 This is actually two meetings today. The one is the committee of the whole meeting, the full town council. And the second is the actual finance committee of which there are five counselors that are members. So as president of the town council, I'll call the town council meeting to order at 203. Thank you. I have somebody to take minutes for the town council. I have an official minute, a serious official minute taker tonight. And I'll call the finance committee to order also a 203. I could call the 204 just to be different. And I guess the question is at least taking some notes on any, on the parts of the meeting that happened after the committee of the whole, since then we do have some additional agenda item topics. Okay. So I need to make sure. I'll be glad to do that. Okay, so, but we'll just leave that the minutes will only, for the council will be also the minutes of finance committee for the department's joint meeting. And Dan, would you like us to introduce ourselves so that you know who we all are? And Chris, because you know that I'm Andy Steinberg because I was on the select board before and now on the council and chair of the finance council's finance committee. And I'm Lynn Griezmer, excuse me, I'm supposed to use our mics. I'm Lynn Griezmer and I'm a district two counselor here in Amherst. And I'm president of the council. Hi, I'm Dorothy Pam district three counselor. Hi, I'm Shawnee district five and member of the finance committee. Hi, I'm Pat and I'm a counselor district two. Kathy Shane district one counselor member of the finance committee. Evan Ross district four counselor. I'm Dan Sherman actuary been the actuary for the town for I guess six or seven years, maybe eight or nine years. I'm not sure which it's always a pleasure to be back here. I've been doing this kind of work since 1977. So I've been at it for a long time. It is great to be here, especially on a nice sunny day like this. I remember the last trip I was here was snowing and made for an interesting drive in and drive out. I appreciate the fine weather you've given me. So this report is on page page two is what I call the funding report. Post retirement and we were sent these yesterday. So as they're passing out the hard copies, there are actually two reports. And what I'll do is I'll bring up the header, the title page on what I'm going to start with does not have a rectangle on it. The other report does have a rectangle. So there are two reports and hopefully we'll start with this one that has no rectangle on the cover. Everybody there. So your page two should look like this. At the top is this section two required information. So this report I'm calling a funding report. Now in the past we've only issued a single report that covers both funding and accounting. But the government accounting standards board decided that's too simple. We need to make this complex and difficult for everybody. So they said we're going to establish a new set of rules that says from this point forward, we're going to have our own rules regarding accounting. And we're not going to give you any answers on how much you should be funding. So the whole different set of rules on accounting. So when that became an effect, I knew immediately that I had to issue two reports, which is what we have been doing recently with pension. On the pension side, you've been receiving two reports. One for funding that goes to the PARAC and it requires how much appropriation you're going to send to the county. And then the second report says, oh, here's your accounting numbers, which is on a totally different basis. And therefore the second report is necessary. So for other post-employment benefits, i.e. mostly the medical side for retirees, I'm now issuing two reports. So this is the funding report. So for funding purposes, what I've done here on page two, which is about 80% of what you need to know, I'm showing the two different valuation dates. We did this as of June 30th of 16 and next to that June 30th of 18. And you can see that your value of assets increase significantly. You went from $2.8 million up to almost $5 million as of June 30. The next item is what we call the accrued liability. This is the value of all the benefits that have been earned to date. What has been accrued by your retirees and your active people who have some years of service. So on that count, your total accrued liability increased very slightly, less than expected, to about $56.5 million. So if I subtract our assets of $5 million from the $56.5 million, I get $51.5 million, which is your unfunded liability, and it's actually lower than it was two years ago by $2.3 million. And that's a very good thing. It also shows that your funded ratio increased from 5.1% up to 8.8%, which is also extremely good. That is above the norm across Massachusetts. I do work for about 45 cities and towns and look at their numbers, and at 8.8%, you are above average. And that also looks favorable when the rating agencies come in and look at your financial statements, that the fact that you're funding this and you're at almost 10% is very good. The next item is the payroll. And the only reason the payroll is in here at $37.5 million is that it gives the readers of your financial something to compare you to, say, the city of Boston or the state of Ohio or anybody else. They can say, well, okay, they have this unfunded liability of $51 million. Is that a big deal or is it a little deal? For the city of Boston, it's a microscopic deal. For you guys, it's a big nut. So the fact that you're at 137% gives readers of your financial some idea as how big a nut this is for you as a community. At 137%, you are above average. In this case, you want the percentage to be as low as possible. And most of my plans that are funding are up in the 150 to 160, 170% range. Lower the better. So another good thing and you drop from 152 million down to 137. So that's where you are in terms of looking at the past. The next set of numbers is determining how much money you should be putting into the into the trust fund going forward. So the first element will be called the normal cost. Now the normal cost is just simply the value of benefits to be earned in the coming year by your active employees. The active employees are going to work a year of service mostly. They're one year closer to retirement. They're the value of their OPEP benefit went up a little bit because of inflation. So that one year accrual is what we call the normal cost and that's the $1.3 million. Item I is the amortization of your $51.5 million unfunded liability at $2.6 million. So that's just a straight amortization 29 years with increasing payments to pay off the unfunded liability. It's sort of like a mortgage, right? If you own a home, you know you have a mortgage. Most people have a mortgage and they have to pay it off over 15, 20, 30 years, whatever they select. So your mortgage is the $2.6 million. If you own a home, you also have things like real estate taxes, insurance, heat, light and so forth. That is your normal cost. As long as you own a home, you have these current costs that you have to pay every single year. So the sum of those two, looking forward one year and paying off your unfunded comes in at a $4 million figure. Now the last line item at $2.6 million is what you're currently paying on terms of pays you go. You know, the retirees, you've been paying their, you know, Blue Cross with Shield, Harvard, Tufts, whatever medical plans they're in, if it's the GIC or MIA, whatever it is, you guys are paying about $2.6 million today. And so the difference between the $4 million and the $2.6 million is what you have to come up with some new money. And you've been putting in new money, hence you have $5 million in the OPEB trust. If you haven't already been doing new money, that would be zero, but you have been. So the delta between your $4 million and the $2.6 million is how much you would be needed to put in extra above pay go each year. So before I move on, any questions on this page? Because this is the most important page. Yes, go ahead. It's good to hear that we're above average on some of these things. But I know that nationally most pension systems and OPEGs are not funded adequately. What do you think would be a good number? I think the good number is what you're doing is to get up to the $4 million in terms of the number in terms of as a contribution. It'd be great if you could, like for example, Wellesley, one of the things they did several years ago was a prop two and a half override and they came up with their $51 and a half million, but now of course the taxpayers are paying it off over time. So they became fully funded that way. There's only one Wellesley in Massachusetts and they did that. I don't think anybody else could. But almost all of my clients are funding something. They're putting something aside. They're building an asset. I've only got a couple that are not doing anything at this point. And what they're doing, they've established a trust. They haven't put any money in except maybe a token amount. But what they're planning on doing is fully funding their OPEB on a going forward basis once the pension is fully funded. So some of them on a very short schedule, for example, the town of Watertown is going to be fully funded on their pension in 2020. And they're saving about $14 million. 10 of that million is going to OPEB. The other 4 million is going into some elementary school renovations and building projects, some capital projects. So that's their plan. Shrewsbury is the same. They're almost fully funded on pension. And they're going to do the same thing as once they reach full funding. All the savings on pension is getting dumped into OPEB. So it's all coming in retirement, bucket, if you will. It's just they're dividing it differently once they reach full funding on the pension side than all the money. The savings is all going to go into OPEB until that becomes fully funded. So many communities are doing that. Others are doing what you're doing is just putting in, you know, half a million, a million, whatever they can scrounge up out of free cash and put that in above the pay go. What do you owe the trend that we see here over this two-year period? Oh, why? Okay. So one of the things I did between 2016 and 18 is I changed actual assumptions. So I did in 2016, by the end of the year, I completed an experience study. And the experience study said, okay, I had 36,000 lives from 14 or 15 pension systems and looked at mortality, turnover, rates of disability, all those different factors that go into our assumptions. Sorry, I turned that off. So the experience study said that the mortality amongst fire and police was higher than the state had been assuming. And I'd been using the state assumptions. So there was a change there. The other change is the big change is on turnover. The state, for example, and I was using 1.5 percent per year turnover assumption for fire and police, but they were leaving much faster than that, much higher than that. It's more like five or six percent per year. And well, as soon as you say, wait a second, if the probability of a fireman or a policeman leaving before retirement now goes up like a factor of five, that normal cost net crude liability drops way down. So those are the two main factors that affected that on the demographic side. And the other thing that affected is that I had an assumption of, I think, five and a half percent increase in your healthcare costs. And if memory serves, your healthcare costs did not go up that much on a claims basis. Maybe some individual premiums went up that much, but people would select a cheaper plan. So any modifications, there were modifications to the plans and what people selected that also helped keep the increase down to just $800,000. So I'm trying to relate this back to what we heard at MMA about healthcare insurance going forward. Paul, the rates going down are not being nearly as aggressive in this coming year. So we switched from being self-insured to being fully insured, and we received a 0.6 percent increase for FY 20, which was significant for us, and that has it. And when we did the switchover, we did a reenrollment. So I think that impacted some of our assumptions as well. In terms of whether health insurance, the trends are going up as much. I think we anticipate that they're going to be stabilized. But they will be going up. There's no doubt about that. It's a question of how much. I'm assuming 4.5 and 5 percent increases, and I'm just here less than 1 percent. That's going to be a big gain for you the next time this all gets done. So I just think this is maybe for my benefit, but maybe the other counselors as well, having been part of and still part of the state retirement system. I gather in from a municipal standpoint, it's not just one big pot like the state pot is. It's every every municipality on its own bottom. Exactly. But we still get the benefit of selecting from a group of health care providers that the state negotiates with. Yeah. As long as you're part of that for the GIC. Yeah. Yeah, you get to select from that group, and they've been able to keep the cost way down. For the last, I think for the last 10 years at least, the increases have been 3 percent or less. And the actuaries across the country have all been assuming 5, 6, 7 percent increases. So that's one of the reasons why you went from 55 million to 56 versus 58 or 59 or 60, is because GIC has been very successful. So, but we're not part of GIC. So we're part of the Maya Health Benefits Trust, which is a group of about 100 cities and towns that have gathered together to ensure through the health insurance trust. And it's a similar concept of their safety in numbers, basically. And so that any kind of increases are moderated over the entire group versus a town that stands on its own risk, basically. Right. Yeah, it's the same concept, the same idea as the GIC. Are all the retirees who are on health benefits on Medicare, or do you have some that you're picking up the full cost of them? I think there is a handful that are not in Medicare because they were pre-Medicare. So it was 1986, if you're hiring. It was 1986 is when the public had to come on. Yeah, but yeah, there are some who are not. Somebody can answer that. So when we're looking at the healthcare side of retiree, it's their supplemental coverage. There is a handful of retirees that are not subject to Medicare, that we are just keeping on regular insurance and paying the penalties. I'm not sure exactly why they weren't on Medicare. They were the five percenters a long time ago. Yeah, so you didn't have to be in Medicare