 So, I'm calling the Town Council Finance Committee of Tuesday, April 9, 2019, to order at five minutes after 2 p.m. And thank you, everybody, for their attendance. And I'm going to take this a little bit out of order for what we posted because I want to allow our superintendent of Public Works to be able to get back to other things and appreciate Mr. Moreing, your being here. So we were going to talk about enterprise funds first. Is that what you were – so the purpose of this is that we thought it would be helpful for the Finance Committee to have a better understanding of how the enterprise system works. Actually, that's a good question. A minute-taker. Paul, who's taking – we're not having somebody cover minutes today, right? Thank you. So you're going to give us a primer on enterprise funds, so thank you. I didn't do the title, so – yeah, so enterprise funds are a different way of keeping track of how we operate a section of the town government. And the reason why I get to do this is three of the enterprise funds reside in the Public Works Department, and the fourth one we have was shared with the Public Works Police and the Collector's Office. So I deal with the two biggest ones on a daily basis, and so I got the great honor to do this one. So an enterprise fund is basically an accounting methodology that gives us flexibility in how to manage an individual task or individual process we want to manage. An example is separate accounting and financials, and it keeps the revenues and expenses kind of segregated from the rest of the town government so you can really see. The advantages, it identifies total cost, breaks it down much easier, provides useful management information as you're trying to make decisions, which we'll talk about a little later on, and it keeps the revenue you make and the revenue you collect in the same spot. It doesn't put it in with a general fund. Sometimes at the time you'll talk about getting some type of donation or some type of payment and it goes to the general fund and then it gets appropriated out of the general fund. The enterprise system stays in the enterprise system and gets appropriated out of the enterprise system. So you can list your revenue sources, you can identify your spending types in the enterprise system and keep track of all this stuff. As we look at the budget, in the future budget for the enterprise systems you'll see that personal cost, whether it's regular time, overtime, whether it's longevity, whether it's seasonal health, they're all kept in this one budget, they're not spread out throughout the whole budget. You'll also see that the retirement payments, the health care payments, they're kept in these same budgets as well, they're not shown up in another place somewhere else in the budget. And then of course maintenance and capital costs are kept in this budget as well. It allows you to, by consolidating all these things, you get to see a better picture of your management information. So everything is there and it provides you a really good decision making tool when you want to decide on rates or whether to increase something or decrease something or whether, even if you really want to keep an enterprise system around, we've had discussions every once in a while about getting rid of one of our enterprise systems and we use these tools and the fact that it's all together to study that and see whether we want to keep it or not. And then it retains, like we said, it retains the investments inside the account. So all the earnings, everything in the state is inside the enterprise system. So what can you have an enterprise system for? So the state law is very specific, you can have it for public utility, recreation, transportation. And then again in Amherst we have it for four. We have it for sewer fund, a water fund, solid waste fund, and a transportation fund. And again the last note on there is just to remind you, you just can't set up an enterprise fund when you want to. It has to fall within the guidelines of the state and they control it. One of the interesting things about enterprise systems is they're kind of universal across the country, across the United States. When I worked in other communities, we had enterprise systems as well and we had to follow the same rules and they were all kind of lumped the same. So revenue sources. So most of your revenue sources for an enterprise system is basically your user fees. When people call up and complain that our taxes are so high, why is our water rate going up? Well, they're totally separate. Tax rate is based on the general fund needs, water rate is set on the water fund needs. You can also get revenue from other departments. Other departments, you charge them or they can charge you. That's actually expense. But you can get revenue from other departments. As a water system in Amherst, we actually sell water to Hadley in the situations where they have to have maintenance on their system or have to shut down part of their system and they need extra water. We can sell it to them. We also have people outside of Amherst who use the sewer system as well in the solid waste system. And again, your revenue also comes from your investment income. So whatever you have in your designated reserve account or your surplus account, it's invested in according to the guidelines and you make interest on it. You don't make great gobs of interest on it, but you do make some interest on it. The expenses again, as we talked about, salaries, just buying things, expenses, capital. The other is like we talked about before is your health care, life insurance, OPEB, which is your other benefits, post-employment, OPEB. You'll learn about that. It's great. Indirect costs are because we're not our enterprise systems work with the rest of the town of Amherst, we don't duplicate services. So in our enterprise systems, we don't have an accounting department. We don't have an HR department. We don't have a town manager department. We use the existing town services and we pay a share of the town budget for those items that we use. And those are the indirect costs that go to the town, those are the expenses that go from the enterprise fund to the town. Other funny fact is, one of our expenses is we pay property tax to the other towns we're in. The waste for our treatment plants in Hadley, we pay property tax to Hadley. The reservoir we end around the watersheds is in Pelham, Leverett, Sonetson, and Schuetsbury. We pay in Belcher Town as well. We actually pay property tax to them. So those are expenses. Wow, I went really fast. That's a basic outline of how it goes. And if you don't have any questions about that, I have a little more to talk about and I'll show you how we actually use these things when we kind of set our rates. Dourton. What is a bond anticipation note or a premium on a bond premium, whatever, from my notes? They are just like in the general fund. If you want to do a capital project, build a school, for instance. You don't have enough money. You're going to take a bond out and use that bond to pay for the school. The enterprise systems has their own ability to bond of approved. So we're replacing all the water meters in town. It was a $2 million process. It was more than we wanted to take out of our reserve fund. We took a bond on it. We borrowed the money, bonded it, that's what that is. So the enterprise systems do borrowing through the town and they're kept separate as well from the rest of the town borrowing and bonding. Yeah, Lou. Does it count against our limit for bonding? That was a new one. I did. Now? That depends on whether it's voted as inside the debt limit or outside the debt limit. Some water and sewer projects are allowed to be outside the debt limit and it wouldn't count. So it just would matter. I think I believe most of the bigger projects we do when we're outside, the smaller ones are in. Show me. I had a question about the capital expenses and I don't know if you need to wait for that. But I noticed in the sewer, for example, the Amherst Woods was a new sewer system. But then my question was again, you've heard me say, how do we make these decisions? Because I also heard from Hurst Road people why, you know, they've been wanting, I believe it's Hurst Road, they've been wanting a sewer system. So how are these decisions made, where the sewer system goes and where it doesn't go? I can answer that question and I will start by saying it has nothing to do with how we budget. When we decide where we're going to expand our water or sewer services, we have plans that we've drawn up of where we need to go and then we rate those. There's a sewer master plan that talks about where to extend sewers. And as you look at that master plan, we have hit the top three areas on the master plan for sewering right now when we finish Amherst Woods. And if the town decides to sewer more of the town, we would go to the next one down on that list. So we have a master plan for how to expand the sewer and that's how we decide which areas we go to next. Could you just share a little more, how do you decide that process? Like what is the criteria used to decide those are the three main regions? That's a whole other presentation. But what we did was we actually looked at such things as how easy it was to build a sewer system, how many people were in the area, how many septic failures they had, the cost benefit for that adding that sewer. There's probably eight items we looked at, and those made up an aggregate score. And then they were rated one through 12, I believe there's 12 areas that were left at the time. I can get you that if you want, you can see it. Kathy? Staying with a more general, but I have one related to sewer if we go to the specifics. Do all the surpluses always have to stay within a specific enterprise fund? And so are there any instances where the town can draw down on us? And is that, we have to get to a closely related activity? If we have surplus funds at the end of the year from the water system, they'll go to the water surplus fund and they're authorized in the water surplus fund. If there's sewer excess, it goes to the sewer. So any surplus goes directly to that fund surplus. It has to stay in that surplus until it's appropriated out. So if you had a project and there's a sewer component to it, there's a water component to it. When the project is appropriated and authorized, you could appropriate funds from those to make the whole project cost. I think that's what you're asking, right? Can the rest of the town ever borrow against or are these really sequestered? They are really sequestered. Okay. And I guess along the same, so if we were, your fees in a sewer, your fees in a name another fund would have to cover the indebtedness that the fund took on as well. There would be no way that would spill over to the town that you can't meet the bond servicing costs or the debt servicing costs. That's two questions. Yeah, yeah, so. Let me break it apart. Okay. The cost of the bonding is supposed to stay in the fund. There is a chance that it could go into the general fund and that's if the fund and the business you're operating actually fails. If we were actually to drive it into the ground and fail and the sewer system had $50 million of debt on it. When we drove it into the ground, the general fund