Finance Committee Meeting May 27, 2021

Finance Committee

May 27, 2021

 

Members present: Chairman Joseph McGiverin, Vice Chairman Peter Tallman, Michael Sullivan

Other councilors present: Terence Murphy, Howard Greaney, Jr

Chairman McGiverin called the meeting to order at 6:34 PM

 

Councilor Tallman made a motion to suspend the necessary rules to remove item 5 from the table out of order. Councilor Sullivan seconded the motion. All members voted in favor.

Item 5: 4-6-21 MCGEE — Order to invite in the auditor to discuss and update the council on the rules associated with the ARP Act – auditor to also provide council with update as they become available. Refer to finance.
*Tabled 4-15-21, 5-10-21

—>      Laid on the table 3-0.

DISCUSSION:

Chairman McGiverin noted that the committee had been told that the guidelines were not totally available yet. He also noted that some of the funds would go into the general budget, adding that others would-be handled in another way. He then recognized Alicia Zoeller, Director of Community Development.

A. Zoeller stated that the city had been awarded around $29 million through the American Rescue Plan Act (ARPA), adding that the federal grants would be received through the Coronavirus State and Local Fiscal Recovery grants program. She noted that an allocation process had been identified that would be similar to the block grant process utilizing the Citizens Advisory Committee as well as the City Council. She also stated there would be an opportunity for the public to participate in commenting on the allocation process. She stated that the funds would have to be used for specific purposes such as revenue replacement, affordable housing, water, sewer, and broadband infrastructure, public assistance to households, food assistance, job retraining, as well as an economic development package reaching out to the tourism and travel sectors. She expressed an expectation that the proposals would come before the City Council for its August 3rd meeting for recommendations. She added that agreements would be in place by September. She noted that there would be two separate deposits, one arriving a year after the other. She stated they would have to be allocated by 2024 and spent by 2026.

Chairman McGiverin suggested that funds used for revenue replacement should go through the budget process involving input from the City Council.

Tanya Wdowiak, City auditor, noted that guidance received stated that the funding would be handled as a federal grant which would be processed and expended in the same way as grant funding.

Chairman McGiverin clarified that he was referring to funds that would be used to replace revenue in specific budget line items.

Councilor Murphy stated that he would view funds for the allocation of lost revenue as a supplemental budget with the City Council having final say. He reiterated that the remaining would be handled like block grant funding.

Chairman McGiverin stated that his intent was to assure consideration of what the outside auditor and Department of Local Services (DLS) would be looked at in terms of deficits.

Councilor Tallman made a motion to lay on the table the order. Councilor Sullivan seconded the motion. All members voted in favor.

 

(10:10)

Councilor Sullivan made a motion to remove item 1 from the table. Councilor Tallman seconded the motion. All members voted in favor.

Item 1: 5-18-21 CPA FY20 PROJECT RECOMMENDATION FOR JACKSON STREET FIRST TIME HOMEBUYER AFFORDABLE HOUSING PROJECT

—>      Approved 3-0

DISCUSSION:

Chairman McGiverin recognized Amy Landau, CPA Administrator. He stated that the appropriation had already been approved, noting that this item was an amendment.

Councilor Sullivan stated that there would be no change in the dollar amount or the scope of the project, but in the terms and conditions of the agreement. He stated that procurement laws prevented Holyoke Housing Authority (HHA) from managing the project, adding that Habitat for Humanity would be taking it over.

A. Landau stated that the Council voted to recommend the project with specific terms, requiring a new approval due to the amendment. She stated that Habitat for Humanity would be building both homes instead of HHA building one. She then stated that the project would require 24 months instead of 12 due to the change. She also noted another change would be that the committee would place a 15  year affordable housing restriction rather than in perpetuity, allowing a return on investment to the homeowner. She also stated that an additional amendment would allow for a 6 month extension without a need for further City Council review.

Chairman McGiverin asked to clarify that HHA would remain the petitioner.

A. Landau stated that they would still be the owners of the properties.

Councilor Tallman asked if the total borrowed was $120,000.

