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Selectmen Meeting Minutes 6/10/2014
Selectmen’s Meeting
Nathan Media Center
Fuller Meadow School
June 10, 2014
7:30 PM

Call to Order – Chairman Jones called the meeting to order at 7:33.  Also present were Mr. Cresta, Mr. Houten, Ms. Mr. Prentakis, Town Administrator Mr. Singer, Assistant Town Administrator Mr. Ferrara and Town Planning Coordinator, Ms. O’Leary.

Minutes – Mr. Houten made a motion to approve the minutes of the May 20,, 2014 Regular Session.  Mr. Prentakis seconded the motion and all were in favor.

Approval of Warrants – Payroll Warrant 1449 totaled $504,196 and included the bi-weekly School Payroll as well as the monthly overtime ($29,316) and part time ($27,464) for the Fire Department.  The Payables Warrant totaled $387,447 and included $177,077 for Payroll Deductions, $93,981 for the School Department including $38,896 for computers, and $40,581 in water liens collected by Middleton for Danvers.
        Mr. Prentakis made a motion to approve the warrants.  Ms. Houten seconded the motion and all were in favor.

Town Administrator’s Report
  • Massachusetts School Building Authority (MSBA) - The MSBA has accepted Middleton’s Statement of Interest application and has invited the Town to participate in the Accelerated Repair Program for a project to replace the roof on the older section of the Fuller Meadow School building.  There is no guarantee past the invitation into the first phase.  A vote will be required to insure that the Town supports the project.  The School Department will also have to provide proof that the Town has kept up with the maintenance on the building.  This will be a collaborative process.  MSBA hires their own design teams to conduct the feasibility study to insure that the repairs are timely and cost effective.  There will be something for the Selectmen to sign and some action to be taken at next May’s Annual Town Meeting.  The Town’s share will have to be appropriated no later than December of 2015 so the Town will target the May 2015 annual town meeting.  The feasibility study should begin within 60 days of receiving the vote from the Board of Selectmen and the maintenance documentation from the School Department.
  • Division of Capital Asset Management and Maintenance (DCAMM) Land Transfer – Representative Jones has filed special legislation (House 4138) to facilitate this transfer.  Despite the efforts of the Conservation Commission, DCAMM has informed two State Agencies (Division of Food & Agriculture and Division of Fish & Wildlife) that, pending the special legislation, they have approved those agencies’ requests to have the land transferred to them.  No notice was given to Middleton.  DFA has a good reputation and has control of land in Middleton, including the land surrounding the Agricultural School which is being farmed.  The Peabody St. lands, which have traditionally been farmed, would go to DFA and might be well off there.  With inaction, these lands could be used for other purposes.  Representative Jones will be pushing to have the land deeded to the Town.  Mr. Prentakis asked if all 111 acres were going to DFA or DFW.  Mr. Singer said that he did not think so, though he had not had a chance to thoroughly review the memo from DCAMM.  Mr. Cresta asked what would stop DFA or DFW from transferring the land to another State Agency that might use it for non-conservation purposed.  Ms. Singer explained that the legislation would have to be structured properly.  The commission stated that it would be transferred subject to Article 97 of the Constitution.  It would require a two thirds vote of the legislature to take it out.  If the legislation did not include Article 97 protections, then it would be less secure.
  • Gas Line on Gregory Street - The Conservation Commission provided contact information for residents interested in connecting to the new gas line being installed for the Department of Youth Services project.
  • Local Liquor License – The House is expected to debate Comprehensive Economic Development legislation which originally included language to return local control of liquor licenses to the cities and towns.  As the economy improves, surrounding towns have been asking for additional license.  The Massachusetts Municipal Association supports return of liquor license control to the municipalities.  Mr. Singer suggested that if the Board agrees, they should ask that the language be restored to lift the cap on the number of license.  The Economic Development aspect is that restaurants form their own economic engines, improving their surroundings.  If an applicant has to wait 7 to 12 month for a license, the project can fail.  Mr. Prentakis noted that no one in Middleton has paid another business for their license so there is no loss to them if Middleton increases the number of licenses.  Mr. Singer added that Middleton is just about at the maximum number of licenses.
Mr. Houten made a motion to write a letter to Middleton’s legislative delegation asking for the insertion of a provision to return local control of liquor license to the cities and towns.  Mr. Cresta seconded the motion and all were in favor.
  • Request from National Grid - At the next meeting, National Grid will be asking for a locked gate at the end of Rockaway Road because of trespassing in the right of way which is a hazard to the power lines.  The Town has frontage acquired by tax title on this road.  Mr. Singer feels that the Town should issue a revocable license for the gate.  The Police and Fire department will have keys
Alfalfa Farm Winery Application for a “Tasting License” at Middleton Farmers Market for 2014 Season – The application is in the packet.
Mr. Houten made a motion to approve Alfalfa Farm Winery Application for a “Tasting License” at Middleton Farmers Market for 2014 Season.  Mr. Prentakis seconded the motion and all were in favor.

