to do, and of course it helps the whole system it helps mostly so since we're able to not increase the volumetric rate yeah that's that's okay um and maybe this is uh better for mr de la russo um the it looks like we're having pretty hefty free cash balances um over 700 000 in the sewer enterprise fund um has this been a particularly is there something about the the year this year is i mean we've had a lot of rain so i know that can mean we're not going out watering the lawns and so on but that does seem like it's it's pretty substantial amount of retained earnings are we charging more than we should on the rate you know are there other environmental factors that are

▶ 2:41:09 Monica C. Medeiros: have caused that to be so high which fund are you just uh i'm so i was looking at another memorandum that uh mr shenna had dropped off for this for an order coming up saying that there's uh sewer enterprise water and sewer enterprise funds each have a free cash balance of 738 945 dollars and seven hundred and eighteen thousand nine hundred and twenty nine uh respectively so that seems like it's you know knowing that we are putting money aside from the rates for reserves it seems like that's pretty substantial retained earnings balance and is there something that's caused that to be so high is that higher than we you know and we could for instance apply some of that to the rate to bring the rate down so is there some reason that we shouldn't yeah i

▶ 2:42:17 think if you take a look uh the letter from rafael said we got that john thank you point of order madam chair this questioning is this for two orders that's further down on our agenda because i still think we're on item three is that correct i'm talking about rates we're still on the sewer rates and we're addressing the analysis of an increase in the base fee i thought we were talking about free cash i thought the question for mr del russo was on free cash i think it's it sounds like it's related insofar as there may be yes so uh through through the uh chair to alderman Zwirko the rates that we set for water and sewer if we bring in more than we expend the sewer fund itself will have free cash or retained earnings and since we've

▶ 2:43:29 Kate Lipper-Garabedian: brought in over seven hundred thousand dollars in retained earnings in the sewer fund it leads me to believe that we may be charging more for the rates than we need to I I guess I understand how the water and sewer rates work and and the the free cash balances i i just i'm trying to understand which order we're on there's certainly and i think i think we don't have to have a debate about this we're on order number two zero one nine dash eighty eight and it's reasonable i think to ask what the balance is and and the sewer fund and so far as we're discussing fees and whether it's appropriate to raise certain fees i think it's all related okay thank you um some of the answers to that question um first and foremost is if you take a look at the retained earnings calculation from

▶ 2:44:24 the department of revenue those the retained earnings that are represented are not just for one year so if we hadn't used those retained earnings as we say they carry forward to the next year and hopefully they'll turn into available free cash but then you have to take away your encumbrances your warrants payable and then any um undesignated accounts receivable that are left over that's how you come up with the 738 945 water and the same for saw but it's not apples to apples we're not we're not overcharging at all in fact raphaelis would indicated that he would not recommend that we reduce the rates in fact communities that do do that end up in a lot of trouble when they try to go sporadically which we have avoided this

▶ 2:45:15 This is an article, April 13th, 2018, Residents to Pay for Errant Water and Soil Budget Forecast and the Stoneham, where they ended up having to have a big rate hike in that current year because they had went ahead and applied to reduce the rate previous. As a result, they ended up with a significant shortfall. what we have avoided and we that's a goal should be to avoid these kind of actions because when when you start to manipulate that that's when problems start because you can't control consumption no one is i can't and no one in this room can control consumption just to reinforce these retained earnings are not just from last year no they're from at least three years of carrying over retained earnings year to year to year now at a point where we're looking to reappropriate the

▶ 2:46:11 return retained earnings but included in that window is also a few years back when we had that heavy drought and summer consumption was at levels that we've never seen before and you have the chart the charts i passed out show three years of consumption and you can see that year three years ago where our summer consumption was extremely higher than it has been the last two years that that use and the revenue generated from that use is in that retained earnings figure that's before you tonight we just didn't act on it three years ago or two years ago but we're ready to move forward this year and reappropriate it okay thank you thank you thank you vice chair roizal thank you in the listing of the rates that you gave a few minutes well earlier this evening

▶ 2:47:05 Robert A. Boisselle: And from exhibit one, proposed fiscal 20 sewer rates. I go to exhibit nine, fiscal 20 proposed lower right hand corner. There seems to be some differences in the numbers. Is the exhibit nine a later number or an earlier number? the exhibit one is the final numbers exhibit one is the final exhibit one shows the proposed rate um changes that we're that we're proposing okay well what i'm saying is both of them say propose yeah and the numbers you're giving is one proposed and exhibit nine shows a second series of numbers exhibit one is the final so exhibit one is the final okay now um patrick uh concerning i also see here proposed monthly billing uh we are there how many people are actually doing monthly uh

