NOTES OF FEBRUARY 2, 2016 RYE BUDGET COMMITTEE MEETING
Final Revision B – Provided by the Rye Civic League
Editor’s
note: For ease in finding particular
sections using the archived video and audio on the Town website, the elapsed
time is indicated. Use the slider and
the elapsed time indicated at the bottom of the video window to fast forward to
the desired section. Videos on the Town website may currently be accessed
at www.town.rye.nh.us by clicking on
“Town Hall Streaming” at the bottom left of the screen. Follow the link for “Town Hall Live
Streaming,” then find the meeting by date under “Previous.”
The video starts
at 6:30:11 p.m. (0:00 elapsed).
Present (clockwise around table): Frank Drake, Kevin Brandon (arrived late at 6:33 p.m.), Craig Musselman, Paul Goldman, Jim Maheras, Randy Crapo, Ralph Hickson, Ray Jarvis
Present from Rye Water District and sitting in the audience: Art Ditto, Thomas Clifford. Present from the Rye Beach Village District: Linda.
Persons present from the public included: Peter Crawford, Sam Winebaum.
Summary
Introduction
Chairman Paul Goldman announced that this was a public hearing and that there was a sign in sheet. There are two items on the agenda, including the approval of two sets of minutes (January 13 School Budget hearing and January 14 Town Budget hearing), as well as the public hearings for the three districts. No handout material was received in advance, he said.
Minutes (1:39 elapsed)
The minutes of the School Budget hearing were unanimously approved without changes, except that Frank Drake and Craig Musselman abstained. The minutes of the Town Budget hearing were unanimously approved without changes, except that Frank Drake abstained.
Rye Beach Village District budget (5:04
elapsed)
Frank Drake passed out copies of a single page. He noted that fuel for the precinct building had been reduced from $6500 to $5500. Looking at today’s fuel prices, the question might arise as to why it had not been reduced even more. The contract in place does not reflect the current reality. There is also a tenant in the building: the Sewer Department, so there is more usage upstairs, he said.
Paul Goldman asked why there was no column for the 2015 budget. Linda, sitting in the audience and apparently the person who prepared the budget, indicated that the figures were for 2014.
(5:55 elapsed)
Frank Drake explained that they were in disarray because the Treasurer had skipped town to go to Denver to “count his money or whatever he does out there.” They were left with no Treasurer’s Report. Linda had tried for about six hours to get something together that would work. Mr. Drake said that he could get them copies of the 2015 proposed budget that had been approved by the Budget Committee. “We’re doing it on the fly here today,” Mr. Drake said.
It was determined that the 2015 budget total was $143,300, so was within $100 of the 2014 budget. Mr. Goldman noted that “at a high level,” the District was actually proposing a reduced budget. Mr. Drake agreed, and noted reductions in the oil and sewer line items. Tree care dropped significantly as the pruning program has been completed. They want to start a tree replacement program but are not quite sure how to do that, he said.
Mr. Drake stated that there is a $500 place holder for fee income. Then there is rent. The Post Office pays rent of $17,230 a year for the space downstairs. That runs through July of 2017 and then there will be an increase and another five year contract. There is also $3000 in rental income from the Sewer Commission.
Selectman Musselman asked about the $86,221. Mr. Drake did not know the answer. Linda responded that that was the January 1 cash balance. There was discussion about $66,221 being applied to reduce taxation.
Jim Maheras asked about the difference between the $143,000 2015 budget and the $91,000 estimate for 2016. Mr. Drake responded that the total budget for 2016 is $135,050. Mr. Maheras asked about the actuals for 2015. Mr. Drake responded that their estimate, as of now, is $91,000 as the Treasurer is in the Bahamas. Mr. Maheras asked whether the difference is as large as between $91,000 and the $143,000 budgeted. Mr. Drake responded that it could be. There was discussion about whether there could be outstanding bills. The response was uncertain.
Mr. Drake referred to a $50,000 difference between budget and actual in 2014, a $34,000 difference in 2013, and a $44,000 difference in 2012.
Ray Jarvis noted that they were budgeting 50 percent above the actuals over the last five years. He asked whether that was due to the small amounts and the difficulty of prediction.
Mr. Goldman made a comment about the missing columns.
