 This program is brought to you by Cable Franchise V's and generous donations from viewers like you. So I'd like to welcome everybody and call the Finance Committee meeting for March 6. I'm pursuant to Governor Baker's March 12, 2020 order suspending certain provisions of the open meeting law, general law chapter 30A section 18. This meeting of the Finance Committee is being conducted via remote participation. So in a moment, what I'm going to do is take the agenda down from the screen and ask each member of the Finance Committee who's present. And I think that everybody, but one is here now and all will be present in a few minutes. We know that one member is going to be a few minutes late. And then we will move to the agenda. And the agenda is essentially item number two, as you see on the screen, though, there is one other item. Because we asked Sean to say something about the revised financial projections for FY22. We do have provision for public comment, and I may call on public comment in a couple of different pieces. And I'll explain that as we go along, but public comment is a very important part of all of our council and council committee meetings. And we look forward to hearing from public about their questions and things on topic. The one other thing I wanted to mention to anybody who has been aware of what our agenda plan originally was for today. We did drop one major item and will postpone it probably until April. And that is to have the actuary report from the OPEB other post-employment and benefit section of our liability and discuss that liability at a later stage. So with that I'm going to stop sharing for a moment so that I can go through and we can do introductions. And I'm going to start by asking each of the members of the committee to acknowledge that they're present and they can hear and we can hear them. And I will try and make sure we can get around and introduce each of the other people who is present. And as I call on our guests, be helpful for you to each after I take the opportunity to explain what your role is in the process. So that people know what you're bringing to the table. So with that, let me go with the members of the finance committee and start with Vice Chair Kathy Shane. Yes, I can hear you. I'm here. Okay. And Lynn Grusmer. Present. Pat DeAngelis is also here. Pat is, oh, you're here now. You're back. So we're all here. Pat DeAngelis and. Yes, I can hear you. And Dorothy Pam. Yes, I can. And Bob Higner. I'm here. Bernie Gubiak. Yes. Jane Schaeffler. I'm here. I think that all members of the committee are present. We also have Sean Vangana, who's our finance director and I think that all of us know Sean. And other people who are present. David Isenthal. I'm David Isenthal. I'm the president with Unibank fiscal advisory services. I'm the municipal advisor to the town and have provided a lot, much of the analysis working closely with Sean on preparing projections of financial impacts of the, of this and other projects. Okay, thank you. I know we have a couple of trustees present. And one is Alex Lefebvre. I think Bob Hammes here also. Yes. I think the treasurer of the trustees. And so then the other people who are present. I know just Jim Alexander. Jim Alexanderき from the library. Jim Alexander... Jim Alexander if I go Alexander architects for the library. Doug Teller. Yes, Doug Teller with Salon associates. George Barnes I think is the other person who wanted to introduce, I'm a project manager with Collier's project leaders were OPMs for the Jones library. I would like to thank every. David and Jim and Doug and George for present and Ken Farber is here. So, Kent. Thank you very much. I'm the co chair of the development committee of the friends of the Jones library which is undertaking to raise the gifts for the project. And I realize I missed a long. Hi, a long journey from Cuneville architects. We did the accessibility study at the Jones library. So, with that, thank you. And we also have Ken guy yet from colors collars as well. Okay. Should be on here. Right. Yes, I'm here. Okay, so. What I want to do. Next is go back to screen sharing for just a moment to show one additional item to give you a sense of what it is that we're doing now see if I make sure I have the right item on the screen. I'm afraid that I don't have to go back. Stop share because what I want to do is explain what the process that we're going to be going through today, so that we can understand how we're proceeding through. This is the item that I needed to show. So, at the last finance committee meeting. We identified areas that we thought were important categories for questions for consideration. This meeting in the next meeting that we then scheduled to hold that were financial, which were the first 10 items on the list that you see at the top of the screen. And then we also recognize that there were additional questions, which we viewed as non financial, but realize that we've been receiving a lot of questions in those areas. What, then, as we as Lynn and I went through the questions. We identified two other areas where there were questions that came in that have financial consideration. As we tried to sort the questions we couldn't get them into categories one through 10 and we had to create two additional categories so I wanted to acknowledge that and explain it to the finance committee members who are not involved in the discussion and that you understand that we felt it necessary to put in the two that are listed in yellow in which is the just general project oversight and construction management and ownership of the building. I want to thank Lynn for all of her work in the major document which you have seen, which is the questions and answers that have been provided and I think all of the people who've helped to provide answers many from are present today. So we're going to generally deal with the issues that were marked exclusively really with the ones that are marked with the X under the March 16 date for today, but I'm not going to be able to take them in order, because of the need for one person to have his only limited amount of time. We are going to actually start with number for the cash flow and financing section, and then come back to project oversight and management, the other those issues after that so that noted, I think that when I'm going to do is turn the screen over to Lynn and she's going to help us through the make sure that we're looking at the right sections of questions as we can each one and ask for discussion and questions that come up about them and but we will be doing that one section that I think it starts on page nine Lynn first. So, so any do you want me to introduce this section and then go through it. In just a second, we'll get the participant list up so I can notice as people are so we were. You want to go to cash flow and financing. Okay. Okay. Okay. Thank you. So yeah so this section is all about the debt schedules and the cash flow so I'll give an overview. And then I'm going to turn it over to David Eisenthal or our advisor financial advisor who's going to walk through the schedules and a little bit more detail and sort of explain how they work and some of the assumptions. So, there are four debt schedules that are attached. There are two for the addition renovation options and they're two for the repair options. And so all of those schedules are based on cash flow projections that were either put together by Collier's or put together by Cune-Riddle. And the timing associated with that is also based on the work of those architects or OPMs. So there's a there's a question here about the timing and then we just want to be clear that the all the financing pieces built upon the assumptions that the architects or the OPM used for those different options. When we go through the schedules, you'll see the interest rates and David can highlight that. And then the one last piece before we go there is there was a question on what ones include CPA money and historic tax credit money and which ones don't. So the expansion and renovation options factor in the CPA and historic tax credits as it's been sort of budgeted throughout this entire project. So repair options do not. And that's not to say that we can't in the future if something changes but up until this point we haven't heard or seeing that the details of those projects where those would be an eligible source of funds. So those have not been included in the repair projects. And then I think with that we can go to the first table and I'll, I'll let David start to speak, speak to this. Through the chair. There are the two renovation and addition options that we looked at option one would be what I would consider to be more conventional approach to the financing as you may know the NBLC the mass board of library commissioners is going to be starting to pay grants or is expected to be starting to pay grants. Relatively soon and so the need for the town to incur to borrowings to borrow to fund its share will not really need to happen until we're estimating March of 2023 based on the cash flow that colliers provided and the, this sheet that you are looking at shows debt service projected debt service, assuming an issuance in March of 2023. And I also, you can see outstanding debt service that's the projected outstanding general debt service, just as a comparison of town. You want to go down to option to be. This assumes much sooner issuance, not justified by the cash flow of the project, as I said before the NBLC is expected to start making its grant payments but this would be the point at which the town could withdraw and not based on the cash flow could reasonably expect to avoid having to calculate arbitrage rebate and thus could proceed with a permanent financing in an environment that may, and I'll say may be more favorable than we're talking about the end of this calendar year rather than the beginning of calendar year 23. I assumed an overall effective rate on the first option of approximately 2.80% projected for this December of 21 financing an effective rate of approximately 2.04%. So maybe I should stop and ask if there are any questions at this point. I think David one thing you might want to speak to real quick is the how the premium is applied in this situation because that's one of the writer questions you could probably. You know, I, the premium, you know, because we're talking about financings that are going to happen in the next two years I tried to produce somewhat more realistic scenarios, including the use of bond premium. And, you know, these rates that we see are actually net effectively net rates, these are real effective costs. And the reason, for example, that you see on the sheet in front of you that the borrowing amount of $14.9 million, but financing 15.7 is that about $841,000 in premium is applied to the project. And I think for the non financial folks, you can kind of think of it as being like points on a mortgage only in reverse. The, you know, you, if you have a mortgage, you know, you might pay points to the bank that effectively raises the cost of borrowing. In this case, bondholders will are willing to pay up pay the issuer funds in order to get a higher coupon rate on the bonds and that's trying to in modeling. And so for the next couple of years I wanted to try to capture that bit of realism. I will say that for projections that are out beyond two years I didn't really factor in premium didn't feel like we just don't know what market conditions would be really, I mean, we have a better sense up to two years but really beyond two years it's really much harder to make those types of projections. So, I think that's that's the basis it's, and so these these costs and you're seeing the 2.80 and the 2.04 are sort of net of the premium these are real costs of cap projected costs of capital under each circumstance. And the, I'll say that the rates are based on what we think market conditions may be what the structure of repayment looks like. And just and what we just what we think the the market is going to look like at these different times also credit. These are the you know we're assuming that the town continues to have a strong bond rating that that's factored into this as well. So, maybe go down to the next set of slides. Yeah, it makes sense to go through the, the next two schedules and then open it up for questions. Repair options one and two. I simply rejected out what the, you know, based on the cash flows that King Riddle provided for each of these options, a financing scheme. There was a projection based on those cash flows and that's really, and the interest rates really were based on those, those, the