Select Board: February 5, 2025

Transcript captured from MHTV’s Vimeo auto-captioning. No speaker labels; proper names and dollar figures occasionally misheard. Click any timecode to jump to that moment in the source video.

0:00 Sure. Tonight is Wednesday, February 5th, 2025. It’s a little after seven. We were just waiting for some, uh, technical, having some tech technical difficulties in the hallway. There are several seats available along the back by the windows if you prefer to sit. And then I see that there’s some there as well. Um, we have one item of business on, um, on before we get to the presentation, and it’s, uh, regarding a request from Gary Swain to, uh, to proclaim Friday, February 7th, donate Life, donate Life Day. Um, they are, he is a recipient of an organ donation and they, and raising awareness about organ donation

0:47 and funds for the New England Donor Services, uh, which coordinates transplants across New England. And there’s actually many transplant plant recipients in Marblehead and many waiting as well on the list. So, um, I ask for a motion to prove the request from Gary Swain to proclaim this Friday, February 7th, 2025. Donate Life Day in Marblehead. So Moved. Second. Um, all in favor? Okay, great. Okay. Um, that brings us to our state of the town presentation from our town administrator. That’s your Keyser, who’s worked alongside our finance

1:33 director, chief financial Officer, Alicia Benjamin. And, uh, after the presentation, there will be time for question and answer period. So, um, keep that in mind. And with, um, with that, I’ll turn it over to Mr. Keer. Okay. The chair. Thank you. Select board, other elected officials here, uh, same town, employees, residents. Uh, welcome back. This is my, this is my third time doing this. Uh, the first time I did it was no long after I rolled in. I had no idea what to expect. Uh, last year I had a better idea and then we, we got hit, uh, on some issues

2:18 that folks are concerned with. Property taxes. I’m sure this one will just go nice and smooth and fine. So, welcome. Hi. And I sound better with the microphone on. Um, So what I’m gonna do is, um, I have a PowerPoint presentation go through. Um, the main takeaway that we’re looking at is in preparation for developing the fiscal year 26 budget, um, is primarily looking at our revenues and where we stand and determining basically what’s the bottom line that we have available to work with. Um, look at projections of expenditures and look at, um, I, some of the challenges we have, some

3:03 of the successes we’ve had, uh, the things that we’re focused on. Um, I want to also first shout out a big thanks to our chief financial officer, Alicia Benjamin and her team. Um, uh, there’s a, there’s so much work that’s going on from Marblehead that’s behind the scenes that most folks don’t see, but we have folks that pull all-nighters, not because they’re told, because they just want to get things done. Um, I sometimes have to order them to go home. Um, so anyways, I will proceed and I think my laptop and it works. So the first thing I always start with, with any, um,

3:49 you know, major organizational efforts, um, is ask the question why do we exist? Um, and I’ve said this in the past. So here’s the mission statement for the town to provide excellent services at the level desired by the citizens. So they get to choose primarily a town meeting and through elected boards, um, citizens, tax payers, rate payers, um, that ensures the health, safety, education, welfare, and quality of life of the community. That’s why we exist existing for what, 340 some odd years doing this. Um, and so all our efforts are to maintain meeting that mission statement.

4:35 So next, um, what I also like to, to show is, um, what are the core municipal services? So what are those services that we’re expected to provide? Um, and I haven’t broken out here and five, what I call service delivery services. So public education, um, public safety, obviously our police fire harbor, um, our inspection spec folks are really considered part of the public safety realm. Keeping the public safe, uh, public works to manage, primarily manage our infrastructure in, in our ways, um, culture and recreation. So those are like, for example, our veteran services, our,

5:22 um, youth programs, our senior programs, um, library, uh, those, those type of activities fall on that, I’m sorry, cultural recreation back up. Uh, some of the youth programs, counseling, aging and such. Uh, and then we have the human services, which, um, helps, um, you know, folks in need, um, uh, providing services, uh, to folks. Um, in order for those five services to be, uh, successful underlying them, you have general government that provides sort of, um, um, um, the enabling of those services continues.

6:08 So that’s your, your finance folks, your per your, your HR folks, uh, all those payroll, others who support the organization for those who are delivering the services. And then finally, you have your, um, executive management that’s, that works to set your policies and make sure you’re on the right vector and applying the right amount of thrust, uh, on that vector. So, um, that’s sort of the, the top view of how we are organized as, as, as an organization.

6:44 Next, um, I’m gonna show some, some, uh, some charts. Uh, this has come about as a result of the work of the charter, uh, committee that’s, that’s working on proposing, uh, first ever charter for Marblehead. Um, and just if you haven’t heard, we’re shooting for 2026 town meeting, not 2025. So, uh, lots of work and, uh, lots of opportunity for input from the public. And we are highly encouraging folks. Tune in, um, take a look at it and, and, and give us feedback. But as a result of that work, um, trying to help the committee, but I do it for myself too, if, what’s the, uh, municipal organization? What does it look like?

7:30 And what’s interesting, um, when you put it in into a, a form like this, um, we have, I’ve lost count, like 12 separate elected entities managing the affairs of Marblehead. Now, two of ‘em are, are, are single person, the town clerk, the town moderator, the others are boards, elected boards and committees that have, uh, some management oversight of some component of the town. And so here on the chart, um, for example, um, the first block, I have the select board and the next slide, we’ll break that out in greater detail. But you have the school committee obviously overseeing the school department municipal light,

8:15 overseeing the municipal light department, uh, the library board of trustees overseeing Abbott Public Library Cemetery Commission over the cemetery department. Um, the assessors, I have that as a light blue because that’s, um, the assessors still have the hiring and firing of the assessor. But due to a, a bylaw change, the day to day, uh, the assessor’s office works under the chief financial office. So it’s sort of a dual line. Um, water sewer commission, uh, the Board of Health, which has both public health department and the waste department, uh, and recreation parks. It has parks department and recreation department. Um, so those are all the red boxes are all elected positions.

9:02 Uh, and the blue boxes underneath means there are some staff or, or numbers of staff that report to them in a breakout. For the select board, it gets a little smaller on the screen, but it, it shows the organization that falls under the, the, the prerogative of the select board. Uh, inside that sort of red box at the top is, is the, um, the select board office in which I sit, and, uh, Kyle and Caesar and I, that’s, uh, three of us. Um, within that office, we handle, uh, all the licensing, record access officer, chief procurement officer, a DA coordinator. And then I have in whatever color that is, shade of purple is our town council.

9:49 So it’s town council’s a, a contract arrangement, not an employee, but, uh, falls under, under the select board for, for management. And then under that are the, uh, departments, uh, very familiar to everyone, police Harbor Master and Fire Department on the left, those, there’s your public safety, the Council on Aging, veteran Services Office. Then you have the finance department, which under it has treasure collector, accounting, payroll, um, information technology, and the, the assessor day-to-day functioning. Next, we have the Human Resource Department, which we created last year, um, and, and have our first ever, um, HR director,

10:35 Tom Howard, who’s here with us. Uh, next public works under, uh, uh, Amy Chu and the, uh, functions of the highway, um, and trees and, and all others, which we’ve sort of rolled into one, you know, larger organization. And I have to give credit to Amy, the work over the past year has been to look at all the positions, the functions, and sort of reorganize the department, uh, in a way that one, increases the productivity. Two, provides opportunity upward mobility for the employees so that they have, uh, a better career path, um, working for us.

11:21 So I, I give her credit for the hard work to pull that off. Next we have, um, the newly created community development and planning department. Um, and over the past year, we’ve, we’ve hired the sustainability coordinator who is doing incredible work to identify, um, in one sense, um, building energy savings, cost savings, um, as we move forward on a lot of projects for our facilities, that’ll be even more critical of, uh, improving our carbon footprint. Uh, also, um, you know, the Green Marble Head Committee, which was formed, uh, and, and worked with the whole community to develop the net zero,

12:06 um, plan for the community with a goal of having net zero carbon footprint by 2040. And having an individual who has expertise in these matters who can actually implement the plan, uh, for the community. So, so there’s lots of work to be done. Also under that, obviously the town planner, which was hired, uh, newly this year, uh, diving in and, and learning a lot about marble, he came with lots of experience. Uh, the Washington DC area, London, um, and Is, is welcome. And then, um, our, uh, grant coordinator, uh, who, who has joined us, who’s really helping all of us, everybody, I’ve said everyone in the organization

12:53 has a responsibility to go after grants, write grants, pursue grants, but we have a person that one can help to coordinate, uh, helps reporting to me on a regular basis as to what do we have in the pipeline, what are we applying for, what is accepted? And as I’ve always said about grants, the easy part is applying for grants. You can, you can apply for a gazillion grants and get awarded a lot of them. Then you have to manage those grants. There are deadlines and compliance and reporting and all that. And so, so that position is critical to, to assist all of us in that effort and, and, and organize it. Um, and, um, the good news we have is our new director,

13:40 um, uh, Brendan Callahan, uh, for that department starts on Monday. And we’re, oh, sitting in the back. Brendan, go ahead and stand up and recognize so we know who you are. Yeah. Um, welcome.

13:58 I knew we talked whether you were gonna make it, and I didn’t get a chance to ping, but I’m glad you could. Uh, one, um, lots of experience in, in, uh, the city of Peabody doing a lot of great work for a number of years, and also happens to be a Marble Head resident. So, um, he’s gonna bring a lot of professionalism and, uh, understands the local flavor with it. So we’re looking forward the first ever in the history of Marblehead, director of Community Development Planning. So welcome. Um, and then the last two blocks, um, the, uh, superintendent, um, eh, that’s a typo, uh, should be the inspection, the building commissioner and the superintendent of buildings. Um, so, um, I think I reported last year, one

14:45 of the, the, the, the moves that we had made. ‘cause it’s really, really hard to find building commissioners. They have to have qualifications, and they have to wanna work, uh, in this area. And there are far and few between that, that match both. So we made an arrangement with the Town of Swamp Scott last year, where we entered into a contract with the town in order to share the Building Commissioner of Swamp Scott, and work with us on a part-time basis, um, which is worked, worked really well. And then, uh, over the course of the past year, uh, there were personnel changes and changes made in Swamp Scott. So the long story short is, um, we are fortunate that the, uh, the building commissioner

15:31 that we were sharing is now a full-time Marblehead, uh, employee, which, which we have, you know, all of his, um, knowledge and expertise here, Marblehead. And he has been picking up a lot of the project work that falls under the superintendent of buildings to help us to manage our facilities that are in, and I’ll get into a little more later in, in bad shape. So, um, I, I think it’s helpful as we develop budgets and programs to understand the organization. And finally, this is, uh, a chart of all the volunteer boards and committees. Um, there’s a whole bunch, um, and I have them organized based on the ones that have been created by town meeting on the left

16:18 on the right, those that are created by the select board over a number of years. And on the bottom are boards and committees that are actually created by state law. And the green ones are created by state law, such as, um, planning board or finance committee. That’s just, uh, part of state law to have a finance committee. And then the yellows are, um, committees that are created by the state for a function, which marblehead appoints people to. So if they’re not really marblehead boards, but there are appointees from Marblehead that serve on those boards. So that’s the color coding. So that’s our organization Next.

17:04 Um, I’m gonna review some current challenges that, that we’re working on. Um, and a lot of these are repeating from prior years of doing this ‘cause they’re ongoing and they’re that important. First, building reserves to, to meet policy and bond agency goals. And what I mean by that, uh, are reserves. Uh, there are generally two types of reserves for municipalities. There’s free cash, which is considered an unrestricted reserve. And then there’s stabilization funds, which is a restricted reserve, which means when you put money into the stabilization fund by a simple vote of town meeting to take it back out, to use it for whatever purpose, it takes a two thirds vote to come back out.

17:51 So it creates a higher threshold, um, of justification to, to use. So, uh, the bonding agencies love it because, uh, it allows you to have the reserves and be very prudent in how you use them. And the policy is the select board pass some financial policies. A year or so ago, uh, after Alicia came on board, in which we have a policy of, uh, having a goal of 5% of our having reserves equal 5% of our operating budget. So our operating budget is a little over a hundred million. Uh, so a little over 5 million, uh, I’m happy to say, uh, report, and we’ll go into the numbers. Um, with what we’re proposing, we would have over three and a half million dollars allocated to those reserves.

