Budget and Finance Subcommittee

RECEIVED By City Clerk at 2:38 pm, 5/26/22 AMESBURY CITY HALL 62 Friend Street Amesbury, MA 01913 City Council Finance Committee Meeting Minutes Tuesday, March 22, 2022 at 7:15 PM or Immediately Following Special City Council Meeting Amesbury City Hall Auditorium Finance Committee Chair Stanganelli called the meeting to order at 8:40 PM. Roll Call was taken and present were: Councilor Deschenes, Councilor Frey, Councilor Hickok, Councilor Hogg, Councilor Lennon, Councilor Mandeville, Councilor Rinaldi, Councilor Wheeler and Councilor Stanganelli (9) Minutes for Approval: None at this time. Communications & Updates:  Chief Financial Officer, Marisa Batista, asked the Finance Committee how they would like their monthly reports. She apologized for not having anything for tonight’s meeting, however she has been in budget meetings since she has started. o She said that she does think a couple departments will be needing transfers. Year-end transfers are allowed from May 15 to July 15 with approval from the city council.  Councilor Stanganelli asked what the free cash is currently and where does the City stand financially. o Marisa answered, the free cash was certified at $1.9 million, it is to her understanding there have not been any City Council votes on free cash, so she believes the free cash still stands at the certified amount. o Regarding expenditures, she said she is still going through everything in detail to see which accounts and where anything was expended from. o She said she is working with department heads to see if these transfers will be able to be absorbed by their budgets.  Councilor Stanganelli took a straw poll on if the committee would like the monthly reports to be the same as they were with the previous CFO. The consensus was, yes.  Councilor Stanganelli told Maria that the reports were emailed to the Finance Committee prior to their meetings as well as posted on the Administration and Finance page of the Amesbury website.  Councilor Mandeville noted, he would like the new CFO to use her discretion to add anything important or anything she thinks the Finance Committee would like to see. He encourages her creativity and fresh thoughts.  Councilor Wheeler noted that the reports on the website have not been updated since September [2021] and if they are available, to please update the website. o Marisa stated she understood and will update them. Public Comment  None at this time. 2022-033 An Order to authorize the transfer of $116,453 from the FY22 Reserve Fund to the FY22 Fire + Emergency Management operating budget. – Mayor Sponsor  Councilor Stanganelli noted, for context, in 2021-001 the FY22 budget as approved, item 220 was the total Fire Department budget of $3,756,665.00. This included salaries at $3,527,669.00 and  other expenses at $228,996.00. The approved Fire Department budget can be found on page 60 of the budget book for reference.  Mayor Gove gave a statement: Good evening, councilors, and members of the public, I’m here tonight with some of our department heads- some of them new and some of them well-known to all of you. As you are all keenly aware, we stand before you now to request a budget transfer from the city’s reserves to supplement our fire rescue’s expenses for the remaining of FY22. Of course, this is not a position that any of us want to be in; however, this request has been carefully vetted and there are some major factors driving this. 1. The fire department’s budget for expenses, which do not include salaries and wages and other personnel expenses has been on a downward trajectory and the FY22 budget for expenses was almost $70,000 short of FY18. 2. Additionally, the budgeting process for ambulance billing has changed this fiscal year and will result in approximately $40,000 being expensed to the department’s budget. If this change had been identified during last year’s budget planning process, this appropriation would have been included. Bottom line: the FY22 fire department budget for other expenses- not relating to salaries and wages is insufficient and requires this supplement. All of our department heads are held to the highest standards when it comes to managing their operating funds. I am working closely with Chief Berkenbush on his budget, and Amesbury fire rescue will need to request approval prior to incurring expenses for the rest of this fiscal year. With our new chief financial officer joining us we will also have a fresh set of eyes to help Chief Berkenbush through the FY23 budget process and assist in keeping the department on track in the future. Amesbury fire rescue is the only full-service medical response team in the region and provide a much-needed service to our and surrounding communities. I am committed to supporting their important work while also making sure that we are utilizing taxpayer dollars efficiently