Mr. Jarvis noted the large difference between the budget and actual figures, and explained that that was because they are dealing with small numbers, many of which do not actually occur.
Mr. Goldman made additional comments about it being a “process question” and center column meaning something different than the others. It’s just a different way of presenting it, he said.
“Because the Treasurer went away,” Mr. Jarvis said. There was laughter.
Linda said that “he might as well stay out of town as far as I’m concerned.” There was more laughter.
Selectman Musselman asked whether the District was audited and whether they were part of the town audit. Frank Drake responded that they were not part of the town audit and that they self audit. There was more laughter. Mr. Drake explained that they have to provide a form to the State.
It was explained that the Treasurer was expected back on February 9.
Kevin
Brandon asked whether the District gave itself a “clean opinion” every
year. Editor’s note: A “clean opinion”
is a term used in the accounting business to reflect that an audit has
determined that the figures presented fairly the financial position of the
entity being audited.
Mr. Drake explained that the Treasurer goes away every month, and that he had shirked his duties.
Ray Jarvis asked whether the Committee should ask for a final accounting once the Treasurer returns. Mr. Drake agreed. Randy Crapo said that Mr. Drake probably does not have the form for everyone to sign anyway. He explained the forms that go back and forth between the District and the State.
Mr. Drake suggested that the process should be that they would get the Budget Committee their “usual good information” with some added deltas and additional analysis. Randy Crapo suggested that the meeting should be on a Saturday at Mr. Drake’s house, and that brunch should be served. Mr. Drake suggested that they meet at Abenaqui, which is in the Precinct.
Someone asked whether there should be another meeting. Mr. Drake agreed as what was presented was “a little sloppy.”
Ray Jarvis suggested a motion to table.
Selectman Musselman stated that it appeared that many of their biggest projects did not need to occur.
Mr. Crapo stated that the problem is that there can only be a ten percent increase at the meeting. If something comes up in the interim, the amount of the increase would be limited.
Jim Maheras asked whether Rye Beach could be incorporated into the town. Selectman Musselman said “no.” He added that it wasn’t a bad question and there is the issue of whether this is an archaic government function.
Ray Jarvis moved to table the Rye Beach Village District budget. Ralph Hickson seconded. Mr. Drake explained that there could be a meeting as soon as they had their “ducks in a row” around the 15th. All were in favor except Mr. Drake abstained.
Mr. Drake apologized, saying that usually they are “a breeze.”
Jenness Beach Village District budget
(28:13 elapsed)
Randy Crapo
passed around a single sheet with the budget.
He stated that they had actuals.
Frank Drake asked whether they self audited. Mr. Crapo said that they had an auditor who
is a “lady down the street.” Editor’s note: Lori Carbajal is the auditor.
Mr. Crapo explained that last year’s budget was $100,050 and that $91,000 had been spent. The hydrants and water rental were lower than anticipated. The street lighting was a little lower, but sometimes December is estimated.
For this year, the street lighting will increase from $16,000 actual to $20,000 because of a $30,000 project to replace the lights and the possibility of additional costs for removal and storage of the old lights. Two new poles will be put up, one to show a lateral streaming light and the other a round one. There is money budgeted to send information to the summer people on the lights.
Liability insurance for the Commissioners was finally obtained in December. There had been none for 5-6 years, Mr. Crapo said.
There is a $30,000 warrant article, which was in the CIP, to replace up to 69 lights with lower wattage use street lights that will also provide savings on the rate. Mercury lights that use a lot of electricity will be replaced with LED lights. There is the potential for perhaps $6000 in rebates. They have put together an RFP to send out. A committee has studied this for eight months. Michele Sopher has worked on. Sam Winebaum headed the committee. Mr. Crapo mentioned some other names, including John Menes.
Some on the committee want to reduce the lights from 69 to 40, but that would require negotiation with the neighbors. People have gotten lights over the past years with petitions, but now their kids are gone and the lights may no longer be needed.
The rate change can be obtained only if all of the lights are changed out. At least 40 percent will be saved. The cost is currently $1500 per month and that would go down to $1000 per month. There are vendors who would put the lights in and allow them to pay the higher rate to them until the lights have been paid off. The payback period is 2.3 to 2.7 years. The former would apply if some of the street lights are eliminated.
