 Okay, good afternoon. I'm going to call the town council finance committee meeting to order at 2 35 p.m. And it is November 5th 2019 of the committee there are Two members who are not here Shallow he's here So the only one Dorothy Pam is not here and She is planning to be here, but it's gonna be a few minutes late And the one who we do not expect to be here is one of the resident members of the committee Mary Lou tolman But we do have a quorum present and we are proceeding and So I want to thank everyone for being here, and I want to thank Amherst media for Providing coverage for the community The one item that we wanted to take up first You know is the second item on the agenda So I'm gonna what I'm gonna do or propose to do but make sure that we all have agreement on this is to Reverse the two first items so that number two comes first the proposed affordable housing Priorities policy, and then the second is the FY 19 fourth quarter in Year-end budget updates So we would try and cover those two first and maybe we would that will allow shall need to be present for those two items The percent for arts by-laws just a preliminary report It is not actually gonna be a final discussion of the item so that I can put that off the scheduling for 2020 I think is just gonna be a brief discussion so that we can take that up later and then the What additional item is to get a report on where we are for the major capital investment listening sessions and So we'll take that up so the first two items if that's agreeable to everybody is to start with The affordable housing policy I was going to thank John Hornick who's chair of the affordable housing trust and who that sent the policy for consideration and then it was referred to this committee and So we're looking at it as is the community resources committee and At the last meeting We had a brief discussion and sort of tried to identify Issues that we thought we should pay attention to as we looked at the policy As we agreed at the end of the meeting I reduced that to a memorandum which is really just a listing of the issues and Our vice chair Kathy Looked at it and offered some comments and then we sent it along to the committee and it is posted there's another item that is available that All of us either have electronic clear in hand which mr. Hornick provided today and I will forward along to be included in the packet for today's meeting also which is Some information that he provided after having Seen our last meeting by the Amherst media and That is sort of a helpful launch to the discussion so why don't you come on up and so Then you're facing us and it makes it and grounds the table makes for a nice approach and make sure your microphone is on So do you want to say anything introductory? Yeah, I'll say something given the opportunity Thanks, Andy. I Appreciate it. I first I want to apologize for not being at the last meeting. That was a schedule mess up by myself But I did take advantage as Andy said of viewing the meeting on Amherst media and also looking at the minutes or notes he provided and I took those and Frankly reorganized them in a way that I felt was easier to respond to I did try to Incorporate all of the elements that people had somewhere in the form of questions somewhere in the form of comments Somewhere in the form of requests for data and so I did what I could and I hope this furthers the committee and its work I don't think I need to say anything more Except I'm prepared to respond to questions Make additional comments You know the first obvious thing is I provided a table right at the top that seemed to be responsive to things that different people had asked for what's happened in the last five years what are the projects and And How many units how many bedrooms how many people how much of town funds how much of other funds and as you can see I couldn't complete that matrix Because the data isn't available nonetheless, I Created it and left it here on the chance that at some point We can fill in some of the additional stuff so that we don't lose track of the fact that people had these questions I Should say I have not reviewed this with Nate Boy, which I should have done If I had time I'm sure Nate can fill in some things that I missed That was actually going to be my one question was whether you'd had a chance to talk to Nate since I Assume you have his memo that he sent to us Yes, and I use that in part But there are a couple of things that weren't on that You know particularly I created a proposed growth table Which I thought you'd also be interested in that you know as well as the growth over the last five years Also, I should say that when I looked at his memo There were a number of things that had to do with Rehab projects, which I did not include in the top table because they were really Maintaining the quality of existing units not development of new units, which makes sense Yes, Kathy now I'd actually thank you John for doing this extra work in the graph I'd actually thought it would be important for the town To gather up this data, and I noticed last night on his slide Paul talked about having spent eight million dollars in the last Five years, but I just You know whatever the number is I don't know what the right number is But I think it would be good to both put how many Affordable units we've been able to create and however We're counting them whether they're single bedroom studios or two bedroom and then how much total housing has grown Because you know if we get to the point as a town that we have a policy with a target You know wanted the discussions at last night's housing form and the small group I was in you know if we only grew by a total of 250 units total in five years having all of them be Affordable, you know just to put it in context of how fast are we growing with anything in town and and There was a lot of discussion of are there have there been Will there be opportunities going forward so I really appreciate you doing this, but I didn't think it should be you alone I thought you know we should go back into the town records and and what they know about You know development around the town on new developments that are in process that may have no affordable units in it But just you know a general sense so I do You know combining yours and Nates, but just getting something out of the planning department that gives us Not so much combining is my drawing from information that he's provided in the past sure I'll just say that The official counts are things that the town provides to the commonwealth subsidized housing inventory And I provided the link if you're curious so you can look and see what that is I think it was established under 40 be it must have been yeah, I think we saw right So the count provides both counts of total housing as well as Affordable housing or subsidized housing under that and Nate will know all of that so that can be added I think without too much difficulty Obviously some of the items aren't quite so easy Lynn you know the in this chart my guess is that part of the way that the town manager got to the 8 million is Included some value for East Street school Yes, but that My recollection is people estimated that to be a quarter of a million dollars or less of the value of that property I think the other big thing is I think he included rolling green and He acknowledged last night is that rolling green was an effort to preserve affordable housing that otherwise would have been lost if it had gone to market rate it had been sold as a market rate development and The town investment was very substantial We would have gone backwards by that number of units had the town not partnered with beacon to Create the current ownership structure which preserves preserve the affordable units And it is on the list that Nate gave you I didn't add it here because I considered it to be more than five years ago Although we're still paying off the buttons. I think it was the total of 1.25 million Well, this sort of gets to a question that I have and then I keep looking around so that because if any of you have questions at any time just Signaled to me so I know When the trust talked about the policy that it wanted the council to consider And it talked about 250 units It would adopted a number that was already in existence From a prior policy the housing production plan from what was it 14? 2014 There have been units constructed since I'm assuming From what I heard last night that I just want to confirm That your proposal is essentially a start over of the 250 that you're not going backwards to 2014 you're going Forwards from where we are now in your proposal. Yeah, I'm not suggesting or we're not suggesting that we make up for lowest ground so the I think that the Value of looking at this information is that it Gives us an idea of how what's the ratio of town funds to units produced in various projects because Obviously we're a finance committee and our comments are gonna Feel long Lines in part if not totally it's a committee decision in the end can we afford it and that Historic data is in some ways a valuable predictor of what we can Expect the cost to be going forward Yeah, I hope they're a little less actually Andy Well, I won't say we overpaid for some of these projects in terms of the town contribution One of the things that is in the policy is a statement that Except under extraordinary circumstances the range per unit should be I think between 40,000 and 100,000 and Obviously we had had a number of projects that go over that We don't say in the policy what are the circumstances under which you could exceed that Maybe we we ought to have included that but we didn't I Do think that there are I won't say the town overpaid, but it I think the there was more money there. Maybe then then we should have put into some of these projects Yeah, the some of this small new construction ones particularly The ones who were done through habitat, right Now that is leveraged. I know it doesn't show there But habitat does leverage through Sweat equity put in by the eventual homeowner, but also through contributions from various building suppliers in town And and obviously other contributions that they receive But that leaves us with the other funds piece being blank, which is something the cafe was I Realized it's a complicated thing to put together, but it it you know if we Spend 700,000 and leverage another five million, you know, just it's just some Accounting way I did a rough Adding up of the units that you have and it's comes to about a hundred maybe a plus or minus You know and you know, what did we spend directly? And I would include land value whatever it is That's in the town funds and that's the town fund column And then to the extent we were leveraging other and that's it's clear that when a developer Puts in units and we didn't have to spend money for it that that was a good deal So I did it just all helps to get a context that if we spent this amount of money over five years and got 90 or Whatever number, you know What's doable over? Another the next five years with what resources what indirect direct So I think of a policy as being you know that target emerges Sort of as a bottom line in a goal, but then it's here's the background information Here's how we think we might be able to get there You know what what tools are we using to get there? So you've got a lot of the pieces of it, but some are missing And then we would have to decide whether Given our resources, that's you know, how do we set that? Yeah, I agree some of the information is missing Frankly, what's missing is also somewhat complicated for example if you look at North Square It looks like we're paying roughly a hundred thousand dollars per unit But one of the things that the town got with North Square Square is deeper affordability so it's not 80% AMI and I'm not going to remember the numbers, but I think it's as deep as 50% and maybe a few units at 30% AMI So that's the reason the subsidy there would appear greater than it is elsewhere. So when you're looking at What we're subsidizing it's not just units, but it's the affordability of units Which makes it more complicated So is there anything further on the first part, which is the Look at Investments