unless you were hired after 1986. And so if they never qualified because they didn't get their 40 quarters, then they can't get in at this point. And that's the handful we're talking about. This is a public employee choice at municipal and state level could opt out. They opted out of, some states opted out of Social Security as well. And then with Medicare, the federal government closed. Not anymore. Closed that. Yeah, but I mean, my husband has never worked a Medicare job. I don't believe it was an opt out back then. Not for the town of Amherst, anyways. I'm sorry I didn't hear you, Sonia. I have to work these things. I've got to hold it right. That one I don't. Okay, sorry. Yeah, but the issue would be if it's a 40 quarter requirement to be entitled to Medicare. So if they worked a couple years in the town, but the other eight years were worked for the state government, the university wasn't Medicare before a particular date. So I was just curious on how many you're carrying the full cost. Not that many. Not that many. Can I ask Dan a question? I'd like you to explain to the audience at home why our liability went from 100 million to 50 something million. That's the questions we've been getting a lot from people. So if you could explain that. Sure. Thank you. So the previous reports, I would do two sets of interest rates. You can see at the top that I have 775 for 2016 and 7.5% for 2018. And under GASB 43 and 45, it was a set of rules that said if you're not funding the obligation, you have to use a discount rate that's tied to the long-term expectation on short-term money. In other words, where your money is in the general fund. And your general fund does not earn 7.5%. So, I don't recall what percentage I used back in 2016, but it was probably around 3.5%. And when you say it's a 3.5% assumed return, it's also a 3.5% discount rate on a future obligation. So if you say, right, if I have $100 in my hand and I'm going to earn 3.5% on that, how much is that worth 10 years from now? Or if I have $100 in my hand and it's 7.5%, how much is it worth 10 years from now? You're going to get a very, very different number. So what I do is just the flip of that. I say, well, I owe $100 10 years from now. How much money do I need today if I'm going to earn 3.5% on that money versus 7.5%. Well, at 3.5%, you're going to need a whole lot more money today to get $100 10 years from now. And so that's what they call the discount rate. So the old numbers were based on the GASV 43 and 45 scenario that you weren't fully funding the obligation, which you weren't paying the normal cost plus the amortization. And therefore, the GASV rule says you can only use the short term or like 3.5% interest rate and hence the liability was more like $100 million rather than $56 million. So it's just taken a present value of a future obligation. You know, these payments are going to happen 10, 15, 20, 30 years from now. What's the value today on a time value of money basis? And at 3.5%, you're going to get a much, much bigger number than $56 million. Good? So is the rule still that you have to do the bacterial assessment every two years? That's correct. And the last one was done on June 30, 2018. At that point, we were still operating our own insurance plan and hadn't switched with lower rates that we're receiving now as a part of the group plan that Paul was referring to. Would that switch in plan actually help us in the next round potentially because of our rate experience? Well, two things are going to happen. One, the fact that you're looking at just less than 1% increase in those rates, obviously that's going to help. So that'll create an actual gain. What we don't know until we get the data is how did it affect people's choices? In other words, did they switch plans because of the new? Did they go to a cheaper plan or did they go to a more expensive plan? So until you see the data, you don't know the full effect of that change. But you do know that the numbers are probably not going to go up, they may go down. And they certainly won't go up as much as one might expect. I would not expect changes in choice to completely offset something as low as a, you know, less than 1% increase in your healthcare rates. So it's going to be good news, just we don't know how much. Okay, thank you. And I just wonder, I mean, Sean is nodding his head because he showed us in the regional district those rates because of the switching of plans and people dropping on and off did make a difference in terms of the overall increase. Mid offset, what was the straight premium increase? So we might see a even better trend when you get 2019 in here. Good. Well, you won't get 2019, you'll get 2020. 2020. And by that point, we'll have been on the new plan for two years, Paul. Great, thank you. Okay, this just shows the various rates for the HMO and the PPO and the medics option, which of course now is out of date, as of today. This page four gives you a breakdown by enterprise accounts. This is pretty popular amongst all my clients because one of the things they are able to do is charge these costs back to enterprise accounts. Almost everybody's got water and sewer enterprise. You also have landfill and parking, but there's a cost line item down there, $84,000 for sewer and $95,000 for water that can be charged back to the enterprise accounts and saves the town a little bit on the tax levy. This is the other 20% of the important part of this report. And this is a forecast of what's going to happen going forward. My best guess, if you will. And so you see the same line that we talked about before in terms of normal costs to the amortization and the total recommended contribution of $4 million and the pay go at $2.6. But you can see where each of those, the last two columns move going forward. So if you think about where you are now in budgeting for OPEB and where you want to be, is really that they aren't columns. So you want to be able to say, we're supposed to be at $4 million, $4.2, $4.4, and so forth. So as those numbers increase, but the delta between the two columns increases slightly to, I guess, about $2 million in 2025. It grows to about $2.8 million in 2031. But then when you get down here to 2046, it goes the other direction. So you've reached at that point that last mortgage payment of $8.2 million, which sounds like a really big number. But in 2046, that's still a long ways from now. And so what will happen then is that a cost will drop from roughly $12 million down to $4 as you reach full funding. And all you have to do is pay your real estate taxes, insurance, heat, and light, and maintenance on your house, and you can burn the mortgage. And that'll be a beautiful thing. So that's the current schedule. There are no rules regarding what this schedule looks like. I have lots of clients that have very different schedules. Some are very short. Some have level amortization. Some have other increases. Some have, Dan, put together a schedule that is like what you have now until 2024. And then when we reach full funded status with the pension, divert all the savings in 2025 to OPEB and give me that schedule. So then what you'd see was a big blip on the unfunded liability payment in 2025. Millions of dollars in some cases. And then they'd be fully funded by say 2035 because now I can drop all those later years. It's the same as a mortgage. You pay off stuff early. You can kill payments at the end. So it's the same idea. And there's no right answer to this schedule. It's whatever fits your situation. So one of the things that I've put together is a schedule that people come back to me and say, hey Dan, we're doing the school thing with Watertown. And that'll run out for a number of years. Shrewsbury will say when we reach full funded, divert the millions. Everybody's got a little different idea as to what will work for them. And this schedule can be whatever you want it to be. There's no rules that say this has to be a certain way. I'm giving you a 2029 or a 29 year schedule that finishes in 2046. I can give you a schedule that says I'm going to finish in 2030 or 2035 or I want level payments. So I want more increasing payments rather than 4%. So you really do have a lot of flexibility in terms of how you pay off your $51 million liability. I have a very basic question. Okay, when you do a mortgage with a house and you finish paying it off, you have a house. If you borrow money and you finish paying it off, you just don't owe money. So I'm missing something here. Is this a big pile of money that you don't have to go anywhere that just sits in a bank earning interest? So it's in the bank. It's like the pension. So at this point, after you're making all these contributions, you'll probably have in 2046, probably $75 or $80 million, and maybe go close to $100 million in the bank. Okay, your trust fund will be at least about, I'd say about $100 million at that point in time. So that's your house that you now own. That $100 million will fund your pay go because you notice at that point your pay go is roughly $11 million. So you probably have more like $120 million because you have to pay the pay go benefits with something left over in the normal cost of going. So somewhere between $120 million you'll have interest on that and the normal cost will go in and the $11 million, $12 million of pay go will come out. So the way this thing is, the best practice is to make this thing run like a pension is run. Right now the pension system, all the employee, all the employer money, all the interest runs to the trust and the trust makes the payments to retirees. Right now you have two line items. One line item for the retiree health care cost, a second line for whatever you're putting in the trust. The way to go is to combine those into a single line item, a payment into the trust. And then the trust pays the MIIA or whatever the new arrangement. They make the payments out of the trust rather than having two line items. So you get down to one. Thank you. Let's see. And then the rest of it, I was talking about in terms of Medicare inflation, I'm using 5% and 4.5%. So right now 5% compared to whatever the 0.2 looks really, really good. So those are just the various assumptions under the whole mess of them. They got stuff for men, women, fire and police and everybody else. So if we are all set with funding, I'm going to switch and put my accounting hat on. Now the accountants, in their report, they take a completely different look at this in certain respects. And what I want to do is jump down to here. So the first thing that they now have is something called the net position restricted for OPEB, which is page three. And basically what the accountants don't like to do is use the same words that they use in other pronouncements. So instead of calling these assets, they call it net position. I said, what is net position? Oh, it's the assets. Okay. So the net position restricted for OPEB. So what this is, it just shows a trace of where you were at the beginning and where you are at the end. And so what we have is you had 3.9 million at the beginning of the year. In this case, this is June 30th of 17. It's an important distinction. Employer contributions at 3.1. This is the sum of your pay go and the extra amount that you put in. What you paid out is the 2.5 million couple lines down. Your investment income is 421,000. And so if you do the math, you'll end up with almost $5 million into your trust account. So that little table will show up in your financial statement showing beginning of year and end of year on assets. The following page at the top is your liability. And that will show from the beginning to the end. And here we started at 57 million. We have what's now what they call, oh, we don't want to use normal costs. We're going to change it. We're going to call it service costs. Same thing, but they don't like to use the same word. So it's now called service costs. Interest on the service costs and the liability is at the 4.4, just moving forward one year. And now we have the experience gain of 3.9. So this goes back to your question before regarding why did it go down, right? Why didn't it go up as much? And again, it's the same answer, but now you can see how much it was worth. So that was worth 3.9 million dollars as a reduction in your liability. The benefit payments were paid out. And if you do the math, you add that all up, you'll end up at 56.5 million dollars. What's noteworthy is the experience gain of 3.9 million because that'll show up later in this report as a negative number. So the bottom of the page, the other thing that they want us to disclose is, well, what if you don't earn 7.5 percent? What if you only get 6.5 percent on your money? Or what if you get 8.5 percent on your money? What does that do to the liability and what does it do to the unfunded liability? So if you lower your discount rate to 6.5 percent, now the liability jumps to 56 million. Partway toward that 100 million they used to show. And then if you go to 8.5, now it's dropped down to 50 million. So if you can convince your trustees to earn 8.5 percent over the long term, that just cut 6 million dollars out of your liabilities, free money, because now the investments are picking up that portion. So that's what that page is about. The top of the next page, page 5, the accountants also said, well, what if your healthcare trend, your healthcare inflation, is greater than or less than what you expect by 1 percent? What did that do? Same thing as the previous table, but in reverse. So 1 percent decrease in inflation lowers your liability to about 50 million dollars and a 1 percent increase increase at the 65 million. So given those two tables, it gives you a pretty good idea that your liability can move a lot from one valuation date to another by many millions of dollars. It doesn't take much to move it. The middle table is basically what we call the OPEV expense. Now under Gatsby 43 and 45, I would show roughly 4 million dollars like we had on that funding report. But note at the bottom of this page is at this table is 4.6 million, it's more. Because Gatsby says, well, we don't like those rules regarding the amortization of experience and change of assumptions and so forth. We have our own rules. So the service costs, again, normal cost, same thing, 1.3 million. Interest is the same that we had in our previous page, 4.4. But now we have a difference in experience. So what they say is, we had this 4 million dollar negative number that we saw in our previous page or two pages ago. We want you to amortize that, not over 29 years or 28 or 15, we want you to amortize that over the average future working