would have to take on that debt and have to resolve that issue. That's the only way that happens. I just stay with this. So suppose you thought you had enough fees coming in to cover your debt service and you misjudged. Is the full faith and credit of the town at risk? So in other words, we have to meet the debt obligation. Would be their temporary or would it be it triggers an increase in fees? What we would do is we had an issue where you had an unexpected increase and needed an unexpected increase in our fees. We would actually raise the fees and if there was some type of issue where we had to, we couldn't raise it all the way up. We'd have to figure out some type of financial methodology inside the fund to resolve the issue and we would work within the fund. Just to add to that a little, this is why we have reserve funds and retained earnings in the enterprise funds. We tried to, we're trying to build it up to 25%. If for some reason you don't raise enough revenues in that budget year to cover all the costs, it falls to that surplus fund. So it nets it out of there. Once that surplus fund is gone, then we'd have to go towards the general fund for that. That makes sense. You're protecting the town, but also sudden jumps and fees. I mean, you're doing it both ways. Well, so one other thing is some towns. This town is very disciplined about saying sewer costs stay in the sewer fund, water costs stay in the water fund. Some communities will take bonding that's required for a water treatment plan or something and put it on the general tax rate. And the reason they do that is some people in the community feel like, I can deduct my taxes from my federal income taxes. I can't deduct the sewer rates. But that's not our advice, but it is an option if the town says we want to put this on the tax rate instead of on the sewer funds. But I'll add to that. If you make that switch, you have to be very thoughtful about the proposition two and a half consequences. If you want to see an example of that, you can look at our neighbor next door in Hadley. They actually will use sewer funds or general funds and sewer funds for projects to upgrade their sewer system. Because it's sort of the reverse of what Mr. Bachman said. They use general funds to help substitute or support the sewer system because the sewer system is the biggest tax generator of the area. It sewers all the retail areas and that's a big tax bonus for them. So all the taxpayers get a lower tax rate, so they pay a little. So you can do it both ways, but you really have to explain it when you do it. It's got to be explained why you're doing it and how you're doing it because it has to stand the scrutiny of your auditors. And our auditors come every year and they have to write a financial report back saying we're operating our system properly. So I did have a question about the sewer fund, which I think Kathy just asked in general terms. But what I was seeing was the increase in the operating revenue was 164,000 and then our debt service was 243,000. So I guess that's kind of what you were saying, where our revenues are less than at least over a certain period of time, I guess. You're taking, let me go to the next slides and I'll... Oh yeah, you can answer it when you think. And also can you explain what capital program means? The capital program is our... It has multiple definitions. The state has one version of a definition for it. We have another one. Our capital plan is what we plan to do in the next five years. So we look five years out and we say these are the things we want to work on and these are the areas we want to work in. And that develops our capital plan. So it could be sewer extensions. The last big thing we were doing in the sewer is Amherst Woods and we're still kind of working that out. But we've done little smaller projects of capital as well. And then our next big thing we're doing in the sewer system is going to be replace the gravity belt thickener. And then water we have a capital plan. We have a plan where we're going there. So those are the capital plans. It's what we plan to spend our money on to improve the biggest pieces of the capital assets of the enterprise system. The one thing I will add while we're talking about capital is that the... Another advantage the enterprise funds offer us is that we don't have to put that... those expenses into the calculations that the Joint Capital Planning Committee makes because JCPC is looking at an amount that is based upon a percentage of the tax levy and that's determined on an annual basis. And that we, as we struggle to do many things with our capital, the major expenses that go to the enterprise funds for water sewer systems that are not being paid out of taxes then are not... don't have to be considered as part of the JCPC process. Yes, Lynn. So if we... But if we were going to put a capital expenditure value on these various enterprise funds per year, we could actually say that above the 9.5% or 9% or whatever percent we're going to spend as authorized through the council, this is spent for capital on top of that. It is. Okay, thank you. So when we sit down and start talking about how to run our system, we basically do the calculation. What are you going to bring in and what are you going to spend? So this is a breakdown from FY 2019 of what the cost to set up the sewer water fund and what our expenses were. Salary and wages, 1.1, expenses, 2.1. Expenses gets broken down on many more things and expenses, but I couldn't... I would have had to show you the whole budget to show you all the expenses. But like I said, it includes OPEB cost, it includes health care cost, retirement cost, operating costs for electricity and gas and diesel fuel, it includes payment and fluid taxes to the town. It includes also tax revenues and tax revenue we have to pay our tax liability. We have other communities. Capital, that's the capital we had for that year. We had $219,000 in capital planned for that year. General fund services, that is the cost where we talk about indirect costs. That's what the town services, the general fund provides to the enterprise system, the accounting department, the HR department, the conservation and inspections department. That's what we pay for those services from the town, our share. And then the debt, that number at the bottom is what we're paying on debt service for all the bonds we have out in the water system. So then that's what our expenses are. And then we look at what our revenue will be. Water rates. Is the maintenance included somewhere there? Like, I know the wells because I am in South Amherst and recently had that well thing issue, so do we have maintenance? All the money for like repairs to the wells, repairs to meters, that's in the expense line too. There's probably close to 60, 70 lines in that. If you actually look at everything, we kind of break down in the expense side. Guilford, when you get to the general fund services, is that just a ratio on overall revenue, like your draw on the overhead is X% for water and something else for sewer? Yes, it is and no, it's not. Okay. It is a percent of the budget. But we actually, every few years, we go through all the services that we've been provided by the general fund side. And we actually look and balance to make sure that the percent we're taking from our budget to pay for the general services makes sense. We just can't make up a number. Like, if you're a million dollars short on the general side, need a million dollars, you just can't divide that between the, you have to have a rhyme or reason because the auditors will expect rhyme or reason why you chose that number. My frame of reference, I'm just thinking, yeah, in large hospitals, so used to be a debate on how much the emergency room was really using the cafeteria, in terms of it was being built back, it was the same idea, central operating entity was billing out to different departments here, you've got it sequestered, okay. Two questions, picking up on Cathie's. But that general fund services not a negotiated rate with an outside cognizant agency, it's done defensively so that our auditors accept it. It's done so that we pay for the services that our general fund provides to us and we have backup and accountability for why we're charging that. But it's set by us. But we have to be able to show reasonable process by which we set it. Correct, I mean if you actually break it down, break it down, the rates that we are charged are based on the contract rates for employees' times and those type of things. If we actually had an outside person providing this service to us, you would see that number in the expense section. And my second question is about the debt line. And whether or not that debt line shows up in Sean McAno's work or it does. It does not. Okay, thank you. And I brought the water fund from Paul's budget document. And if I go back to FY15, the expenses ran higher than the revenues. What happens when that happens? I'll tell you in a second. On the debt side, for debt service, that to me that looks very big. Is this good or is it going to get better or should I not worry about it? That's debt service, right? It's debt service. It is actually, and I'll show you where it comes from in a few minutes. It is a good number. We're not really deep in debt. I mean we're actually, all together this is a $4 million budget. Not on that $4 million, half a million is your debt service. I mean that's a lot of money. It balances out well. It's our water system with a lot of capital. Yeah, I think that is a problem because you think about all of the pipes and all of the plants that we have to run through the water. It's a very capital intensive operation. So then when we balance the budget, we're looking at these items, basically. Water rates is our biggest source of revenue for the water side. How much water people use and what we charge for that. That's our biggest intake of funds and revenue. We have water liens, that's people who don't pay their bills. We lean them, we collect the water lien. That number is about what it's normally been. It's gone anywhere, one year it was 90,000. A few years back it was as low as 50,000, so we budgeted a number for that. Water connections fees, we always have new construction going on recently. So it's always a number you can figure what's coming in on the road. So that's the connection for one East Pleasant Street. That's the connection for one Kendrick Place. If you have an existing water line and you have to change it and you have to upgrade it, that goes into that fee as well. Because there's a charge to renew your water system to renew the connection. Other water revenue, it tends to be mostly things we sell out to surplus out. If we have a piece of equipment that we trade in, that trade in value doesn't go to the general fund. That vehicle value goes into the other water revenue. If we collect a lot of water meters as we changing them over, we strip them down. We have a scrap metal component. We have brass and then we have general scrap metal. We send that to the scrap yard. That money comes back in and goes into other revenue. If we do some special event and there's a charge for the special event, that goes into other water revenue. Then we have interest in late fees. Interest is not that great, it's like your