▶ 2:48:12 payments for water is out of the population we have the monthly billing expert here i'll let Let her come up with the statistics. It's about 800. Out of a total of what? It's about 10%. How much? We have about 8,000 residential customers. Okay, is there any outreach program? I mean, some of the hearings that we had in the past. We put notices in every bill last year, at least once, notifying people. offer monthly billing if this is what you have to do to to opt in it's an optional program we're not forcing people to go that route some people have really liked it and others have just ignored it because they don't want to pay 12 bills they prefer to pay four a year it's their option so we we cycled through the city over the course of last fiscal year offering this and putting this

▶ 2:49:11 note and now it's just a general note if somebody wants to switch they can contact us and um and we could do it we see a lot of the changes happen at a real estate transaction where people sell new people come in oh you do this and oh i'm interested i'm not interested but right right now it's around 10 it's lower than we originally estimated we thought more people would be interested in it but we we do we do push it as much as we can um and we'll probably put it back out i have to work out the scheduling but we'll probably put it back out on another round of um yeah at least once a year just make that effort to get out there and uh people the economy has changed and they're what they're looking at their water bills and they may want to have a quicker

▶ 2:49:58 look at it and so forth well it's a really good indicator because i mean if you switch to monthly you get you get your consumption um usage that much faster so you can you can find it's an indicator of a problem and um and our water billing team is very good lisa patterson um downstairs in the office and the whole group of the meter readers they even reach out to people now if if we see that your consumption may have changed or we see a spike there's a way the program red flags that account and lisa has reached out to people and sometimes it's a leaky toilet sometimes it's the three kids that have moved back from college for the summer so whatever the reason may be switching to monthly does give you the opportunity to better

▶ 2:50:50 better monitor your consumption that said you can still do it quarterly and if there's an issue we can still come out and get the information from these new meters to help you through that problem and that lisa and the whole team downstairs is excellent at that well since the public is paying their bills on a monthly basis instead of quarterly is there any initiative for some sort of discount i mean we're getting our money in faster we don't offer a discount we don't charge more though i mean it's costing us more to issue 12 bills than it is for so i guess the discount is that we're not charging more okay good enough thank you thank you madam chair just as a final maybe hopefully these will probably the final question or remain on this

▶ 2:51:39 Kate Lipper-Garabedian: order but if someone's looking at the document that's online right now and we've addressed that it should say fiscal 20 sewer rates for quarterly billing customers and there's an old base fee and a new base fee so anyone can take a look and see how much their quarterly bill will go up on the base fee if i'm a if i'm living in an apartment or if i'm living in a single family home or i'm a business owner which of these which of these um metered sizes am i likely to be should i look at the majority of residential homes and smaller businesses have one inch or less so it's the first possibly the second the majority of the community is in that first grouping and so just for the record that means that the majority of folks will either see a five dollar

▶ 2:52:31 quarterly increase on their base fee for a total of twenty dollars um or about a little less than twenty dollars per quarter for a total of eighty dollars correct thank you anyone else with questions or what's the yes alderman's workout thank you madam chair is there any urgency to passing these orders this evening and further if they would they were successfully passed or recommended for passage this evening they presumably would come before the board on june 17th for ultimate passage well we do need a budget passed by the end of the fiscal year so we can operate on july 1st thank you subsequently the rates have to support the budgets yes i'd like to move to move this forward without recommendation to the full board

▶ 2:53:27 Monica C. Medeiros: so that would mean that we would be able to take a final vote if we want to at that date but we could still have more discussion second we have a motion to move this order forward to the full board without a recommendation made by Alderman Medeiros seconded by Vice Chair Boisselle on discussion Alderman Zarco Thank You madam chair through the chair curious as to why without recommendation I understand that we want to have these items uploaded for the public to view So I guess I just don't understand why without recommendation sure yeah I stated earlier I mean we we got you know more than you know at least a half an inch worth of documents today handed to us we have something here that you know