A. Landau confirmed that was correct.

Councilor Tallman noted having read a detail regarding HHA not getting the funding for the homes. He then asked to clarify that Habitat would be building both.

A. Landau confirmed that was correct. She then reiterated that it would require more time.

Councilor Tallman asked if there was a time frame to finish.

A. Landau stated that the project was planned to take 24 months, adding that the Council could agree to allow an additional 6 months, if necessary. She then stated that the part that usually takes the longest is the drafting the contracts.

Councilor Greaney asked for clarification of the rationale for HHA not participating.

Councilor Sullivan stated that HHA would be required to build the project under the prevailing wage, doubling the cost of the project. He then stated that they would not have been able to cover their share of the cost within their budget.

Councilor Tallman made a motion to approve the amendments. Councilor Sullivan seconded the motion. All members voted in favor.

 

(18:45)

Councilor Tallman made a motion to remove item 2 from the table. Chairman McGiverin seconded the motion. All members voted in favor.

Item 2: 5-18-21 MCGIVERIN — that there be and is hereby appropriated by transfer in the fiscal year 2021, FIFTY THOUSAND DOLLARS AND 00/100 Dollars ($50,000) as follows:
FROM:
16101-51275 SALARY STUDY $16,000
16101-51102 REFERENCE LIBARY ASSISTANT 7,000
16101-51113 ASSISTANT DIRECTOR 27,000
TOTAL: $50,000
TO:
19191-51999 POLICE/FIRE INDEMNIFICATION $25,000
19121-51999 WORKERS COMP 25,000
TOTAL: $50,000

—>      Approved 3-0

DISCUSSION:

Chairman McGiverin recognized City Auditor, Tanya Wdowiak, to provide details of the transfer.

T. Wdowiak stated that there had been a request for additional funding due to increase in the indemnification insurance and workers comp insurance. She noted that they had large exposes due to surgeries. She also noted they were paying $7,000-$8,000 in workers comp, adding that it had been an increase from previous years.

Councilor Tallman asked for an explanation of the surplus funds in the sending budgets.

T. Wdowiak stated that salary increases due to the new salary schedule would be going into effect with the new fiscal year. She then stated that the other two surpluses were due to vacant positions that had not been filled.

Councilor Tallman asked for a clarification of the salary study funds.

T. Wdowiak stated that the money would not be spent because the new salaries would not go into effect until July 1st.

Councilor Sullivan asked if the police/fire indemnification was a new line item.

T. Wdowiak stated that it was not.

Councilor Sullivan asked how much had been in the original budget.

T. Wdowiak stated it had been $135,000.

Councilor Sullivan asked if the price had increased to $160,000.

T. Wdowiak stated that it had, adding that there had been $383 at the moment.

Councilor Sullivan asked who the indemnification is purchased from.

T. Wdowiak clarified that the costs are from prescriptions and doctors appointments for Police and Fire Department employees.

Councilor Sullivan asked what the workers comp was paying, noting that there were regular transfers from salary budgets to injured-on-duty budgets.

T. Wdowiak stated that workers comp was separate.

Councilor Sullivan asked if they were getting their full salary while injured on duty and also receiving workers comp.

T. Wdowiak stated they were separate employees, noting that some get paid through injured on duty and other are paid through workers comp.

Councilor Sullivan asked to clarify that this budget was for municipal employees outside of the Police and Fire Departments.

T. Wdowiak stated that was correct.

McGivern asked if workers comp need had been higher in the current year.

T. Wdowiak stated that it had been usual to have 1-2 employees at a time, adding that the current year had 6-7 employees. She stated that the increase brought it to around $6,000-$7,000 per pay period.

Councilor Greaney attempted to ask a question and lost his connection. The Chair intended to give him an opportunity to ask his question when he returned.

Chairman McGiverin asked for a listing of the positions and departments the workers comp claims were coming from.

T. Wdowiak stated that she could provide that.

Councilor Tallman made a motion to approve the transfer. Councilor Sullivan seconded the motion. All members voted in favor.

Councilor Greaney asked why there were different designations for injured on duty and workers comp.