18:39 So we are well on the way, we’re, we’re more than half, uh, pass meeting that reserve policy. And I’ll say, uh, the reserves that we have put aside over the last couple years have absolutely had an impact because, um, as, as the bonding agencies read newspapers about how things are going in the communities, they read headlines and they call the CFO and they say, uh, we have some questions. Send us all your financials. And we were able to show that by, by the reserves we have, uh, to justify maintaining our AAA bond rating, which has an impact on our borrowing. So I have that as the first bullet. Um, next, reducing reliance on free cash

19:26 for the operating budget. And as, as we’ve reported, when I first came in, it was somewhere around $10.5 million, basically, the entirety of free cash that was generated being used into the operating budget. And the key factor there is free cash is considered a one-time revenue. You cannot guarantee that you’re gonna generate free cash from year to year. And so under DOR best practices, you should not be using free cash to maintain your operating budget, which is an annual obligation. I’m gonna go into some nuance later on that, but we’re trying to reduce our reliance. And, um, again, I’ll have some more, more detail.

20:12 Uh, increasing new growth revenues, that’s also Biggie. Um, as I’ve said, when I came into Marblehead and looked at the numbers, uh, Marblehead numbers have been low. Um, they’re improving, but they’ve been low and compared to other communities, in looking at the, the economic cycles and the trends and how we compare to that, what’s important about new growth revenues we’re increasing, our property taxes increase the two and a half percent that we’re automatically allowed every year based on last year’s taxes. New growth revenue, again, as an explanation, is if you make significant improvements to your property, certain improvements, um, hold kitchen renovations,

21:00 expansions, new swim pools, um, there are some improvements that don’t qualify as new growth revenue. Uh, but the ones that do, um, it, it’s in the interest of the municipality, uh, for the assessors. And, and the information usually comes from the inspectors to the assessors through the building permit process. The assessors evaluate and determine what’s the increase value of the property based on the improvements and tax the individuals right away on, on that. And what’s key is by capturing as new growth revenue, that additional amount of taxes collected goes on top of the tax levy, um,

21:47 and adds to it immediately. And so what municipalities that are in a strong financial position capture every bit of new growth and try to encourage activities to create new growth opportunities. And you can a municipality, and I’ll say, I was successful in doing this in Amesbury, where Amesbury was at full two and a half, and every year, having to grab the whole amount that we increased new growth revenue significantly enough that when we were building budgets, we didn’t have to increase the property taxes by the full two and a half because the new growth revenues was providing that extra stream of revenue. And that’s real tax relief.

22:34 And so the key is with new growth revenue, you’re actually taxing immediately those people who have the means and choose to make improvements to their properties, capturing that revenue, adding it so that we put less pressure on having to increase taxes across the board to everyone, whether they can afford it or not. So that’s why it’s such an important strategy to, to focus on generating that new growth growth revenues. Um, next meeting, GIC health insurance rate increases. Last year, we, we had the same bullet last year, and we were highly concerned about the impact because it was at 8% average. This year, we’re looking at 10, um,

23:20 we won’t know the real numbers because that’s an average over a whole bunch of different plans. And our employees sit in different plans. They have plan options, they can choose. Some are family, some are single, and each of those plans will have a different rate of cost increase. So, um, the GIC at some point will meet and establish the new rates for all the plans. We then take the demographics of the employees where they are in the plan. That’s great, other than then open season starts and all the employees get to move around in the plans. So it is not an easy process to nail down the actual costs of healthcare costs, but all we know is those costs are, are increasing, um,

24:07 at a pretty high rate. Um, next migrate into new information systems and the strain on staff time. So I’ve talked about the need and the good news effort is we are moving a lot of our functions onto, uh, platforms. Um, as I’ve said, our employees, especially new employees coming in, they don’t wanna be, they, they don’t want a job where they’re processing things. They wanna manage and, and, and, you know, do quality control of things. So we’re trying to try to change the way we do business where our folks are doing less processing, let the software do the processing, and let our folks manage it. Um, but to get from where we are with a lot of paper systems, and a lot of, uh, a lot

24:54 of the information systems we’ve had are just woefully outdated. Um, and as we upgrade certain parts of our software, like our, our, um, uh, network systems and such, the oldest software starts conflicting with the newer software that needs to run on and, and reeks havoc. So, uh, what I’m pointing out here is we have a bunch of staff, Alicia, among them, that are putting in incredible amounts of effort to get us through the migration off of either an old system to a new system or, or from a paper system to that. And the concern I have is putting a lot of strain on a whole bunch of employees. I wanna make sure that they’re, uh, they make it back in the morning, uh,

25:41 to do the main function, uh, conditions of municipal facilities. Next, we, uh, on the townside, and I know the schools have gone through a whole, uh, cycle and plan and, and did an excellent job of developing a long range plan, identifying the buildings, replacing or renovating on a sequence, um, building the community support, getting the funding and financing. We need to do the same on the Townside. Uh, Mary Alley, um, built in the 1950s, operated as a hospital till, I don’t know what, late eighties, early nineties, when all the municipal hospitals went under. And at some point the town moved in. There has been little to none maintenance of that building. And we’ve had floods and, you know, the break-ins.

26:26 Um, but the infrastructure in the building is failing. Our HVAC system is pretty much junk. And so during the winter, everybody has plugin heaters to stay warm and in the summer air conditions in the windows. So there goes our energy bills and concerns over, you know, uh, somebody leaving a heater on over the weekend and burning the bla down. So we are, we are moving forward on a bunch of projects immediately that you’ll see coming for the, for the budget to address the most critical, as well as building, uh, a long range plan for all the municipal facilities. The Public works facilities is the other one that’s, I think, on the critical list. And working with the new, um,

27:11 capital improvement plan committee that was reconstituted by the select board, uh, get that kicked up and running to, to help us in that effort. Uh, next, recruitment and retention to workforce, um, which brings challenges on wages. Uh, we need to be more competitive. Um, uh, there’s demands for flexible schedules and lots of questions about the workspace. That’s part of the effort of improving the workspace. So if we’re recruiting people and they come and visit us in the building, we don’t want ‘em to turn on their heels and split because, uh, uh, uh, the way the buildings are, um, increase in recycling and, and disposal costs. So Andrew Petty’s here, he’s already given us the warnings for next year, you know, the contracts.

27:58 So he has long, long-term contracts with vendors for trash and recycling that are coming due. And, you know, the pricing scheme from, was it there 10 years, right? Uh, are way outdated. We’re gonna see a, a, an incredible hit. I think it’s trash in 2027. So we need to, we need to start looking forward to address those type of challenges. Uh, finally, um, uh, limited tax revenue growth due to prop two and a half. Again, prop two and a half puts a cap on how much we can, we can increase. And that cap is below what the inflation rate has been. So we’re all familiar with that.

28:39 The next subject that’s important to finances and building a budget is free cash and what we choose to do with it. So Marblehead has gone through some gyrations of free cash. Uh, the overall trend is down decreasing. There, there are blips that come along and I, I, I compared it to, you know, uh, the fact that we’re having a cold spell doesn’t mean there isn’t global warming, right? Uh, so we, this year, um, we actually have a, a, a strong position in, in the amount of free cash that we’re generating, uh, for this year, um, in part to the work of, of the professional staff, both schools

29:24 and town, of really controlling our spending, um, um, and, and, and being wise in, in that. Secondly, we’ve had just some, some lucky breaks and some good work by staff. For example, um, our interest income, which had been normally about 60,000 a year from our, our accounts, uh, brought in over $2 million, uh, year before last, which finally rose into free cash this year as a result of as having, uh, uh, a bunch of ARPA funds and other funds sitting in the accounts at the time that there were really high interest rates, um, combined with having the Treasurer’s office really, uh, plused up

30:11 with staff and, uh, to actively manage the accounts. Uh, we went through a whole transition of several years of just turnover, where folks just weren’t able to, to manage the accounts. They were just trying to keep the doors open. Now that we’ve settled that down, have taken advantage of that, doesn’t mean we’re gonna get another hit like that. Rates have come down, we’re, we’re expending the ARPA funds as we go. Um, but part of the effort of free cash is, uh, hopefully there are other, like, opportunities that come along where we can get those hits of, of free cash. Um, so we were able to generate, uh, we, this has not been certified, so it’s not official. This is our best guess at a conservative,

30:59 it might be a little over 12 million, but we’re using round numbers. But what we’re doing is building a plan based on our best guess on our numbers. Uh, but we have to wait for Department of Revenue to certify, and that’ll be the actual number. So what are we gonna do with the, the free cash that we have? So, um, the other thing I’ll mention as part of that 12 million in free cash, over 2 million, two and a half million of that 12 million comes from the free cash that we reserved from prior year that rolls over into the current year. So you, you roll it over and you, it’s like a snowball. We just keep trying to add to the snowball and make it bigger and bigger, rolling it over.

31:46 Um, what we intend to do is, the first $2 million is to move it from the free cash unrestricted reserve into the stabilization fund. Uh, it, it, it’s a goal of ours to build up the stabilization fund, have the restricted fund reserves. That helps us in the bond rating, as I mentioned earlier. Um, so we wanna move 2 million into the stabilization fund, and that’ll be in addition to getting back to doing the annual appropriation to the stabilization fund, which is a wise financial approach, a million to stay in free cash, basically not to allocate it for any purposes. Leave it in there and start the next snowball, uh, for next year and start building that up.

32:32 Um, 2 million apply to, uh, I call it capital cash projects. So these are projects that are not gonna, there are some bigger projects that are gonna be bonded. These are cash projects we’re gonna pay with cash to do capital projects. As I mentioned, there’s some Mary Alley critical things we need to do. Uh, those are examples there. There’re vehicles there. There’s, uh, a long list that’s been lingering for a long time that we’re, we’re trying to get to, uh, on that last year for the first time, we allocated a million of free cash. And then what our finance folks did is looked back on prior projects, funded projects that were completed and had leftover revenues, some residual revenues,

33:18 leftover unspent, went back and swept it all up. It was 400 some odd thousand dollars. And so we applied 1,000,400 and change to capital this year. We did a great job of cleaning it up. So that’ll be a, a small residual, if any. So we’re gonna apply 2 million to really aggressively go after some capital. And then the last part is towards the tax levy. And that’s my nuance. So, as I said, the goal is to, to reduce our reliance on free cash within the operating budget. We’ve already been doing it for a whole number of years. It’s in there, we’re working to decrease that year over year, um, for this year. So last year we had, uh, 6.5,

34:04 but a million went to the capital. So 5.5 million was what was used towards the levy, right to, to, to use it for the operating budget. We’re adding a million and a half to that this year. One thing we’re doing is because of the contract years of negotiating the, the, the settled contracts, contracts to be settled, we knew there was gonna be a lot of pressure on the budgets, uh, to, to meet the, the due obligation. So, uh, the decision I’m, I’m proposing is that as far as do, so, we’re just gonna, we’re gonna flat line for this year, the reduction instead of keeping the decline, uh, again, to address that pressure. Secondly, we’re identifying as we get better

34:52 information on our spending, our accounts, uh, where money’s going. Um, every organization, right? We have a over a hundred million dollars budget. Uh, you’re gonna have some, uh, what’s the word? Uh, fudge. Fudge. He uses fudge. I don’t like that word, but, but, buffer. Buffer, right? Right. Because, ‘cause you’re never gonna budget exact dollar for everything. So, so you’re gonna have right variances up and down and, and transactions are gonna happen that come in under budget or revenues over budget and stuff. Um, you wanna be more than one and a half, 2% of that, that revenue. But what we’re doing is, because we have a better control, better understanding of the budget, is using a million

35:38 and a half of that free cash, knowing that we have at least a million and a half that’s being generated from ongoing revenues. So we’re confident we can, we can shift that, apply it, uh, to the bottom line, to, to basically take some pressure off the budgets to, to address, um, a, a number of costs, employee costs, as well as some other things. So, so the intent is the reduction in the reliance on it. We’re gonna flatten it, get back to it, uh, as we roll forward, but for this year, um, take some pressure off. So that’s our plan for free cash. So let’s talk about revenue projections. So this is where, where it gets put. So this, this slide shows, uh, fiscal 24, what was voted,

36:28 what was actually, uh, received as revenues. And this, this chart is strictly revenues, the revenue side. Uh, next column is what has been voted for the current fiscal year. So we’re in fiscal year 25, building the fiscal year 26 budget, which I have highlighted in the, in the light blue or whatever color the screen puts it at. Um, and then the changes. So, um, some highlights. One, our prop two and a half, it’s the normal, um, it’s two and a half. The number’s a little more than two and a half, but it’s because you get your two and a half, not just on the prior levy, but the new growth too added to it. So it slightly more, um, uh, on that, um, state aid.