savings account. Late fees actually has been getting better. People have been paying more on time, so it's good. Then you see that line at zero for 2019. In 2019, we use no money from our surplus to balance the budget. If we need to balance the budget, we had more expenses than revenue coming in. We would then go to our surplus and we plug in a number for the balance of the budget out. If you add this page up, and this page up, they both equal each other. Just like they should. But we don't do it in a simple method like this. Hold on. We do it. We have a big sheet with multiple pages and this is how we do it. This is actually the sewer fund. You can see at the top. You can see the different on this column here are the expenses and revenue sides down at the bottom here. We have down here is a certified free cash, which gets certified every year and that's how much we can take. So the sheet has multiple pages and I'll go through it really quickly. Our other operating expenses are revenues. Other operating revenues, these are the things that make it up. For the sewer side, we have entrance fees, septic tank disposals, leans, interest again, interest in the fees again, miscellaneous. UMass sometimes makes a special, has to make a special payment for something they're doing to the system. We actually had a cell tower on one of our properties and the rent from the cell tower went to this. And then you have the rest of those things. We do get grants if there's a grant that would show up here as well. So these are all the other operating sources, our expenditures, our debt. And then this debt page is really what you look at if you really want to see that number and where it is. So in the sewer system for 2019, we had $11,000 to pay for sewer extension number one, which is Mechanic and Chapel Street, I believe. And then they had a second, no, actually, no, sorry. This is Amherst Woods, this is the Amherst Woods sewer numbers here. And then Pine Street, we put a sewer on Pine Street. So we're paying for the Amherst Woods sewer and we're paying for the Pine Street sewer in our debt right now. We've paid off other projects we've done. We have the, when we do this and we start playing with the spreadsheet, we have this section called Proposed Debt. And we can look at things we want to think about doing and we can project out what the, what we think the rates will be and what the debt will be over a 20 year period or a 10 year period. And so we can do all our planning with this document to see where we are. Okay, when you're, when you're doing your playing with your document out several years, so you've plugged in 5%, does that cut across? So I'm thinking Paul, across all documents that are best bet would be 5% for those years, or does each enterprise form do its own crystal ball? That's, those aren't the rates right now, but just, you know, I'm just getting a sense of like where does 5 come from versus 2.5? The interest rate comes from what we think will be charged with the time we go to go out to borrow. So it's a decision that's made usually by the finance director and concurrence with the controller lately. They decide which one we're going to go with. They talk to our bond counsel and they have to go. So you basically would all have the same number, whatever it might be, in terms of someone's reason, judgment? Yes, so I mean. Well, that would depend on whether we're permanently bonded and already had a fixed interest rate for some of these. And some are just bands that we haven't permanently bonded yet. So we get our best estimate from our financial advisor on that. This was the answer you gave me the other day. These bands are more, you know, you're not going to a really long term. You're doing a bond anticipation notes. So they're basically cash flow money while the projects being done. Usually we're in the proposed section. It looks worse than the real life is because we're really conservative. We're just, even though this is Amherst, when we do this, we're very conservative about how we do it. And then this is our smaller capital. So these are the projects that we are going to pay for out of our rates or out of surplus. We're not going to bond for. So these are trucks, mowers. These are small sewer line replacements, collection system improvements. It could pay for a pump station upgrade. It could pay for a half mile of sewer line replacement. It could pay for other things. The sewer jet vacuum cleaner right down here at the bottom. That was a good one. That was a $385,000 piece of equipment. And it fit within our what we had in surplus. In 2019, we set aside a million dollars to pay for our new gravity belt thickener. So sometimes we do have big ticket items in here. Sometimes we don't. Yeah. Who makes the decisions about how you're going to spend your capital? So our capital decisions are made based on our capital plan. So that's where it comes from, basically. And we move from there. Most of the capital plan is put together by the staff, our consultants, and then what we know with our permitting and what's coming down the road with DEP regulations. Though it does come back to now the council through the budget because the budget that the town manager will propose will include a section of each of the enterprise funds that includes the capital. All this is just the planning process. It all has to be appropriated. And the appropriating body is actually who makes the final decisions, if you really want to say it. Just staying within that, the back and forth. So suppose the capital planning process for the large expenditures you've got would have, depending on how you do it, a differential rate on the water rates or on the sewer rates. Would that have to come back now to the town council to say yes? Yes. OK. So that's the last page. So those are the pages that go back into the spreadsheet. That's the front page here. And then in this little section right in here, you can see the rates needed to cover our cost. So this is how we determine what we're going to recommend as a staff, as the new water rate or sewer rate. And that's what we recommend. And then that does have to come through and be approved by the council or the water sewer commissioners. So yes, that's how that's done. So I guess I think there's one thing to look at the rates. And assuming you've done the math correctly, to say you need that rate to cover your costs, well, we're going to give you the rate. Otherwise, you can't cover your costs. And it would be another to say, do the costs have to be what the costs are, which is what's driving the rates? And once you've decided to do the capital, it becomes the cost. But the year before, two years before, you can anticipate. So is there that if we do this now, the rates will need to increase our rates next year or the year after? Yes. And we can do that in our document. As we actually look, there's different years here. So if we have a capital question and we're trying to decide whether to do a capital project now or do it a year or two later to soften the impact on rates, we can go to the capital page. We can move it out a little bit. We can see where it fits in. And you can watch the numbers change. You can see the rates change. You can see how much surplus you need to pay for your yearly rate. Or you can see how your surplus is building or actually how your surplus is crashing. You can see all that as they go through. So we'll look at that as we go through the whole planning process. We'll move a project off a year or two years. We'll downsize the project to make it smaller so we can keep the rates within a reasonable area. And then we go back. Once we've done that, we do do a couple more checks. Even though the spreadsheet says this is the rate we need, and this year the rates need to be this. And that's going to be the recommendation to you, is that we increase our water and sewer rate by 10 cents. Then we'll go back and we check and see what everybody else is charging. So we don't just do it in a vacuum to see if we're in the right area, if everything is. We do make sure everything fits in. We don't just do it in a vacuum and say we have to make our world work. We have to make our world work in relation to all the other worlds. The only issue is when we do this kind of balancing act, these are rates reported to Ty and Bond, which is an engineering company in Westfield. And they put out a report every two years. So the last report was 1718. They haven't done one for 1920 yet. So those are the water rates, as you can see them marked. We're recommending going up to the rates that are there now in the yellow. Northampton actually just released their water rates. And there's two Northampton lines here. This is their rate for 1718. And this is the rate they're proposing for 2020. And we take it and we compare it. So this chart here takes the rate and actually compares it to an average household. An average household uses about 120 units of water a year. So we're charged the water rate 120 units. You charge the sewer rate 120 units. And that's how we come up with the overall number. So we're expecting, if we increase the rates, that the average household in Amherst will pay just under $1,000 a year for their water and sewer. Where other communities, you can see, we're almost at the bottom, even though these are two-year-old rates. We're almost at the bottom of the group we look at. So we check everything and we balance it out. We don't just think what we need. You've got two in the two doors, Ian. Dorothy runs. OK. So what do you attribute this wonderful news to? What wonderful news? That we have great rates? Yes, yes. That we are very competitive with having lower rates for water and sewer. I mean, so my husband, I just hear, wow, the water rates are high. But now I can tell him, well, comparatively, they're not. But what are you doing differently from what other people are doing or what's easier about Amherst than other places? We all think it asks that question. We have a really good staff. We have very good employees. If you go toward the wastewater treatment plant, that plant was built and put online in the 70s. It's only had small, little upgrades as we've gone along. We do have a major upgrade for the wastewater plant coming. And that's going to be a big number, and everybody's going to fall off their chair when they get that. That's coming when it comes as years away, hopefully. But we have a great staff that maintains our equipment, and they take great pride in the equipment, and they keep it running properly. The water side does the same thing. We also have the ability to do things other departments don't do. We switch highway guys over to help with water repairs. We don't bring a contractor in to do that. We bring contractors in for big things that take a lot of time. Small things that are quick and easy to do. We move people around, and we take care of things. We do have a complicated water system. And that is a challenge, and it's a benefit, because we can switch water around easier than most communities. Most communities, Northampton has really only one source of water now. Everything goes through their main water treatment plant up at Mountain Reservoir. That's it. It all goes through that plant. So if something happens, it's just that plant. We have the Atkins plant. We