timing of those and the structure of those issues. And this is being short term financings temporary financings that get permanently financed by general obligation bond issues and this is really driven, as I say by, by cash flow and to a certain extent by the by fiscal, you know, the idea of trying to structure the debt appropriately, given the fiscal conditions of the town. So, at this point, I guess, Sean, you should I carry should I cover anything else at this point. Why don't we go to questions if that's okay with you Andy and Lynn, and then I think most people have seen these charts before so we can focus on the questions. Okay, so now Kathy. Yeah, thank you, thank you very much on my question, I think is pretty straightforward. If I look at the one you. If I look at if I look at the option you've got on the screen option to on repair, which Coon Riddle, you're correct of course you're correct that they had done in two phases the second phase was external repairs to the building. If the town were willing to do them all in just one phase because one is happening outside one happening inside. We potentially save some money on the escalation. Am I right in assuming that you could apply. Just think of that amount is now part of the first line the 12.1 becomes that plus that and you could get that interest rate question number one. And then when I look up at your repair, your renovate and expansion option where you've got an even more favorable interest rate by financing it at the end of 2021. That's assuming we're ready to go with that same financing rate of the 2.04 apply if, if the town said, you know, we're ready to go with with. So it's not the repair option but this is the repair option it's way back up with the renovation and expansion you have finance it right away at the end of this year end of 2021 and you get us down to a 2.04%. You were financing repair option to which doesn't have to be two phases it was specced out to be two phases. Am I right in assuming that we could get that same. There's nothing magic about the interest rates it's just the timing of when we're financing it. It's the timing it's also the structure. It's a big difference I mean it doesn't sound like there's going to be a radically big difference in the borrowing amounts of the costs of issuance should be the weight of the cost of issuance on the cost of financing should be roughly similar so I think if you are assuming. In each case we assumed a 20 year repayment on a level debt service or a mortgage like basis. I think that these rates would be representative. Given the given those under those assumptions. I think I would want to if you wanted to see other. Other options I'd probably want to crunch some more numbers. In order to show what those look like but I think in general timing structure meaning and what I'm talking about is the repayment over 20 years level debt service. You should end roughly this a similar amount of borrowing should produce a similar result in terms of economic cost. Okay, I guess. Not anything that if you're financing something that's a major repair where it's it's upgrading accessibility is. It's not that the bond market will treat that money differently than. I'm sorry. Yeah, so it's pretty much the timing I and when you said if we want to see others that was left in the memo that if the finance committee asked for you could do something else so I don't know whether you know it'll be the committee deciding whether we want to but you know I just looked at the repair option to which was specced out as to being to pay two phases 14.4 but it was because the second phase had inflation and if you did it all at once, you know close the building and just did it all at once. You could, instead of doing two debt issuance that you could do one because it would be at the same in the same time period. Okay, that point. The, you know, the security of the borrowing is the taxes that are raised by the towns. I don't think that the town would the bond market would not distinguish between a new construction project and a rapid renovation. That doesn't make a difference here. Okay, thank you very much. Yeah, I have two questions. The first question I think is in the renovation in addition option to be. I think the total is wrong. I think it's doubled or approximately double you got like a $42 million total there which doesn't seem right. That's that's total, if I might that's total debt service that includes principal interest. Yeah. The grand total on that one is is doubled up. Yeah, it's added it twice. You're right. We'll have to. We'll crop that out for you Bob. No, no, and I just wanted to reassure myself on that. I guess the other question I have is, you've assumed a 20 year bond or a 20 year borrowing period. There are other options like 25 or 30. Obviously you pay, maybe a higher interest rate and you, you know, carry more interest over that. But if cash flow on a given year was a problem that would be a way to stretch the, the debt out. I could speak to that a little bit. So David's provided when we started working on all these projects David is really good at giving us multiple versions of it so you can do different terms you can do level debt verse level principle. For the option that we presented a finance committee or the plan that we presented a finance committee we decided to go with 20 years. Because when I looked at it, you know, the trade off and the annual payment for 20 years versus a 30 year. It was a, you know, relatively small savings on a per year basis, but you paid a lot more for that 30, 30 years. So, you know, I think for all these projects, if we can get them down to 20 years, you know, because of favorable interest rates and try to stay within our, you know, what we're budgeting. That would be my preference to keep our debt running, you know, one of the things our credit rating agencies look at and David can speak to this a little bit is, you know, how much of our debt obligation is left to be paid. And so the longer you stretch out your debt obligations or the smaller portion of your debt overall that you've paid off, but you're right we could look at a 30 year option if we were trying to get things down a little bit. That's an option we could explore more. I think we have it. I think that is one that we've already looked at. So we have it available. Yeah, I think I think, you know, if 20 years make sense, then I'm fine with that. You know, I just wanted to make sure that we had looked at that. Yeah. I don't think I can raise my hand. Okay, go ahead. Sean and David, can I also assume that at any point in time we can refinance the debt. A standard approach to refinancing is that the bonds generally become refinanceable after the seventh anniversary. So, if you issue in December of 21, probably somewhere around 2028 or 2029, the bonds would be redeemable and that's a pretty standard feature of the municipal bond market. I guess I have a question for Kathy just to understand because I was trying to see what was behind what she was asking. So Kathy, were you suggesting a essentially a third repair option. Yeah. Let me just, am I unmuted still. Yes, I can hear you. If you look at what what has been priced here, you go out for a long term, you've got to, he's got to scroll down to the repair option to the way it was without with the way it was set up as you first went out for $12 million. And then you waited two years later to go out for another 2.2 million. Oops, this is the one right here. Um, so you didn't scroll it down just a little up so you can see the two. So you're not going out for that second amount Andy until 2024. And as a result of that you're paying a higher interest rates. So you can't quite see it on this screen but I've got it up so it's 3% if we're not financing it till 2024. So we're going to just do it all in one go out 22 for the 14 million and some odd change we save a little bit on inflation. Then you can get that favorable interest rate by getting all the money in the one issuance. And that's just what I was looking at the difference because it's a 0.5% higher by waiting for two more years. And I looked at what what Coon Riddle had in phase two for this option. It's called external so it's, it's going on on the outside of the building and the rest is, you know, the elevator and major systems inside so it didn't seem to me any reason other than spreading town's cost for not doing it all at one the way renovation and repair isn't saying do part of it now and then to part of it later. So that was just my question of putting that $2 million back up into the first line of government bonds so it would be more like $14 million. That's about 0.5% it lowers, you know, as you can, you can imagine it's going to lower the total cost of it by I did a rough back of the envelope thing but it will lower the total cost to repaying this debt purely because we're not incurring that 3% interest rate. I'm confused because I'm trying to understand Kathy what the difference is between that and the option where they did the only left the building one time. I mean they they provide repair options. Yes, but this is that option option to is the option where we only closed the building once, but the second phase that $2 million point to $2.2 million that you see on this line. The second phase, they had, they had suggested that we do that two years later and it's the external part of the building. Yeah, okay. Okay, so the building is closed during that $12 million phase, and then you come back so I thought, because the interest rate is so much higher two years later. They were asked to spread it out but here, if we wanted to do this we might not want to do it twice instead of just raise all the money and do everything in the 12 months the building is closed. Thank you. Yeah, we can. I'll come back in a moment, we can ask the alarm whether that's a feasible from the work that she did. But I'm assuming you're talking about doing all the work at once and not not done in two chunks, because of. That's correct. Since borrowing, you're not proposing that we borrow for later construction. That's exactly right Andy so instead of, you know, finance the whole thing and do as much of what was in phase two on this you know I have theirs in phase two was a lot of external work on the building they did, they closed the building to do all the internal work, and then came back and did some external furnishing so it seemed physically feasible to do this, and that it's an advantage to finance it this way purely because of the interest rates, otherwise it would spread out the costs better for the town. Eileen Eileen is here and I wonder if we want to just quickly ask who that is even feasible. It is feasible to do all the work at once and it was spread out just for that reason to spread out the cost, so that you wouldn't have to put as much money up front. If you could do the entire project all at once it might be a little bit longer than than 12 months. So there's a little, there might be a little additional cost in terms of rental for the library. But yeah, it's possible to do all the work at once. Okay. And, and I guess on the flip side there might be some savings because the contractor is only mobilizing once. Thank you. So, sorry, so I was going to say, I think that addressed pretty much all the questions or a couple, you know, even the ones that were below the charts there was, you know, there were some on the bands but I think they, I don't know if David touched on it but if you see the word ban and any of these schedules it's a bond anticipation note, which means it's a temporary borrowing, and it would be converted to a bond or, or discharged later on. And then there was a question about, you know why some interest rates are higher and it has to do with the timing and that the farther away the borrowing occurs, the more conservative our interest rates, our interest rate estimates are. I think that addresses just about everything so the question I would have is, if the committee does want us to go back, and I can work with David to run that option, if that's what the committee wants us to do. I think you should run that option. And also, just for the sake of discussion, run one, one of each of the options that go out to 30 years to just give some people some sense of the difference between 20 and 30. Is there anybody on the committee who disagrees with Lou's recommendation for those two additional option requests and then. Alex, did you have something your hand was up momentarily. I was just going to say that I don't know, I don't know, I remember off the top of my head, but the KRA proposal and a line can speak to this further is more of