and responsibly. Our new CFO and I will be looking at current processes and will make any necessary adjustments to ensure this doesn't happen in future years. The council order transfer request in front of you all this evening in the amount of $116,453 was determined using actual past invoices and realistic projected expenses from December through June. We do, in fact, have critical expenses pending payment to keep this department’s services intact, and I urge council to consider this request on behalf of the city. We do not want to be in a position of having to defend ourselves against claims, be deprived of services or jeopardize the reputation and character of our great city. In closing, we thank you for your consideration and are here tonight to answer any questions you may have. Fire Chief Berkenbush will take the lead from here and answer your questions.  Fire Chief, Ken Berkenbush, stated he would like to run through the entire sheet (attachment 1) that has been given to City Council; run through it, explain how we [the fire department] got here and some of the mitigating factors surrounding it. o He started with 5211, Fire Electricity. He said the electricity bills are paid by the finance department. He does not see them and does not know how much money is in that account. o 5212, Fire Heat. He said the Fire Department (FD) currently owes $4,123.00 to National Grid and Sprig Electric. They have not paid any bills since December. Unsure of what the heating cost will be, he put into anticipating costs, $8,129.32 o Fire Building Maintenance, this has had some unique things paid for out of it [the account]. One of the things is the sharps container box kiosk, that has been purchased and will be in use by the end of the week at the Police Department. That cost was $6,402.00. He said the FD was told to take it out of this line and the previous CFO was going to transfer it from one of the public health lines, that never happened so it stayed in the maintenance line. This line has traditionally been underfunded for years. The FD recently lost their 2  dishwasher/sanitizer, according to National Fire Protection Association (NFPA) and the Department of Public Health Services this machine is required to maintain the protection against food borne illnesses or accidents. The dishwasher itself is $4,300.00 (attachment 2) and installation is estimated at about $1,500.00; a plumber and electrician will need to be hired. In addition to the washer, the Plymovent system (the diesel exhaust extrication system) has two annual maintenance payments of $1,950.00. The second payment is due currently. He explained some of the other expenses are from the Plymovent repairs, garage door panels and other fixtures that need repairs in the building. o Fire Ambulance Repair, currently the FD owes $3,440.00, he believes there are 2 more bills pending. One was for replacing a set of tires on ambulance 2. o Fire Alarm Maintenance, he explained how there is old wire on top of the polls, occasionally it breaks and will be swinging in the street. When that happens, he needs to call someone with a bucket truck to come and cut them. The $775.00 represents that, that line was zeroed out. o Fire Apparatus Maintenance, this line was renamed last year, and all of the items were moved down to Fire Vehicle Supplies.  He said he has been trying to realign the FD budget’s line items, because they do not make much sense to him. He is trying to write them to explain what they are and how they are spent. o Fire Repair and other Equipment, there were a couple of things that came up in that this year. The FD put in for an Assistance to Firefighters Grant (AFG) for over $200,000.00 to assist with purchasing new Self-Contained Breathing Apparatuses (SCBA). The SCBA have been needing repairs, the last one was $900.00. There is also Hydro Testing, which was thought to be next year but was this year costing, $2,800.00. o Ambulance Billing, there is a private company that bills and they take a percentage of 4.5%. What was done previously was the fee was billed directly out of the ambulance fund. What was said, the fee needed to be in a line item someone in the budget. So, the previous CFO said it should come out of the Fire Department’s budget. $15,000.00 has already been billed out. The Ambulance fees have been raised this year, so it is expected to pay more in collection fees. o Fire Training, the FD currently owes $1,981.20. What this line is used for is online training for the Fire Fighters. Massachusetts became an OSHA state a few years ago and requires certain trainings throughout the year. This way the trainings can be assigned, completed, and documented. All the courses are OSHA certified. This adds a layer of protection to the city. o Fire Communications, this line item handles not only all the communications for the Fire Department but EMS as