Meeting transcript
Andover Board of Finance Special Meeting
January 18, 2023 · Watch on YouTube · All meetings
And we'll go ahead and call this meeting to order. This is the Board of Finance of the Town of Andover special meeting of Wednesday, 01/18/2023. This is a special meeting with a very specific agenda item, and as usual with any special meeting, we do not have the option to change the agenda in any way. So we will go ahead and proceed for the agenda that was distributed. First, we'll go ahead and say the Pledge of Allegiance. I pledge allegiance to the flag of The United States Of America and to the Republic for which it stands one nation under God indivisible with liberty and justice for all. You okay I didn't agenda number item number two is public speak doesn't look like we have any members of the public on Eric Eric Correct. Eric Okay we'll move on to agenda item three which is the public works plow truck, this is the only agenda item we have for this subcategories it purchase agreement financing method terms source of funding, and the Board of Selectmen's referral. Eric, do want to give us the overview and talk about the purchase?
Sure. So at this point, you've all seen, I think, the equipment plan for the town of Andover. What we've been anticipating is buying a plow truck every five years, because that seems to be the lowest overall cost point for the town. The range for municipalities, some get rid of them as soon as twelve years, others run seventeen to twenty years. So, and for the record, state DOTs by and large, their cycle for a truck of this size would be around eight years before they would get rid of it. So, chose that point because that means we have the primary trucks stay in service for fifteen years, and then they have five years as a reserve vehicle before we get rid of them.
So that's the basic plan. Just to go through the numbers, essentially what the town has settled on, and this has been approved by both CAIP and the Board of Selectmen is buying a truck off the state bid contract. You know, which is a Freightliner vehicle, Freightliner chassis. And the reason we're doing it now is these have an eight to twelve month build time. And right now it's at the shorter end of the time, but if we don't order it fairly quickly, we're not going to have, right now it looks like we still have a build slot, but we wait a couple of months and we're not going to have a build slot in this year, And we would be anticipating a truck for fall of twenty twenty four, not fall of twenty twenty three. So, that's what the goal is in terms of the purchase agreement because the truck is beyond what we can afford to buy outright with capital. We are going to be essentially taking a five year loan on the vehicle to be paid back over a total of five years. But the finance company is requiring that we escrow the money now as we sign the contract. So this, we will essentially be escrowing the money now and signing the contract, even though we're looking at a delivery in eight months best case scenario. So that's where we're at with this. You know, we always have the problem with these that the trucks have to be purchased out of cycle, because if you wait until the budget is approved, then you run into the case where
you get delivery of it two years down the road, not one year down the road. That's kind of where we're at with this truck. So that's basically the finance or the contract. Anybody have questions on that I know Louise had some questions about the. The extended warranty and that extended warranty and the details of that are baked into the price of this. And given the cost of repairing, you know, an engine failure or an engine issue, I mean, we definitely think that's appropriate. So that's baked right into the cost of the, you know, the vehicle. We are also, along with the state bid, we've spec ed the Tenco all season bodies. The reason we did that is because in the past, the town has always bought the least expensive mild steel bodies, but we've pretty consistently had to replace bodies on the vehicles at about the ten year mark. And the cost to do a body replacement on these vehicles has been running, was running about $40,000 I think it's more now. I think just the body itself without labor is over 40. So, it's more economical to spend the money upfront to get the stainless all season body with the hard ox floor than it is to get the mild steel ones, which we've done in the past. And for the record, our Ford plow truck has been completely rebodied once, and now is showing significant signs of rust. And our 2,004, which is truck number seven, we elected not to buy the body because we just didn't have the money in the capital funds the last couple years.