have the Centennial plant, which is actually offline going through some upgrades. I'll hopefully soon be upgrading. We have baby carriage, and we have five wells, four wells. Sorry, baby carriage is a well, really. So we have the ability to be a little more flexible and be a little more agile and responsive. Is Atkins the newest of the plants as far as age since it was constructed? Atkins and baby carriage are about the same age. Is there? Yeah, go ahead. Can you do the same? Some of us are an onsour. So can you do the same kind of internally? I don't need to see it, but just water without sewer. So you'd be able to do internally the same kind of look on pure water rights. Yes. Actually, you just look at the water column. If you just use the water column, that's what you're. Oh, look, but I just didn't see that. Yes. So the water column, if you just have water, you'll get 468. And if you do water and sewer, you'll be the two together. Thanks. I just didn't see the profile. So our higher ed institutions, all three of them are big customers. Are they paying the same rates as residents? Yes. We used to have a stepped water rate. We used to have a rate that was three tiered. The larger consumers paid a higher rate, which is we actually look at Northampton's water rates in the town of Hadley's water rates. They have a tiered system. Based on your usage, you pay more. We don't have that anymore. That was changed back in 2006 or 2007, 2008, I think. We just have one rate. Everyone pays the same rate. Why? It was a decision made at the town manager's level to only charge one rate and do away with the stepped rates. We will probably be told we need to go back to a step rate system because it's recommended by the Department of Environmental Protection that you use a step rate system, one, to encourage conservation, and two, to penalize those who are high users of water. Yes, Lynn. Is that a DEP requirement? I mean, Cal, what kind of leverage do they have over us to enforce that we do that? In our next water permit, which we may see in my lifetime, it will probably be a requirement that it's one of the conservation methods we can use and that we have to use. So there'll be a toolbox of conservation methods, and that'll be one of the ones in there. And I'll rate you on how well you do conservation by which method you use. And that's how we will probably be forced to go back to a tiered rating system. Shelby. You don't have to answer if it's not appropriate here, but I was wondering if you did want to go to the step rate, what would be the process? Like, who initiates that? If we want to go to a step rate system, usually if the council wanted to do that, I would tell the town manager we want to investigate it, and we'd investigate it, and come up with some proposals for you, and present it back to the town manager, and it come back. The reason it's a little bit different in this community is that we have our three major water users or our three higher institutions of higher education, so it impacts them dramatically. And I think as a conservation manager, if you have a, if you're a high water user as a residential customer, they want to encourage you to cut back. And so I think that was part of the thinking at the time 12 years ago when they talked about this, and I think that was in conversation with the institutions of higher education as well, because it had the big impacts on those institutions. It is. If you really want to do a case study on the last community that just did step rates and the feedback they got, Northampton's the one to look for, they did a step, went back to a step rate system, and a lot of people raised concerns about it, and if you look at their step rate system, they have a residential step rate system, and then they have a commercial system. So they kind of came up with a happy medium that actually works, and so there's multiple ways of doing it. The way we used to do it is probably not the way we'd ever propose doing it again. So how do we, one of the issues with water in the, in every, all the time, but increasingly is contaminants, PFAS, I guess is one of the big ones that's been talked about. How do we deal with that? Do we work with the state on that, et cetera? So we go through the same requirements of every water system for those issues. We have what our standard testing is, because there's actual requirements we have to test for and make sure they're not there, period, or we have to make sure they're at a certain level, period, and then we have a whole list of contaminants which are called emerging contaminants. It's great. Can we test for those too? Yeah, I think it's the one. So PFAS is in there, 1,4-dioxane is in there as well. There's a whole group of them that are in there. A lot of the stuff you see around farmland that is used in pesticides are in those. We have not seen anything every once in a while in our monitoring wells. We'll see a 1,4-dioxane hit. But we have not seen a PFAS hit, and we have stayed well below the interesting thresholds that have been set for the other unregulated contaminants. And then what they do with those unregulated contaminants is every like 10 years, they take the ones that are important and they add it to the required testing and then it drops into the required testing pool. Other questions? Yeah, the challenge. So going back to the step rate thing for UMass, is that something we could use to negotiate with UMass for if we're not charging you a higher rate for water and stuff, can they compensate in other ways? Are we doing that already? So we can do that. We are having conversations with the university about a lot of different things. We've just collected all of our interactions with the university, so that's one of the things. I guess there's one thing that I just want to clarify to the committee. We are now the water and sewer commissioners, which is an additional responsibility. The way that the former government was that we had a town meeting, which was the legislative and the select board, was the administrative and the select board was the water and sewer commissioners. So when we received water and sewer recommendations at the select board, we had no committee to refer to because we didn't operate with committees. Now the question is gonna probably come up as to when the water and sewer rate process goes on how it's gonna work within the council and I'm not sure that we've talked about that. Actually, we did talk about that just last week and I can't remember which agenda it's going to be on, but as soon as we get then it will automatically be referred to the finance committee. So it's very good that we're learning about this today. And we also made it part of our charge. We wrote a line in. Is there a requirement and I can ask all three of our staff present that there be a hearing process because we always labeled something as a hearing process for rates to allow public, invite public input. Is that a requirement and does the council have to make a decision as to whether the hearing be before the committee or the council as a whole? I don't think there's a requirement, but I think it's probably not a bad idea to have one. But typically the select board would and no one ever showed up really. Right, but we did invite it. So that was, I mean it just is another thing that we need to think about. I'm just trying to think about trying to create future processes, which we're doing as we go. We could include as part of our budget forum or hearing. If the timing is right. If the timing is right. That's the, so are there other things? I really appreciate the presentation and I'm glad that you ended with this chart because I've always tried to lead with that when people complain about property tax rates. Say, hey, but you really do well on a lot of rates. Yes. Just from the totally uninvolved citizen point of view. We get these little robo calls now and then saying, we have a slightly high level of something in our water today. Don't drink it or boil it before you use it. And I've gotten a number of these and I haven't known whether to be worried about them or do we have them more often, less often? Just general comments on what this means and what we should think about it. We have never sent out a robo call saying we have a high level of something in our water and town. So it's not a town, unless someone is making. Then I must be saying it wrong because I've had it with the town manager named. I've received these calls. Maybe they've said, maybe watch out for your water. I have received these calls and ammorsed. Yes, I have. We're receiving calls when the water level was low. The pressure was low. The pressure was low. Yes, we did send those calls out. And sometimes when the pressure is low, not only are you supposed to watch your use, but it can lead to maybe something. I don't think so. It's pretty much watch your water views. In the near, in the current future, I mean, we haven't sent out anything except for the low pressure calls that we had low pressure during one of the hockey games at UMass. Oh, it was the weekend of the, weekend of the Blarney blowout. Well, but about two years ago when we were going through the drought, we did get calls. Those are to conserve. We got calls to conserve. To conserve, right. We didn't call to warn people. I think maybe the last time we did something that said something about possible contaminants or that we were just seeing out, notices was quite a while ago. I don't. In the last eight years. I can go back and check. Under the previous town manager, I remember getting those calls. Previous town manager might have done that. Yes, maybe that was, we typically don't want to do that. We typically do not want to send out a robo call saying anything unless it's a dire emergency. And when you get one of those calls that say, this is a problem with the water, you shouldn't drink it or you need to boil. That's the what we will say. And we will tell you specifically what to do and what we expect. We won't give out any ambiguity. We do not try to like to send out calls that give any ambiguous data or ambiguous information because that just causes more problems. Anything else really to Mr. Moreing's presentation? Well, thank you very much. I really appreciate it. This has been very informative and helpful. You're welcome. We'll be back with a big story later. Then I'm going to go back up to the regional school issues. There are four things that we will be required to do on the regional school. And I just want to put them out. And I don't know, Sonia will advise us in a minute as to whether we need to do all of them at the next meeting or only three of them. But the first one that will happen is that there's a requirement that in the regional agreement for the schools that three out of four towns have to approve the overall regional school budget so that the budget has to be approved. And that's step one. Step two is the assessment method which we've had a lot of discussion about because it is not the statutory method but an alternative to the statutory method. It has to be approved by all four towns. So that's the second course. Then you take the assessment method and the result and that versus in the amount that the budget that we would be considering and how much it is proposing be raised by assessments and