well. The EMS side of things is expensive. The ambulances run two modems which must have tight cyber security since they house patient health history. There are data monitors hooked up to the cardio monitors. These will send information to the doctor’s while the patient is in transit in the ambulance. o EMS Recerts, this is the money paid out to the people who complete their certifications. They are paid for their licensure as part of the collective bargaining agreement, they produce their license, and we produce their payment. He stated the $10,000.00 bill was a mistake on his part and takes responsibility for it. It was something that had to be done, it was not budgeted for. o Fire Vehicle Supplies, the brakes on Fire Engine 1 will need to be replaced before May or it will be rendered out of service. The estimate for that is $11,400.00 from ATG a truck repair company in Seabrook, NH (attachment 3). o Apparatus Fuel, originally there was going to be a turnback of $8,602.41, but due to the state of the year, the FD would like to take it out of Apparatus Fuel and put it into Fire Building Maintenance. o Ambulance Equipment and Supplies, there have been great increases different areas in EMS:  fuel costs  medical supplies  medical supplies have gone up [in price] 20-30% monthly 3   the monthly medication cost have gone from $800.00-$900.00 a month to up around $1,200.00-$1,300.00 a month.  A big factor in the rising prices of medical supplies is the increased run volume over the past two years. In FY20 there were 1,139 EMS transports. In FY21 there were 1,317 total transports. This year [FY22] year to date there have been 1,683 transports. The FD has gone from doing roughly 100 transports a month to 210. o Fire Prevention, this includes classes, and trainings. o Protective Equipment, there was a lot of money spent at the beginning of the year, the reason was the FD hired 4 new employees. They needed new gear. There was money set aside last year for this, but the gear did not show up until this year [FY22]. Chief Berkenbush stated he will not put the Amesbury Fire Department in danger because of their clothes or trucks.  Councilor Wheeler noted that he had passed out a document with questions on it for the Fire Department (attachment 4). He yields to the rest of the council for questions before going through the document.  Councilor Rinaldi asked if the prices of the ambulance fees went up. o Assistant Fire Chief, David Mather, stated that every fiscal year, the FD looks at the ambulance fees. There are a lot of different methods to determine what to charge. Medicare is the base rate, everything above that is a percentage. The FD tries to stay around Medicare + 250%. There is no fighting for it or resubmitting to insurance companies. Private insurance companies have different rates, the FD has contracts with a lot of them. When you see the statements, you’ll see a contractual allowance vs. what is billed. The FD can bill for whatever they want but if there is a contracted agreement with an insurance company, that’s what will be collected. There are a lot or rules and regulations in the billing process, that is why there is a third-party billing company.  Councilor Stanganelli stated there were a number of items in the actual expenditure which were lower than the appropriated amount. He noted, that some of the [Fire Department] account numbers and the sheet Councilor Wheeler provided did not match.  Councilor Wheeler referenced his comment/question packet (attachment 2) o He made a comment on projected expenditures vs. actual expenditures. He noted that although the budget process starts a little over ¾ the way through the year, the department should have a pretty accurate picture of what will be spent.  He noted that the Fire Department in FY21 had listed their line-item Communications as $10,000.00 however they spent $30,000.00. They then budgeted for $10,000.00 for FY22 and spent $30,000.00 again. o He stated that a lot of the account codes had been changed since the approval of the FY22 budget last year.  He used the line-item Fuel as an example.  Chief of Staff, Ann Marie Casey, explained the increase costs in fuel, heat and electricity during this economy.  Councilor Rinaldi asked what the original budget, before labor services, was for the Fire Department. o Councilor Stanganelli replied, the order 2021-001 approved the Fire Department Expenses budget at, $228,996.00. Labor itself was, $3,527,669.00. He wanted to note that the appropriation in question is 3% of the total Fire Department budget.  Councilor Hickok asked if the Fire Chief or Administration believe that the uprise in ambulance revenue will help with next year’s budget. o Chief Berkenbush stated, he believes yes, the rise in service will aid in the budget. Fiscal year to date, the FD has collected $635,024.31. This is more than what was collected last year and there is still 3 or 4 more months to go.  