Appropriations & Oversight Committee — 2021-03-22
Attendance
Christopher Cinella ; Jack Eccles ; Mark Garipay ; Jen Grigoraitis ; Maya Jamaleddine ; Shawn M. MacMaster ; Jeff McNaught ; Leila Migliorelli ; Robb Stewart ; Cory Thomas ; John N. Tramontozzi
Agenda
Minutes
CITY OF MELROSE APPROPRIATIONS COMMITTEE CALENDAR● MARCH 22, 2021 Web-based remote meeting Committee Meeting 7:30 PM , Melrose, MA 02176 The public should take notice that the Melrose City Council may, on certain occasions, have a quorum in attendance due to standing committees of the City Council 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 Jeff McNaught Chair Present Jack Eccles Vice Chair Present John N. Tramontozzi Present Shawn M. MacMaster Present Mark Garipay Present Jen Grigoraitis Present Leila Migliorelli Present Robb Stewart Present Cory Thomas Present Maya Jamaleddine Present Christopher Cinella President, ex oficio Present
ORDER-2021-84 Request A request for an update on the Mayor’s Free Cash Distribution Plan for Fiscal Year 2021 Recommend Place on File City Council City of Melrose Page 1 3/31/2021 3:46 PM
Transcript
▶ 36:53 Jeff McNaught: good evening the time is 7 39 pm the date is march 22nd 2021 this is a meeting of the appropriations committee i am councilor mcnaught the chair of this committee and in lieu of a roll call attendance i will announce uh all voting Member which is the whole council um who are in attendance this evening um and we have vice chair eccles Councilor Tramontozzi Councilor Migliorelli Councilor Garipay Councilor Grigoraitis Councilor gemaladin Councilor stewart Councilor Thomas, and President Cinella. I also believe Councilor McMaster is with us and he'll be back in in just a moment. We'll recognize him when he returns, but that provides a notice of quorum for the record. Pursuant to Governor Baker's March 12, 2020 order suspending certain provisions
▶ 37:48 Jeff McNaught: of the open meeting law and the Governor's March 15, 2020 order imposing strict limitations on the number of people that may gather in one place this meeting of the appropriations committee will be conducted via remote participation to the greatest extent possible we will post an audio or video recording transcript or other comprehensive record of these proceedings as soon as possible after the meeting on the city of maryland's website and on mmtv3.org And at this time, I'll move for unanimous consent. If there is no objection to opening public comment, seeing no objection, we are open for public comment and for the public at home. This is the portion of the meeting where anyone from the public can come to speak to anything on the appropriations agenda. We have 1 order on the agenda this evening. Madam clerk.
▶ 38:45 Do we have anyone from the public wishing to speak on this matter? We do Mr. McSweeney. I'm going to unmute him now. Thank you. Thanks so much. I've been McSweeney, 160 West Wyoming, just here speaking as me, though. There's only one thing in order on the agenda speaking for that. And I just wanted to make sure that the conversation, which I think is a great one to have. um and i thank the counselors for introducing it i want to make sure we give a shout out to the city's um planning department and the plans that we have that exist i think um for circumstances like this you know we have a master plan um that the residents of the city you know put a lot of time into we have an open space plan we have a complete streets plan um any one of these documents
▶ 39:32 will contain a lot of recommendations for great uses uh uses which the public has weighed in on a lot already um of opportunities like this where you may have a little bit of free cash um and i'll you know highlight two that are certainly close to me um the first is the complete streets plan that was this was this was a list of projects um which was put together in order to get access to the the state's Complete Streets grant program. There's no requirement though that any that you know those those those plan those um those those preferences those projects are complete are done with Complete Streets money right. The city could choose to accelerate any one of those projects um if they felt them to be a priority and the great thing is you know there's already
▶ 40:21 a whole list of Complete Streets projects just kind of waiting there to be to be chosen from. The other thing I'll mention is the city's open space plan. There are and continue to be a lot of vulnerable, privately held open parcels in the city, which for basically decades now, the city's open space plan has been suggesting we fund acquisition of. And since, you know, the 2004 master plan going back that far, we've had parcels that have been on that list, the big one being in Ward 7, the Colucci Estates, which the city has said, hey, we should think about a way to purchase some of these and protect them forever for our residents. And nothing has ever happened. Unfortunately, and, you know, Councilor Thomas word, we lost the Colucci Estates. That open space is gone now, permanently.
▶ 41:21 There's a plan in Councilor McMaster's ward on Montvale that the residents, you know, there were multiple residents who called into the planning board meeting begging this developer who had bought the land to sell it back to them as residents. we shouldn't have residents who are who are offering you know in public meetings and public forums to to be purchasing land back these little parcels that are on our plans for purchase anyways um we should be we should be putting together a program as a city to purchase these i know that there are plans that are in ward seven uh plots in ward seven right now that have residents who want to sell them to the city at assessed value there are a lot of you in your wards have
▶ 42:07 these these parcels in them um and the great thing about these acquisitions is they're you know they're usually available for relatively cheap and you buy them once and then you have them forever so i think it's a really appropriate use of free cash i'd love to see the administration asked about that um and like i said you don't need to continuously fund these things you get a one-time opportunity to purchase them you purchase them and then that's it um but like we've seen in ward 7 and in so many other of our wooded areas recently um once these these these parcels are gone they're gone and as property values go up in melrose as they have been doing um you'll see more and more of them disappear for good and so i really just want to advocate for the open
▶ 42:52 Jeff McNaught: space plan with the parcels that are in that plan and then asking the administration what can be done about preserving some of those parcels forever residents for residents now and in the future thank you everybody you're muted counselor madam clerk i don't see any other hands raised in the audience so at this time i'll move for unanimous consent to close public comment if there is no objection seeing none um public comment is closed i just want to recognize that council mcmaster is back with us we did count you as halfway and so don't worry council mcmaster we We knew you were here and at this time, I will move for unanimous consent to suspend the rules. If there is no objection. Seeing no objection, the rules are suspended and we can now communicate with Member of the administration on the 1, whereas it is before us this evening. If you give me 1 moment, I will read that.
▶ 44:04 Paul Brodeur: okay this is order 2021-84 a request for an update on the mayor's free cash distribution plan for fiscal year 2021 and madam clerk i believe we have we have the mayor we do and we have the mayor mr de la rusa and coming in now gentlemen can you hear us speaking for myself i can Mr. De La Russo is also here. Outstanding. Good evening, Mr. Mayor. Good evening, Mr. De La Russo. Good evening. Good evening, everyone. We are obviously looking forward to questions. I've got something that might help frame it a little bit if you're so inclined. I hope it's brief. I do think it'll be helpful to just give you some opening considerations. One of the reasons I want to do this is actually, I think we all understand what free cash is,
▶ 45:16 Paul Brodeur: but I was talking to a bunch of Boy Scouts and their parents over the weekend at their food drive, and one of the Boy Scouts for one of his merit badges had to interview a local official, and he asked me about free cash. I do think it is worthy to just give a little background to again ground folks that might be watching about what we're talking about. And obviously, to a certain degree in the current climate, we're in, it's very hard to talk about cash without speaking to the various buckets of federal aid. There are also going to either are available or shortly will be available to the city. So, as you all know, free cash is a revenue source that results from a calculation of the city's on remaining on remaining unrestricted funds from operations of the prior fiscal year.
▶ 46:08 Paul Brodeur: And that usually includes, as you all know, receipts in excess of our revenue estimates, unspent monies that we budgeted for and didn't use all that money, certain receivables and deficits like unpaid property tax. are deducted from that amount and as you all know, the free cash can't be spent until it is certified by DOS, the Division of Local Services, which is part of the Department of Revenue. Now, to put a little bit of context in it, the Technical Assistance Bureau of DOR does recommend certain what they consider to be sound free cash practices that we try to follow here in the city and Mr. De La Rosa can speak. Better to them, quite frankly, than I can given his experience. But among those, the idea that a community should try to generate.