Mr. Crapo said that some of the lights that are too bright might be removed and put in the “barn,” to be used when others fail. Selectman Musselman expressed surprise that they had a “barn.” Mr. Crapo responded that they have the Old Police Station. Mr. Crapo said that they needed a place to store materials so that the contractor does not have to transport them back and forth.
The $30,000 would raise the taxes by $.05 per $1000 if it is not spread out over time. Editor’s note: This calculation appears to be incorrect. The total valuation in the Jenness Beach Village District, according to the 2015 Town Annual Report, is $407,618,700. The increase would be $.074 per $1000 assessed valuation if the total valuation remains the same for 2016. Of the $14,000 surplus, $12,000 would be used to reduce taxes, Mr. Crapo said.
Mr. Crapo explained that the $30,000 would be raised within the District and there would be no town-wide tax impact.
Sam Winebaum noted that the light is very natural so people can be recognized more easily, contributing to better safety. Also, they will also try to illuminate the three crosswalks along Ocean Blvd.
Mr. Crapo explained that the overall budget is $129,925. Selectman Musselman made a motion to recommend the entire budget. Peter Crawford asked whether there needed to be a separate vote on the warrant article.
Selectman Musselman changed his motion to recommend $99,295 (sic) for the operating budget. All were in favor.
Selectman Musselman moved to approve $30,000 for the LED street lights. Ray Jarvis clarified that the motion should be to recommend. Selectman Musselman agreed. All were in favor.
Rye Water District budget (45:42 elapsed)
Art Ditto passed out copies of the budget.
Paul Goldman asked a “process question.” He stated that the proposed warrant had been typed and asked whether they should go down through it.
Art Ditto explained that there had been an adjustment in the compensation as the Business Manager had left the prior January. Since then, a part-time business manager was hired, supplemented by temporary help. Mr. Goldman asked whether that accounted for the $10,400 delta on the 6720 account. Mr. Ditto confirmed.
Mr. Ditto stated that the rest of the office operating costs are about the same.
Mr. Ditto stated that the consumer confidence reporting would be contracted out, rather than done in house.
Mr. Goldman noted that the office operating expense is not really the same, and that it is up about 10 percent. There was then discussion about the individual components.
Under Plant Operating Expense, electricity is up $8000 due to increased rates. The repairs are up due to the purchase of additional curb valves that wear out. The hydrants are up significantly as additional parts must be bought.
On Parsons Rd., an asbestos water line would be replaced to improve flow down there.
Selectman Musselman asked whether a rate study had been included in the budget. Mr. Ditto stated that it had been. Mr. Ditto stated that they had not yet obtained a figure for the cost.
Selectman Musselman said that $15,000 was not even close to being enough for a rate study.
Mr. Ditto said that the structural equipment is due to chemical feed equipment, of which $7000 is for telemetry.
Mr. Goldman asked about the increase in the structural equipment budget from $5600 to $14,000. He questioned the eight percent difference shown in the last column. Mr. Ditto said that it must be a math error.
Meters and accessories is up quite a bit due to the purchase of 200 radio readers. These would permit the meters to be read from the curbside. A drive by is still required. It was agreed that this was similar to what Eversource is doing. The inventory expense is up due to the purchase of five curb side meter pits.
There is $26,000 in extensions and improvements for the replacement of four hydrants. Each would be $6500.
Jim Maheras asked how many hydrants the Water District has. Selectman Musselman and Mr. Ditto responded that there are 255. Mr. Ditto stated that the replacement cost includes the cost of the hydrant as well as digging the hole and other associated activities. They are old and parts are no longer available for certain models, he said.
Ray Jarvis referred to the mess in Flint, Michigan and whether all of the basics were covered in Rye. Mr. Ditto described how the water was conditioned to maintain a pH of 7.0. The water coming out of the Garland well is usually about 6.3. The water is conditioned with potassium hydroxide to make the water neutral pH. That prevents corrosion and keep the lead from leaching out. It sounds like the water in Flint was corrosive. Regulation of the drinking water requires tests for both lead and copper to make sure nothing is leaching out, he said.
Ray Jarvis stated that he understood that the river water had eaten away the covering of the lead water pipes.
Tom Clifford said that the brass is replaced with lead free brass in the Water District. The old brass used to contain lead, he said.
Frank Drake left.
(65:04 elapsed)
Turning to the capital and major maintenance expense, Mr. Ditto explained that the prior expenses occurred every year.