▶ 2:54:18 Monica C. Medeiros: doesn't doesn't show the accurate you know the accurate rate changes because being FY 20 I'm inclined to support these when it moves forward to full board which is why you know I think we could probably and I didn't hear a tremendous amount of opposition but at the same time I think we should have the opportunity to hear from our constituents about some of these things and to really digest all the information that's been passed up to us so we have a motion made and do we second any further discussion on the motion all in favor aye aye any opposed okay so we will move this forward to the full board without a recommendation which will allow us to discuss it a little additionally all right fourth order before us tonight is order number

▶ 2:55:13 For 2019-89, in appropriation from account number 6000-319000, sewer retained earnings in the amount of $575,100 to various accounts as set forth herein. So this order moves to, is requesting to reappropriate funds that are currently in retained earnings to various projects. that we will be working on over the summer our outside auditors confirmed that seven hundred and thirty eight thousand nine hundred forty five dollars um of retained earnings that have been certified in water and seven hundred and eighteen thousand in sewer we have made a right we are making a recommendation it's supported by our water and sewer committee that eighty percent of those funds be reappropriated through this order and the next order order 2019

▶ 2:56:24 Kate Lipper-Garabedian: 90. motion to join orders uh numbers two zero one nine dash eight nine and order two zero one nine dash nine zero by alderman's record to join the two orders now on our agenda both related to retained earnings second second and by alderman Tramontozzi discussion all in favor aye aye opposed okay so those orders are now joined i'll just read in the order that we've just joined is order number two zero one nine dash nine zero and appropriation from account number six one zero zero dash three one nine zero zero zero water retained earnings in the amount of five hundred ninety one thousand one hundred dollars to various accounts is set forth here in yes alderman medeiros thank you i'd like to move to add uh the memorandum from mr john shenna director of public works

▶ 2:57:16 Monica C. Medeiros: and mr. de la Rousseau the city auditor and CFO dated June 10th 2019 recommend appropriation of existing water and sewer fund enterprise free fund free cash memo that we received tonight second motion to add to the orders the memorandum dated June 10th 2019 made by alderman Medeiros seconded by vice-chair boys all in favor aye opposed okay so that motion is now added to the public record and it was said in the previous order but if we can reiterate this again you said the free cash balances that are listed here are not all from just last year and how many how many years is this carry through typically it would be reflection of anything that was not turned over so for last year I think it a good portion that was simply wasn't appropriated that would roll over into the next year so it'll

▶ 2:58:19 go year by year by year like that and uh mr shenna could you talk a little bit about the specifics of what you intend to use yes so um we've um both water and sewer there's five main areas that we're looking to appropriate funds for on the water side the first the first grouping is for water system improvements these are targeted for lower main street lower main street is going to be repaved in 2020. what we want to do is use this summer and we're prepared to start work immediately upon passage of this order to upgrade water gate valves in that area to get better control on the system in the event of emergencies and also upgrade substandard water services that are prone to leaking we also want to do upgrades to our water booster stations the wet western and samson assists us in

▶ 2:59:23 maintaining our water stations and our sewer stations two years ago they did a cip on the five major stations in the city and our request and they listed both some short term and longer term capital improvements the station repairs identified and these two or um and these two orders came from that report um in water we're also looking to use fifteen thousand six hundred dollars of it to start designing our next water program i made reference earlier that we'll be back this summer to propose new borrowings this would give us a significant head start and designing the areas that we want to work in next on the sewer side there is a 70 000 request it says pay off lease on vector in the sewer budget for the last three fiscal years there's a line

▶ 3:00:20 item for a lease that's for a vac the truck this would allow us to make a double payment next fiscal year there's already funding in the proposed 20 budget for year four of the lease this would cover four and five and eliminate that line for from the budget operating budgets and fiscal 21 and on so it's a 70 000 reduction in future fiscal years because it takes equipment off the table in the operating budget um 339 500 and 250 000 from sewer are being requested to address aging aging equipment that the department uses on a daily basis i've attached some photos of that equipment over the winter the cfo and i along with some other members of the administration met with several department heads and in public works as in the public works world we met with

▶ 3:01:24 various supervisors that came forward and outlined various equipment needs and um and we ranked them we requested that they rank their priorities and what this reflects uh is the top four needs in the water and sewer group it replaces a backhoe a six-wheel dump truck and two working what we refer to as crew trucks it's the trucks that the crew takes out to the job site both for water and sewer the sewer crew truck is going to be equipped with a what the industry calls as a push camera that is a camera that can actually we can video start to video the inside of sewers right on the spot as the emergencies are taking place as opposed to calling in a vendor that sometimes can't make it or make it later it gives us more up-to-date information on subsurface

