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20240408 City Council Meeting Minutes CITY OF iEYUO F.GI-�Y+Cl.�K�ftdFFiCEEO City of Beverly Special City Council Meeting LON 1�4 2 q P 3-- 14 Public Meeting Minutes Monday, April 8, 2024, 7:OOpm City Council Chambers, 191 Cabot St. Julie Flowers, City Council President, called the meeting to order at 7:00pm. City Clerk, Lisa Kent, took attendance by roll call. Members Present: Hannah Bowen, Steven Crowley, Kathleen Feldman, Danielle Spang, Matthew St. Hilaire, Brendan Sweeney, Todd Rotondo, Julie Flowers Members Absent: Scott Houseman Feldman led the pledge of allegiance. Public Hearing Order#017-7:00pm-A request that the City appropriates the sum of Fourteen Million Four Hundred Sixteen Thousand Seven Hundred Ten Dollars ($14,416,710)to pay costs of building and systems construction, renovations or improvements at the Beverly Public Library main branch, including site improvements and the payment of any other costs incidental or related thereto, and that to meet said appropriation, the Treasurer, with the approval of the Mayor, is authorized to borrow$14,416,710 under and pursuant to G.L. c.44, §7(1) or any other enabling authority, and to issue bonds or notes of the City therefore. The Mayor is authorized to take any other action necessary to carry out this project, including, but not limited to, applying for, accepting and expending any and all grants that may be available to the City to defray costs of this project. The amount authorized to be borrowed by this order shall be reduced to the extent the city receives any grant payments on account of such projects prior to the issuance of any bonds for related project (continued from February 26, 2024 and March 18, 2024 meetings) Joanne Panunzio, 31 Old Planters Road, stated she is here as a private citizen but also has been a Trustee of the Library for over 20 years and stated the "new section" of the library is 30 years old. It seems every other Trustees meeting has something on the agenda regarding the HVAC problems. Four years ago, we learned that the compressors were working only at 50% capacity and the HVAC company determined the system needed to be replaced. The library is used in the summer as a cooling center and as a warming center in the cold. During the worst of the cold,the system could only be brought up to 54 degrees. Panunzio expressed safety concerns about the closure of the Winter Street entrance due to icicles falling and breaking glass. Sealing the building envelope is essential. We need to think of this as a renovation, not just an HVAC system. Panunzio spoke about the importance of preservation as well. Chair of Clean Energy Advisory Committee Jordan Stutt, 113'/2 Bridge Street, stated all Clean Energy Advisory Committee members who were present at a meeting last week voted in support of this. Stutt read comments from Fred Hopps in support of the project. When thinking of major projects in the city, it is always important to consider a zero pollution option. Thanks to the City's work to track down funding, it appears this is a clear climate and economic win for Beverly. Stutt urged the Council to support this project. Dean Berg, 45 Neptune Street, stated he is here representing Green Beverly tonight. There are two options, the option to upgrade the existing gas system or migrate to a geothermal system. Based on current numbers, the cost of geothermal is a little bit more expensive to build, but that cost is recouped in lifecycle and returns. Berg spoke about the cost of carbon. We as a city and as residents have a fiscal responsibility to look at this, and we have an environmental obligation. We have an obligation to future generations. Green Beverly supports the project. Gin Wallace, 34 South Terrace, requested the Council not approve this project as presented by the mayor. The library is assessed at$6 million. Wallace stated she has heard the City does not assess its properties at true values, so even guessing it is really more like $12-18 million, in what world does it make sense to spend $14 million on a building worth that much. Because the City is financially capable of taking on this debt, it does not mean it should. The senior center has needed an upgrade for years. Elementary schools are hitting their 25 year marks in the next few years. Wallace asked what debt the City is going to need to take on to raise the property of Lynch Park. This must be done with a plan and eye towards fiscal responsibility. Wallace asked if the City is planning to put this type of system in city hall and in the elementary schools, which will bankrupt the City. It seems the Council is being asked to vote yes or no, all or nothing, without thinking through what the impact will be in the corning years as other city buildings are looking for solutions. Wallace stated she thought the ramifications have not been thought through. This should be part of a plan of how all city buildings will be upgraded going forward. Wallace asked if the City is going to work towards sustainability leadership or jump in with the most expensive solution. Toni Musante, 12 Willow Street, stated$18 million is too much. Musante stated she would like to see a clear three bid system for replacing the system. There is a built in conflict of interest asking those looking for business to compare the costs. The city hall and McPherson projects will cause disruption as well as the bridge