that have been made I'll say one other thing about this some More than a decade ago. I was involved in the study of mental health residential programs And one of the things we were looking at is the cost per Bed or per unit and the study involved half a dozen different states And if you looked across the states what you saw was a great variability Massachusetts had a much higher cost rate for example than Tennessee Well, why is that? Well, the answer goes back partly to what it actually costs to create a mental health resident residential unit But he perhaps even more significantly what states were willing to pay for so When you look at this the question isn't not so much what our costs might be going forward Kathy But what we're willing to pay for and the more we're willing to pay the deeper subsidies We can afford the less we're willing to pay the smaller number of units or the less deep the subsidies are they would be available I think that's important to think about and Not necessarily to place an over reliance on history Well over reliance on history has a problem. I say you hand it Bob The reliance in history in part is that We know that cost of construction goes up four to seven percent every year and another issue so that There's that limitation on which you can use historical data for Bob Yeah, I just have a question about the the town funds. I mean in some cases. Are we not Creating a tax subsidy in which case that would continue on into the future for some period of time Do we have any handle on? What that amount is? As far as I know there's only been one tax incentive financing project Which is the beacon communities project at North Square which? The actual value is estimated to be between I believe 2.6 and 2.8 million. Is that right? Okay, that's what I recall hearing and I put in two points Six million is the value so yes, that's one of the ways we kind of financing the others are also in essence based on Local taxes well, not entirely local taxes if we use community development block grant dollars. Let's pass through money Right, but so this 2.6 million then it's over a period of years, correct. Yes. Yeah, okay You may not have spent 2.6 million dollars and you know over in this year or next year that it's going to extend for 10 years 15 years whatever the period To further clarify was that CPA money? No, that was tax incentive financing. I got it. Thank you. Yeah It was a reduction in property tax But it is still expenditure of funds whether you take it I remember by reducing income or you take it out of Expend the expense side of the budget. It's still town funds Dorothy welcome what we're doing is we flip the order on the agenda a little bit and we're Started with the housing and what you're receiving is John had done Some attempt to respond to some of the issues who were raised at our last meeting that he was unable to attend In person but attended by Amherst media and So he provided that Do we want to move on to the next section? Is there anything else to say here because we want to keep moving Knowing we have limited time One thing I wanted to say about inclusionary zoning, which is the sort of the first topic is mandatory inclusionary zoning Since the last meeting and I will send this to the entire committee After the meeting is over. I only came across it this within the past few days I was advised by a former member of the Planning Board that in 2014 the same group that did the housing study and the housing production plan RKG says it's Did a study of what the cost? What what the effect might be on Construction of housing if there was a 15 percent requirement for Inclusionary zoning in all projects as opposed to the way that the Zoning by-law is currently written and The study was done for the benefit of the zoning subcommittee in the Planning Board because they were considering A proposal a town meeting and then recommended against it and it did not go forward to town meeting What their conclusion was I can I'll summarize Very simply, but it really is worth looking at because it really goes into great detail looking at the economic costs of constructing buildings and of development was that It is they concluded at that time again remember the date that it is highly unlikely That new construction would occur if there was a requirement of inclusionary zoning for all properties and the In that it was particularly true in downtown Because cost of land is higher so that the higher the cost of land more likely it is That you would have that net result as a result the then zoning subcommittee Did not recommend This provision which was actually I believe in the original housing plan is a suggestion to consider Definitely in the housing production it was in the housing production plan which actually was also I believe earlier in 2014 I think that's why they it came up in 2014 to the Planning board Now I did have some conversations with some of our staff and planning about that study and They The feeling was is it probably needs some revisiting to see if there have been Changes in some of the economic assumptions that were built into that study that alter the Bottom line outcome of the study But that it was very clear that that was the conclusion They also had Some assistance from the Pirate and Air Valley Planning Commission to do some additional work that in BVPC came in with the same conclusion and We don't it is Something that needs to be considered carefully because as a finance committee We have to recognize that not only does it mean that you not only get no affordable units if that's still true But you get no units at all and you don't get any new tax revenue from new growth so that it does have a financial impact if it but we I'm not sure that we know that the 2014 study is still valid unless somebody who has the appropriate expertise goes back into it. That was my recollection and Since I just came across it I did send it to Shalini and I think you know a couple others But I will get it to the entire committee after today's meeting And I understand from Chris Breistrup who I did discuss it with yesterday that Chris is getting it to the planning board 2014 report from Arc AG and So they will be having a similar discussion and I sent it along to the chair of the Community Resources Committee Um Could I add something to that Andy? Yes, I think it's worth noting as you follow that line of thinking if there's no more or if construction downtown is Viewed as not Viable if there is mandatory inclusionary zoning then the I think it's worth noting the economic impact on the downtown itself Okay Yes Well, I am and I'm not the one to do this, but I Have heard that it operates in other towns So it would be interesting to see an economic analysis of why it seems to be working in some other towns and not here And then I would like some creative thinking on ways in which the town could make it so that it does work I Like the idea of Diversity so that instead of having all of the affordable housing together, but having a small amount everywhere I think it makes a better town and there may be I think we've talked about Offsets that perhaps may be a height inclusion or some kind of offsets Which would allow the people the the developer to make what is regarded as a good enough Profit for them to want to do the thing To happen but to in order to do it So I'm just I just feel there is some way to make this work, and I think we should do it Because it's it's even if it cost the town something to make this happen It would be I think better Some of the towns where it has worked have an extremely different economic picture than exists here and And You know everybody loves to pick on to say oh, but Cambridge does it Cambridge is just not an analogous Community whatsoever the amount of commercial development that they have is just so Overwhelming in comparison to ours that there's no way to draw that comparison That's always everybody's favorite community. There are other communities that have made it work. So I think that But I don't know where they are and what and how their similarities exist to ours each community is unique I think that it gets back to a point that Bob had brought up as I read the report But everybody should read it for themselves because I may be misinterpreting it and that was Bob's point from the last meeting that there isn't that much developable land and the expense of the land is so great that It is the factor that was driving that analysis But it clearly is from that report that it was more pronounced in Downtown than it was in the other two locations. They actually did a Deep analysis of three locations one downtown and two others So the question is could could it have worked say on Southeast Street? Don't know would it work now in Southeast Street? Don't know, you know, there's a lot But Clearly downtown and that report was where it was least Usable and I only point that out because everybody loves to pick on the three new buildings in downtown that have been built in the One that's under construction and saying gee if we had had affordable units in those buildings how many affordable units we could would we would have and The the flip side of the question is would we have any units whatsoever? Yeah, I just say generally with respect to this section There is nothing that is listed here that was included in the town policy Most of these items are really the province of the planning board And so we kind of left it to the planning board to decide what if anything might be incorporated into the town policy and in fact they are Working on that issue We have had One building built 70 University Drive with affordable units and my understanding is the To actually presidential also presidential Right a presidential added units, right? Yeah But I'm thinking about I think it's Aspen Heights is the name. I can't remember if that's quite right Would be built with affordable units and I think it's now somewhere in the permitting stage No, I think that it gets back to Dorothy's point that It an inclusionary zoning which would spread it around so that if you had an inclusionary zoning for Some districts, but not all That is something else that could be considered because You Know just the logical extension of this. I don't have to go any further Are there other thoughts that people have going to what John has written on the top of page two there? He has a section of other or possible approaches and strategies and then the second one it says Eight things you town can do to add more housing without spending a dime So I was wondering if there are other questions or comments about any of those sections. I I don't really have questions on them as much as if we if you thought through a package that had these possible levers in them You know speculation on How many of what could you get? Would be interesting, you know even last night there was some talk about Some of the people who might have a unit in their own home that they could rent out are finding it more economically advantageous to rent it out as a Bed and breakfast as a Airbnb You know, so, you know people are going to make decisions with their own property So to the extent to the extent there's some consulting assistance How could you subdivide your house if you wanted to do that to make a separate unit, you know, where are their barriers? To what could be a natural incentive to an older person living alone in a very large house that they might like company, you know But when and where so I think just some of this trying to put a little bit more meat on it I'm not talking just about you you but trying to think of you know, what is the barrier to that happening now there was nothing to stop Us from doing it in our big house, you know other than you know would you know? There's no separate staircase kind of thing But but you know so some of these seem like oh, that's a really good idea But so it's thinking through that a little bit and and the study Andy's talking about I know that clearly if An area is zoned in a way that you can only build this tall with this many units on it You're less likely to get multiple units there unless you think you can get someone saying you could do something differently And we've had examples with the up in North