lifetime of all the participants in the plan. And I don't remember the number off the top of my head, but it's right here at 5.4 years. So I took the 4 million dollar gain that we had divided by 5.4, and that gives us a credit of $720,000. We also get to use projection of earnings, which is a reduction that projection is $326,000. And it was, we actually had a better year than $326,000. The expected return was $326,000. The actual was more like $380,000 or more than that, I should say. Because now we have this $54,000 credit because your assets did really well. And that's amortized over five years. It's always five years for assets. But two items that did not occur this year that I want to talk about is right here. The fourth one down is the amortization for assumption changes. If there was a change in assumptions, that would entail an amortization of the same 5.4 years. If you change the plan provisions, let's say you decided that instead of being 75, 25, co-shared, you made it 60, 40. Or you decided to add, say, dental coverage. Any change in the plan, a significant change, the small changes we don't measure. But if a significant change happens, you have to recognize that change over an amortization period of one year. In other words, immediate recognition. And what all this means is that this number, this 4.6 million, is highly, highly volatile. I can't express how volatile this number is. I've got plans that had a negative number. In other words, they had income from their OPEB on the accounting basis versus an expense. Because they had some big gains. They changed the plan, which reduced reliability. So that was a one-year amortization. And they actually had income in 2018. So you really can't rely on that expense number for anything. Just recognize that it'll show up in your financial statements. It'll be recorded there. And it will move around a lot. The bottom of the table just goes through your liabilities and assets. And shows, again, your 8.8% funded. Shows your covered payroll and percentage of 137. So these numbers are all basically the same as they were under the old GASB rules. So the other thing I did was I included the amortization that I just talked about. So on the investment side, you can see we have a five-year amortization. So 2018, you had a very good year, $95,000 gain. The previous year, you had $175,000 gain. And then you get to realize those gains as a credit of $19,000 and $35,000 over the future. You can see where that comes through. As I mentioned, we also had a very good experience, $3.8 million at a gain there. That's amortized over 5.4 years. And you can see what's left on that going from $720,000 out to $20.88 in terms of the amortization payments and what's left. The bottom table is just purely for the accountants in the world. One of the things I added is say I want to see what your net unfunded liability does from beginning of year to end of year. And this serves as a cross check to make sure my numbers are right. And the accountants, the auditors appreciate it because they do the same thing. And so we've got these cross checks to make sure all the numbers line up. So basically this table just does the cross check in terms of deferred inflows and outflows that have changed contributions, revenue, and then a net end of year liability. That's the same table we had before. It's your head count. You had 576 actives and 492 retirees and beneficiaries. And then same provisions and assumptions that we had on the previous table. I'm not going to go through that. I don't want to put anybody to sleep. So I'd be happy to answer any questions about the accounting side of it. In terms of those of you in the finance committee, this second report has less interest. The more important report is the first one I went through. That's the one you should really be focusing on in terms of budgets. And where are we going to spend the money? Because right now the accountants have decided they're going to go off on a totally different path. So for a lot of people, this is the first time they these are a lot of people for the first time are looking at this number of these documents. So it's probably really overwhelming to most people in this room. So thank you for the presentation. So can you in English sort of summarize where the town of Amherst is in comparison to your other clients in terms of how we're doing on our OPEB funding schedule and everything? Yeah, I covered that a little bit on the funding report. Is that at 8.8% funded, you guys are ahead of the curve. The fact that you're putting some money, you know, money's aside I think was $700,000. Let me go back to this table here. So you put, yeah, you put in roughly $700,000 above and beyond what was required. That's the difference between the 3.1 million and the 2.4 million. But that difference of roughly $700,000 isn't quite where it needs to be. Where you really need to be is up here on this table. Where the difference between these two columns is this is almost $2 million. For example, for 2019, it's about $2 million for 2020. So the fact that you're at roughly $700,000 is really good above average. You got to think about the target is to get up to that $2 million difference. Then a little bit more than that 2.1, 2.2. So stay the course, keep putting extra money aside wherever you can. And I would keep doing that. Now I get two questions regarding what happens if we have something, state 8 gets cut by 15%, oh my God, what are we going to do now? One of the beauties that you have by having this OPEB trust of roughly $5 million is that if you have an emergency, you don't have to put in the $708 million extra that you're putting in now. You can cut that back to zero if you had to. You could even cut back further on your first line item in terms of healthcare costs and actually tap the $5 million if you really ran into a financial crisis. Because now the $5 million is like a reserve that you can tap to pay retiree medical. So this $2.6 million, let's say for whatever reason it jumped to $3 million and you didn't have the money. Well then you can take $200, $300,000 out of the $5 million trust and pay MIIA for that because they hit you with a big increase. So you can treat this as a reserve. It does not require two-thirds vote of town meeting to pull it out like a regular stabilization reserve but it does act as a reserve if you do have a financial crisis. So having that money is really beneficial for planning and for a contingency in case bad things happen. Do you know when we had that situation last in your first? In terms of a big increase or the state aid cut? Yeah. Yeah, 2000. 2002, wasn't it? Well, that was that one but they also cut it in 2009. And at that point we weren't able to contribute more than the minimum. The state, I'm the chairman of the finance committee for the town of Wakefield and I'm doing a presentation at our town meeting next Monday regarding the fact that our, I have a chart that shows state aid and it goes back to 1992 I think. And it nice creeps up until you get 2002 and it dropped down a bit and we'll level a little bit and then it dropped down again 2009, 2010 and now it's back up. It's back up to only 15% less than where it was back in 1999. So it's like we haven't got back to where we used to be. Right. So is there now a legal requirement that these funds be made whole? What do you mean by made whole? Oh, in other words if you tap it, yeah, so let's assume for a second that you tap it and say we have to spend $400,000 out of this trust fund because we had a crisis. What you can then do is have a new schedule like this one, but it would replenish those monies over time. You still want to be fully funded. So you got hit, you drop back a little bit and then you start making it up down the road. My question really is, is there a requirement that these funds now be fully funded? Oh no. There is no requirement. Massachusetts still allows everyone to do whatever they want to do. Pay as you go. And I also think the question is, will they change that? And right now I'm quickly saying no because they have a requirement, I think it's up to around $14 billion just to fully, I mean you're at $4 million, they're $14 billion and they haven't put a dime extra since they put in a bunch of tobacco settlement money in 10, 12 years ago. They haven't done anything. So they can't impose anything on you guys until they get their own house in order. So I wouldn't worry about that. I would just say that I really don't like the phrase tap it and that I do not think that we should look upon this as a reserve fund. I am a retiree from the city and state of New York and I'm very proud and confident and safe in my benefits as many people are not and many people lost their retirement. And I just think I'd like to be kind of more old fashioned about it and to say, you know, you can take it out and think it'll get better and what if it just gets worse and then you never pay it back and then the people don't get their retirement. Right, right. And like a mortgage, the longer you pay it back, the more interest you pay. So the shorter you can pay this off and get it fully funded, the better off you are. I mean, I haven't worked with this for a while. So it's been the philosophy that we have an obligation to future at this point, future councils and future taxpayers in order to make sure that the town is able to meet its needs and as it is in future years and our taking care of OPEB to the extent that we can and as well as pension is a question of protecting the future of the community and that it's our responsibility to protect the future of the community. The other thing we'll hear about this in our next presentation I suspect is that taking that philosophy will in fact reduce our borrowing costs going forward as we need to borrow money to do what a community needs to do. And those are the things that are reasons to be very forward thinking and our planning on this as painful as it is to pay back for the fact that promises were made to employees without funds being set aside many years ago. So we're now catching up for other decisions made. But it's our responsibility to live with the present. And I guess my other comment is prompted by what Ms. Pam said is that in Massachusetts we're at least fortunate enough that I think our legislature and our governmental bodies were very forward thinking about how to handle pension and getting sure making sure that the pension side was funded adequately and that that's going to be very meaningful for the town in the future. I just to reinforce it your first point. Town of Wakefield we had a double A plus rating for a long time. We started funding our OPEB. We're about 15 percent funded now. We had about 14 and almost 15 million dollars in our trust fund. When we did a new middle school a couple of years ago we went off the bond rating of course to go all through the jump to their hoops and so forth. They came back and they cited among other things but they decided the fact that we were fully funding our OPEB as a reason that they made us triple A and that lowered obviously our interest cost on a 50 million dollar school bond. So that's real money. You know here you're paying yourself. I'd rather pay myself than pay Wall Street. So I just had a it's a question comment but Andy was differentiating what we've just heard from pensions. Is there a similar report that's put out on the pension side of our contributions and funding? Yeah yeah you're part of a county system and they issue a report both for funding purposes and another one for accounting. I haven't looked at it but I'm sure Sonya's got it. Now there's yeah so it's available. It's also online. You can actually if you go to the PARAC website you can find it. PARAC is P-E-R-A-C. You just do a Google search for PARAC and then you can dig in you can find it. So I just thought it was important for people to realize we're looking at just the healthcare side of this. I mean these are big numbers but this doesn't have pensions in it. As opposed to some states where neither side is taken care of and they're the ones that get the banner headlines. Oh I know that all too well. I'm the actuator for City of Central Falls. It had been for about 10 years. They went they went through Bank of C. It was very very painful. The Department of Revenue hired me to come in and clean up the mess or help them clean up the mess. We had to cut their pensions retirees pensions 50 percent. So you can imagine how how that felt. They are now their ship has been righted. They're floating again and they're moving forward but the retirees now are getting 75 percent of what they used to get 50 percent from the city and 25 percent from the state. But they still got a big a big cut no matter how you look at it. So Rhode Island I always use Massachusetts. When I go to Rhode Island I have several clients from Rhode Island. I always use a Massachusetts pension as as what you guys should be doing because they got the rules in place. You got the funding in place. They've got you can't renege on on your contrary appropriations because your assessor's office can go in and actually you know pull the money directly from taxpayers. They don't need you know town council. They don't need town meeting. They don't need anything. They can go right to the tax people and put a certain tax on tax bills or real property taxes to get the pension payments. Rhode Island doesn't have anything like that. So I used you know Massachusetts as a model for the folks in Rhode Island how to fix their system. And they've adopted a lot of that stuff but they still got a ways to go. So anything else? Thank you. Thank you. You're very welcome. So Mr. Chair. So next up is David Eisenthal who's the town's financial advisor. He's been our financial advisor for many many years. He'll tell and you have a little biography of him in your packet and he's going to talk a bit about a who he is but then also about our how our bonding and how bonds get set and sort of background on all of our borrowing. Thank you. Thank you. Mr. Buckleman asked me to come. Is that better? Okay. Mr. Buckleman asked me to come before you to discuss in very general terms what is municipal finance and kind of the starting from there talk about the specific case of the town of Amherst. I want to thank you for having me today and I'm looking forward to a good discussion. So I'm starting with a very basic question and I apologize if this is too basic a question but what is municipal finance? And it really boils down to two issues. It's planning and carrying out plans for the current revenues and expenditures to operate the municipal government. It's also