▶ 47:03 Paul Brodeur: Free cash of around 3 to 5% of the annual operating budget and that, because as a non recurring revenue source, free cash should be restricted to paying 1 time expenditures. Funding capital projects are replenishing other reserve accounts that we might have. And as a practice city, city should resist supplementing current, um, operating and F, what current operating, um, operations with with free cash now, over the past. 5 or so years, the city has been fairly stable. Um, and what it's available for free cash from. a low in 2018 of 2.3 million to today's figure which is a little north of five million dollars not that much more than we had last year um somewhat anomaly one thing that makes our
▶ 47:59 Paul Brodeur: our number unusual this year is that that number does include uh one-time payment of a million dollars uh as a lease payment for a 10-year lease for a city-owned property on 99 that's the waste management property that a previous council um approved after the city negotiated it admittedly before my time um we do have in this year things are a little bit more complicated never changing we do know what our free cash number is to be sure we also know that the fed the federal government um the president signed into law a 1.9 trillion dollar federal aid package which includes about 130 billion dollars going directly to municipal and county governments the current estimates are that melrose receive around 8.2 million dollars under that program and those funds happily
▶ 49:00 Paul Brodeur: as we as we sit here today can be used to replace revenue lost or reduced as a result of the pandemic that's something other buckets of federal aid couldn't be used for and a laundry list of other things that you all are probably uh pretty familiar with we're going to get that money in essentially two blocks one in calendar year 2021 excuse me one in calendar year 2022 and if that those funds will be available for use through 2024. we are still waiting for the u.s treasury department to issue guidance about what is actual permissible uses in a much more granular fashion and we obviously look forward to finding out what those allowable uses are what we haven't talked about so much yet in this context is that the legislation also provides as i understand it
▶ 49:55 Paul Brodeur: 126 billion dollars for k to 12 school support that funding falls under the elementary and secondary school emergency relief fund or esser fund now there's already been two tranches of that from prior coveted relief federal bills and we are certainly going to work in conjunction with the school department uh regarding that resource we did just learn at about four o'clock today from Congresswoman Clark's office regarding ESSER III and this most recent tranche, if you will, is that the preliminary estimate for what we'll receive under ESSER III is a little bit under one million dollars. And again, we're waiting for some clarifying information to confirm that preliminary estimate and to see what, if any, restrictions are
▶ 50:43 Paul Brodeur: they're on use or timing of expenditure of those funds we do have a dedicated bucket outside of free cash and outside of the eight point you know eight plus million dollars that is available for what i guess i call general coven relief um cfo zalarusa did provide a memo with the administration's current thinking uh in general terms as of march 3rd that of course was before the american recovery plan was signed into law on march 11th but you probably won't be surprised to learn that in terms of strategy and planning around free cash and to a certain degree the buckets of federal money as well the focus is going to be on solving covert problems solving some of our infrastructure issues addressing one-time expenditures as much as possible and with an eye towards maintaining
▶ 51:41 long-term fiscal stability as we try to meet the needs as all our of all our residents and spread that money out as effectively as possible to get the most pain paying for the buck now our experience has been you know in the recent past that some of this federal funding or the rules around it can change so you all know when we started off FEMA reimbursement was available at 75%, COVID was 100%, but it was deadline restricted to December 31st of last year. Well, FEMA is now at 100% reimbursement, but it is a reimbursement that does take some amount of time and impacts cash flow. COVID, we all know that deadline has been extended and some of what we can cover on it has changed mostly in the positive, but also in the negative in terms, in particular, some of some cleaning costs.
▶ 52:43 And so one thing that both the school side and Mr. De La Russo and his department have worked on is how can we kind of reallocate that money or or repurpose it in terms of where it's being paid from and where it's going to to maximize the use of resources and that has changed over time and the we we are making sure as we go along that we are not missing opportunities under the new american rescue plan dollars to make sure that we are again getting the most bang for that buck as we learn what the the possible uses for the various buckets of money are out there. One thing I want folks to keep in mind, I think it's a small likelihood, but it's something we need to think about is that given the amount of aid that has
▶ 53:30 gone to cities and towns under the federal government, it does raise a concern on my part that the state government might not be as generous as the governor's initial projections around Chapter 70 and unrestricted state aid because they they might look you guys have gotten a lot of support about the fed from the federal government there are some state buckets that need to be filled you know accounts that need to be shored up around mass health or some of their big ticket banks unemployment um that might cause them to draw back from that initial commitment but certainly the theme will be maximizing the use of every available dollar at hand in the best long-term interest of all the residents of Melrose. I want to thank Mr. McSweeney. He
▶ 54:26 teased a bit of the answer originally. I'm not saying on the particular priorities, but the good news to a certain degree is that the city is well positioned um to make decisions around this because we do in fact have a master plan from 2017 some of the other master plans he mentioned as well as a capital improvement plan um that should inform our decisions about where to where to use these assets the the free cash allocation will reflect many of the priorities that individual counselors have identified when uh when the administration when we inquired of what your priorities are and it will also cover some significant obligations that are um that we don't have uh really any flexibility on in terms of medicaid reimbursement
▶ 55:17 some commitments to police and fire overtime some of our unpunched unfunded pension liability and other expenses that having been said that sounds daunting and negative i want to be clear this is an exciting opportunity for the city to move on some of the things that we have wanted to for a long time and quite frankly address some potential needs i'll use the senior center hvac as a small example of things that have come up since the cip was done that will really improve the city over the long term make the investments in infrastructure that we haven't done as aggressively as i think we all would have wanted over time and really move the city forward it is a terrific opportunity i look forward to seizing it and i look forward to the discussion
▶ 56:12 tonight with that i don't know if you want to jump into questions or if mr de la russa has anything to add before we get into the the final point um can you hear me yes thank you hi good evening good Good evening and the mayor that was excellent mayor and I, I, I know you, you set the tables ready properly this evening and I'm really pleased to be here. I, um. I look forward to answering any and all questions I possibly can this evening and if not, I promise I'll get back to the council. With the information that they're requesting, um, there's a number of ways that we can go about this. Um, I, in the beginning, I was going to. Just touch on a couple of highlights of the original memorandum. I sent you back on March 3rd.
▶ 57:06 To make a is to point out a couple of things and a little bit insight into what a, how I look at it and what my mind thinks. As far as the use of this. Type of revenue, and it is a substantial amount of money. I think we all recognize that. But let me just touch on if I'm just for a moment, a couple of of highlights here. And if you check the deal, our guidelines for the use of free cash is the mayor alluded to. The 1st thing we have to consider, whether it was 5Million or a 1Million dollars. Is what do we have to do to shore up our financial foundation? Before you can build the house, you have to have a good foundation. So we know that the use of free cash is really critically important to stand in importance
▶ 58:05 and how we use it and what we intend to fund with it plays a big role in our bond rating. We have a double A plus, we've been able to sustain that through good and bad times. Um, and a lot of people can say that, and particularly with what we saw with the pandemic. The approach we took candidly last year, I put in 50%. Of the free cash that we had, um, certified. Into the reserve funds was a substantial plus in our column. The fact that we funded the open obligation, the way we did, that's 1 of the, um. Concerns as if he has of every community, but us as well. And that's so that comes to the forefront. What do we have to do? What funds in particular should be addressed? What have we got on the horizon that we need to be concerned with?
▶ 58:59 Regarding reserves, so we took the approach and I think you'll see it. In this document, we talk about 1Million, basically 250,000 at this time. Being socked away in our stabilization funds. To begin the process of shoring up what we need to share up. For the upcoming fiscal year, that is just under 25%. So it's about half what we did last year. From there, we move on to the 3 critical items that. Department of revenue division of local services look to us to do. What do they say right on their own publications as a non recurring revenue source, which this is. Free cash should be restricted to paying 1 time expenditures. Funding capital projects or replenishing other reserves. So we do all the above.
▶ 1:00:00 And if you take a look, which is when you have an opportunity to what we did last year. Because I think you'll find that the approach we talk about balance and the need for a balanced program. That's exactly what we did with the just under 5Million dollars last year. And I'll give you some highlights. We put money in the stabilization funds as I indicated. We also addressed the city hall generated design study. We put over 1.3Million dollars in one time capital projects. we did over 150 000 in sidewalk infrastructure trees 55 000 speed signs for radar 75 000 the cemetery project we put over 50 000 into that um we did the diversity training for 28 000 we also did fund public safety vehicles public in i.t in the school department school projectors
▶ 1:00:58 we find a technology at 225 000 so we did extremely well i think in using the funds for the purposes for which was ultimately voted by the council having said that one of the key components and i want to thank the council because we get some wonderful wonderful uh suggestions and recommendations on the use of free cash from the city council thank you very much for doing that it really helps overall allow us to see the bigger picture and the perspective that's necessary to have a good healthy program which is what we want everyone this year so we take that into consideration we also try candidly to prioritize the use of this money that may be for example if we have an opportunity for a grant and it's going to require a match
▶ 1:01:51 So, for example, let's say the grant will pay 75% if we match at 25%. Well, that's not a bad deal for using free cash and that capitalizes again, you're expanding the use of the one-time money and you're actually gaining three times its factor. So those opportunities also come to the forefront and oftentimes they rise to a higher level because of the nature of the expenditure. It's going to be matched. is matching funds are always critical. It's like you're getting a bonus. And that's what we also look at. It's not just the project itself. But having said that, I will open. Is there any questions? I'm sure there are. Rather than go through my list here, I'm sure you guys have some direct questions
▶ 1:02:42 Leila Migliorelli: and I'm happy to answer them. Thank you, Mr. Mayor. Thank you, Mr. De La Rosa. First, we have a Councilor Migliorelli. Thank you Mr. Chairman and thank you Mr. Mayor and Mr. De La Rosa for being here tonight. I appreciated receiving that memo after counselors Grigoraitis and Jamaladeen and I had filed the order. I think, you know, sort of the impetus of the order as I'd mentioned at the previous meeting was, you know, heading it and this was prior to the news of the, you know, federal American Rescue Act funding, was just to have a better idea of what was coming ahead for us for free cash um so we had already made some some um uh approved some funds and kind of wanted to get a better sense of what was going ahead particularly as there's so much out there in the community
▶ 1:03:33 Leila Migliorelli: right now um regarding uh you know covid recovery items you know such as the schools um i know that in reaching out to constituents that i had heard a lot predominantly everyone's concerned about sidewalks and streets and that's that's kind of something i'm i'm sure a lot of the ward counselors get those calls quite frequently as well um and i noticed that in the memo that's sort of a tbd there so i think what i just wanted i've got a bunch of questions i'll ask a few of them now and it might circle back to a few later um but i think if we can kind of start out going through that memo and just two two first questions about the stabilization funds and why um how what What are the balances in those accounts now, or roughly where are we at now? And why do we feel a need to put more funding into those accounts? And then also the on the roadway and sidewalk improvements.