So we did a major welding repair on that one to try to get it through. That was about $12 last year. We probably have to do the other side of that body because the other side's getting really funky too. So we're going to end up spending on that one, you know, probably another 12,000 to $14,000 on the opposite side to fix that up. Because even though that's a 2,004, and, you know, it's already, what, eighteen years, we still have to limp that one. That will still one will still be limped along as our fourth spare vehicle for the next five years. So we are gonna have to spend the money to keep that in repair, even though that's a pretty expensive vehicle to keep on the road right now. It will be less expensive when it's just a backup and it's not in daily use. So that is that. Does anybody have questions on that? Joanne? You're on mute, so. Yeah,
thank you. Just, is this the typical way that this happens? I know you said usually it comes up between budget season so you don't have to wait the two years for a new truck. So when the time comes, is it usually like this we call a special meeting, you've always had it, it's never a planned expense, it kind of comes in the middle where we'll have to make a decision, call a town meeting. Is that what you've noticed?
So, the last time we did this was in 2018, and we had the town meeting in I think March 2018 to order the last unit, which we got for the twenty nineteen-twenty twenty plow season. So yes, yes, because it's off cycle, the last time we had enough money in the unexpended fund balance, but we bought that one outright. That one was about $193,000 This one's considerably more expensive, even though we're actually switching manufacturers, because the Peterbilt trucks now spec'd the way we want them, those were, you know, even 20 something thousand dollars more than this unit. So international, you know, we discard even though they're the lowest bidder because those vehicles all seem to have a much lower life expectancy and a much higher cost of maintenance. But the Freightliner chassis, you know, in the last ten or twelve years have seemed to be very reliable. So, we feel like we can safely switch to Freightliner and it's lower cost. So, that's what we're anticipating doing. Thank you.
And the escrow amount just is based on the lowest of the payment amounts and the financing options at the end of the end of the proposed contract?
Correct. That may change slightly because this has already expired, but the goal is before the town meeting to have the exact updated figure. So we can just make a motion. I don't think it's gonna change much. The cost is not gonna change, but, you know, there was and I don't think there's been an interest rate adjustment, since this quote was received in now, but. Because this quote is is expired will be expired by three weeks or so prior to the meeting, we will have to get an updated finance agreement. So again, I don't think it's going to change it much, but it's possible it does. I talked to the town's attorney and the town's attorney said you could either, because it's a town meeting and the town meeting can change its mind, you could change that number slightly by announcing a new figure at the meeting,
or just give yourself a little wiggle room and set it to 60,000 or such.
Well we would have to, okay yes I mean we have to approve the whole thing right and that's necessarily just the 60,000 right?
Yes, you would have so. If we had enough money in the fund. You as a board of selectmen, since it's a budget, since the capital fund for public works equipment is budgeted, you would not have had to go back to town meeting. Where you're having to go down to town meeting is only a town meeting can approve any indebtedness from the town. So that automatically, the fact that we're doing lease payments of this automatically makes this a town issue.
Yep. Does anybody have any further questions for Eric? Joanne?
I just have one more. I remember at one of the meetings, either our last meeting or the Board of Selectmen when this went through, because it's held in escrow, kind of like a down payment or an insurance plan sort of that we are going to go through and not pull out. Is that the first payment? I forget how that stacked out how you talked about it deciding where to take the money from there was discussion on that.
So we basically have to escrow and send them a check right now as soon as we sign this contract for $58,888.95. So, that will be gone out of our bank accounts as soon as this, you know, in held in escrow until such time as we take delivery of the vehicle, and then that becomes the first payment. Thank you. I just wanted clarity. Thank you. Yep.
And we've got to do that to get the process going and retain the build slot and get them working out. Right. Right. So. Yep. I have a question. Louise?
Yeah, the reason for the, public hearing, is it basically just to communicate this to the town? Mean, do they have a, Can they turn around and say no, we don't want this done? Absolutely. Okay.
It's really a town meeting because because of like Eric said, the in there going into debt for multiple years, the crossing over multiple budget years hasn't been approved for all intents and purposes so.