a schematic design. So, we're not going to have shovel in the ground 2021, which may not affect your financing but we have a similar six month to year lead time that we have on this proposal on the renovation expansion in terms of when you'd be able to start the project so I just wanted to make sure that was clear for when you are doing your options. And I would I would just chime in that it's not even schematic design it's really conceptual there. There are actually no drawings at all it's all, you know, ideas about the scope of work based on visual observations so the expansion project is much more detailed in terms of the amount of information about the potential project. So yes, it will take time for us to put the documents together before you would be shovel ready. And I ask a question of Eileen while we're on this topic. Sure. Okay, so I mean you, you keep referring to this as an accessibility study. And I keep thinking, thinking that as a major systems repair study, and because of the cost it trips accessibility. So, the Jones library had a systems evaluation done by Western builders, and they looked at all the systems within the building. What they were not able to do was look at what the accessibility requirements would be because that's really what an architect does. And so, based on the value of the repairs required, it triggers by code accessibility upgrades. So our study carry was only focused on what the accessibility upgrades would be. Well, that's helpful. I just want to make sure that people understand that the systems are the issue at here. And it is because those systems that are near failure that it has triggered accessibility because of the cost of replacing those systems. That's all I want. It's a general understanding I want people to make sure they have. Okay. This is a result and nothing happens to the building, other than repairing the systems which were identified by Western builders and the necessary accessibility that flows from that. Nothing else is done to the building. Right. Okay. So are there any other questions or comments on this section. Because I know that David has to leave and that's why we were doing it in this order. And the other thing I'm going to do is I said I was going to do two periods of for public comment. This is actually a very limited one but if there's any members of the public who want to ask any questions. At this point or make any comments regarding what we have discussed in the financing options. All other issues will be public comment after we have for the presentation but I, if it requires David's presence I wanted to get a hill to Greenbaum I see your hand is up in the stop. I think you answered it but I wasn't quite sure the column that says grand total it ends with 42 million of that is an error so that the total financing is only 19.8 million is that correct. The cost of the project is like what we will get that including principle and interest and but we will provide a corrected. So it's 19.8 is correct. So it's 19 point. Whatever the number was I thought it's the it's the it's the total and the total. Yeah, exactly. Yep, no sorry about that. We fixed that we caught that for the presentation that was made during the, the library presentation. Yeah, I thought that somebody had asked that question before. That's what I wanted to ask because the numbers that had been touted around last fall, we're more like the 42 million number so yeah sorry it is not 42 million for the town share just to be clear. Thank you. Tony Cunningham was the other member of the public who raised hands and Tony do you have anything that you wanted to ask on the subject, David is still available for responding. Yeah, thank you. That's what Kathy Shane has asked for there that cash flow that looks at doing the repair in one phase. Is it possible David to apply the same premium assumption that you apply to the expansion to that 14 million borrowing. So, if it if it's, if that repair option is the 14.4 is it possible to have that premium on that also to reduce the amount that would be repaid. Does that make sense. I could, you know, I could make a projection including a premium but I don't think it would have a material effect on the impact on the fiscal impact. I would expect that we would be looking at still, you know, given that timing I would expect that probably we would be looking at a an effective cost somewhere in the range of the two and a half percent. And I don't think I don't think the result would be very different I think that the reason for including the premium previously was just to lend a little bit more realism but it's really just what we're really after here is what is the cost of the financing to the town. And I think that I think that probably we would say for a mid June 2022 financing that you would be looking at, I think we've, I would come up with, even if there was a premium, the effective cost would still come in near that point and probably would not be a materially different projection. Yeah. Elon has her hand up to add in a few. I'm sorry I just wanted to let people know that I have another meeting at three o'clock so I also am limited on time. Okay, that's helpful to know and I appreciate you being here and as we give into the next topics we may again change the order a little bit so that we can deal with the, actually probably was next on up anyway was the total cost of all three options inflation overruns, and then get back into project oversight and construction management next with that. Lynn do you agree that that would make sense. Yeah, and since colliers is involved in both of those, these two really go together. Okay. So, I think that if there are no other questions from anybody who's present, particularly from the committee, regarding the financing options that we've discussed already. I want to thank David. Thank you for being here. We really appreciate all your participation in your help. Sean did you have anything else that you want to say on the subject. No, we'll be able to work with David and we'll get the committee that information in advance of your next meeting so you can factor that into your discussion and thank you David for helping us out today. Thank you. Take care now. Okay. So, Lynn, I guess that you need to help us cue back to the questions were any answers that we have so far and I think that what we decided just moment ago was to go to what's now section three total cost of all three options. And inflation, and so the week if their questions come up about the repair cost estimates we can handle those now with all of the participants present. So, when you get us back to those questions will. When you get us there I assume you muted so I'm not hearing what you're saying but. There we go thank you. But I, let me just mention I also believe collars wanted to share some slides at some point here too. Sean you made you did the major development of this I believe. So, I know this was mostly Sharon but I can just do a quick introduction. I don't know if Alex or anybody wants to lead through the rest of it but this was mostly compiled by Sharon. Okay. She's not able to be with us today as you know Alex do you do you want to lead through this or do you want me to try to. I mean, this is mostly just cut and paste from the other document with collars to fill in the gaps. So, I don't know that there's a whole lot here to go through. No, I know, I know my questions are more on the new table we have on total costs and then a couple of the answers on the repair option. That's Kathy speaking. So, so Lynn maybe we should just go to questions while the opium and the architects are here. And then we can go through if anything's not addressed in the questions. That sounds fun. Do you want me to show the questions or. And I was going to see if anybody Kathy said she had some questions she wanted to ask them yeah. Yeah. Yes, sorry I just blurted in I was just thinking that we didn't have to go over things if we didn't have questions. Lynn, a Lynn had said that she has to leave so I don't know whether. I'm going to ask my questions on the big table you just showed. I'm, I, as you know the new table we have have some lines darkened out. And I have a few questions but just starting with an overarching question I'm trying to understand what contingency is built into the 336.3 million. I did tried to compute the blackened outline that's down at the bottom of that chart. I took the total, and then I subtracted this the components of it to say what slept over, and I got a dollar amount and then divided it and it looked like it was just 6%. So, is there contingency on construction that is built into the construction number and is not on that bottom line. I'm just trying to get a sense of what that dollar amount is and what the percentage amount is. That's my first question. So I can I can answer that through the chair. So typically for a great cost estimate at this phase of the project. There's typically what's called design and pricing contingency carried in those numbers, which is basically the estimator saying listen we haven't had enough time to fully design this building so we know there's going to be approximately this amount of dollar value that still needs to be designed into this project. That's carried within the estimate which is carried in the construction numbers on the top part of this sheet. Okay. So just that's in the fantasy reports so that's where I found a line item for that. Yes, that should be a three, there's a $3 million design contingency in that number. And does that contingency, if you, I just need to understand what the contingency covers so if, if you bid out the construction at the estimated cost, and then they open up the walls of all old Jones and or open up the floors and all the other things they didn't anticipate. Does that incur a cost overrun and is that what the other contingency is, or does that 10% cover a construction construction, am I, I'm asking it in a way that's clear. The design contingency I think that he's carrying up in the design should almost go to zero, you know at the time the drawings are complete and we go to bid and the number comes in correctly then the design is over the construction contingency I think can you're carrying that in your numbers right. So at the bottom of this form, there's it's redacted because we purposely don't like to put that out to the public because then contractors can see how much additional funds are available for changes. So we typically put that at the bottom and that's construction contingency typically we carry between three and 5% for both construction contingency and owners project contingency owners project contingency are for soft costs for betterments and things of that nature. So the construction contingency would be the number that we would, we would attach any sort of changes to the work in the construction phase of the project. And is that contingency also for, or, you know, I went back and looked at the original grant proposal but it had contingency on architectural fees on furniture. So is this an overarching contingency on everything. Yeah, so there's there's there's two key contingencies here that we know construction and owners project. The construction is your hard costs owners project or your soft costs or all the soft costs which would be your designer fees, opm fees, any changes to testing anything of that nature. FF&E that would all be borne by the owners project contingency not the construction contingency. So that is all in that. I mean, as I said I can compute what the number is by subtracting everything off the 36 but it looks like it's around 6%. So that is more or less what you put into this. Okay, correct. And Kathy, I would be more than happy to actually bring up the Excel document and walk you through it one on one. I'll just go back out to the public for various reasons. Okay, and then my other I'll just go to my other major question. I saw you done inflation, your escalation up to 2022 on construction it took me I had to go back and forth a couple times with the But it didn't look like you'd put any escalation on fees or on furnishing furnishing at all and in the original grant there wasn't escalation factor on that is there a reason. And some of those numbers are quite a bit lower the furnishing number dropped from the original so it's a lower number but without escalation so I'm curious as to why. I'll answer that as well. A couple of things to note so as you look at this form before you, this is actually an Excel document that's been created over years of scar tissue. So the numbers that are noted in black are typically uneditable formulaic numbers. All right, we