Jewell Farm Winery Application for a “Tasting License” at Middleton Farmers Market for 2014 Season
Mr. Houten made a motion to approve Jewell Farm Winery Application for a “Tasting License” at Middleton Farmers Market for 2014 Season.  Mr. Prentakis seconded the motion and all were in favor

Presentation of Certificate of Acknowledgement for Purple Heart Community by Tim Perkins, Senior Vice Commander of the Mass Military Order of the Purple Heart, to the Town of Middleton – Mr. Perkins introduced himself to the Board.   He explained that he met Mr. Ferrara at a “Wreaths Across America” event in December of 2013.  In March of 2014, The Middleton Board of Selectmen approved declaring Middleton a “Purple Heart Community”.  Mr. Perkins explained the history of the Purple Heart.  It was originally awarded by General George Washington in 1782 to three individuals that are known.  In 1932, the Purple Heart was resurrected by General Douglas MacArthur.  36,000 Purple Hearts were awarded during the Iraq and Afghanistan campaigns.  Middleton now has four Purple Heart recipients.  Mr. Perkins read the certificate.  He added that some towns have signs indicating that they are Purple Heart communities and he will forward information on the sign to the Town.  Three other communities on the North Shore have become Purple Heart communities.   They are Topsfield, Beverly, and Salem.  Mr. Prentakis suggested that August 7, which is Purple Heart Day be acknowledged on the Town Bulletin Board.
Request for Exception to Cemetery Rules and Regulations from Mr. Bart Brown to Permit Placement of a Single Headstone in the Middle of Two Contiguous Cemetery Plots – Mr. Brown was represented by his daughters, Sarah George, Katharine Brown and Janet Parker.  The Selectmen’s packet contained a letter from Mr. LaBossiere, the DPW Superintendent, recommending that they approve this request.  Mr. Cresta should think about updating the regulations.  There are plots that have larger headstones than are allowed.
Mr. Houten made a motion to approve the request for an exception to Cemetery Rules and Regulations from Mr. Bart Brown to permit placement of a single headstone that is larger than allowed in the middle of two contiguous four grave cemetery plots.

Request for Signature of Support from Jill Onderdonk on Behalf of Riverview Park LLC for the Local Action Units Application to Promote the Sale of the Six Units Eligible for Purchase by Low or Moderate Income Parties Age 55 or Older at the Riverview Park Condominiums – Ms. Onderdonk also ran a similar lottery for the Maple Street Condominiums.  Mr. Prentakis noted that four of the six affordable units are reserved for Middleton residents.
Mr. Houten made a motion to authorize the Chair to sign the letter of support requested by Jill Onderdonk on behalf of Riverview Park LLC for the Local Action Units Application to promote the sale of the six units eligible for purchase by low or moderate income parties age 55 or older at the Riverview Park Condominiums.  Mr. Cresta seconded the motion and all were in favor.