▶ 1:04:29 And why that to be determined did not place at a higher higher level. And it seems like that's what's of most interest to constituents. Awesome, that's a loaded question. I'd be happy to answer that. Let's begin with the stabilization funds. Actually, what we're looking at now, and I'm so glad you brought that up about the change with the American Rescue Act, since that March 3rd memorandum that I distributed to the board, we had four significant events come across my desk. First and foremost, we had a request for about $40,000 For the fire department for motor vehicle equipment repairs. We have another request for about 20,000. On top of that, for the Essex agricultural, we're getting 2 more students.
▶ 1:05:22 I think we, if you recall this year already, we went for extra funding for 2. this is going to be another 2. So that's going to be another 20,833 dollars. And also from the assessors permit GIS. software there's a request for about sixteen thousand dollars that at the time this memorandum was crafted that was not known and the fourth most significant factor is obviously the eight just under 8.2 million dollars on the american rescue plan act federal money from covert dynamics behind that are phenomenal i think the mayor touched on two critical factors here the programs that we've got the cares act funding as well as the fema the changes that they're making midstream um at and and onward a significant it alters the approach you would
▶ 1:06:20 take at times to look at how you would fund certain items the i think the federal government they made it clear that this they did not give cities and towns the um flexibility for the use of this new money this like just on 8.2 million they have hand uh you know held it to the um covert impact of the pandemic it's not an open checkbook by any means and if anyone believes that unless they but again um that's today they may change that in six months they may increase the use um i mean we saw that happen already with the cares act funds we saw that with fema so anything and everything is possible it's in the most dynamic time in i think municipal finance that i've ever seen um but having said that let's talk about the stabilization funds um
▶ 1:07:14 the first one is the foundation stabilization fund it's got just over 3.1 million dollars we're looking to add 400 000 we should bring it just over to 3.5 million dollars for purposes of the council the objective with that fund you want that fund alone to be to be five percent of your operating budget which it is not yet in order for us to achieve that five percent mark we have to incorporate the use of free cash as the second supplement to that um practice so we are trying to bring that into um to the point where it'll be a direct five percent of the budget each and every year that is the target we're not there yet that fund again is the fund that i don't think i've ever gone to in my history here and hopefully i never have to that really is the foundation of
▶ 1:08:11 the house that we have here in melrose that is the core base that we have in place and so that we can avoid uh service interruptions or delivery of service of any kind to the residents that's what it's there for um the next one is the contract stabilization fund it's got over 925 000. um we're asking for 200 000 to go into that fund which will bring it over 1.1 million we have a number of unions that are out of contract and i think that some are going to cover a multi-year span and what happens the two things one is that you need to be able to pay the retro on those contracts in a timely fashion you also have to acknowledge the fact that once the contract is settled the retro will include a component that probably i'll say for the
▶ 1:09:09 purposes of this discussion two percent higher than the prior year so you have contract you have salaries going up and you have longer duration of the contract not being settled that liability grows and grows until there is an agreement on that collective bargaining unit you have to have a funding source to address that um and again that is an item that comes up every year with standard employers they always ask which contracts are out there but what is still unsettled and how do you intend to pay for it this is our direct response that we have being sure there's a provision there to address our contracts to pay the retroactive portions as they become um as they surface regionally the next is the capital stabilization
▶ 1:10:04 fund the current balance is just over 348 000 at this time we're looking to put about 200 000 in there and um that'll bring it to about 548 000 and again we target 250 to 500 um for the fiscal year the intent obviously is to fund capital one-time items projects um typically as we saw last year the capital projects we funded were all basically on the cip plan and they all had a designated number that's what we like to see this money here to make it clear for the city council you may have a situation that happens mid-year and equipment breaks down and you may have to replace it mid-year or something of that nature and it was unanticipated you always want to have a resource to go to to address your capital equipment needs in particular um and that's obviously it's not
▶ 1:11:03 inexpensive so that number is i think is a good marker for us as a community it seems to sustained itself so far i don't see any change in that suits and claims we have 285 441 We're looking to put $200,000 in now, which will bring it over to $485,441. I do want to bring up a point here, and the Mayor touched on it. We have an agreement with Waste Management that we made for the $1 million on the first payment. There has been a commitment over 10 years that in the event that I'll say one or the other party terminates the agreement, that we have an obligation to pay a certain percentage that back to waste management so this is a um provision that within that fund we're going to try to set that aside should that event occur materialize um hopefully it will not but again
▶ 1:12:01 we have that agreement and we i think actually the time we made the agreement we told the council at the time we would do that and that's exactly what we're doing right now i kept i kept i wanted that commitment to the city council that i would put this money in there um just to give us a cushion in the event the contract was terminated by either party for whatever reason um our favorite here is the opib um other post employment benefits again that's the health insurance um liability we're putting a hundred thousand which we're targeting each year we have 753 000 in there now we're proposing to put in a hundred thousand through the council's affirmation that'll give it 853 000. the importance of this um stabilization fund is is more that
▶ 1:12:52 more even more than the amount at times because actually when you add to it it diminishes your liability quite significantly more than you would recognize over a long period of time it's that we're demonstrating to Standard & Poor's that we are not ignoring it, that we are putting funds there toward it that we said we would. I made a commitment to Standard & Poor's that I would strive to fund that each and every year to demonstrate that the City of Melrose takes our obligations seriously and that is something that we haven't overlooked and that's exactly why that's there the special education fund 530 000 243 that's on the school side we're not proposing any new money be put in that fund right now we try to keep it at
▶ 1:13:40 500 000 mark and that's um one of those sensitive issues because as i'm sitting here before you this evening we don't have any control over special ed special ed costs or needs for students so there there may be a time we have to draw from that fund like we did in the past. But I personally think that $500,000 is a good number to have in there. I think the last time that prior superintendent used it, it was 450,000 that was drawn out. So that's not an unrealistic number at all. And that's a great, again, It's a, it's a great asset to the schools and to know that that's there in the event that during the year at any point they get just like, we're getting additional students at the Essex that they have a resource to go to through this council to pay that cost.
▶ 1:14:37 So many things we can't control and that's 1 of them. The OSHA fund, we have 100, just over 100,299 in there. We're proposing another 50,000 to bring it to 150,299. I think you'll actually see a request at some point for use of that fund by the fire department. And again, it's necessary to have that provision there. so that during the year again in particular should something surface that we have a resource to go to and it's it's not going away OSHA's the guidelines and their requirements are going to get more enhanced not less and the last one which is actually new to my list but this year is the recreational marijuana fund is $25,230.96. We're proposing no free cash obviously into the fund,
▶ 1:15:34 but it is a fund and it is there and that again is just over $25,000. So the total will be be currently $6,075,063 and go up to just $7,225,063, $1,150,000, which is a little bit different than what actually is this original memo because we were able to modify one of the funds to our advantage, which made more money available for other purposes. So that's the nature of the funding sources. It would be, again, to the city's best interest, short-term and long-term, to maintain this portfolio and have that as an asset because it's a remarkable thing. It's a remarkable statement to make that you have that type of capacity in your stabilization funds at this time, given all that's happened. It's remarkable.
▶ 1:16:39 Thank you. It's a real quick in terms of the full of the philosophy behind it. I guess that this is. A snapshot in time, and it may change. I suspect not a ton because the fundamental is this part of the practice. Um, I, I think a very sound and Patrick correct me if I'm wrong. It's represents about 25%. Of our available free cash, is that correct? Yeah. Yeah. It was to me. It's under 25% about 23%. And what it does again, it's for the purposes of this evening and for people to realize why it's so important to stand in a pause. It diminishes the risk. They always look for what the city is doing to minimize risk. For any 1 of these situations that might come up, whether it's contractual or. Uh, special led suits and claims, they want to know that we have provisions to address that and we don't say to ourselves, what do we do now?
▶ 1:17:41 That creates risk risk, creates uncertainty and certain creates a lower quantity. It's really that simple. So, the reason why. Again, I want to give you a quick illustration of. Why it's a little bit, but it may appear to be a little bit of a shell game. But I think it's instructive and that is there's been a lot of interest. In buying tents for the school department to help out with. To essentially create space, particularly around. Lunch, because as the guidelines of change in the classrooms may be able to be. A 3 foot distance that is that helps, but we do have a bit of a log jam in that as we sit here today, 6 feet is the requirement for lunch space. And I think part, there was a lot of interest from several quarters in using free cash to spend for what you get an ungodly amount of money because it's almost like a commodity market and tents are very expensive.