can overwrite them but for the for the most part those are all formulas so as we start to escalate the construction number. So put necessarily an escalation on fees and opm fees and architects fees because those are all a product of a percentage of the construction so as the construction escalates. The opm fees and the architects fees and everything else that's formulaic automatically escalates as well. We've got a separate line item for escalation for soft costs noted in here. The MVLC has us break that out, but quite honestly the MVLCs form is secondary to our budget form our budget form is created first. And then we have to try to fit our numbers into the MVLC form to make it work. However, it doesn't do anything to your ineligible versus eligible costs those remain the same inconsistent throughout both forms. It doesn't really impact it doesn't impact your grant at all. It's strictly how we place our numbers compared to how the MVLC looks at the numbers as you can see from our form. It is much more thorough, a lot more line items. Again, because of all the things we've seen in the past we want to make sure we're capturing all the costs. The MVLC form is nowhere near that that that thorough. Last question I want to turn it over to other people is does that I got a copy of the fantasy estimates that were for the redesigned project 2020. But I think that was before a lot of the energy work that was done and I can see in this we've got two line items that are similar to are the same as what you showed during the council presentation for the timber, but does the basic production have systems kinds of things like the the heating systems insulation and glazing is all of that already in because some of those were going on at the same time. Hennessy was doing them or is that already in their numbers. So the line items that were presented as far as the ECM the approved ECMs that are that we're talking about, those are carried up above in a line item called ECM. The ECMs and the ad alternate the ad alternate is the timber framing, both of those combined equates to about $656,000 worth of additional work which is the difference between the 36.27 million and the 35.623 million. I will. And that those are my major questions. Most of the others related to me trying to recompute some of these costs and crosswalk them to the other document that we had. I would like to decide whether you want to try and do that in the public meeting or you want to take Ken's offer. I would take his offer, you know, I tried to, I tried to, you know, as an example, Ken, I tried to take the escalated costs per square footage times growth square footage to get to a sum and it wasn't exactly the same sum you had but it looked like you had something a little bit different, but it did match the fantasy number so it's like looking at multiple documents. So I think my biggest question was about where the contingency fees are, and how much, and it goes with how much is the town protected. Since we're going to pay the remainder, unless we drain the endowment fund from from the cost not going higher than 36.3. Yeah. So that's the main one I want to just know what's built in for. I think of it as wiggle room. You know, yeah. Yes, yep. Okay, is there anybody else who has questions at this point on topic of costs of the three projects the estimates for the three projects. Eileen was raising her hand. I'm sorry. I think she was just leaving. That's right. Thank you. I'm sorry. Can I just say that. I know that colliers has a couple of slides they wanted to share with people. Would you like to go ahead and do that because I think it deals with the whole issue cost containment and project management. I can definitely share the slides that I was going to provide there. They're strictly to answer Kathy's questions and which I think I've done already but I'll go through some of the steps that we had to take in order to get to where we are today with the numbers and I think that might be helpful to the rest of the rest of the individuals in the call. I think that's very useful for the general public. And remember we're recording and broadcasting. So at the beginning of the project which is again way back in 2015 as when we came on board we developed what we call a high low probable budget. That's based on historical knowledge, the type of building that the the trustees wanted to build, as well as the size of the building that they were looking to build. So that high low probable was then informed in 2016 by the first fantasy estimate. The first estimate was incorporated into our budget analysis that you see here before you in in the end of October 2016. And again, the blue numbers that you see here are the numbers that are that we edit within the document so the dollars per square foot in that fantasy contract estimate are noted here, the square footage are again are noted here and then all the lines subsequent lines down the line are then either either formula, or again the related construction is input through through fantasies cost estimate, and so on and so forth as we go down the line. This first 2016 budget analysis, which was then incorporated into the grant was predicated on understanding that we're looking at escalation to 2019 which is again something that the MVLC requires. And so that's why these numbers were included in here for the what they call inflation in the form but it's it's escalation and that's been tracking at about 4% year over year escalation which is what this this form shows. Once this form was completed. We then work on the MVLC grant analysis form. That shows up here. Let me take a second to just load up. So there is a form that the MVLC requires us to to fill out which basically shows the eligible versus ineligible costs which would be the 35 623 versus the 32 6265. And those costs are then added into this form to produce what the MVLCs. What the MVLC shares going to be let me just I just got to pull this real quick. Sorry about that. Technology problems. Well you're doing that I want to clarify that MVLC does not pay for sustainability is that correct. That's correct there's several things that the MVLC will not pay for however, at the end of the project, and I'll show you this in this next form. At the end of the project, they do offer some incentives for the whatever certification you get whatever the sustainability goals might have been, and they will. They will give you a dollar value based on that and as soon as I pull this thing up I will show you exactly what I mean. I'm going to pipe in just on that note, because the MVLC is tied only to lead certification. Our building is beyond lead certification and the sustainability committee discussed if the expense of becoming lead certified was a worthwhile expense and ultimately the decision was, we know we're doing better and paying to have somebody come in and say that we're meeting lead certification didn't make sense so that was just sort of chasing money from the MVLC that the sustainability committee ultimately didn't think was worth chasing because it's not offsetting the cost of sustainability, just getting a certification. The certification can be upwards of $100,000 easily for a major project. That's a choice that increasingly companies are making. That's correct. So they offer an incentive but it's only based on lead certification is what you're saying. Yeah, and I actually recently followed up with the MVLC to see if, given that lead was really cool a couple of years ago but but buildings are really moving beyond that, and was told they're not there yet they're still tied to just lead certification so unfortunately. That's still where they are relative to reimbursing for any certification. Thank you. Okay, I can, it's coming up right now. And, and then Dorothy has her hand up. Dorothy has her hand up, but if can found his form. Then Dorothy I'll come back to you in just a moment. Okay, so I'm assuming everybody can hopefully see this. Yes. So this is the form that basically outlines what the grant at the grant award will be for a project over $15 million is something that we work with the MVLC to finalize this form. And as you can see here, it shows the 35 623 which is our total project cost that 32265 which is the estimated eligible project costs. The grant award is based on a sliding scale as you can see here so it starts at 3 million at 60% then it goes between 3 million and 6 million at 45 and you can see those calculations here on the right to give you 11.9 million. And then there is a need factor of 14.53% the maximum the MVLC will allow is 15%. This is a socio economics to us to make this the formula work for the overall grant. And that was 14.53 which gets us the 13.663 million for the potential grant award. So that's how that that total project budget ends up becoming the estimated eligible award by the MVLC. That was the second step, then the third step would be to to get us to go into the MVLC spreadsheet and break our costs into the typical boxes that the MVLC wants to see them in again we have a long list. That ends up getting broken down to a very, very short truncated list of the MVLC requires. So that ends up becoming part of that grant application as well that was submitted in January of 2017. These numbers unfortunately are a point in time that they are not able to be adjusted now. So this is the budget that we have to work towards and work against. And by the only thing that we were able to adjust after the latest fantasy cost estimate. We had to do that within the current budget and not adjust the budget make the budget 38 million or 39 million or whatever that needed to be with the new construction cost. So we have to have to do it within the overall budget, which is, which is why you see the number only changing the 656,000 for the ECM and the ad alternate for the timber framing. Any questions. Dorothy your hand was up so I wanted to get to you next. Okay. I think I misunderstood your discussion about the lead certification. Did it cost money in order to get the lead certification, and that you might, it would cost you $100,000. That's correct. I guess I would love a little explanation on that because that sounds kind of wild. It's just a historic fact. Unfortunately, there's just so much paperwork that that that's that's labor intensive to get the certification process that historically it ends up being about six figures for project this size to be certified. And then what do you get for that besides feeling good about yourself. A plaque. Okay, so I can see you think let's skip that step. We're going to a further further level of energy saving good. Thank you. And we see a lot of our clients doing that nowadays they want the benefits of lead without the certification. Linda, do you have a question. Yes. So, I just want to be very, very clear. The bottom line is the bottom line we see now. This is somebody, not the town council, not the library trustees, not anybody else says we want to do something else. This is the bottom line, and whatever other changes want to be made. This is the bottom line. That's correct this budget is is is locked in time, especially with the MVLC the grant award will not change so this is the budget that we are dealing with right now. So, even if inflation happens, because of the cross cost of steel, or whatever else may happen. This is the budget we have to live with. That's correct that's why those contingencies are there to be able to absorb those costs. I want people to hear that loud and clear, because the word inflation, while useful is not the issue here. If you're done. This is the budget. This is the bottom line. You build to the budget. You don't go beyond it. It's not a blank check. Yeah, that's absolutely correct which is why I said when when we sent in the application to the MVLC that's when we locked in that budget, and that budget has not changed it will not go up or down based on any sort of outside influence. Yeah, I didn't know if he has a hand up. Yeah, I didn't know if you had anything else. Otherwise, I was going to call him Kathy. Okay, happy. I just want to build on what you said Lynn, I do understand that that that's the cap here. So what why I was asking about contingency is if when we actually go out to bed, and then when you go ahead into building, we find between those two things, uh oh, you know we. We're not as we had hoped they would be, you know, because you haven't. So, I know one of you when you presented on Monday night, a while ago to the council said you could value engineer you could get back down to the total. What I'm, what I'm worried about or what I want to know is there a point at which, if those estimates