Request for Letter of Support for House Bill 1859 Entitled “An Act Promoting the Planning and Development of Sustainable Communities” Also Known as the Consensus Zoning Reform Act – Ms. O’Leary summarized this zoning reform legislation and expressed her opinion that this revision might pass the legislature.  She divided her presentation into improvement to the planning and permitting process and new planning tools.  Finally she will present reasons to support his bill.
Background - This is the first major change to planning and zoning control since 1975 and to sub division regulations since 1953.  There have been a number of failed attempts.  This legislation does not touch on Chapter 40B, which might give it a better chance of passing.  The Bill has now been assigned the number 4065.  
  • The legislation gives clear definitions of planning tools such as impact fees, inclusionary zoning, natural resource protections and transfer of development rights.
  • It gives Cities and Towns the option of reducing the threshold for passing new zoning changes from two thirds down to a simple majority.  It would require a two thirds majority to make this change.  The assumption is that the vote to go to a simple majority would have to be approved by the Attorney General to be in effect, so that zoning changes at the same meeting that approved the reduced threshold would still require a two thirds vote.  Mr. Singer pointed out that there could be special legislation to address this.
Grandfathering – The proposal would eliminate all zoning freezes for Approval Not Required (ANR) plans: the 5 year for 1, 2, and 3 lots held in common ownership and the use freeze of three years for simple plot plans.  Today when a project is approved it freezes the zoning for the land forever, even if the project is scrapped.  The proposed change freezes the zoning for that project only.  Nothing changes for projects that have been approved or for single lots that complied with the zoning when they were created.
Land Use Dispute Avoidance – This offers a way for parties to work though the difficulties in a project by working with a neutral facilitator.  Mr. Singer feels that it is a way to keep things out of court.  Aggrieved parties can try this path before filing suit.
Special Permits – Granting of a Special Permit will only require a simple majority.  The life of a Special Permit will be extended from two years to three.  There will now be clear regulations on how to grant a Special Permit.
  • Site Plan Review – There is nothing in State Law defining Site Plan Review.  This legislation contains time limit and definitions of the appeal process.
Variances – The current process is so restrictive that towns either choose to not grant them at all or end up granting them illegally.  This legislation creates more reasonable procedures.
  • Appeals – The proposed legislation streamlines the language for site plan review, special permits and subdivisions.
  • ANR – This allows municipalities to replace ANR’s with minor sub-division regulations for projects under seven lots.  These regulations could cover both ANRs and minor sub-divisions. This gives the town greater regulatory oversight   Mr. Singer said that examples in Middleton would be Park Ave. and Gould Hill.  The Planning Board has struggled with these issues for years.  This would give them more authority to look at the whole roadway.  Mr. Prentakis asked if this would enable a developer to take a large tract and divide it into a number of minor sub-divisions of seven lots.  Ms. O’Leary replied that she did not think that would be easier for a developer than permitting the full sub-division.  Mr. Singer noted that the Planning Board would have to review its regulations to be sure that couldn’t happen.