the obtaining of funds beyond current revenues for whatever purpose and this is most of what I'm focused on today. And you may ask well what purposes what are the purposes for which municipality would obtain funds beyond current revenues and sometimes it is for operations deficits cash flow deficits which is more common budget deficits which we see very occasionally and it would be very unusual for a town like Amherst to have financings of this type in the few decades that I've been working with the town I've never seen I don't believe I've ever seen even a cash flow short term note much less a budget deficit financing issue. It's also unusual for Massachusetts municipalities so most of what we see is financing for capital purposes which spreads payments for these items over multiple years. Now the mechanism for a town like Amherst to obtain funds is the issuance of securities and securities are basically financial assets like stocks or bonds bought by investors or lenders sold by organizations that are looking for capital whether they be these organizations can be governments or corporations or other organizations the different kinds of securities that are relevant to this discussion would be bonds and notes bonds usually have a term of more than a year notes are usually one year or less in term. Now the different types of securities that Amherst would be issuing general obligation bonds is a fairly common type of issuance what are called permanent state house notes and I should explain that there is a distinction there's a program at the state level that's run within the division of local services that actually provides cities and towns with the ability to issue notes mostly short term notes but some longer term securities without a legal opinion directly and it reduces the cost of issuance but and is particularly for smaller financings is a good way for towns and cities to issue debt. Some of the short term types of securities bond anticipation notes revenue anticipation notes and grant anticipation notes. Now I want to talk a little bit about the legal environment in which a community like Amherst is operating federal law has a lot to say here tax exemption the principle here is that the interest income on borrowing for governmental purposes that's an important concept so if you're building a school or a police station or a fire station and you don't have any other sort of complications the for the holder of that debt the interest income is exempt from federal and often state and most of the time it will be in massachusetts state taxation it lowers it has the effect of lowering the interest rate for the borrower compared to if the financing was taxable. Now the internal revenue code of 1986 had a lot to say about how we operate and then the tax reform that was passed at the end of 2017 the so-called tax cuts and jobs act of 2017 eliminated certain types of financings and also changed marginal tax rates which kind of that changed the environment in which municipalities all over the country operate. Federal law also has a lot to say about disclosure and market regulation the securities and exchange commission has a major role and a more major role than even in the past with the passage of the Dodd-Frank Act in 2010 the securities and exchange commission particularly in connection with the municipal securities rulemaking board has a lot of influence over the municipal securities market now state law governs many details of the issuance of bonds and notes for a town like Amherst State law chapter 44 of the mass general laws in particular governs the types of borrowing the purposes and repayment and we also see the debt limit five percent of equalized valuation which is a legal limit on the amount of debt that a municipality in massachusetts may incur although there is a mechanism available for municipalities to issue debt beyond that and in fact much of the debt that is allowed by the general laws is by its by law exempt in any case for example many water purposes are exempt from the debt limit and then school projects that are funded by the massachusetts school building authority those are exempt from the five percent debt limit bond council for the town is currently locked lord and they review federal and state legal issues for the town for its financing now i'm going to move on to funding sources for its various bonds and notes the town has the general fund both within proposition two and a half and then excluded from proposition two and a half i would look at those as two separate funding sources the community preservation fund is another source of financing for debt finance projects and then enterprise funds which the town of amherst uses quite a bit in financing its water and sewer lecture that's how the financial operations of the water and sewer utilities are operated as enterprise funds and those are the those enterprise fund revenues are the source of revenue in the first instance for debt for those purposes now all of this operates within the capital markets now what are the capital markets that it's you the question is who lends funds to a community like amherst or other organizations i mean at&t or any just about any corporate or other kind of entity governmental entity will have occasion to borrow money there are commercial banks that generally buy and hold the debt in fact the town is going to be taking bids on a 1.39 million dollar bond anticipation note on thursday and that likely is going to be purchased by a buy and hold lender so that's a in all likelihood the other types of banks are the investment banks the jp morgans the fidelity capital markets these types of investment banks often reoffer securities to purchasers of all shapes and sizes now another major participant in the capital markets set of participants are the rating agencies s and p global ratings the town has had a rating with s and p for about 10 years currently that rating is double a plus the next highest rating as mr sherman alluded before moody's investor service is the other major rating agency now municipal advisor we that would be our role unibank fiscal advisory services we advise the town on debt and capital issues and we work with you basically every step of the way and i have a uh long history with the town and i'm very happy pleased to have that history but we are currently your municipal advisor now s and p global ratings and talk about how issuers like the town interact with s and p and i and i think that you have the most recent rating report which is actually now about four years old as well as the updated methodology that s and p global ratings uses so way that the starts is that the management of the town will interact with analysts rating analysts of s and p global ratings those analysts will review audited financial statements other disclosure information and other sources of information and then there will be some sort of meeting or call with the management including us in advance of a rating in general the town would be asking for a rating with a major financing either a large note issue or a bond issue this is why the town hasn't sought a rating in about four years that's the last time that the town actually issued general obligation bonds after that process is completed analysts then go to a rating committee which then makes the decision on what the rating is yeah um can we pause for a moment and see if there are any questions that have arisen so far or would you prefer to go all the way through and handle questions at the end uh mr chairman it's your pleasure see if there are any questions that have arisen so far then i have some but let's just keep going well kathy i just on when you went through the different kinds of uh going out with a bond like in terms of an an anticipatory note would you normally go out fairly short term for that because then you're going out for the longer term right well i think that it's it depends on the strategy there are a couple of factors that will go into that last few years the town has actually issued on a um about an annual basis those bond anticipation notes uh one advantage has been that short term rates have been very low it also makes sense in terms of um the you know if the amount of spending for the capital projects is still uncertain um it's a way to be a little bit flexible about what is being financed and then it also is a matter of the size of the borrowing one would want to see sort of a critical mass for the size of a bond issue so those would all be reasons maybe not in the past four years of equal importance but those would be reasons why uh a town like amherst would issue bond anticipation notes how often do we go out for a bond rating and for our s and p rating well the last time was um january of 2015 which is the last time that the town issued long-term bonds okay uh i would expect that one of two things will happen in the next year uh it's possible that uh and i'll defer to the management of the town but if the town were to issue bonds uh in say in the next year then i would expect that um the town would apply for a rating it is also possible that uh s and p could call either sherry or call me and say we want to do a surveillance call and uh so that they would arrange a time to sit with us either on the phone or in person and review where the town is so i would say that within the next year either the town will apply for a rating with in connection with a new issuance of bonds or there will be a surveillance of the existing rating is it better to i'm making an assumption but i'll ask it as a question is it better to do that rating when you are at a very low level of borrowing well i you know it's it's kind of the the you it's what you want to do is you want to get a rating when in order to make a financing as marketable and as efficient as possible um whether or not uh debt levels are high i mean debt is and as i'll go i'll talk about it a little bit debt is only one factor the level of debt is only one factor that the rating agencies look at it's uh i mean less debt may make a community stronger but um it's not the only factor and it is only in this case in s and p's case it's 10 percent of the rating so it's not it's not even a majority of the of the score here mr chairman oh i'm just looking around to see if there's anything else thank you okay i just proceed now i'm going to talk about how does s and p global ratings look at local governments and this methodology was implemented um a little over five years ago september of 2013 and in fact when the town got its rating in early calendar 2014 the town town's rating was upgraded as a result of this new methodology and for each of the credit categories the scoring reads as very strong strong adequate weak or very weak and what the rating agencies do is come up with this rating agency does i should say s and p global ratings arrives at an initial indicative score the categories are finances and within finances reserves which you would think of as free cash and stabilization fund would be the primary ones surplus is in deficits in a given year is the is the town um adding to free cash and stabilization or is it taking away on a net basis cash position what does your liquidity look like at June 30th and then debt and other liabilities and actually this category looks at some of the issues that mr sherman raised in his presentation um the economy tax base and income 30 and for amherst is it's kind of an unusual case because um because of your 35 000 residents something like 20 000 of them are between the ages of 18 and 22 that has a significant distorting effect on the income measures and um and also the the fact that you have a major some major tax exempt institutions in the tax base also distorts um but the but s and p does recognize and make adjustments especially in amherst's case for this issue um management 20 percent that is not based on the biographies or the personalities of your individual managers this is based on written policies and procedures and whether those policies and procedures are followed in the areas of reporting on revenues and expenditures methods of budgeting policies on reserves and liquidity investment policies debt policies do you have a capital plan which amherst's is uh is a very um robust capital plan and and lastly uh revenue and expenditure operating forecasting now the last uh area that they look at is what's called institutional factors and this is a statewide legal and regulatory examination all municipalities within a state get this rating uh get the that the score in massachusetts it is strong the second second highest score and this is 10 percent of the total uh initial score and then there are various adjustments that uh are made by the analysts and by rating committee as they deliberate on the rating and just pause for a second on the prior slide to point something out to other members of the council who are here um the management the 20 percent my recollection and having worked with um our former town manager and finance director john misanti he recognized to think that that was one that we could have a substantial effect on ourselves and um when he worked very hard as a finance director to help us to develop the management policies and objectives which are written set of policies that we could then follow the the creation of those policies was a very deliberate action on his part to encourage us in the direction um i'm assuming that under economy because so much of our land is education and therefore not taxed hurts us well it's um actually i i'm gonna give away what the score the last time the score was actually strong which we had to kind of you know it's sandy cooler um was finance director at the time we really pulled out all the stops to make that case they you know we started with the fact that the income figures are below average and the fact that tax base per capita is also below average but also recognizing that amherst is part of a um a broad and diverse economy and also has stabilizing institutions the university ecologists are considered to be stabilizing institutions and i believe the latter was explicitly cited as a as a positive adjustment in that score so um to say that those hurt amherst is um i mean certainly that's where we start when we um talk to the rating agencies and we're very aware of where that starts but it isn't necessarily where it ends so the fact that for example one of those institutions is very well endowed and another of those institutions is funded by the full faith of the commonwealth helps us well the fact that they are very stable and in fact i'll make a sort of off um i'll make a comment in the years that i've worked