Right. Okay. So there will be other things on the on the meeting for approval, because what none of us realized until we got into this and I had the town attorney look at this is I have to also get my grant applications approved at town meeting, which is nuts, but any grant application that requires a match on the town side technically has to get approved at town meeting. We're going have a few of those up for discussion also.
So if we have one of these situations where it's an eightytwenty deal, you know, the town's responsible for 20%, we can't just budget for that in a normal budget process. You have to go to the town for a special meeting? According to the charter, yeah. We have never done that. Wow. Right.
I know. The last time we did that was for Bunker Hill Bridge replacement, and it got turned down flat by the town. So it's it's scary. But, you know, it is town money, and that's they can do what they choose to do. We appear we just lost Mark,
by the way. It does look like we did. We'll see if he comes back. In the meantime, Eric, I ask you a quick question? When I the last CIP meeting, this we talked about the truck a bit, and I got really confused because of some of the comments that Adrian made to you. You know, basically, it's in the budget. Go get it. That doesn't seem to be correct.
Well, so here's the issue. Our charter is fairly convoluted. There are a bunch of things in there that make it somewhat difficult to operate. And it's not in the section that refers to this is not at all in the finance section. It's a couple of lines in the section that relates to special meetings. It's like, by the way, if you're taking on any indebtedness, that takes a special meeting. Oh, by the way, if you're submitting any grant, that requires a special meeting. So we were looking through that in reference to something else. You know, when I was talking to the town's attorney, I'm like, read that. Tell me if that thinks, if that says what I think that says it is, because that's not how we've been operating. So so that's kind of why we're going back and doing this. You know? Anybody know where the Gasco is? Did Mark text anything? You
want me to text him? I can try. Text him real quick and see where he went. Hey, Bill. Welcome.
Hey. Sorry. I'm late. My my company blocks Zoom from my computer, so I had to do this long workaround. It all deals to Zoom from way back when they first started and they had those security breaches. Sure. Anyways, it's a long workaround and I finally got it to work.
Okay. Fair enough. Okay. Alright, Rob. For some reason, Mark Brinker just dropped out of the Zoom call about two minutes ago, so we're just kinda waiting for Yeah. I'm assuming he's having technical difficulties. I just texted him to see what's going on.
Hey, Eric. Can I ask a follow-up question since you said coming into temp meeting, how many of your grant applications are gonna have to go on? Is it
Anything to match? Is there any dollar amount? Yeah. Right now there's three Julian, I apologize. That's okay. There are three grant applications. The first is the steep grant, which we've already gotten. That's a $275,000 grant. It requires about a $75,000 grant. We'd already decided to take that money from the multi use building fund. So that is fully funded.
The second one is I don't think I knew that we were taking it from the multi use that's that's you know, and thank you for I think my question was going to stem from I think it kind of is a good idea to go through that maybe not a meeting, but some when it's a big amount, like Robert was alluding to. 78,000 is a lot, you know, but it of course grants are always good for the town. I'm not opposed, but I mean there has to be a balance of, you know, 5,000, matching 5,000, but 78. So I'll let you continue with the amounts of the rest. I don't think they're as big as that one. Just real quick, guys. He's
gonna call in. He lost his Internet. Yeah. I'm back. Can you hear me? Oh, hey, Mark. We can hear you. Yeah. I'm on my phone. I'm not sure what happened. It looks like we lost Internet here.
Oh, bummer. Don't have Fortunately, have my phone handy. Responding to anything, so probably wasn't a motorist hitting the pole. But Yeah. We have power, so that's a good thing. Yeah. That's it. That is a good thing.
Yeah. Eric, I have a question. If by if by chance at the public meeting, they say no to that, what's our To what? To the the, truck. Do we have another plan? We don't buy a truck. Okay.
