Finance Committee meets at 7:30 before every Town Meeting in case there is any last minute business to be done.

Today we first approved the minutes of the previous meeting.

We then revised our vote on Article 75.  The original vote was no longer needed given the Contributory Retirement Board’s surprise announcement that they would move Arlington’s funds into PRIT.  A vote of no action was then recommended on the article, by a vote of 15-1.

The reclassification article was adjusted by $14.

Black text is mostly objective, red text is mostly subjective in nature. These are notes from 3/5.

The minutes from the last meeting were approved.

First up was the Capital Budget, discussed on Monday. The budget was recommended at $8,538,000. There was almost no discussion; we’d talked for an hour and a half earlier in the week.

Article 17 – Holding the warrant open until 60 days before Town Meeting. This was put on by the TM Procedures committee. John Leone and John Maher spoke. Evidently the Selectmen are agreeing to open the warrant in the first week of December and closing it in the 3rd full week of January. The article will be withrawn.

Article 44-45 – John Maher spoke about the destination of the OPEB funds. Maher repeated his statement that the only option offered by the special legislation was to transfer the funds to the Retirement Board. FinComm then voted a recommendation of no action on Article 45 (the article that would transfer the money somewhere else). As I previously blogged, I think we were outmaneuvered. I wouldn’t choose to give this money to the Retirement Board, but they won this battle when Town Meeting asked for the special legislation.

Article 19 – Housing Director Laura Weiner, AHA Board Chair John Griffin, and Town Counsel John Maher spoke about this article. The Symmes agreement includes a $150,000 payment to be used towards affordable housing. This would be the place to put it. There were several questions about the potential increased costs to the town: employees, eminent domain, management of property, and others. The goal was stated to be a “bank account” for affordable housing – when a developer wants to build affordable housing they could borrow money from this trust to build the housing. Several questions were asked about whether the trust had too many downsides – the general goal of bank account could be met through a regular town fund. It was stated that there are many towns using this structure, but they are mostly town who have adopted the Community Preservation Act. It was noted that there are several options for the Symmes payment; the money can be accepted and used by the town without this article. After discussion, the committee voted to recommend no action on this article. This article would erect a new bureaucracy with lots of potential costs and risk. The potential upside is small. There are three active affordable housing organizations in the town, including the non-profit Housing Corporation of Arlington. I strongly prefer that this excellent organization continue its work. A town trust would only slow things down and increase costs.

Minuteman – Superintendent Bouquillon presented the Minuteman budget. His presentation was consistent with what I saw in January. He talked about MCAS success, out of district students, recruitment goals, communication with other districts and towns, recruiting new members, program choices, and more. The assessment this year is smaller than last year, mostly due to a lower enrollment figure. I continue to be impressed with the Superintendent. There are a lot of things right about Minuteman, and a lot of problems. He’s not hesitant to address the problems and talk about solutions. The budget was recommended at $3,153,000.

Black text is mostly objective, red text is mostly subjective in nature. These are notes from 3/3.

The minutes for the previous meeting were approved. We started right in on budgets.

Town Manager – There was some discussion of the 1/4 position and how that should be classified. Much of the budget increase is in raise for the manager. Some of the budget should move to IT in the long run. Recommended at $460,000.

Personnel – Recommended at $190,000.

Assessor – It was noted that there is no revaluation article for this year, but next year might be $25-50,000. Approved at $301,000.

Next up was the presentation from the Capital Committee. The most important element of their presentation was that they assumed a renewal of the 5-year plan of some sort – presumably another override.

They discussed the Stratton and Thompson schools. They have met with the state and are coming up with possible revenue sources to do significant renovations. There is no rebuild in the foreseeable future.

They are considering a multi-department security system for next year. Field renovation progress was discussed. Cemetery needs came up. The fire stations are not moving. The “quint” is in the budget.

There was an extensive discussion of the projected costs of the Veteran’s Rink. The Manager still has not come up with a plan for the rink.

There was an extensive discussion about whether the current financial situation in the US affects Arlington’s ability to borrow. This is one of those questions that you never know for sure until you try to sell the bonds. But, I’m persuaded that it’s not a big deal. Most of the headlines in the municipal markets relate to variable rate bonds – Arlington doesn’t sell them. Arlington is a good risk, and I believe we will continue to find borrowers.