project, and closing the library for eight months is just too much. An HVAC system does not require closing the building. Musante asked what the plan will be for library staff during the vacancy. Other repairs can be done in phases. Musante asked why the roof was not replaced before. Now it seems like padding to justify the project. Musante said she feels all the hearings are after the fact only to placate the public and give the impression the public is being listened to. Musante stated she hopes the Council will take a stand since they were not involved in the process. Just because it is possible does not mean it is good to do. Musante stated her taxes have gone up 42% during this administration and her building's taxes have gone up 60%when Prop 21/z would have been more like 25%. Replace the system with a more efficient HVAC system. Jay Coburn, 30 Princeton Avenue, spoke in support of the project. There are a number of sustainability benefits including lower annual operating costs, a significant reduction in carbon emission, greater resilience to extreme temperatures and a longer life span of the mechanical components of the system. $18 million seems like a huge step up from the original $4 million for the HVAC replacement that this began with, however this higher cost seems to also reflect the work that makes sense for a library project in addition to the HVAC replacement. Old buildings need work, and it is hard to know how much until you start to get into it. When you start with the feasibility, you do not start trying to estimate every last thing. Coburn stated he understood the idea of surprising rises in costs with projects that involve old buildings. We could not replace the building for the cost of the project, so if we like it as a building, we are stuck with keeping it up. This is the way this process often works with the design of these projects in old buildings. The reported story of this project has sometimes made it sound like the cost of the geothermal HVAC was underestimated, but really what we have now is the full cost of what it would take to complete the project. The City has made important commitments to carbon reduction. Coburn asked if it can't begin with this building where there are literally millions of dollars in subsidies and incentives to help, how will the City get these kinds of things that are a part of the future and Beverly City Council Meeting Minutes—April 8,2024 page 2 of 12 policy. Coburn urged Councilors to move ahead with this investment that the City can be proud of over the longer term. The efficiencies of geothermal may give some breaks in the annual budget in the coming years when other costs are likely to be rising. The City will not have to buy as much fossil fuel or electricity because of an efficient plan at the library. George Gomes, 63 Bridge Street, stated it seems like there are two separate issues here. One is the project management oversight issue. This ballooned behind closed doors and got a lot bigger than anticipated when the Council did that first authorization. There is a little bit of a pattern here, and that is a conversation between the administration and the Council in terms of how oversight is being performed. There need to be more regular check-ins and ongoing dialogue. Getting more of that communication is a value to everybody. Gomes stated he can understand where the resistance is coming from but that needs to be set aside to look at this project specifically. The second issue is the actual project that is before the Council now. People are caught up on the geothermal thing, but it is one small part of the project at this point. The project as a whole is a good one, and it is an important, beautiful building that needs to be maintained and preserved. How to heat the building is a smaller policy conversation in the frame of the broader project that needs to happen. Gomes stated he understands the way the project came forward was not the best from the Council's perspective, but this is the project that is here now. Gomes stated he is supportive of geothermal and these first steps towards the City's climate goals. Wayne Miller, 5 Pasture Road, spoke in support of the project. The total annual operating cost of the distributed ground source heat pump system is 13.6% lower than in-kind replacement, possibly even lower depending on the assumed increases in utility rates of 4% or 4.5%. This would be aligned with the PlanBeverly master plan,the Resilient Together climate plan,the Library Board of Trustees, the Clean Energy Advisory Committee and Green Beverly. To act in a way contrary to the well-vetted opinion of these five trusted resources would be, at best, perplexing and, at worst, disrespectful. Miller stated he does not believe the City can justify a decision to replace the HVAC with in-kind fossil-based technology when there is a financially sound agreement to update the HVAC and future proof it for many decades to come. Flowers stated the Council received two emails from those who could not be here tonight. Flowers read an email from Kathy Penny in support of the project and from Jeffrey Silva not in favor of the project. A motion for a recess was made and seconded. A vote was taken, and the motion carried(8-0). The public hearing and meeting was recessed at 7:40pm. The meeting and public hearing were called back to order at 7:45pm. Flowers noted there was additional information received both April 4 