I I mean, we don't. You know, every town meeting is a crapshoot and, you know, the town has made many decisions in the past that aired on the side of frugality that, you know, unintendedly cost to the town a lot more money in the long run. You know, we choose to do, we're on a fifteen year plan because that appears to be the lowest cost to taxpayers when you take in the cost of purchase and total equipment maintenance. I mean, that's why we're doing it. And, you know, like, I mean, that international pickup truck we have, the 2004, the town has spent way over $100,000 in repair costs and maintenance costs on that vehicle to this point. You know, and that's not going to go away because we're in the range where major things could go. And this is kind of an aside, but we're actively considering keeping the 2007 or not the 2007, the 1997 Ford instead of the international, even though it's newer, because the repair record for the international has been a lot worse than the older Ford because the older was pre all the pollution equipment for diesel vehicles, then it's much simpler. It does not have any of the the electronics that are in modern vehicles. So we haven't made that decision, but the town will consider that.
So will this be, excuse me, communicated to everyone, like in a letter form prior to the meeting, or is it gonna be discussed right at the public meeting?
It'll be discussed at the public meeting. I was anticipating I would do a quick PowerPoint presentation for each of the grants and for the plow truck decision and just lay out the town's case of why we think this is and what the impact is to the town.
Can you just finish your I interrupted you too and then the follow-up. Just that this so the two other grants we know this deep and then what were the two other ones?
I've heard the second one is called the trip grant, which is a brand new Department of Transportation grant, stands for transportation rural infrastructure program grant. That will be We're going to ask for about $800,000 and use that money to reconstruct a section of Hendy Road, a section of Long Hill Road, and Skinner because those are the roads that have the biggest kind of structural problems that need extensive drainage work right now. And then our match for that would be how much? So our match for that is not set in stone right now because those are construction grants. They don't pay for the cost of, we're gonna need some preliminary engineering work and survey work for both the drainage and for some of the things we're going to do on that. So, would, my best guess right now is we're going to be into that for somewhere between 25,000 and $30,000 in design work. But that money will just come from our road improvement fund that we fund every year as part of the budget process.
So, we're not asking for any kind of supplemental money to match. We're just, we're looking at it as, you know, if we get the grant, that's just more roadwork for the same amount of money we would be spending anyway. Okay. And then the third one?
Sorry. The third one is a recreational trails grant funded through the DEEP. And the goal is a safe multi use, so pedestrian cycling, that kind of stuff, connection between the town hall area and the rail trail, because that was something that was identified in the plan conservation and development as a significant. Impediment to multimodal transportation ultimately it is my intention to submit a what's called a lot sick grant to fund the construction of the trail. You know, because it's one of the few things that we, the town of Andover actually has that they could submit a lots of grant. But what I wanna do is I wanna use this grant to get a lot of the planning and some of the engineering out of the way, because again, lots of grants don't pay for the, you know, the design and engineering costs, they pay for the construction costs.
Eric, I'm a little concerned we're kind of deviating from our agenda, and given that it's a special meeting and stuff I just you know unless unless this is kind of pertinent I think we should probably limit the discussion. No truck.
Yeah, he had mentioned we're talking about it at the town meeting so that's Okay. Yeah, so that's
how it kind of moved in. Yeah, thank you. Yeah, good. Just moving back to the truck.
Okay, any other questions for Eric? Okay, does anybody want to make a motion that the Board of Finance approve the referral of the purchase of the public works plow truck to a town meeting for the next step in the purchase?
Mark, before we do that, can we have a real quick conversation about source of funding? Yeah, sure. Okay.
So just so that you know, we have a fair bit of money at the moment in the Public Works Capital Equipment Fund, but we're going to. You know, bunch of that money on the bobcat in the trailer. So we're looking at a difference if once we complete that fund completely we're looking for a deep difference of about 17,500. The Board of Selectmen recommended that since the money is just being escrowed, that it could be taken from unexpended fund balance. The town treasurer, Cheryl, told me that in her opinion, that would be a supplemental appropriation, and you can't just do that. You would have to make a motion for a supplemental appropriation for that amount. The good news is that that amount is below the threshold, which requires a town meeting, which is another way of saying the Board of Finance could make that decision separately from the town meeting. Does not have to be part of the town meeting discussion, as, as I understand. That's all I wanted to say on that. Or you could elect to take it from, from the, either the town aid road fund and then reimburse the town aid road fund later if you had money in the budget, or you could make a determination to take it from contingency if you were comfortable doing that. So those are really the options.
