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City Council Minutes 06-08-2020Finance & Property /Committee of the Whole FY21 Budget Meeting MINUTES — Monday June 8, 2020 @ 7:00 PM Remote Meeting on Google Meet/Hangout Called to Order @ 7:00 PM Guanci- Committee of the whole called to order at 7:OOPM Chair Flaherty: I would like to call Finance and Property to order 7:OOPM Councilor Rand and Councilor Guanci are on this Committee and here tonight. Also present: Councilor Rotondo, Councilor Ames, Councilor Frates, Councilor Feldman, Councilor Houseman (Absent Councilor Flowers) Budget Analyst Perry, Financial Director Ayles, Mayor Cahill, HR Director Teixeira, Animal Control Officer Lipinski, Veterans Agent Mr. Perinchief, Purchasing agent Mr. Gelineau, Solicitor Williams, building inspector Mr. Fredrickson and City Clerk Lisa Kent Mr Perry: We are facing challenging times. There is risk not knowing what the revenues will be. I believe the plan works. I have had questions, do we have a plan B? To Simplify we have a 2 fold plan. Expenditure and Revenues side we still have stabilization fund to tap in to so we can cut the budget if necessary on expenditures in area of roads and sidewalks few others in the DPW department.. We built a great reserve and we will use $1,059,898.stabilization that equals to 20- 25 employees not being laid off. It is an appropriate to use the stabilization fund. I check with the auditors and it will not affect our rating. Bottom line the budget maintains existing services, and we avoid layoffs, Increased School enrollment and have we have plan B, my concerns in building a budget you always look into the next year, so we must be flexible. Next year will be much more challenging. It is my recommendation to you to approve this budget as is. Guanci: Your honor the mayor we are going in to the Executive Budget. Mayor: Basic budget. We have a 36 -37 non -union employees we will not be asking for the money for the COLA. Hopefully in the near future we will be able to go back to it. Rotondo: Shift in salaries in Chief of Staff and Constituents Services Director. Mayor: The Chief of Staff position got posted we took a piece of that salary and moved it over to the Constituents Services Director because of the new hires for both positions due to the former Chief of staff leaving there was flexibility there because his salary was higher after the 6 years he was here. Rotondo - Summer learning program going up, will it add to your budget going up? Mayor: We served 180 kids last summer we have about 120 kids this summer, we stopped sending invitation because we are concerned about the ratio from kids to staff. We have to make a decision whether we will run this program again. I think we can handle it from this budget line, we can make it work, but we need to talk it through and make a decision later this week. Ames: I want to thank you Mr. Mayor this is a moderate budget and I think it invests in the city and it serves the public well. I would like some information on your unforeseen expenses line, I see it has gone down. Where do you think it will be spent or what will you use this money for? What have you spent it on in the past? Mayor: I am going to refer this to Mr. Ayles. Ayles: Historically this line item almost always requested to be half a million dollars, we have used for excessive snowstorms to unmatched Grants, it truly represents the unforeseen building a budget 13 months in advance. We always have to come before the Council to transfer money out of that line. Ames: Do you anticipate where the funds make go to in the coming year? Mayor: That's a good question, I think of all the years this is the most unknown year. Its possible revenues come in less than we had hoped, or if the Covid -19 surge whatever that may be. Possibly if we do not have the free cash, maybe the fire truck we hope to order, the HVAC over at the library. We just don't know what will happen yet. But those are some examples. Ayles-In general the Finance consist of multiple departments. You will notice we have some department with increases, For example the accounting department house all the cities insurance premiums which increase each year. In the IT department has an increase that we undertook pre Covid for a new state of the art seamless new system for licensing and permits. Other than that its minimum movement in the departments. Rotondo- Have you considered raiding our tax rate I%. In the event money does come in more than expected, where would that money go? Or less for that matter. Ayles: In terms of revenue we know it will vary. Even if we have positive revenue before we know what the motor vehicle excise revenue is, we will not know that for 9 months. We set a target but we will not know if we hit that target until then. If revenue from State aid comes in a lower reduction, we will decide by how much of a difference the number is. We have resources like the unforeseen account, reduce expenditures, like road and sidewalks that we wait till the end of the year, also we have new growth figures July 1, 2019 -June 30, 2020 we were humming along before Covid -19, so there are a number of different ways we can do this. In addition to stabilization reserves that we also have. If revenues come in over it goes into free cash, we don't lose it. The tax rate and the levy City of Beverly always goes to 2 1/2 percent, we have never gone beyond that. The value of the 2 1/2 percent equals to 2.7 Million dollars. If we went off the 21/2 2 percent we would have to cut an additional 2.7 Million dollars to the budget. If we would come off the 21/2 increase, we would have to find additional revenues. The real questions is the benefit to the tax payer versus the actual impact that it would have on the budget and the staffing issues, Houseman: I assumed the IT department increase was hardware, is it both hardware and software? Ayles: Almost all of it has been absorbed in the IT budget related to the Enterprise software solution, it is a database tool that all departments will benefit from. Houseman: Decrease in the cell phones, phones, and licensing fees is that from the new software? Ayles: In 2020 included a revamp of telephone systems, also to start migration with Central Square. The new phone system will not be on next year. The Cares Act will hopefully pay for that. Feldman: I am asking as I represent Ward 5 and I am asked all the time if we could go without the 2 'h percent tax rate. Do we have to go to the limit all the time? Is there a possibility to use the stabilization fund to give the taxpayers a tax break? Can we use money from there? Would that effect our Bond rate? Would it affect us long term? Mayor -If we raise 500,000 less in property taxes and believe the level of expenditures that we plan to make is the right level and we tap reserves. If we believe this necessary for services that we need and that would mean we would need that years going forward we would need that 500,000 from the stabilization would be going for 4 to 5 years. That would mean 