Selectmens Meeting Minutes - 06/12/2012
Selectmen’s Meeting
Nathan Media Center
Fuller Meadow School
June 12th, 2012
7:30 PM
Call to Order –Chairman Cresta called the meeting to order at 7:40.  Present: Mr. Houten, Ms. Jones, Mr. Prentakis, Town Administrator Mr. Singer and Town Accountant, Mr. Vanni.
Minutes - Mr. Houten made a motion to accept the minutes of the May 29, 2012 meeting.  Mr. Prentakis seconded the motion and all were in favor.
Approval of Warrants – The Board approved a Payroll Warrant in the amount of $158,687 which included $20,558 for the Police Department and $69,874 for the Fire Department.  They also approved a Payables Warrant in the amount of $805,436, the majority of which was for the purchase of power.  Other expenses included:
        $95,400 for the School of which h$36,268 was for transportation and $11,180 was for SPED tuition,
        $28,286 for Public Works, $11,008 for solid waste removal, and
        $19,873 for the Police Department
Town Administrator’s Report
        The Building Commissioner’s report is in the packet.  $500,000 in fees has been collected year to date.  This is more than was expected when the budget was developed.  This represents $27 million in new value, including 35 to 37 new houses.  This uptick in activity signals a restart of development.
        Congratulations are due to Animal Control Officer, Michael Plunkett for the completion of the Animal Control Officer Certification Course.
        A number of residents have expressed an interest in serving the Town.  Mr. Singer will be contacting them to see if they are interested in any of the available vacancies.
        The impasse in the legislature, which is holding up the Chapter 90 highway funding is going to delay roadwork for a few weeks.  Sixty to ninety days of planning are needed before work can start.  Wennerberg Rd. and the area around the Howe-Manning School can be started.  Sub-contractors need lots of notice and do not want to come for small jobs.
        Mr. Singer attended the “ground-breaking” at CoCo Keys, now officially the DoubleTree Hilton.  They are putting $10 million into the hotel.  The roof has been replaced.  They remain a vibrant business.  They would like to have a sign on Route 1 advertising their presence.  Mr. Cresta asked which Town collects the fees for building inspections.   Mr. Singer said that 100 rooms are in Middleton. The fees are paid according to which Town the space where the work is being done is.
Request from Robert King, owner of McDonalds for continuation of 24 hour license - Mr. King had previously obtained an extension of hours to be open 24 hours.  The license was issued conditionally until June.  Mr. King indicated that he is satisfied with the business he is doing.  He feels he provides a service to the Town because night workers now have somewhere to get something to eat.  He also feels it is safer.  Mr. Cresta noted that the Police Department has not reported any incidents.  
Mr. Prentakis made a motion to continue the 24 hour license for McDonalds.  Mr. Houten seconded the motion and all were in favor.
Review of Restrictions under Executive Office of Energy and Environmental Affairs Local Acquisitions for Natural Diversity (LAND) Grant Program and Decision to Apply for Funds by July 13, 2012 Deadline – Mr. Singer told the Board that a close review of the grant application confirmed that if the grant were obtained, no active recreation would be allowed on the recently acquired property on East St. (the Riddle property).  Up to 50% of the cost of the property ($45,000 to $50,000) could be paid for by this grant.  There are one or two acres of upland that might possibly be developable as a small field.  He would like to make sure that the Board understands that the grant would preclude such development.
        Mr. Cresta asked if the field could still be mowed.  Mr. Singer said that mowing would be allowed.  Ms. Jones noted that passive recreation seemed to be what the voters at Town Meeting wanted when they voted to purchase the land.  Mr. Cresta pointed out that the grant requires that the care and custody of the land be transferred to the Conservation Commission.  Mr. Prentakis asked about the cost of applying for the grant.  Mr. Singer said that it would cost a few thousand dollars for a grant writer.  Ms. Jones added that community gardens are an allowed use under the grant.  
        Mr. Prentakis made a motion to instruct the Town Administrator to pursue this grant.  Ms. Jones seconded the motion and all were in favor.
Update on System Pension Funding and Other Issues Relating to Essex Regional Retirement System (ERRS) and Chapter 176 Pension Reforms – Mr. Singer explained that ERRS provides retirement services for 5000 active and retired employees in 48 entities.  The Public Employee Retirement Administration Commission (PERAC) has improved oversight and governance of the retirement systems in the state.  Among the new requirements are:
Board members are now required to file Statements of Financial Interest.
Retirees are prohibited from doing business with their Retirement Boards.
Anyone doing business with a Retirement Board must sign a non-collusion statement.
Board members are required to take 18 hours of PERAC approved training.
Procurement Policies have been established.
        Mr. Singer feels that these reforms are long overdue.  They are just what the cities and towns already have to do.
        There have also been substantive changes in how the pensions are funded.  Anyone hired after April 12, 2012, will have a later retirement age.  This will match up with Social Security.  Pensions will be calculated on the highest five years of earnings rather than three.  This will reduce the unfunded pension liability and line up with pension changes throughout the country.  The unfunded liability had grown because of the 2008 financial downturn.  The funds use an earnings assumption of 7% – 8 ½%.  The Massachusetts Pension Reserve Investment Trust (PRIT) has averaged 10%+ over the last thirty years.  The funds also assume 4 ½ to 5% salary increases but the actual numbers have been less.
        ERRS took a large loss in 2008.  They hope to be at 50 60 % funded at the next valuation, and feel that they will be fully funded by 2030.  The average state pension is only $30,000 a year.  Additionally any Cost of Living Adjustment (COLA) only applies to the first $12,000 so the increase in only about $300 a year.