They discussed rescinding the authority to borrow. Article 60 was recommended to rescind $2,724,000 in borrowing permission.

Town Clerk – The budget was approved at $234,000.

Registrar of Voters – The proposed budget has an increase of $10,000 to cover the presidential election. This increase was well in excess of the 3% guideline. There was no backup documentation/explanation for the increase. The Clerk had been invited to speak to the committee, but declined. The committee voted to renew the invitation for additional information and table the budget.

Black text is mostly objective, red text is mostly subjective in nature. These are notes from 2/27.

The minutes were approved.

Town Manager Sullivan, Deputy Manager Galkowski, and DPW Director Bean were there. The first item was discussion of plowing the sidewalks. The Manager said that it would cost much more than estimated by Stephen Harrington. Director Bean spoke at great length and answered questions at length on the issue. This was not a fun hour. The DPW director went on and on and ON. He didn’t listen well to questions and then responded at length – without addressing the question. It was very frustrating. Still, the message confirmed my thoughts: don’t do this bylaw without a test run first. Mr. Bean left.

Sullivan talked about outsourcing some cemetery work and using the savings to hire a police officer. The recycling person has been on the job for a few months. This discussion doesn’t give me any more confidence that we know how to measure the effectiveness of this person. We hired them, but we have no meaningful way to see if it’s money well spent. The snow and ice budget was discussed. I asked about the pension budget funding, and whether we were overpaying by keeping it at 4%, higher than required by the actuary. The manager didn’t’ appear to have a strong opinion either way. Asked about the OPEB funds, the manager pointed out that the retirement board can get a better return than the town. This was an excellent point. I’m not thrilled with giving OPEB to the retirement board, but this is a reason to do it anyway. There was discussion of who controls payouts from the fund. He favored the POB enabling legislation; it’s good to be able to do it, but probably never do it.

He talked about union negotiations and arbitration for the patrolmen’s union. He talked about the GIC and answered several questions about it. He thinks that there is a large savings to be found.

We moved on to budgets.

IT: This is the first IT budget separate from the comptroller. I presented the budget (I had corrected a salary mistake, but forgot to note the mistake, so people asked questions, which I finally figured out. In the end I had forgotten overtime, though. Oops). I also spoke about the benefits we’re seeing from this change. Recommended at $526,000.

Comptroller: I presented this budget too. There were fewer questions, and it was approved at $384,000.

Black text is mostly objective, red text is mostly subjective in nature. These are notes from 2/25.

The minutes were approved.

Article 26: Stephen Harrington was there to make the case for plowing some sidewalks in town. He gave a presentation showing pictures of various curbcuts and unshoveled sidewalks. He showed a map of several miles of sidewalk that he thought should be plowed, covering Mass Ave, the schools, the senior center, and the connections between them. He shared information he got from Lexington about costs. From the figures provided, the cost of plowing the sidewalks would be $20,000 per year at most. There were several questions about whether the anticipated cost figure was realistic; some members did not think they were. I asked if this really was a bylaw, and if there was text available; it was, and there wasn’t. I also suggested that this might be better as a year-long trial, rather than a permanent bylaw. I think I would support a $20,000 experiment. Put it out to bid, see where the market is. If we really can do it that cheaply then maybe it is a good idea. My suggestion was rejected, and, to my mind, not reasonably. The argument against a trial seemed to be “we’ve waited too long, and morally we have to do this.” The argument didn’t hold water. If it is too expensive, we can’t justify it, period. We should do the trial and decide. The issue did not get to a vote before time ran out.

School Budget: Superintendent Levenson and School Committee Members Theilman and Spangler came. Levenson gave a presentation on the current budget draft. He spelled out the challenge of rising salaries and special education. He went into areas where money was being saved, where additional revenue was found, where cash accounts were drained, and cuts that he was considering. He talked about the challenges of maintaing class size when there are only 2 or 3 classes of a given grade in the 7 elementary schools. He answered further questions on special ed costs, special ed transportation costs. He was asked about the cost of Metco, and whether the tuition received matched the marginal cost of additional students. He talked about special ed “circuit breaker” funding from the state. He suggested that redistricting wouldn’t save significant money. There was discussion of whether and how special ed should get special handling, like health care, in the next financial plan. Kingergarten costs and potential savings from the GIC were discussed. I was again impressed with the superintendent. He writes and delivers an excellent budget. I was troubled by some of the cuts suggested. I think it is fair to say that the school budget is experiencing more distress than the town side. One of the notable themes: on more than one occasion the cost of having seven elementary schools came up. It showed up in things like class size – how do you divide 54 students? 2 of 27, or 3 of 18? There is no good choice. We would not be having this problem if we had fewer schools! The hour was late, and the meeting adjourned.