There is a large item for design under engineering services. This is related to the Garland well upgrade. The asset management plan would be updated through the GIS system. The Plant Maintenance, Structural Equipment budget dropped down. The $93,000 in 2015 was for the painting of the two tanks on Washington Rd. The $189,000 under Extensions and Improvements relates to Parsons Rd. and Robin Rd. Parsons Rd. in the Marsh Rd. area has a section of asbestos cement water pipe that they plan to replace in the Spring. Parsons Rd. and Robin Rd. is a series of valves that need to be replaced. Editor’s note: The $189,000 is an increase of $118,600 above 2015. Ralph Hickson explained that the main size is being increased to improve fire protection.
Selectman Musselman asked whether there was a fee proposal from Wright Pierce for the $64,000. Mr. Ditto confirmed. Selectman Musselman asked whether a comprehensive rate study had been requested of them. Mr. Ditto said that they had made that request, but had not gotten a response back yet. Selectman Musselman noted that the proposal for the $64,000 had been obtained in less than a year. Editor’s note: He was apparently alluding to his having mentioned a rate study at the prior year’s Budget Committee meeting on the District Budgets. At that time, Selectman Musselman asserted that the charge to taxpayers for the hydrants was too high, but the charge for water usage too low. Selectman Musselman asked why Wright Pierce had failed to provide a proposal for the rate study after the Water District had a year to obtain a proposal. Mr. Ditto stated that the request had been made only in the last month. Selectman Musselman asked why it had taken a year to get a proposal on the rate study. Mr. Ditto responded “because we knew we were going to be talking to you.” Selectman Mussleman interjected “Good Lord.”
(68:50 elapsed)
Mr. Goldman said that he would jump up to the 100,000 foot level for a second. He stated that Plant Operation is an ongoing expense. The 2015 budget is $241,200 and the actual $245,200. That says that it is fairly predictable. All of a sudden, for 2016, the set of Plant Operating expense accounts jump up 40 percent, speaking at a high level. To boot, in the Capital and Major Expense accounts, $211K was budgeted, $161K was spent, but now they want to increase it to $255K. They want to increase that 21 percent over the 2015 budget. It looks like a big discontinuity he said. He asked why something that was steady state and operating with small jitters would jump up 40 percent.
Mr. Ditto stated that, as an example, the Extensions and Improvements, Miscellaneous account, which is the hydrants, had been added. That $26,000 is a third of the increase. In-house manpower would be used for that but the excavation would be contracted out. Meters and accessories is a purchase item. There is no physical labor cost. There is no labor force increase associated with that, he said.
Mr. Goldman asked whether this was a one-time blip. Mr. Ditto asserted that it would not increase 40 percent again next year.
Randy Crapo said that these should be in the CIP projections. Mr. Ditto stated that they had listed the Garland well house in this year’s CIP, but did not get to it. The design was still being developed when the project was submitted. For this coming year, the replacement of the mains up by the water tanks was submitted, but that they will not be doing that, he said.
Mr. Goldman asked whether the 2017 budget would remain at $338K or whether it would drop back down to the $240K level. Editor’s note: He is referring to the total for Plant Operation. Mr. Ditto responded that that was not an unreasonable expectation. Mr. Goldman said that he could see a one year discontinuity because of the items that had been explained, but he would not expect a 40 percent jump followed by a budget remaining at that level. Mr. Ditto responded that he could not answer that question as he does not know what they are going to do next year. He said that they might decide next year to replace four more hydrants. In that case, the $26,000 would still be there. Mr. Ditto agreed that it is a big jump, but the work identified is warranted. They are not making this up, he asserted.
Ray Jarvis asked whether the jump is anticipated in the CIP. Mr. Ditto explained that the Capital and Major items are the types of things that are in the CIP. Hydrants and valves could be replaced every year. That is the kind of thing that they do when they get old. Those are repetitive maintenance items, he said.
Mr. Ditto reiterated that the Garland Rd. pump house was not going ahead in 2016. Requirements get moved around. They are still trying to finalize that and come up with an appropriate scope. For 2017, there was a plan to replace 2100 feet of water line and increase it from 12 inches to 16 inches along Washington Rd. from Grove Rd. to Blueberry Ln. It is a fire protection issue as the flow out of the tanks is limited and that affects the fire ratings down by the beach.