in amherst and i work with some of the surrounding communities as well the observation i make is that the valley is all but recession proof um eastern massachusetts can go through a recession and that actually that has an effect on amherst in terms of revenues you make you may have your state aid maybe put in jeopardy because of what's happening in boston in the boston area but over 15 years at least one can observe with the business cycle that the amherst had the north hampton that corridor has consistently been pretty strong economically but as you look at unemployment rates and similar data although parts of western mass don't have that same oh you don't have to go very far in what in western and central mass uh and it is pretty remarkable i'll i'll agree with you uh that you don't have to go very far find something very different could you talk a little bit more about cash position um reserves and liquidity just expand on what you mean there well what the technical examination that uh s and p does if they look at total cash in the audited financials as of june 30th and they actually look at enterprise fund cash as well as general fund cash but they then compare that to total expenditures in what are called governmental funds which is not just the general fund of the town but it includes other also called governmental funds the community preservation fund um certain special revenue funds so then they take they compare the cash position to expenditures and also to total debt service that's paid out of governmental funds and then come up with a metric to say how strong the town's cash position is and actually i might as well what i might as well do is go forward to what the scores were uh at least four years ago just go ahead to there um and just say that the reserves four years ago were strong uh surpluses the budgetary performances strong liquidity cash very strong debt was very strong although i'm gonna i should asterisk that and i don't know if he's not still here but pension and opab uh was somewhat of a concern then maybe can may continue to be a concern um generally in massachusetts s and p particularly is concerned about the impact of pension and opab on the operations of municipalities um last time with the last rating the combined total of the hampshire county retirement assessment plus the pay as you go opab cost was nine percent of governmental expenditures and that was fiscal year 2014 and s and p looks at a 10 percent if you're 10 percent or above that raises a red flag so i you know back at the envelope for 2018 the most recent audited financials it's a little bit lower uh it's more towards eight percent but still it's on the it's on the high side and if there were anything that was going to prevent upward movement in the rating that might be it and and anytime that i speak with the analysts at s and p they'll say in massachusetts we are concerned about pension and opab and particularly for those communities where those percentages are higher so um but debt at the time in 2015 was very low it's continues to be low right now you know that uh you and other stakeholders in the community are looking at capital projects which could change that and i will talk a little bit about that but um the score was very strong i'm going to go to the so the economy as i said before was rated the score is strong which took you know the raw scores are weak but i think that they were able to see the mitigating effect of uh various uh of the presence of the very stable employers and participation in a very vibrant regional economy as being offsetting benefiting factors well and and i would think they're they're looking i mean s and p is looking across the country so they've got municipalities that are one company towns um and destabilizing g e or destabilizing an industry i'll sink as you said we were more protected against those um well i think that there are a number you know i think that the um i'll say that just the stability of the employers yeah and the um the fact that you know you have a very you know a vibrant economy beyond the borders of amherst that you know people can commute to the springfield area the hartford area and places further away that those factors do help um so that's how the the town got a strong economy score management uh and the chair spoke about the efforts and i would mention both john um and uh sandy pooler as having uh it laid the groundwork um for the policies and procedures that got the town to that very strong score back in 2015 and then uh this the score then and now for institutional has been strong so let's chairman this might actually be a good time for me to pause for a moment to see if there are any other questions oh see any okay so thank you so as of today the town has 13.3 million dollars worth of debt about 10.2 million in long-term debt of which 8.1 is enterprise supported either water or sewer and 2.1 is uh general fund supported and the town currently pays its debt very fast more than half of the debt will be paid by the end of fiscal year 24 over 80 by 2029 so right now these are very really strong debt numbers is that bottom numbers that you had on there include the debt for the enterprise funds is that across board okay so i alluded to um short term debt um town renewed 3.155 million fairly recently and is going to be issuing about actually a little bit less than the 1.4 million shortly taking bids on thursday uh the town has about 9.1 million currently in authorized and issued debt 4 million of which is for sewer 2.8 million of which is for water and 2.3 million of which is for general purposes now um what for general fund what does authorized unissue what does it literally mean i mean that we peg a number with some ideas of what we're going to be spending it on well it means that well in the case uh i don't believe that the town council has authorized any debt yet so this would be debt that the town meeting when there was still a town meeting authorized and that the town has not borrowed against yet so it's available it's authorization that's available to be borrowed but it hasn't been borrowed yet or it may it may actually include the short term i should say it does include the short term debt but it does it would not include the long term debt i need to have you go back over that again so it may include the slide before so our total debt is 13.3 right and that's long term and long term long term is about 10.2 so there's about 3.2 3.2 you know the 3.155 that's short term and these uh the 9.1 that's authorized unissued includes the the two numbers above the 3.155 and the 1.4 those will convert to issued debt when the town issues long term debt for those purposes i'm curious i mean sewer and water it's kind of like you have to just keep on maintaining stuff on the general debt that's been authorized uh Paul can you give us a little more background on that i mean that includes things like crosswalk at the amity the amity crosswalk and parking lot i think what else uh so it's things that may be projects that we have on short term debt that we haven't rolled over uh or things that town meeting has authorized said we were willing to borrow money but we haven't actually borrowed it or even done the project yet to take that on examples yeah i think i think some of the cpa projects some of the purchases of land would be considered general fund even though they're supported by cpa um there's a boiler at the wildwood school there's planning for the fort river school though that would be included in the 2.3 million authorized unissued debt because it's it may be outstanding in short term notes but it's not issued as long term debt at this point okay um it might be in the numbers that you have but in the end of the year when i have to record it for the uh division of local services i do include any short term debt that's been issued as authorized and issued right so it's any authorization that town meeting had made in the past if they authorized 2 million for the sewer fund it would sit there as as unissued until we actually borrowed funds for that and then whatever portion we issued that year would come off that balance so um i haven't i didn't verify these numbers they're close to what we have general fund debt is uh the parking lot our peg we haven't we haven't issued any money for peg yet so that's still unauthorized right but and they and they're not to confuse matters but the some of the reports that the controller will file might treat because the department of revenue might look at things a little bit differently than how if we are preparing a disclosure document for the capital markets they we would treat them treat these matters a little bit differently i think and this they were get to the we get to the same numbers but i think they have this somewhat different perspective and i mean if you want to get into the weeds here we can do that but it's uh it's really just a different way of stating the same information do just for keep adding to the ceiling for sewer and water so that it's you know we spend it down or we go out and get authorized debt and then we might have to do more well water and sewer can sometimes be bar authorized outside the debt limit so it doesn't go against that right and and water almost always this 2.8 million almost almost certainly is outside the debt limit and the town has been making principal pay downs over the past few years on these series you know since 2016 uh series of short term notes the town has been making principal payments and actually reducing the amount of uh indebtedness because once you pay principal that does that reduces the authorization as well as the amount of debt the short term debt that's outstanding so at the time the year at the time that interest rates really dipped um which you know they're still low compared to years ago did we do any refinancing of our debt to take advantage of those interest rates yes yes um and I am I will have to get back to you about when that was done I want to say in 2014 but I'm I would I would get back to management here and I can through them I can get you an answer to that I mean I worked on I know I've worked on actually over the past few decades a number of refinancings when interest rates have been favorable um and the fact is that the strategy that the town has used since 2016 has taken advantage of very low short term interest rates um and actually we may be heading back those rates may be heading back down a little bit at this point so um you know we'll see going forward where that goes but certainly we would be looking at opportunities to help the town save some money for debt service just want to point out one other thing um part of the largest part of our general fund debt is actually for some bands we took out for road repairs I think we took out four million a couple years ago so we're still paying that back so that's yeah and and the numbers are lower than the four million because the town has been paying down that principle along all along um so that's that's why the numbers appear to be less than that four million dollars so um the town authorizes debt at this point it's you folks two-thirds vote of the town council authorizes debt before the council was empaneled it was two-thirds vote of town meeting uh now excluded debt is a majority vote at a an election of the voters uh so that's something to keep in mind if you are looking at debt exclusions that that is a ballot at an election rather than a vote of the town council to we as a town council if we're going to excluded debt do we first take a vote and does it have to be a two-thirds vote to go to excluded debt I would have to check with bond council but I believe the rule would be a majority I will check that and get back but I believe it's a majority vote of the council to place a question on the ballot but I can get back to you on exactly what the procedure is I think that from our experience of just what we went through um majority of the vote of the council as previously majority of the vote of the select board would allow it to be presented to the voters which would then authorize the debt by a majority vote but we'd still need to issue the bonds and the issuance of the bonds is different from authorizing the debt and that required two-thirds and that's and that's why I just asked about the first step that we also have to have to even go to the voters so you're thinking it was a majority and I have looked at that recently to double check my memory on it so just to make sure we because this is a big issue we authorized by a majority to put it on the ballot well it's actually for the for any debt it's a two-thirds vote of the council so to authorize any debt including excluded debt there first has to be a two-thirds vote of the council if then the desire is to exclude the debt service on that debt from the limits of proposition two and a half then a majority vote of the council can authorize a ballot vote which would pass with a majority at at an election of the voters and then does it come back to the council and require a two-thirds well you need the two-thirds just to authorize the debt in the first place you need it's two it's a two-step process so all debt okay think of all debt is you know the the universe of all debt that the town of Amherst would be issuing would require a two-thirds vote of the council the subset of that debt that is excluded from proposition two and a half then in addition to the two-thirds vote authorizing the debt also requires a majority vote of the council to place a ballot question before the voters that if pat if approved by a majority voting would then exclude the debt service from the limits of proposition two and a half but i think the one additional thing to note because i went into this before we authorized the override vote for the school last time communities have the option to either authorize the debt before or after that exclusion override that is a totally a local decision to be made but at some point the two-thirds requirement when decisions were made about which order to take it in in the last round it was a question of deciding whether it was better to get the guidance from the voters before going to town meeting or after going to town meeting so in that case the select board authorized they took it out to the vote the vote was a majority and then town meeting failed to do the two-thirds that's correct and the other thing that i found as i was looking into it during that period of time is the probably majority of the communities do it the order of authorizing the debt and then going for the debt exclusion override so that that's more common but not required by