▶ 1:18:45 Our financial circumstances changed in that because of some of the changes in FEMA and CARES and some other buckets of money, we were able to use CARES Act money to pay for tent leases that, But if you asked us about that probably two months ago, it wouldn't have been an option because that was not the fiscal situation at the time. We expect, quite frankly, we want to be prepared for more instances like that to come down the road. And that's why you might – what may seem like a rock dance is really prudence in terms of making specific spending decisions where we still have, you know, three months or so left in the fiscal year it's so true and what one of the um side benefits of the um change in
▶ 1:19:47 the regulations again where theme is now paying 100 way back to day one is that a freed up money that we had to use for cares act to match the 25 percent that we required to match so because of the change in the regulations theme is now picking up that whole tab on a number of items not just not 75%, that freed up this CARES Act money to take care of the tents. So that really was another spinoff benefit. And it was logistic in that sense. And as Amir indicated, it really was a plus for us. Thank you. That was just one question that I had. It sounds like the stabilization accounts are there to help improve bond rating. My follow-up question about that is, well, part of that question was about infrastructure and infrastructure improvements and i think mr mayor you were saying
▶ 1:20:40 Leila Migliorelli: um that that this that these funds are going to enable us to make improvements that maybe we we wouldn't have had the opportunity opportunity to do before and um you know going through the capital improvement program plan um we have already ticked off a number of those items on that plan at least four of them that i can see and i think a few are other a few other in process and at least two of them are well beyond the scope of whatever funding we'll be receiving through free cash and the federal government. So I'm just kind of wanting a bigger picture. I mean, as I mentioned it earlier, you know, with helping our sidewalks, streets improvements, that still being a TBD on there, and then these other, you know, other capital needs, like what's your bigger vision
▶ 1:21:27 Paul Brodeur: for how we can help address those with some specificity so that we can, you know, share this back with constituents for asking questions you need in there mr mayor you're on mute i'll do my best to try to resolve the tension between uh a grand vision and granular specifics about where the money is going to be spent because we're not prepared to give you that in terms of whether it's 50 or 100 000 on sidewalk repair i'm not prepared to commit to that i refer to the capital improvement program because yes the top a lot of the items that were identified for fy 20 are in progress and that is to really all of our credit but the you know the capital needs that were listed in the plan i think there were six six and this this leaves to the side is the
▶ 1:22:34 the capital improvements or land acquisition, whatever the case may be, open space, that Mr. McSweeney was talking about. We're still talking about 66 proposals or so with a rough. Let's see if I can find the number for you. If I got it right, 66 projects with capital costs totaling a little bit more than 95 million. Now, to your point, you back off the public safety buildings that were in there because you're right, those are not going to be paid for out of these funds. But the vision is making those investments, targeting investments that have already been identified as high need. Some of them boring, and some of them that might not fit within federal regulations around what can be done with the $8.2 million bucket.
▶ 1:23:42 The boring thing, a couple of million dollars in school roofs. No one's too excited to do school roofs, just like none of us were excited to do the salt shed. But a big part of what I think we should do is accelerate where appropriate and where the money is eligible to do things that we've identified, some of which are really long-standing needs, and try to balance that out with some things either that didn't come up quite frankly. I'll use the Senior Center HVAC piece, which I think is an opportunity to do a bunch of things. It's probably going to be eligible in some federal bucket. It is needed as a generic kind of maintenance and improvement plan. We know from covert that it is super important to keep an eye on.
▶ 1:24:37 Air quality within our buildings, and if you look towards our resiliency planning, we know that we need. Cooling centers, the data on how hot are someone's going to be. Going forward is really, really challenging and we currently don't have the infrastructure to support. Some of those things, some of those solutions are pretty simple. It's simple as. Tree canopy or benches, but some of them are a little bit more expensive. So we will take. in that sense a broad strategic view by looking at the cip looking at our net zero 2050 goals looking at a range of things and seeing where you know we can get the most bang for our buck and again make sure we're pulling out of the right bucket so that we're not using free cash
▶ 1:25:34 on something that we might be able to use other federal dollars for i hope that makes sense Yeah, so it sounds like the memo for free cash pretty much stands with a few minor tweaks and the usage for federal funds that sort of are still working on where, where that will go as you're the weeks go on. Is that correct? I think that's probably fair to say. I mean, the, the priorities in some respects. Our, our, we know we have far more capacity. We have 4 more needs. Then the money regardless of what's up what the, you know, the final bottom line is, but that having said, it is that maximize the value because, you know, think of that 8Million dollars. is terrific news it doesn't mean we have to be in lockstep with the capital plan but i think when
▶ 1:26:32 you combine that very careful work that was done by a you know well-established group of committee including council representation from from council tramontosi with um as mr mcsweeney said the master plan as something that the city put a lot of time and effort in to set in some respects some very broad priorities and giving us opportunities to get towards those not necessarily you're never finished but i think those are good signposts for how we can make these investments yeah thank you and um i don't see the chairman on here anymore but i'll let whoever's going next ask their questions i did reach out to him he fell off so he's going to try to get back in i I don't know who we had next in queue.
▶ 1:27:26 Maya Jamaleddine: Mr. Eccles, take over. I suppose I could look like Councilor Gimaldi and just- Bring back. I'm back. We're good? Welcome back, Chairman McNaught. Thank you. Thank you very much. Thank you, Mr. Mayor and Mr. De La Rosa for joining us tonight. We really appreciate you working with us to serve community and present more transparency um i do have few questions and uh you you've mentioned that um you always wanted to keep some of the money on the side just in case we had some unexpected um issues to repair fixing and repair how much do you usually keep on the side I can't oh you muted uh it is this better if I understand your question correctly am I how are you um if I understand the question correctly how much do we try to keep um one of the um and that's a
▶ 1:28:49 great question because we we just don't know typically um what um these particular generally like equipment repeaters um always come up to the surface whether it's police or fire the public works but what we try to do is that because we allocate which i think was a reasonable amount of money for the snow and ice deficit for example we're probably going to experience about half of the 1.5 million as of today i think the deficit's about 620 000 plus or minus and if that holds true and i probably shouldn't say this because that's when it snows but if that should hold true then there's there'll be another um additional revenue that we could put towards a host of items that we've discussed here this evening and proper consideration and one
▶ 1:29:42 of the things that um on that side of the table is that generally it's not till may or june that the city council actually votes the largest portion of our free cash that's historically when it happens why is that two things one is that we know we have to spend the money if we're going to spend it because you don't have to by june 30th um but it also allows us to be sure we're not missing anything that we're not going to all of a sudden allocate the money for something you know other and all of a sudden something really critical came up we have no resources to use so we actually tried to right to the very end to be sure that we've captured what we need to pay for what emergency repairs are necessary we've taken care of those and then we could we feel much more
▶ 1:30:31 Maya Jamaleddine: comfortable putting that money towards something else but again it's time sensitive as you know municipalities change daily and it's just a matter of being prudent and just giving us the community time to be sure that there's no surprises that um are going to hit us that we can't pay for absolutely i totally agree with you and you know like this year is like no any other year especially when it comes to uh planning with the free cash so we definitely have to deal with totally different problems unexpected um issues and um you know and planning differently um when it comes to that i only can see you know like i see a lot of issues and but the two most vulnerable population that i'm looking at is our school and students and educators
▶ 1:31:35 Maya Jamaleddine: and our seniors um we recently heard a lot about school and um you know we have so many items on their agenda that can be considered as uh free cash part of the free cash um you know uniform tents um a lot of other things that and items that we can list and that i'm sure it would lift our students and help them during this time so i was wondering if you would consider if this is something that mr mayor and uh you as well are considering to include in your planning The other one that I promised Mr. Mayor that I will always ask for is a full-time social worker. I'm very grateful that we were able to get a part-time social worker. However, this part-time was extremely needed prior to the pandemic and we didn't have that resource. So now
▶ 1:32:46 Maya Jamaleddine: during the pandemic our seniors uh and and that community overall is in dire need of that support so i would encourage you to to include this in your agenda and i know it's hard to to hire a um Um, social worker with a free cash, but I, I propose that we can do a contractor social worker for this year and hopefully by next year, we'll be able to include it in the budget. I, you know, as you know, I very much appreciate your efforts on the, on the social worker, because I think I said this before without your strong advocacy starting before you were a counselor. I don't think we would be where we are today. We might be back to five hours a week and that is not sufficient. I very much appreciate your comments
▶ 1:33:44 about the fundamentals that we try to follow, meaning the vast majority of this money is both on the school side and on the city side, though I'm not as expert certainly about the federal, About the school side is 1 time expenses when I take whenever I talk about long term viability. I'm trying to think of 2, 3 or 4 years out. How are we going to pay for those things when. We don't have 5Million dollars. We don't have 8Million dollars. To make it all work that is why there's such a stress on. Capital instruments and reserve funds to try to stretch those dollars. And make it all work and certainly, you know, on the school side again, it's a question of. Where, in some respects, where is the best place to get the money given that we still have 2 money? I don't know if we have after 1 money.