▶ 3:02:18 conditions right there as we're trying to solve emergencies we're very fortunate and i'm happy that we're able to make these purchases without bonding a few years back i think it was four years back we had a dire need to replace our vector truck and the only way that we could go about it was to lease the vehicle do a lease to purchase and put the put the lease payment right in the operating budget at least now we can through this order we'll be able to pay off that lease and purchase four new pieces of equipment with zero lease zero interest zero borrowing um so that's the that's the main purpose of these orders there's also a recommendation to put forty thousand dollars of the water retained earning towards reserves and fifty five thousand one

▶ 3:03:11 hundred dollars of the sewer retained earning towards that reserved account um we're very close to ten percent on both this appropriation we feel will not only address maintaining that level this fiscal year but we uh we anticipate that if we do this even we'll be okay even next fiscal year in the event that the retained earnings don't don't get to what we have today and there's any more questions uh no thank you okay thank you thank you madam chair oh it was was on Zwirko oh sorry go ahead sorry thank you so we're paying cash for these pieces of equipment essentially outright purchases and the you actually the tail end of your comments you addressed the question that I had was on the reserves

▶ 3:04:13 Michael P. Zwirko: that that's gonna bring us up to where we feel comfortable hitting our 10% yeah I know two years ago I think it was in 2017 we were able to appropriate a small amount to hit the 10% but then the did the leftover amount I think we put back into the retained earnings and turn back right and and we're here instead of doing that we're just making purchases for the equipment and my question on the equipment is it going to be there's you've listed in your memo four items the first two just say backhoe and dump truck the next two say for water crew and for sewer crew are the first two items going to be shared between water and sewer but not the other no so no these are these are equipment this is equipment that go strictly stays within water and sewer I must say in the winter

▶ 3:05:10 Robert A. Boisselle: we do plow with everything yep um it's all hands on deck but for the the balance of the air this is equipment that stays with that water and sewer group okay and the um the the the vector truck that's going to be zeroed out as well with this and successful passage of the fy20 sewer budget okay all right thank you those are the only questions i had vice chair Boisselle in the documentation here you miss you indicate 6 pieces of equipment, but you list 5 for vehicles in the back to truck, what was the 6, 1. Is that the memo. Well in the water number 3 equipment purchases 3 pieces of equipment and sewer equipment purchases 3 pieces of equipment to to the end when you come into the second page you have 4 new

▶ 3:06:08 pieces of equipment which i'm assuming it's a four by four backhoe dump truck and two crew trucks yeah that's correct the the there's pieces that are shared so some of the dump truck half of the dump trucks being paid out of water half of the dump trucks being paid out of sewer so that same piece of equipment shows up in both cows so ditto physically there's just five vehicles ditto ditto the backhoe half of the backhoe is being paid out of water retained earnings half is being paid out of sewer retained earnings that piece of equipment shows up in both counts okay if you're they're digging the same hole for water and sewer that's how it that's how it's because the retained earnings are in different enterprises they're separate enterprises all right good enough thank

▶ 3:06:58 Thank you. Thank you Madam Chair. Thank you. Can you also speak just briefly on the sewer, the proposed uses of the sewer. It mentions sewer system improvements of $130,000. Yeah, that's a good question. So those have, I didn't, we did not identify the exact location of those. But what we can tell you is that wherever the current study tells us to go next is where those funds will be appropriated to those projects. Our city engineer, I think, made reference that we're currently out doing investigations. Soon we'll have those results, and the top projects from those results is where we'll spend this money. So this is additional money above and beyond what we borrow from the MWRA that we want to put towards I&I,

▶ 3:07:49 and soon we'll have those results that we can spend this money on. Motion to recommend the conjoined orders for passage. Second. Motion to recommend the conjoined orders for passage made by Alderman Medeiros, seconded by President Lemmerman. All in favor? Aye. And opposed? We will recommend those to the full board. It's attached also to the memorandum, I believe, so that will be included. um order number 2019-91 water enterprise operating budget for fiscal year 2020 in the amount of 5 million 412 thousand six hundred seventy seven dollars and fifty four cents thank you thank you very much um a couple of questions can you talk about the the water replacement line 5.27 to 2, it's water. It's a reduction of 23.1%.