  • Impact Fees - It establishes standards for impact fees.  Right now, the Towns can ask the developer to do an impact study.  The Town then decides whether to allow the project but can’t ask for money to offset the impacts.  Ms. O’Leary feels that allowing impact fees allows more uses by right rather than special permit, still within the site plan review process.  Developers would rather know the cost up front.  The legislation does define the impact fees, and again, this is an option the Town would have to adopt.  These fees can apply to both commercial and residential projects.  Mr. Cresta asked about impact fees on 40B projects.  Ms. O’Leary said that she believes that impact fees can’t apply to Affordable Housing projects.  Mr. Houten observed that developers might use the threat of using 40B to try to convince the Town not to charge an impact fee.  Ms. O’Leary pointed out that the advantage for developers will be that they will know the fees up front, rather than the small requests such as contributing to the sidewalk fund.  Mr. Singer pointed out that the sidewalk fees are not impact fees because they result from the granting of a waiver.  If this becomes illegal, the Planning Board will have to change its regulations.  Ms. O’Leary noted that some towns require all projects, including ANRs, to build sidewalks or contribute to a fund.  Mr. Singer added that now that the sidewalk fund has money that was collected due Ms. O’Leary’s research, it will be possible to talk about some sidewalk priorities.
  • Inclusionary Zoning – This section provides for the adoption of measures that require the creation of Affordable Housing in development project.  Many Towns have adopted such measure.  It is a local option.
  • Comprehensive Permitting – This seeks to insure that all Boards get common information about larger projects and have the opportunity to bring all the regulatory boards together at the beginning of a project.  Middleton currently does this informally.
  • Parks and Playgrounds – This provision gives the municipalities to the ability to require parks and playgrounds within a sub-division, or to contribute to a fund to have them in a more logical location
  • Planning ahead for Growth Grants – This provision provides incentive for smart growth and give enhanced planning tools and consideration for state grants.  Ms. O’Leary pointed out that it is hard to get grants if you don’t have a large staff.
Reasons to Support this Legislation
  • It will make the development process more predictable.
  • It will encourage communities to plan and regulate in ways that allow for growth and density.
  • It will make communities more walkable
  • It will preserve critical natural resources
  • It will reduce liability of town staff and boards by giving clarity to the decision making process.
Mr. Cresta noted that the formal legislative session ends July 30 and if this legislation is not passed by the end of July, it will have to start all over again next year.  Mr. Singer added that each year efforts to reform zoning get more impetus, but still don’t pass the legislature.  This has been a twenty year effort.  He feels that there is more support this time than ever before.  Mr. Houten said that he liked the ability for a Town to adopt individual provisions.  Mr. Singer expressed his opinion that that is why this legislation has more support than past legislations.  Mr. Cresta feels that this would give the Town the tools for doing what the Town wants with North Main St.  Ms. O’Leary noted that the Planning Board will review the legislation tomorrow.  
Mr. Cresta made a motion to write a letter to the Middleton House and Senate delegations expressing support for House Bill 4065 and to urge them to take positive action before the end of the legislative session to allow Middleton and other towns to have more local control and options regarding zoning needs.  Mr. Houten seconded the motion and all were in favor.
Mr. Cresta expressed his appreciation for the work Ms. O’Leary put into this presentation.  He added that there are options in here that the Town could pass on its own even if this legislation fails.

