 |
Board of Selectmen |
October 15, 2008 |
Regular Meeting |
Teachers’ Lunch Room #331 @ Middle School |
Present: |
Arthur J. Bourque III, Chairman |
|
Robert P. MacKendrick, Selectman (absent) |
|
Al Merritt, Selectman, Selectman |
Chairman Bourque called the meeting to order at 7:15 p.m. and the following business was conducted:
Septic Management Program Interim Loan Note
Mr. Gustus explained the Interim Loan Note for the Septic Management Loan Program. The principal amount is $200,000 with a zero percentage and will be payable on October 15, 2011. The Town will pay to the Massachusetts Water Pollution Abatement Trust the Principal Amount, or lesser amount, as shall have been advanced from time to time to the Borrower on account of this note in accordance with the Loan Agreement. No interest shall accrue and be payable on the Principal Amount of this note. This note is issued pursuant to Chapter 29C and Chapter 111, Section 127B1/2 of the General Laws as amended for the purpose of financing costs of a community septic management loan program in anticipation of the proceeds of a loan to the Borrower under and pursuant to Loan Agreement No. T5-97-1142-A dated as of
June 13, 2001 between the Trust and the Borrower. This note is a general obligation of the Borrower and the full faith and credit of the Borrower are pledged to the payment of the principal of this note.
On a motion of Selectman Merritt, duly seconded, the Board unanimously voted the following:
(1) |
That the Town shall issue a bond or bonds in an aggregate principal amount not to exceed $200,000 (the “Bonds”) pursuant to Chapters 29C and 111 of the General Laws and a vote of the Town passed April 24, 2000 (Article 20), for a community septic management loan program (the “Project”); |
(2) |
that in anticipation of the issuance of the bonds the Treasurer is authorized to issue an interim loan note or notes (the “Notes”) from time to time in an aggregate principal amount not to exceed $200,000; |
(3) |
that each Bond or Note shall be issued as a single registered security, and sold to the Massachusetts Water Pollution Abatement Trust (the “Trust”) at a price determined pursuant to the Loan Agreement; |
(4) |
that the Treasurer is authorized to determine the date, the form, the maximum interest rate and the principal maturities of each Bond and Note, and to execute a Loan Agreement or Agreements with the Trust with respect to the sale of the Bonds and Notes, such date, form and maturities and the specific interest rate or rates of the Bonds and Notes to be approved by a majority of the Board of Selectmen and the Treasurer and evidenced by their execution of the Bonds or Notes; |
(5) |
that all action taken to date by the Town and its officers and agents to carry out the Project and its financing, including the execution of any loan agreement by the Treasurer, are herby ratified, approved and confirmed; and |
(6) |
that the Treasurer and the other appropriate Town officials are each hereby authorized to take any and all action necessary and convenient to carryout the provisions of this vote, including execution and delivery of the Loan Agreement or Agreements and the Project Approval Certificate and Regulatory Agreement or Agreements relating to the Project. |
Request to Recess Meeting
At 7:25 p.m. on a motion of Selectman Merritt, duly seconded, the Board voted unanimously to recess the meeting to the end of the public hearing.
Financial Issues due to State Budget Deficit
Chairman Bourque called the meeting back to order at 7:25 p.m. Mr. Gustus discussed the following financial issues everyone is facing:
(1) |
National Financial Issues have nearly closed Municipal Borrowing Markets. |
(2) |
Down turn in the economy effecting state and local revenues. |
(3) |
State will run a $1.2B deficit requiring cuts to state spending including local aid. |
(4) |
Our local aid cuts will be at least $250K for FY09 and likely double that in FY10. |
(5) |
Downturn in local economy will lead to reduction in new growth in FY10 and may delay much of our expected new growth until FY11. |
(6) |
Medicaid reimbursements (General Fund Revenues) will be reduced by 50% in FY09 and may disappear completely in FY10. |
(7) |
Borrowing costs on town notes ($7.2M) will likely double from 2.1% to over 4% increasing costs by $140K. Borrowing for technology and fire truck will be impacted as well. |
(8) |
Loss of $1M in Colonial revenue will not be made up in new growth in FY10. There will likely be a $250K shortfall. |
(9) |
Local receipts will decline slightly in FY09 and FY10 requiring reduction in both budgets. |
(10) |
Programmed salary increases will add 3% to overall FY10 budget. |
(11) |
Utility and fixed costs still growing by 8%. |
(12) |
Without action to cut spending and/or generate new revenue, FY10 budget currently $2.3M out of balance before any provision for capital spending. |
(13) |
Losses in Stock Market will lead to large increase in FY10 pension assessment. |
(14) |
Repeal of State Income Tax will lead to additional $3M+ loss of Local Aid. |
(15) |
South School Land Sale could be delayed by the credit crunch. Not likely to be able to pay down $4.2M in notes next spring requiring the roll over of all golf course notes. |
Governor Patrick’s plan doesn’t include cutting local aid to the cities and towns however, if another round of cuts is needed it will be very difficult for him to keep this pledge. Mr. Gustus cautioned, if Question One (eliminating state income taxes) passes at the November 4th election ballot, Lynnfield’s state aid will be wiped out. We would likely lose $250K in local aid this year and $500K next year. Mr. Gustus feels the state will cut local aid after municipalities set their tax rates leaving fewer options than we presently have. We can be proactive and deal with it now. Mr. Gustus predicted a $975K shortfall in FY09 due to revenue losses and expense increases for the current budget. This includes $250K cut in
local aid, reduction of $100K in local receipts, and an additional $625K in debt service on the golf course purchase. He recommended offsetting these shortfalls by $350K in budget cuts and raising $625K in additional revenue by taxing under the golf course debt exclusion. FY10 is predicted to have a $500K cut in local aid and a $1M loss of revenue from the National Development deal plus $150K in increased borrowing costs. These losses can be partially offset with $650K anticipated in new growth and $655,909K by taxing to the max allowed under Proposition 2-1/2. He asked the Selectman to amend their recommendation and approve this new financing package for FY2009 and FY2010. After some discussion, on a motion of Selectman Merritt, duly seconded, the Board voted unanimously to adopt the finance
plan as laid out by the Town Administrator (see attachments).
Request to Recess Meeting
At 7:42 p.m. on a motion of Selectman Merritt, duly seconded, the Board voted unanimously to recess the meeting to the end of the Planning Board’s public hearing regarding Article 5 – an amendment to Section 9.5 of the Zoning Bylaw to allow a boutique theater/restaurant in the Traditional Neighborhood Village Sub-District as a Recreational Use.
Chairman Bourque called the meeting back in session at 9:40 p.m. On a motion of Selectman Merritt, duly seconded, the Board voted unanimously to adjourn the meeting at 9:40 p.m.
Linda Cardavelli
Administrative Assistant
| |