        Mr. Singer is confident that the system is on its way to being healthy again without any undue burden and the cities and towns.
Vote to Allocate Uncommitted FY 2011 North Shore HOME (Federal) Consortium Funds of $13,849 to HAWC, (Healing Abuse Working for Change) a Non-Profit Organization dedicated to provide housing and services to abused individuals and children on the North Shore – Mr. Cresta referred to the letter from the North Shore HOME Consortium asking Middleton how it would use its remaining uncommitted funds of $13,849.  He referred to the four allowed purposes of the fund   Mr. Singer said that this is the letter that is received every year.  Mr. Cresta asked if these funds could be used to offer low-interest loans.  Mr. Singer pointed out that Middleton has tried to offer rehabilitation assistance with these funds in the past.  The problem is that once you go into a house, it has to be brought completely up to code.  Five or six loans of between $10,000 and $15,000 were given out.  Mr. Cresta asked if it could be a way of setting up a mini Section 8 program.  Mr. Singer said he would look into that but he feels that this is a federal program that may be cut.  Middleton is now too affluent to get substantial funds.  Nineteen communities split $2 million.  The $15,000 to $17,000 that Middleton gets is not enough to do anything with.  That is why Middleton has been giving the money to HAWC.
Mr. Houten made a motion to give Middleton’s share of the HOME Consortium funds to HAWC.  Ms. Jones seconded the motion and all were in favor.
Review of Annual Financial Audit for Fiscal Year 2011 – Mr. Cresta explained that the Independent Financial Audit for FY 2011 is available as well as the Management letter.  The Town Accountant Mr. Vanni, who worked with the Auditor is here to participate in the discussion.  Mr. Singer noted that the most important part of the audit is that no material weaknesses or significant defects were found.  The Town continues to show significant strength in its financials as demonstrated by its strong bond rating.  General Fund Revenues increased by 3.3% in FY2011 to $24.7 million.  As of June 30, 2011, the Formally Uncommitted Fund Balance was $3.07 million down slightly from the previous year.
        The Auditor did identify a number of issues.  Some are standard and will be found in any audit but must still be reported.  Among them are:
        GASB 34 pertains to the accounting of fixed assets.  Mr. Vanni will be working with the auditor to improve this reporting.
        The amount of Tax Receivables has increased slightly.  This is a combination of bad economic times and turnover in the Treasurer’s Office.  The Receivables Report is attached.  Motor Vehicle and Personal Property receivables are a small percent of the total.  Most of it is Real Estate.  Mr. Cresta noted that about $400,000 is in tax title.  He wants to know where in the process these properties are.  Mr. Singer said that this changes all the time.  The Town has started to foreclose on 3 or 4 higher priced properties as funds allow.  Mr. Cresta asked what percentage is either in bankruptcy or just undesirable.  Mr. Singer said that was about $250,000 out of the $400,000.  Mr. Cresta had talked at the MMA conference with vendors who purchase tax liens.  Mr. Singer said that the Town can auction the lien as long as the property is not involved in a bankruptcy.  When the liens go to auction, the owners often come up with the money.  He suggested taking this up again when the Board discusses financials in July.
        Mr. Prentakis questioned the Auditor’s statement about using the Overlay Account as a mechanism to remove the receivables.  Mr. Singer will seek clarification.
        The Auditor had some comments on the Town’s special funds.  These are small funds but the Town will seek to respond.
        There was a comment about the year–end encumbrance process.  Mr. Vanni responded that he allows two warrant cycles to capture all the fiscal year expenses.  After that a department must have a good reason to carry money forward, such as a purchase commitment.
        There was a comment about GASB-40, Deposit and Investment Risk.  Mr. Carter will be working on a new investment policy.
        The Town also needs to develop a computer policy.  This might be a task for the Assistant Town Administrator.
        There was a comment about tailings.  If the Town issues a check which is never cashed, the monies must revert to the State under the abandoned property laws.  The Town will comply with this.
        All are agreed that the current Danvers Water Agreement needs to be re-worked.  The Town feels that it does not receive enough of the water revenues to accomplish what it is responsible for.
        There are some outstanding issues with the Middleton Electric Light Department relating to the street lights.  More money has been appropriated to cover street lights.  The Board discussed ways of reducing the cost of street lights.
Establish Summer Meeting Schedule – Mr. Cresta explained that at the last meeting the members present had agreed that meeting the 2nd and 4th Tuesdays would be more predictable and avoid scheduling conflicts.  Mr. Houten and Ms. Jones agreed.
        The projected Summer schedule is July 10th, July 31st, August 14th, September 11th and September 25th.
New Business
Mr. Prentakis reported that at the last meeting of the Library/Town Common Committee the budget was reviewed as adjusted for savings that would be realized if the DPW did some of the work.  This would bring the remaining cost to under $200,000.
Mr. Prentakis noted that the first monthly review of financial documents will be at the July 31st meeting.
        The Middleton Farmer’s Market will be opening on June 13th
Executive Session under Mass General Laws, Chapter 39, Section 23B, Paragraph 3 Collective Bargaining - Mr. Cresta announced that the Board would be going into Executive Session under Section 23B, Paragraph 3 (Collective Bargaining) and that the Board would not be coming back into open session.  Mr. Cresta voted yes.  Mr. Houten voted yes.  Ms. Jones voted yes.  Mr. Prentakis voted yes.  The Board entered Executive Session at 9:05.
Respectfully submitted,
Mary Jane Morrin        
Mary Jane Morrin, Recording Secretary
Chris Lindberg, Clerk