Amherst of Co-housing coming in and figuring out a new way of using land where they roll barely close together but they share green space and Making that easier or more difficult, you know get you Housing it doesn't necessarily get you affordable housing. It's the point we made last week That land is expensive in Amherst and then building on expensive land is expensive So if you build a small house, it may not be a cheap small house You know so I just think getting a little bit of perspective on the things that don't cost anything would be great On thinking it through You know so we do we have it now? What else could we do and then the other thing I heard last night and I don't have a sense of how much more and around the margin That when people get a section 8 voucher To help them with their rent the section 8 voucher doesn't help you pay first month's month last month's rent and security deposit So you can pay your monthly rent with the voucher, but you can't get you can't go to rent You know that contracts so that's around the edge of getting someone into the unit in the first place and that's Section 8's not under control, but around the margin of section 8 could be CPA money or you know The community block grant you know just some of these are a Smaller amount of money is not actually buying the unit it but it's buying them someone in to being able to use their voucher So these are things that I don't have any sense of does that get you 15 more in Amherst does that get you one more in Amherst? You know just a sense of that has a lot of potential payoff or this has very little Again around some of these possible tools that aren't you know paying a large amount of money but paying some money or giving some support systems Yeah, the problem with section 8 that you're describing Occurs when someone has a voucher and wants to use it in a market rate unit then all those other costs come into play But if they want to use it in a unit that's designated as affordable You don't run into those obstacles, which is one of the reasons for trying to expand the number of affordable units I'm gonna say with respect to all of these things. I was trying to be responsive to the committee's interest in what other strategies might be pursued and the Things the town can do without cost was something actually that Shalini provided that were in Andy's notes So I thought well why not list them here? They overlap to some extent with ideas that Janet McGowan has I Don't think we can do all of these I guess I was thinking that the planning board would be sorting through these and deciding which ones were ones to make a priority at least and the Policy document itself might say okay, the town's gonna try to move forward with two or three of these But certainly not leave it entirely up in the air or say anything as possible I Think each of these is interesting in its own right, but they will have their own risks. It is There's one other section that I we're gonna run out of time And there's one other section that I wanted to at least address myself But I want to see if there are other sections that the rest of you want to make sure that you cover Out of this memo and the amount of time we have left Because I do now that they know that Sean is here We want to have we have to build some time in for looking at your advice version of the tool if He has that available which was And plus looks like he doesn't want to stay longer than necessary The one that I wanted to bring up I'm just since nobody's raised their hand is on top of page three other town financing schools section five We know we've talked extensively last time about CPA funding surplus town property We always have to be very cautious in thinking about the question of whether the property has resale value And what is the resale value that we're giving up by not using it? This is my favorite topic of discussion is everybody wants to use the central fire station if we ever abandon it for the new fire station lin is devoted her life to building and But yes, we could make it into the Performing Arts Center that the arts community talks about But it also would be sellable for Significant sums it everything is you give away as an asset So there's an asset value to the CDBG funds I think we all know about tax incentive financing. We already talked about Airbnb We can only do what the Legislature authorizes us to do and we've taxed it to the max. I thought the town had already adopted. Yes, we did so with there's so we're already Counting on that revenue into the revenue that we have so it's not there's not new revenue Actually by statute some of it has to be set aside for affordable housing and the town went with the state guideline, but not any further and The inclusionary zoning payments in lieu we have you know as you point out it's there in the statute We haven't collected any Yes, I'm brought mentioned at trade-offs where the Zoning could grant the right to additional story for Affordable units there was no discussion of that. So why is that not a good idea? That in some ways is the inclusionary zoning provision that we have now Change of use on no the Last town meeting changed the by-law So that any Specialty any permit That the original words the town meeting had was for any permit special permit Any permit and the it was there were words were added that said for change of use and there was discussion This is just within the last two weeks that that should be changed and returned to any Permit all and any permit I don't I don't think that that's right, and I guess I'll have to discuss that with them Because there was that action in the last town meeting. It was specifically done because That is how your understanding is yes, but again, I don't recall the specific language, but yeah, I mean in the case of couple buildings downtown there the issue was they Got some special permit or waiver And the question was well should that have triggered the inclusionary zoning law by law the interpretation of the time was no And so the bylaw was theoretically changed so that that wouldn't happen again But I can't quote your chapter first either No, I mean obviously when he's pleasantries the best example it was both height and setback and Neither one of them triggered Because of the way it had been written before right I do have one other one and it's really about the competition for CPA funds and I'm actually quite concerned about this because Based on what the goals are whether how much of the CPA funds are we really looking to spend on housing Versus the other three areas which for other reasons are also important to the town so I'm just as I was not in favor of going beyond the fifty percent required on the The Airbnb money, I'm very reluctant to say that a certain fund Should have a certain percentage or have certain goals that must be met by that fund And it be captured by one of the four options for that fund They actually should I owe to Mary Lou who wrote this My priority for the housing policy would be for the homeless as the first group to be housed Also, I would be concerned about the amount of financial backing The town would commit to the project from the operating budget and or grant money in light of all the other capital needs that are urgent So I wanted to read her comment into the record at her request Actually the first part of her comment there was nothing in the policy that gave preference to homeless it just was talking about Affordable units not to the population to Benefit As I recall your yeah, that may be true of mivin and oversight, but certainly that was the intention on the other hand The policy basically described wanting to have a mix of people eligible At different rates of AMI Although I think we settled on an average of 60 percent AMI Which means that you would have to have a fair number of units that were down around 30 percent in order to be able to get that mix But even 30 percent Is not necessarily going to be enough for people for some people who are either homeless or Have extremely low incomes Again part of the discussion last night Ginny Hamilton was saying that Her son has experiences with friends in school who come from families that are very poor and are forced to move Because their family can no longer Afford the rent and what they would need is a subsidy that assumed a very low income Or an extremely low income so I mean all of these are values Take questions. I mean, I I'm not going to say that I exactly Disagree with what lin said earlier. I mean, obviously I do But it's a values position. It's not a logical position like I can say I'm right because of this the answer is my Says that we ought to do a certain amount of affordable housing and unless we set ourselves to do that And actually work hard at making it happen. It's not going to happen Yeah, tell me Yeah, I do feel like as the town council and taking into account what the values are of the town we need to have a shared statement of You know, what are our goals with respect to whether of with the limited resources we have was it whether it's homeless people or and or workforce housing that's another group that is sort of Doesn't make it make the cut and so I mean if you try to do everything for everyone, maybe we don't have the resources So could be I mean that's something we need to discuss what our goals for each of these populations and Yeah, that's at least addressed or raised as a question under item six concerns about affordability What level of affordability do we want to pay for? Or what level of subsidy? Are we willing to commit to? You're dorthy I think that we should have people who receive Welfare benefits or disability payments. Are there maybe like 15 percent of AMI? I don't I think they should be included in our plan Yes, I I agree And I think somewhere we say that although again It may not be as specific as you would like it to be In which case that's why we're having this conversation. Okay, so I think that we I need to draw this to a conclusion and it seems to me that there's several things one is That there seems to be generally within the committee a support for doing something But we have some big questions about what it is second of all I'm not sure that How much of it is a finance committee discussion and how much of it is a crc discussion and it all will ultimately be a council discussion But the the development of some of the thinking on some of these issues Probably falls more in crc and we ought to be At least making sure that while we don't have to be exclusive to our Areas that we cover the financial areas thoroughly and In doing that The discussion we had initially about costs what we know are risks of the of making assumptions about costs per unit available sources of funds and Negative financial consequences of some of the other strategies that have been suggested if we can identify that they exist Or beneficial Consequences if we can identify them they exist Are probably the financial things that we should think about and I wonder if the best way to Do it is to see if I can work with somebody else in the committee and Try and come up with a little bit of an outline of that so that we can continue our discussion in a more focused way and see what kinds of resources we can get either from Finance or planning or whoever whichever is the most important appropriate department To help us develop any additional information that would be useful for the council When it comes back to them because that's what our goal is is to be useful to the council And to inform their discussion So If that's okay, I think that what we could do is I will work on that and move to Kathy He'll be a good person to work with his Vice chair and see what we can do before our next meeting Yes, bob Andy, I just would like to add effectiveness To that list. I mean how effective are each of these strategies? What do we get? You know how easy it is to to implement and you know, what's going to work A lot of these things could work or might work, but we don't know that they will work That was that was well said that was my point, you know that this gets you not much or gets you Something but with the awful lot of effort Yeah, right and can I Yes, that was a similar question. I had with The point