Budget and Finance Subcommittee

RECEIVED By Ellie at 1:53 pm, 6/8/21 AMESBURY CITY HALL 62 Friend Street Amesbury, MA 01913 City Council Finance Committee Meeting Minutes Tuesday, April 27, 2020 at 7:00 PM Virtual Meeting Finance Committee Chair Stanganelli called the meeting to order at 7:04 PM. Roll Call was taken and present were: Councilor Rinaldi, Councilor Stanganelli, Councilor Wheeler, Councilor Gilday, Councilor Hogg, and Councilor Einson. Councilor Mandeville joined the meeting at 7:23PM Minutes for Approval: March 23, 2021 Councilor Einson motioned to accept the minutes with the correction noted by Councilor Stanganelli. Councilor Hogg seconded this motion. Roll call was taken, 7 out of 8 members present voted yes, 1 member abstained (Gilday). Motion passed. Communications & Updates · Monthly Financial Reports · Free Cash Review · Review/Update on Past Actions · Workshop - Other Municipal Finance: * License and Fee Review * Review of Audit Results  Chief Financial Officer, Angel Wills gave the monthly communication and updates. o She said the revenues through March are trending better than anticipated. There does not seem to be a revenue deficit. o There are a few small appropriation transfers being put together for May 1st to July 15th that will be presented at the next Finance Committee meeting. o In regards to the free cash, there is still about $168,000.00 that will be used to mitigate the tax rate in FY22 as well as fund some school capital projects. o Angel stated she anticipates the free cash for next year will be higher than this year’s.  Councilor Gilday asked if Angel could provide the amount of funds in the two stabilization funds as it would serve the council while moving into budget season. o Angel replied, the general stabilization fund right now is $573,680.00 and the smart growth stabilization is $ 200,992.00  Councilor Stanganelli asked Angel, how much money does the City anticipate receiving back after Medicare reimbursements? o Angel replied, she does not know the amount, but can say that the budget was reduced for this year on the grounds of what they received last year. She mentioned if there were any further questions into the depth of the reimbursements she could have Joan Liporto, the City’s school business administrator respond. 1   Councilor Stanganelli asked Chief of Staff, Paul Fahey, about updates concerning the fee schedule review. o Paul replied there will be an update sent to Council sometime in mid-May.  Councilor Stanganelli announced there is a draft of ordinances pertaining to the business licensing that will hopefully be presented at the next City Council meeting. Public Comment: There is no public comment at this time. 2021-044  Councilor Einson asked what the anticipated financial impact of this proposed order is now that the amendment is to take from the overlay account and not from a split tax rate. o Councilor Stanganelli explained all but the tax rate is the same from the original proposal. He said based on the data from other cities and towns that use similar programs, the anticipated amount of seniors who would apply and use this program would be 20% - 30% of the senior circuit breaker tax program participants. He said the IRS data showed that there were 370 people who filed their taxes with the senior circuit tax breaker program, not all of them were homeowners. o Councilor Stanganelli wanted to note that written into the proposal is a clause saying the program would not go into effect until the fiscal year after passage. o Councilor Rinaldi confirmed that citizens need to file the year prior for tax programs, so in the scenario this order gets passed this fiscal year, the people who would like to file for the program would have to wait until next year and be filing for 2023.  Councilor Gilday asked why is it that the mayor needs to submit a home rule petition to the state legislature. o Councilor Stanganelli responded by saying in section 6 of the proposal the language states that a home rule petition will be submitted if needed. He said it is in there for the lawyers to decide whether or not one is necessary. o Chief Assessor, Todd Laramie, explained he does not know the legality behind the home rule petition, but can inquire with other town and city assessors. He also stated the differences in qualifiers between the STEP program and the senior circuit tax breaker program. He said with this program people who are not eligible for the senior circuit tax breaker may still be able to have some relief with this program. o Councilor Rinaldi asked if this is in the Massachusetts State Law.  Councilor Stanganelli replied, it is not in the Massachusetts State Laws, this is an individual city or town piece of legislature. He did mention there is a proposal to implement this program statewide, however that proposal is still in its infancy.  Councilor Stanganelli suggested an option of adding a section 8, budgeting for a cap, and recommending $200,000.00 with the residual funds going into free cash. o He said the estimates are between $150,000.00 and $170,000.00 and he recommends being conservative with $200,000.00. Councilor Gilday motioned to send order 2021-044 back to City Councilor with a positive recommendation pending amendments. Councilor Lennon seconded this motion. Roll call was taken 9 out of 9 members voted yes. Motion passed.  Include a section 8, to the effect of "the annual exemption limit for this program shall be $200,000.00"  Having knowledge, prior to the next City Council meeting, of whether or not a Home Rule Petition is needed.  Having a modified version of this bill to vote on for the second reading. 2 2021-052  Councilor Rinaldi explained the proposed order: o The order would lower the current tax rate from 8% to 4%. o The senior citizens, under this program, can defer any amount of their taxes each year up to 50% of the value of their home. o This bill is updating the current bill that exists. The current program is averaged at being used by 2-3 people a year. o It is not giving anyone money, it is essentially lending money due to the tax deferrals only until the property changes hands. o This program has been in effect since 1983 in Amesbury, MA.  