T. Wdowiak stated that the injured on duty designation was in the contract.

Chairman McGiverin clarified that it had been negotiated and approved.

 

(28:45)

Councilor Tallman made a motion to remove item 3 from the table. Chairman McGiverin seconded the motion. All members voted in favor.

Item 3: 5-18-21 MCGIVERIN — That the City of Holyoke appropriate the amount of Seven Million Four Hundred Seventy One Thousand Six Hundred Fifty Four Dollars ($7,471,654) for the purpose of paying costs of:
Partial roof replacement at the Lt. Clayre Councilor Sullivan Elementary School, a 112,000 square foot school building originally constructed in 1960, and located at 400 Jarvis Avenue, Holyoke, Massachusetts,
Partial roof replacement at the Maurice A. Donahue School, a 70,550 square foot school building originally constructed in 1972 and located at 210 Whiting Farms Rd., Holyoke, Massachusetts, and
Partial roof replacement at the E.N. White School, a 63,965 square foot school building constructed in 1958 and located at 1 Jefferson Street, Holyoke, Massachusetts,
including the payment of all costs incidental or related thereto (the “Project”), which proposed repair project would materially extend the useful life of the school(s) and preserve an asset that otherwise is capable of supporting the required educational program, and for which the City of Holyoke has applied for a grant from the Massachusetts School Building Authority (“MSBA”), said amount to be expended under the direction of The Holyoke City Council. To meet this appropriation the City Treasurer, with the approval of the Mayor, is authorized to borrow said amount under and pursuant to M.G.L. Chapter 44, or pursuant to any other enabling authority. The City of Holyoke acknowledges that the MSBA’s grant program is a non-entitlement, discretionary program based on need, as determined by the MSBA, and if the MSBA’s Board of Directors votes to invite the City to collaborate with the MSBA on this proposed repair project, any project costs the City of Holyoke incurs in excess of any grant that may be approved by and received from the MSBA shall be the sole responsibility of the City of Holyoke, and that the amount of borrowing authorized pursuant to this vote shall be reduced by any grant amount set forth in the Project Funding Agreement that may be executed between the City of Holyoke and the MSBA provided further that any grant that the City of Holyoke may receive from the MSBA for the Project shall not exceed the lesser of (1) Eighty (80) percent ( %) of eligible, approved project costs, as determined by the MSBA, or (2) the total maximum grant amount determined by the MSBA.
Any premium received upon the sale of any bonds or notes approved by this vote, less any such premium applied to the payment of the costs of issuance of such bonds or notes, may be applied to the payment of costs approved by this vote in accordance with G.L. c. 44, Section 20, thereby reducing the amount authorized to be borrowed to pay such costs by a like amount.
The City Treasurer is authorized to file an application with the appropriate officials of The Commonwealth of Massachusetts (the “Commonwealth”) to qualify under Chapter 44A of the General Laws any and all bonds or notes of the City authorized by this order and to provide such information and execute such documents as such officials of the Commonwealth may require in connection therewith.

—>      Approved 3-0

DISCUSSION:

Chairman McGiverin stated that the city would have to qualify by submitting an application according to MSBA procedure. He then stated that the grant would be eligible for 80% reimbursement. He then recognized Whitney Anderson, Maintenance Administrator for Holyoke Public Schools.

W. Anderson stated that the matter was part of the design feasibility stage of the process where the parameters would be established. He stated that the accelerated funding program was intended to address windows and doors, boilers, as well as roof work. He also noted there had been three successful projects in the district through this program a couple years prior. He also noted that roofs have to be at least 30 years old to qualify, noting that several school roofs in the district qualified. He also noted that the warranties on the roofs had been for 15 years. He stated that the proposed schools were Sullivan, EN White, and Donahue. He also noted that there would be a combination of replacing membrane rooftops as well as refurbishing metal rooftops where possible. He added that they would seek designs for roofs that would last for at least 25 years. He also stated that plan would be for the work to take place in the summer of 2022. He stated that in order to comply with deadlines and to work with a more cost-favorable bidding environment, they would need to go out to bid by late in the year or early the following year.