was can we look at the existing financial tools and see What has been effective, but since even if they haven't been it feels like some of them We could find a solution why like for example the tax incentive has not been utilized much other than beacon Community so it seems like the flaw in this system is it's very complicated So could we have a group that can consult or the legal paperwork? Consult with the developers. So when we look at these tools, maybe there are easy solutions or easier solutions so that would Yeah, that's a complicated one and I have to Say that First of all, it's fairly new and beacon is only one that's come along, but there wasn't that much time Um and You know, we had to go through the legislature to get permission to do it and there are limitations in what the ordinance has Provided and the legislative authorization has Once beacon came along with the proposal Um, it was a fair amount of work for mr. Poole or who was the any instructor at the time that we put that through To make sure that it gets negotiated and structured in an appropriate way It was not something that You can do very easily. There's a lot of work that goes into Doing it plus making the decision of the investment Um, so yeah, we should encourage it Um as appropriate, but it's something that we have to recognize Is not going to be easy to do but that's not different from the others and I think that that's sort of gets to my last point which I've brought up many many times and that is that Is I've looked back over my history with this town and what we've accomplished We've accomplished it because an opportunity arose and we grabbed the opportunity and there are all sorts of different opportunities to arise But it's hard for us to create things Sometimes it's it takes a partnership to create it and We don't know the partners are going to be until they come out of the woodwork and come to us So I think that the other question I would have for the Affordable housing trust to think about and crc to think about is How do we go about and create partnerships on our own? Is that possible? But that's not It's a policy issues, but just maybe more than a financial. Yes I I have a clipping. I wish I brought it with me of a new development made by wayfinders Um, which included lots of things that we would love and included Uh, one that was also targeted towards I guess single mothers who needed to go back to school and they actually had a Room which was a set up as a school study space in this new development. This is something that Just I got I think we just got out of the paper Recently, maybe I don't know that was the boston paper or the springfield paper But you know wayfinders does does great things and I thought wow they did that there Couldn't we do something like that? Wayfinders is a great organization and actually I mean I would encourage Some direct conversation by an appropriate body and it's probably not the finance committee with wayfinders about You know, I've worked with them for years. They used to be called hap ink and back in the days when I first started working They were called housing allowance project And They Are certainly one of the most creative Organizations, I think that they As much seize opportunities as the other way around they were certainly our partners in butternut farm And that was a question of I believe the planning department identified the possibility and partnered with them And but they were there and ready to jump and ready to make it happen But Somebody should really involve a conversation with them town staff are in touch with wayfinders as our members of the housing trust So it's it's not that they're unknown to us But okay, well I think we need to go on but thank you very much john You're welcome. Are there any other issues that I should attend to if I You know, is it worth doing a revision of this document? What would you want in it if you had it? I don't think I would encourage you to spend the time on it now, but Is we identify things The one thing that we need to do and we need to talk with Nate will worry about is gets back to the chart at the beginning on page one and I know that Kathy Has talked about that because I think that she would like to make that a lot more complete and richer chart and I think that was one I am Reading the crc minutes. I haven't gone to their meeting. I mean they have They've identified a series of things So I think you trying to respond to things as two different committees ponder issues Would be time-consuming rather than waiting To get you know a more solid group of you know either questions or ideas about where we think we could be going and as you said this Funding to the extent to which the planning department can refine the table add to it expand it whatever But you shouldn't have to do all of that. Yeah Well counts there for pretty busy and if I can I try to pitch in So I think what we're going to do what I'm going to propose that we do is Because I know that shallony needs to go or I don't know you said gave a time around now So The Two things that I want to make sure that we address today and I want to get to Sean next and get his report On where we are with financial planning tools and anything that he has to report to us so that he can Get going and then the other is the fourth quarter and year end report Which we have received and I want to have some time today for those who are present Because I know that you won't be able to be here for that to have a preliminary discussion of Eight questions, but there will be a second opportunity at our next meeting. It's not a report that goes away And it is what it is. That's what's important is we have the opportunity to understand it So I'll just watch this on the on the ms media site So okay, and then if you have additional questions particularly on that last topic That I mentioned the fourth quarter year end report Certainly Sonya comes to all of our meetings so we can come back and Follow up in the next meeting with additional questions that you Or Mary Lou might have since Mary Lou also couldn't make it Okay So Sean Hello everybody So the update will basically be bringing you through some of the changes that I've made since the last time we met and feels like we're getting Closer to the final version, but you can let me know if there's things you see that still need some tweaks So What we're talking about now is the financial planning tool it has been worked on. I think was last first time was version 1.03 And it is to help This committee the council and the community To understand the costs of the projects that We've been talking about the major projects for the elementary schools libraries the Fire station and the dpw facility and to help Facilitate a community conversation About them this looks a little funny Working okay No, I don't think so Okay Will allow you to open up the Open up the excel workbook Yeah Yeah, it's something called solstice that they had me download and then A code appeared on there and I could log in It's kind of magical If you want I can try working on this while sonia and holly do the Budget report if you want That'd be work. Um, sonia What we thought we'd do is and uh rather than uh us watching sean try and Get it started that we at least haven't the initial conversation about the Fourth quarter year end report, which you did send to the committee in advance And um, I think that everybody had a copy Um I'm just There it is mine So I don't know if you have any introductory comments that you would like to make I wanted to bring holly here with me for this report since we kind of did this as a team effort this year All the year-end stuff and we both worked on the quarter report together So she can remind me of the things I forgot and I can do advice first for her I wanted her to present this today, but She declined So, um, gentle fund ended up with a operating surplus this year of almost 4.1 million dollars Are you there? Do you want me to continue or do you want me to? Okay, um, the best best way to look at it is if you look on page eight of the of the quarterly report, that's the Best summary for this and what made this up is 75 percent of this was Revenues in excess of what was budgeted And the main the main contributed to this was the two million dollars being paid back from the health claims trust fund 2018 we voted two million dollars out of free cash To avoid having a deficit in our health claims trust fund. We were having Issues we've since gone to Maya to a fully insured plan. We instituted a surcharge And it was going to take two years to pay this back However, we received quite a bit back in large claims from our stop-loss policy, which allowed us to end this much sooner So the two million dollars has been paid back and that's the biggest contributor to this the second largest would be our Medicare D reimbursements This is not a budgeted revenue, but the revenue comes into The general fund we let it fall to free cash and we subsequent Used to be a subsequent town meeting, but now a council vote will move that money from Free cash to op-ed and this is the last year that this is going to happen because we no longer have Medicare D the third Contributed to this was a tax lien so that we're collected in excess of what we budgeted The other 25 contributing to this is returns from operating budget The biggest contributors there were Most of my notes here caught me off guard was the general fund was the biggest part at seven hundred and eighty six thousand dollars and that was um Savings and our benefits savings from bidding out our property and casualty Insurance overall we saved over a hundred thousand dollars on that It was it's allocated through region elementary school library, but A biggest chunk of it was was here Yes, and the enterprise funds. Thank you The other was a largest was community services and that was Money being returned the 50 the 60 thousand dollars that was voted at town meeting for social services, which was for was it preschool youth We didn't have time to Get into a contract so the money had to be returned because we can't carry over money To spend after unless we had a contract in place and we didn't so it closed back to free cash It's it's all in this report It's all written up in the in the previous pages of what it what it is And if you look on pages five through seven, there's more detail from each account where the money Came from so I didn't want to read everything line for line I just wanted to give you a quick overview on that That's it for the general fund good news We also have free cash certified and we certified at 6.1 million Again, that is because we brought back 2 million into the general fund from the health claims trust fund. That's why it's so high And it's been our financial policies to move anything That is over five percent from free cash 5 percent of an operating budget from free cash and moving into stabilization fund And I believe we're planning on doing that again this year The enterprise funds If you look on page four, it's pretty much summarizes the enterprise funds We had we had revenue deficits in water and sewer the rates Consumption was way down this year. We had a lot more rain. So there was a lot less use and But there was enough turn back in water to to cover to create a surplus of 137 sewer There was not so we had a deficit there and we don't have to raise that we have sufficient retained earnings to cover that So it's not it just reduced our free cash and sewer for that and everything else is Pretty unable to have any specific questions on this report I didn't quite catch. Did you say that the uh Excess four million is going to go into the stabilization fund a No, it's something about stabilization fund. I didn't quite catch one our free cash was certified at 6.1 million dollars this year So anything over five percent of the operating revenue for that year Is our it's been our policy to move that from free cash to stabilization fund because free cash goes away at june 30th It has to be recertified every year where stabilization fund Is constant and it's always available It's all money that's available to us. It's just comes in different forms. It's like two different forms of savings accounts, essentially I