▶ 3:09:12 And I see we spent less than 9,000 back in 2000 17 bills that we spent a lot in in 2018 and we we know what that is so we were required to by the dep to conduct a rather aggressive lead service replacement program we did that we did that successfully in fact again kudos to the department they ran an award-winning lead service replacement program as identified by by waterworks standard in the waterworks industry we don't have to run that program anymore so we're back to doing regular standard water service replacement program so that spike in expenses is not reduced and accordingly we reduced the line item okay and we think we'll probably uh continue to do some lead replacement yeah absolutely we'll continue but not to that aggressive nature

▶ 3:10:16 and um and what's the malden 99 line so malden supplies water to that stretch of melrose on route 99 there are a couple of accounts most notably aggregate and waste management so we there's a meter at the town line there between malden and melrose we we monitor and meter the amount of water that enters into melrose and malden sends us a bill we we we invoice the bellrose customers and we pay malden for that water okay very good and um the salary and wages line here in this budget it's showing a 3.4 percent increase um that's uh mostly basic uh basic changes in some of that contractual yeah a lot of it is contractual so the employees the the the workforce um they see a two and a half percent cola they have step increases in addition to that

▶ 3:11:28 Monica C. Medeiros: cola um so don't so don't the clerical union members and um so the majority of that is all contractually driven increases and are the new positions in here at all in water yeah yes no in part of the proposed there is a there is the executive assistant position with a portion of the salary um now being attributed to water and sewer and when that position is filled that person could help you for instance preparing all the meeting stuff right and so i think that it certainly um would be helpful um and i'm sure needed so you can do other things and in yes in this budget we're seeing a decrease in postage by 10 and i sorry i realized in the indirect costs that have been handed out for this budget there's um one of the lines that

▶ 3:12:42 Monica C. Medeiros: was previously posted slash soft software which is previously basically software has been increased to add postage and has gone up is that just a shift in where the postage is coming well my reduction is simple we estimated high on what we felt the community would how the community would respond to monthly billing and when the community didn't respond as aggressively as first thought if you look at the fy19 budgets i printed out and passed that there is surplus font there are surplus funds in those existing lines that's why i proposed the cut in the budget and you'll see an equal cut in the sewer budget for postage okay and maybe mr delaruso can just uh talk about the addition of postage to the indirect costs between 19 and and 20.

▶ 3:13:39 Monica C. Medeiros: So, in the other section, it says postage slash software, but before that was really just kind of like software licensing. Oh, postage slash software? I think in, so what was your question again? I'm sorry. So, in FY19, that line was less, and it did not include postage. It just said software licenses. so I'm wondering why we're adding postage and what I thought perhaps it might be to offset the decrease in this budget and again I'll confirm this view but we're using the exact terminology that is in the template I think this one here principally is software because I think you saw the number of 39 for 54 64 I'm sorry for fiscal 19 and then 46 580 and I would suggest it has to do the new software the new hardware and software that we're upgrading from munis because they also

▶ 3:14:51 take a portion of that so as that cost goes up it should reflect a higher cost for software for that because we did purchase the upgrade to munis is this including any are we looking to to use postage as an offset for indirect costs no i'm not i'm suggesting that may not be posted at all i'm just saying if you look at the the way the terminology is on on the actual template um from the munis template no from department of revenue they have it labeled that way but for our purposes we're principally focused on software and i'll confirm that for you though thank you yeah thank you alderman's workshop thank you madam chair so i wanted to um talk a little bit about the indirect costs as it relates to employees

▶ 3:15:49 Michael P. Zwirko: so the packet that you handed out this evening which is voluminous but very detailed and it is appreciated there is a section where department heads acknowledge my and i appreciate that they acknowledge it and there's a memo that outlines the respective duties performed in the departments that fall that that that could be or are rather build as indirect cost to water and sewer do and I see that they're their duties but it doesn't seem that that it's a record kept it seems more that it's task based so and we don't do this with other departments right? I mean, so if the city solicitor, for example, is working on an issue in parking, he's not billing or his office isn't billing the treasurer's office. That's correct. Right. But yet

▶ 3:16:55 Michael P. Zwirko: we do that in water and sewer. So I wonder why this doesn't apply to other departments. Because where I work, it's a company of 50,000 employees and we have cost centers for everything. And anytime I work on any item I have to build that associating cost center legal departments do the same so why is water and sewer held out if you look in the packet under section first section it's the city of Melrose indirect cost allocation to services this says overview one two and three mm-hmm two things one is we're not we are not a manufacturing company and that's not we don't record time as such but having said that I'll put that to the side it's I'll just go right to number two this is indirect costs I distinguish

