2012-05-29Special Meeting of Beverly City Council 7: 00 PM May 3 0, 2006 Page 1 of 4
Beverly Meeting Minutes
From: Kathy Connolly [kconnolly @beverlyma.gov]
Sent: Thursday, August 16, 2012 7 :01 PM
To: pguanci @beverlyma.gov; sdullea @beverlyma.gov; jsilva @beverlyma.gov;
mtroubetaris @beverlyma.gov; wslate @beverlyma.gov; Jim Latter; shouseman @beverlyma.gov; Don
Martin; Brett Schetzsle; minutes @beverlyma.gov
Subject: SpecMeet 5- 29- 12.doc
Specia[Weeting of Beverly City Council
Tuesday, :May 29, 2012 - 8:00 "f
Roll Call: Councilors Present: Paul Guanci, D. Scott Dullea, Jason C. Silva, Maureen Troubetaris, D. Wesley Slate
James F. Latter, Scott D. Houseman, Jr., Donald Martin, Brett Schetzsle
Pledge of Allegiance to the Flag: yea by Councilor Martin
Communications from His Honor the Mayor:
#122
Call for Special Meeting of May 29, 2012
#123
Dear Honorable Council:
BUDGET MESSAGE
It is always useful to begin the development of the budget for the upcoming fiscal year with a careful review of the year
soon to end which necessarily acts as a foundation for the year to come. Fortunately, it is true to say that both years represent
substantial progress in making Beverly an even better city. It is no secret that our city, Beverly, is a special place and that our
common goal is to make Beverly even more special.
For the year to end this June 30t the City will once again spend slightly less than what was budgeted while taking in
slightly more revenue than budgeted. This positive outcome has been aided by building permits bringing in nearly $1,000,000
vs. a budget of $500,000 as Beverly continues to demonstrate that it is a desirable location for appropriate economic
development. Increased collections of overdue taxes have also increased revenues. On the expense side, the mild winter
certainly helped as did careful control of other expense spending.
A significant event in the past year was the essential completion of the high school project on budget. The High
School recently received a major award for excellence in construction from the New England Chapter of the Construction
Management Association of America. It is worth noting that real estate values throughout the City have been enhanced by the
successful outcome of the High School project. Another very important event was the passing of legislation by the State which
slowed the rise in municipal health care costs. During my time as your Mayor, the cost of municipal health care had risen from 7
cents on each General Fund dollar to 17 cents, thus requiring a significant diversion from other important needs of 10 cents on
every dollar. This is true despite the increase in the percentage contribution of employees and retirees to total health care costs
from 10% to 20% and despite the increase in co -pays from $5 to $15. The new legislation introduces still higher co -pays, co-
pays on services which formerly had none, and also for the first time, introduces annual deductibles. The City insures
approximately 3,000 people including over 700 employees who subscribe to municipal health insurance; 2/3 of them work for the
schools, the other 1/3 work on the city -side. Many of these employees have dependents. On top of these numbers, there are
approximately 1,000 retirees and dependents. When all these groups are added together one arrives at a total of 3,000 persons
who are provided health insurance by the City of Beverly.
8/23/2012
Special Meeting of Beverly City Council 7: 00 PM May 3 0, 2006 Page 2 of 4
The good news is that the overall cost to the City in Fiscal 2013 for active and retiree health insurance has been reduced by 10%
from the budgeted amount in Fiscal 2012. This is due primarily to the above mentioned plan design legislation but also to an overall
reduction in total subscribers and a migration of retirees from active plans to Medicare supplement plans. This total reduction of almost
$1.7 million has had a very positive effect on both the General Fund and the School Department budgets.
In trying to have a perspective on the overall city financial situation, it is important that every Beverly citizen note that Local Aid
from the State is the second largest source of revenue to the City, second only to real estate taxes, and that this annually received sum
has been reduced over the past decade from approximately $14,800,000 to $11,300,000 per year, a decrease of $3,500,000 per year due
to the difficult economy which has lowered State revenue collections. The combination of increased health care costs and decreased local
aid revenue has put a tremendous squeeze on annual municipal budgets. Fortunately throughout this entire period, the City has managed
to generate appropriate new growth averaging over $1,000,000 each year without which our service levels would have suffered greatly and
without which we could not have afforded the major high school project.
For Fiscal 2013, the budget you have received tonight shows revenues and expenses of $103,451,315 up 3% from last year.
Our direct funding of our school system continues to be by far the largest single outlay at $46,854,000 including Chapter 70 Local Aid. We
are pleased that the budget proposed by the Senate this year shows a modest increase in Chapter 70 School Aid of $171,600 as well as
the commitment to again fund what had been described as a one -time distribution of Unrestricted Aid in the amount of $357,138.