was trying to get the numbers to add up and because we had 4,081,389 was the amount of Going excess surplus net surplus and then 2 million was the amount that we had Allocated from free cash to the health claims trust fund that's comes back So it's roughly half of it And then We said the remaining that 1,017,765 comes from Department spending below budgeted levels And the other portion is excess revenues And that all adds up I gather So when we compare Against prior years We're because you made that in the prior paragraph if the comparable figure would be to take the 80 45 987 and add it to the 1 million so that is One million about 1,097 1,098. I guess I'm not following what you're calculating. I'm just trying to In the first paragraph You had said The 4,081 was much higher than prior years and then you gave the fyi 1817 and 16 numbers And I was trying to get the comparable figure if you backed out the 2 million And see how that worked out Is that made the difference? If you back out the 2 million you get down to 2 million Which is higher than the 1.5 1.8, but it starts to be in the ballpark Right when I look across the years, you know, so if I just take that one out, that's a one-time phenomenon as we transitioned So we had Roughly 2 million more 2 million, but also we um our surplus return for the general fund is higher than normal So that's that would make Make up the difference of the anomaly here So, you know going along where annie was trying to track prior years to this year and Is it a practice? Which I think is a good practice that You're conservative both on the revenue side and the expenditure side So it looks like You're you're rarely coming in with an exact balance. You're coming in with You know For different reasons probably in each year. It's because some staffing turnover happened something came in lower Because if I go across the years One six and I tend to round up so one seven one nine one six, you know And then this year the bump up, you know, we're in we're in the sort of same neighborhood Is is that what's going on here that you we're very conservative in budgeting our revenues? yeah, and Our expenditures are tight every year. I mean returning some of these departments returning A public safety returning 123,000 out of what eight million dollar schools Oh education returning zero Thanks, John But public safety return 123,000 out of 10 million dollars for public safety That's that's not a lot of money being returned. Their budgets are tight all the budgets are Yeah, so news all on the general government Balance and That also includes one or two positions that went unfilled for the year in general government. Yeah. Yeah. Yes It includes open positions that have not been filled turnover. There's been a lot of turnover and it takes time to to get people in place And public the 123 coming back from public safety that that too is turnover takes. Thank you The the anomaly here is general government because of the health insurance We increased our rates and then we went to to my we paid off our um surcharge sooner So we didn't have to use that appropriation that we had for The town side. So all of that played into the 786,000. It's all in the text in here Yes I'm on page four and this is my stupid question of the afternoon The sewer fund had a revenue deficit Okay, 371,691 and returned appropriations So I do know that you subtract the returned appropriations from the deficit and you get the total deficit But I don't understand what the returned appropriations Mean if there was a deficit So if you look on page nine Budget versus actual statement that's the clearest the top part is revenue sources so our Charges for services came in less by 483 thousand dollars But expenses we didn't spend as much as we budgeted So that's returned appropriations. So the 268 454 we didn't spend that So the net of that would be the deficit in that fund because it's an enterprise fund it It's net One of the things I think that would be helpful as we go into next year's budget When we get to these enterprise funds to get a fuller display of the reserves, you know, just because clearly some of The way that we're able to go year to year as we've built up reserves So if revenues don't come in the way we thought we we had it's not Doing a mid-year rate increase on anything And I I know you have those Sonia. I just I'm just thinking that when we look at them You know, we just talked about the new plant coming in and going Backwards but also forwards knowing what we have in reserves So we get a better sense of How this works out Right. Um, I can tell you we have about 2.1 million over 2.1 million in sewer for retained earnings. We have just over 2 million in water 111,000 in solid waste and 173,000 in transportation Which are all certified So it gives us a buffer, um, you know, you don't want to run a deficit for too long or the buffer goes away, right? Oh, yeah Oh, yeah, we watched that very Lynn um Sonia besides the I I think it was the youth programs was 60 million. I could be wrong It could have been some other but besides that are there any other Funds that were committed by town meeting that didn't get expended Not this year Thank you so I have, um Process question One or two comments the process question is have you had a discussion with Paul about Sending this report to the council and do we or does it come to the council through a report from The finance committee. How are we handling that as a process? It's been a while since we talked about it. I've talked about it with paul But I believe it comes to the finance committee and it's a report to the council So to come from us, right Which then gives us the ability to put a memo on top of it similar to what? prior finance committees Did in sending it to town meeting It would go to we did send it to town meeting at the fall special town meeting but with a finance committee Memo on top and I think that the one things that we explained is that the amount That gets and you have it a little bit in your memo too The amount I think it's added to Reserves the total of the two reserve accounts Is not necessarily the amount that shows us a surplus here for the reasons that you explained That it's not been audited and It's not been audited but also also this report is budgetary only so this is reporting only on the budget That was voted for fiscal year 19. It doesn't include any carry forwards that we carried over the year before that didn't get spent That all gets closed out to free cash, but that's a whole different other Gap process that we work through with dor. This is this is telling you how the budget performed And then what happens is that ultimately and Free cash usually gets certified pretty much at the end of the year calendar year But it's not tied to the calendar year it gets it usually gets sort of once we would close our books And now we have to close the whole system the whole financial system the munis system here And then once we do that and filed all our other reports the free the schedule a And our balance sheet is final. We send it in for free cash and that usually happens right around October Okay, do we have any Excuse me. Do we have any other votes? That the council has to make with regard to transfer funds based on f y 19 Yes And when will those we follow our finance policy and move anything over five percent from free cash into stabilization So there's a transfer there and then our medicare d money that closed out to free cash We need to move that into opa because that's been our policy and our practice And when do you see those being ready to come forward? I can make them ready just about any time. It's just timing of what Should they come to the finance committee first andy? They will. Yes. They should come to the finance committee first they The second the two that was described can't come until this d or certifies free cash That's fine. So we're probably not talking until the first of the year, right? There's no Rush, I'm just looking at two um Two agendas for the council one of december and one in one in november that are just so jammed that we'll be here This can wait beyond that Well, now we have the advantage of what we called year-round government when we were talking about adopting a charter Because we used to rush it to try and get it around town in the town meeting sessions We don't have to do that anymore. We can do it at any time Um, I don't know if that's good. The medicare d one has an additional factor that we probably should be according to the council and considering when we set up budget guidelines and that is that We funded OPEV in essentially two ways if I recall one is the medicare d and the other is direct appropriation and the Medicare d will no longer exist after this year for the because we no longer are running our own health care trust fund So that we don't get the medicare reimbursements don't come to the town anymore um So that needs we need to consider whether to recommend a greater OPEV so that we can continue the OPEV Contributions and amount and I guess that we're looking for recommendation from the town manager on that But I know that was a mouthful and I want to make sure that anybody understands what we're talking about with OPEV With the medicare d and OPEV and how that worked and there was one other piece to that and that was If my recollection was is that we get the entire amount and then we were giving some amount to Pelham and to the region and So if we're doing that again, that's another action that has to come in the council order I would think they've already received their portions of it Because it comes through and it's already identified as region money and Pelham money We were able to just let them put the revenues into their side instead of falling for free cash This is the last time we're going to be doing this transfer. So we just expedited so that they would have their money now okay with mess um within Muni mod municipal modernization act If we were continuing with our health claims trust fund and we were continuing with with medicare d We could have gone and had one vote to declare all medicare d money OPEV money and we wouldn't have to do any of these transfers anymore But since this is only this was going to end we didn't even bother to bring that okay yeah Medicare d reimbursements come Mostly to retirees who are participating in our health insurance plan as town retirees And therefore it seems most logical when we got the medicare d reimbursements since um to to put that into OPEV and that's uh what we were doing The quickest explanation that I can give to that The other thing that was on my mind is that um This gets back to all of you who are sitting there One of the reasons that we'd always been trying to um over the past several years um Build up our stabilization fund because we knew that the major building projects were coming And the thought with the major building projects is that there might be some reason to um spend some money in the most likely time to do that in Sean when he shows us the Graphs in a minute we'll be able to demonstrate what i'm talking about That in some years If expenditures have to go over that That balloon the 10% limit that that's where you could justify pulling money from the stabilization fund So that you can continue on with current Money that is going into ongoing capital expenditures as recommended to the town manager by jcpc and not And still be able to do the projects so that when we go Into the charts, Sean will be able to demonstrate that to us and That's an explanation that we may need to include in our report to the council so that the council understands Why Having that money is available Do we speaking of stabilization funds? Do we have a percentage? Or some level of requirement? For how much we have to maintain In stabilization funds at all times We don't have we don't have a requirement for stabilization fund Um standing alone We do have our reserves that between 5 and 15 percent of our operating budget Okay, thank you Is our policy and this is a this was a policy that the old finance committee had adopted And was modified from time to time by the former finance committee It was one of their charges at the time to adopt a Budget essentially financial