Overview of Public Employee Retirement Administration (PERAC) and Massachusetts Pension Reserves Investment Trust (PRIT) Fund – Mr. Singer feels that it is important for the Board to have an overview of where Middleton stands as part of the Essex Regional Retirement System (ERRS), in terms of investments and the overall administration of pensions.  Mr. Singer explained that PERAC oversees the State Retirement System, as well as the 105 other public retirement systems in Massachusetts, including ERRS. This presentation was given to the ERRS Advisory Board which consists of the treasurers of the participating entities.  ERRS consists of 48 entities including 19 communities as well as School Districts and Housing Authorities.
        The mission of PERAC is to oversee, guide and monitor the public pension system.  100s of 1000s of individuals are affected by these plans which offer a defined benefit program.  Defined benefit pensions are a thing of the past in the private sector, having dropped from 80% in the 1980’s to 19% today.  Though in some states, public employees did not contribute to their retirement systems, Massachusetts employees have always contributed to the pension fund.  The contribution is now at 11% of salary. Additionally public employees are not allowed to collect the benefits of Social Security unless they worked under Social Security for 30 years or more.
The PERAC Commission consists of seven members including designees of the Governor and the State Auditor and representatives of various public employee unions.  PERAC has nine units including an actuarial unit that performs valuations of each of the 105 retirement systems.  PERAC has a lot of authority to oversee the decisions of each public retirement system.  The investment unit oversees the portfolios of all the pension systems even if they do their own investing rather than participating in PRIT.  
        The pensions systems overseen by PERAC have 306,000 active members and 204,000 retired members.  The funding ratio is 60.4%.  With benefits payouts of $6.1 billion, the pension systems are an economic stimulus.  The unfunded liability spiked following the 2008 economic downturn.  It is now coming back in part because of the Reform Act of 2009, which reduced some benefits, eliminated some loopholes, and increased some retirement ages.  
The average pay of the 130,000 local employees covered by the retirement plans is $49,200 and their average retirement benefit is $23,700.  Some are much higher than the average and some much lower, primarily for part time employees.  There have been some changes to the vesting system so it takes longer for part-time employees to become vested.
There is $58 billion under PRIT’s management.  Non PRIT systems do their own investing.  ERRS is a hybrid which has been moving towards PRIT, because of the lobbying efforts of the cities and towns in the system  Non PRIT systems have an average return in 2012 of 12.25% while PRIT’s rate for that period was 13.87%.  PRIT has averaged 9.65% return over the past 28 years.  Many are complaining that an 8% assumption is not conservative enough, but this shows that historically the returns have been there.  The trend is to adopt lower assumptions but then the system has to collect more money from the cities and towns.  PRIT has met and exceeded the benchmark of comparable public systems.  A certain amount must be invested in fixed assets.  Prior to its restructuring, ERRS suffered the largest loss of any system in the State, losing 31 % of its assets in 1 ½ years.  PRIT suffered a 22% loss in that period, as did all retirement systems as well as individual portfolios   Mr. Singer is impressed with the level of investment expertise.  PERAC has also created a Fraud Prevention Unit which has saved over $39 million since its inception.
The Pension Reform Act of 2011 increased certain retirement ages.  It will be 10 to 15 years before savings are realized but small changes have big impacts.  Another change is that pensions are now calculated based on the highest five years of earnings rather than three.  It also eliminated the loophole known as spiking where someone works at a low paying job for most of their career and then gets a high paying job for the last few years.  The ERRS Board reviews the calculation for each retiree.  The Act also extended the funding schedule to 2040.  It requires financial disclosure statements from all retirement board members.  It mandates a competitive bidding process for all services.  All retirement board members must acquire 18 Continuing Education Units (CEU) each year.  This is useful because smaller board sometimes have members who lack expertise.
ERRS investments currently total about $350 million to cover the 6000 to 7000 employees.  $311 million of their assets are held in PRIT.  The remaining funds are in instruments that have obligations that could not be liquidated when the other funds were transferred.  As they expire, they will be moved to PRIT.  Mr. Singer showed a list of non PRIT investments.  Some are significant, some are not.  In 2008, 80% of ERRS’ assets were managed in house and that turned out to be the worst performance in the State.
In 2010, ERRS started moving its assets to PRIT under pressure from the participating cities and towns.  By 2013, 91% of ERRS assets were in PRIT, who just has more expertise.  ERRS performance over the last 4 years is just slightly under PRIT’s because of the remaining non PRIT assets.  The national benchmark for similar retirement funds is 12.6%.  PRIT achieved a 15.2 % return resulting in 100s of millions of additional assets.  The fund now totals around $55 billion.  ERRS’ return was 14.37%.  The Pioneer Institute rated ERRS 62nd out of the 105 systems and gave ERRS a grade of A.  ERRS assets are almost back to what they were before the economic downturn.  A new investment manager for the non PRIT assets has been hired.
For the next 4 years, Middleton will be contributing 8% into the system.  After 2020, the contribution will go down to 4% until the system is fully funded in 2035.  The message is that the defined benefit system is well funded in Massachusetts and well managed both locally and State wide through PERAC.  He did add that none of this covers the Other Post-Employment Benefits (OPEB) issues.
Mr. Cresta noted that when the retirement system contribution drops, the Town will be able to make larger contributions to the OPEB fund.  Mr. Singer pointed out that consistent guidelines of OPEB funding are needed.  However the fact that the Town was able to transfer its fund to PRIT means that it is now getting a 15% return rather than no return. This may result in the minimum contribution being covered by investment income

New Business
Chief Will Day – Mr. Houten reminded everyone that Chief Will’s Day will be Saturday, June 21 at the Transfer Station.  High School students can get community service credits by volunteering at the event.

Adjournment – Mr. Cresta made a motion to adjourn the meeting.  Mr. Houten seconded the motion and all were in favor.  The meeting was adjourned at 9:25.

Respectfully submitted,
Mary Jane Morrin                        
Mary Jane Morrin, Recording Secretary
Kosta Prentakis, Clerk