that gets to the amount that Amherst will be required to pay in the fiscal year. So there will be have to be a vote to raise and appropriate the funds from the general fund budget to pay that particular assessment. So my question I guess was on that one is whether that has to be at the same meeting or not. And then the fourth thing that we have is the capital budget request. And I think we've previously explained that that there's a requirement that if we are going to object to the capital assessment that they've proposed that there was a 60 day window to do it from the time that we received notice. So that's the fourth thing that we need to consider. If we take no action, then that is the same. I mean says we agree to it and that's it. So I think that we have four things that are there. And would you Sonia assume that we're gonna take the vote to raise and appropriate the funds at the same meeting? So there will be four actions and whether we do this at which meeting we do it, I think this is a termination that the president will make. But those are the things that we need to have recommendations on. Andy, can I just, since the budget, since our share of the budget, but also the entire budget is dependent on the agreed on assessment method, how are they separable? Are you just saying we have to take a vote on each because we had to come up with an assessment method since it wasn't statutory. Once we get the assessment method, we've got the budget. If we did a different assessment method, we'd have a different budget is where I'm. No, if we had a different assessment method, you'd have a different way of dividing up the amount that needs to be assessed for property taxes to the four towns, but. It might not affect the total budget. It wouldn't affect the total budget and there's a different vote requirement for the budget. I mean, that's a statutory process that it has to be two separate votes. But if a budget passes and the assessment method doesn't pass, then the assessment method becomes the statutory method and the statutory method gets applied against the amount in the budget that is to be assessed to towns. There are other revenues that are factored in when you look at the regional budget because it receives state money, it receives federal money through the state, through IDEA, which is for special education, receives regional transportation money, and could choose to use part of its excess and deficiency budget and other grants so that there are other revenue sources. Okay, I understand. So I think that we've had several presentations now in the budget and I didn't, I assume that we had no need to delve further into questions because we had that opportunity at two separate meetings. One of the committee, one that was of the committee has a hearing with the council present. But we do need to take to make recommendations now to the council on the four matters that I indicated. Do we have these written up as the motions that they need to be? The answer is no, but they will be, I think is the, and I think that we know they're fairly straightforward. There's, the wording will need to be crafted before it gets to the council so that the actual wording of the motion is what we want it to be. So we can take a vote on these, but the actual motion that goes to the council can still be crafted after our vote. Correct. One is to, the first one will be, and I think I'm gonna break them apart so that we can see if we have motions on each one of them within this committee and then can decide when and how this is being reported. But the first one is whether to recommend approval of the proposed budget as presented by the superintendent to the committee and at the public hearing. Okay, so let me make sure I've got that motion. So it's to recommend to the town council approval of the regional school budget. Yes. So there's somebody. And I guess I heard, I mean, and you can wordsmith it later, but this specific budget as proposed at the public meeting. I mean, we have an actual concrete proposal. Yes. As proposed by the regional school committee. Yeah, as proposed by the regional school committee and, or you could say as proposed and presented by the superintendent. That's it. I make a genius to make a motion and second it. Is that what we need to do next? I think so. Do you apologize? I may have some sample suggested language for you. Okay. Move that the town council, well, you would recommend that the town council approve the Amherst Pellum Regional School District operating in capital budget of 32 million 167,342. And that the town raise an appropriate 16,444,279 as its share of that budget. And are those two separate votes, Paul? No, that could be one. In a town meeting that would have been one vote. But it combines your first and your second, third point. Yes. Okay. So you've got these motions, right? I have a sample motion, yes. Okay. So I'll get them from you for the minutes. So I put that motion on the table. Second from somebody? Kathy? Okay, since it's been made the second, I think during the discussion on the motion. Hearing none, all in favor indicate. So it's five to zero. And is there an assessment method motion that you have to recommend? Sonia went down to get that. So if you can. Okay. While we're talking about this, the real issue then is whether or not the rest of the finance committee, and that's the four of us minus Andy, feel comfortable enough with this to have it appear on the April 22nd agenda for the town council. And the reason I bring that up is because Andy will not be able to be there or will he be able to be there remotely. And so if there are any questions about the budget, about the assessment method, about the amount we have to pay for the assessment method or the capital, although I think we could wait on the capital. The question to the rest of us is, do we feel comfortable enough, obviously with Paul and Sonia's assistance to be able to answer any questions that might arise? Because that will determine whether this goes on an agenda for the 22nd or whether we move it to a meeting presently scheduled for the 29th of June. So my question is, if a member of the council or the public asked us a question at that meeting and none of us felt confident to answer it, would Paul answer it? Yes. Yes, Sonia and I would answer it, yes. Yeah, Paul or Sonia would answer it. And I mean, yes, they would answer it. Then I am comfortable in having the meeting at that time. To have it on the April 22nd agenda. And I am also, and we've been given background and documents that I think actually help us even on things like the assessment method because we were shown the preferred method versus alternatives and it quickly becomes clear that this makes sense why the four towns came up with it, yeah. Yes. And the other point is you did have a public hearing on the regional school district budget and no one commented at that moment. So there was an opportunity for the public to come in and raise questions. It doesn't mean, I mean, and the president could entertain questions or say we've already had the public hearing on that. So they don't have to entertain if you chose not to. Correct. I did, on an issue of this, my feeling is that given the whole new cycle of budgeting and budget in relationship to the charter, this for some people in Amherst feels out of sync. So I just wanna make sure that we feel comfortable and the public feels comfortable with our action. And they only feel comfortable, I think, if we feel comfortable and we can convey that. That's all. Shall we? Maybe I need to go and read up about this, but is there a summary you can give of the assessment method, Andy, why you felt this was good for our town? And if you think I should just go and read because I honestly haven't read that document. So if you can point me to the document, I should read about that. I think, Andy, just let me suggest that I think we could get a very good two or three sentence description from Sean Magano that would be fine and I would feel comfortable with that. Take it all. Yeah, no, thank you. I appreciate that. And I think that what's important to recall and to report is that there was a process that involved all four towns and in the process representatives of the four towns looked at numerous methodologies and alternatives and came to two, which was presented to the four town meetings with recommendations, three of the four members of that committee favored one person withheld. And then at the four town meeting, we reached a unanimous agreement for the four towns. And I think that that's, so it's partly, I mean, to get into the technicalities of all of the different methods that was considered, I think I'd have to call on Sean because I'm not sure that I could even pull that one off. I think we can ask Sean to give us a minute. And I think if we had to add one more sentence, it would be that you've got a blend of the statutory method and our own method that we're gonna live with for X years. I mean, we've got something that we, you know, whatever that I can't remember the exact wording, but it was a blend. And it was, and it was an agreement that we try it. Well, nobody's bound to it because we'll have to vote on it each of the years. There was an agreement that it would be proposed for two successive years, so that we would not do this process again. And so... Can I ask a question about the capital? Do we need to vote the capital? Maybe we're ready to, but it's not an expenditure until 2021. No, there's 60 days from the date that the school committee provided notice to the towns and the member towns and the action has to be taken within the 60-day window. You're well within that 60-day window. We're well within the 60-day window, but it's not something you can leave forever. You can leave it forever, but leaving it forever is agreeing to it. I would suggest that based upon fact that it was discussed at the Fortown meeting and presented and we all understand the middle school roof and the need to preserve and protect that building. And also, we in Amherst have the additional consideration that we might wanna have our sixth grade in a school and we'd rather not move them from a school with a leaky roof to another school with a leaky roof. It's not so about it at all. So I would suggest that the recommendation might be to take no action. Take no action or take action that strongly urges that they do it in support of keeping our buildings in good shape. I have to go back and look at the regional agreement now to see I think that it does set it up so that it's assumed to happen and the only action is needed is to stop it from happening. So given that and the fact that we'll be dealing with a lot of other budget votes in May, it seems as if we can let that one, if we're going to make a statement at all about it, wait. And by that point, we can check with what it is the regional agreement. Yeah, I guess we have to just check to see when the 60 days is up. And I don't know if we have, I'd have to look for that email to find. My recollection is the earliest it's up is mid-May. I think that's right. And of course, the way they time that is quite frankly, so that it goes through town meeting season in the other towns and gives other towns the opportunity to act if they so wish. Under a town form of government, the