the commonwealth i believe you're correct mr chairman i think if there aren't any other questions about this question the last slide is basically and i understand that a group of projects that may total 100 million dollars is under consideration uh in the town of amherst and the question is what effect does this have on the town and i think my question my answer is it depends it depends on the timing um you know how you how and when it is authorized do you authorize it all at once do you uh authorize this um you know once every few years uh take a project every once every few years um it depends on when you'd be scheduling construction because the um the thing that's going to drive financing is the need to pay contractors you know when you know whether it's a short-term financing or a long-term financing those um that timing and those amounts that are borrowed are driven by what the town needs to cover uh for uh for its contractors that are doing the work on the projects and then how financing is timed how it's structured that those considerations could have an effect on how um the bond ratings have the bond rating agency agencies and the capital markets in general would look at the uh at this uh at this capital program um so um can i this is what i think i heard so say we went out initially for 30 million or 40 million first big project um if the bond agencies did not know we had another 60 we might stay with a higher rating i wouldn't necessarily advise not telling them no no but you know no but no but it they would first consider that and then might be the spread but i'm wondering whether the interest rate and the rating we might get on each of the bonds when we went out would vary depending they so it could so we could go out with a very good rating but as we start to get to the higher debt load we could be facing a higher interest rate because the rating changed is what i'm looking at i don't know that i i think the rating itself is likely to be more stable you know unless we see a real pressure on or or positive pressure on credit factors uh i mean the that's possible too i think the you know the double a plus rating there's only one notch higher that the town could where the town could go and that's triple a um you know there are the town could potentially go down but that's i don't i think that the rating in general is going to be more stable what's harder to predict uh more of an art and a science is what do we think interest rates are going to be going forward especially as we get years into the future that's a really speculative uh exercise something that i do will do have done uh for the town but it's it's speculative and i think the changes in capital market conditions could have much more of an effect on what those interest rates are than any given change in the rating that's helpful that was and i didn't mean not saying the larger amount i meant more staging it over time as as we loading up i think that if i think if the town presents a thoughtful plan to and can make the argument about how just how that plan is going to be executed how it's going to be paid what the effects on tax rates enterprise funds budgets what those effects are going to be really project that out then i think that that the rating agencies would see that at least as not negative and possibly a real positive so funding source is a an issue i mean enterprise fund debt as long as it is self supporting doesn't count towards the scores that s and p global ratings uses to look at debt with a recent rating presentation that i was involved with uh town of probably reasonably similar size to amherst was issuing 13 million dollars in bonds 8 million dollars in bands all governmental funds but then recently it had issued a major pro had done a major project for a wastewater treatment facility and we went to great lengths to demonstrate that this financing for the wastewater treatment facility which was going to be in excess of 40 million dollars would not count towards the debt scores we made sure that we nailed down that this this was not going to count towards the town's debt so that's that sort of thing matters here um and then you know the future and credit current credit conditions you know the size of operations the uh s and p global ratings looks at how big i mean you governmental funds here are 85 million dollars roughly speaking and that probably will grow over a number of years but that's something to sort of keep in mind uh that's right from the audited financials tax base and wealth you know notice that there has been development and in amherst center in recent years that probably is adding to the tax base some we'd want to see uh effects on financial operations i mentioned inside the levy limit debt what is what is that impact going to be on operating budgets that's something that needs to be carefully considered now i think the mechanism that is in place does that uh very well but it's i think you're going to see to really apply that and i'm sure that it will be really applied uh with uh any major proposed projects and then one thought about uh excluded debt is if and this isn't necessarily to say that this would be a concern except for the very very large project but would a could a uh a debt excluded project affect collection rates property to tax collection rates that's at least something with a really large project effect to at least ask the question does that affect uh your collection rates even if you're able to levy the uh the dollars are you are you going to be able to collect them and then other liabilities we talked about pension op-ed plans for the regional school districts you know what what debt that they may have going forward i think that that's going to have to be considered as well so uh i hope that this is useful to you it is it's very helpful i wanted to turn back to something you said way back at slide seven and uh that was where you were talking about the five percent of eqv um limits amount and you said as i understood it there was some special rule that applied to msba well msba supported debt is outside the the uh the five percent debt limit that's it's not counted against the five percent debt limit any the portion that's paid by the town uh is not is not counted against that huge that's big yeah i i'm i'm i'm sure of that that's i i want to go back to this really because this is this is like news to us right so hypothetically we build a new elementary school right hypothetically it's an 80 million dollar school right hypothetically we get 40 million from msba right our 40 million that we go out and the citizens approve will not count against the the five percent debt limit but that's not i think i want to emphasize the debt limit is is purely a legal issue yeah it doesn't i think probably higher in your minds further you know closer in should be what are the credit implications what are the effects on operations of issuing this debt right i think this leaves you know this is sort of a uh sort of a an initial hurdle that you that the town would have to pass is does the town legally have the ability to authorize and issue the debt but i don't think that's the end of the story even if the town if that 40 million doesn't count uh against the five percent eqv limit um that's still um that's not the end of the story and the analysis that we would have to help the town do is what effect does this have on tax rates or budgets collection rates all of the other issues that affect the operations of the town oh so i think that's the that's the key point is there is that legal limit but more than that i think the ratings agencies are looking at your debt overall in the plan for debt over time and i think one of the things that's important to remember is that ratings agencies don't from my experience don't look for no debt they want communities to be investing in their infrastructure and their built built environment that's a good sign that's a healthy sign that you are investing uh but they want it to be managed and i think a lot of what david is saying is is about it's about management do you know how you're managing your resources do you have the resources to to pay off things that you take on the other problem the other challenge we have is that sometimes things are outside our control the state economy and those things we those are things that we we have a micro economy here but they are also we're overlaid with a state economy and with a federal economy and with a world economy and all those things get factored into the rating that we get fortunately we're in a strong state that has a good reputation for management for municipal management we're at the upper tier of municipal management so i think we're the things that we can control we do pretty well on there's some things that we don't control i hear that and you know even in the recent our most recent recession massachusetts fared better than just about any other state in the nation but so the model this is not your question but the model we've been looking at has assumed that the debt is part of our ceiling yeah so it may have been a miscommunication between myself and david so i sent the model for david to take a look at with the projects included um and maybe it wasn't clear that one of the projects was a msp of school funded project um but that's news to me that that's not um that that's not subject to the debt ceiling so we can adjust the model to include that i i again i'm not ignoring paul's caution and your caution david just you know it's whether our taxpayers will bear it is a whole big issue and then lots of other issues as well but right but i think these are separate issues the as i said this this legal uh issue is kind of a sort of a minimum threshold it's a threshold issue and i'm sorry if there was a discommunication there but the the school you know that that's considered to be pure whether it's excluded from proposition two and a half and one thing actually um i did clarify with um bond counsel today and this is a limit that you should be also aware of is that the the twenty five dollar per thousand primary limit or levy ceiling is not limited by a debt exclusion you can you can pay debt service above and beyond that level not that that's a desirable thing to do but so that that that is a that's something to be aware of is that that's the twenty five dollar is that two and a half uh yeah that's in two and a half okay got it yeah so the two and a half limit uh you know and you know rick manley is one is a as an expert and he you know he he and i were talking about this and it you know we clarified that it is in fact a debt that it's good debt service can be can raise the tax rate above that twenty five dollars per thousand not that amherst is in any danger currently of that other communities not too far away are but um that's something also to keep in the back of our minds in addition you know we're talking about the five percent eqv limit but the uh levy limit is another issue to keep in mind as well i think is uh people who run for public office but even before i ran for public office we're all aware of the fact that a lot of people are on fixed incomes or otherwise struggling to meet their property tax obligations and that as elected officials that's where we have an obligation to weigh needs versus sensitivity towards the taxpayers in the community who are our constituents so other discussion questions comments paul just just the last thing i just want you know recognize that our treasurer and collector jan and sherry are here as well we rely a lot on david this is i thought this was an excellent presentation i really appreciated it you sort of walked us through a lot of the very detailed complex things in a very understandable way and he's been working with the town for decades um before almost everybody except sherry's been here i think i work with the nancy maglione and so he knows so so he knows us well he knows our operations it's a relief to be able to talk to someone who's there's no ramp up in understanding us and he knows all the elements so it's so thank you very much for your time thank you very nice thank you appreciated thank you so um i guess a question i'm gonna turn it back over to the president because i don't know if there are other things you wanted to cover from the council wide perspective and it's since it's a special meeting we don't require public comment but you'll come back to that later because your finance committee does require um correct yes okay is there anything else from the council at this time this really covers our two agenda items uh and you're welcome to stay for the rest of the finance committee uh discussion uh where we will get into no just stay where you stay where you are don't worry about it ah okay so given this what i would like to do is i have a motion to adjourn this special meeting of the town council and a second evan is the second and all those in favor and that's unanimous so take a break if you don't mind dandy okay and uh as we get to the break to this so that members of the council who are here uh one other discussion item that we're going to have very quickly is on um something that we were charged to do which was to think about the qualifications that we would be looking for for resident members of the finance committee so that you're aware that that's a discussion item that's coming up very quickly so with that i think we'll take a five minute recess okay so shall we reconvene the finance committee meeting after the recess and um i don't know if there's any um major additional item that we want to talk about that previously identified as the criteria for citizen uh resident members of the finance committee i didn't know if there was any public comment um on any subject so this would be the answer seems to be no so thank you um so uh if you didn't get an email i sent earlier in the afternoon i wanted to send that pass out a few copies so i suggested um one additional question which is number five and therefore underlined everything else is just putting the numbering questions that's nice um so i want to turn to the rest of you then to see if there are any um additional questions or rewording of questions concerns about questions whatever i guess i'm taking notes you all right i will try to do both because i do have some some things i wanted to mention or discuss here um when you say in the under the qualifications experience serving on finance committees in amherst to me that means on the finance committee of town meeting is that what you mean yes that i that's what i wrote and it should could be rephrased linda be specific i actually object to that okay because that