and today that has been added to the order. Mayor Michael Cahill spoke to some information that has been clarified in the additional documents. What you will see is the comparable project cost for the proposed geothermal and a gas replacement system. In either instance, renovations are needed in addition to the HVAC system. You will see comparables of$9.5 million for geothermal and$9.4 million for gas. In either instance, we would do our best to not spend the owner's contingency and would want to turn it back. With the geothermal, we could turn back up to $1.5 million, which would make the project about$8 million. If it were gas, we would estimate about a$900,000 owners contingency which, if turned back, could bring the cost for a gas replacement down to $8.5 million. Cahill spoke about the life cycle cost savings. On the geothermal side,there is a slightly higher Beverly City Council Meeting Minutes—April 8,2024 page 3 of 12 equipment replacement cost and annualized maintenance cost, but, factoring that in with the energy savings,there is still savings year over year. The numbers are in line up front,then over time they are significantly less on the geothermal side. The direct pay tax credit the City could earn on the geothermal side is about$4.3 million and worth up to another million if using domestic content. Cahill gave an overview of the three projects that are being managed-the library, city hall and the youth center. With the youth center, we are going to use as much of ARPA funding as possible. We have worked hard to keep it where it needs to be. In addition, we have worked on a federal earmark for that project of an additional million dollars in federal money, so that project will come in without needing to come back to the Council for additional funds. Cahill noted that these three projects have been going through the early stages during a time of historical cost challenges like global supply chain disruptions and significant labor increases. The middle school was built in 2018 at a cost of$110 million, and today comparable middle and high schools are being built for over$400 million. Our commitment has been to build projects on time and under budget. With the library, we are committed to doing the project without long-term borrowing. Cahill stated he has committed that the administration will come forward looking for free cash to pay this project down so that the City does not need to borrow long term to do it. When it comes to city hall, the proposal that was on the table was escalating, so we have spent some time looking at that.Now we can renovate city hall and the old police station to provide the working environment and space that staff need,bring back inspectional services and health,build into city hall a working HVAC system which it has never had on the first and second floor, and build what the community needs in this building while still staying within the budget the city hall project has had all along. The plan is to have no long-term borrowing for the library, and we have planned to borrow for city hall all along. The City is on a healthy track with the capital plan and capital projects. Many healthy governmental entities carry some debt service. The mechanical engineer with B2Q Associates stated a new construction cost estimate was developed based on the design development package from February and the life cycle cost analysis has been updated. The new cost estimate is showing a reduction of approximately $700,000 compared to the schematic design effort that was previously estimated in the fall. A project executive from Consigli stated the design development is a more detailed process and led to more clarity, so costs went down. The mechanical engineer presented some slides showing the reductions were in the Beverly Room window and metal roof replacement and in the accessibility upgrades. If the City were to go forward with in-kind replacement, $377,211 of additional improvements such as dehumidification capability and improved zone level temperature control would still be strongly recommended. There also would be some specific scope options to align an in-kind replacement with what was already included in the geothermal option like repaving the parking lot($317,046) and adding the ability to connect a trailer generator for the full HVAC system to run during a power outage since the building is utilized as a heating and cooling center($30,756). The owner's project manager stated if there were an in-kind system instead of the proposed ground source, it would take approximately three months to redesign which would be an additional soft cost at this point. Director of Sustainability Erina Keefe spoke to the updated electric supply rate. In March,the City secured a new contract for three years at a rate of 12 cents per kilowatt-hour. The mechanical engineer with B2Q Associates showed a table with the comparison of Beverly City Council Meeting Minutes—April 8,2024 page 4 of 12 maintenance and replacement costs that factored in energy costs on an annual basis. The table reflected that the geothermal annual operating cost for maintenance,replacement and energy would be $198,839 and for an in-kind replacement would be $230,358. The updated life cycle cost analysis showed the ground source heat pump option as the lowest cost and with a much more significant value due to taking advantage of reimbursements and grants that are available. Cahill spoke about