select board would have to decide to put it on the town meeting war and so it would take an action of two bodies in those towns. Let me ask you this then. How many towns have to agree to that capital expenditure all for or just? I believe it's all for one objects. So my only reason for suggesting we actually proceed is to send a signal to the other towns that we plan to approve it. I actually don't, I'm not sure Lynn what you're asking, but I thought it made sense to go ahead and vote on it here. I don't see any reason not to since we heard why and other things that it does for the potential of moving sixth grade in with some things with the roof designed to. Yes. So do you have wording for the? Is this both of them or just the first one? It's just the first one. Assess amendment to regional assessment. All right, so the motion, I'm gonna make the motion, if you don't mind. I don't. And that is to recommend to the town council that we vote to amend section six. All right, said. Is that correct? Am I doing the right one? Yeah. Of the Amherst Pellum School Regional School District Agreement by adding subsection J as follows for fiscal year 2020 only comma, the alternative operating budget assessment shall be calculated as 30% of a five year average minimum contributions with remainder of the assessment allocations to the member towns in accordance with the per pupil method found in section six E of the Amherst Pellum Regional School District Agreement. The five year average of minimum contribution will include the five most recent years or take any other action relative there too. So the motion's been made. Yeah. Seconded? I just don't know. You may not need that or take any other action relative there too, but because that's more like town meeting language, but if it's there, it doesn't hurt it. Okay. Yeah, I was gonna say, I was reading the same thing. Okay, so it's been motion made seconded discussion. All in favor indicate. So it's five to zero. Did you move second? Yes, I did. And I think the wording you just gave us is really helpful because that very first sentence, as opposed to the italicized sentence is nice and clear. The rest, you have to know what section six and various things are where the first is, you know, so the two together are very helpful. When we give this to the council, we probably should have the regional agreement in the packet. Okay. You know, I think that the motion that we can make is that we recommend the funding of the capital project for the middle school roof is proposed by the regional school committee and any appropriate action to assure the... Any appropriate project. I would so move. Then it gives flexibility as to exactly the actions to be taken and I don't think that we have to specify which actions we're taking. Can you give me the motion again? We're recommending to the town council. Take appropriate action in support of the recommendation of the regional school committee to assess capital funds for the repair of the middle school roof. The committee to assess funds, capital, assess capital funds. Will the repair of the regional school, thank you. And just remind everyone the way this will work is that we will be assessed under a different assessment method than is used for the general budget. It is a method specified in the regional agreement for capital. And to any, is there a second? That motion, you've made that motion. You made the motion and Dorothy seconded it. Okay. So discussion all in favor say aye or raise hands. So that's five, zero. Okay, thank you. Thank you for getting the language, Sonia. Did you need the fourth one? Because Sonia's actually given you one to raise an appropriate transfer of the available funds. Is that your fourth? That's actually the one we used for bullet number one. Yes. Okay. Is this the motion that Paul, that you read to us? It's no, it's different. So that one we had to revise because it didn't have a funding source on it. So you're, but you have the motion written down. Yeah. And it covered both, I'm sorry. You had the motion written down. Well, the budget and the raising, raising the money and appropriating the money. So it did the two together, right? Yes. So we don't need four separate ones, then? No. So is the, in the consensus is that the committee will present it on the 20, provides it's presented on the 22nd. Do we want to, should we just designate our vice chair to make that presentation on behalf of the committee? Is the vice chair willing to do that? The vice chair is totally willing to because I'm assuming by then I'll have a clearly worded motion and I will be able to verbally explain why we reached that conclusion, yes. Mr. Chair, so we will do a memo that will include the draft motions. The draft motions will be on the motion sheet. So there'll be three motions and we'll do a memo that puts it in context that the council can refer to. I've noticed that the council reads its material and then once they feel comfortable, they usually are pretty comfortable moving forward. And if we need to, I mean we could do a half a page report that just says we're bringing this and this is the reason why, just as background to those. Yeah, and if you need to consult with me about it try to do it before Thursday night, Friday morning I'll be thinking, Paul's reminding me I have to pack sometime. I will. I think this is good because we have so much stuff coming down at us. It's good to tie this up so we can move forward. You notice that's why I said about a half a page report. So yes, I can get that. Okay, so we put budget review on the agenda, Paul. So after your last meeting, there were some members who had raised questions about where we are in the budget process and Sonya has the most recent overall budget review because as you noted in my town manager report I've been telling you there is still a gap that we're preparing to address. This shows where that gap is and we can Sonya will be able to talk about how we will get there to address it. So we will have a balanced budget come May 1st. One of the questions I had as you lead us through this is I saw the note in your manager's report. So I was not sure to what extent it was a combination of two things or mainly one source. So one would be our expected revenues locally were coming in at less than we expected and how much it was that the state funds were coming in at lower than what we'd originally, so where the, or of course, expenses could have been higher too, but we've been hearing expenses have been coming in about it, right? So sort of the source of, and I'll be able to cross compare these, but I figure you know that by heart. Would you like me to run through this a little? Yes. From the beginning. Okay, we'll start on the revenue side. So we're showing our tax levy. It's the green highlight fiscal year 20, green highlight at the top that we're looking at. So our tax rate increased at two and a half percent and then we've estimated our new growth to be 800,000 that comes from our principal assessor. So it's a pretty good number. Then we have our local receipts and we base these figures on trend over the last three or four years just to see what their trend's going. Then we have state aid, the state aid numbers are the governor's numbers. We should be getting the house ways and needs in next week sometime and I will update with that. Our net increase in state aid from what our original projection was in October was $18,000 more with the governor's numbers. So it wasn't a huge help to us. And then our, the other financing sources which is the ambulance fund funding, the CPA funding for debt service and our enterprise fund reimbursements what Gilford talked about earlier today in the enterprise funds is the indirect costs. This is where it comes into the general fund as a revenue source. And while we're still on that page, at the very bottom you'll see under other financing sources, you'll see overlay surplus. And in FY 19, you'll see we use 300,000 from overlay surplus. And we have zero in there at this point in time. So what you see is a reduction of $300,000. So that's a zero at this point in time. But last year we used 300,000 of overlay surplus. So is that basically how you help balance it? Yep, you pull down on that, yep. Just for the record, this is not a recurring revenue source. We've just had a couple of really good years with our abatements and exemptions that we've had to pay out. Then on the other side is our expenditures. We have the town operating budget increase of 2.8%. And the reason it's 2.8% is the added expenses for the council costs. And that's a 0.3% increase overall, just say now. And then our elementary schools at 2.6, we net out the choice and charter this year. The assessment came in lower, so it was in favor of the schools for a little bit. Most of the time it nets out to about 2% for the schools. The regional assessment, which is the number you just voted to recommend to the council. And then the Jones Library tax support. And the next section is our capital budget, and this includes our debt service. And if you look on the revenue side, you'll see the corresponding 421, 465 for CPA as a source to pay for that debt expense. So there's our ongoing debt, our current debt and our projected debt. And then our cash capital that we're paid for. So our 9.5% of the tax levy was $5,014,825. And that's what our capital plan will work out to be as well. Then we have miscellaneous expenses, which is our retirement assessment, our regional lockup assessment, our OPEB. And we no longer need reserve fund with this form of government, so that's been eliminated the 100,000. And then the unappropriated uses are the reserve for abatements and exemptions. Another word is overlay. That's where we get our overlay surplus. It's recommended by the DOR to appropriate 3% of the tax levy to cover any abatements and exemptions. We've always only appropriated 1% of the tax levy and that's usually been plenty. We have a really great assessor and he does a really good job at setting our tax rate. Then there's the cherry sheet offset, the assessments and the offsets. And we have our tax title. We raised $10,000 a year for tax title accounts. And then the 6,104 is for our Pioneer Valley PVPC Planning Commission, thank you. And we short revenue 385,848. So that's our deficit at this moment. Now, this will change once the houseway needs and needs budget comes in. We'll see if we work out better. We have a plan to use overlay surplus again this year if we need to to help supplement the capital so we can keep it at the 9.5%. Does anyone? So I pulled out the sheet that you had as of October 18th. So on the revenue side, we're a little bit higher than where you've been, I mean, not much, but you've pulled the deficit down by some of the other things. Right. So my two questions are on the town sources, our own tax, these are increasingly solid numbers, right? So the ones that are still uncertain are exactly what we're gonna get on state funds. With that, is that an accurate statement? Yes, that and new growth. It could be a little more new growth. It could be a little less. That gets certified by the state as we're setting the tax rate. The revenues never get settled until the tax rate is set. There's always some adjustment to local receipts. We have to, it's a huge