▶ 3:17:58 from direct costs by the fact that they cannot be assigned precisely which I think is what you're asking, to various municipal activities. As a result, the indirect costs allocated to a particular department or service are approximate rather than exact cost. Sometimes this fact bothers officials who like to have precise cost figures. It is important to remember that even though indirect costs are approximations, including them, and the full cost of municipal services results in a more accurate cost information than if they're not included it goes on to number three it says the direct of accounts may reject any community's methodology written or otherwise as unreasonable for tax rate setting purposes it's an important etc that we

▶ 3:18:50 be consistent and that we do our allocation which is considered reasonable and fair and that's from the costing municipal services booklet of the department of revenue division of local services so we try to um uh and i think we've done it successfully because history has shown we have from fiscal 13 to today our percentages have not deviated from 11 plus or minus i know what i'm doing is correct because it's been certified each and every year since then if i felt that we were off base and anything um i would definitely bring that to the attention in fact if you look at this year where we i actually reduced my time from 15 down to uh you know because by five percent from last year because i've looked at where we're at and the

▶ 3:19:38 level of work that i think that's been done has helped me do that because i don't have to get as involved in things i used to have to get involved in because now that i think they're done quite frankly um credited to public works here in a much more efficient manner so those things occur each and every year so we do look at it we try to be consistent we try to be reasonable but um i think that's the best we can ask for and we get again this is provided to everyone the or as well as the outside auditors and um they would be consistent and we have no issues yeah and i just want to clarify i'm not questioning i'm not questioning the billing of indirect costs to the water and sewer i know that it's not only legal but it's it's it's used by many municipalities so

▶ 3:20:25 Michael P. Zwirko: so I get that I guess it was more of the there's an acknowledgment but but not a verification but I do know that and you're essentially saying this in your quote your ending remarks that now there's a system in place there's been policies and procedures that have been developed that previously excuse me previously weren't there there's a rote memory to how we do our business day to day and how the the departments are working in conjunction with any water and sewer activity and if i add to the trick absolutely correct when we introduce monthly billing for example that impacted the treasure collector's office it impacted you know the billing how we do things that there's a trickle-down effect yeah so you know five years ago to say that wasn't there but

▶ 3:21:10 now you introduce that that affects different people i think it's in the treasures collectors outline to their work so then more time is needed because of monthly billing is it going to be for short time is it going to be for a couple years until we get it you know under wrap and then it just becomes mechanical which is the goal and then you can reduce the time element so yeah absolutely correct so as those elements come in again putting in the new meters for the water replacement that took time that we didn't have to apply before and once that's done that time can be removed that's why this year you'll see it indirect costs are down by over 46 000 dollars so as we they go down we're not afraid to reduce it and the um i was reminded of this

▶ 3:21:57 Michael P. Zwirko: while you were speaking you did provide up this is for mr shena the total um volume used by the municipal um parcels buildings entities but i didn't and i might not have seen it but i don't don't think that it showed a cost a total cost it was just the volume no we track consumption I can I can I didn't know if there was a way to calculate that in between now next Monday I can work to create a dollar I don't think it's gonna hold anything up I just think a dollar amount as well as the volume would be helpful thank you those are the only questions I had madam chair thank you first time thank you I just wanted to realize that I don't believe for the these packets that we were handed out earlier today really do

▶ 3:22:48 Monica C. Medeiros: kind of affect not just the rates part of it but also the budget side of it and so I'd like to move to include the two memo packages that where we were presented to us tonight one from the John shed to the FY 20 Public Works water and sewer budget presentation information and the other from Mr. De La Russo, City of Melrose Water and Sewer Indirect Costs and Allocation for Services documents. Okay. Is there a second? Second. Okay, great. So we have a motion to add to the record the two major packets of documents that we received today to this order as well. That was made by Alderman Medeiros and seconded by Alderman Zwirko. All in favor? Aye. Any opposed? Okay and then I just wanted to just touch briefly on indirect costs here and and the expenditures so