now bids come in, and they are higher than what we had hoped they would be beyond, you know, the, the wiggle room you've got and contingency. I would be confident that we don't cut something out that you built into this building that will give it that 50 years life that we were expected and my understanding of 1993 from some people who talked to me about it is it was value engineered down for some things, you know, I don't know exactly what but I wouldn't want us to stay within budget and give up something we really want. I'm sure nobody wants that so I've also been worrying about the soft costs you know whether there's furniture or the automatic book so is there some place where the actual building comes in somewhat higher than we hope. Is there something else that could be given up and still bring the building home without going over the total without hurting the integrity of the building itself so you know the furniture costs already went down. And that number went down quite a bit from what was in the original document. You know so that's, that's what I'm looking for I know that that's what the opm is supposed to help everybody be doing with this. And it's when would you know that. And if we got to appointment said whoa we were really off before the money starts flowing from the grant and the everything would we know that within, you know, a month of getting bids on construction we're, you know, what's the timing on when we might know that the best guess was off. I'd be happy if the best guess was off on the, it's cheaper than we thought that would be great right. No, I could see it and I saw one town recently in their thing they said when they actually went out to bid it came in lower than they thought so I realize it does happen. That would be a gift to everybody right. So what kind of when in the process do we know that before we start putting, you know, a shovel in the ground or whatever we want to say you know, yeah. Yeah, no understood and so there's several things that are going to happen between now, and even when this project goes out to bid and I think I mentioned him previously at the town council meeting they're still at least two more times that this project is going to be estimated. Prior to moving into the next phase of the design process. There's still a lot of design that still needs to happen we're going to know at the end of design development, which is the next phase of design. What our assumptions were in the previous phase and how those are shaking out for the coming phase which is construction document phase, which is the final design phase before going out on the street. We're going to make sure that we're going to look at not just any I hate the phrase value engineering because it's really value management that we're looking to try to do. We're looking to ensure that this project is going to be a project after bid day. So we're going to look at different alternates if there's at alternates that can be easily delineated within the contract documents to ensure that we have a viable project. Once this project is bid out. We'll say that historically, we have been extremely successful in getting projects to be better than we had estimated Cape Cod tech was 10% below our estimate. Gardner elementary school below our estimate West Freefield High School again user and these were West Freefield High School happened to be during the the the great recession so you know there is opportunities here that we're going to look at to capitalize on and things to build on and make sure that we've got a very, very successful chance of bid value within budget come bid day. I would like to reinforce that I think this the estimates that will come in the next phase. Really if we do the design developments starting, you know, fairly shortly, you know within probably seven months we would know where we are confirming or changing and struggling with our schematic budget and can we'll be doing another budget we will have fantasy doing an updated budget and then we reconcile so we have two estimates to be reconciled but the design development again at construction documents. We agree with can we've been successful when we get to the construction documents and we look, we still think we might have trouble because who can control all the markets, etc. We're using some alternatives, you know where we, they're all, you know, level of windows which would serve the project and we're sticking with the highest level. There are intermediate levels which would also be maybe something we want to look at like we have all wood window replacements in the existing building, which is what we want. They could be done in aluminum and match this profiles, etc. So I think we have things like that we will look at for you. We know hands from the committee as of right now and question. questions that we had on that she back to the major question and answer sheet on project oversight and construction management so we ought to get back to since this closely related to what we've been talking about. I just want to interrupt and let you know that Doug Callagher from Epsilon, who's the mass historic tax credit consultant has a 330 meeting so if we can table the questions around mass historic 30th. Because I don't think we're going to be able to get him in the next five 10 minutes for seven minutes. Unless I don't know if Doug's left the meeting yet if there's one pressing question people want to ask that I just want to let you know. I'd like to see if he's still here to answer that question well lens. I think he's I think he's gone. I think he left to so we will really noted thank you that we're going to have to take that up later and these are the questions that came under project oversight and construction management. I guess the, I don't want to go through reading exercise because I know that these have been out there for the committee to review and read. So, what I'm looking for is whether there are any follow up questions. In this category or comments that members of the committee have about the general question of the project is in how it's managed. And while we're looking at that I just want to be very very clear that well I put a few page numbers and filled in a couple of questions and organized the original questions. Alex and Sean, and other trustees Bob included spent the mass mass majority of the time providing these questions answers to these questions, enormous numbers of hours have been put into them. So I don't know, Andy, this is Sean sorry, I don't know, maybe it would be a good question for Ken to talk about. I know there was one question about how this project will be managed whether it's a design bid build or a construction manager. Does it make sense for Ken to get a little breakdown of what each of those is and you know what are the assumptions right now. Thank you for the suggestion, Sean. Sure, so the assumptions for this project would be a chapter 149 national law chapter 149 design big build. They are typically your, your standard general contractor type of project have to go through all the requirements of national law with pre qualification and file sub bid contractors etc. So construction management 149 a which is construction manager at risk, which is a little bit different. A little bit more. They tend to have more allowances that allow you to be a little bit more flexible with your with your phasing of the projects you typically see a CM at risk construction manager at risk project when it would be a more than occupied renovation project where you would need to have that ability to be flexible with regarding public safety and temporary construction and things of that nature. It's typically more expensive to do a CM at risk because of that extended oversight and those that flexibility. It's about 10 to 15% more expensive going to see him at risk. And because this project is going to be an unoccupied addition renovation project, it just makes sense to go with the chapter 149 general contractor design big build process for this project. And that's what's been assumed in the budget. Andy you're you're muted Andy I don't know if you were calling on Kathy or somebody. Okay, I, I had done that because my phone was ringing and I didn't want it to be reading the background. Alex, did you have something your hand is up. Okay Kathy. Yeah, I'm just, it was the page Lynn just showed what said town manager so the, the, you described how you were going to go through your stages and to what extent is the town manager at the table. You know, along this process, Sean at the table, or checkbacks to the town on, you know, I just wrote down seven months from now you'll have a better idea of what these are. You know, this is going to segue and not as much to your management but I know the trustees are putting the endowment up as one of our fallback so there's another set of questions on that but you know will someone in the town that I'll stop there, it said town manager, you know, next to that thing so what does that mean that the town manager will at some, you know, on a building committee you've already got your OPM. That's my question. So, I'll jump in I think that question was about, you know, will there be a building committee for this project I think we left it open that, you know the plan is for there to be a building committee I don't know if the composition has been decided yet. I think we'll be on that committee. Ken, can you talk about the types of reports that we'll get once the project starts that tells us how the project is faring compared to what the budget was. Absolutely. We will provide the committee. We typically oversee our projects, looking at cost quality and schedule from day one. We ensure that the budget is being tracked with not only what has been contracted but is projected to be contracted what your potential exposures are out there that is all tracked on a very comprehensive cost spreadsheet analysis worksheet that we share with the committee. It's updated in real time, day in and day out so it's available at a moment's notice for the committee to be able to use it's also online on our call your 360 platform, you'll be able to see where you're tracking as far as the budget is concerned. On the quality of project, you're going to have oversight daily oversight from one of our construction reps on the quality of the project, looking at the construction, doing daily refuel reports ensuring that the construction is is going per plan suspects that you are getting what you pay for. And then that's going to be presented to the building committee on a biweekly or monthly basis in the form of a comprehensive monthly report which will include all those daily reports to give a historical tracking of where we're at. On the completion, I would assume and I would recommend that a member of that committee attend the weekly destruction progress meetings so that they are fully up to speed with what's going on on site. That's the owner architect contractor meetings. We typically like to see a member of the building committee there. Again, just for that transparency and that clarity so they understand where things are at. Not only in the field but also financially and what we're seeing for potential issues out on site. Again, being proactive and projecting that out ahead of time, so that the committee has an opportunity to be able to react to it appropriately and not have to have it to be a fire drill every time we're meeting on an issue that's projected out there so there'll be a lot of paperwork that's going to be going back and forth between our office and the committee. And that will be done again via a website as well. So they'll have all that information at their fingertips. Andy, can I ask one follow up question to that. Yes. And can I just, I assume to that those reports will track our progress towards meeting all the milestones for our grant payments to make sure that we get a grant payment every fiscal year. That's correct. Yep, not only, not only again, I didn't mention the third leg of that school as a cost quality but the schedule is also key component as well and we're constantly monitoring that schedule at every one of our weekly job meetings as well as our as well as daily to make sure that the site to ensure that the project is tracking the way the contractor had intended and that all of our milestones are being get appropriately and we'll make sure that the MBLC is getting their paperwork kindly to ensure that you're getting your grant payments. Thank you. So, question that I would have is what other kinds of changes might be identified as you're holding your weekly meetings that the architects might feel that you need to recommend