A bright spot, no pun intended, in the budget is a savings of $301,000 which will repeat annually by having the City purchase our
entire street light population from National Grid. We expect to maintain the lights internally at a cost of about $75,000 annually. The
$225,000 annual net savings will go a long way toward paying the debt service on the badly needed construction improvements to City Hall
and the Main Library which will get underway in 2013. We have budgeted for both the reduced amount of the monthly bills from National
Grid for the streetlight rental component and the estimated $110,000 for the actual purchase of the lights.
Salaries for city -side employees are shown in the budget at the same amounts for FY 2013 as was budgeted in FY 2012. As
union contracts are settled, salaries will be changed as appropriate. For non -union salaried employees, no one of whom has received a
raise for two full years, a reserve for salary increases of $60,000 has been proposed. There are twenty -nine individuals in this group.
For the new budget year, we have transferred municipal electrical system operating responsibilities requiring physical labor to
the Public Services Department from the Inspection Department. We will also by the start of the fiscal year have transferred all parking
meter responsibilities from the Police Department to the Engineering Department. With regard to parking, the RFP for the MBTA
Commuter Rail Parking Garage has been issued to three sizable companies which qualified as Construction Managers in this first -ever
MBTA Construction Managers at Risk project. The project is on schedule for groundbreaking in October of this year. This project will have
a powerful impact on our downtown's vitality. At the same time, the long awaited Rantoul Street reconstruction project which calls for
backside of sidewalk to backside of sidewalk from Gloucester Crossing to the Beverly -Salem Bridge has finally reached close to the top of
the Statewide Transportation Improvement Program, better known as TIP. The TIP calls for construction in Fiscal 2014 just one fiscal year
away. This project when coupled with the commuter rail parking garage should lead to a renaissance of Rantoul Street and desirable
economic growth.
You will recall that during the fiscal year we submitted an extensive Statement of Interest regarding an upgraded Middle School
to the Massachusetts School Building Authority (MSBA). We have received verbal feedback that MSBA will give us the go ahead to
perform a feasibility study late in the new fiscal year. I translate this signal to mean that the State will agree to pay approximately 60% of
the cost of the new school. We continue to expect to complete the school project in time for the 2017 school year. The completion of the
Middle School project will result in a totally modern school system for the City of Beverly, something we can all be proud of.
During the upcoming fiscal year, the eagerly awaited Regional Dispatch Center will come on line. Beverly is the largest of the
communities being served by this project which will offer both improved service and savings in both the police and fire departments.
Another important element of the budget is the recent acceptance of Beverly by the State as a Green Community and the
granting of $206,000 to the City to make energy saving improvements to our schools and Main Library over the next year. The Green
Community designation will severely limit our ability to recycle aged police cars within our Public Services Department, a practice which
was cost effective. Instead, we will be purchasing smaller fuel efficient vehicles for use by City employees whose jobs require a city
vehicle.
A major change in the budget is the creation of a stabilization fund to be budgeted at $200,000 for FY 2013. Over the years as
we have constantly improved our balance sheet and received eight increases in our bond rating, we have constantly been funding
infrastructure improvements, most notably to our schools. Now it is time to specifically set aside some rainy day funds for just that reason.
We have also been able this year to put a more substantial sum into the Reserve for Unforeseen which is carried in my own budget. The
recommended sum is $432,062 for next year but note should be taken that improvements to our phone system and the purchase of
smaller fuel efficient vehicles and the purchase of improved permitting software will need to come from this source of funds.
8/23/2012
Special Meeting of Beverly City Council 7: 00 PM May 3 0, 2006 Page 3 of 4
The proposed water rate for Fiscal 2013 is unchanged at $2.52/100 cubic feet. The proposed sewer rate is increased from
$5.58/100 cubic feet to $5.87/100 cubic feet. The combined rate then is proposed to be $8.39/100 cubic feet or an increase of 3.58 %. 1
am also proposing that the Council vote to combine the now distinct water and sewer funds into one fund.
One aspect of the upcoming budget which is unfortunate is the need to increase the transfer of funds from the General Fund to
the Sanitation Fund by $500,000. Our trash costs have not risen. In fact, Beverly citizens have done a terrific job in reducing trash
delivered to Saugus by making great strides with recycling. Our citizens are to be congratulated for their success in reducing tipped
tonnage from nearly 19,000 tons per year to less than 13,000 tons, a reduction of over 6,000 tons (12,000,000 pounds). But we all need to
remember that several years ago when the City Council correctly made the decision as recommended by me to reduce the annual support
of the General Fund to the Sanitation Fund in order to save the Cove School as an elementary school, it was only a matter of time before
the balance in the Fund ran dry. Now is that time. The Fund balance is close to zero and we must increase the General Fund transfer
from the $325,000 level of last year to $825,000 for next year.