calculation and there's rounding, so some numbers change, but very insignificantly. Yeah, we usually set the tax rate in last year it was October, so we're helping October in this year. So you had one line in the old sheet called Pag PEG that has disappeared now. Did that fold into something? Yes, that was for the Emerson media audio visual. We authorized borrowing of 410,000 chapter discussions with Jim Liscoe from Emerson media. They're not gonna borrow the money in this, they're not gonna be spending any of their money in this fiscal year, the remainder of this fiscal year, so there won't be any debt service in 20. It got pushed out for one more year. And I just did that this morning, good eye. That's a $100,000 gift, that's helpful. Pause to see if there are other questions. What we're going through is really not different from any other year that because we receive so much revenue that comes from the state that chose up under the state aid categories, and the governor's budget is not the budget, that's the only number we have to operate on right now until the legislative process starts. We don't really know, and it doesn't start until, actually we should receive the ways and means committee budget tomorrow. That is the projection, is tomorrow. And because it's always Wednesday before Patriot's day week. And then they take it up the week after Patriot's day week on the House floor after receiving all of the amendments. Do we usually do better in the House and the Senate? Yes. Thank you. Usually the governor's budget's our little watermark. Yeah, that's my experience with other parts of the budget. And the Senate, I don't think I ever recall them coming in with a number lower than the House number. And recently the state did, they were projecting a deficit, and not a deficit, but not get bringing in enough revenues but they've corrected and said that they're now on target. So I don't see a problem anymore. So we will. But at this point, the question really is whether we project that we have enough flexibility with other revenues that we think we can cover the expense side of the budget with revenues that we reasonably project to have. And I think given the fact that there's the overlay surplus possibility that the answer is yes. And this is everybody know what the overlay surplus is. The overlay surplus. Why don't you go ahead with that, Andy? I can do, any of the three of us can do this. There was a mention on the budget that an amount of 1% has to be set, at a minimum of 1% has to be set aside in each community that shows up as unappropriated uses reserved for abatements and exemptions. And that's referred to as the overlay account. And if people, taxpayers contest their assessment and there's a decision in favor of the taxpayer, that's where the flexibility is to repay that. The after a certain number of years, if the fund for any particular year is not used, it can be declared a surplus by the Board of Assessors and then can be reallocated for other purposes. And that's what the overlay surplus account is and there's some flexibility that comes from that. Do we let it accumulate until we need it in reserves like this? Which is kind of a nice cushion that you've got. So does it, can it just build up or do you know that we're never really drawing down on it? So do you end up spending part of it every year? We can let it build up. We're usually a couple of years in arrears for drawing on it. Once we declare it surplus, we can spend it for any lawful purpose. However, if you don't spend it by the end of the fiscal year, it closes out to free cash. So it doesn't just stay there and the surplus doesn't stay there accumulated. And what does free cash mean? It's what the state certifies every year. Your end are undesignated fund balance that's not obligated for anything. They certify that as free cash. So it's part of our reserves. So basically it stays in reserves. Right. So it's even more flexible than surplus. Surplus has to be spent in a year, so. No, the overlay surplus has well specifically bowed it. Once it's released by the Board of Assessors. Once it's released from the overlay account and declared surplus, it becomes available for expenditure until the end of the fiscal year. Is this what we would refer to as our rainy day fund? Not really. You can't really count on it. Our rainy day fund is mostly our reserves, right? Stabilization. Our general stable, okay. Yeah. The reserves are composed of what is referred to as free cash and then what we deliberately put into what's called the stabilization fund and stabilization fund gets voted in, I think still by a majority now and but it takes two thirds vote of the council to take money from stabilization. There was an effort to try and increase stabilization over the past few years in part because it's a part of the flexibility that we're working on with the capital projects. And the other thing that I just wanted to point out on the expenditure page under miscellaneous last item when there was a reference made by Sonya to the reserve fund, that's not the reserves. That was an entirely different thing. And that had to do with the fact that town meeting would pass budgets but town meeting only met twice a year. And if there was any kind of expenses that needed to be allocated between times the finance committee could vote to make expenditures from the reserve fund. So money was appropriated to reserve fund for that purpose to provide so that there would be a body of the old finance committee to make that recommendation because we are now a council that is meeting at a minimum of twice a month. We don't need to have that reserve fund type of action for flexibility because if there's an emergency expense, the council can always take a vote at any time. And that sort of obviates the need for that. It's really a mechanism that belongs to towns, not to cities. Yes. I have a comment about the abatement fund. And that is that it is good that you haven't had to spend too much money on it recently to allow the fund to be good, but there's maybe some challenges to, I forgot the word for when you evaluate a house based on some of the difficulties with houses nearby with a lot of students in it that are impacting some property values right now in some of the areas near the Colton University. So just want to say that I think it's good not to waste money on that. And to point out that that's a serious thing that we have to look at. I'm not sure whether it gets looked at in the new CRC committee or whether in the finance committee or where it gets looked at, but. So the assessors would look at that. They determine the property value based on sales, actual sales and people will come in and say they may make an argument my house isn't as valuable as it should be otherwise, but they will take that into consideration. But really it's based on actual sales on the ground. And that's how they have to base it. And the arguments made to the assessors have to be based on sales data as well. Well, there's some houses that can't sell because of being too near party houses. So I guess the answer is they could sell and maybe if the price were right. They could sell to somebody who's going to rent it out to a lot of individual students. But that's kind of against some of the, I'm just mentioning that the idea is to keep good assessments on the houses, to keep the houses valuable. Agreed. So going into delving into a topic that's not really our topic. The sad thing is that the conversion of houses to student rentals has actually increased property values and that decreased property values. Yeah, that's what I was going to say. So your house, even though you don't want to sell it that way, goes up in value and it's what you feel about your neighborhood didn't. But it's a market rate, not a personal. So other, yes, Lynn. I would like to go back to item five and make one request of this committee with regard to the issues around the finance committee charge. Okay, we can go there, but we can go there now. I'm sorry. We hadn't started the discussion of the charge, but let's go ahead. I didn't know since the charge was accepted by the town council, why don't you start the discussion and then I'll add Michael. No, I just didn't know if there was any other comments that would come from the committee, which is what you were about to do. So I didn't have a specific reason of my own to put it on the agenda, but I wanted to allow it to come before the committee if somebody had something to raise. So that was why it's there. So you had something that you wanted to add. Yes, I would like the finance committee to develop a set of questions for consideration by OCA as they proceed to interview. They're doing this for other committees. And I believe that it's appropriate for the finance committee to at least provide input to those questions. This is for the residents who will be recommended to the town council by OCA for membership on the finance committee. So how do we... Do you know when those interviews would start, Lynn? Cause I could, we're not meeting next week, but I could draft some questions and share them with everyone by email. And then the question is, since we can't each talk with each other and it'll be two weeks from now. So I just don't know what the timing is on getting them to set a question. I think that will be definitely be soon enough. Soon enough, two weeks from now. They have not set up any interviews. Not that I'm aware of. So if I draft a set of questions, get them out to everybody. So we make it the first item on when we come back together again, that we look at that. We do have to, I believe, isn't that the meeting also Sonia, where you've arranged for the actuary and the somebody else to be, oh, the bond person? Yes, that would be, I think, the right time. Okay, I'm willing to volunteer for that. And as I said, I'd get them out as quickly as possible so people could do their own edits, changes on it. So we come together with a group think, starting with a piece. We had a little bit of a discussion of skills, range of experience, knowledge, but trying to tease that out with specific questions that would go beyond what we might see in a resume or a CV or whatever else they brought us a document. It would be great. So you would share it back with, you're back with the committee, but it would not be for just, I'm thinking of open meeting law and what we'd know from Terny Goldberg. Not as for any comments on it, other than everyone would have an initial draft. So they, and I'd give it to them in a Word document so they could say, I've thought of two more things or I think this isn't. But the request is to bring those comments to the meet to an open meeting, not to send them back to Kathy. Exactly, just come to the meeting with your printout on your machine, whatever way is easy. So we could have a focus discussion. So we would have, so let me amend this by saying, I think it's not just questions, but it's also qualifications. I was gonna pearl you, we're looking for the following range and it would be great if they didn't all duplicate. I thought I'd send some pearl you like that and then hear your questions. Yes. So you'd circulate the questions and if we had other things we wanted to add, we would add that to it. And my suggestion would be that we just, write on