what a"yes" vote would do and what a"no"vote would do as laid out in the documentation received earlier today. Cahill stated he would prefer that there are not contingencies on the request. In talking with Councilor Houseman about this project, we as the administration did not intentionally hold things back from the Council but should have shared what was going on more quickly. It would be better to get in a rhythm of coming in on a regular basis to do an across the board project update. City Council Budget Analyst Gerry Perry reviewed the memo he sent to the Council. Perry stated he thinks it is time to take a vote on this. Perry stated one change to his memo would be that the memo indicates a downward change of$718,000; it is $702,000, so the new borrowing authorization would be $10,518,655. Perry recommended voting it at the figure. The Council can vote to bring down the dollar amount of the loan authorization and cannot vote to increase it. Perry stated that his professional opinion is that the City can do it and that the goal is to not actually borrow for this project. The City can stay inside its debt capacity and financially do all these projects. This is the same strategy that the City did with the new police station. Perry stated his view is that the City can afford to do this. Perry stated the City needs to do a better job communicating between the executive and legislative branches. Perry advised not to do a contingency appropriation on the loan order because it would make the loan authorization very difficult. If the Council feels they have to do a contingency, do it on the stabilization or free cash transfer. From a purely financial perspective,this is doable. There have been concerns expressed from a policy perspective such as if it is too expensive, if it is the right priority, should it be in- kind versus geothermal, whether the scope is appropriate and the challenge of finishing off capital projects in a timely manner. Those are policy decisions for the Council to make. Perry stated it is his recommendation to approve the loan authorization. Flowers opened it to questions from the Council. Sweeney stated it is frustrating to receive these updated numbers in the eleventh hour. Sweeney asked about the change to the accessibility upgrade cost estimates. Sweeney stated his understanding is that those requirements are set by state law and asked if anyone can speak to what changed there. The mechanical engineer stated when the accessibility compliance engineers identified issues, then the decision had to be made of what to include and where to go for variants. The initial estimates were based on conceptual ideas, and now that the concepts have been incorporated into the design documents,that is more clearly defined. Bowen stated that on the updated life cycle cost analysis the calculation of energy cost savings escalates the cost per year based on what would be paid for electricity and gas and asked if the costs for maintenance and replacement escalate similarly. The mechanical engineer confirmed and stated that different escalation rates were included. For electric and gas, we looked at past bills and for maintenance and replacement we used the standard inflation escalation rate over 27 years, so they are slightly different, but it is incorporated. Beverly City Council Meeting Minutes—April 8,2024 page 5 of 12 Bowen stated the way this was presented initially, everything was compared back to baseline to show that whatever is done will be better. Since the project expanded, that baseline has dropped out and everything has been compared to the in-kind replacement. Bowen said she hoped for an explanation of when that dropped out or if it still exists somewhere. It seems there would still be some efficiency gain to a new in-kind replacement compared to today's system. It would change the conversation. The mechanical engineer with B2Q Associates stated the in-kind replacement represents what is required by code for the new system. It could not be replaced with what is there and be to code. The energy savings would be marginal which is why the in-kind is used as the new baseline. Bowen asked about the sunk costs that would be lost because of how far down the road this has gotten if changes are made now to the design of the project. The owner's project manager stated it would take about three months and cost$362,279 to get the in-kind system to the design development level equal to where it is now. Cahill stated if the geothermal system and renovations are approved, the effective cost to taxpayers peaks at$9.5 million and it is being worked down from there. Bowen asked how much lower what was spent could have been six months ago. Cahill stated at the point in the fall where the numbers came in higher, we would not have been ready to make a recommendation at that point. We would have been needing to spend additional money in order to get to a recommendation. The owner's project manager stated the number in May was the design team's estimate and then September was the actual cost estimate at a higher confidence level. Bowen stated between May and when the RFP was prepared for bringing on a construction manager she was still holding in her mind a placeholder for the $3-5 million. It would have been helpful to be able to weigh in on where that fit in the overall picture of capital expenditures and bring those questions for discussion and deliberation. Bowen stated