back to a building committee and what are the consequences of those when they typically arise if they do. That's a great question and it typically it depends on the committee there's there's some committees that authorize a financial subcommittee with a certain dollar threshold for incidental changes that might happen on site or even one committee member that might have the authority to say anything below a $20,000 threshold to be able to make that change and then report back to the committee. Some committees want to know about everything. We keep a very comprehensive blog of not only changes that are happening, both credits and ads but also things that are again projected to be out there that we're seeing that a construction rep might hear while he's on on site about a pipe that was exposed that had additional asbestos on it that needs to be abated something to that effect something that wasn't originally caught in the contract documents. Things happen on every single job site, which is why we just want to make sure we're as proactive about these as possible and ensure that we're tracking those dollars accordingly. Oftentimes again if if there's a particular committee member that's more hands on in this and during the OAC meetings and things of that nature, they would typically be on a you know, very easy to reach by our by our team to ensure that we're getting their eyes on things as they're happening immediately and not waiting till that next meeting or waiting to that next building committee meeting even to ensure that we're getting their oversight in addition to us and and when we get changes from contractors. It's not just a rubber stand that we thoroughly vet those changes ensure that we're being firm but fair. If it is a cost that's associated with the project we want to make sure that it wasn't already bought in the documents and that we've got a real cost associated with that project change. There's a credit that's due for some of the work that should have been done in light of this change we want to make sure that we're counting for that as well, looking at all the, all the prevailing wage rates ensuring that that's a comprehensive full cost that they can't come back later on and add to it to make sure that we're looking at that appropriately. Other questions in the committee. I want to make it clear that we're coming back to public comment one more time after we've completed the last section, but at this point I'm looking to the committee, or to the trustees if they have anything to add. Is the other section that we were definitely pointing to cover today was any issues that people want to ask about relating to sustainability and timing. So I want to make sure that we have included time for that discussion and presentation and while we are guests are with us. So, would you want to pull up those questions for a moment is that possible. Yep. So, any further questions that cover these topics. If not, then I will go back to public comment for any additional public comment. Looking for hands for members of the committee. So, people feel that the questions have been their questions were adequately answered or within the written document and I think all of the people who provided the written document. Rudy Perkins, who is one of our town experts on the subject of, can you along I don't know what your question is if it's related to the sustainability piece or otherwise, but really welcome to the meeting and please introduce yourself and tell us what your comments questions are. Chairman Steinberg can you hear me I'm on a phone. Yes, I can. Okay, great. My question related to both the budget and to sustainability. It sounded like from Mr guy at that the two cost increases for sustainability issues where the ECMs that were added those five ECMs and the cross laminated timber. Those are called out as a separate increase item in the budget. Were there other things those get us from the 34.4 E UI down to the 29 E UI. Where there are other things that we needed to add to the project to get to the 34.4 for example, the VRF heating system that didn't look like it was in the 2016 scope to me, where there increases in installation. We do other air tightening of the building where their thermal bridging changes that were made because some of those were called out in an April 2020 memo. File memo at find gold Alexander, and it looked like they were recommending those as additional steps. So my question boils down to, did those get captured in the original 2016 budget, or were they add ons and if so, what is the cost of all those other add ons and why isn't that in this budget or is it, and where is it, if it is. Maybe I can start and can finish. No, those were not in the 16 budget that they were in the revised budget in May 2020, because we had had dialogue at that point about it about the system we had already gone to the non gas system we changed to electric. And that system was reviewed by the engineer and information given to the cost estimator. We also I think at that time we were using the 2018 standards for insulation which were admittedly lower than we'd like to be and we were still looking at the next phase if we do we're going to look at a greater level of wall installation and insulation and under slab so, but there were upgrades made from the 2016 to the current estimate and that does include as far as I know everything that we've done, except for the added ECMs which can is made way for. I didn't see any reference in the 2020 fantasy estimate of a later document that included those may changes. Why wasn't that called out by them and what was that document and could you, could someone could that be posted somewhere so we can take a look at what the additions were. I'm not sure we specifically identified the cost of each of those additions because they were part of the overall re estimate that was done at that time. So, the final drawings, which were submitted to him in, I guess in May, had that in those instructions were just given to him by the engineers. And by the sustainability report and the appendix. Okay, I'll take a look. Okay, thanks anything else Rudy. It's a desk. Okay, so thank you Rudy. So, there are two other people who I see of hands up Tony has bring you back in the room for a moment and Yeah, following up on what counselor Shane asked about the escalation and can you point out where in the total budget analysis the three more years of escalation from July 2019 to March 2022 construction is shown, because I don't see it the number seemed to have gone down from the July 2019 start to the March 2022 start as opposed to going up. So that's the first question and then secondly the contingency in the MVLC pro forma submitted in 2016. It had 11.5% for construction contingency and it had 10% for soft costs contingency. And it seems like now you have only 6% in this is that sufficient to cover construction contingency and soft costs and I know in the fantasy estimate they explicitly say construction contingency is not included in their figures. I'm just wondering if that 6% is enough at this early stage to cover any overruns or unforeseen changes. Thank you. So I'll answer the first question, a second question first and I said yes that that is that 6% the way the MVLC calculates their contingency is different than the way that our budget formula calculates the contingency which is why that you see the discrepancy there, but there is ample contingency contained within the budget to be able to produce this project. For the first question, the escalation is simple. We got a revised estimate from Tennessee in 2020 so we're only escalating those costs from that estimate to the 2022 date, which would be approximately a year and a half for the for that escalation which is why that value is less than the original contemplated pre years for the 2016 submission to the MVLC. If I may just follow up on that and where is the escalation on the soft costs. I answered before the escalation is formulaic. So the soft costs to be our formulaic so as the construction costs go up and are escalated up the soft costs are escalated up as well because they're a percentage of construction costs. But they actually came down. Which soft costs are you referring to that came down furnishings. Yeah, so, so in order to be able to make fees. So in order to be able to make the budget work within our constraints. We had to reduce certain certain items down to account for the additional escalation that came into the project from this being a 2022 2022 project now, instead of a 2019 project. I just want to share that if you'd like, it was $1.8 million worth of adjustments to the overall budget to reduce the budget to us to ensure that we didn't go over the originally intended budget of 35 million. So those changes on furnishings and equipment. Satisfy the expectations of the library and bring us the project that we in the MVLC and library anticipated. And so this has been discussed with the trustees and I believe they fully understand the sacrifice that had to be made here and we're going to work within that budget to ensure that the proper FFD is included in the project. Alex, you have something. Yeah, two things so I'm just going back to Rudy's question and I want to make sure that it's clear sort of the timeline. The trustees went back to find gold Alexander to request an updated schematic originally to change the location of the meeting room based on the MVLC's request. So when that process was begun the sustainability committee came out with its recommendations. So we went back to find gold Alexander and said, you're working on revised schematics, we want these sustainability measures to be included in the updated schematics. So the schematics that we received from find gold Alexander, and the corresponding updated cost construction from fantasy include coming up with a building that met that UI of 34.4 and incorporated all of the changes requested by the sustainability committee, so that we weren't looking at those 2016 designs from an energy perspective anymore. The ECMs were a way to get us down because our committee had asked for an UI between 24 and 29. And the building as presented with the fantasy schematics and with with the fantasy cost estimates and updated schematics didn't quite get us there. So there were the additional ECMs that were also costed out either by the engineers or by fantasy for the CLT to get us to that point so I just want to make sure people understand the timeline we it wasn't like we got the updated schematic and then we went back and did the sustainability stuff it was all that was one of the primary reasons for going back to find gold Alexander. And then also some of the numbers I saw Tony had some questions in hers about the numbers that colliers has filled in. So again because we went back and we paid additional funds to do the energy analysis and to do more design work and then was traditionally in a schematic that allowed us to fill in certain elements. So if you look at the MVLC grant, you'll see that there were certain parts around like site work and site prep and things like that that were blank they were an all included number. And then if you go back and you compare the current fantasy to those certain same lines, you now see where they're actually filled in and those numbers correlate directly to the numbers in the fantasy. So that additional amount of work that the trustees paid for has allowed colliers to have a better understanding of what our actual budget is, which removes some of the elements required in the contingency when you're making guesses of things. And the other point was, yes, so Sharon the library director and I went line by line through every item. So we made a request of colliers to pretend the sky is the limit, project out the budget, as if we had no budget. It came out $1.8 million above. And then I said great. Now, now go back and tell me what we would have to cut and we went line by line through each cut and had a discussion about what made sense what didn't make sense. And, you know, could we still do it right so will we have top of the line furniture, maybe not will it still be long lasting high quality furniture absolutely. There are other elements in the budget such as right now we have $500,000 for rental. If we are able to get a space in town where we don't have to use rent that's $500,000 that goes back toward other costs. So there's, I personally am comfortable with the numbers that we went through the library directors comfortable with the numbers that have been have gone through, and it was absolutely vetted where we would have to cut what it would look like. Thank you. Other questions