policies for the town I think that we're in a different era and what's going to happen is is that the finance committee will recommend changes to it as changes become appropriate But it will require council action to change it. I think that We don't have the same authority that we had in the prior form of government. It's not something that we've This is I don't want to spend our time with Sean this way, but setting the goals and establishing The guidelines for both reserves and what they're used for and stabilization of what they're used for Is something I think we need to spend a little time on with the council And then looking at how we deal with that because it's come up now a couple times in discussions About the fact that we're dipping into stabilization funds or that kind of thing I just want to point out that we're at 19.7 percent this year Once we got the two million dollars paid back 19.7 because of the fact that we had thought we spent a bunch 16.5 million health Claim trust fund alive and then it turned out that we didn't it was needed I feel like we're in very good financial shape I just know that as we move into The capital projects or Should we unfortunately be hit with any serious fluctuations in state appropriations? These are the two Like death knells. Yep. So I just want to make sure we all understand it and how to go forward Thank you. Paul laughs at me when I say I want 25 percent yeah, um, so Let's get to the other topic per second. Sean is going to demonstrate how the chart shows us Thank you. What we're talking about is to where You might want to recommend use of stabilization to make The plan work and Um Still be able to do the capital that needs to be done So I'll send this to you all either this evening or tomorrow There's four changes. I just want to highlight real quick and then we can model something The first change is I think last time we talked about adding more options for repair Um of the library Originally, we just had 10 million and we talked about adding different tiers So those different tiers have been put in Up to you. Yeah, and it's it's easy. Um, the other sort of visual change is We put the ongoing capital on top As to not make it look like any project was on top So just a small change, but you'll see that yellow bar now that represents ongoing capital is at the top And if somebody says like I don't want to be the project on the bottom. I'll probably lose it So I'm just gonna put that But so that's done There is now sort of a first crack at an assumptions page And so you'll want to look through this and see what you think So it's the original instructions and then there's assumptions and some information about each of the different variables that are in there And where possible I try to link it to information that's already on the town website Um, and then the last one that's sort of a bigger change, but I think it I don't know. You let me know if you think it's better or worse Um, so before if you wanted to do the two school option You sort of were locked in to doing two new schools or two renovated schools and there wasn't really any choices around the size of those schools, which Makes it really difficult to really model that accurately So what I put in there is the there's an extra decision The first decision is whether you want to do the two school option or a single school option And so you choose that And then based on that it brings you to the next decision Which allows you if you choose the single school option You choose from this list if you choose The two school option You can choose from this list and it gives you add renaus and news at different enrollment sizes Because I think that is an important piece to recognize that There's just gonna be there could be different enrollments depending on how that plays out And these are all tied to the final report from tskp They're sort of the the midpoint of the different groupings of cost estimates that we received And then from there you can do the same stuff choose whether they're dead exclusion what year you want to start it and how along So those are the the four changes So i'll model something real quick and then we can talk about The reserves as it relates to Expenses exceeding the 10% levy So we'll do the library projects Existing capital we'll do fire station at 20 million We'll do that from existing capital You tell us what you're doing. Yes. Yes. I literally can't see that. Sorry. All right. So the options which I think I'll stick with for now are For the library Just again modeling not proposing modeling addition renovation The the mblc project essentially the 35.6 million dollar ad run out In your 2023 using existing capital funds and looking at 30 years fire station 20 million Modeling 2024 with existing capital funds and 30 years Department of public works 25 million 2022 existing capital funds 30 years And then for the schools a single school option at 80 million 2023 with a dead exclusion again just a model So we can look at how it plays out Borrowing rate using four percent Which is the midpoint of the options cost escalation using four percent, which is the midpoint using seven and a half percent for net zero And doing the percent for art and ongoing capital Um right now is at two and a half million, which is roughly half Maybe a little less than what's currently spent on ongoing capital. So it's it would be dropping down And if you do that and you look at the chart, so you'll see the three projects in there This is your existing dad as it runs off. This is your ongoing capital at the two and a half million Here is the dpw and gray the library in purple and the fire in red And the number kind of focused on us as 12 million and so I've been sort of operating if it's around 10 million or less that it's Given our discussions around reserves and and other You know some parts of the model that are conservative That it's probably a plan that could be at least explored further So this is close to that And so, you know, there's different ways to incorporate the reserves the town has to help with this model But the years where you might need to think about it Or how you might factor that in would be these years where the you know, eclipses the 10 levy line So this 12 million is not in any one year. It's the cumulative of all these years So the biggest single year would be about 2 million And it would get smaller after that This is the total debts and then the other thing that's in here is the debt exclusion So this is modeling based on 322,000 which I Believe is around the median household income in Amherst And so there's only one debt exclusion in this model. So just goes up once and then sort of winds its way down And this was the percent for our thing that we put in as well Around the debt exclusion if you went back to the model And you said We were going to Spend 4 million on on other capital instead of 2.5 Could you show us what that Makes a yeah that that variable makes a big difference in the model And just again to reiterate the assumption. So it's it's 4 million in the base year, which is 2020 or 2021 And then it scales up based on the two and a half percent estimate of the levy going up as well So that's why it grows a little bit in the future What year do you have the last project? Starting in whatever i'm looking at starting um 2024 So this is being aggressive and you know trying to do all the projects really within sort of five years Can you just give us a sense if you take Two of them I don't care which to stretch them out. You have to take dpw and then fire take dpw and fire and put them in What 20 28 20 30, you know something further out Stretch the timeline out on when they start Take linds and go back to either 2.5 million or 3.5 million or you know just something a little bit smaller No in the past what I saw is it doesn't help us very much and I just wanted People to see it doesn't help very much this piece makes a big So this really makes the biggest difference or one of the biggest differences is how much you just going from 4 million down to 3.5 made a pretty big Impact on this number it went from about 55 down to 36 the other thing again It's looking at all time and again other parts of this model again Why I say it's conservative is like so we're assuming the two and a half percent going forward We don't we're not factoring in new growth beyond that which over the long term is probably a safe assumption to try to keep it conservative So, you know any given year things could be a little bit better a little bit worse But the amount of funds we dedicate to ongoing capital is one of the variables that makes a big Impact on the chart And the other other issue is the longer we go out Two things the more we have to deal with the price going up just because of inflation But the less sure we are that will be able to be at four percent interest rate And that's the piece that scares me Yeah, the farther out you go the again the projects get more expensive because of the cost escalation assumptions in here And the you're at the interest rate is farther out the more you'd probably lean towards the five percent number Go on The amount that you're allocating to capital atop bar That's increasing each year by two and a half percent Yep Yeah, so it's so the first the number you're putting in Yeah, so it's the first year exactly So if you look in a year like this in the behind the you know the chart behind it It's going to be more than in this case three and a half million because it will have grown over that time So it does allow again it does allow for that in the future It's not like we're holding ourselves at three and a half million forever It's just those increases are going to be small each year that that goes towards ongoing capital But it mirrors what we do generally because Aside to the tax levy, you know assuming we got to 10 percent and we figured out what 10 percent is That's the amount of tax levy is going to go up through the year I think the thing that's confusing Is You don't see the schools here because it doesn't have to be in our debt exclusion, right? Yeah, but it does go into the tax rate right Did we discuss whether there was any way to do a few different Scenarios for you know, your home is priced at this price or your home is priced at that price Yeah, no, it's you can definitely So this is allows you to enter it yourself, but we can put some I think you had already made that change you can plug in any Any numbers so that any number you want in that but again, we could create a for some people They may not want to go into this we could create a chart that kind of gives those approximate numbers Yeah But the default setting right now is the median I just a couple questions on choices you've made The choice to put the ongoing capital on top rather than the bottom what was you know, just what was the reasoning I think that the Time it was whatever project was on the tippy top kind of felt like it was What was pushing us over the limits and so maybe it was the bad guy or bad woman Yeah, maybe perception perception problem as opposed to I personally Preferred the old way But I understand the sensitivity The old way you can see sort of the ongoing capital kind of mirror the trend of the 10% levy line a little easier Yeah, there's an advantage to it and that is that we all know that ongoing capital is something that we've been committed to and that's where Things that people understand like roads and sidewalks Keeping buildings maintained Replacing equipment that wears out Everything you do is a normal course of business and If you don't do something and you can you just borrow a bunch of money for other projects That's ultimately going to be what's squeezed unless you take it out of Free stabilization Um, I think that's right But you know, I agree with Lynn. I like I liked it the old way But I can understand why you flipped it and I'm wondering very easy change. So No, no, no, I'm wondering if one thing we might do when it including when it comes to the full council Freeze frame A slide with no choices on it where we haven't done anything on the four buildings And let you play with that so you can just see that we only have so much money And if you know, I want to spend it all