narrows the pool dramatically and i would like to make sure that like we did with the ecac we say among the group there might be some of with that kind of experience but to lead with it almost as being a qualification that you have to have done that suggests to me don't bother to apply unless you've been on the finance committee the past so when i drafted it i didn't mean whoops these should i understand what you're saying this was among the experience among the candidates yes i think the problem is it's too close to the other mic i didn't that's that's a drafting problem there certainly didn't mean that that is you have to have that so experiences of interest include or something it was supposed to be ideally we wouldn't get people who were just with an amherst experience i was hoping we get some from beyond amherst some others so any kind of wording that would reword that that it wouldn't be just an amherst experience so i just meant included among the experiences that would be of interest are the following because i take someone who knew a lot about x y or z who had never been on a finance i didn't mean it to be excluding i think you should say can include which i think is the word from the other committee as opposed to include and i think that was something like that i can't include finance committees do you want to say finance committees in amherst or elsewhere yes it was again poorly drafted because that first whole clause would be a finance committee in amherst and any other public body or any private body so i i just meant any kind of finance committee that would be one of the things that would be of interest and then if you didn't have that you know so i was trying to do these are here are some of the kinds of things that would be of interest so people should literally give me better wording on this it was not supposed to be you have to have one from each bucket the other thing that again i'm going back to the presentations we had today and unless there's other experience in this group that i'm not aware of which certainly could be possible if we happen to find somebody that had experience with actuarials and bonding it would actually enhance the committee's knowledge so would it be helpful i'm writing that down i could put qualifications i may include any of the following and then bullet bullet bullet bullet so versus experience on other committees train your experience then add actuarial so it's so accounting actuarial i don't think we need to finish because we're meeting on on when thursday are we meeting thursday this week are we meeting on thursday no i guess not no it's not until but we are meeting before the next council meeting so maybe the best thing to do today is to take some suggestions and um draft with it but Dorothy and i think we're pretty much i don't want to speak for Dorothy but basically saying the experience can include this but it doesn't have to include this i just want to make sure it doesn't sound like a job application it's sounding a little bit too much like that the kind that we get we get posted on you know the hcc job list and people often do think they have to fill in you know put a check next to each thing there should be something not quite so specific these are awfully job specific it's like saying you have to know these three kinds of software or whatever that's an interesting point and i think is maybe let me rephrase it and see if i have it wrong just to and that is are we looking for people with experience it's always looking for people with experience in financial management or are we looking for anyone from the town who is able to also assist us with the general questions of what are the priorities of the community as far as financial matters getting back to the prior discussion weighing the importance of doing capital investments versus the concerns about the effect on the ability to pay taxes this is again i go back to our experience with ecac and our and and what we tried to do was strike something that basically said there's just regular Joe and Mary citizens on this committee who know how to ask good questions and represent the voters you don't want people to say i should be paid for this that's true for all boards and committees of the entire town we have at times over the course of because of legal or practical requirements required people to have certain kinds of expertise planning board for example or the historic district commission requires somebody who has architecture or experience but that's one person in other words that many of those committees it sounds like somebody from this somebody from that somebody from there but not somebody with all of these things that was the intent of this that's why i was thinking maybe a bullet list that any of the following because it was at least in my mind if we get three people it would be great to have them be different from each other you know the one is bringing something and someone else is bringing something else so we get a rich addition of three people and i don't know what that might be you know i'm just saying that they don't all have exact they don't all have the same background experience as each other but do we need to say that explicitly because i think that this is where we get into the problem that the interview screening is no longer being suggested to be a member of the finance committee that has not been solved that that has still been delayed as a vote in the council we delayed it again last night so i think that that's really what the more that the that the committee has a direct role in the process then the less clear you have to be but if we're not going to have that direct role which is an undecided issue there is a need to be clear exactly i also noticed with the climate committee there may have been applicants that had none of the above you know in terms of the long list but we got people that were fantastic that had many of the above and that were different you know so the richness of the pool will also help us figure out what we what well what the mix could be so one of the possibilities is to take the sentence that we've been looking at and say across the pool comma the qualifications of members might include and i would just say experience serving on finance committees and not say even in Amherst actually i was wondering about even more broad knowledge about municipal or government finance um and then saying giving possibilities i'm thinking about somebody who happens to be a resident of Amherst first sentence does say that i just didn't put it in the list then because we actually put that in our charge so preference should be given to applicants with experience skills or knowledge of finance tax or policy issues including municipal finance with an overall yes quads preference should be again that makes it sound like you you're excluding somebody in the general public who it just knows the residents of Amherst and knows what their limits are could we just strike the first sentence and just start with qualifications colon across the pool the qualifications and the members might include experience serving on finance committees etc and include and i like i love the last place where you say including knowledge beyond Amherst i would even say knowledge of Amherst and beyond Amherst i would say that yes it was useful hearing some of the uh the uh our experts talking about how some of the towns in massachusetts have dealt with various problems that's why it's interesting so pat you do so you just say something like serving on finance committees no i i actually didn't take notes just in the last one i was just looking at the charge the charge that we approved last night says selection of resident members shall be based on relevant experience skills and policy knowledge with an emphasis on municipal and public finance i like that general so i like the word policy in there it's not just isolated skills but uh it's people are going to be trying to make decisions for the town so could i just copy and paste that sentence as the first sentence and then do this yes qualities among other qualities might include i said across the pool across the across the appointees the qualifications of the members might include other thoughts because i guess that my thought would be the knowledge that they bring may be important but um it doesn't need it certainly would be helpful if they had the experience we would want to know that but um i don't think that it's an exclusive and that's what we're trying to get at we don't want to make it be that we end up with people who all have one set of particular qualifications to the exclusion of all others we should say might include a range such as to mean you don't have to have everything or not everyone that has to have everything right either and and frankly maybe somebody doesn't even have that and again we go back to ecac where at least one or two people are really there because they're strong advocates it's not because they know how to do retrofitting so we're gonna so just to we're gonna take the first sentence out of the um committee charge and then the next sentence i Kathy do you have it or do you might helpful across the pool qualifications of appointees might include a range and then i have experience serving on finance committees if you still like the second one train expertise in policy economics or finance accounting or actuarial practice skills related to municipal or maybe just municipal finance and i can delete the ability to understand data i don't need to put that in i'm typing as you talk now so i can be changing this any way you want across the appointees not the pool okay the qualifications might include experience serving on finance committees no capitals and no enamors other public or private boards or bodies training experience in economics or finance munis and municipal finance i think it should say or spirit and experience in municipal finance because then if we set if we take out and end an ability to understand and interpret financial data spreadsheets did the and has to go before it's going a little slower the experience serving on finance committees other private or public boards then what's your next one training slash expertise in economics or finance and experience in municipal finance can you add the word interest with the experience experience slash interest so you don't well we're supposed to try to get um a balanced committee representing the community so if you make it too tight a fit we might not get that we're adding them to five of us where there will be eight with some balance so just remember i mean it is going to be a group of eight they don't vote right up accounting or actuarial is the next um we may decide that that's too specific okay that's and that's fine so the first sentence comes from the job i mean from the um committee charge the second sentence across the appointees the qualifications might include experience serving on finance committees or other public or private bodies training slash experience in economics or finance colon and experience slash interest in municipal finance period ideally residents would represent a mix of experiences and skills including knowledge of and beyond amherst i don't like question one um because it's two job specific i think if you just start with the second one it's a friendlier opening okay we'll have minutes there's a question you were saying combine it with question five um i think that's an interesting question somehow the first the the first question suggested that you might think somebody had an ulterior motive but when you change it to interest in serving then the emphasis is on they are volunteering to come forward to help the community no i like the change feeling like there needs to be i don't want to get too specific on experience or knowledge but it's almost like there needs to be another question like that i like number two as it's written i just feel like there needs to be another question that gets at people's experience etc so a more open and yeah like of anything else you want to share or you know something that talk more yeah i do too that's why so you know one the way two is written now it says any specific areas of interest if we took that clause out and had a three um uh anything else you'd like to highlight about yourself or it means some you're getting it something just more what else would you like to make sure we know yeah i mean i think we're getting to number seven when does that do it for you okay and i just want to go back to the bottom oh mine isn't that's right it isn't thank you you so i want to go back to the bottom and just this is for andy's benefit last night when we went through the approval of the revision and the finance committee the gol recommended that we not refer to a special first round terms in any of these i have to say i've had some so therefore they took out the three years okay i've had some second thoughts about the three years and this is by reasoning i'm trying to figure out how not to bind future councils so you want to leave remainder yeah yeah it was just i put two years in here because i read the revised charge and i decided we were back to two so i put two in right and at the end of the two years we as a council may want to assess whether it's worked out to have residents as members of the finance committee and we may want to recommend that we not that future councils consider that that maybe they're not going to i think i think the council has this is a broader issue and i think that makes sense has a lot of learning to do about what it means when you mix counselors with residents on committees so i would like to leave this as two years like you have it but i wanted andy to be aware of what changed last night so but the last two sentences then does not or three sentences doesn't really change that's correct that is correct okay being task oriented at this point then the other thing that got delayed again last night and frankly some of this because you weren't there was we have two different committee reports one recommends the finance does do the interviewing for this position and another one recommends that it does not and the only way i know how to resolve that is to bring it to the full council i grew that so do we have an opinion on that isn't it up to the the president of the council to appoint to the fight the the all the members of the finance committee no the members of the yes the council members of the finance committee the president gets to a point the resident members of the finance committee the council appoints and that is a special so that if we choose to have residents of the finance committee then the