from comments from the committee if not, I wanted to go back to, we're in public comments and there's one more person who wishes to join us. Hilda. Hi, Hilda. I got another question for you. This has to do with the bidding process because I don't remember all the details and it's a general question. Are we committed to taking the lowest bid, or is there a way of checking out the work of the person's bid that we might possibly accept before you take them. In terms of the atrium which has been a fiasco, it's leaked from the beginning and apparently make a long story short the contractor who built it went bankrupt and disappeared or whatever, so that the atrium was never fixed. How do we protect ourselves as a cover from insurance or how do you how do you pick. If you have to take the lowest guy. Can you also pick a guy that's going to give you a really good job that will last 50 years does that that's the one question. My other question is also an insurance the kind of thing. Is there somewhere in the budget that protects the library from liability to damage to the foundation of the strong or any damage to the strong house from vibrations during demolition and huge dump trucks taking the stuff away that certainly will be shaken the earth a little bit so those two things that have been on my mind. Can you want to try or. I can take those questions through the chair. So for the first question. This project is going to go through a pre qualification process for the general contractor and the subcontractors. So at any point in time if there's a reason to disqualify a contractor we will be able to do so at that time. If we do get into a situation where there is an issue on site and the contractor goes belly up. There are performance and payments payment bonds that are a requirement of mass general law to ensure that at that point in time, the bonding agent would come in and the bonding company would come in and complete the project. So we're going to start with the existing strong house and potential issues with construction. We're going to make sure again by being on site as much as we're going to be on site and having those conversations with the strong house faculty and and staff to make sure that we're keeping in touch with the residents on everything that's going on on site with regard to any sort of drilling compaction things of that nature. We're also going to want to make sure that we along with our consultants do an accurate assessment of the existing conditions of that building to ensure that if there is something that goes wrong that we've got an accurate assessment of what the project was like prior to the construction starting. And we're going to make sure that the contractor has has the the required requisite insurance is required to make good on those repairs if needed. Well, it's the contractor responsible not to tell that we yeah that's correct. There'll be there'll be components written right into the contract documents about protection of adjacent properties. It's a standard practice, especially when you're around to store properties. The strong house isn't the only property and immediate proximity to the, to the strong, the Jones library. So in the contract documents when the contract was doing his bidding, there will be components referencing the adjacent properties and means to protect it. With respect to quality control I just wanted to add in as Ken mentioned earlier. Colliers is an OPM we do a regular site inspection we monitor the quality of work, but we're not the only ones out there also the architects find good Alexander. They have their experts out on the site, making sure that the work is being conducted in accordance with the contract documents the performance requirements. Do you actually have multiple sets of eyes watching what's happening out on the site. And this is above and beyond the contractors own quality control. So you'll have a minimum of at least three sets of eyes, watching the quality progress of the work. To gather some insurance assurances that it's being done properly so you don't have to rely on an insurance claim at a later date. Yeah, for the intent is to be proactive, catch anything before it happens track it, make sure it's fixed before we take, or before you take ownership of the project. Thank you. Yeah, I don't know if you had a piece to your question is to, if the skylight problem in the 93 edition was not discovered until after the work was completed. I don't know. I don't know. What would happen that was, I don't know if that was part of your question but I'll. Okay, I can answer that one as well through the chair so as part of this project one of our recommendations is going to be building envelope commissioning. So something for instance, with the envelope of the building it's going to be tested from by this commissioning agent to ensure that this is a, a well designed well constructed building envelope to ensure that those issues that happen at the old building do not happen again in the future. And then there's a warranty period obviously part of our discussion with the design team and the trustees as we go forward in the building committee is what the duration of that warranty period wants to be there maybe some items that we want to look at, potentially extending warranties on to ensure that something like that doesn't happen again, but those are some of the things that we're going to be talking about in the coming phases. So Hilda thank you for bringing that up. That was helpful. So Alex did you have something you wanted to add to this. Yeah, the only thing I wanted to add is that in the 1990s work. In the past four OPMs were required, and I think, I think Ken and George are very much proving today why OPMs are invaluable so just the very nature of the process has changed so that we are required by the MVLC to contract OPM who sold job it is is to make sure that the building is built right. We come in on budget that everything all the rules are being followed and so there is a process built in now that assures that things go as they should and the duty and the obligation of the OPM is to us, not to anyone else and so I think that's a really important piece that has not existed in the past on these building projects. Dorothy you had a question. Yes, I'd like a little bit more explanation. Several times in the papers, I read that if there is more money needed on the library that the cost would not then go to the town, but that the library would seek further fundraising that this hasn't been formalized yet. But some kind of document is in the works, perhaps with a town manager. To me that certainly relieved some of the questions that many people have had, though I'm not quite sure how it works so I'd like you to explain it please. And did you want me to start with that. Yeah, why don't you say start one. So, literally, we have had a number of conversations. And today we had yet another one, this time with KP law to outline the terms of the MOU that would be between the town and the Jones library. And that would define all of the issues with regard to the fundraising, the payment, when the payments would be made, how we would monitor that on a regular basis, including looking at their financial statements their other federal, the federal tax forms, and also the tax statements that they get for their not trust fund their endowment. So there would be it all be in an MOU. And then, if possible, we're hoping to at least have the basic elements that come before the finance committee next week and not two weeks from now, and then that will be part of what the town council also would then agree to sign. So, again, I want to just go back to MBLC is locked in to a certain amount of money, they will give us the town with its vote would be locked in to a certain amount of money that will come from the town. The fundraising, then locks in the library trustees, Inc. Jones library trustees, Jones library Inc. to the remaining amount of money. And it would be over a five year period. And we still have some other details to work through on that Dorothy. None of us wants to bankrupt the endowment, and none of us wants to jeopardize the operating funds of the library. I have to tell you that I believe that treasure Bob Pam has done an excellent job of doing his analysis and coming forward with that. And we have another discussion that I believe Austin plans to have with Kent with regard to cash flow that we might or might not be able to expect with regard to fundraising. But I want to be very clear the fundraising has a big balloon at the end, because that is when historic tax credits or any sustainability credits come in. And we're trying to make sure all of that is carefully laid out. We're also talking with the lawyer about how we protect the town's interest with regard to a significant amount of money that will go into this. And then the other issue that will come up is who actually signs the contract at server, and all of that is being done with with legal counsel. Thank you very much. Lynn, I'm glad you said that's going to come to us on March 30 because I think the one. And then you added that we don't want to put. And I know endowment is a discussion next week in two weeks, you did it. I think there's risk I understand we're trying to cap the risk, but as far as I know we don't have trustees with very deep pockets in terms of their own personal assets. So we're not holding them personally liable. And so the question is, you know, what this, what the security blanket is and what's in MLU so we're going to focus on. We're going to put it, which is my endowment questions next week on, you know, how much Bob's already answered at once but I have some additional questions on on this as well. You know, I understand every effort's going to be made and Alex just assured us we're not opening a library with no furniture in it we're just opening up opening a library with more utilitarian furniture in it which is, or maybe reusing some old furniture so okay, but you know what we wouldn't want to build a new building and come back to the town and say oh we forgot the pernishing. So I think you know there's, there aren't that many pieces that can be completely foregone. If we reach uncertainty so I do, I do want to, I worked for a foundation where the foundation had deep pockets and they could be liable for for things but we don't necessarily have that here. So that's next week, correct. It's two weeks in two weeks. Two weeks from now, although we do have Pam with us here we have Ken Farber with here with us and the historic tax credits. I'm hoping he the gentleman who's the consultant on that will be able to return in two weeks as well. I mean, Kathy, I really urge you to look over the answers to the questions that have already been raised, and make sure we know what they are because right now the finance committee is scheduled to meet on the 30th, and then this comes to the full council on the fifth. I did look over the answers and I wrote up some additional, you know just focusing off those answers but I can hold them for next next time we meet. I just don't know how much. Yeah, really after the chair how he wants to handle that. Well, if we we did reserve the subjects for two weeks from now that we're currently discussing and to go back just to remind everybody the list for next time March 30 as was put together in the document includes revisiting project oversight and construction management to the extent necessary, though I hope that on the duplicated we don't have to do that. We will get into the questions of ownership of building historic tax credits fundraising endowment community preservation act funds. And financial modeling and impact on other projects is food and just general operating budgets, because Sharon Sherry hopefully we'll able to be with us next time. I think that I will welcome if any members of the committee wish to touch on subjects now but that is our plan for next time. And we are going to have a second full meeting on the subject to the library to say recognizing that this was such a big topic that it covers. It really required two meetings and it required us to move the OPEB question to later meetings after we're done with these two library focused meetings. So, back to the committee are there any other questions that people would like to raise today or comments that our guests would like to offer. Before we adjourn today's section is the next meeting we'll also want to have just a general discussion on how we're going to report back to the council. And then we'll take the conclusion of our to we do to meeting investigation. So, I see none. And I, so I think I'm going to turn