Councilor Gilday asked about transfer of ownership. o Councilor Rinaldi responded by saying, once someone is registered into this program a lien is put on the house. Whoever succeeds in ownership, before the transfer of the deed, will have to clear the lien. o Councilor Rinaldi said there is also a clause in the program that states if there is still back taxes when the transfer of ownership begins, the interest rate goes up 16% a year on the amount out.  Todd Laramie stated there were three applications taken out for this program last year, but only two of them applied. The total per each application was approximately $2,000.00 to $3,000.00 tax deferred a year. o He stated that the consequence for not paying the amount deferred within 6 months of transfer can cause the Treasurer to petition the land court for a foreclosure on the lien on the property.  Councilor Einson asked about how the lowering of the interest rate would help seniors. o Councilor Rinaldi responded by saying it is less money they [the senior citizens] have to pay when they close out the lien.  Councilor Rinaldi said this bill might make the program look more appealing than before. He said he wants there to be more options for senior citizens.  Councilor Gilday asked if the program allowed someone to pay back the deferred taxes plus interest and revert back to regular tax payer status. o Councilor Rinaldi responded yes.  Councilor Mandeville asked what is the missing tax burden to the City as is with this program. o Todd expressed he was unsure and could ask the Treasurer.  Councilor Mandeville asked what the value of taxes the City is not receiving annually as a result of this program. o Councilor Stanganelli said it is lower in comparison to Microfab.  Councilor Wheeler asked what the income limit for eligibility being used currently. o Councilor Rinaldi responded, $40,000.00. He said in the year 2000, it was changed from $20,000.00 to $40,000.00 and has been the same since. o Councilor Wheeler asked if that is per individual or household. o Councilor Rinaldi responded it is per household. o Councilor Rinaldi said it is being raised to $61,000.00.  Councilor Einson asked if there is a cap on applicants. o Councilor Rinaldi responded, no.  Councilor Einson asked if the deficit will be funded by the overlay fund or back pay from the people already in the program. o Todd responded it comes out of the overlay. 3 Councilor Einson motioned to send order 2021-052 back to City Council with a positive recommendation. Councilor Rinaldi seconded this motion. Roll call was taken, 7 out of 9 members voted yes, two members voted no (Kisieleski & Lennon). Motion passed. 2021-058  Paul Fahey explained that this is a yearly event.  Councilor Einson asked if there is any match. o Paul responded by saying, there is no match. Councilor Einson motioned to send order 2021-058 back to City Council with a positive recommendation. Councilor Gilday seconded this motion. Roll call was taken, 9 out of 9 members voted yes. Motion passed. 2021-059  Assistant Fire Chief, Dave Mather, explained the grant money will help sustain the vaccine clinics as well as provide PPE for first responders. Councilor Wheeler voted to send order 2020-059 back to City Council with a positive recommendation. Councilor Hogg seconded this motion. Roll call was taken, 9 out of 9 members voted yes. Motion passed. 2021-060  Dave Mather explained the grant is for watercraft safety equipment for ice rescue.  Councilor Stanganelli asked if there are any extra training costs.  Dave responded most of the training will be happening in house. Councilor Wheeler motioned to send order 2021-060 back to City Council with a positive recommendation. Councilor Mandeville seconded this motion. Roll call was taken, 9 out of 9 members voted yes. Motion passed. 2021-065  Director of Community and Economic Development, Angela Cleveland, gave a brief summary of the order. She said this is the final draft, corrected and reviewed by KP Law.  Councilor Wheeler stated he knows that this order is to amend a city ordinance, but could not find where the original ordinance is in the E code.  Councilor Wheeler wanted to note that the title of this is an order, but ordinances can only be amended with other ordinances. It should read, “be it ordained” instead of “be it ordered”  Councilor Einson wanted to clarify that the trustees are able to make recommendations on appropriating money but not able to spend it. o Councilor Stanganelli said he would refer to section 8-5 Power of the Trustees, paragraph A:  They can accept funds of any type.  Angela Cleveland stated she was under the impression that the Board of Trustees could in fact expend funds. 4   Councilor Stanganelli read from part Q of the powers of the trustees, stating they can distribute funds like any other committee. Councilor Lennon motioned to send back order 2021-065 with a positive recommendation pending amendments to language and other changes by KP Law. Councilor Hogg seconded this motion. Roll call was taken, 9 out of 9 members voted yes. Motion passed.  Changing of “be it ordered” to “be it ordained”  KP Law’s recommended changes to accommodate proper language. 2021-066  Paul Fahey stated there is a question of whether or not this order would need two votes, it was sent to KP Law but has not been returned with an answer at this time. Councilor Lennon motioned to continue order 2021-066 to the next Finance Committee meeting on June 1, 2021. Councilor Hogg seconded this motion. Roll call was taken, 9 out of 9 members voted yes. Motion passed. 2021-067  Angela Cleveland stated these are yearly grants that are applied for, with no matching involved. Councilor Lennon motioned to send order 2021-067 back to City Council with a positive recommendation. Councilor Gilday seconded this motion. Roll call was taken 9 out of 9 members voted yes. Motion passed. 2021-068  Rob Desmarais said the unpaid invoice was for an employee’s wastewater certification program course. Councilor Lennon motioned to send order 2021-068 back to City Council with a positive recommendation. Councilor Rinaldi seconded this motion. Roll call was taken, 9 out of 9 members voted yes. Motion passed. Councilor Lennon motioned to adjourn. Councilor Hogg seconded this motion. Roll call was take, 9 out of 9 members voted yes, one member abstained (Hogg). Motion passed. Meeting adjourned at 9:08 pm Respectfully Submitted, May 20th, 2021 5