Black text is mostly objective, red text is mostly subjective in nature. These are notes from 2/20.

The minutes were approved.

Article 62 – Ed Starr asked that the previously appropriated money for the Transportation Advisory Committee (TAC) be “rolled over” into future years, not to exceed $15,000. He described some of the ways the money has been spent in the past. The committee voted to recommend the article.

Article 40, again – Joe Roselli came to speak again on the article after he heard that we voted against the proposal to award certain benefits to posthumously apply to certain pensioners. He said that he was changing the wording to say “widows” rather than “estates.” He repeated they history of this particular benefit and the many steps he and others had gone through to get the benefit. He finished with a plea to approve the benefit “if you feel it in your heart” when you watch veterans march in parades. The presentation was, again, rambling. The last time I asked him a question about how the scope of the change was limited, and he couldn’t answer. In his presentation this time he talked about “people who died since 1995.” So, I rephrased my question to ask him “How does this law treat people who died in 1994 differently from 1995? Where is that spelled out.” He couldn’t answer. He talked quite a bit in response – he went all over the place talking about judges and findings and the people involved in the story. But he was unable to answer this very direct question. This is an easy vote when the scope is unclear. The committee did not change it’s mind, and the original recommendation of “no action” still stands.

We moved on to budgets:

Selectmen: There was good detail on the costs of elections. There was some confusion about reclassifications and hiring and how it affected everything. Recommended at $250,000 (about. I forgot to write it down).

Legal: It was noted that Maher’s retirement buyout is not budgeted. Recommended at $460,000.

Lighting: Recommended at $418,000.

Reserve Fund: This is the fund from which the Finance Committee can transfer money to cover unexpected overruns. In recent years it has been complete drained, with the biggest chunks going to firefighter overtime, retirements, and election costs. The original budget called for a $450,000 fund this year, a $50,000 increase. A motion was made to increase it to $500,000. There was a long and interesting discussion about how to handle retirement buyouts, how to plan for them, and anticipated overruns. Some were concerned that by having a large reserve fund, it might have the effect of department heads spending more, knowing there was a reserve. There was also concern about how the increase would be justified. This was a good discussion. I’m glad we’re talking about these strains in our budget. They’re not the headline grabbers like special education or health care, but they really matter. In the end, the larger increase failed 6-9, and the $450,000 passed unanimously.

Black text is mostly objective, red text is mostly subjective in nature. These are notes from 2/11.  I missed 2/6 meeting because of a work dinner.

Charlie Foskett chaired in Al Tosti’s absence.

The hearing for the assessor’s article is canceled – he won’t need the article.  Minutes were approved.

Article 74 – The committee heard and voted this article on 2/6.  It is related to reporting from the retirement board.  We voted to amend the recommendation made on 2/6.  I don’t have the full text, but I gather the result is a request, not a requirement, with some other language softened.

Next up was Treasurer Stephen Gilligan talking about bonding our pension requirement (POBs).  He brought Peter Frazier from First southwest. Gilligan is proposing that we request special legislation that would permit (not require, permit) the town to to borrow money and use it to pay down the pension obligation.  (Note, the pension obligtion is NOT the OPEB obligation – one is pension, the other is health care).  The crux of the argument is that the retirement board plans on a 7.75% return on its investments, and we can borrow money at maybe 5.3%.  That percentage difference would free up $6.8m (present dollar value) over the next decade or so that could be used on OPEB or other town obligations.

There was more than an hour of discussion.  The investment would be managed by PRIT.  If POBs are actually sold, it reduces flexibility for the town.  It is an increased financial risk. 10 towns in Massachusetts have the permission, but only Worcester and Brockton have done it.  Gilligan recommended against doing this for OPEB, only for pension.  This was an interesting presentation and discussion.  The Treasurer tends towards longwindedness and is not afraid of repeating himself to make his points.  Still, the presentation was an idea that was new to me.  I’ve been thinking about it and talking about it ever since.  At lunch the next day I told a co-worker what I’d heard the night before: “The treasurer wants to borrow $50 million and invest it in the stock market.”  That’s a gross oversimplification, but it got a laugh! 