it to Sean for a moment. Anything that you wanted to say in particular to about the, or did you have anything to show us a breakdown on the changes that you've made to the projected operating budget for FY 22. And with that I think the live people have here from the architecture firm in the opium, but we're not. We're not going to come back to library when we're just talking on general operating budget you're welcome to stay but obviously, we appreciate you having been here and just wanted to assure you that the library in particular is not going to come up again in today's meeting and so if you disappear we certainly appreciate you having been here. And thank you. Thank you very much. Thank you Andy. So, you know this year with Kobe and everything going on we've been updating our revenue projections a little more frequently, because obviously things are changing pretty quickly. So the see Paul made me get this webcam, and now I can't get it secured and it keeps falling on me. There we go. All right, there we go. So, so yeah so we updated our revenue projections of last week, and we have a little bit of good news to share. We were able to get operating budget increases up to 2.1% from 1.5%. The major components that shifted in a positive direction are that we updated new growth. I think it was at around 500 or 550 during the last projection, we work with the assessor's office, and we feel confident we can bring that up to 600,000 for new growth. We also had a major or our annual large motor vehicle excise tax commitment which dictates how much revenue we're going to bring in for motor vehicle excise tax. And so the number we were projecting was a little bit lower than what we did so we felt we beefed that up I think about 50,000. And then we also started to include cannabis revenues so we, and to be clear this is the tax on cannabis revenues, not the impact fee. So this is the money that the cannabis dispensaries pay to the state and then the state turns around takes whatever portion they keep and gives us the town's portion. So we have a conservative estimate of about 195,000 I'll send the, I'll send the projection sheet out after so everybody has it and posted in the packet. And then the other big thing that wasn't really it doesn't affect the revenues or expenses but it's good for this group to know sort of where things are headed is at the JCPC level. We're looking at rolling over the capital reserve that was approved last year that it was about $706,000 that was set aside as for like an emergency reserve if some sort of capital need came up during the year. Nothing has come up so at the, when we're planning for FY 22 capital, our plan is to roll that capital reserve over to next year to support capital projects and FY 22. What that means is we do have to appropriate that still so on the, the budget worksheet that you'll send out to everybody, you'll see in the other financing sources section. There's a new amount for that $700 plus thousand dollars. That would be basically reappropriating this capital reserve, and then on the expense side there's a similar amount that is being offset. There were a couple other little changes but those were, were the major things and so we've communicated that information to the library in the school so they're aware of that. So we're getting very close to their decisions, making final decisions on their budget so we want to make sure they had it. And I'm happy to answer any questions on it. Kathy wanted to see if you had anything to say is chair of JCPC but you also have your hand up, maybe about other matters so. You know, and JCPC. I'm just so people know I'm Sean and the staff have done a really good job of bringing in a budget in terms of capital requests that matches the amount of money we have to spend which is quite nice as opposed to being $4 million more than what we have to spend so my trying a new concept. And, and the next year, also is getting near near to be balance is my question is the interaction between operating and capital and the modeling you showed us on a what if does you had showed us that if we tried to do all five projects for projects. There is a fifth out there but anyway, they for projects with the library fire DPW and then schools being an override that there was a squeeze on operating budgets, not this coming year but the following year FY 23. Does the new information you have on revenues make FY 23 look better also so that's my question looking out of it because you know and I realized two of the two of the other assumptions were live fire and DPW would both be taking money during those years so we'd have three big ones happening over a short period of time but it's the interaction with the Jones library discussion partly an operating budget discussion also so I just wanted to know whether if there it you don't have to say you've got it updated but you know if if there is an update on what that scenario looks like I think it would be good to see it if we could see it. Yeah, I can say a few, a little bit more about that. So, we'll actually talk about that a little bit at the next finance committee meeting when we talk about one of the questions I know was about that operating capital interaction that you described so we'll talk about it in more detail so it does help because it raises the baseline that we were looking at so you know instead of it being a one and a half percent baseline now it's a 2.1% baseline. So it does help in that respect that we're projecting a higher amount. You know we're still anticipating when we go from 8.5% for capital to 10% for capital that if, if our local revenues don't recover quickly or as quickly as they could that again we might be in that one to 2% range for operating budget increases. However, the, the piece of optimism is again if things start to bounce back quickly and, and you know we've seen our revenue estimates rise steadily throughout this process. You know if that trend continues and revenues continue to rise. You know we could be in a better place again it's we're projecting out a couple years and how things are going to play out here. But again the faster our local economy gets back to normal if it could even just get again if it can just get back to close to normal, then it's not much of an issue. The pandemic is really what created that sort of squeeze between the operating budget and capital it's not. We've been planning for these four billion projects for a while so if we would say to 10% we wouldn't be having this, you know having to do this sort of analysis the same way. So, we'll, but we are doing the analysis and we're going to keep updating as we get more information. Thank you. Any money out of the new federal stimulus. Yeah. So it feels funny talking about all this because I know every time I say something and it's going to change. So, so you know there are estimates out there of, of, you know, a significant amount of money available to Amherst as well as many other communities. We're still, you know we've got general, a general sense of the types of things that money can be used for. We've gone down into like the specifics of how much can be used for what, you know how much is going to be used can be used for this fiscal year how much can be rolled over. That's the, the piece of that we're really going to dig into as soon as that information is sort of shared out officially from the state with us. And again that could also affect these projections once we get that information. So the timing, kind of, you know it's okay for the town the timing but it's tough on the schools and the library that are working on their budgets now. You know what I've told them is be flexible and be ready to adapt, kind of like we all had to do the last year and a half or so. But yeah, we have seen the amount of money that's projected, it's not finalized yet, and we're digging into the specifics and as soon as we get into that piece of it. I'm sure we'll have an update for the committee. Does the government have any in the statute has passed does it have any specifics that give us guidance already. So they're, you know, Paul may want to weigh in because he's, he's heard a little bit more. You know there is talk of it potentially being available for revenue loss, which is one of the big things that we've been hoping for. And then there's some other pieces related to potentially supporting enterprise funds and things of that nature. But again we haven't received sort of the official or I haven't received yet the official webinar, you know, report from the Department of local services that says, you know here's the detailed list and how you calculate how much you can use. Again, we'll we'll come back. I'm sure we'll update the committee as soon as we get that. I haven't seen that Paul is looking to. Yeah, I just I would just support what Sean said, it's very early. It's a significant amount of money that's been given. There's formulas that they're applying to how the money is being forwarded from the federal government to the state government to localities. And they also filter in a county format as well. But, and then they've, I've just heard and not again we haven't seen a anything official on this that they want to talk as he as Sean mentioned enterprise funds are talking about water sewer broadband sort of infrastructure type things and that would be significant for us, because we are ready to go on some of those projects and we could sure use the funding to support that that work. And we took a large hit on water and sewer fund. And the key that we've always wanted we want it with the cares act was to was revenue replacement because, you know, we along with every other community had loss of revenue from our, our various funds, our enterprise funds and our transportation funds and things like that. So we'd like to see to get those back to where they were because we lost a whole year of revenue on many of those things. And that has put us in a very challenging position. And the good thing is that we all in each of those enterprise funds we've had some reserves, so we could cushion that, but we'd like to get back to where we were a year ago. We had some reserves, but we also made some decisions to not ask for the same reimbursement to the town for expenses that the town incurs on behalf of the enterprise funds. Precisely. Yeah. I just wanted to point out to the committee, and not something for heavy discussion I see Lin's hand up but the cannabis excise tax. I think that the presumption is is that it's an excise tax equivalent to meal and lodging tax, and that it therefore should be expended within the budget under the same charter rule. The same charter rules that apply to other, the similar kinds of excise taxes that it's not a distinct or unique piece that can be peeled off for a purpose, which is different from the other piece of cannabis money that's coming in, which is more equivalent to the housing piece for short term rentals and that's impact the, and then you're talking about what the impact on the town is for having the cannabis operations or short term rentals, then you're dealing with having to show what the impact is and using funds accordingly. It's something. Andy you're reading my mind is to say that while you and Alyssa were on the count select board during the whole cannabis decisions, this is something the council has never discussed. And it will be coming up on some agenda in the future so people understand those two streams of money. Paul. Yeah, just along those lines and you sort of set up I emphasize it by taking the tax revenue the excise tax and putting it in with all the other excise taxes. It filters through our process so that the library in the schools in the town I'll get the share of that of the revenue that comes in it doesn't stay on one ledger. The impact fee is a different animal. And that's something that we have to have a policy discussion with the count discussion with the council on about how do you want to allocate because that's money that might be there it might go away. It's not a recurring source of revenue. So that's something that we would also want to engage the school department on as well as because it, they would be looking at using some of those funds for education or something like that. Okay, thank you. Anything else that the members of the committee when they asked, Sean or Paul regarding the revised estimates and because if not done I think that we've had a busy day and very I think a very good meeting and I appreciate everybody's participation. But I will say that the meeting is adjourned and see all everyone two weeks away. Lots of good information thank you. Thank you everybody.