2010-06-01
Regular Meeting
Page 1 of3
Beverly Meeting Minutes
From: Fran MacDonald [fmacdonald@beverlyma.gov]
Sent: Monday, June 07, 2010 11: 17 AM
To: minutes@beverlyma.gov
Subject: 6/1/10
Special Meeting
Beverly City Council 7:00 PM June 1, 2010
Roll Call: Councilors Present: Judith A. Cronin, Patricia A. Grimes, Paul M. Guanci, Kevin Hobin, James F. Latter,
Donald Martin, D. Wesley Slate, Jr., Maureen Troubetaris, Michael P. Cahill
Pledge of Allegiance to the Flag: Led by Councilor Ttroubetaris
Public Hearings and Public Speakers:
Communications from His Honor the Mayor:
# 113
June 1, 2010
Honorable City Council
City Hall
Beverly, MA 01915
Dear Honorable Council:
I present to you this evening the proposed FY 2011 general fund operating budget for the City of Beverly. As it must be by law,
this budget is balanced despite the challenges presented by a further reduction in Local Aid, now $2,400,000 less annually than
what was received three years ago. On top of that this budget has had to recognize and absorb very significant health care and
pension cost increases.
While the operating budget appears at first blush to increase by only $300,000, adjustment for a change to both revenues and
expenses brought about by action taken at the State level shows that total net new money for the FY 2011 operating budget is
approximately $1,900,000. But the sobering fact is that this entire sum is almost exactly the same as the total cost increases in
health care and pension funding. Said differently, health care and pensions will together consume all the new funds available for
FY 2011 even when including the $440,000 in revenue anticipated from the recently-adopted meals and lodging excises.
Despite all these challenges, the budget before you represents essentially a level services budget on the City side while
providing the school district with $1,050,000 in additional City funding. I will comment further on both city and school services
later in this message.
I do wish to emphasize that this budget is extremely lean with no reserves for unforeseen events and no salary increases for
non-union employees. There is good reason, however, to expect receipt of some non-budgeted funds during the fiscal year.
Such funds could then be appropriated by the City Council as needed. We have also decreased the contribution from the
General Fund to the Sanitation Enterprise Fund by $250,000 which will decrease the balance in that account. Concurrently, we
are confidently negotiating a drop in our per-ton tipping fee which will have a favorable impact on this account. This impact has
not been budgeted.
The budget as presented on the city side does take advantage of attrition. From the viewpoint of the citizens of Beverly, they will
6/14/2010
Regular Meeting
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see the libraries open the same hours as now with similar staffing. Police presence in the streets will be unchanged. Fire Department
response will be unchanged with round the clock manning and response from each of three stations. Public services will also continue
with the same resources as in FY 2010.
You have no doubt heard that the school system plans to make reductions in personnel for FY 2011. I believe it is important to repeat that
when we made the decision to move forward with the High School renovation project it was agreed by the School Committee, the
Superintendent, the Mayor and the City Council that future budget increases in the city's contribution to the schools would be limited to 2 ~
to 3 % annually. We have met this commitment with $1,050,000 in additional city funds for FY 2011. This decision was made recognizing
the increased debt service requirement brought about by the city's share of the $80,000,000 reconstruction project.
It is worth noting that the High School project is proceeding well. We expect to occupy the new academic wing in November of this year,
although other work will continue into calendar year 2011.
For context, it is important to comment on the year soon to end. At this time, I can tell you that we will end the current fiscal year with a
balance between revenue and expenses, although both factors may be below budget. It is also important to note that we were able to
refinance $24,200,000 in existing debt at lower interest rates which will save us money each year over the next decade. In FY 2011 that
savings will be in excess of $250,000. We also were able to borrow the first $20 million for the High School project at a 3.90/0 interest rate
rather than the 50/0 originally estimated. Lastly, the State of Massachusetts allowed Beverly and other communities to amortize their
respective school projects over twenty-five years versus twenty. This change makes sense given that the projects are designed and
constructed for a fifty-year life.
I would also like to add that while FY 2011 will be a most difficult year, I am pleased to advise you that FY 2010 saw building permits
exceed budget by nearly 2 to 1 in value. The translation of these permits into construction bodes well for new growth.
The fast rising cost of fringe benefits, especially health care, is clearly the most significant problem facing all communities throughout
Massachusetts and beyond.
Last Friday, the Massachusetts Senate passed a bill with some positive features aimed at granting communities more say in controlling the
cost of health care. The current version of the bill now heads to the House of Representatives. From the viewpoint of mayors and town
managers, the bill as written also contains several very undesirable features. Time will tell how the bill looks when it finally becomes law,
but several things seem likely. One is that it will be a local option law based on a City Council vote and another is that it will have no
impact on next fiscal year. I have been closely involved in this process through the Massachusetts Municipal Association and I will stay
close. I will keep your Honorable Council apprised as future developments occur.
I would like to think that some help will be forthcoming in controlling health care cost increases in future fiscal years beyond this coming
year.
Very truly yours,
William F. Scanlon, Jr., Mayor
Refer to Finance and Property
# 114
June 1, 2010
Honorable City Council
City Hall
Beverly, MA 01915
Dear Honorable Council:
Attached for your review is a letter from John Dunn regarding bids for the lease/purchase of school busses for the School Transportation
Department. Because the lease/purchase plans exceed three (3) years, Council approval is needed to execute the contract.
I respectfully ask that you consider this request and approve the terms of the contract.
Sincerely,
6/14/2010
Regular Meeting
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William F. Scanlon, Jr. Mayor
Refer to Finance and Property
#115
Call for Special Meeting of June 1, 2010
Reports from Committees:
# 114
The Committee on Finance and Property / Committee of the Whole to whom was referred the matter of Lease/Purchase of School Buses
for School Transportation Dept. have considered said matter and beg leave to report as follows, to wit:
Submit the accompanying order and recommend its adoption
Ordered: That the City Council approve the request of the Mayor for lease/purchase of school busses for School Transportation Dept.
Order read once and adopted
#110
The Committee on Legal Affairs / Committee of the Whole to whom was referred the matter of Application for Lodging House License
North Shore Veterans Counseling Services, Inc. have considered said matter and beg leave to report as follows, to wit:
Recommend the license be granted
Pending proof that the ownership has been transferred and that payment of 2009 Fire Watch has been
received
Order read once and adopted 9-0 Vote
Meeting Adjourned: 7:37 PM
Attest: Kathleen P. Connolly
Asst. City Clerk
6/14/2010