The Board of Selectmen recommended the unexpended fund balance, but ultimately that's a Board of Finance decision.
Yeah, thanks, Eric. That was there and I didn't really think about it in those terms for the motion, but that is an important explanation too. So that probably becomes part of the motion that we would move that if the truck purchase were to be approved at town meeting that we would transfer $17,500 difference required from either the unexpended fund balance or some other fund. Sound accurate?
That is, but ultimately, I think you guys should probably weigh in on where you want to take it from if you're going to make the motion. Yep. But that's just me.
Without the stuff in front of me here. We don't have the fund balances on this document. So
So what fund are you do you want to know about?
Well, you've listed, I think, probably the three funds that would make the most sense, unexploded fund balance, the contingency fund or Town Road maybe. Right.
I mean, have no idea what we have in unexplained fund balance because we don't have an audit back yet. So that one, I don't know. Town Aid Road, we just got our January allotment of $93,000 We had, after all was said and done about $40,000 in that account for that, but we still owe a contractor somewhere around $14,000 out of that. So there is Ballpark 26 Plus 93 in the Town Aid Road account. The Road Improvement account has been drawn down to zero at this point. So those are the funds. An unexpended fund or the contingency fund, we have not spent any money out of the contingency fund.
What was the contingency fund this year? Is it like 75,000, something like that? I can't remember. It was reduced to 50,000. 50,000? Okay. Yep. But
if you chose that I can tell you that, you know, we've had very few significant overexpenditures this year, barring any natural disaster. I think our current budget should hold for the year, at least on expenses. I'm not prepared to talk about where we are on revenues. Although taxation has been coming in normal, you know, we're right on track with taxation. Okay. But I don't know about a lot of the little fees like how much we've collected. I haven't really gone through yet and analyzed what we've actually collected from the town clerk's office, you know, in the building department funds up to this point. So I don't have that midyear gauge yet.
So the contingency fund, if we were to hit that, so that would basically leave us at about slightly over $32,000 in the contingency fund, assuming we haven't spent it elsewhere, don't think so. And we have remaining about five months left in the a little over five months in the fiscal year. Yeah.
But at this point, you don't aren't aware of anything we would need to go to the contingency fund for?
No, no. I think, so far we're in reasonable, in reasonably good condition. So far it has not been an excessive snow year. So, you know, one of the things we always worry about is busting our snow plowing account, which can add up really fast. So far, we're quite a bit under for where we should be right now. Salaries, we seem to be in a really good position. Part of it is we haven't had, for much of the budget year, we haven't had a full time, you know, associate finance person. So, you know, we've saved somewhere around $18,000 so far just by, because we haven't filled that position yet.
So overall, I think we're in pretty good shape. I'm not seeing any major overages that are affecting us at this point.
Anybody have any thoughts or questions for Eric on the funding?
Joanne has a reason. Yeah, thank you. So even if, you know, I'm sort of leaning towards a contingency fund based on everything you said and then say we do have overages and other accounts later in the year there's always possibilities of journal entries or transferring funds from other accounts like you mentioned that haven't been used, correct, Into those lines at the end of the year in a cleanup kind of way?
Yes, I mean, we often at the end of the year will transfer money laterally between budgets for anything we're over. And then we will address things that are. You know if there are priorities or priority funds we have that for whatever reason we feel we've under budgeted, the Board of Finance has transferred money into those, you know, like for the tree fund, for instance, because we can always spend more money cutting trees, you know, and we desperately need that. Sure.