on roads or what, you know And then you can that would just be these buying off old debt And yellow so that people have that picture in their mind on how much room there is under the line Before we start building it up I I have said this more than once but I'll say it again I also don't mind if you want to put dpw and fire Put fire on top Go ahead put fire on top. I don't care Yeah, I think the sensitivity was library kept getting on top, right? Yeah, it's from the library Has its own issues and that people whenever they need it, they need it whenever it doesn't do right They complain and whenever they don't need it. They can't tell you what they do so But fire and ems we know what they do and I'm put it on top. Yeah So the only guy I need to I would need to do which is again Very easy changes just add a zero option for the cost right now We kind of left this you had a model all four projects, but if I add a zero option then you could Not you could actually this this gets to the other point I was going to raise I don't think I'd want a zero option and the reason is that Lynn and I have had this discussion several times and that is there's a cost of doing nothing and the cost of doing nothing Is built into the library how much they concluded needed to be spent that they have not asked to Incorporate into prior see Bud JCPC budgets because they were counting on this happening So they put in an amount and gave you an amount which is I call the cost of doing of not doing a project is that you have to do something to just maintain the building So putting it a zero is not Realistic for any of these buildings the problem is is we haven't calculated it for the other ones and I somewhat Feeling that we're not treating all projects equally within the model if we've created this Option for one and not for the other so in the work that I've been Doing to try to get a set of draft slides ready Press to go on the road um, I actually have gone back through the old studies first of the fire station which goes all the way back to 2006 And this is where I I hate these numbers. I don't think they're reliable, but in fact we have a number for what it would cost to repair central fire station Or renovate central fire station. The problem is It's a 2006 and then a 2009 number and the multiplier is close to 6 percent. I don't understand that level of inflation Annually and then DPW actually do have a figure in the feasibility study that was done in 2016 and Of what it would cost to renovate the existing DPW so I'm still working on those Andy and I are gonna spend a little more time Looking at that anytime you'd like to give us both of you and doing this all three of you is most welcome because It's hard to take a figure out of a study that's Over 10 years old and place any reliability on it. Yeah, and I think for the schools We could go back through the jcpc report from last year and go to all of the out years Yeah, we've got a pretty good We've got a decent number for the schools and one of the things Sonya and I We're gonna do for this jcpc cycle was for all the departments have them include The projects that maybe were previously not included but help us come up with those numbers for you all So for the schools, what are the projects that if the new buildings were built at a certain point Or the new building was built at certain point What kind of would come off the capital plan and have the same analysis for each of the projects so we can give you A rough estimate for all all four building projects So i'm not trying I want to go back to this your statement on the schools I actually think we have a better estimate for the schools by looking at the fort river study Yep, because the fort river study includes a full renovation option In it What and and that is without zero energy Having to be put on it The only question I have is could you actually extrapolate that number to be a 600 student school? Are you going to just be bound by it being I think was 460 or something was the highest enrollment that they went in any of those schools? Yeah, I'm not sure That that would be the sort rather than try to go through jcpc and You know over the last 10 years or whatever I would actually go to the fort rivers. I think there's actually a it's a challenge to get any kind of apples and apples Because this you could say okay, we're not going to build a new school. We're going to put a new roof on them Right, but you know do that's the number that we would get from the jcpc is the roof number Put a whole new heating system in it put a you know, whatever um because the the fort river modeling on you know 90 percent renovation and 10 percent new if you had to build a school that was 50 percent larger It's got to be more new You know some part of it has to be more new because it's bigger than the current school, but You know, so that's where you get if you're really trying to To fit it to a different purpose than they were just Creating windows And the reality is a lot of those Projects that would be sort of the alternative to a new building. They're going to be part of this process They're not going to be all done at once They're going to be go through the the jcpc process and have to get vetted and approved each year It's some of the I guess a meeting we had recently and there there was support for dpw by the way People do have a sense of how valuable it is But there was some expressed worry about the stabilization fund In your plan does that stay strong? Yeah, so There's different ways to model it. We're trying to find at least a model that relies on the stabilization fund as little as possible So that in the future if there's because again what this doesn't model is an economic downturn where Exactly where state aid Plumets or we have an issue. So we're really trying to come up with a model or options that We're not banking on using all of the stabilization fund to support because we'd rather that be there for If you for stabilization if there's an economic downturn Yeah, it should be zero basically in this case He's allowing it to go above It it stays greener yellow if it goes above our levy as long as we're not drawing the stabilization down To zero. I mean he's got some you've got some this is just the amount this so as of right now the stabilization fund itself is not specifically included in here, but again We Yeah, we fact if it's with 10 million over again That's just sort of my arbitrary number that I came up with which is I think we could make Figure out a way to make it work if we were within that range If you're much over that range, then it starts being in my opinion more difficult to Figure out how to make that solution work. No, I think that's important You know to say we want at least five million whatever the number is and then you can draw it down You can draw it down, but you know the the red light comes on when I'm sorry There's there's no more draw down. You have to draw you have to come up with some number at least for the model to kind of Yeah, you know either way there's a little margin of error on each side It's one here where you have everything going out for That exclusion override and us spending this money on repairs for sidewalks What multiplier or what level are you using a lot of money for sidewalks? That's a lot of money for sidewalks. Yeah, I know sidewalks roads, etc Um, yeah, um, I'm sorry what multiple you said multiplier So this is this is kind of looking out if we spend the same rough level that we're currently spending which is a little over five million Okay Yeah, excuse me, but we we didn't spend Over five million because we got still one point whatever of debt serfs from old stuff So right so in these early news stuff has only been at least last year Right, I knew it was only about three and a half on new stuff is last but as that winds down so going forward But you're right on this current year new stuff was less than the five million And then I think only about 2.5 was roads and sidewalks and the rest was equipment and Technology so could you just go down to the tax rate so we can just scare everybody you want you sure So this is if you excluded everything So that's the amount that would be increased above the regular tax rate to pay for the debt exclusion override It's not the tax says somebody would pay the taxes somebody pay would be much higher Right That's the amount. Yeah, just created by debt exclusion. Yes, right And what is the value you have up there for the 322? Okay You've got all the projects in there were the debt override Um, I yeah, I switched them all so it's two of them go in 2023. So that first the first bump up is a combination of the library and the schools and then in 2027 is dbw and then 2030s fire station Can you talk that in words? I can't see the numbers any way up. Yeah, so again I this is just we did the I did this so that you could see the other chart what it looks like with no projects in it So it was more for that purpose But this just shows that if you excluded all the projects you'd be adding At its peak about a little less than 1200 on top of Um, an average property value of 322,000 on top of their property tax bill We're not considering that. I mean, I don't think I have a problem with putting things like this Anywhere because right somebody's going to run with it So again, I'll send this to you all um, you can send me your feedback impact Input any other you know, if you see anything you can send it to us Yeah, I'll send it to you probably tomorrow morning the only other choice Question I had but I'll see it if you send it to us when you Allowed a two school choice. Did you do a paired choice? You know, so we we only need to build a school for You know x number of student. It lets you choose so it lets you um It lets you choose based on, you know, how How sort of Involved I guess you've been you can choose for example 465 here and you can choose a 315 or You know 315 either down the road there are a couple different ways of doing it once you send it back to us one is you could say You know if we're going to do two schools We need either space for 750 kids or we need space for 600 kids depending on what you're doing with sixth grade So don't choose two schools that only yeah, we can put that 500 kids, you know I mean you have to you know, it's a you you don't have free choice on what we're building the hard part was there's just so many options No, there's so many options. So just tell the user that you know, your constraints are this Yeah, what the enrollment target should be for yeah, that makes sense Good Any final questions? No, but I Lynn, you know, I I do think putting the yellow on the bottom would be good Um, so if you put virus the very top one, I just I just think it's a conceptually that Not before any of the buildings if you want to do something this is how much It just it's hard for me to think that the remainder is everything else As opposed to My options except for the fact that If you borrow money, you got to pay it back And this is the debt that we owe and so putting The debt you owe at the bottom is actually Because you don't have a choice And therefore the only thing that remains flexible Is cutting back on the things that you allocate year for year And that's why it makes sense to have it on top Accept that notice green is going down here because he's he's making the taxpayers pay for all You know, so you're not We are paying for the debt, but we're not seeing it. I'm not making We're not seeing it on the draw on our five million. You know somebody's paying for that You know what Andy? I think you've just convinced me that I like it on top Because that that means now we have to go into stabilization To make to continue to put this other and so it makes people Look at the issue of what do you give up? Okay As we know some people believe And I'm not saying they're wrong that roads and sidewalks are as and vehicles are as important as these buildings. So Well, I think what some people might agree on is that the roads and sidewalks are not Being maintained and and so yeah, okay But it may mean that they have to under I think what Andy's pointing out is Once we commit to any one of these projects now we have a debt we have to pay The only place where we