▶ 1:34:46 And we're about to get 3 money, let's make sure we're getting the most bank for that educational buck before we necessarily talk about additional city side support for, for school infrastructure. The school committee meeting extender on a little bit long, but we've already started those conversations about things like. um you know summer learning loss and compensatory services which are um and i would defer to the superintendent uh for the expertise on this those are very obviously and hopefully discreet costs easily tieable to the pandemic right so we understand the cause and the need to and the need to fix as opposed to um broader school needs that we can't necessarily tie to the pandemic so we
▶ 1:35:46 have to be a little bit more creative about the funding but everything you know to that sense um i don't want to say everything's on the table because we are there's only so many dollars to go around but that all goes into thinking about where we want to land as of you know right as of june 30th with the free cash and the bigger picture with the federal money the the um if i may on the state side um what's the concern is that the net state aid for this city is is actually less it's about 141 000 less than it was a year ago over the two years we've lost about a half a million dollars in state aid that doesn't bode well for to grow a school district and this is after they've indicated they have fully funded the student opportunity act and
▶ 1:36:47 having said that um they've also provided three and a half percent increase with the unrestricted general government aid but it makes it you know because that is that's your base for state aid local aid that is not going in the right direction as the mayor indicated earlier if they decide to even reduce that more that's going to create a bigger hole than we did we have right now so there's really no new state aid available to anyone the city or the school it's less and last year was less first year of the pandemic by 340 some somewhat thousand and now this year i mean it's almost a half a million dollars in two years that we've taken a hit in state aid so we're down almost a half a million dollars today in state aid from two years ago and yet everyone here knows
▶ 1:37:42 Maya Jamaleddine: the needs have grown the costs have grown but we're getting less money from the commonwealth extremely extremely concerning um and that can't that fact needs to be um recognized it's not something we can control unfortunately and it but it does have a direct impact and i believe that what we can find it's just that simple um thank you for clarifying so i you know like you mary you you did mention that a part of your planning um well you know you always wanted to make sure that you are including um some of the problem to resolve some of the problems that were due to covet um i do see that these are the most common uh problems like our students have been for a long time without sports, without a lot of other social activities that left them with a lot of social
▶ 1:38:46 Maya Jamaleddine: emotion challenges and struggles. And for us, the least we can do, I feel, at this time is to try to problem solve these issues by providing them some of the ways to socially, safely practice their activities and gather so that's why I mentioned the parents and the other ways that we can provide them so I'm just gonna leave it there if we can include it in our planning it would be a great way to support our students who counts on us and then if we can include our the social worker as a full-time contractor we can also support our senior to pay them back when we counted on them am i can i'm gonna take the silence as a promise is silence acceptance contracts 101 i kid a kid that's a whole different thing because there was a question
▶ 1:40:10 Jack Eccles: i did not respond that was not a question yeah so uh council jamal adin if is that all you have at this moment thank you thank you next we have Councilor eccles thank you mr chairman um so i just have a few a few questions and they're more kind of about the free cash procedure because i think that there can be some helpful um information coming out there i guess first thing would be to circle back to talking about the federal dollars. And this question, I guess, would be for Mr. DellaRusso. Do you anticipate us spending free cash for things that we then apply for FEMA reimbursement or any sort of COVID aid-related reimbursement in the future, or is this kind of when we spend it, we won't be applying for reimbursement? Is that generally the
▶ 1:41:08 Jack Eccles: the way it works grab you thank you that's a great question right now i have no um interest in using this free cash to purchase something that i may have the opportunity to get from the federal dollars right now i have not seen the need right now jack candidly um that doesn't mean it won't change between now and and july 1st as they move the markers but right now as i'm sitting here with the council i haven't um seen the need to do that awesome and then um another question i had is kind of so we free cash gets certified in the fall and then the fiscal year closes on june 30th you kind of talk about i know that free cash isn't available on july 1st right so if we leave anything in there can you kind of talk about where that goes and what happens absolutely it's
▶ 1:42:09 great question in the event that the um all the free cash is not appropriated um what happens is it simply rolls into the next year um that the cash is not spent it rolls into next year and go towards next year's calculation free cash that's all that happens to it doesn't so um but that's a great question you know and typically um we try to have a robust program so that we can hit on a a lot of items that the community needs because it's really your only, if you really think about it, outside of this federal money right now, it's really your only source of additional revenue for the whole year to find certain things that surface. So, my average of pre-cash is, the last five years is $4 million.
▶ 1:43:03 And it makes the interest that that is probably gonna stay at that level, plus or minus as we go forward. But it's really the only source of additional revenue and we can't lose sight of that. And it serves so many purposes, not only for reserve funds, but there's so many needs in the community that are constantly changing. There's needs now that we're not gonna even know about for six months from now. But that's the kind of thing where you want that flexibility counselor. So, when they do surface, you can, you can make a positive approach to it and not feel lost. And what do we do now? Kind of thing. We don't want to ever be like that. Gotcha. So just just to clarify, and I think this is 1 thing that we all learn. So, so the books.
▶ 1:43:51 The fiscal year closed on June 30th that free cash essentially we don't spend it is unavailable. Absolutely, and you may not get and that's a great question. You may not get dollar for dollar either. As the mayor indicated, because now you're, you're entering a brand new year. And the receivables have changed as they always do and other factors have changed. So, you may not see the dollar for dollar, you know, that you've turned over. That's again, you have no control over that. Can you explain that a little bit? Sorry. So, so. if you don't spend it you might not get a dollar for dollar in the next year's free cash yeah it'll turn over to next year's free cash plus but there's also now a brand new host of
▶ 1:44:38 factors that are going to reduce your free cash the next year that say for example you did not fund your snow and ice deficit things of that nature um if you did if um all of a sudden you have a deficit in any one of your grant funds then that automatically kicks your free cash they would reduce your free cash by that amount of money so now you're subjecting that's you know so you may it doesn't necessarily mean you're going to see the dollar for dollar return you may you may get less depending on your deficits at that time it's just more of a technical question but um the fact of the matter is once it's once june 30th comes it's turned over and whatever it ends up being it ends up being the next year gotcha so so gr could knock down the free cash if we hadn't
▶ 1:45:26 done oh do you want yeah they are the they're the ones that actually um designate your free cash we don't do that here we provide them a balance sheet and we also have to provide them a full accounting of all our deficits all our grant funds that are in deficit all our receivables and they make the determination of free cash not the city of melrose gotcha and then can you kind of talk a little bit about how the snow and ice deficit works, it could help me understand this a little bit better. It's probably the most, one of the things that's probably worked me the most, at least personally, all this time because it's a difficult concept, but in many respects. So let's just sit down today, let's pretend we
▶ 1:46:08 have a $500,000 deficit in snow and ice that you didn't budget enough this year to cover it. Well, Well, if, in fact, you don't use this free cash to do that, to pay off that $500,000, get rid of it, then what happens July 1st, I have to put that on what's called the tax recap, that $500,000. So the first expense for the new year is the cost of the snow expense of the prior year that you didn't pay. So you're hurting the fiscal 2022 budget by $500,000. first item that happens you just reduce your available funds for regular budgets city and school by half a million dollars because you left that hole open it wasn't paid and they say guess what did you forget this bill you owe five hundred thousand dollars before you can
▶ 1:46:59 spend anything new for fiscal 22 you're going to pay this first so it takes away half a million dollars from your operating budget immediately to july 1st so we've been extremely fortunate I don't see that I've ever had to deal with that. I think I've always been able to, at least to my recollection, pay that off because to penalize next year's operations for the City of School, because the amount of snow that had occurred the prior year that you didn't budget or didn't have enough funds to pay for, it just seems so backwards today. And I think there's a lot of better ways to cover that, but so far the State has decided to do it that way and that's what we do. So, so it's because it just seems different than kind of any other expense we use. So it's not something that.
▶ 1:47:47 We could budget on the front end and say, to prevent it, you know, allocate X amount. In the fiscal year with the operating budget, and then we don't have to fill this whole every year. This is just something that's different. For whatever reason, is that is that right? Yeah, it's the only it's really the only qualify. This is the only real expense you have that. That's the only real item you really have that you can legally over expend. That's the only 1, they really allow you to spend more than you have. Um, there are, um. You know, you could, uh, we try to do here, we try to add, I'll say, I'll say 50,000 for the sake of a number every year to our snow and ice budget. If we can. um to try to minimize that deficit and get it down to a working number so you don't have a half a
▶ 1:48:42 million dollar hole or 750 000 hole so you try to chip at it every year and to minimize that and it's probably the best you can do outside of um and there's been some discussion about in the past about setting up a stabilization fund for snow and ice um and using that to fund your um deficit again another concept another idea at the end of the day um you do have to pay it though and it doesn't go away i could say real quickly hopefully hopefully we can put snow and ice to bed is the reason why it's a unique thing is because it is almost impossible to budget for right you don't know if you're going to have five cataclysmic storms over the space of a three or four months or if you're going to have,
▶ 1:49:37 Jack Eccles: from a municipal perspective, a terrific winter. That number in the budget probably more than any other number is a placeholder. It's a guess about what you think the winter is going to look like, and that's why it's treated uniquely and why there's some flexibility dealing with it that you don't really have with any other item in the budget. Thanks. Yeah, I guess that really helped me. I just have 1 kind of more question about the planning. In the May, I think the mayor kind of got at this. There's no real. Is there a way to come up with an upper lower bound? Because I took to your point earlier Patrick. When when it's May, we're working on the operating budget and then it certainly is a new counselor for me last year to be working on the operating budget and then have role.