CFO, Marisa Batista, clarified there is an Ambulance Receipts Reserve for Appropriation fund, which is completely separate from the General Fund. 4   Councilor Lennon commented on line 5501 Ambulance Supplies in the budget book has the asterix next to it with the note, “Partially funded with AARPA funds”. She asked where those funds are and why there is no mention of them today.  She mentioned how she feels this is a case of the Fire Department spending money then asking for forgiveness from Council. That is not something that can continue to happen. She wants to hear how this is going to get better, how everyone is going to be proactive to not let this happen again. She said just because the community doesn’t have a microscope on this situation, doesn’t mean there never will be and when there is, everyone in this room will have to answer to them. She does not want it to get to that point. She said she wants the Fire Department to go through the request again and make the numbers smaller and the explanations clearer. She doesn’t want to explain to other department heads that it’s ok to do this, nor does she want to explain to tax payers that it is ok to do this.  Councilor Mandeville stated it would be good practice to show the revenues vs. wear and tear expenses pertaining to the ambulances. Since the ambulances are bringing in more work which means more revenue, the expenses will go up as well. If there were comparisons that showed the correlation, it would not be as scary as it is now.  Councilor Wheeler went over the comment/question sheet he distributed.  Councilor Wheeler asked, how much of this [appropriation request] was inflation and rising cost and how much was improper budgeting? o Chief Berkenbush said about 30% is due to inflation and unforeseen costs. Historically the Fire Expenses are around $300,000.00.  Councilor Deschenes asked to confirm that the expenses are usually $300,000.00 o Chief Berkenbush confirmed yes, $270,000.00 to $300,000.00.  Councilor Deschenes wanted to comment, he agrees with Councilor Lennon. He remembers 20 years ago sitting on the Council and having the Fire Chief [different than Chief Berkenbush] asking the same thing. He reiterated what Councilor Lennon had said about departments spending money and asking forgiveness.  Councilor Frey asked what the amount in the reserve fund is. o The CFO responded, $153,321.00.  Councilor Hickok noted that the CFO had spoken about a couple of other departments that might need transfers at the end of the fiscal year, if this order is passed and the $116,000.00 is appropriated, that would leave $30,000.00 or so for the remaining departments if they go over budget. o She confirmed, yes. She said there are two ways to pay the excess debt, either by turn- backs in other budgets or a free cash vote.  Councilor Stanganelli wanted to note that the previous year’s budget was greater than the actual expenditure, and this year’s actual expenditure is about the same amount that got turned back last year. He said when it comes to public safety, he will echo the previous chair of Finance Committee and say, ‘You cannot put a price on public safety’. Councilor Wheeler motioned to continue order 2022-033 to a Special Finance Committee meeting on April 12, 2022. Councilor Mandeville seconded the motion. Seven (7) members voted in favor; two (2) members opposed (Hickok & Stanganelli). Motion passed. Councilor Wheeler made a point of order, the Council rules declare that a vote must take place if the council would like to extend the meeting past 10:30 PM. Councilor Wheeler motioned to extend the meeting no later than 11:00PM. Councilor Mandeville seconded this motion. Motion passed unanimously. 2022-034 An Order to authorize the Mayor to expend funds not previously approved from a Massachusetts School Building Authority (MSBA) grant to replace the Amesbury Elementary School (AES) with a new building. - Mayor Sponsor  Mayor Gove stated, the project funding agreement has two totals on it, when the grant was 5  initially written the lower of the two numbers. o It could take years until we get up to 24 million.  Councilor Stanganelli asked when the first time under MSBA rules this should have been done. o Mayor Gove stated, 2019. The funding agreement was signed by the previous administration and the grant had not been accepted. Councilor Wheeler motioned to send order 2022-034 back to City Council with a positive recommendation. Councilor Hickok seconded the motion. Five (5) members voted in favor; one (1) opposed (Stanganelli), and three (3) abstentions (Deschenes, Lennon & Mandeville). Motion passed. Councilor Lennon motioned to adjourn. Councilor Hogg seconded this motion. Motion passed unanimously. Meeting adjourned at 10:47 PM Respectfully Submitted by, Ellie Andersen, April 21, 2022 6 7