37:15 So the cherry sheets, uh, we, we’ve broke this year, broke it out between the, the town and the school. These numbers are based on the current governor’s proposal for cherry sheets. These numbers are gonna change ‘cause it’s gonna go from the governor’s budget as, as I described, having worked up in Beacon Hill for many years, the governor produces budget, hands it off to the house, the house takes, it, drops it in the can or the shredder and generates house one, their budget. They go through the gyration. They senate, the Senate, the Senate takes it, puts it in the shredder, and they generate their budget. And then at some point, the house and the Senate reconcile the two, come to a a, an agreed upon budget, send it to the governor. So there’s a lot of a, a lot of, uh, movement between now

38:01 and then, but we have to base it on something. And usually the governor’s numbers are a good starting point. Um, and they may vary from there. Um, what I’ll point out here though, you can look at the increase in the cherry sheets and imagine it was still paper cherry colored paper. Uh, the front side would be all the revenue increases, which of these numbers, then you gotta flip it over and it’s all the, the paybacks in, in the, you know, the, um, the deductions that the state takes out. So what’s really important in the budget is knowing what the net state aid increase sometimes decrease is. Last year, I think the schools were a net 80,000,

38:46 and the town was like a net 8,000 on aid somewhere in that magnitude. So, uh, wait and see is the point below that. Other available funds, um, there are a small amount of transfer funds, um, from, from, uh, revolving accounts. Um, then you see the, the free cash levy going to the levy plus free cash that’s being dedicated to capital. Um, so that’s where they’re accounted for, um, in these bottom line. And then you have your municipal light surplus. I’m happy to say that we’ve, we’ve got a 10% increase from the prior. So we’re working with, uh, our folks over there to, to develop a, a methodology of how,

39:33 how we best should go forward. But we appreciate, um, joining the effort to, to, to address our revenues, um, inter enterprise fund indirect costs. So what happens is we have the enterprise funds. There are separate accounting, but there are services that are provided by staff that are in the general fund. And this is to reconcile, uh, between the, the two type of accounts and, and transfers, uh, local receipts. So those are your, your fees, other incomes interest income on those. And that has contributed to, uh, a pretty good increase in our revenues. Uh, as you remember, we increased inspection fees last year times a lot of activity that’s going on.

40:21 Um, there’s, we’re doing a lot of work of improving our process there and, and, and keeping good data on all the projects going on. So that has helped and, and paid off, um, as well as some of the other, uh, local receipts. The other is the meals or rooms tax that has contributed. Now, we estimated when we implemented to town, town meeting that according to state data, we expect to generate between 800,000 and a million from those two revenues. Um, we started, we got our first quarterly payment from the state. So, so the taxes are paid, the vendor it goes to, the money goes to the state, the state takes our portion and sends it back to us once a quarter.

41:08 The first payment that we received, the quarterly trend was we’re only gonna hit the 400,000. So we’re like, crap, that’s kinda low. We were hoping the 800,000 to a million, the second quarter improved. So what we’re building into the budget for this year is going from, uh, uh, estimating 400,000 to 600,000, right? And hope that the trend keeps going to the 800 to a million that we, we, we, we hope to be generated. It’s better to be conservative on the revenues if the revenues do come in over and above these estimates, that rolls into free cash the following year that, that we have access to. So, so anyways, local receipts, excellent return this year.

41:56 Um, and so that brings us to our estimated total revenues of 102 million 282, 697 on this chart. Uh, below that are the debt exclusions. Um, as a revenue I’ve sort of netted out on, on some of my charts debt exclusions because when, when voters vote, a debt exclusion, an override exclusion of a capital project, um, there is a bonding, you know, a cost for financing the project through bonds, but the override vote allows the raising of taxes to match that payment. So your revenue equals the expense every year. So it’s a wash. So, um,

42:43 and I’ll, I’ll have some more updates on, on what overall debt our, uh, debt exclusions are doing. Anyways, that’s our revenue projections. I’m sorry. Yep. You explain A debt exclusion. Sure. So it’s not, That’s $9 million. Yep. Yep. So it’s not small, so it’s, you’re, you’re correct. Uh, so it’s an override vote. So you have, there’s three, but two primarily that, that are, that are utilized. A general override is a tax increase ongoing, and it’s usually used to, to, to, to go towards your operating costs. Um, a debt exclusion, you put it to the ballot, you vote it, what it does is it authorizing the temporary raising

43:29 of your taxes to pay the debt service on a capital project. So, uh, school building, a new school, right? So you’ll get the price tag, you build a new school, you, you go to the, the boat, you figure out what the, the debt service cost is. Um, and if you pass a debt exclusion on the ballot, whatever the debt service for each year, the taxes are automatically raised to pay for it. When the debt service matures, that revenue falls off the, the tax increase is eliminated. Does that help? So the $9 million is lefty to pay the debt. Yes. And there’s multiple debts over years to pay. So, but If I could ask for a Clarifying Question, for example, there are many times in town

44:15 meetings three millions of dollars that never gets done that the father has, Right? So go ahead, I’ll let the expert say it. So for that, if, if we didn’t borrow it, it’s not being raised in your taxes. So it’s, it’s not in that number. So if I didn’t borrow it, it’s not in that number, it’s not being raised. Once I do borrow it, then it does get into that number, and then it gets factored. So for example, say you, you requested 5 million to fix the road, but you borrow, but you still have the authority to borrow. Yeah, That is correct. It’s going ahead at some point, but it may not be in this, Right? Correct. Right. It’s, it’s what’s case for That then. So what, let me, let’s say the for afterwards and,

45:04 and happy even one on one to go, go into depth. So let me, let me, may I continue? Alright, next slide. Uh, this is a graphic form to show, um, the allocation of where our taxes come from, where all our revenues come from. So the largest piece obviously is the property taxes, 76%. Um, the next bigger ones, uh, enterprise funds to pay for the enterprise activities. Um, we have, um, uh, state aid, the purple is a significant one. Our local receipts and our free cash levy. And free cash capital are the biggest slices. The smallest slices are basically, uh, transfers, revolving,

45:52 fund transfers, small nature. The, the point, the takeaway on this is 76. Now, 76% of all our revenue is based on property taxes. Um, and again, part of the effort is try to generate other revenue sources to take relief from that. Um, Next slide. Uh, so what this slide does, it looks at the current fiscal year and goes forward a number of years as projections. So a lot of the work that we’re doing, uh, for folks, the, the finance committee, and we have folks from CLA here, Clifton, Lawson, Allen, who are really helping us deep dive into

46:39 all these, all these numbers. But what we’re trying to do is project, in this case where our revenues are going, as well as there’s some work, lots of work going, projecting what are the expense drivers and see where the deltas, uh, are going. And so again, the fiscal year we’re building that we’re focused on is fiscal 26. Um, and it’s the same numbers as the early chart. So fiscal 27, 28, 29, and 30. Um, the takeaway on this is, again, the property tax revenues are very limited. And that’s, when I say 72% of our revenue source is capped and limited, that’s the challenge.

47:26 Later on, we’re gonna compare what some projected expenses to these revenue numbers and see where that puts us. But, um, you have, have these, uh, numbers available. They are projections, they’ll change over time, but this is how we plan. Um, this slide, kind of going back to debt exclusions, what I’m looking at here is what, um, the last couple years of, of the amount of debt exclusions we’re carrying and what are the numbers going forward? Um, and what you’ll see, the, the, the big info is for fiscal 26, that’s the budget year we’re going into. There’s a significant decrease, $1.875 million decrease

48:13 in a debt service, which means that tax, uh, the, the, the, the tax side of it is gonna drop by 1.8 million. Now, there are other debts that are gonna be obligated, not, not nearly as much as 1.8 million. So, so, uh, the net result that we’re looking at on that portion of your tax bill that supports the, the debt exclusion, you’re gonna see a a, a pretty, pretty good decrease on the tax bill. Uh, all else being equal, it’ll be a decrease. Obviously your tax bills are gonna be the net result of many other transactions that are going on. But this is good news. This, um, uh, rolling forward for the taxpayers as well as

49:00 informing folks, uh, for future decisions of, of obligations that, um, there’ll be an ability to put some more obligations on while keeping your, your, your, the, the net cost, the, the cost lower than what it’s been. Um, so basically the capacity of, of that. And then you’ll see in a number of the following years, there’s more debt that’s maturing and falling off. Um, so it, it’s just a continuously rolling basis, but good news is 1.8 over $1.8 million is coming off of the debt exclusion list.

49:45 Next, let’s look at some expense projections. And again, I, I, there’s a bunch of folks, uh, they’re doing a lot of deep diving work, um, in this, it’s really helping us. Um, and again, this one looks back to our fiscal 24 actuals, what we budgeted, um, and then fiscal year budget that we budgeted that we’re currently in. And then our assumptions for fiscal, uh, 26. Um, the key numbers here are the numbers for town operating budget and school department appropriation. Um, those numbers are equal to, um,

50:31 what we’ve done is looking at the revenues. Um, and this is the third year we’ve done this, that we analyze project our revenues, calculate what’s the new additional revenue that’s been generated. Look at the allocation primarily between the town and the schools. And it’s just the nature of how school budgets are appropriate. They’re lump sum bottom line to the school. And then the balance, we, we have to do, you know, itemized out to all the other departments. Um, but the goal here is to make a determination as to what is the bottom line on the town side and the school side that we need to drive to

51:16 as we build our budgets every year. It’s the nature of the business. The needs of the services are gonna exceed the amount of revenue we have, but we now have a bottom line that we know we have to get to. And, and the way we came to these numbers is, um, calculating the total of new revenues splitting at 50 50. ‘cause right now our analysis is the, the, the sort of the obligations on both sides is about a 50 50 split. We still carry the health costs on the town side for both school and town. At some point in the future, if we had to shift the,

52:02 the obligation over, we would shift the, the revenue side of it over to, to match. But as of right now, um, it’s on the town. So we determine it’s a 50 50 split, um, based on the total revenues that we’ve generated. Um, it’s about 4.2 million in new revenues split between the town and the school. So 2.1 million in change is the split. But what we’re also doing on the school side with the, the obligations, uh,

52:40 taking an additional 250,000 and allocating it to the schools, um, to, to assist on meeting their, their contractual obligations. Um, and again, the, the primary approach we’re taking is a 50 50 split. Um, we’re in a position to take some relief off the school side this year. We, we will not always be able to do that. It’ll be a year to year decision, but, um, it seems to be working well on the formula that we use. I think it’s so important. I used to say this back when I became chair of the finance committee in Salisbury in 19 90, 91. And as usual, the economy’s tanking. So I’m playing that role in hard times.

53:27 And I would say the one thing worse, uh, than not having enough money is not knowing how much you have. ‘cause you can’t make any plans any contingencies. So part of this effort is, you know, your bottom line. You know what you have to get to make your plans accordingly. And again, we lots of communication between the finance folks and the town of schools as we work through this. Um, so based on that and the other, the other obligations, expenditures, again, a lot of folks doing a bunch of analysis to help us generate these numbers and come to what we expect to be a hundred, $2 million bottom line before the debt exclusion is added to that.

54:13 So, um, the actual total bottom line would be, would be higher, um, be more of 111 million when you add the 9.1 million back. Um, so that’s, um, that’s the key. What’s important for some of the, the department heads and finance folks in here. That’s what they’re, they’re looking for, uh, in those, in those numbers. Next, again, let’s take the current fiscal year and let’s look out a number of years. Uh, and again, these are just projections based on a bunch of assumptions. And how are we looking? So I think, I think folks are figuring out for this year, we’re looking, uh, in pretty good shape for where we stand.

54:58 There’s work to be done. We’re in pretty good shape for this year going forward. Once again, it’s gonna be challenging because, uh, again, some of the, the, the contractual obligations, the, the, the back end of the agreements are higher than the front end. Uh, so those, those obligations are gonna increase. Um, we’re making conservative, um, estimates on our revenues, conservative in the other direction, on our, on our expenditures in order to plot out where we are. So given on these projections at this time, um,

55:39 you know, we’re looking at somewhere on the order of a $7 million deficit next year. No, it’s 2,000,020, uh, yeah, year after. Thank you. Um, I’m already in the blue zone. Why did You lease Act 27 by 27?