▶ 1:50:32 Concurrent orders for free cash with various items on it. Is it kind of standard always in every municipality to have all of that pre-cash in May and June, kind of right at the end of the year and not earlier because of the snow and ice? I'll just say that if they don't do that, they probably should consider because again, just because they may feel they can handle the deficit the next year, right doesn't mean they should do that it's poor practice um you're really setting aside your future revenue for past expense in that sense and i don't think you do anything to try to catch up all the time it's just not a healthy way to budget it just isn't thank you both that answered a lot of my questions thank you mr chairman thank you vice chair uh i believe next we have council
▶ 1:51:35 Jen Grigoraitis: Grigoraitis then i have Councilor stewart am i missing anyone else and council mcmaster So, council Grigoraitis, thank you. Mr. chairman and thank you. Mr. mayor and Mr. for being here. I always appreciate the opportunity to hear from both of you. I very much like to think of the budgeting of spending and city priorities as a partnership between the administration and this council and the school committee. I know it's not always a partnership any of us want to be in, but I think that's how I see it. i i think we are better when we communicate and collaborate but i think having you here tonight to have some high priority discussions is really important i'm getting a bit of feedback thank you mr dell um i most i have two comments the first is to mayor broder to say i'm very excited about
▶ 1:52:25 Jen Grigoraitis: school roofs and windows as someone whose children attend a school that was originally built in 1926 i don't i think they're Member of this community that'll be very happy to hear about that investment um so i don't i don't want to undersell that um and i i guess i just the the purpose of this order was to get an update on free cash and thanks to the delay now we get to talk about eight million dollars that's coming to the city of melrose and i don't know the time when we've ever had that much federal aid coming our way and i guess i just want to say i don't want us to squander that opportunity to recognize the very real rainy day that we are living in right now and have been living in for the past year i i want to meet the needs of standards and poor but i also
▶ 1:53:09 Jen Grigoraitis: want to meet the needs of our residents and i think we have some really compelling immediate ones to kind of help us move toward covid recovery and i just want to make sure we're not losing sight of that whether it's using free cash to be business as usual but you know using the um the rescue plan money to really kind of address the needs of the past year because i think there are many and i think they are real and i hope that we can be a part of that conversation i hope the community is a part of that conversation i hope the school committee is a part of that conversation um because i i don't i don't think we can just be business as usual i think we are in a situation now and we need to address that situation for our community while also
▶ 1:53:52 Jen Grigoraitis: balancing what we think may be coming three years five years down the line so and um to the comments about the state, I think I share a different narrative about that. I think it is possible the state could pull back state aid. I also think it's possible that we could see more money. I know Senator Lewis and Rep. Garabedian have both seemed to be very engaged in the idea of hold harmless around student enrollment, around accelerating funding for the Student Opportunity Act. So I choose to remain optimistic that we really could be looking at a coalescing need and money which may never come again in any of our tenure in public service and i just really hope we can be collaborative and thoughtful and possibly a little bold in how we go about meeting
▶ 1:54:42 Paul Brodeur: the needs of our community so i just wanted to say that out loud i don't have a specific question but i appreciate having you both here to talk some of this through i appreciate the comment and i will say i think it's even i think it's even more complicated than we suggest because i do think I think that is a theoretical possibility. I think you're right. I think it is very hard as a former member, I know it is virtually impossible to go back on a commitment that you make to cities and towns in terms of funding. I think where the most likely thing is that it might, it might put a bit of a damper on the pressure that the House and Senate feel to go dramatically higher Then the governor, and they do have, they do have an out, um, to a certain degree. The more interesting thing I think is don't forget that the, that the state is getting a separate.
▶ 1:55:37 Paul Brodeur: Bucket of direct federal aid, and it depends to a certain degree on what they decide to do with that by that. I mean, if the state decides to. Um, stand up some kind of significant. Um, educational program of its own. we're obviously going to want to take advantage of that to the extent it's available to us as opposed to maybe communities of of higher need um there may you know they might decide to channel state stimulus dollars into things that will directly benefit our main street it might be direct direct aid to businesses but we have seen the state over the last year do some more What they consider more soft economic development aid around things like. Investing in Main Street, which is something.
▶ 1:56:28 Paul Brodeur: 1 of the things I'm excited to explore with this new money. That we might learn, you know, 3 months down the road that the state has announced a plan. Maybe we'll be leveraging that plan with our own dollars. You know, who that knows and, um. On the infrastructure front, um. I've just happened to be looking at the New York Times and this story was, I will tell you was posted. A lot under 2 hours ago. Biden team prepared 3 trillion dollars in new spending for the economy. So, yeah, I wasn't kidding when I said, like, I was like, I thought this idea of using some of this money significant amount of this money. To advance our net 0 goals, maybe there's another bucket coming. that would make it not the best use of our money to make that particular investment because those
▶ 1:57:22 Paul Brodeur: are the kind of long-term plays that what are we all about ultimately um we don't have a lot of of work in here you know as opposed to like a big city like a boston cambridge somerville so we have basically play and live right and so what and those what that falls into is is long-term quality of life across the spectrum so you know the the needs probably of our earliest learners maybe folks that aren't in the district formally we might want to do some stuff for certainly seniors particularly around transportation i think if we get really creative there are some tremendous opportunities to do some real game-changing things around transportation that could help our seniors you know like point to point within the city
▶ 1:58:15 It will help our metro kids be able to. Kind of be liberated from the early bus late bus. Problem that they currently they currently have. I mean, we can do those, those are big quality of life for everyone. I say it with both fingers crossed. I don't know if we can pull something like that off. But that is the kind of thing that we wouldn't be in a position to do. If we can kind of stack a couple of buckets of money the right way. That could be a huge difference for those people and. You know, transportation, traffic, mitigation. Air pollution, all those things. Feed into that program as an example of. As we try to get clever, strategic and proactive. Those are very exciting opportunities. I think they get the benefit the whole community.
▶ 1:59:07 Jen Grigoraitis: Jumping at the bit to do some of those. Thank you and I agree, I think, you know, parklets transit, those are things that we've heard a lot about this year and I certainly appreciate. It's no easy job for Mr. Delaware. So you're constantly trying to move. Your money around, so your least restricted bucket is available for the innovative projects that that is a challenge and you have led us. Faithfully through that, and I'm just excited for us to hopefully think a little. A little bit outside the box, so thank you both. Thank you. Mr. Chairman. Thank you. Thank you. Thank you. Councilor Garitas. Next we have Councilor Stewart. Thank you, Chair McNaught. Mr. Mayor, Mr. Del Rosario, thank you for your time tonight.
▶ 1:59:57 Robb Stewart: I have a couple of observations I would like to echo. Some of the comments that our previous councillors had made, I think it is important to keep in mind, in particular, the most 2 impacted groups, our children and our seniors, I hope. And we'll anticipate a lot of good things will come out of the administration that will directly help. And reflect the commitment that we have to those 2 parts of the demographic of the city, and I appreciate the comments from my fellow counselors regarding that. Regarding and it's my understanding that this sub that this can this money can feed supplemental operating costs. Right? I got that. Right. You can supplement that. Yeah, you if if I understand it correctly, you can supplement.
▶ 2:00:54 Robb Stewart: Operating on ongoing operating costs with the free cash. With free cash. Yeah, I think he needs those 1 time expenses. Right. And where I'm going with this is, and it was brought up, I believe, by Councilor Migliorelli regarding the roads, where she had an initial question on that. And that's one of the most visible and, I think, easiest ways to positively impact the city and positively affect the community and our constituents. When I walk around the streets, I take my dog for a walk on the weekend and I see a lot of the roads are a mess and it's something that I feel that has to be a reactive action by our community. I think it would speak volumes. We took a bit of a proactive approach to go around and make the city a little bit better. So just a little bit of feedback. I think that would help quite a bit.