the sheet, check the ones you like and add comments and then become ready to discuss them. Exactly, any way you want, just don't send them back to me and don't send them to anybody else. I'm always a typist, so, but any way you wanna write. Well, if we get your questions and we wanted to add something, how would we do that? At the meeting. Just at the meeting. Yeah. But come to the meeting with, as you just said, Dorothy, if it's easy to just write on what I sent, have them written out so we can be efficient. Yeah. I guess the only thing that I would say, since we're in public meeting and I can say it here, I would certainly would like to make sure that anybody who's considering the committee has a personal commitment to attend all meetings. That if there are barriers to, they're being able to make that commitment, I think it's something that should be known. We might want to have a description then of what our meeting schedule looks like, particularly the heaviness of it as we get into the spring. I think, you know, I have, you all just sent us the electronic copy of our current meeting schedule. So I can, we can make that plus whatever we come up with was what we think July or September, you know, the months where we didn't exist, what we think those months are gonna look like. Looking forward, yeah. So it's really a question, questions, qualifications and example schedule. Okay, anything else on that subject? Then I wanna, let's do foregoing to our own housekeeping things. See if there's any further discussion or questions about the schedule. And I know that there is one regarding possible June meetings which are the if needed meetings. But the schedule that's proposed for May, are there any questions about May before we jump into the June question? Then I think we have agreement. Thank you to Paul and Sonia for having made the arrangements for May. June, we don't know what we will need at this point. During that, we will have a requirement to complete our work by the end of May and to report back to the council. The council really has the month of June to work on the budget. Could be referring things back to the committee for additional investigation as questions come up. So I think for that reason and for other reasons, we did reserve dates on an if needed basis. But there's been a question that's been raised about scheduling problems for one of our members. Just one other thing, Andy, last time we discussed that that first June date, and I am fine with not meeting in the afternoon, the first June date might focus on capital because we're about to have a capital form. And so rather than it be FY19 budget adjustments, it might also be the prelude to Paul, Lynn, however we're thinking of doing that capital. What does that look like? Because it's supposed to be this year's capital but also inventory. We have that requirement by it's already set and Lynn, you've already set a date for it, right? We have set the date of June 10th at 6.30 for that forum. It will be in this room. The town manager and I have had an initial discussion but I really feel that the last time when we discussed the forum presentation, it benefited from this committee giving input. And so I definitely would like to see us have that opportunity at the beginning of June. Let me also add, I have no problem with changing the time when we meet. Yeah, I'm going to, I'm totally flexible to shift it to mornings and to other days but Tuesday mornings are fine. Thank you, because I will, I'm pretty sure be teaching that course just in the month of June in the afternoons including Tuesdays and Thursdays. But nine o'clock or 9.30, I don't know, whichever is better. For our fruits. I'm fine with either. Yeah, I'm fine with either. I'm an early riser so, but anything that's easier Dorothy, if it's easier for you to do nine. Nine would be better so I don't have to worry so much. Okay. Okay, so we will agree that any meetings during the month of June will be scheduled for 9 a.m. as opposed to the afternoon. And thank you. And the only thing, Kathy, perhaps because of Andy getting ready to leave town, could you make sure that the town, that Angela knows of these changes because they're scheduling rules? Yes. Thank you. I think it's Jennifer's one. Can, Kathy, we don't have any June 4th. I have rules meeting. Say it again. The June 4th, we have a rules meeting in the morning. Only on June 4th. No, the council votes on June 3rd. We, in theory, have finished our job. I think it's not in theory. The charter says whatever you don't finish at that point gets referred to another committee. We're done, Shalini. Okay, so let's go back to the top of the agenda. Yes, you did something else from this? I just need to catch up. Okay, so we've taken care of one, two, and three, of course. So I wanted to get back with four. I don't, I was reviewing one set of minutes and I'm almost done and we'll send those to you. I started working on that, I think it was. You know what, I didn't have in my notes, Lynn, did you do one other set of minutes that we didn't get back? I did, but you two all have, somebody has to tell me what date those were. Okay, I believe it was March, I went through all my minutes and I think it was either March 11th or 12th. I'll send you the note for it. I went through the meetings that we had a draft of and there was one I found that we didn't. I'm sure that's it, if you'll just send me an email and tell me which one. Okay. Thank you. And Shalini and I are gonna do a joint. We just don't have them ready yet. And I'll have, it's sent to you February 26th before I leave. Yeah, I actually, I think it was March 19th, but it's March 19th, this is the Dorothy first draft. Okay. Sorry, I don't know why when I touch mine, I'm trying. Is it better if I put it there? Yes, except if I don't, I can't. Here. How's this, ah, talk to the left, not to the right. Did we decide on the method where one person just is assigned to approve minutes? Yes, we did, I remember that. And is that person the chair? Yes, it is. I remember that, it's got at my nose, yeah. So obviously this is not gonna happen before you leave, Andy, but unless you would prefer that we reassign that. You know, we had a quick discussion and I just thought several times, Andy made track changes, corrected a couple of things and we were quickly to yes. But if anyone wants to re-delegate it to me, I'd be happy to and I'd always wanna check with Andy to make sure we didn't miss something, but you at least have two sets of eyes looking at it. You know, if we wanna delegate it that way. I'm perfectly comfortable with that. More importantly, I just feel we need to get some minutes posted. And if we can do that in the next week or two, that would be good. Yeah, cause what I have done when uncertain, it's what Shalini's doing with this, is go back and watch the film if I have to to just make sure, and sometimes it's just been straightforward what we did, but sometimes it was a conversation. So I think we could get caught up by next time we meet. Could I ask, I turned in the draft of the minutes for March 19th quickly, was it, what's the delay? Or is it, I mean, I did ask some questions in it, but did it just get lost between the people? I think it just, I take responsibility for it. It's just the amount of things between JCPC and the Finance Committee going on at this time. It's just been a very hectic period. And I know we, minutes, minutes are burdensome. I'm willing to do more than my fair share as long as people are willing to take what we call summaries of the discussion. Cause I can type and listen and talk at the same time. I type badly, but I go back and fix all the typos. So are we agreeing that Kathy is going to take over cleaning up and consulting with us if she needs to individually and approving minutes and getting them final, getting them posted? Yes, thank you. That sounds good. If Andy likes it, that's great with me. I think that's fine. I appreciate Kathy. Thank you. Is there anything else on minutes that we need to talk about right now? We'll finish, I think then there's no public comment. To ask if there's public comment. Is there anything else on the listed agenda item or other business that was not anticipated to raise? I have a question. Lynn mentioned that meeting on the June 10th. So quickly, I don't know what it is. I haven't sent out an email. We have tentatively identified June 10th as the required public forum for the capital. I'm not gonna come up with the right wording, but it's all about capital. Capital expenditures, present capital looking out over five years and some mention of the large capital projects and maybe even some more use of the model. And just because forum and hearing, one of them has the weird requirement is which one is? It's a forum. It's a forum, which means if we talk for half an hour, we have to wait for them for half an hour. We actually are, we may have a question into town, the town attorney on that. We have also consulted with the charter members of the former charter commission and who all seem to feel that dialogue that might take place after presentation would be considered part of public comment. So that what we're trying to do is come up with a way in which there's more of an exchange during public comment than a stifling of everybody. Good, yeah. And one of the things I thought we would do in district one, just to give, this one is a friendly mic. In district one, we have a meeting schedule, a district meeting schedule on May 12th and I would try to do a preview to ask people to come, to try to rally the team to come to the June meeting to be able to ask longer term as well as short term questions to realize we really wanted to get input. So there might be a way of doing a better job of encouraging people to come if we knew we were doing it. This is, because you're also, the thing says we're supposed to do current longer term, but also talk about an inventory of the town. It's kind of like where we are. So it'll be the first time, I think we've ever done this in Amherst, right? Focus separately on the word capital. Paul. Yes, so what you will be seeing is what we can put together in time for this forum. So it's not gonna be an ideal, and as you noted, and you said that you're on the JCPC, we have money set aside to do a really thorough inventory of all the assets of the town. And that was sort of the goal of that, those funds being set aside. Well, Paul, what Kathy is saying is great, linking the district meeting with getting them involved and coming to this forum. And we have, district three has a district meeting schedule for Thursday night, June 6th. We had to change it. And I know you'd agree to a Sunday event. I don't know if you've responded to the Thursday night one on June 6th. But again, that's just five days before. That would be a great time to get people interested in having questions and hopefully coming out to the forum on the following Monday. So anything else? Nothing else. I would like to thank Amherst Media for providing coverage for this meeting, which will be made available on Amherst Media and through their normal channels, and I assume including their YouTube channel. And so thank you, Amherst Media. And I'll take a motion to adjourn. And so moved. And I'll vote. We are adjourned at seven minutes after four.