I haven’t decided what I think about it.  I lean towards thinking its a good idea.  I know we don’t have enough information to decide if POBs are right for Arlington, let alone right for Arlington and right now.  The “right now” decision will be handed to the treasurer and selectmen – a big responsibility.  But I can certainly see the logic of the arguments.  How do we decide whether the increased risk is worth the saved money we keep in return?  I’ve heard the knee jerk-reactions that “market timing is dumb” and “the stock market is always a good bet in the long run.”  I reject them.  This is a very complex question that requires a careful response.

Afterwards, we turned to budgets.  $10,778 was recommended for the FinComm budget, approved unanimously.

The zoning budget was approved at $23,111 total.

The cemetary was approved on a 15-0-1 vote.  There was consideration that the outsourcing might not come back at a good price.

We decided to have a hearing on Article 7 about affordable housing trust.

Black text is mostly objective, red text is mostly subjective in nature. These are notes from 2/4.

The minutes were approved. It was noted that we’re approximately $125,000 over budget for snow and ice removal.

John Bilafer, Joe Roselli, and Larry Greco came to discuss a series of articles related to retirement.

Article 39 – This article is to give cost of living increases (COLAs) to children of deceased retirees who had accidental death benefits. The town has been doing this for a number of years but was notified last year that it did not have the legal authority to do so. The total cost is approximately $1900. This was easy to support. It was very small money, a reasonable request, and basically administrative. The article was recommended unanimously.

Article 40 – This article would increase benefits to the estates of veterans who were disabled while working for the town who died before 2005. Joe Roselli spoke at length in favor of this article. He explained that he and others had worked for a long time to make this benefit available to all veterans (disabled pensioners had been excluded before 2005). There were many questions as the committee tried to unravel the proposal. Greco had an estimated cost of $100,000, but his numbers only included extending the benefit to living widow(er)s. The text of the article appeared to include all estates, not just living beneficiaries. This was a painful presentation. It was very disjointed. Roselli insisted on retelling parts of the story over and over, and they didn’t appear to relate to the issue at hand. Bilafer and Greco appeared to be uncomfortable with some of the claims Roselli was making and Greco corrected him more than once. None of them could answer what the scope of the article was – it wasn’t clear how many people this would apply to. Not least, Roselli was unable to make a convincing argument why this pension benefit should be made retroactive. I’m firmly opposed to the text as it stands. If the scope is corrected I’ll take another look, but I’m skeptical that the benefit should be applied rectroactivel. The committee unanimously voted a recommendation of no action.

Article 41 – Increase in benefits to 25-year retirees. It’s approved annually. This year is approximately $24,000. It was approved unanimously.

Article 42 – OPEB. This article would transfer the money saved thus far for the OPEB obligation to the account created by special legislation. The funds would be under the retirement board. There was question and discussion about whether it could be the treasurer instead. Bilafer believe that would require more special legislation. Alan Jones asked if the retirement board would agree to annual reporting to Town Meeting, and Bilafer said it would. Dean Carman noted that the teachers’ have money in OPEB, but no seat on the retirement board. Bilafer noted that employees will have to contribute to OPEB in some way, and that the state pension board, PRIT, doesn’t have the authority to invest OPEB funds. I believe I have been out-maneuvered! If I had my choice, this money would not be managed by the retirement board. I disagree with their strategies, policies, and investment choices. But this particular battle was won when the special legislation was written – and I didnt’ see it coming. Well, the OPEB issue is far from resolved. There will be other opportunities to direct the investments. The article was tabled, as was article 43.

Article 15 – Notification for Abutters. Jeanne Leary was there to explain why she wanted to increase the abutter notifications of town actions. She talked about the challenges she’s had learning about Symmes construction, Summer St. construction, and dog parks. The committee was strongly opposed to this. The text would require all sorts of notifications that would be very difficult to administer. I think the questions started a bit harshly, but by the end I think she was getting good, constructive criticism that she can use to modify the proposal. The article was tabled.

There was a discussion about data display using a projector.