▶ 2:01:58 Robb Stewart: I don't think it would cost hundreds of thousands of dollars to do that, but it could make a significant improvement in impact on our community. A quick question regarding the bond rating, and I understand we do have a strong bond rating. When are we going to take action? You know, if we have a strong bond rating, that tells me that we have significant leverage borrowing power. And with that, and given the current state of the economy and how interest rates are at a very attractive level, can you speak a little bit, and I'm not challenging you on this, I'm just interested in your thought process on when we are going to take action on being able to leverage that strong bond rate for some of the capital areas. You do a great job,
▶ 2:02:53 Mr. Del Russo of getting us into this great fiscal picture, you know, at a certain point there needs to be an apotheosis of our fiscal stature. And when do we take advantage of that? That's an excellent question. Let's talk about that. Let's talk about the roads, for example, and the road workers. Everyone is aware we get chapter 90 money from the Commonwealth. Let's just say it's about a half a million dollars North or South every year to address roads. We also are looking to do 500,000 dollars per year. Per year, the road work on the, on the bonding side. Of the city, we'll also have placeholders for almost 3Million dollars for the BB. Okay, and again, I think everyone recognizes that's. We had a whole situation with the pandemic and everything else that occurred. Just like with the library, we have a placeholder for the library. Should that be approved by the council at some point?
▶ 2:03:57 For 10Million dollars, we have provisions that we're putting the debt model itself And to your point, I'm sure that perhaps we could have already initiated, but we, we did lose. I'll say a year in some sense with the pandemic and the, um. Even the library products, they were, they were actually put off for a whole year. So, I think a push to another year and now, but we have spoken to a certifying bank. We do intend to do the 1 and a half million dollars in road work to continue that. we are going to be doing work on um we do water and soils as everyone is aware when you try to replace the rows and get them into shape after they uh they brought up but again we maintain that um five percent threshold and the rates being what they are um
▶ 2:04:54 are favorable but um we are uh again we have scheduled projects we're paying our debt and again we're looking to continue the same exact process we do every year we try to identify what projects memorial hall for example the um the ladder truck another another item that's bonded so we have taken advantage in that sense that we've gone out to the market it's um so we we're extremely cognizant of that fact um we also can't um unfortunately control some of these outside influences that directly impact when we actually go to borrow. ABB I believe was talked about at one point is actually going on live earlier than it may end up going maybe another year before that's done and there's three million dollars that was set aside in the program
▶ 2:05:48 for that that could have been borrowed today for example and begun to that process. So it's a combination of factors it's an excellent question um and again uh i'm holding firm that we do the right thing we control what we can control and part of what you can control in your own as a counselor myself here is to be sure that we take whatever steps we can to present a good solid picture to the aid to the outside world so that when this city does want to go to borrow whether it's a year from now or now they're going to get the best rating they can get and that's the most i think you can ask of anyone this maintains stability prudency and in the end you'll come out ahead in my opinion from a from a from a refi i know this has nothing to do with free cash but
▶ 2:06:37 Paul Brodeur: the um our treasurer catherine armada i think she addressed this in maybe not in another right um Always looking to refi debt on favorable terms, depending on market conditions, much like folks try to take advantage of that to refi a house when they see the rates change enough to make it worth the transactional cost. Again, to the Mayor's point, oftentimes those obligated require a 10-year window to have occurred, Councilor Stewart, before they allow the refi to take place. But yeah, as the Mayor indicated, we are on top of that and so is our certifying bank. If that opportunity is there, as we've done in the past a number of times, we jump on it and you can save easily half a million dollars at times without a blank.
▶ 2:07:28 Great. Thank you, Mr. Delarusso. Thank you, Mr. Mayor. That's all I have, Mr. Chair. Thank you. Thank you, Councilor Stewart. Next, we have Councilor McMaster. Thank you, Mr. Chairman. Good evening, Mr. Delarusso. With respect to the general stabilization, you mentioned that the idea is to have that at 5% of the operating budget. How is that target determined? Great question that target generally is from best practices. And we try to strive. to reach that target is if you look at our investment strategies now we incorporate the use of the free cash balance as well which i think probably brings us to about seven or eight percent but the ideally and we we simply want to maintain five percent at any time and the best way to do
▶ 2:08:28 that is to uh increase it um in a way that every year you're striving to get closer to that goal and it's going to take some time, but not striving for that goal I think is not to our advantage. Because again, you can control that I think and candidly in a way that more so than you can actually control food cash. And with respect to contract stabilization, you talked about the potential for having to account for retroactive pay. What contracts are currently unsettled in the city well i know we're negotiating now with the fire we're also going to be talking about um patrolmen i believe um and uh i'll say public works perhaps i think is up this year as well um i'm not sure if the library may be up also
▶ 2:09:28 Shawn M. MacMaster: this year but um i can confirm that but i don't think the library's up but the patrolman and the superior yeah it's a period all right so it's just It's just a matter of preparing yourself for at some point of addressing that obligation. And I appreciate you mentioning the $1 million from the waste management lease. That's important. We do have to be cognizant of that. You mentioned that in concert with suits and claims, and I just wanted to, if I got that correct, I just wanted to understand that better. Can you just talk about that relationship as you see it? And did I get that right? You mentioned it while you were talking about the, I believe it was $200,000 to put into a request to put $200,000 into the suites and claims stabilization fund.
▶ 2:10:26 Shawn M. MacMaster: Yes, you're absolutely correct. And I had spoken with the City Solicitor. He indicated that he felt that that would be the best um stabilization fund to put that money in um to hold that there and it's in place so that's exactly why i did it thank you i appreciate you mentioning that because that was my concern is whether or not that would be a lawful uh stabilization fund as you know once you put it in uh it's in there and if we're we're putting our money in there and we can't lawfully um expend it for that purpose i'd have some some concerns about that so if that is the city solicitor's legal determination. I'm glad to hear that. Is there any reason we're not putting more into that particular fund other than the $200,000?
▶ 2:11:19 If we do have to pay it back, that's only $200,000 of one million. Correct, but as the years go by, let's just say it's 100,000 a year. Let's say go over 10 years as the years go by, then it diminishes the liability. We also have the ability at that time should that occur when that does occur. That we can seek to use other resources. So if it happened. And a great question, if it happened mid year. Next year, let's say it happens next November, December. And you have to end up going to free cash to fund that the balance of what you owe. That would be a hit on free cash, but also it's a liability that has to be paid. So, it is, it's sort of a, you know, a. Judgmental expectation that you're not going to.
▶ 2:12:16 It would be poor practice not to have a provision of any kind. He believes, and I talked to him and he believes that this would be reasonable. And I, I agree with that, I think, given the fact that I think the relationship and what he believes. The use of the et cetera in the agreement. It's a reasonable expectation that that's going to, you know. Continue for that 10 years, but again, if not, then we go to other funds as we would any other purpose and. Pay the bill in some respects think of it as a. As a hedge, you know, we're early on in the, you know, that money just hit. So, essentially, while it's all just money at this point, because it's free cash taking some of that money. If you think of that as a separate chunk of it, taking a partial, a portion of that.
▶ 2:13:05 To cover that that possibility, which. It probably becomes more likely over time, but this is the year we have the millions. So. Paging that now is is. In our opinion, you know, the best financial practice, we don't expect. To leave in the next year or 2, we. And, you know, that would be on the out years. The determination or cost benefit, right? We think we can do something better with the property that makes it worth. Essentially buying out the rest of the contract, and we would have some resources to do it, but. You know, let's take from that initial tranche of money. Put that away for that purpose and give us that flexibility. Thank you my last question relates to the OSHA stabilization fund. Council and Jamal team mentioned the very real impacts of 19 on our residents.
▶ 2:14:07 Shawn M. MacMaster: Those are impacts that obviously are experienced by our city employees as well. It's been a very difficult year, especially for first responders and I'm wondering whether or not that fund would be an appropriate fund to pay for wellness initiatives, training, other programs, understanding that wellness can impact performance which can relate to on-the-job actions that may result in injury. uh to employees to Member of the public and that could raise liability issues so i'm wondering whether or not the osha fund and i know we recently established it and i looked over the language it's general and i'm thinking perhaps it's general for this particular purpose so there's some flexibility there and i'm wondering whether or not that's an appropriate fund to uh cover
▶ 2:14:56 Jeff McNaught: wellness initiatives yeah i mean i'd be happy to uh constantly happy to uh follow up on that it seem reasonable just based on what you might understand as you just indicated but i'd be happy to look into that piece sir and just so i understand what what would we what would we be looking into no i want to be sure that if we indicate that we can use it for those purposes that's all that there's no reason we wouldn't be able to do that that's all thank you thank you council mcmaster do we have any other counselors for the first time seeing no hands i just have a couple of questions myself um and and i say this joking half joking half serious but i imagine if i'm in the city of melrose right now and i went past channel 22 and listen to two minutes of this
▶ 2:15:56 Jeff McNaught: i'm probably changing the channel um because of all the acronyms and terms that we're using that people have no idea what the heck we're talking about and uh and a lot of us have had one year's experience um ironically to become pretty familiar with a lot of this stuff um but i just want to remind everybody at home that free cash is not free money falling from the sky that we have to use i think that's that's an important thing it's money generally that's not spent from the prior year's budget am i correct in saying that and you have to have it recertified each year after the end of the fiscal year which is after june 30th which usually becomes available in the fall somewhere between october and november and then we have between receipt of that money say we'll
▶ 2:16:47 Jeff McNaught: say november is when we got it this year to the next june 30th to use that money correct um and this year we have five million which isn't too far off from the average that we usually have in free cash usually it's probably more towards four million is that correct yeah The last 5 years, it's been $4M on average. Okay. So, um, I think. You know, when I try to think of this, because I'm still a novice at this when I try to think of this is we're only using. Just shy of a quarter 23% of this. And it looks like we're headed towards giving a lot of this back again, approximately 4Million, which is why we'll probably get 4Million again next year. If I'm a resident, right? So, if I'm a resident, keep my fingers crossed, don't spend it till you get it. Right. So, but if I'm a resident, if we can just help the people understand, why are we, why aren't we using more of that?