can not be paying a debt is that gold Bar and it says this is what you have to give up Which in fact is roads sidewalks vehicles, etc Well, I sorry just to further that I think I think people already think that so Do you know what I mean? Like if people already are experiencing that their roads and sidewalks Aren't being maintained the fact that they're going to have to give up the fact that their roads and sidewalks aren't going to be maintained is You know But I think it's going to be there are many people who believe the roads and sidewalks should be the fifth project. So Some people would give up something else first absolutely It Andy's point works better when we didn't debt exclude everything else because the green bar was going up Now it's this magic We built a whole bunch of buildings without any debt and that's because it's over there on the on the taxpayer so, you know, we just have to be careful when we're using this because This just like schools disappear while we're spending in the schools. It's just showing up someplace else Yep, no, that's going to be one of the most important decisions You guys are going to have to you've got to really know what what you're doing when you're playing Yeah, that's true Just for the sake of discussion you started out with This the only debt exclusion was the schools You put in the full library um, you put in 20 for fire you put in 25 for dpw And you back the years and you made the years earlier Like, you know around 224 so forth Maybe 224 225 Schools. Yeah, schools are the only ones that are in the schools are down below what you're at 400 or a little over 400 Last question and then I we should let you go and we should get conclude our own meeting too Would it be helpful for people visualizing this to put the current Total of stabilization above that Red box so that people have something to have measured against And it's just a label insertion It's doable. I just from our perspective. I think the thing we're we don't want to necessarily get to a place where The plan is to spend the whole stabilization fund to make this plan work because then you're left with nothing to So I think it's just being careful with that comparison People think you can spend all of it to make this work because you're just you're going to be at a much greater risk that we should I mean the other Way to approach it is To in this probably is a further finance committee and maybe even council policy discussion is what amount What is the minimum amount of stabilization? that we feel must be maintained and because the current policy is Son you pointed out earlier as we The policy says reserves should be between five and fifteen percent and anything about five percent can go in stabilization That makes it sound like five percent is the minimum if you're saying that five percent is not the minimum Which makes that's a logical statement to make then we it ought to become a policy question Then you say the reserves right now are nineteen Oops, nineteen point seven percent but um the five percent above free cash Is what our policy says anything in free cash that is over five percent gets moved over to stabilization five percent doesn't really have anything to do with the Stabilization other than between five and Fifteen percent for reserves is a total So the sum of free cash, but what we could do, you know in terms of your box sandy is Whatever the number is, you know, we've got 20 million 15 million in the stabilization fund We can say the stabilization fund has As much as 10 million available, or you know, so we've taken the five million out Whatever, you know, it would require a decision that there's as much as 10 million available And beyond that we don't have we don't have a savings account. It's like I have to keep some So making that decision on looking at what our current reserves are Saying we don't want to go below a certain threshold Then you could show the net over that as is available To it's we've been building up the savings account to use for this. We just can't Drain it I'm going to wear my comptroller hat here and remind everybody that at any point in time We may not be able to maintain 10 of the tax levy So you want to keep enough in the stabilization fund to cover our debt once we obligate ourselves That's what I mean. I mean, I mean, whatever I mean Sandy said we don't know what to Have a considered Number that we really need to have and we shouldn't go below that whatever it is It also shouldn't be too hard to go back and look over the years Over the two or three four years in a row where we would have to use stabilization And figure out what that money would cost in today's money. I mean that to me, that's much more Of what we really need to understand is When we view stabilization in the past, how much have we had to use? I I think Talking about regular people not mathematicians That they would like to not have any of the stabilization used on the four projects Because if you do a project, you know that there's always extra money that that has to come up So that not only would there be a question against a downturn which people think is coming But there would be money there for the things that We didn't plan on that that happened. Yeah Yeah So it makes so it makes me go back in time which I hate to do Because back around 2006 or seven when we developed the policy With our former finance director who at that time was john musanti 15 was a pipe dream We were nowhere near 15 Does that mean I have hopes for 25 percent? I Mean that's that's a policy question We we created this policy goal of 15 percent at that time Thinking maybe someday we'd get there and sonia's a big reason why you're there So I don't know what else to say on those other questions Then I thank you very much. I know you Have somebody who's very impatiently wanting you to get home. Do you have an under come to work today? So that's shown. Do you have an understudy? Yeah, so her um her daycare was her school was closed today So she's either daycare all day or she wanted me to pick her up and shadow me for the day. So She's very busy Take my daughter. She got her uh technology time in well. Thank you very much Sean for being here being part of this and the Um all of the work you've done on this project. It has really been great and I think it's going to be Very very helpful as we're going into our next stage And which is what we wanted it for as well as for our own thinking and analysis um So I think we're going to do let me just just run tell you where we are with the agenda because I don't think we can Have to do anything else at this point Um We said that if anybody had any additional questions about the year and fourth quarter report that could raise them again at the next building the percent for arts I just wanted to mention that Um Most of what we're talking about in the current version and kathy k will add to it is chair Because if she thinks i'm really being too brief, but i'm trying to be brief Is that um, it's new buildings and new buildings are funded one of two ways, which we've been talking about and the chart A chart currently has an amount Um available to calculate where you've debt excluded and I think that what we probably need to do is figure out um Some way of demonstrating What the cost is for buildings that we're building that are not debt excluded How much the annual additional increment will be on bond expenditures and for payback and we'll work with uh sony on that And uh, that'll allow us when the process gets further to be able to Contribute our piece of talking about cost because we're going to be more about cost than policy probably at that point even though um Mary lou feels a little bit more strongly on the topic um But go ahead kathy and then i'll just i'll preview we we're hoping To get a revised version back to finance A couple weeks from now um if or within that but the two big changes we've made from the original To respond to concerns about the total cost Is that it only applies to a project that's at least a million dollars We raised the threshold that would be debt financed so we're spreading the cost out and then we put in I called it Initially an escape clause if the council and the manager determines right now we can't We can decide not to buy a majority vote So it it specifically allows on a project by project basis And then the the third piece is some people were worried that the art project development might slow down The implementation of the major project. So again, it can be canceled if it can't be done in a timely manner You know, so we put some things in that are protective in terms of total total So that's what yanny is saying then you can model it Saying if you're financing An art project over 20 years. It's in any given year. It's not a lot of money So that's what's going to be coming back in terms of some fairly substantial changes from uh Create a fund and have to appropriate every year so I will work with kathy's chair of the ad hoc committee and We'll see it talk to sonya about any help we need for modeling the Financial piece for percent for arts and that will come back on a future agenda and be a more informed discussion that way um the Scheduling for next year's meetings. We'll take up at a future meeting and So the only last thing is uh, lind, did you have anything you wanted to? Say to the committee or ask the committee regarding the update on In preparation for scheduling of the listening sessions on major projects, right? So um Some of us have been working very hard to get ready for Taking this out on the road on November 18th At 5 30. We're going to do For anybody who wants to attend It's the hour before the town council actually meets But it'll be an official meeting of the town council because there will probably be a Majority we're going to do a thing where we basically say here's the Here's the powerpoint and here is the script and here's how we're planning to approach these meetings, etc We are not going to do the video at that point Because we don't want to do a video and then have to go back and change it so But we're doing the video within like two days after that and then We actually and i'll send this have Andy send this or you send this to you We've actually set four dates for next listening sessions The first one is december third Which is um both in the afternoon and then the evening two different meetings and then december Monday december 9th again two different meetings one in the afternoon and one in the evening and This is where we basically and we invite you to come and join us We basically sit there and say nothing but listen like the schools did and The schools and the library are also invited to come and do the same And the facilitator that is working with us is the same one that they used for the schools Although they have screened out a person that did not work that well because They were too familiar with Amherst So they kind of kept wanting to lead the audience And that doesn't work for us. So This is going along very well. Kathy's working with me on some of this And Andy and I have a big thing we need to do, but I wanted to just Alert you to that the other thing let me just mention too is that There will be a formal invitation sent out for the december 2nd state of the town Meeting it'll be a meeting of a special meeting of the council and it will be the town manager and myself have to do By charter a state of the town address and then also the library and the schools are going to be doing annual reports of their year as well, so That one starts at 6 30 and I should add senator comford and Representative dom will also be speaking about legislative initiatives, particularly as they relate to the minnow municipal government So No public to comment. Is there anything else that anybody from the committee would like to report on or ask and if not I think for this meeting we Can be adjourned and I think I'll just declare it without the motion that we're Adjourning at 450 and I want to thank Amherst media for providing coverage because I do know From questions that I received a lot of people appreciate Amherst media doing this for us and I don't think our note taker and Sonia who's provided our support and We're adjourned. Thank you