55:56 Um, because I’ve been doing a lot of, yeah, I, because I was doing a lot of copying and pasting, so, um, I think I, I hit a column that should be in there. Um, I’ll, I’ll fix that on a published one. The whole takeaway on this is that based on our revenue projections and our expenditure direction, uh, uh, uh, projections, and we’ve talked about this before, we have a gap, a significant gap, and figuring out how do we address it, we’re addressing it by finding additional revenue sources, um, as well as, you know, new growth revenues, as well as doing some analysis of, of override scenarios.

56:43 Um, and what would they look like, um, over, over the term of this. So, um, you have a sense much work to be done, you’re saying In two years, this a 7 million gap. Any idea what projection? I think I’ve suppressed that. Uh, 27, 3 0.7 million. Yep. Thank you. I’ll unhide that later. So anyways, there, those are the numbers. Okay. Next, what are we focused on? What are some of the things that we’re trying to work on? I’m gonna tell you the list is longer, but these are the highlights. One, as I mentioned, migrating to new muni financial software. That’s the biggie. That’s the mother of the, the, the,

57:29 the software platforms. That’s the general ledger account and a lot of the other modules, financial modules connect to and talk to that. That’s the main system we’re using. Soft, right? Uh, we’re using a version that upgrades are not even available. Um, and then it conflicts with our upgrades to our servers and networks, and we cannot migrate fast enough. Um, we are due, well, I have it later, as to the good news of when that’s due. Um, we’re focused on, again, building the town’s reserves. I think that’s probably really good news story here where we’re gonna have over 3.5 million in reserves

58:15 on our way to the 5% goal. Um, and, and we’re coming, this is only in three years, uh, to do this. And it is critical for the bond ratings, um, effort, um, continue reducing reliance on free cash. I’ve talked about how that’ll be an ongoing effort, but we’re gonna flat line for this year and continue that effort, um, capturing all new growth revenues that we can, and I’ve explained why that’s important. Um, some of the things we’re doing folks as example, increasing the veterans tax exemption comes outta the hero act, um, which basically allows a Kohler adjustment to the exemption.

59:01 It’s been sort of a fixed dollar ratio, um, as well as allowing, uh, eligibility for a hundred percent exemption. And, and veterans, some are, are, are eligible for a hundred percent. Some are apportioned based on disabilities and such. Um, the whole point on this, and there’s some other efforts coming for town meeting, is as we make efforts to increase our revenues, we also wanna make efforts to protect the vulnerable, uh, folks who would be, be impacted by, by the efforts on, on trying to bring up our revenues to match our, our service obligations. Uh, again, tracking new reoccurring revenue streams. So we’re gonna continue, uh,

59:46 we’ll be continue watching the rooms and meals tax on how that implements. Uh, we’re gonna continue looking at our fee structures for all our various fees. We’re gonna look at what other communities are doing so that we’re, we’re comparable in the marketplace. But, um, you know, in the last year or so, we, we’ve updated fees that hadn’t been changed in 15, 20 years. So we want to keep those current, um, bargain agreements. So ongoing, we have police and municipal employees ongoing. Um, the Peck agreement, that’s the, the public employee committee. So Marblehead has coalition bargaining for the health plans. So representatives from all of the collective bargaining units plus retirees sit on that

1:00:33 and do the negotiations with me, uh, in order to do the health plans. While that’s already on our radar, it doesn’t expire till June of 2026, but we’re in the group insurance commission under the state, and there are notification deadlines at the end of this year if we’re gonna make changes and to contemplate changes, uh, we, we intend to go out to bid for, uh, insurance carriers to bid on providing health insurance and compete on price, which helps lower the cost. It, it doesn’t just lower the cost for municipality, it lowers the cost for the employees. ‘cause there’s a, a split share, different splits for different plans, but,

1:01:20 but if we can generate cost, overall cost savings, that’s a win for the employees. Win for the, the municipality. Um, we went out to bid last year or the year before as we were negotiating. And based on our health experience of the town, um, no one put in bids. So we were stuck with the GIC. We agreed to a two year with the GIC in order to be able to go back out in the marketplace. And hopefully our, our, our history is in a better shape that we, we get some bids. Um, where did I, okay, next page. Um, anybody remember Paul Harvey? Bright guy? Yeah. Yep. You should be in 20 only.

1:02:05 Only those are gray hair. We’ll, remember, I know, I know. Working to address structural deficit. I think we’ve, we’ve talked about that and there’ll be a lot of talk about that and a lot of work with folks. Uh, long-term planning, and again, I, I made reference to the work of the finance committee and CLA that’s with us that are helping us. Um, again, looking at all of our numbers, all of our, our revenue sources, all of our expenditures, expenditures, and really give us really good data about the future to make decisions, um, addressing immediate town facility maintenance issues. We are like fixing things as they burst. And so part of the reason for the capital, um,

1:02:52 increasing the capital projects, um, addressing the expiry trash contract that I mentioned and looking at the Opep Trust fund, opep, uh, other public employee benefits. Um, and so that those are, those are the other, uh, employee benefits other than, uh, health and, um, in the retirements that, um, have costs. You have a trust fund, uh, we wanna make sure we we’re in the right place and, and have the best deal as far as managing our Opep trust fund. Basically, it’s a fund that needs to be invested and managed, and we wanna make sure that we’re maximizing any opportunities there. So our treasure collector is starting to

1:03:38 deep dive into that. Again, no rock unturned, uh, in our efforts. Some recent successes, again, I mentioned we’ve hired our first ever in the history of Marblehead Community Development Planning Director. That’s right. Last year I was saying first ever in the history of Marble Head HR Director. So we’re, we’re, we’re continuing that trend. Um, you know, very much needed positions critical to our overall operations. Um, we have been consistently getting the GFOA, the Government Finance Officers Association, an exciting group. Uh, I bet their conferences are wild, huh?

1:04:22 Um, receiving a budget award for our budgets, and let me tell you, that is not easy. That is, uh, you know, both finance people are going, uh, not easy at all. It is not just the spreadsheet with numbers, it’s goals, it’s, uh, projections. It, there’s sort of all the criteria that goes into that award. It’s a lot of work. Bringing, uh, clear gov on board, um, has the module that builds it for us, makes life a lot easier. Uh, Alicia is actually you’re judge or something with GFOA, you’re now, uh, I don’t know what title guru extraordinaire for clear gov, she’s kind of teaching clear gov how they need to

1:05:10 reprogram their stuff to work with us. So we’re, we’re, she’s blending those, those both skills together. Next, uh, Tyler is the company, Munis is the financial system planning to go live July 1st, 2025 for the, that’s the general ledger, the main hub for those of us who have to deal with for budgets, numbers for the department heads that need access to where do I stand right now? This is a game changer for us, and it is worth all of the pain and agony that, not just a leadership, but a whole lot of people have to do numerous eight hour training sessions and validation sessions over the course

1:05:56 of almost a full year. Um, and then in, in addition, there’ll be the HR module, there’ll be other modules, uh, personnel module, uh, payroll module, uh, what and tax modules. Yes. Uh, more modules that I can keep in my head that talk to. But I’ve always said one of my goals on the software and applications is we need to identify an enterprise system that does everything we need it to do, uh, all in an enterprise. If there’s a function that we can’t find that’s part of the enterprise. The criteria is it has to talk to our main enterprise system. And if it’s software that doesn’t talk to the system,

1:06:45 get something else, we’re gonna go to something else. And, and, um, Munis is the, the answer next clear gov capital planning module. So we, we, you know, the big last year was clear gov where residents and department heads and everybody have access to more numbers than, than you probably even want. Uh, you go into clear gov, uh, the transparency module, and the trick is finding a little link that says Download and you can download into an Excel and create numbers to your heart’s desire. This is the capital project module that we’re now using to manage our capital, uh, side of the projects. And as part of the module, um, we’re, we’re building it up also has the ability

1:07:30 to push out information about various projects that we’re working on. So, uh, again, enhance our capabilities. And, um, the other great success I talked about it, our interest investment income reached 2.3 million. We went from 60,000 to 2.3 million, and that is the great work of our finance folks. Uh, done that. So click of capital, here’s just some screenshots. This is the, uh, some pretty pictures of, of the module of things that it can do. Um, so we encourage people to explore

1:08:11 next the muni migration. Now, I was hoping for a sexy picture of the, the Muni, but then I realize it’s a financial software, right?

1:08:22 Sorry Alec. Um, um, but anyways, game changer for us. And then finally last slide, um, February 19th Newtown website. So there’s been a whole lot of work to migrate from the, the, the platform that we’re on for our website, uh, migrating to a new platform that gives us a whole bunch of additional capabilities. It is still a bear to manage the volume of data and make it as easy as possible to find things. Um, I’ll say it’ll be better. You still have to, it’s still work and it’s, I I, I attribute it to the fact that we have so much information through our website.

1:09:09 Uh, it’s getting it organized, but again, this is gonna create more capabilities for us and for the public to access and, and, and generate, um, information online. And with that Madam Chair, Thank you My presentation. Thank you so much. Um, I’ll uh, open it up to the board for any comments or questions.

1:09:35 Um, I was just gonna, uh, give you the opportunity to specify some of the cost drivers that, I mean, we talked about them, but that grow it more than two and a half percent. I know it like the, um, health insurance, energy and utilities and pensions. And I don’t know if you have estimates from, based on like last year percentage wise, what the growth rate is. I know we’re still negotiating with health insurance, but just so folks under understand like we’re, we’re constricted to a two and half percent, but there’s these huge cost drivers that, uh, year over year exceed, far exceed that increase.

1:10:15 Yeah. Even inflation on regular every day supplies that people are getting tires, I heard when they’re trying to buy tires now, they’re extremely expensive vehicles. We used to be able to have a contract with a purchase order and the state’s allowing them to actually charge us more. ‘cause it’s such high demand for some of these vehicles and the parts that people need. So we said 10% on average for the health insurance, that’s on a range between eight to 12. So if our population is in the 12% category, our increase could possibly be 12%. But we’re still waiting to hear back. Uh, the GIC also said anywhere between 12 to 30% on the retired plan. So we’re waiting to hear back on that. Um, also open contracts right now and when we’re stuck with the 2.5% with the,

1:11:01 as RAs said multiple times, we really don’t have new growth here. So we’re really living on two and a half percent. Uh, the great news is the recurring revenue with the meals and the rooms tax. I was worried, I’m, when I saw our Q1 and I went really, I was glad I went really conservative because we were on target only to meet, but our Q2 came in more in line with what the state was estimating. So, and with that being a recurring revenue source for the future, that does help us. But I also know from talking with Andrew a, you know, potential $1 million increase to our trash contract and costs for recycling, that he wasn’t charged because he had done such a great job in securing a 10 year contract, that they’re actually eating those costs, which now since the contract’s gonna be up, we’re gonna have to now get those costs. In addition to, so from

1:11:49 what I’ve seen from many department heads is there’s a lot of costs that are happening and they’re trying their best to, to manage them, but it’s just not controllable at 2%. Thank you, um, for pointing that out. And then one other question that maybe you have a better way to explain this to folks than I’ve come up with, but, uh, when people look and they see that their property assessment has increased and they’re paying more in taxes, that doesn’t mean that the levy has raised it means it just, it’s, it’s just a fluctuation of assessments in town. I don’t know the best way for people to understand that, but I get that question a lot. And

1:12:34 So, so the, the sequence of events is, um, in May you set the budget, you know, you determine you approve a budget and 72% of that budget is based on the property taxes. And again, they’re increase at two and a half percent plus whatever new growth of property tax. Once the budget is set, then the assessors during the course of time are determining the value of individual properties for the town. And then as of the January 1st of that, of the, this is why it’s not easy to explain, um, there’s a cutoff at January 1st where you determine what the values of all the properties in the community.

1:13:21 A and then it’s a calculation. The rate, the tax rate is just the ratio between, uh, the total cost of the levy. Your taxes is the, uh, denominate, the, the nu numerator and the denominator downstairs is the total values of the property divided by a thousand to get the tax rate. Um, once, once the levy is set that determines the total dollars that the town’s gonna collect, the values can go up, the values go down, all that does is changes the rate, the macro value, the so, so the, the total value of all properties that determines the rate. And then this is the part

1:14:07 where folks are gonna look at their bills, each individual property based on assessments and on comparable sales of what’s going on in, in, in sales. Individual properties are going to gain in value or decrease in value relative to the other properties. And all that’s doing is determine what share of the tax pie you get to pay. So if your value is increasing, you’re gonna pay more of the slice of pie. And if your value individual property is decreasing a smaller slice of the pie, the size of the pie is also gonna grow and sometimes shrink. Um, but it’s the relationship between the two.