there are still a number of other projects in the capital expenditure plan that are slated to take place within the next five to ten years, many of which say they will rely on free cash. This plan for the library would take $3 million of a seemingly smaller pool of free cash next year. Bowen asked where the other projects are in the trade-off process and how that impacts where $1-2 million savings on this project could go. City Finance Director Bryant Ayles stated there are a lot of projects identified through the capital expenditure plan. We have taken feedback from the Council over the years on how to identify potential projects and tried to incorporate everything that is significant enough to at least get on paper and develop some rough plan for possible funding options. That said, we cannot possibly do everything in the capital expenditure plan in the ten year time frame that it covers; it will be some portion of that. As for the free cash usage,we have been very successful over the past few years with addressing these medium and small capital projects. That is why specific projects within that plan are identified as looking to free cash and or other sources whether it be grants or other options to support those. As for the $2-3 million specific to this project in FY25, we hope to not use that much. We are going to do everything possible to turn back that owner's contingency. If that happens, and if we qualify for the extra addition to the IRA,we could see not coming for any free cash in FY25. It is a range for the worst case scenario, and we do not anticipate needing the full amount. Feldman asked of the $6,833,000 how much of the other funding sources are guaranteed and Beverly City Council Meeting Minutes—April 8,2024 page 6 of 12 secured. Assistant Director of Finance Amit Chhayani stated about$2 million is secured; the earmarks have been allotted. The National Grid HVAC rebate ($544,500), rebate for the management system($28,130), weatherization rebate ($86,633), and the IRA $4.3 million are all expected. Cahill stated about five people had a piece in coordinating all of this funding. All three earmarks and the Green Communities grant are in the City's accounts. Keefe stated the rebates coming from National Grid can be filed for after the work is done, but they are secured. The City has approval letters for rebates for the weatherization scope and the building controls (the management system). With the HVAC rebate, the City will have a commitment letter once the package is finalized, but that is ours because we are eligible. The rebates are secured. The use of unbilled credits is money the City has, and the same with the street light incentive payments that can be applied to the project. Ayles spoke about the IRA tax incentive. The City consulted with Deloitte, a national tax company of experts in this field,to review specific costs and see what costs would be eligible. Those funds would not be received until the City files taxes for tax year 2024. St. Hilaire asked for confirmation that the IRA money is not in the City's account and that this is a projection of what is expected. Cahill stated this direct payment can be earned. Deloitte has walked through the City's proposal and given a range in what can be expected. This is an investment credit. They do this all the time in the tax paying world. Direct payment is new because for the first time ever it is for governmental and nonprofit entities. The underlying tax code governs a lot of the mathematics of it. Deloitte has given a range of what we can expect to earn, which is $4.3 million or more. In terms of whether we should be confident in it, the City received a letter from the U.S. Treasury recently which documented the over 500 eligible entities who have filed or pre-filed for over 45,000 eligible projects. Roughly half of the filers are taxpayers and roughly half are government and nonprofit. Rotondo asked what earmarks are eligible for the in-kind system. Bowen asked if the National Grid credits are city revenue that could go to other things. Bowen stated she was thinking about what the tradeoff is of spending available funds on this project versus others. Bowen asked what restrictions there are on those. Cahill pulled up a spreadsheet to respond to the last question from Councilor Rotondo. Cahill stated there would be $6.8 million in funding for a ground source system and of that$1.3 million can be applied to any project, including an in-kind system. Cahill stated the City overpaid National Grid $295,000 for LED street lights a couple years ago, and that money has just come back. The other pieces are a buildup of credits. Keefe stated the $723,000 listed in bill repayment was an excess of credits generated from one of the City's solar projects under the net metering program. The City is allowed on a one-time basis to transfer accrued utility credits to a specific account and use the credits to pay off an energy efficiency project. These are only applicable to projects that generate electric savings and cannot be applied to another function. As long as the weatherization and building controls are done, it can be applied to this project. Bowen asked if the City were to do weatherization or HVAC improvements at the senior center if that would be eligible or if it is already tied to this project. Beverly City Council Meeting Minutes—April 8,2024 page 7 of 12 Keefe stated it could apply to any project that