Ray Jarvis pointed out the benefit of people seeing what is coming, even though projects may be advanced or delayed a year.
Mr. Ditto referred to an increase in the size of the Wentworth Rd. line from 10 to 12 inches. However, if the bridge to New Castle becomes a fixed bridge and Portsmouth connects at the bridge where the Water District’s line ends then the flow could go both ways and that project would go away.
Jim Maheras pointed out that the variance on the total appropriations without warrant articles should be $44,631 not $46,000. He wondered what else in that column is not correct. Mr. Ditto agreed that the arithmetic is incorrect.
Mr. Brandon said that he noted that a number of the percentages are incorrect and that the spreadsheet needs to be cleaned up. Without the history back to 2012 it is difficult to figure out, he said. He asked whether this is a new plateau or whether this is a bubble caused by equipment replacement. He suggested that the figures be looked at per homes served.
There was a question about the reserve accounts. Mr. Ditto stated that account 8840 for unanticipated expenses has $85,588 in it. Account 8830, for system replacement has $122,793 in it. Account 8850, equipment and buildings, from which vehicles are purchased, has a current balance is $31,838. A vehicle was just bought last year, he said.
Mr. Ditto confirmed for Mr. Jarvis that the money for unanticipated expenses is in an expendable trust. He said that those funds would be used if there is a water main break. The system replacement account could also be used, he said.
(85:54 elapsed)
Mr. Ditto moved on to the debt service. He said that the $80,000 bond item had been paid off. The $4500 in interest was on that. Account 8742, which was the State Revolving Loan Fund for work on the Boulevard, was a construction loan at 1 percent. That was converted to a mortgage. The interest is broken down into .26 percent and 2 percent. The principal repayment is in account 8747, which is $102,000. What is in the 2016 budget is what will be occurring into the future.
Mr. Ditto stated that the delta for the total without warrant articles is $44,631.
They are proposing to put into the capital reserves, $30,000 for system replacement, $15,000 for contingency, and $15,000 for buildings and equipment. There is a vehicle to be purchased in 2017. That is identified in the CIP for $40,000. It will probably be more like $50,000, he said.
(89:29 elapsed)
Art Ditto went through the revenues. He stated that the tax rate comes out essentially the same as the prior year, $.581 in 2015 and $.587 in 2016. Editor’s note: Actually, this version of the budget did not include the effect of an increase of approximately $42 million in the district-wide total assessed valuation. That was subsequently corrected, and the 2016 projected tax rate is $.566. There was confusion relating to the 2015 figures not having included the second tax payment in 2015.
Selectman
Musselman asked whether the three Water District Commissioners were willing to
contact Wright Pierce tomorrow and obtain a proposal in three weeks for a
comprehensive rate study. He asked
whether they were willing to commit to obtain a comprehensive rate study by
November, with the intention of establishing a fair and appropriate hydrant charge. He stated that the cost would be funded out
of accounts 7220 and 8830. Editor’s note: these are the Purchased Service Engineering
and Capital Reserve, System Replacement accounts.
Water District Commissioners Tom Clifford and Ralph Hickson stated that they would not be willing to make that commitment. Selectman Musselman stated that the funds are available. Ralph Hickson stated that account 8830 is earmarked for other projects. Selectman Musselman disagreed. Selectman Musselman said that he would review the proposal in detail and provide comments to Wright Pierce. Tom Clifford said that Selectman Musselman’s comments could be reviewed at the Water District meeting. Ralph Hickson stated that he did not believe that 8830 was an appropriate account to take the money from. Tom Clifford suggested that Selectman Musselman attend one of their Wednesday meetings.
Commissioner Art Ditto stated that they believe that they need to look at the rates, but are not prepared to commit to the extent that Selectman Musselman has asked. He said that someone had come in and looked at their rate structure in 2012.
Selectman Musselman said that the Rye Beach Village District and Jenness Beach Village District hydrant charges are greatly smaller than those of the Rye Water District. Tom Clifford said that the cost per hydrant is not an appropriate way to measure the cost. Drinking water could be supplied to the town with an 8-inch main with no hydrants. However, it is supplied with 12-inch mains to provide for the fire flow, he argued.