1:14:52 And I know, uh, in other conversations, in other forum talking about, you know, comparing the wealth of communities, and I’ve said, I don’t know if Elon Musk would be the good example of these days, but being the richest man, among other things he does, Elon Musk in, uh, Bezos, if they lived in Marblehead, that would not generate another nickel in our taxes. It just wouldn’t, it’s just not the way prop two and a half in the property tax system in Massachusetts works. It’s based on overall values of properties and the relationship to how much tax your tax levy is, and it gives you a tax rate and the rest is math based on your individual property values.

1:15:37 So I think Aaron, I’m sure that clarified for a simple answer for you for people.

1:15:44 Can I, I need you the one give. Yeah. Can we, yeah, I don’t try for 20. Explain That. I guess I’ll, I’ll give a very, very, very simplified, let’s just say there’s house A, B, and C and the budget, I’m gonna make it really easy, is a hundred bucks. So that’s what we said. A hundred dollars is what we have to collect. Well, house A is worth $50, house B is 25, house C is 25. So House A is like, well I’m paying double that, but house A is double the size of house B and C. So whatever we set at the time for the budget, what you’re voting, that’s what’s getting raised. So that’s 72%. So what you wanna look at is that levy number, total tax levy, that’s what we’re raising on the taxes. And then your share is based on whatever value your home is. And as we know right now, there’s such high demand

1:16:31 and we’re such a housing crisis with so much demand, just not enough housing, that prices continue to skyrocket. Can I try the total, the total amount for the town goes up two and a half. Your share changes, right? Your share changes. I was just, that is like the clear rate. It’s the share your Share and then when they ask more than Some goes up, some goes down. Yeah. But We don’t, we don’t make the Budget more. No. So It’s not like more budget. Yeah. Okay. Well thank you. Do you have a question? Yeah, a couple actually, this is probably fi I’d like to dovetail and I’m sorry, I don’t know your name. Um, Jim Rees. Hey Jim. Um, so I think, I think the question that maybe was being asked is that we do have some, some, some borrowing that’s been approved, but you haven’t bonded it. Is that taken into account and your budget that we’re seeing here?

1:17:18 So in other words, I think looking at town meeting where we have some future debt exclusion overrides possibly coming, if taxpayers are looking about, we know that your, your actual, uh, borrowing Yes. Is coming off. We have some coming off, yes. But is there some that’s gonna go on because it’s been approved but not bonded? Yes. How could, how can taxpayers try to get a feeling for what, what might be coming in the future if it’s on your budget? So I’m Doing a bond anticipation note, which is a short term borrowing. I did one last year and I put a short term interest line in. I put another short term interest line in this year for fiscal 26. ‘cause I intend on rolling the short term note again before I go long term. So that’s factored into fiscal year 26 with the short term interest. So Your short term interest from your bans, your short, your one term one one year notes are projected in your

1:18:07 fiscal on the next year fiscal, correct. So that’s once that we’ve actually borrowed but not bonded. So is there, is there more borrowing that’s been approved? So There, so like I know that we have some, but how, how can taxpayers look at this? And you’re looking at your tax bill, I’m assuming, and figuring out whether or not you wanna prove future overrides, right? Where can they, where can we all get an understanding of how much more that might be? I think is your, I think is your question. It’s, Yes. So that would be based on cash flow needs. So what I usually do is I meet with the departments that have those large borrowings, and I ask them what is their cash flow needs? When are they ready to start the project? What are they doing? And then I can come up with a plan on how to borrow based on that. I’m also looking at the capacity as that stated earlier within the levee when the debt’s falling off to see how much I wanna add back into the levee.

1:18:55 I think, I think if I could just Piggy back, please go for it. In a sense, right, you’re, you’re looking at it on a very short term basis. You’ve got some short term, you’ve got departments taking short term needs projects.

1:19:12 I think what’s missing here is that if you go back over 10 meetings paths, there are tens of millions of dollars of approval, Correct. Not borrowed. Correct. And that’s a part of cash flow. So I’m not just gonna go out, let’s just say you approved 20 million at the last meeting. If I don’t ask for cash flow and I just go out and borrow 20 million, somebody’s saying, I think what, What we’re looking for is that some point, there’s a financial ramification for past approvals, never Spent. I may just compliance my chair a presentation with Alicia in December and there were actually two really Good slides. I think they went out 15 or 20 years maybe. And the first one was actual, previous debt exclusions that have been authorized and it showed it going down, right?

1:19:58 Because over time you’re gonna use it all. The second one was, let’s adjust that for presumably we’re gonna be issuing new ones. It’s very hard to understand what we will be, but she did her best estimate. So I think those two slides would be helpful. I think that slide shows what capacity we still have. Yeah. That hasn’t been borrowed, which we, which we can get should it’s, it’s a great slide. If you could Just, I mean, and, and I realize I’m asking you just off the cuff, but is that $10 million? Uh, let me pull it up on my phone. It spent a month Roofs on schools, all this money that hasn’t been borrowed, but we’re saying, alright, debt service is gonna go down 1.8 million. That’s fantastic because we paid for something we bought 30 years ago. So the first slide, the debt previously authorized debt, we went out to 2044.

1:20:45 Right Alicia, that’s when it’ll fully roll off the debt service that has been previously authorized. And it’s, you know, from 20 25, 10 0.9 down to nine and 26, 9, 9, 9, 9, 8, 8, 8, 7, 6, 6 5. The second tab is factoring in presumably that we’re gonna be asking for more debt On previously approved, Not previously approved. Factoring in there’s gonna be more debt in the future. So, I mean, it would be great if we never had to issue debt ever again. Right. But I Understand that. But I guess, Sir, can I just pause you for a second, Courtney? Haven’t moved into the Q and a yet. Just yet. So we’re getting really far off Last, just, just last last point I just wanna make is,

1:21:32 yes, there is a long term, I do have a long term forecast. I’m not, I don’t feel comfortable sharing that at this time. It’s an estimate and I still wanna speak and meet with the different departments on their spending before I make any choices. I, I think that’s an important Okay. Do you have any, um, other Questions? I have, yeah, thank you. I Go ahead. I do, um, some of the questions Thatcher I’m getting is, uh, around, uh, operational organization and we’ve, we’ve seen some of it tonight. You’ve listed it out principally around resource management. So, you know, one of the questions is, hey, you know, there’s a whole, there are whole new departments, there are whole new hires. First of all, we’re conducting these reorgs with within the existing budget, right? And we’re improving kind of that

1:22:18 where you’ve shown resource management in this graph, the general government component, you know, especially in finance, especially in tech and in hr. And so these are, you know, super important in terms of centralizing those functions under the town administrator and finance, obviously under the, you know, under the finance director that I, in my opinion, is a huge component to why we’re not going for an override this year and for why, how we’re discovering efficiencies throughout the town. And I know, you know, Thatcher, I think at some point it would be really very helpful to kind of understand that in more detail. I know we don’t have enough room, you know, in, in this, in this presentation, but maybe you can comment on that. So Yeah, so the concept is,

1:23:04 and the reason for doing the revenue projections, doing the 50 50 split and setting the bottom line upfront, you know, that’s the limit of what, what we’ve got to work with. So it’s optimizing the organization from, from within that bottom line, rather than asking for more resources that are increasing, right? The cost above that bottom line. So, you know, as an organization, you, you’ve gotta, you’ve gotta evolve over time to one, meet new demands, new needs, but also just new ways of doing business. And, and like I point out the work of public works and the reorganization we’ve done there to make it a much more productive operation.

1:23:50 Um, bringing in certain specialists, HR director as the example where as in the chart, right? We have 11 different entities operating all trying to be their own HR department, doing their own, having, you know, search and advertise and do all those things. Uh, and then you have all the compliance issues and policy issues where, you know, threats of lawsuits and things, uh, are out there. So bringing in a specialized position and taking that burden off of the department heads from trying to be a police chief or a DBW director and an HR director and a procurement specialist and the whatever else

1:24:35 because we’re, we’re taking our experts that we hired to, to be experts at a function and pulling them away from that function to do these other things. So we’re picking and choosing those specialized tasks and consolidate ‘em in certain positions to make everybody more productive. But the key is it always fits under that bottom line. So anything that we create new is because we’re taking from something else that we do no longer need or, or is not as important, uh, relative to what we’re doing. Well, HR is a great example. I think technology is another example because the breadth of adoption across our, our highly decentralized town structure is very, very, it’s a big deal. And, uh, you know, so that’s, that’s been an a ma you know,

1:25:22 major achievement, uh, towards increased efficiencies in the town. Yeah, no, I think it’s, that’s great. Go Ahead Dan. I think Moses, you pointed out on here that we’ve got a little thing said no override, no proposition, two and a half override. That should have been, did I forget to mention that? I thought that was supposed to be a neon, but, um, That should have been in 25. Yeah, so I mean, I think we all this year came into this year expecting that we were likely going for an override. Um, and you know, based on our free cash number, I think is part of why and the great job at investing are there inefficiencies, but we, we knew we were gonna do the efficiencies. Is there anything else that you could, that in deep diving, which I know you’ve done a great job yourself and through consultants, how do you think that,

1:26:07 can you point to why we’re in the position we are and we don’t need override? Yes. So, um, the schools turned back some funds. We’ve turned back some funds. In addition to that, the, the revenue sources, the, um, two local receipts with that 2.3, almost $4 million that we absolutely had no idea that was gonna come in. Um, our inspections are up, so these one time they go all are cyclical. They all variable, but really, well, another thing that I do when I come into a municipality is I look at grants. So any grant deficits, anything that has the deficit in it at the end of the year actually reduces your free cash by the Department of Revenue. So what I do is I keep everything open through September 30th so I can accrue back the revenue

1:26:55 that we’ve collected to maximize the towns free cash. And that wasn’t being done before. So the deficit she’s referring to would be, um, a lot of grants are reimbursements. And so you, you get the grant awarded, you perform the function using your own expenses, then you have to apply and wait to get the reimbursement. That’s, that’s kind of the grant deficit that she’s referring to. So we have to carry that on the books, which hits us on the free cash numbers. It deducts from Yeah, it’s a, it’s a liability on the books or is it? Yeah, or It just, they have a negative balance. So they, they hit us for any of the negative balances. So I think last year we almost close to a million dollars. This year we’re down to 200,000

1:27:41 and I’d like to see it down to zero. Okay. Thank you.

1:27:48 Um, I just, uh, wanted to again commend, uh, you both and, um, definitely Amy UE for the restructuring and operational efficiencies. Amy did a great presentation at our last meeting, um, around just some practical and creative ways that she could improve operations there, you know, or even the physical space at Mary Alley oper, you know, um, making that more efficient and functional for the departments under us. And I, I just, I think in conversations with, um, other elected officials in town, I think that there’s more ideas around how, uh,

1:28:33 more widespread as a town we can collaborate with other boards around, um, or, or start conversations with other boards around ways we can better collaborate as a town. So, um, with that, I’d like to open it up to a question, answer period. Can I get a show of hands of who will, who thinks they might make comment just so I can Okay. And we have how many people online? Oh, 40 of people line. Sorry. Okay. Um, Lee, do you wanna go to the mic and I can, yeah, you have to go to the mic and just introduce yourself. Just state your name and, and make a comment, your question and We’ll, you wanna do, wanna try to, um, you know, get to folks online as well, so I’ll try to alternate.