▶ 2:17:45 Jeff McNaught: The 5Million that we have now, and I know a lot of it's related to the bond rating that we've discussed at length. But if there's a way that we can explain it to me or to everyone, like we're a four-year-old, as we all know from a famous movie, I think that would be helpful as to why it looks like we're headed towards another June 30th deadline where we're not going to use this whole $5 million. I want to make sure I understand the question, Council. I believe we're going to allocate this before now on June 30th without hesitation. In fact, I think part of me, sorry, the whole 5Million. Yes, okay, I think just if you look at, you know, some of the items that you never have enough for road work streets sidewalks. I mean, candidly. Um, that's that's an open.
▶ 2:18:43 Jeff McNaught: That's an open wound sometimes right that you can't put enough in there. But, um, we expect to go to the city council with a full program, um, before the end of the fiscal year. Okay, um, and just another thing I was thinking of is the 8Million that we're getting in federal aid is not related even though a lot of expenditures could be pulled out of. Both buckets, there's a 5Million dollar bucket and an 8Million dollar bucket. Um. They're not to be confused, I guess is the easiest way to put it, even though I know, as you said, federal monies could be pulled back if they're not used appropriately. They could be pulled back for other reasons, too. Just simply the government saying we need more money for these coffers here and there. So, I just don't want to confuse that 8Million with the 5Million that seems a bit safer to spend at home.
▶ 2:19:40 Just is that a fair characterization? Yeah, exactly. The 5Million is the money that. Is the under the umbrella of the community, the city was originated here. It's the city's. Say bank account the federal money because of its restrictions and I know it's a direct payment from the federal government. um and is strictly federal money they they um are responsible for setting the rules and regulations and we have to comply and at any point they can change those pull those away so obviously we have less direct control over that easily and we have to be i'm sensitive to that and i'm hoping that um you know that will be a fluid operation it's going to take time as the mirror indicated it's complex but um again we can't control it we just have to buy by the rules and comply
▶ 2:20:39 but that's a great question council it's not to be written it's two buckets so it comes in two in two payments you know whenever those whatever those happen to come in not they're complicated even further imagine between bill assuming they're splitting up you know we have four million We think of some great yeah, we, we program that very effectively the whole 8Million. And then this infrastructure program hits and we learn. All right, if there's a green energy piece to what this 3 trillion dollar thing might be that transportation thing I was talking about, we might go, you know, what? We're not doing it with this. It might be worth waiting a year because the whole thing. With infrastructure money, as opposed to.
▶ 2:21:31 Jeff McNaught: American rescue plane money, it's just, I mean, it's. There's almost no good way to explain this to folks that aren't really. Hardcore into municipal finance and state federal local relations. Right. That's why I'm here to ask the questions I'm asking. Amen, brother. Make it as simple as we can. I kid. I kid. One last question I had was, I know that you said that we would probably, it sounded like we're probably going to get most or all free cash orders during the month of May. Is there a way to avoid that? Because as you know, the month of May, we're doing the budget four nights a week, and it can kind of confuse those meetings, delay meetings, cause certain groups to get bumped to another night or be waiting around for hours at a time.
▶ 2:22:27 I guess a simpler way of asking it is, do we have things that can come down between now and next month, so that we don't have to wait until May to get the bulk of it? Yeah, if I may, through the chair, absolutely. We have items that we can, I think I mentioned a few this evening, there was three or four, not large items, but significant items that we believe we're going to ask the council to fund. Um, again, and council, the, the chief impetus is that. Um, we, you know, we, we want to have enough time. To be sure we've covered all the bases and in particular, I'm going to talk about department transfers because that actually brings to light by the major. Surfaces also, we have to be sure that within individual departments that they're going to not fall short.
▶ 2:23:23 For whatever reason, at the end of the year, and that may necessitate a use of free cash. We don't want to do that. We always try to do the internally the transfers between departments to cover it. Particularly public works, because it's so dynamic. So we just want to be sure that we have enough to do that. Unfortunately, at times, like, with police and fire over time, you don't really know the exposure till. Later on in the year, it's not something we do intentionally. It's just that we find ourselves, um. At times in a predicament that we again. As much as we try to control it, if someone goes out an injury or second, we can't control that. And then there's an expense. We just didn't know about. That's all. But no other reason. I agree with you. I wish we do. If we can make it earlier, we will do that.
▶ 2:24:11 But I agree with you wholeheartedly just makes it more complicated in via 2. I agree with that 100%. I would say it depends a little bit on your comfort level if you're comfortable making. You know, certain decisions right now once we do it. We're committed to it so that, you know, if there is something in June that you think, oh, yeah, we, we may might not be able to do that. I mean, I think we can get to. A pretty big chunk of this pretty efficiently as long as. We're all comfortable making that leap. I don't think it's a huge leap, but. You can certainly give it a go. That's all I have. I did see another hand raised counselor. Yes, thank you. Chairman. Not your questions reminded me of another question or point of clarification. I wanted to make for the public was that.
▶ 2:25:03 Leila Migliorelli: Free cash orders will get approved by the council, but the federal stimulus or not stimulus. The federal money will not get approved by the 8Million will not get approved by the council. So, I just want that clarification for the public too is that the 5Million free cash city council approved the rest is not approved by the council. That's correct, right? No, that is absolutely correct and it's a terrific point. It's the same thing with the CARES Act money on the city side, to the extent it's used on the city side, or CARES Act money or ESSER money on the school side. Okay. Thank you, everyone. Are there any other councillors with questions? Councilor Eccles, Vice Chair Eccles. Thank you, Mr. Chairman. It seems like we're wrapping up. I just had one question that came in from a constituent to the council, and I might as well ask about it.
▶ 2:26:06 Jack Eccles: About funding or providing a funding source or any sort of allocation for the new affordable housing trust from the free cash that we have out there right now. We did have a consistent asset that it seems like right now we don't have a dedicated funding source for it with the exception of some people, some developers who might opt to pay into the trust. So, so, you know. I guess I'll ask a question, which is. Um, if can we fund affordable housing trust with free cash? Is it a good idea? And if not, is there other opportunities within the city to fund the affordable asset trust? Sorry, that's kind of tough if you want to answer it. I mean, I can start. There is virtually nothing that can't be funded with free cash.
▶ 2:27:02 So that while you will continue to hear me and Mr. De La Rosa say time and time again, We will strongly resist using free cash to add positions, to pay for recurring costs. That is not illegal. That is just good practice. There is almost nothing that you can't use free cash for subject, obviously, to the approval Of the council, thank you. Mr. Joe. Do you have anything or. Lawful appropriation and what I would do in that particular case, I would just circle back and confirm with counsel that there'd be no restrictions that we would be confronted with. Be happy to do that. Yeah, I know we did have that 1 constituent and. You know, I think it's a good idea. We definitely. Some way to fund it for cash is the way to do it until they wrote it. That was.
▶ 2:28:25 Possibility, I'd be happy to circle back on that and my friend. Thank you. Yeah. Do we have any questions from any other counselors? Seeing no hands raised what is the will of the committee. It was going to place on file 2nd, we have a motion to place on file by Council care pay seconded by Council Grigoraitis on discussion. Seeing none, Madam clerk, we please call the roll. Chairman not yes. Vice chair Eccles yes. Council of yes. Council of McMaster yes. Councilor Garipay? Yes. Councilor Grigoraitis? Yes. Councilor Migliorelli? Yes. Councilor Stewart? Yes. Councilor Thomas? Yes. I will note for the record Councilor Jamaleddine just fell off just about a minute ago. She is trying to get back in. And President Cinella? Yes. And yes.
▶ 2:29:39 Jeff McNaught: A motion to place on file passes. That concludes the business for the Appropriations Committee this evening. This time I'll entertain a motion to adjourn. Motion to adjourn. Second. Motion to adjourn made by Council Garipay, seconded by Vice Chair Eccles. Madam Clerk, would you please call the roll? Chair McNaught? Yes. Vice Chair Eccles? Yes. Councilor Tramontozzi? Yes. Councilor McMaster? Yes. Councilor Garipay? Yes. Councilor Grigoraitis? Yes. Councilor Migliorelli? Yes. Councilor Stewart? Yes. Councilor Thomas? Yes. President Cinella? Yes. Ten yes. Motion to adjourn passes. We are adjourned. Thank you, Mr. Mayor and Mrs. DellaRusso for joining us and helping shed some light on this this evening.
▶ 2:30:37 And thank you for taking the time much. Appreciate it. Thanks.