No, just for the purpose of making this decision, I know. No, thank you. And I remember from last year, I was on the board last year too, at that time of year, but I just wanted to make sure. If we do touch contingency, we end up using the rest of, there are other ways to fund those over dues. So I'm in favor of taking the 17.5. I mean, I know other people have opinions, but that's where I stand from that, from the contingency.
Anybody have any other thoughts about funding sources for the required amount, 17,500? I would tend to agree with Joanne about using the contingency funding, not knowing what the unexpected fund balance is, you know, we didn't have a lot of wiggle room in that account without having an audit. That makes me a little concerned. So, you know, I don't feel super strongly that way, but, I think it seems like we should be able to make that work. Other comments? Anybody care to make a motion?
I can make the motion. I just need a little help with Yes. It's pretty complex. I'm sorry.
I was just saying I I could do it too, but I was gonna ask for some help with the boarding, but I'll let Joanne do it because she has more experience than me. I'll try. I mean, I'd like to make a motion that we send. Approve to send to the town meeting.
Right. That we wanna move the topic of purchasing this new plow truck to town meeting based on everything we talked about tonight with the stipulation of making up the difference or needing the down payment, the funding source would come from. Do I need to put that in, Mark? Yeah. I don't have everything in front of me, so I'm just kinda yeah. So we would we would use, you know, what was already, I think, 41,000 in the equipment fund. Right, Eric?
So, I I would say what you're going to do is you're going to take the majority, the $41,000 from the equipment fund and you're going to take the remaining money from?
Contingency. From the contingent. I just wanted to make sure I'm reading it right. So we'll take the 41,000 from the equipment fund, making up the difference of the $17.05 or thereabouts. Or am I allowed to say that? Because we said we're gonna, you know, come to think of the balance from the contingency fund is probably the way to put it. Okay, I'm gonna, yes.
Would And I think we also would probably wanna stipulate that, you know, plus or minus 10% because as Eric noted, the quote is expired. Therefore we need to go out for quote and there could be a small differential in the amount, so we don't want to get locked into some technicality about the amount being different.
I have to say that, so plus or minus 10%, you know, to make up the difference of the new quote and the Yeah, due to differences
in the quote, right. Okay, yeah. So I'm going to restate that, try anyway, so it's a it's a complex, very complex motion, but it so, Joanne, correct me if I've misstated this as you intended, but so Joanne has moved that the Board of Finance approve the plow truck purchase as quoted for $258,608 rounded down, and we vote to recommend we pass this on to the town meeting with the funding sources being $41,000 out of the equipment fund and the balance out of the contingency fund and at the same time allowing for a 10% increase due to changes in the quote, due to, expired quote, I guess roughly. Does that sound about right?
Yes. Yeah, I don't think you even need to include 10, but No. Whatever you think, right?
You know, it's going to be what it's going to be. Whatever we get the quote is going to go in front of the town meeting. Let's just leave ourselves open for that, right? If it's 10% higher, maybe they'll vote it down. It doesn't matter. We still have to go to town meeting. So that would be my thought. I'll go ahead and second that. Okay. Thank you, Louise. So much Further
discussion on the motion? Okay. Hearing none, will call for a vote. All those in favor, aye. Aye. Any opposed? Any abstentions? Okay, the motion passes unanimously. Thank you everybody. Thank you, Joanne, that was a tongue twister even being happy to be restated two or three times. I'll just study on that. Okay, so, again, we do not appear to have anybody in the public here, although we don't actually have another public speak item on there. We'll go directly to adjournment. Anybody would like to make a motion to adjourn? I'll make the motion to adjourn.
Okay, thank you, Bill. Do I have a second? I'll second it. Thank you, Louise. Any discussion? All those in favor say aye. Aye. Any opposed? Any abstentions? Hearing none, the motion is adjourned or the meeting is adjourned. Thank you.