1:29:20 Absolutely. Lube Lander, west Port Lane, Marblehead current. Um, so Thatcher, I just wanna follow up when you were talking about the 50 50 split, 4.2 million in new revenue. So the schools get 2.1 and the town gets 2.1, the schools get 2.1 plus you’re giving them an extra two 50 K. So is that the total 2.1 plus two 50 K that they have above level funding for FY 26? That’s Above what their appropriation was last year, above What their appropriation was last year. So, um, and that’s about the same as last year, right? What was it last year? Last year the split was 750 and 750. Oh, okay. And then we kicked in the 250. We, so the two 50 numbers we have, uh, trying

1:30:07 to do an annual appropriation to stabilization fund of 250. And so last year we put zero and apply the two 50 to the school. Um, Alicia was planning on doing a catch up for that 500,000 in stabilization, but because we were rolling in 2 million, we decided let’s, let’s take half of that. Let’s just do the normal two 50 and apply the other two 50 over the school to, to, to assist on that. So that’s, that’s kind of how, where that number comes from. Okay. But it is a significant increase from last year to this year as to what that split is. Okay. Um, and just to clarify, because it wasn’t in neon as, as Dan said,

1:30:53 no general override from the Townside in 2026. What about to fund the Mary Alley project? Would that be a debt exclusion override? Will, will taxpayers be asked at all at town meeting to raise prop two and a half? So their taxes? Yeah, we’re working through the capital project plan, uh, and again, putting, allocating 2 million of free cash, there’ll be those capital projects that we’re gonna pay cash for. And there will be some projects, some of the facility projects that are gonna be larger that we contemplate having some type of borrowing request. So that’s an override. I mean, it’s a different, Uh, It’s a debt exclusion override. It will increase taxes for a, for a period of time. Yeah. And There’s, I mean, we can do debt borrowing

1:31:38 that’s not a debt exclusion or we can do debt exclusion. Those decision made. And obviously the CFO will be crunching, crunching to, to make recommendations. Okay. Alright. Thank you. Thank you. Um, do we have anybody online? I don’t see any hands raised. I don’t see any hands. Okay. Um, anybody else wanna go to the mic? You wanna, you’d like to step up? Thanks.

1:32:10 Sorry. Okay. Uh, Tani Callahan Devereux Street. Uh, good evening. I stand here today on behalf of the Marblehead Education Association, proudly expressing our unwavering support for the Marblehead Municipal employees, police and fire unions. The issues that were raised in the fall are not isolated to our schools. They extend across every department affecting our entire town. The challenges our municipal workers face from understaffing to inadequate resources are felt by all of us in every corner of Marblehead. Back in the fall, we heard an overwhelming message. The support for a tax override wasn’t just a benefit to our schools, but to ensure the town’s municipal services could thrive. Once again, these services have been starved

1:32:56 for far too long, and the time has come for us to address that as a town. The question now is, what is the plan to fix these systemic issues? When will the town hear that plan? Without a clear actionable strategy in place, there will be severe consequences for the future of Marblehead. We cannot afford to delay or ignore this any longer. It’s time for all of us to come together as one town to ensure that our municipal services are properly supported and our future and the future of the town of Marblehead is secured.

1:33:38 Um,

1:33:50 Hi. Terry Toro, one 13 Jersey Street. I’m the President of the Marblehead Municipal Employees Union. Um, first of all, I’m, I’m a little concerned that nobody at the table even said had a question about the contracts that aren’t that, that haven’t been settled yet. We have three outstanding contracts, well, two outstanding that expired in July with the police union and my union. And we also have another contract that’s going into negotiations with the fire department. So that is a concern with this whole budget. So just because we didn’t ask the question tonight about it doesn’t mean that we don’t ask those questions and we aren’t. Okay. We are kept abreast of, of the negotiation. Are you okay? Excellent. Well, just, um, on behalf of the town employees,

1:34:35 I have an informal petition signed by every department, schools, all the municipal departments, all the employees. Um, we, the undersigned respectfully request that the select board step in to make union negotiations and the, and municipal employees a priority. Sorry, my glasses. As union members, town employees, and Marblehead residents, we are concerned that the town’s representatives are not bargaining in good faith to provide municipal workers a successor contract that meets all public needs. We request you personally oversee your appointed negotiating team, ensure good faith bargaining, and stop the tactical delays and have demonstrated to stain for 80% of marble head’s workforce. I have this here and I have more coming from other departments.

1:35:22 Thank you. Thank you. Oh, thank you. My names Terry. I have, I can take photos of his last two pages. Mm-hmm. No, I’ll give it back to you. Yep. Yep. Before we leave, I can give you those.

1:35:38 We’ve gotta do something. We’ve been in negotiations for 11 months and nothing is getting anywhere. We’ve requested state mediators. The mediator doesn’t even know what to do at this point. We can’t get a date more than three weeks out to even meet. And town meeting is right around the corner. This will be a second year for the lowest paid employees in this town. Not having a raise, not having a cost of living increase. You talk about the cost of tires for the town. How about the cost of tires for my daughter’s car? I can’t pay, I can’t afford to pay it. None of us can. We haven’t had any kinds of increases. Nothing and no talk about it. So we need to get this moving and it’s unacceptable the way we’ve been treated. So thank you.

1:36:23 Thank you.

1:36:34 All right. Um, I don’t have a, I don’t have a very sexy laundry list. My name is Jim Regis. I live at one Lee Street. And, uh, number one, uh, the municipal light department is projected to give back $360,000 to the town’s budget, which is admirable. However, if you drive around town, you see light poles everywhere that are falling down. Uh, just where I live on Lee Street, there are two very critical light poles that are literally snapped and we’re told there’s no money. So I do think that we have to look at the wisdom of accepting $360,000 from the light department when the light department can’t keep the poles up in the town. And I think that sometimes we have to ask the question, why are you giving money back when you can’t meet the, as you were so brought up the services of the town.

1:37:19 So I think that’s the first thing. The second thing is that it is my understanding, and correct me if I’m wrong, that the buildings of the schools are separate from the buildings of the town. In other words, they’re handled and managed differently. Is that true? So the School committee maintains control over the school buildings. Well, there has been very good conversation tonight about efficiency and about the need to handle things professionally and at a higher level than they’ve been handled in the past. And I do really question the wisdom of having a school committee who is entangled in all of the work of trying to keep our education at high standards. However, they may have dropped. Um, it is very important that I think those buildings come back to the town because I think that the roof on the high school

1:38:05 and the AC on the high school and all of the problems that we’re gonna pay $15 million for is a result of poor maintenance. And as a result, not of the school committee, I don’t hold them. It’s, it’s a ridiculous job to give a school committee. Those buildings are worth a lot of money. And the preservation of those assets is really critical. The state law, I’m sorry, the state law, well then I think they, they have full control. That’s the law. Statutorily required. It’s statutory. But then I think what you need to think about is providing them the support so that those buildings can be maintained and they can rubber stamp the approval because these buildings aren’t being maintained. We spend millions on new buildings and then we come back to the AC doesn’t work,

1:38:50 the roof needs to be replaced. These are ridiculous requests given the age of the buildings. And I think at some point that it’s just a system that’s broken. So somehow you have to support the school committee in a different way. Third thing, um, I know isn’t this fun? Uh, essentially I looked at your budget, you’re projecting 2.5% revenue increase and 5% expense increase year over year. It’s pretty simple. The numbers are pretty straightforward. So you have a two point a half percent gap. I get it. I think that projecting expenses at 5% is a little bit high because I think there are some that should be level and there are some that will definitely go up at a much higher rate. But, so that’s in and of itself a tough equation to solve. But it’s the debt that scares me.

1:39:37 I do believe that you have to look at the tens of millions of dollars that’s been approved, that no one has ponied up to spend it. That you are going to spend it and you’re going to borrow it. And interest rates are higher and the environment for taking on debt is, is not as friendly. And I just think that you are giving an overall good look at your debt situation. And it’s not realistic because I know the road money and the school roof money and all these things have not been borrowed. And they will be, and it’s, it’s naive to think that they’re not going to happen at a higher interest rate than the debt that you’re retiring. Um, last thing, increased revenue stream. I think that that is brilliant because when people buy houses in Marblehead,

1:40:25 and it happens all over the downtown area, they buy a house at huge money. It’s not, they buy it for hundreds of thousands of dollars sometimes over assessment, and then they gut it the next day. They gut the house. So they pay 1,000,005, they got the house, you know, they’re putting in another million. I don’t think that’s reflected in the assessments. I don’t think that’s reflected in what ultimately they will sell the house for. So I think that that is the piece of it that is just amazes me because people put hundreds of thousands of dollars into a house they just bought. And I don’t think their assessments reflect that. And that’s just not fair. So just to clarify. Yeah, the assessments. I think, I think, I think we, what you’re trying to say is,

1:41:12 I think Thatcher and Alicia talked about this, that’s captured through new, the key is capturing that new growth. Yeah. That’s where it goes. So the assessments, I Don’t think it has been, and I know there’s a, just know It’s A new growth doesn’t immediately go into the pipeline, but it has to be captured to go into the pipeline. It Can go into the pipeline through new growth. And that’s what they’re trying to do with our assessor now reporting here. And that’s something that Marblehead is is that talked to us? Well, I’m, I, nope, I I’m actually agreeing with you. That needs to be done and we we’re trying to do it better. So I Agree. Yeah, I just think that it’s, I think it’s huge money. I mean, it’s, if you look at the amount of renovations happening in this town, it’s huge money. So anyhow, that’s my list. Thank you. I just Thank you Jim. Thank you. I would just like to respond to, um, the debt service. Yes. So there’s additional debt service that’s being requested

1:41:57 by the schools, but the original was borrowed as far as the debt service for the roads, as I stated, I ask Amy for cash flow. It’s in a short term ban at the moment. I am borrowing, I just have not borrowed the whole thing. Like I said, I don’t want tax please having to pay it all at once if Amy’s only spending a certain portion per year. So I spend a lot of time with my departments before borrowing, so it is being done. No, I understand. And I know you’re trying to meet the needs of the town. I just worry about the snowball that’s coming down the road. Alicia, I, it wouldn’t be incorrect to say that the debt capacity is evaluated on the basis of those authorized, but unused, uh, you know, debt components. So, and you know, we try to keep that within, what is it, around 15% maximum of the overall levy so that we have a kind of limit to the kind of debt

1:42:45 that we can take on in the service that we’re willing to, to, to fund.

1:42:50 Um, okay. Uh, Albert Jordan Roosevelt Avenue. Um, I just don’t understand how we’re spending money. We don’t have here. I know a lot of older people in Marblehead, um, you know, the school teachers are gonna go to town meeting. They want you to support a big raise. Everyone else wants to be supported. A big raise in this town. Um, but I’m just concerned there’s a lot of elderly people in this town. I don’t know, I think it’s 15, 20%. I know a lot of people living alone in a house. They retired 30 years ago. They’re either getting social security or a small town pension. Some of ‘em, um, I was down a house on Christmas that they had no heat, but the guy’s got $3,000 in the bank, um, that worked

1:43:36 for the town for 37 years. So I, I don’t know what’s, I don’t know what’s going on to him because if these, all these raises go through that everyone wants, um, at money that you agreed to that the town didn’t have the money to give. So I don’t even know. I, you know, if I have $150 in my checking account, I can’t write a check for $200. So that, that’s what the town did. If these raises go through, um, you know, they went through on paper, but the taxpayers have to come out. Um, you know, uh, my family parents had six kids, you know, we lived in this town. This guy’s talking about, you know, house value’s gone up. He’s a hundred percent right, what he’s saying. Um, you know, they’re putting a dumpster or they’re tearing the house down there

1:44:22 that is being captured after the house is resold. Uh, for a short period of time, it might not go up as much. But, uh, the people that put that kind of, the people that are coming into town now that are destroying houses and rebuilding ‘em, um, they’re on a different planet. They have much more resources than most of the town employees that are living here. So every time this stuff goes up, um, when these town employees retire, they’re not gonna be living here. Um, this situation went on 30 years ago. We had trash guys and guys that worked for the highway that had houses in town. They, they never would be able to afford to live here the way that things have gone up. Um, but if all these big raises do go through, and I, as a taxpayer, I’m not supporting it. I’m not supporting it because I won’t be living in this town.

1:45:09 I, I have a pension of $28,000 a year. Okay. Fortunately, I’m at a different boat because a lot of people have helped me over the years. So I won’t have to move outta here. But I know a lot of people that don’t have extra help. Um, and I’m just wondering if all these raises go through, we’re going up on all the fees. If I go to the dump and if I, if I get a permit for something, we’re looking at the health insurance, which is broken. They’ve just closed seven or eight hospitals in Massachusetts that file for bankruptcy. And there’ll be more coming. I guarantee you. Um, the doctors aren’t happy in medical facilities and everything. Health insurance is gonna continue to snowball and go up and up and up. I’m just wondering, um, are we looking at if these raises go through and we’re negotiating the health insurance

1:45:56 to get out of the GIC, which I think is a big mistake. We went in there to save money. I thought, ‘cause it was a big bigger group was gonna be cheaper. Now we want to bail out. So I’ve been down this boat before negotiating with places, and they give you a year or two, they give you a deal and then you find out, it’s like you switch your house insurance and you get a deal and then you find out three, four years later and you’re worse shape. So I’d be very, very cautious. But the thing I just want to know about the health insurance, if these raises do go through, um, are, and we’re renegotiating health insurance, are we gonna look at, to go up on what the town employees are paying towards that? ‘cause I think if they get the substantial raises that the school teachers are gonna get, that’s take and give there.