Randy Crapo stated that in his area customers pay for water and sewer based on water usage. The hydrant charge gets divvied up in the property tax. The only unfair thing about it is that it is charged based on the house value.
Selectman Musselman stated that Portsmouth believes that their hydrant charges are on the low side and they are starting to inch them up. They are not getting remotely close to where the Water District is, he said.
Selectman Musselman said that he is asking for a study to see what would be fair and appropriate. It should be looked at, but he is not sure what would be done.
Randy Crapo stated that realtors emphasize the low water rates in the Rye Water District compared to Jenness Beach.
Selectman Musselman said that the Rye Water District rates are inordinately low while the hydrant tax is through the roof.
(101:55 elapsed)
Peter Crawford stated that he agreed with Selectman Musselman, but getting back to the budget, he sees that the debt service is down by $101,000 and the appropriation is up by $45,000. The spending, exclusive of debt service, is up by $146,000 on a base of $1,256,000. The debt service went away on its own, so that’s a twelve percent increase in the spending, which is a problem. A lot of that is the water main replacement on Parsons Rd. However, he asked, why was that not in the CIP plan?
Art Ditto stated that it had been moved up because the road is going to be paved this year and there is a prohibition on work on it for five years thereafter. Also, it is their desire to take the asbestos out as it would be very difficult to work with in the event of a break.
Mr. Crawford stated that it wasn’t moved up, it was added. He noted that in 2017 there is a water main replacement of 2100 ft. for $585,000 on Washington Rd. according to the CIP Plan, and another $960,000 for water main replacement on Wentworth Rd.
Art Ditto noted that the Wentworth Rd. project may go away and the scope of the Garland Rd. pump house work has not been determined. The CIP Plan is dynamic for planning purposes, he argued.
Ray Jarvis asked what the problem was.
Mr. Crawford responded that there is $2 million in capital projects in the CIP Plan. If the debt service is excluded, the appropriation is up 12 percent. If all of these hit, there would be additional debt service being added back. The tax rate would be going up significantly, he argued.
Mr. Jarvis pointed out that the CIP Plan is a tool. There is a certain amount of water of a certain amount of purity needed, and there are professionals figuring it out. The whole exercise is about having enough safe water, he said.
Mr. Crawford asked about other water main replacements that may hit, or more hydrant replacements for $6500 each.
Mr. Jarvis pointed out that recurring expenses, no matter what the amount, are prohibited from being placed in the CIP Plan.
Mr. Crawford pointed out that some line items are jumping way up. He noted that the Plant Maintenance, Hydrants is up from $1500, with $5400 spent, to $15,000 for this year.
Mr. Jarvis
said that that was because they wanted to replace hydrants. Mr. Crawford said that he thought that was
what the $26,000 was for. Editor’s note: This is a reference to the Extensions &
Improvements (misc.) line item that went from zero in 2015 to $26,000 budgeted
for 2016.
Mr. Goldman stated that he had some of the same concerns as Mr. Crawford. The budgeting process should be tighter in the way it is presented. It left him with a lot of concern regarding discontinuities. They tried to answer those, but it is still bothering him. That the spreadsheet is inaccurate means that it is not a very tight process. He recalls the question about the rate structure having been asked a year ago, and thinking that it was a reasonable question.
(109:49 elapsed)
Jim Maheras said that he did not know enough about what is going on behind the scenes to be able to vote on the budget, and he has some of the same concerns that Mr. Goldman does. The huge expenses and sudden big jumps in line items are a concern. He referred to a $19,000 jump in meters and accessories.
Selectman Musselman asked whether all of the added Plant Operating Expenses would remain in future years. He asked whether some of them should be recharacterized as capital expenses. If that were the case, the question would be different. He asked whether meter replacements would be $40,000 every year now. He asked whether $26,000 would be spent on extensions and improvements every year.
Mr. Goldman said that business processes should not have a 40 percent jump and then expenses continuing at the higher level.
Mr. Ditto said that he could not answer the question. He does not know whether four hydrants or four valves would be replaced next year.
Kevin Brandon asked how long the hydrants last. Mr. Ditto said that he did not know, but they have a long life. Mr. Brandon suggested a schedule of hydrants and valves, their depreciable lifetimes, and where each stood relative to that.
Mr. Ditto referred to the asset management plan that they are trying to put in the GIS system. They are trying to level the expense load.