council appoints and it's just an odd phrase and a twist of it if you will in the charter the issue that i have gone back to and that is this is the only council committee that has residents on it and given and therefore i have said for your own committee you should at least be able to select your own residents and otherwise at this point the way the charge reads to okah is that they would do all committees all council appointments so it's um you know and it's come up in the way that we talked about these questions you know if if andy is the person interviewing people for the finance committee he he would probably approach the whole process and candidates with a different perspective because of his vast knowledge of municipal finance than somebody on okah who has never served on finance well or i i totally agree with you and why not have the chair and vice chair of the finance committee do the interviewing it would be very nice if they could do that but right now if they do that then it has to be in public meeting now we get into that whole other issue if two people from the council interview a candidate for an appointment to a committee then it has to be in open meeting and it has to be public now let me just explain there's actually three different ways to do this from what i understand and i've now attended so many okah meetings i can't count them the first way is you do everything in public the second way is you do executive session and in those instances that you do executive sessions you always have to interview one more candidate than you have positions for i don't think that's a problem but that's not that's not the process okah has selected the third one is that you only have one counselor in the room they can have other people as could an executive group executive meeting is they can have you know the town manager they can have sonia they can have you know some other town person they could even have somebody from another board as long as it's not a board they're being appointed to and so what we've seen and that is the practice that okah has chosen and by the way that is the practice that some counselors feel should be brought to the full council for a vote and then there's then the whole issue out there is whether or not our CAFs should be public and that's yet a yet another issue and we're trying to get legal read on all of that i can't imagine if andy is doing the interviewing that he should not be allowed to see all the CAFs that that to me is absolutely outrageous if andy was going to do the interviews frankly if the if the finance committee is going to take the responsibility for this all members of the finance committee based on the practice that okah has described we would all see all of the CAFs what we cannot do is ever discuss them deliberate exchange emails texts or in any way discuss the candidates we can see them but we can't discuss them but then it doesn't serve any purpose that's crazy problem and you know we're stuck with the open meeting law and sort of these anomalous things about the open meeting law the biggest one being that if you have a what constitutes a subcommittee the subcommittee has to meet an open meeting and that makes the process open to the public which then uh has the let puts the light of day on to it but also made discourage applicants and the discouraging applicants is the hard part and and let me just add to that i i without revealing names i already know of at least one candidate who has been named to a committee uh and approved who has said they would not have applied if their CAF had been public that's and if you think back we've only done two committees so it's one of those in addition to that what both Andy and Lisa and people like Connie Krueger who's on the resident advisory committee will tell you it is hard enough to get particularly a diverse applicant pool by having CAFs be public and then there's a whole flip side of this i think of it as a flip side and that is i'm professor x at the university and i am world renowned in some field and it becomes public that i applied for a committee on that's dealing with x and i didn't get appointed it's a professional embarrassment to me that in my own town i didn't get appointed so there's there's the sensitivity of the applicants and i saw i and at this point oca has spent enormous amounts of time on this oh my god 14 meetings 14 weeks of meetings trying to come up with a process that is defensible in the open meeting law and respects the privacy of the individuals who have applied so let's let's explore close executive session uh i would to me and you can tell me why this doesn't work but from what little i know about it that sounds fine people do this all the time i wouldn't do just one extra person i would do several extra persons so that there's not like i'm the only one that didn't get applied but so maybe you have three spots you interview five or six people um i don't what's what is wrong i mean i'm sure you have some good reasons but i just don't know them what is wrong with doing it that way it's not clear to me why they didn't go that way except for the time consuming nature of interviewing that many people i i actually recently had a conversation um about that point making sure that that was had been fully aired that you know for example if you were appointing zoning board of appeals one person is a one-year term so the law says you have to do two two people are two-year terms the law says you had to do three two people are five three year terms the law said you had to do two in my mind that makes sense and these interviews by the way i've gone through one of these interviews when i was selected for um dpw fire they're about 20 minutes they're not it's not like going for an all-day interview for a job it's 20 minutes 20 minutes so i do do we have the authority to say that we would like to do it with andy interviewing the applicants and to do it in executive session now if it's just one person is it executive session my no if andy does it and none of the rest of us are in the room it it doesn't even have to be a published meeting okay whereas executive sessions have to be the only thing i would say is that whatever okah is suggesting is their practice at this point i feel we have to honor that because of what they've gone through at this point i think that okah is very committed to going back and reviewing that practice as they go through this and down the road so then you're willing to let okah interview the finance members that's the to me the issue there's two separable issues um one is the practice so there's a way of doing the interviews and it's been decided that one person is doing the interviews on behalf of a committee with an agreed on set of questions just as we're looking at here so they're going to come back and then the committee and i'm going to say the committee right now that rather than which committee gets to see all the names and that person is coming back with a recommendation on uh these three so that's one that's the practice the second is who is doing the interview and which is the committee seeing it so rules voted out um and then we in finance talked about it that finance in this instance would be the committee and we would designate either andy or someone else from here but at one person so same practice one person does the interviews then that group of five people would get to see the full pool and recommend the three appointments to the full council so the second issue is is it okah doing that or is it finance doing that let me suggest even though andy you pointed out that it's kind of until you if you're not going to do the interviews seeing the caps it for the committee if whether it be finance or whatever is not of much use in reality is once the person that has done the interviews comes back and says here's the three people i'm recommending the rest of the committee has a better ability to judge whether they feel that's a sound recommendation if they've seen all the caps yeah i mean i have to look to the uh experience that we have and i don't want to go into much longer in this but um time constraints but when the eac when time manager announced his proposed appointees to the eac um he did not include in his list the people who were not appointed he only included the people who were appointed and if you get into the business of including the people who were not appointed then you get back into what lin was saying about the embarrassment that exists in the community of not being appointed and the chilling effect that that has on future um committee appointments and that's the struggle um one of the struggles that we're having um the other thing is just that if you have a committee that is looking um where it's being reported back i interviewed the following people and you include all of the people being interviewed because it's being said to the entire committee it becomes public who the list was so i'm not sure how that is the process they're using for planning in other words they're going to interview everyone who's applied and okah only okah will know the full list yeah the full list will never be made the rest of us won't know but that group of five people are going to know the full list that is there the proposed practice and i i think the actual practice it's being implemented this way i guess i need to see the legal opinion that gets it around that um but they can't here's the interesting thing is okah cannot sit at a meeting after that recommendation is made and say i know john jones applied why didn't you choose him but they can say something like having looked at the full pool of people it seems to me that you've got too many of these and not and there's no one representing this kind of expertise now here's the here's the thing i find amazing and that is very likely sarah who will be doing the interviewing will have in the room paul and maybe somebody from the planning department but you know she's not a planner and i'm not being critical by saying that i'm just saying it's this is where the we lose the group think is what i'm concerned about so um so in my my summary of my notes basically say we looked at the qualifications and we looked at the order of the questions and we looked at the practice of interview and we discussed which body and that we agree that this vote should come to the full council as to which body is going to choose is going to recommend so we can't do anything about that i don't think so you got too many conflicting committee reports well some some people are digging their heels in so on the issue of which body yes oh yeah i'm aware of that they're also you know and i know there's a lot of feeling back and forth in the council as to whether or not the full council should see the calves and so forth um right now the way the last vote that was taken is that we will know of the practice in writing when we receive the people who are nominated for appointment for either planning or zoning whichever comes first that's the way the vote that's the way the vote presently is taken so um i'm going to turn to Sonia now we have tentatively placed a meeting for next week did we have anyone we were meeting with because that's actually the day before the first when the manager's budget will be available yes i think we do so we are meeting yeah we were referred last night we were referred cpa okay so we're going to do cpa next week and that allows us to have a draft a redraft this come back to us and put it on the agenda right now well um you know i will yeah and i think that i would not want to do it with but will we meet on may second i have a finance question mark for may second that's the thursday of that of next week i don't think that we i don't have that i have a meeting on thursday or just tuesday i think i have i just looked at it paul had a list last night that i corrected the second i do not have i do not have the second on my calendar i don't have one on mine either okay so but are we doing for the 30th in my book i have um f y 20 budget projection f y 20 budget preview is that occurring no right i don't have one on the second i just have one on the 30th you have meeting on the 30th right we have a meeting on the 30th so we have a meeting on the 30th not on the second and we have then starting the following week we have two meetings each because then a number of presentations have been scheduled are we going to have a are we going to have a presentation from paul and sonia on the budget to kind of kick us off so you think he's planning to present to the council on the sixth i'll have to double check my part i'll have to check on that too that's my job sorry sonia i shouldn't have put you on the spot okay okay so our next meeting is the 30th our next meeting is the 30th and we need we need to use that meaning to review finance i mean jcbc right that was what no we need to use it to it's a community presentation cpa cpa cpa and i believe but i will check back with nate but i have already asked nate if he could be here for that i believe he can make it that day thank you i'll have to double check with the anthony but i'm pretty sure he can great so and then the other agenda item will be to return to the question of the that we had just been talking about with the qualifications and questions so i did try to type quickly and rapidly but i think lin as you were dictating you're going to have the best thing when you look at it whether i captured it so i i thought it was helpful although i didn't see it till now that andy just went and dropped another paragraph in so if people have track edit changes and uh they could upload it to sharepoint you know rather than do it as a group thing but just send it back or something so we come in if we know we to get as near to final quickly as we can you you all have it now as an attached file and i i want to bring this the question of which committee to back to the council on mark on may 6th so we want to talk about that next week as a part of this process okay anything else for today we have no minutes right now i know i know you actually have cat you gave me authority to do i not only approve them but we were missing one day and i decided i'd be a glutton for punishment and i sat down and watched the entire amherst media and created minutes based on my sketchy minutes and it was when sean presented to us the first run through the whole thing so it's a bit a very long set and i've already sent them to sonia so okay well thank you okay and so we're adjourning i think that uh unless there's other business that people thought about we're adjourning okay all those in favor we're done and thank you amherst media