1:46:41 I think they should give something towards the health insurance. They’re working nine months a year and getting health insurance 12 months a year. And a lot of the other town employees are working, uh, you know, substantially more weeks in a year. Um, so I’m not against any of these people, but every time we go and we vote all these fees going up, we have to think of the 20% or the 25%, um, that don’t have the money to already pay the way that they live in these houses. Now I, I found dead people in these towns in houses. Okay. And I found a lawnmower over the neck in the guy’s living room. You should have seen that house on the inside looked like the Adams house on the outside on Manley Road. So, um, thanks.

1:47:27 You know, there’s a lot of people in different circumstances here. Yeah. You know, so, so I, I just want to, like I say, I think when we negotiate things, we shouldn’t just go up for all the fees for the taxpayers to be paying and say in our taxes going up, but all these fees are going up. It should be a two way street. Thank you. Thank you. So, um, we do have a lot of challenges as a town with that I don’t think are, that are not unique just to marblehead. The cost of living has increased. We have a initiative and as a priority of our board is to look at ways to promote diversifying the inventory and style of homes that we have in town. Because it is true that, you know, seniors in town

1:48:16 get stuck upside down in a home that is very valuable, yet have nowhere to downsize to. So that’s a real challenge that the town of Marblehead is confronted with. And we have an aging population in town that, um, is growing at, at a faster rate, frankly, than our peers. And, uh, so we must address that. And as a board, we have two housing groups. Um, we’ll have, uh, you know, the state at a state level, this has obviously been a na a priority from two different governors. You’ll see that the, um, you know, the MBTA communities act, the multifamily zoning, the map area that we’ve designated that through the planning department and the planning, uh, board that, that will be, um,

1:49:05 up on for a vote at at the town at town meeting this year as well. That’s not really the end of the story. That’s a little piece of that puzzle. There’s a lot of work that needs to be done in terms of, uh, as a community, you know, we, we need to create other types of living arrangements besides million dollar single family homes. Um, and so through, um, the housing production plan and through the committees that’re part of, you know, and as we look at properties around town and and, and what the priorities are, we’ll have to confront those. And then the other thing is that, um, even the people that are, are in our town, like the, you know, cost of living and, and people that work, work in our town

1:49:51 and our schools are, uh, are, you know, struggle to, you know, it, it’s, it’s difficult to live here, frankly. And we give the raises because, well, I mean they’re, they’re competitive. We have to be a competitive employer. And if we want to be able to keep and retain the good talent that we have, um, and if, you know, we have to figure out the balance of doing that, you know, this year we’re going, you know, we, we are not asking for talent override, but we are, um, dipping into the free cash to help balance. And at some point, you know, this year it was great that we, we can, we can afford to do that this year. Um, you know, it’s just, these are essential functions

1:50:38 to the running of government in a workforce that is entitled to a competitive wage if we wanna keep, keep people here. So, um, Matt, go ahead. One more follow up to his comment. So anybody knows any seniors in the community that are struggling, and if they’re alone That’s right. Call Lisa Hooper. Mm-hmm. Reach out. And if they’re a veteran, a veteran agent row, get them in touch because they will get folks connected to get help, whatever it is. Yeah. The veteran Agent, that’s why They’re there. Madam Chair, if I may too. Yes. We’re also, we also on the town meeting, we have an article in conjunction with the finance committee, the assessor’s office and the Council on Aging. We’re working on a, a senior tax, um, relief.

1:51:23 So to, to take the burden off those who we’re hitting hardest. So we are, we are looking at that so that they are not taking a portion of the, of the burden of increases at the same level. If they can’t afford it,

1:51:37 I don’t see any hands matches.

1:51:41 Okay. Oh, Christine,

1:51:49 No stupid questions. Yeah. Uh, Christine Nuccio, three dam’s way, do we have any way of knowing, um, all the Airbnbs in town are, is it an honor system for who’s paying? Um, ‘cause when I walk downtown, it seems like a lot of houses are have flipped and there’s a lot of people in and out. But do they have to report to anybody or get any permits or I’m Just Yeah. To register with the state. Yeah. Um, and we’re, we’re looking at ways to inventory, um, and, and to be as aware as possible as to, uh, what we have here in my head. So there are, there, there are 400 and something that are registered with the state.

1:52:34 Mm-hmm. I’m sure there are others who are doing it on the side. Right. And so part of the work, and that’s through the inspections office and other means to identify those and get ‘em on the rules if that’s what’s happening. So it, it is a, it is something we are discussing and looking at on how to address Christine. We’re gonna do a deep dive on that. Yeah. We’re looking to, to really find out more about that in the next year and then look into a policy about what’s appropriate for what the capacity is, um, in town. And because that in Theory, well that’s another whole thing. Whether or not it’s changing the fabric of the neighborhoods or whatever. Right. Question. Well, And is it driving up prices limiting inventory? That is a study that we Are working. Yeah. Then we don’t have people vested in the community and whatever. So there’s, What is it that we have going on? Right. And then we can start coming up with policies

1:53:22 to address, but we, we need to sort of inventory as to what’s going on out there. You can’t have an anonymous hotline number ‘cause most of the people in the neighborhood know, you know, it’s just like, how do they rat ‘em out, you know? So can you email to see if It’s a great question. Just Curious. It’s one that we get a lot. Yeah. And it is something like we’re collecting the data because, you know, we, there is a desire to put some regulations around it, but unless we have the data, which our town planner explained this well to me, um, which he’s, you know, uh, working on doing that. We’re looking at other neighboring communities that have Airbnb regulations. We need the data first because we don’t wanna over-regulate something. Right. That’s bringing tourism dollars into town. No, I know, right. So, um, we don’t have enough data

1:54:10 to, to and analysis yet to, to be confident about what regulations we would propose, but it’s, that’s a work in progress this Year. And now that we have, we’ll have starting Monday fully staffed community ground planning. That’s what they, that’s where that will live. Sounds like a plan. Thank you. Thank You, Christine.

1:54:31 Oh, one other thing on the water and sewer, uh, have they given a, a raise like the electric light for what they give back to the town? Thank you. Yeah. We have OSHA With Them. Yeah. So water and sewer, certain employees are in the MMEU collective bargain. So they’re part of that, that bargain u So no, No, I’m talking about the revenue that we get from the electric light. The electric light. We, we used to get some from the water and sewer we receive ‘cause they’re enterprise lending. Oh, water and sewer gives us indirect cost revenue based on, we have a formula for that. That’s how that’s done. Whereas the pilot payment that’s coming from the municipal light, it’s just been stagnant. We haven’t seen any increases. Okay. It was 300,000 at one time. So now it’s 360 or 70. Well

1:55:18 Now because we’re, we’re talking with them trying to, Okay. ‘cause every, I just got a new water bill and they went up, you know, on the minimum charge again. So, so I think that they should share the wealth with the town. If they’re charging me more, give a little back to help the tax rate. Thank you.

1:55:38 Hey guys, Lee again. Um, from the current and West Portland. Um, so just as a lay person or, or, or you know, can you help me understand when, when we raised our taxes to build the brown school, was that called an override or a debt exclusion? Debt exclusion. Exclusion override. Okay. So are you Overrides they’re all, they’re both considered overrides, but one is a borrowing for a third 2030. I understand that part, but when you say there’s no over, I know I’m being a pain about this, but are you saying that you’re not going to go for a debt exclusion override either. So I, I’m referring to, we don’t need a general override for our operating budget. So that’s different. You may need us to raise our taxes to pay for the HVAC at Mary Alley or, okay. When, when will taxpayers know what you’re asking for

1:56:26 At we we’re work, we, right? I mean, town meeting is where that, that’ll be posed and we’re working through the capital plan At the warrant hearing warn hearing exactly. Okay. Okay, cool. So, and then I have one more question. So if you’re not going for a general override and you can’t use a debt exclusion override to pay salaries, aren’t you basically telling the unions like it’s over, like you’re not gonna get the any more of an increase then? No. Because you don’t, you don’t have the money to pay it. No, we, uh, as the revenues that we projected, our revenues have come in stronger than last year. So have you budgeted for an increase? We, we we’re working our way through the negotiations and it’ll be, uh, sustainable.

1:57:13 We’re trying to address the marketplace as well as maintaining it as sustainable. Okay. Sorry, I lied. One more question. Yeah. So the school roof, everyone’s talking about the high school roof, is that something that the town would ask for a debt exclusion override for or the school committee would ask for? Or would you do it jointly? We’ve already done it. The money’s been approved. The school, the new one, it would be the new one. The new one would be the school. But I’ve been working closely with the assistant superintendent of finance. So I would stand right by side town with the school. So it’ll be a request from the town and the schools. I’d be supportive of the schools. Okay. The schools. Okay. The school’s request for their facilities. Right. Got it. And we may have requests for our facilities, So Just let ‘em fall in.

1:58:00 So how will you help people at town meeting decide what debt exclusions to vote for or to reject based on what they can afford? If there’s not, like will you, again, maybe Alec, it’s at the fin com level. You’ll tell people here are all the debt exclusions that the town and the schools are asking for and here’s the impact on the median tax median, um, homeowner. Yes. We always provide that information for All of them. For Each, yes. What it would add to your median tax bill. Okay. Um, that information will be out with well before town meeting. Okay. So the requests are based on a need. Right? Right. So this isn’t, this isn’t just a discretionary choice. This is a need. Right. If we’re gonna have a roof over the head

1:58:45 of the employees providing the services, we have to do something about the buildings. And this is the mechanism to, to address those needs. And just as a point of information, since that’s been here, what we’ve done is we looked at the budget and what they’ve been doing traditionally is taking some of those smaller items, capital items and just raising them in the levy. Whereas we’ve been using the free cash as a way Right. To alleviate that pressure on the debt service by trying to fund the smaller projects. Right. Okay. Thank you. I go off to the mic. Is there any, what? Is there anything coming, rolling off this year that we know? Does The roof come 1.8 million? 1.8? That’s the high, the high school bill. That’s the high school coming. High school build. Yep. Okay. Just a question on process because, um, here’s where I’m seeing the high school roof.

1:59:32 So the high school roof came before the town at the price of about 5 million, is that correct? You borrowed the money? Someone borrowed the money. But if I read the newspaper reporting correctly, someone actually stepped on the roof and said, oh, it’s much worse than I thought it was long after the town approved the money. So, So well the scope of the project is what grew, not so much The cost. No, I’m Just, I, and we have our, you know, Mike, would you mind? Thank you. I’d love to cover this again. Everybody needs, make sure you quote me Mike P Oh no, actually I, I I’ll ask a follow up. Oh. So, uh, yes, it’s accurate that, um, it was a request made

2:00:18 of a, um, ONS project manager and schematic designer to say, Hey, what would a new roof cost on the high school? It’s leaking. It’s, it’s made of a material that was, uh, state of the art when it was introduced 20 something years ago. And it’s now found to not last the full lifespan of a typical roof project, uh, um, on a building. Um, that firm was not paid a fee to get that estimate. Uh, provided the estimate, uh, hindsight in 2020, we should always go and allocate money in our, either our local budget or our, um, town meeting to do a feasibility study. That did not happen. A feasibility study would’ve been somebody would’ve gone on the roof, they would’ve inspected the roof, they would’ve inspected all the HVAC products on the roof

2:01:04 antennas, uh, any other mechanicals on the roof. That did not happen. So that is accurate that that did not happen. Um, I wasn’t here. I can’t speak to why that didn’t happen. And, and, um, I, I, you know, quite honestly, somebody asked me for a project too, and I did the same thing. I called left field who’s one of our OOP, so owners, project managers and said, Hey, what would it cost to do this? And they, I think now they’re gun shy. They said, we’re not giving you a price. Um, and, and I don’t blame ‘em, you know, you know, they’re now under the gun right now to, you know, why did you, why did we, why did somebody say 5.36 million was the price? And because that is enough to do just the roof, but you can’t take all the equipment off the roof and put it back on. Um, especially being this close of salt air, um, without replacing everything on the roof,

2:01:49 everything mechanical on the roof. I’m not saying everything on the roof, but is that, I appreciate that. So is it fair to say that the cost of the roof has, is the same, roughly the difference that you’re seeing? Like whatever the number is now, what is the estimated It’s 8.8 point. That is a change in the scope. Not that the roof has inflated to eight point million. The Majority is change in scope. Yes. Yes. There might be a slight inflation on the, I mean, it was 3, 2, 2, 3 years ago that Yeah, That’s gonna be a price from two years ago. By the time it gets two or three years ago, the cost is gonna go up for the roof. I guarantee you, we, we gotta price like a year and a half ago it hasn’t been done. Okay. We gotta go to town meet and get more money. So,

2:02:35 And then contract. So, so there is an escalation. There is an escalation in there. They, we know the project’s not getting done this summer. So they have, they have escalated the price to be done for the, that 8.6 million is for the price to do that it next summer. Right. So inflationary for another year on top of, I thought you said 5 million, now you’re saying, hey, which I thought it was eight something. It was originally five years ago And now they’re adding eight Something to It. Wait, adding

2:03:04 Total, We can only have one person speaking at the mic at a time. So I guess my, my point was, and I just, I come back to where my original position was, it’s like, yes, I get the fact that we have expenses that will escalate that we have to manage, but it’s the debt that will kill us. And I think that it’s very difficult credibility wise, when you have a $5 million project going to $14 million and because a process wasn’t followed. Now you can say that the roof didn’t escalate in cost, but what they didn’t include was removing all the equipment. Well, you can’t replace the roof without removing the equipment. So quite frankly, it was a bogus price, right? ‘cause you couldn’t accomplish the work for the price quoted because the means and methods to accomplish the work was gonna cost you more money to begin with.