generates electric savings. The credits have not been transferred to the library project yet but the City has gotten pre-approval for this specific project. Keefe said the City could ask but does not know what National Grid would say about using it for a different project. Sweeney said it sounds like through the purchasing agreement from the solar panels, the City has generated an excess of credits that are not being used towards current electrical usage. Sweeney asked if those credits could be transferred to a building that has already been built, such as the police station, to pay down whatever the delta is for current electrical costs until it is expended. Sweeney asked if these energy credits have to be used in a transfer or could be put to use with an existing municipal building. Keefe stated they do not need to be used for a transfer and do not need to be applied to an energy efficiency project. The police station is already slated to receive credits to pay off a substantial portion of electricity usage. Sweeney asked if there are accounts where this $700,000 can be spread out to pay the bills of what electricity the City is using. Keefe said, generally speaking,the credits can be used no matter what. The City has over 160 electric accounts, and every six months or so how many credits which accounts are getting is rebalanced. Sweeney asked if the City will lose these credits at any time. Keefe stated there is not a penalty but the City will continue to generate credits and should use their value. Cahill stated there is a buildup of credits to the point where the City has more credits than can be used on a monthly basis. The City is preparing an application to DPU to take one of the PPAs [Power Purchase Agreement] and allow National Grid to change those credits to direct payments to the City. It has been done in other cases but will not happen overnight. Sweeney asked if the options are to transfer through direct payments towards one of these two library projects or to hang on to them and utilize them to apply them to electric bills across the City. Ayles stated the second is not as much of an option. It would take a very long time to use those credits. When the City receives credits,they are received at the market rate. The City is paying a reduced rate, so a kilowatt of credits pays for three or four kilowatts of usage, which created a ballooning of these credits. Crowley asked where the number of essentially $11.6 million for an in-kind came up. Cahill stated the bottom line is that an addition was poorly built 30 years ago. The building has not worked well in 30 years. We believe this geothermal proposal is a vastly better system than a gas system. It will deliver consistency for all building users. This project is significant and needs to be. At the same time, on the geothermal side with all the resources that have been brought to bear, it would be a waste to not use them. Crowley asked if$11.6 million includes the additional costs or if it still has to be designed and could potentially go lower. Cahill stated if a proposal on gas was brought forward, it would still need other improvements, such as the building envelope. That is in those numbers now. Beverly City Council Meeting Minutes—April 8,2024 page 8 of 12 The mechanical engineer stated the in-kind replacement was estimated based on the scope narrative and is not designed to the same level as the ground source options. Spang asked about the satellite library space and if that would apply to all options. Library Director Allison Babin stated the library is fortunate to have the farms branch and the bookmobile as other service points. The City is looking at the Rent-A-Center space as a temporary facility. The library would operate with some collections out of that space and would likely increase the amount of electronic resources offered in that particular year, for example, more e-books and more audiobooks. The library would be looking to still have hours for the public but probably would not have space for programming and would look at other facilities around the City to hold them. A project executive from Consigh stated that trying to do the ceiling work piecemeal had a lot of safety concerns. The library would have to be shut down for both options. Bowen asked how committees have been asked to participate in this process, if at all, such as the Clean Energy Advisory Committee and Library Trustees. Cahill stated as a routine matter, both Ms. Babin and Ms. Keefe report to those committees at every meeting and have been doing that for a couple years. Keefe stated the City could do better and has heard that feedback from committees. Keefe stated we are taking it as a lesson learned and respect the experience they have and the work they do. Joanne Panunzio, a library trustee, stated the project first started as an HVAC system, but it was not too much of a surprise that other renovations would be needed to get it up to standards. The public hearing was closed and the item was referred to Committee of the Whole. St. Hilaire spoke about weighing the limited resources. St. Hilaire said that $18 million is too much to replace an HVAC system. St. Hilaire stated he was having a hard time having faith in the changing numbers. St. Hilaire stated that for himself the IRA is an area of risk and he also has concerns on the maintenance projections and energy savings projections. St. Hilaire stated he thinks the City