Chairman McGiverin asked why the designs being sought were for 25 years, given the MSBA requirement that the program requires roofs to be at least 30 years old.

W. Anderson stated that most roof warranties range from 15-25 years depending on the quality of the material.

Chairman McGiverin asked for an estimate on the cost of the roofs.

W. Anderson noted that the MSBA has a database of the costs for the projects they had historically funded. He then stated that he utilized the data to estimate the costs of the proposed projects for HPS. He added that an outside project manager put together an estimate that had been similar to his own estimate.

Chairman McGiverin asked what the cost per square foot was estimated to be.

W. Anderson stated it was around $70 per square foot.

Councilor Greaney noted that the projected cost of materials was increasing, adding that the costs of the project could inflate before the bids go out. He suggested accounting for those potential increases in the request. He also noted that inflation and interest rates were expected to be increasing.

W. Anderson stated that as a safeguard, there were two contingencies in place. He stated that one would address any unexpected expenses as a result of unknown nuances of the roof. He added that the second one would address potential fluctuations and variations in material cost. He added that a majority of the costs would be labor costs.

Councilor Tallman asked if the 20% for the total design and management cost was standard.

W. Anderson stated that it was. He added that the project managers, designers, and architects are supplied to the city as a result of the MSBA already vetting them in order to facilitate quick turnarounds of the projects. He then stated that the fees to these contractors are capped at 20%.

Councilor Tallman asked how long it would take to finish the projects.

W. Anderson stated that the plan was to compete the projects concurrently, adding that they would bid out the projects individually. He then stated that the project would likely take from the end of one school year until the beginning of the following one.

Councilor Tallman clarified that the roofs were being restored. He then asked how long the roofs would be guaranteed for.

W. Anderson stated that was correct. He then stated that they had already drilled through specific areas to open for inspection of hazardous materials and for the structural component. He added that the mechanical engineer inspected the rooftop units to assure the new membrane would be adaptable to them. He then stated that the project was contingent on materials being available, adding that it would not begin until the necessary materials were secured.

Chairman McGiverin asked if accelerated project through the MSBA remained guaranteed with an 80% reimbursement.

W. Anderson stated that they are.

T. Wdowiak confirmed that was correct.

Chairman McGiverin asked what impact this would have on the city’s bonding capacity, as well as the impact it would have on potentially bonding for a middle school project.

T. Wdowiak stated she had not spoken with bond counsel on those details, adding that she would plan to do so.

W. Anderson stated that the net cost to the city of the $7.4 million would be around $1.5 million, accounting for the reimbursement from the MSBA.

Chairman McGiverin asked if that would be paid back over a 20 year period.

T. Wdowiak stated that the bonding would be for the life of the project. She then stated that they get different estimates to determine what would be the most beneficial.

Councilor Sullivan asked for a clarification of the reimbursement of eligible costs, noting that estimates for past proposals limited the reimbursement figure for cost per square foot.

W. Anderson stated that with the accelerated program, the reimbursement rate is job specific and would not have limitations places on it based on cost per square foot. He added that school replacement projects have a more stringent calculation on what is reimbursable.

Chairman McGiverin asked Ms. Wdowiak to reach out to bond counsel prior to the next full City Council meeting to inquire on the impact to the city’s bonding capacity.

Councilor Tallman made a motion to approve submittal of the project to the MSBA. Councilor Sullivan seconded the motion. All members voted in favor.

 

(1:01:30)

Councilor Tallman made a motion to remove item 4 from the table. Councilor Sullivan seconded the motion. All members voted in favor.

Item 4: 5-18-21 MURPHY — Ordered that the finance committee consider a potential proposal from “Viewpoint with Dennis Quaid to include Holyoke on the public television series, “Great Places to Live, Work & Visit.”  Consideration needs to be given to the potential marketing benefits in terms of economic development and tourism against the potential cost to subsidize the production.

—>      Approved 3-0

DISCUSSION:

Chairman McGiverin recognized Jason Frank, Senior Producer of Viewpoint with Dennis Quaid.