2:03:50 So I think that this is where the rubber hits the road. And it’s one thing to say that, oh, the operating budget looks good and we have, you know, until we get into that 5% or two and a half percent gap for the next five years. But the debt and the capital projects and the deferred maintenance and the deferred projects and all of that is where the rubber hits the road. And that is where I think that you can’t walk into town meeting and expect people like me who do this for a living to not be asking tough questions. Mm-hmm. Okay. Can I say something? Just a point of clarification too. I think you threw out the number 14 million, but I heard Mike say 8.9 on top Of that Roof and HVC is 14. Okay. Okay. So this is a $5 million project that went up by 8 million.

2:04:35 So it’s, it’s like over a hundred and something percent increase. 125% increase. Just wanted to clarify ‘cause Mike had threw out 8.9, but it, it’s, Yep. Are you done with sir? Sorry. Everyone wants me to be done. I just Oh no, just a point of information to it. Just a point of information to address some of your concerns. And you know, as Mike spoke too, you know, he wasn’t here when, um, that was done. But one of the things that also has happened is the revitalization of the capital planning committee, which the mission there is to specifically look at these projects holistically within a group that co encompasses the community. That encompasses all of the invested agents, you know, with the finance and the town and pulling people together.

2:05:22 So these types of decisions are made in a way that we have all of the information, all of those questions are being asked. And so then that translates into assessing that debt. And that’s something that, you know, has been brought back and been addressed. And that committee is what’s something we’ve been working on specifically this year. So I just want to alleviate some of your concerns that I hear that those, those concerns that you’re voicing have been heard and we’ve been putting in specific mechanisms to try to address them moving forward and to try to put forward, and we’re talking about any sort of debt exclusion project that it has been addressed as most as we possibly can. Thanks Madam Chair. If I could just add to that, just so we don’t get leave

2:06:08 with the impression that debt is out of control and it just keeps going up. There is definitely a cap. We do not invest or fund capital projects that may be in the capital project pipeline if we start going over our t our, our limit, our debt capacity service limit. Okay. So, you know, and that’s pretty well, you know, rule of thumb that’s, that’s captured at about 15% of the debt exclusion. So that’s, that’s point And, and, and, and Marblehead iss kind of interesting ‘cause we, we impose a discipline on ourselves by limiting, uh, the capital expenditures are funding to debt exclusions. And, and the reason for that is ‘cause you go to town meeting with a specific project, everybody understands it, they understand the impact.

2:06:54 And so everything’s transparent and clear. And that’s why we funded, you know, whatever it was, uh, you know, very large school projects and we’re able to roll that over on the basis of the debt capacity. And quite frankly, one of the, one of the challenges is, is that we spent, you know, uh, a lot on the schools and we, we didn’t spend a lot on the inadmissible buildings of the town. And that’s where we’re at right now. So I think to your point, I understand the prudence on debt. Yeah. And I understand that what it doesn’t account for though is that the need, overall need mm-hmm. May exceed what you choose to debt. That’s right. Put onto debt. That’s right. Which means it may actually come back to the operating budget on some capacity because the need doesn’t go away. Yeah. I would just add as well that we don’t, you know, know there, there, so there’s capital expenditures and there’s another level that’s passed every year in articles that is

2:07:40 for building vehicle and school maintenance. So we do address that layer of maintenance, you know, ongoing maintenance, the argument is it sufficient, you know, generally speaking, you know, more is better. But right now it seems to be, you know, working. Okay. Uh, yeah, I know what you’re saying. I mean, it’s, it’s, yeah, the, the roof is a, is a unique situation. I, I hope it’s unique because it’s pretty disastrous. I just, my personal opinion No, no, no Judgment. Well, it’s also why we put a lot of emphasis on our financial policies as well, so that we can maintain an excellent bond rating. Um, and they, they have, they do look at the reserves that we um, that we, you know, were, were minimal and um, you know, I think Alicia was, it was being pointed out that, and that’s really where this, this cash

2:08:28 and why we’re putting it into the stabilization fund so that when the bond agencies look at the fiscal health of our town, you know, we’re hoping to get to 5%, you know, about $5 million. We’re gonna have three and a half, which is a great progress, but it’s still short. But it’s a great progress and, and we’re mindful of that, um, because we do wanna maintain that bond rating for these projects. And, And I do, I do Wanna, I’m gonna let this man, gentleman, if you may, I’m gonna Let, thank you. Thank good questions.

2:08:58 So I just have a question about the way the grant process works from the state and for the projects that, and how we spend money on that. So the way you explained it today was we do the project, we spend the money, and then they give us the grant money. Now is was all that money was all, was that grant approved before we went and spent the money?

2:09:23 Yes. So they don’t even get an account set up till we have a signed contract. Once we have a signed contract, we set up an account for spending. I got that part. But there’s a grant from the, from, and it all goes back to this, um, this, this MBTA uh mm-hmm. Uh, zoning vote that I assume we’re going to take here again at town meeting, which if it doesn’t pass, would be, uh, would subject us to all kinds of, uh, uh, penalties from the state and also denial of various grants. So I don’t know how much in your budget for this year, you’re already anticipating you’re gonna be able to get grants for that. And those grants may not be given if the, if the uh, uh, zoning vote does not pass. Correct.

2:10:11 So what the state had initially done before the, uh, court decision was we had some contracts that they were gonna award, but they knew that we were running outta time and that we were gonna expire in December. So they said, we’re not gonna sign the contract with you until January. So that way they could say to us, we’re not giving you any funds. So we don’t spend any funds until we have a signed contract. ‘cause that means those funds are coming. What I’m trying to say is when we, we get those grants, it’s reimbursable based, meaning we front the money up front, the town does paying for the expenses, then we submit reports to get that money back. So if we don’t submit reports and we don’t get that money back timely and that shows a deficit, the state reduces our free cash by that deficit And we don’t make the commitment on something

2:10:56 until we have the grant. Right? Yes. Okay. But you are assuming some grants in this coming year’s budget, but there’s no that you expect we’d would be able to get approval for, but we wouldn’t get approval for them if we don’t pass this zoning vote? There’s nothing in the budget I can think of that’s budgeted in anticipation. No. Unless you No. So, so grants or grants, we don’t, we don’t put them in the budget to budget for them. But what I think you’re saying is the fact that we’re fronting them, we’re paying for them upfront because we know that they’re going to be paying us back. So we don’t factor that in cash flow. Correct. Okay. So they can’t deny that. Not unless we Some point after the fact. Correct.

2:11:42 If we don’t vote on this zoning bill. Correct. That’s why they were hesitant to sign the contract until January. Okay. For future I know applications. Okay. I’m David Patton, by the way. Lee Street. Thank you. Hi, thank you. I know everyone wants to go home. Kristin Zaro 16 Merrill Road. I just have a question. I’m not a numbers person, but when I see the, you know, the surplus for the school budget is, I think Thatcher said we’ll cover, you know, the negotiations and contracts and then my understanding was that the roof needs to have an override, but it’s not a debt exclusion override. Is that what I’m saying would Be a borrowing? Right.

2:12:27 So that means that all town people are gonna need to go and vote on that roof. And if that roof does not pass and the funds aren’t there to fix it, does that mean that the funds that are in surplus for the school will go to that roof because we’re under the school? If it doesn’t pass, we wouldn’t, I mean, that’s the will of the legislator. That’s the, that’s the body, the, the voters’ will. Right, right. So, you know Right. We’d be in a real, real bubble, but, Okay. So I just would asking like as those, the funds that can just kind of be moved around and then the roof gets fixed and the raises don’t get paid. I don’t know how that works. That’s why I’m asking. Yeah, no, because it’s a borrowing, we don’t have the money to do the roof. Mm-hmm. So we’d borrow it and then, um,

2:13:13 but if the town decided, God forbid that we didn’t, you know, said, no, we don’t need a new, you know, we just said no to the project, you know, get left. Yeah. Yeah. And their facilities. Okay. Folks would probably be doing a lot of patching, I would assume. And, and it’s a two-prong test too. What? You gotta, thank you. Thank you. You gotta get two question, got two thirds voters at town meeting and then the ballot, so it could fail on either off. Jonathan,

2:13:48 Jonathan Hiller, Ralph Road. Just a quick question. We know that there’s a deadline for citizens to propose an article to be on the warrant to tell meeting, uh, with some of the debt exclusions that you might be proposing. When would citizens find out what those would be, you know, prior to tell meeting? Is there a deadline for, you know, the select board FinCon the town to share that information with us as citizens? Yeah, so actually I have a firm right now, an engineering and architect firm looking over Mary Elliot at the HVAC in the roof. So they’re gonna draft a report for me and give me an estimate. Once I have that, I’ll have the number, but right now I don’t have the number and the papers requested it too. So I told them once I get in a copy of the report,

2:14:34 I’ll give it to the paper as well. Jonathan, what’s your question? When can you find out what’s on the warrant? Uh, so when, so if you, you are going to put debt exclusions on town warrant. So perhaps, wait, the school Warrant School department is going to Income votes on every warrant with financial implications at the warrant hearing. It’s, it’s usually around April 10th. Okay. So, but Usually it could come out in meetings before that, but that’s the official day we vote our recommendation. Okay. So on or before April 10th? Yes. And if you look at our past meeting or two meetings ago, I don’t think it’s, we have, we have all those already listed. Jonathan, if you look, we, we have that at our past meeting. We discussed the the articles Yes. Says where all the select board Add, so the articles that we anticipate, right?

2:15:19 There’s submitted and put in, then there’s work to define the details of the projects and, and the cost and the bigger projects. There’s, there’s a process well in advance to get consultants to do an analysis and do that. The smaller projects, if it’s in-house. And so the, the real rubber hits the road, which is the phrase of the evening, is when the warrant gets published. Right. And there’s a deadline for when the warrant articles in all the detail. And that’s well in. And the purpose of publishing the warrant is to provide very adequate notice to the public as to what is on the, on the warrant. Okay. All right. Thank you. I just clarify too, the warrant it gets, it has to get voted at town meeting.

2:16:06 It has to pass like two thirds at town meeting and then it has to go to the full town if it’s any increase in taxes. So it’s not just town meeting that decides a Debt exclusion. Debt exclusion, yeah. Same. Yes. Yes. That Exclusion. Correct. Okay. Okay. Do we have anybody online? No. Okay. Online’s been quiet tonight. I just wanna thank everybody, um, for coming out tonight and, and, um, like nice to see department heads and employees and our teachers and, um, everyone who feels is very invested in town. And I wanna thank, um, Alicia and Thatcher, uh, who have put together the presentation and, um, you know, we’re always happy to answer questions, um, individually. Our, um, my, my email is our, our emails are our last name,

2:16:53 first initial, so it’d be noonan e@marblehead.org. Um, and I just will ask for a motion to adjourn them. So moved. Second. All in favor? Okay. Thank you. I’ll adjourn us at, what is it, eight 20.