should replace the HVAC system in the least costly way. Feldman stated this would be a good financial investment in the kind of technology the City would want to invest in. Feldman said she would not want the City to purchase an in-kind system and then in a few years have it no longer meet code. A motion to call the question was made. The motion was seconded. A vote was taken, and the motion failed(1-7, Rotondo in favor). Sweeney stated he is frustrated with how the project was not properly scoped. When the initial report was received in June 2022 that led to the City appropriating the $2 million for design, there should have been even a ballpark figure or better understanding at that time that this would not only be an HVAC replacement but a much larger building project. That changes how this project is considered. Sweeney stated he appreciates the commitment to improve communication going forward. Sweeney expressed his concerns with this proposal including the dependence on a large amount of federal Inflation Reduction Act tax credits,that other projected savings for maintenance, reduced electrical usage or other energy costs savings would not materialize, and that the City will not have the financial capacity to complete pressing capital projects that are higher priorities in regards to the order these projects are tackled. Nearly two years ago money was appropriated for the work at the fire station and that funding will not go as far now as it would have. In committing this funding to the library before completing city hall or the fire Beverly City Council Meeting Minutes—April 8,2024 page 9 of 12 station,the City may not have the financial flexibility necessary to address increases in scope. Sweeney suggested as a path forward putting the necessary funding toward roof improvements, envelope work, ice dam repairs and accessibility by applying the earmark funding or transferring from the debt stabilization fund to take some actions while still not tying the City up financially. The federal IRA tax credits do not expire until 2032, so if the library can survive with the current heating system for the next two to three years,then the City would have more time to carefully consider the HVAC project while tackling some other projects and without missing out on some of these grants and incentives. Sweeney suggested if the Council ultimately votes against this proposal, that rather than going to a gas in-kind replacement,the City take a step back on this project until a more thorough review and come back in two years while working on the fire station and city hall in the meantime. Spang urged fellow Councilors to vote in support of the loan authorization of$10,518,655. Spang stated she appreciates the concerns about priorities and opportunity costs. Spang stated the library should be prioritized. A lot of members of the public use the building. The city relies on the library for meeting space for boards and committees. It provides a lot of programming every week for children and adults. The library is one of the last indoor spaces where you can go with young children without paying an admission fee. The administration worked to obtain funding that would not apply to an alternative. There is a lot of opportunity cost if we do not take advantage of those funding sources. We are all aware of the burden of electrifying the grid, and it is rare the public gets to participate in the benefits of electrifying the grid. This presents an opportunity where the general public would benefit. Bowen stated there are a wide variety of competing interests at play here. Hearing all the different perspectives has been really helpful. Bowen stated she has heard the different ways to improve communication and management of capital projects and has not seen those efforts pay off yet. This process has given a lot of great insight. This has taken since January, not because of deliberation, but because some questions were not readily answered and that has taken time. Bowen stated she appreciates Councilors sharing where they see those competing values. It is important to be honest about those trade-offs. The library is still a relevant place that is evolving and continues to have value and should continue to be invested in. Bowen stated she would like to see this broken down into pieces in order to accelerate the weatherization and energy efficiency. Bowen said she would be happy to support those while there is funding available. The HVAC system itself does need replacement. Bowen stated she would like to see it replaced with ground source heat pumps if there is a way to get the cost in line given the competing interests. Bowen stated she would like to see a discussion about where in the capital expenditure plan and strategy this fits. Bowen expressed concerns about the senior center and whether there is a strategy for funding necessary work there. Bowen also expressed concern about the fire station as well as the upcoming school roofs and public services spaces. Bowen said without those plans in place, locking the City into this size of a liability does not feel right yet. Bowen said she is not confident approving the project in its current form, while understanding that this work needs to happen. Crowley stated he believes in getting better and reducing our carbon footprint. Crowley stated it is not that he does not want this to happen but that he does not think the timing is right for it