2 2 %2 million draws from the stabilization fund. Keep in mind next year is going to be even more challenging. To go too deeply in the first year to the stabilization will put us in a tough spot for us in the future years. To keep the taxes at 2 %a percent is a reality of high services to our community. Flaherty: This year's budget is not as much a problem as next years will be, Can we sustain new monies going forward? We committed to the new Police Department pre Covid we voted for that not knowing what might happen in the future. We have new schools, we just can't have everything we might not see new growth in the near future, we have to look at the silver lining Beverly is in great financial shape, we are lucky we did not have to have an layoffs. Frates: I understand we are lucky we are in a good financial situation. But if plan A and Plan B don't work What about plan C, can we cut each department by 17% Ayles: We talked about this, but departments do not have the same budget line items. Some departments can be more nimble. Some departments have lines that need to pay salaries or health insurance for example, other departments have lines they can cut that would not affect their operations. 3 Rotondo- Can you use the Cares Act for the relief for the homeowners? Mayor: Cares Act no. We are applying as a region to get some business aid if we can get it is up to 400 thousand to help small businesses. We have 1300 businesses in Beverly that have 5 employees or less. So we are trying to help those businesses. There is Covid Check list that we can use the Cares Act on. We have a proposal for the state but we can defer to the list and use as we find out what is needed. We are looking at the list of school needs and City needs. Teixiera- I do want to point out that we made some reductions in the budget. One line is the meetings and training lines. We have decided not to renew some HR memberships to save some money. Rand: Regarding those lines, do you think you have money in your budget for training in diversity hiring practices. Can you use that line? Teixiera: That line is for training for the HR department. Rand: Do you have a line for this? Ayles: We can find something in the HR budget but we also have funding in the Mayors budget or in the unforeseen part of the budget. We have options on the table. Lipinski: Animal Control budget is pretty straight forward. WE cut out some of the out of state conferences because of Covd -19. We have zeroed out the part time line, we have Officer Callahan full time now. Those are the biggest movements that I point out. Perinchief: We have been able to cut the budget this year. Some events we have not had so money is coming back. Only added to the budget is work to the graves. To be in compliance we have to do this job. Being careful as we always are with our budget. Gelineau: My budget is straight forward a few reductions that I am comfortable with. We will still deliver the great services to the City. Houseman: Advertising line. Is there any issues having less money. Gelineau: Not at all I try to grab it from the department that is requesting the funds. Ames: How has Covid effected your office? Gelineau: Yes delivering the bids has been changed. It is virtual now. We have the mail sit for 24 hours before opening so there is challenges. Williams: As legal advisors to the City officials, boards and commissions, and to the employees. We review all city contracts, and many other things. There is a something that we can predict that you cannot predict what will happen and that is perfect example 2 Covid -19. We have all had to make many changes, and as you can understand with all the changes we have to support these departments with all these questions and new ways to do things. What they are able to do legally and what they are not able to do. Rotondo: Question on outside Council fees? Feldman: My question is also for outside Council. Williams: We use outside Council for things that we are not experts at. Some lawyers have specific to their practice of law that they do every day and they are better for that situation. It is in the Cities best interest for outside Council. The reduction is to tighten the budget, not for anything specific. We do our best to feel comfortable with our budget and for years we have not come back for more, we are comfortable representing the city with this budget. Ayles: That line item covers more than just labor Council we go to it for many other outside Council. Flaherty: The Charter review that we are looking at we may like to bring in outside council. What are your thoughts on that? Williams: Yes we can talk about this. We certainly can bring in outside Council if needed. Our Charter is sound it has served our city well. Perhaps go through it and see if there is questions or are there changes needed? I think we should start this in house first. Flaherty: I agree. Having someone who has more experience at one point during the process we keep Outside Council as an option. Guanci: Mr. Frederickson you are up Thank you for waiting. Frederickson: A few reductions due to staff turnover, we had retirements so bringing in new staff, comes with at a reduction in salary. Frates: What are you seeing out there during this Covid -19. Any reductions in permit revenue. The permit process is seamless. Frederickson: We have no reductions in permits but we do have reductions in inspections because we cannot go in to the homes. We have a great permit system that is mostly on line, complaints we get on line so that is seamless as well. Inspections by zoom as well we have done. Final inspections have been put on hold. BOA we are meeting virtually but we are putting things off until we can meet in person. Kent: We had some reductions in the budget as well. Houseman: Restoration to historical documents. I see that it is out of the budget CPC money available for that? 5 Kent: Yes we do have funds in the CPC from older funds that we will use, but I am comfortable with waiting for the older books to be restored. Using the CPC money is defiantly going to happen. Ames: How do you see the elections this year? Do you have a plan? Kent: Yes I do have a plan, and thoughts. I am trying to get through the budget season and then it will shift to the elections more. I am happy to announce the posting for an assistant has been posted today. I am very grateful and excited about that. So I will keep you posted as the plans for the election in our new normal happen. Ames: Thank you and I will be as much help as I can be for this city during that time. Rand: One question to the Cares Act. Do you have what you need in your office? Kent: As far as the cares Act we did have a list of what we may need. I did order the poll pads for the Early Voting and that will help very much to have less contact, less staff and less time during voting Motion to adjourn Finance & Property Roll Call Rand Guanci 3 -0 Motion to adjourn Committee of the Whole Roll Call 8 -0 ( Flowers) Motion to adjourn: Roll call Vote 8 -0 Meeting Adjourned at 9:20PM 2