If we take a hard look at our City, there are three things which stand out as being badly needed but not fully planned for. Two of
them are facility related — adequate Public Safety Facilities and adequate Public Services Facilities. Both of these will be solved if the
Brimbal Avenue Interchange upgrade works out successfully. We are pursuing State funding of this $25,000,000 project through a
mechanism called I- cubed. Under this approach funding may be possible if the tax revenues to be generated by subsequent economic
development exceed 1.5 times expected debt servicing costs. We believe that the debt service criterion can easily be met in this case. I
cannot promise a favorable outcome but I am very optimistic and can tell you that we are working hard to achieve success. You will be
kept posted on progress as it occurs. Success with this project will have a very positive impact on Beverly's future.
The one remaining aspect of our infrastructure which has had insufficient attention for many, many years relates to our streets
and sidewalks. There is a good reason why we have not been able to take care of these infrastructure components adequately, namely a
lack of available funds brought about by reasons already discussed including increased health care costs and the loss in Local Aid. But
the fact is that delay in repairing our streets in a timely fashion quickly escalates the cost of doing so by several times and that demands
our finding a solution. So let me now show you a few slides to better make my point.
1. This slide shows that most of our roadways which add up to 133 miles of pavement are in poor to fair condition or worse. The
slide shows an overall rating of 70 out of 100 but that appears to be a generous average.
2. This slide indicates that it would take $25,000,000 to bring all our roads overnight to a good condition. This of course is not
possible to achieve but it demonstrates the size of the problem.
3. The next slide shows what we expected to spend in each of three years to upgrade our roads. This slide was prepared two
years ago when the Road Surface Ratings were first created.
4. The next slide shows that if we wait to fix our roads the cost to fix them grows geometrically not arithmetically and urges that we
pay early attention to sufficient funding.
5. The last graph says that if we spend $1,000,000 per year our roads will continue to degrade; that if in Beverly we spend
$1,500,000, average road conditions will stay constant. If we spend $2,000,000 per year the condition will improve slightly and
after 7 years, our backlog will shrink from $25,000,000 to $21,000,000. Finally if we could spend $3,000,000 a year, after 7
years the $25,000,000 back log would be cut in half. I hope this slide demonstrates clearly the reason I have taken such a
strong position on this subject.
Against this back ground, let me now let you know our current plans:
PAVING PLANS
FY 2013
Revenues Available
Carry over Chapter 90 from last year $ 285,000
New Chapter 90 money 1,029,000
Paving over water line replacements 150,000
New City money from the FY 2013 operating budget 600,000
TOTAL $2
Less Chapter 90 set aside to complete the design
of Rantoul Street which is on the TIP for FY 2014 300,000
8/23/2012
Special Meeting of Beverly City Council 7: 00 PM May 3 0, 2006 Page 4 of 4
$1
Note that this sum benefits from the carryover of $285,000 from last year without which we would be close at $1,479,000 to the
$1,500,000 sum needed just to stay even.
Had we been able to add $500,000 each year to the attack on the streets as I suggested, we would have been able to start to make a
real dent in our backlog. I hope that working together we can find a solution in the future. Our goal should be aggressive because in
addition to rapid cost increase brought on by delay, there are many benefits to good streets including better home values and less car
repairs. We need to keep in mind that making Beverly even more special is our common goal. Some good decisions will not be easy
to make. Thank you.
Refer to Finance and Property and Committee of the Whole
#124
May 29, 2012
Honorable City Council
191 Cabot Street
Beverly, MA 01915
Dear Honorable Council:
I hereby appoint, subject to your review and recommendation, Mr. James A. Duggan, 24 Lothrop Street, Beverly to serve as a member of
the Beverly Licensing Board.
His term to be effective from June 1, 2012 to June 1, 2018.
Very truly yours,
William F. Scanlon, Jr.
Mayor
Refer to Legal Affairs
Reports from Committees:
#124
The Committee on Legal Affairs /Committee of the Whole to whom was referred the matter of Appointment of James A. Duggan, 24 Lothrop
St. Beverly, MA. to serve as a member of the Beverly Licensing Board have considered said matter and beg leave to report as follows, to
wit:
Recommend the Council approve the Appointment
Order read once and adopted 9 -0 Vote
Meeting adjourned: 9:10 PM Kathleen P. Connolly, CMC
City Clerk
8/23/2012