to happen. There are some more immediate needs. Crowley stated he is excited for the McPherson Center and the Central Fire Station is really necessary,then the City can move on to the library. A motion to appropriate the sum of Ten Million Five Hundred Eighteen Thousand Six Beverly City Council Meeting Minutes—April 8,2024 page 10 of 12 Hundred Fifty Five Dollars ($10,518,655)to pay costs of building and systems construction, renovations or improvements at the Beverly Public Library main branch, including site improvements and the payment of any other costs incidental or related thereto, and that to meet said appropriation,the Treasurer,with the approval of the Mayor, is authorized to borrow $10,518,655 under and pursuant to G.L. c.44, §7(1) or any other enabling authority, and to issue bonds or notes of the City therefore. The Mayor is authorized to take any other action necessary to carry out this project, including, but not limited to, applying for, accepting and expending any and all grants that may be available to the City to defray costs of this project. The amount authorized to be borrowed by this order shall be reduced to the extent the city receives any grant payments on account of such projects prior to the issuance of any bonds for related project was made and seconded. Flowers stated that she herself has been back and forth on this project. Flowers referred to the two layers that Mr. Gomes articulated earlier. There are two layers of what is happening here. One is the Council articulating frustration with how information came forward or did not come forward and how that might be addressed. Then another layer is this particular project before the Council and what the library needs. Flowers stated it was important for her to hear a few things before deciding. It was good to hear from the Library Board of Trustees, receive the recommendation from the Clean Energy Committee, and hear the City Council budget analyst's final position on this matter. Flowers stated the final memo the Council received from Mr. Perry gave her confidence that the City can manage this project among others. One thing that is unique about this project is the many ways to defray the costs through initiatives. With this project, federal tax money could come back to benefit people living in Beverly. Federal tax money is paid whether it comes back to the community or not. The City may not be able to do that on a regular basis, but this is a way to bring it back to Beverly. Flowers stated she has been thinking a lot about the Resilient Together plan,the recommendation from the Clean Energy Committee and the input from Green Beverly, the Library Trustees and Mr. Perry. Libraries are among some of the last great equalizers in our society. Flowers stated that for her this is as much about equity and access as it is about sustainability. The library is a resource that goes beyond a building, but without a building the library cannot provide everything it is designed to provide. The library is a warming or cooling space and a place to go when folks lose power. It offers a public meeting space for all kinds of individuals in the community. Flowers stated she also thinks of the access to Wi-Fi and internet for those who do not have access, including children who depend on it for school. The library is one of the few places downtown where you can go if you do not have access to a bathroom and you can use a restroom without having to spend money. The library has created a library of things which both meets a sustainability goal and provides access to people, holds fix-it clinics, and still provides access to print text. Flowers stated considering all of those things has caused her to decide to support Order#017. Bowen stated she wanted to be able to hear from everyone and would prefer to hold this vote to the next meeting for Councilor Houseman to be able to speak on this. Bowen stated she is not looking to open up the conversation further and it does not sound like a week's delay will change the dynamics of the project or the amount of information available. Bowen stated she would like the public to see all of the Councilors weigh in on this. Sweeney recognized the importance of hearing from everyone and stated he would not be present at the next meeting. If at this point the order needs a two-thirds majority to pass, and it seems it is not going to get that vote either way, there is value to voting in order to continue on with other business and so the administration can begin planning. Beverly City Council Meeting Minutes—April 8,2024 page Hof 12 Bowen stated it is helpful to know it also would not be a nine-person vote next week. Bowen stated she would be willing to go ahead with the vote and will leave it as a comment rather than making an objection and holding the vote. It is important that we all have that opportunity. Bowen asked that Councilor Houseman have the opportunity to comment on the project at the next meeting if possible. A vote was taken, and the motion failed(3-5, in favor- Feldman, Flowers, Spang; opposed- Bowen, Crowley, Rotondo, St. Hilaire, Sweeney). Communications from His Honor the Mayor Order#116-2024 Capital Expenditure Plan pursuant to the City Charter Referred to Finance and Property. A motion to adjourn was made and seconded. A vote was taken, and the motion carried (8-0). The meeting adjourned at 10:26pm. Beverly City Council Meeting Minutes—April 8,2024 page 12 of 12