Mr. Brandon asked whether the cow had been milked too hard, necessitating an increase in the expenses.
Ray Jarvis said that the grand total of appropriations are up 3.68 percent. Maybe some of the expense items should be in the capital line, however, he said.
Mr. Brandon stated that that is not the way to look at it. Items should not be lobbed into a larger bucket and the entire total examined for reasonableness.
Selectman Musselman said that once the asset management plan is put in place they replacements could be scheduled and planned to avoid budget spikes. The question has been asked four different ways and perhaps we do not know whether these are going to be recurring expenses. In future years there should be better information, he said. He agreed with Mr. Jarvis that there is, in all likelihood, not a dollar issue.
Mr. Maheras said that they had gotten this budget from the town, they would have chucked it and forgotten about it.
Mr. Crawford stated that, excluding the debt service, the total appropriations are up from $938,101 to $1,084,290, which is 15.6 percent. That is a totally different picture. The debt service reflects past decisions that they have no control over. The real issue is what it costs to run the operation and that is going way up. The major changes, like the $19,000 for the meters, should be looked at. They want to replace 250 meters. That may be great, he said, but he asked what the payback was for the automated reading.
Mr. Goldman said that in one sense, at the 100,000 foot level it is up 3.68 percent. It’s OK in one sense, but underneath there are major categories that are up 40 percent. It would be better due diligence if some things are recharacterized. Some of the items are not inherent in the operation.
Mr. Brandon referred to discretionary and non-discretionary capital expenditures.
Mr. Crapo stated that the $60,000 put into the reserves annually shows a level of anticipation.
Selectman Musselman asked whether the Water District has an accountant. He noted that they had asked whether Cyndi could help out, but they could not work that out. Editor’s note: He is apparently referring to Cyndi Gillespie, the Town Finance Director. Dyana Ledger, Ms. Gillespie’s sister, is currently doing work for the Water District. The Commissioners responded that they have an auditor who does the annual audit, but they do not have an accountant.
Selectman Musselman said that, for the town, every budget cycle, decisions are made as to whether items go in the operating budget, the capital outlay budget or a warrant article. If they budgeted the way the Water District does they would have chaos.
Art Ditto said that they have only four people. Three are the operators.
Selectman Musselman asked about the meter replacement program and how long it would take. Ralph Hickson said that these are readers. Almost all of the meters have already been replaced over 5-6 years. Two hundred of the most difficult meters already have readers. He was looking at doing about 200 a year. There are 1500 meters total. That would most likely require investment at the $40,000 annual level for a number of years.
Selectman Musselman asked about the fire hydrant replacement. Art Ditto said that they need to get that information into a program.
Paul Goldman asked whether the Commissioners had yet voted on this budget. The response was that they had not formally voted at a monthly meeting. Mr. Goldman then asked more of a “process question.” Typically, the Budget Committee votes only once the appropriate bodies have already been voted on. He asked whether they were asking the Budget Committee to vote prior to the Commissioners having voted on it, and if so why.
(133:53 elapsed)
Ralph Hickson stated that it was a timing
issue. The monthly meeting is
tomorrow. They have discussed the
warrant articles at length and agree that this is what they want, but there has
not been a vote at a formal meeting that has been recorded with minutes. Editor’s
note: If two of the commissioners
discussed Water District business outside of a formal meeting,
that is a violation of the right-to-know law unless certain narrow exceptions
apply. See N.H. Rev. Stat. Ann. (“RSA”)
91-A:2, I. All
meetings must be open to the public. RSA
91-A:2, II.
Ray Jarvis asked whether the three Commissioners were not present and why they could not vote tonight.
Selectman Musselman said that the meeting would have to be properly noticed.
Jim Maheras suggested that the matter be tabled.
Mr. Goldman stated that he would “feel better from a process and systems viewpoint” if everything was nailed down and correct, and the Budget Committee was then requested to vote.
Selectman Musselman confirmed the balances in the reserves associated with the three warrant articles adding to the reserves.
The warrant articles were then renewed. Mr. Jarvis said that he did not have a problem with articles three, four or five.
Selectman Musselman moved to table the Water District budget. Randy Crapo seconded. All were in favor.
Whereupon the meeting adjourned at approximately 8:55 p.m.