Councilor Murphy noted having had several conversations with Mr. Quaid on the scale and reach of the production, as well as the potential costs. He stated they would visit Holyoke to gather information on the city’s history, tourism, and economic development. He also stated there would be a 10% cost of the production to the city. He emphasized the value of promoting Holyoke as a good place to live, to work, and to visit.

J. Frank described Viewpoint as an educational documentary series hosted by Dennis Quaid airing nationwide on public television. He noted that there had been requests from public television stations to provide educational content for the benefit of viewers who are looking to relocate from all over the country. He then stated that the short form documentaries are roughly 3-5 minutes to inform viewers on everything happening with the city. He stated it would be aired between other programming. He added that there would be 25-55 minute documentaries airing 45-60 times per quarter, reaching roughly 60 million households and businesses. He added that the city would have creative input. He also noted the project would include 60 second spots that would air during peak and prime time hours on cable news stations. He added that there would be corporate documentary to be a part of a targeted email campaign providing a behind-the-scenes look from a third party perspective to lend credibility to the city, adding that it would be sent to those who request further information. He stated they would require 8 hours of time for putting together the project for filming, scripting, and other creative aspects. He stated there would be scheduling fee of $24,500 as well as an additional $3,400 for crew and equipment costs for on location filming. He also noted the city would receive control of all videos for its own use.

Chairman McGiverin stated that Holyoke would be a great place to feature, adding that the city has much to offer in many areas.

Councilor Greaney noted that there had been some documentaries done within the city that may provide material for the production.

J. Frank stated that they could use any available footage that the city had licensing rights to.

Councilor Tallman suggested that many people and businesses would likely be interested in participating in the production. He then stated that there would be a great marketing benefit to the community, noting that it could include not just businesses but the natural beauty surrounding the city. He asked if there was a way to view programs currently being broadcast.

J. Frank stated that the segment bridge gaps between peak and primetime programming, noting that many programs don’t air for exactly 30 or 60 minutes. He stated they have monitoring reports on when they are aired, clarifying that they are not programs that could be looked up on programming schedules. He then reiterated that the corporate spot would be used for targeted audiences selected by the city. He suggested that he believed Holyoke would be a good fit. He also noted there would be a selection process with the other executives involved in the programming.

Councilor Murphy noted that Holyoke has historically been an immigrant city with a diverse population. He also noted the value of highlighting the canal system, Mt. Tom,, the Children’s Museum and the Volleyball Hall of Fame, and the diverse industry. He then emphasized the investment value of attracting new businesses, new residents, as well as those who come to visit.

J. Frank stated that if the city approves it, he would present it to his VP of Development who would likely follow his recommendation to select the city. He added that the city would receive an invitation in the form of a production authorization highlighting what the project would entail.

Councilor Murphy expressed that he saw value in the extra cost of producing the show on location in Holyoke.

J. Frank stated he would send information. He reiterated that the city would receive licensing rights to all of the content produced.

Councilor Sullivan suggested one focus of the project should be on green energy and renewable resources used within the city.

J. Frank stated that sustainability would resonate well with the viewing audience.

Chairman McGiverin noted that after approving the project, the next step would be approving an appropriation for the cost of the production.

Councilor Tallman made a motion to approve moving forward with the project. Councilor Sullivan seconded the motion. All members voted in favor.

 

(1:32:30)

Councilor Tallman made a motion to remove item 6 from the table. Chairman McGiverin seconded the motion. All members voted in favor.

Item 6: 12-1-20 MCGEE — Order that the finance committee invite in Mike McManus and Robert Peirent to discuss and address budgeting for sidewalks, trees, and equipment.
*Tabled 1-28-21

—>      Complied with 3-0

DISCUSSION:

Chairman McGiverin stated that the item was on the agenda for the purpose of cleaning it out of the jacket. He noted that there had been several steps taken with the DPW over the previous few months that addressed most of the purpose of the order.

Councilor Tallman made a motion that the order had been complied with. Councilor Sullivan seconded the motion. All members voted in favor.

 

Councilor Tallman made a motion to adjourn. Chairman McGiverin seconded the motion. All members voted in favor.

Adjourned 8:09 PM