▶ 3:23:45 Monica C. Medeiros: the the question you know it came up about why do we do this for water and sewer and not for the other departments and in the the real part of that is that And the indirect costs are authorized to be spent out of the general operating budget, but we're collecting the money to pay them out of the water and sewer rates. And so we see, for instance, and we're about to have a motion in a moment or two to fund this water enterprise budget where the grand total 5 million four hundred twelve thousand six hundred seventy seven dollars and fifty four cents but there's also an additional allocation of eight hundred eighty nine thousand ninety seven dollars that we don't see in this water and sewer budget it's in addition to it that's in the general operating fund the

▶ 3:24:47 Monica C. Medeiros: expenditures are in the general operating budget and so that brings up the total cost of operating the system and the to a greater amount but it it can be confusing I think to see that yeah you don't know where that money's being spent and there are only certain because this proposition two and a half there's only certain things that we can raise money in addition to the two and a half percent levy limit and there are only certain things that we can raise additional funds for and we can raise funds for fees which an enterprise account is a special kind of account that should just cover the cost of operating the account and nothing more and so it's important that if we do do this indirect billing that it's it's accurate because we are doing this

▶ 3:25:36 outside of the proposition two-and-a-half protections that are there for taxpayers and ratepayers so thank you thank you this will have the committee what to recommend we have a motion to recommend the water enterprise operating budget for fiscal year 2020 made by alderman Zwirko and seconded by vice chair Boisselle all in favor aye aye any opposed okay we will do that the final order on our agenda tonight is order number two zero one nine dash nine two sewer enterprise operating budget for fiscal year 2020 in the amount of eight million one hundred ninety nine thousand and one hundred seventy one dollars and fifty one cents motion to move forward with no recommendation the motion to move forward and the sewer enterprising operating budget with

▶ 3:26:29 Monica C. Medeiros: no recommendation second second discussion yes thank you and I I would support the no recommendation given the fact that we are we haven't set the rates so that makes sense in that case but I do have some questions in particular again on the salary line the increase in this overall salary line is six point three percent which is higher than some of the percentage increases we've seen in other departments could you explain if there's been staff changes if there's contract negotiations or what no these are all contractually driven changes we've had some personnel change but the positions have not no no additional movement of some percentage no just outside of the executive assistant 15% of that salary and actually in this discussion and perhaps

▶ 3:27:33 Monica C. Medeiros: I'm not sure if we need to do a motion to do this but likewise with the other general operating budget we were able to actually make the salary document a publicly available non password-protected document and since this meant to do this with the water budget too so I apologize but since this is we've now changed the salaries to not show the individual person's specific name it just shows the title and the salary and the number of positions in that title I'd like to see if we could add that to a publicly available format motion to add that the salary information to the public record Madera's seconded by Alderman's work oh all in favor aye opposed okay and the postage line I imagine is that the same as we discussed in the previous budget

▶ 3:28:37 Monica C. Medeiros: so you just haven't we haven't seen as much billing when we bill we pay half from water half from sewer same methodology to managing both of those lines and projecting and the same mr. Del Rosso you would just confirm on the indirect cost same thing oh I'm sorry yes sorry one more motion to add the the two memorandums again, the FY20 Public Works Water and Sewer Budget Presentation Information from the Director of Public Works and the City of Knollers Water and Sewer Indirect Cost Allocation to Services from the City Auditor. Second. Okay, motion to add our two new packets of documents to this order made by Alderman Medeiros, seconded by Alderman Bewtra, all in favor? Aye. Opposed? One quick question on the I&I

▶ 3:29:35 Kate Lipper-Garabedian: and I know we've talked about this before in terms of the different areas, and the spreadsheet includes, or the PowerPoint includes a nice visual that probably looks even better in color for those regions. Is there a map that also has, what am I thinking, a description with labels that sort of tells you where region 15 really is? So we heard that tonight, Swain Pond area, is there some uh a coding system somewhere that the people who are reviewing can understand we can provide something okay a little simpler than what i have in mind but yeah we can provide you with something that would be great and maybe it's just an overlay of that map with the numbers on it yep and a little chat that equates to the that would be great thank you um i believe we do

▶ 3:30:27 have a motion uh made to rec uh to move this to the full board without a recommendation so that that we can make sure that all the materials are in the record we have a chance to digest and that's been duly seconded all in favor aye aye opposed okay we will move that for without a recommendation to the full board tonight I should you adjourn me by aldermen's work was seconded by vice chair Boyce all in favor aye opposed all right

Appropriations & Oversight Committee — 2019-06-10

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