00:00:00,830	S1:
All right, folks. Uh, 802. February 5th. I'm going to open the. When, um, science and advisory committee. Uh, I see present is myself the chair. Uh, the rest of the members could just sound off.

David. 00:00:20,730	S1:
So, Bob and Dan, are you there?

00:00:26,170	S2:
Dana was here.

00:00:27,570	S1:
All right. Great. Thanks. Okay, so I've got the agenda on the screen here, and, um, not hearing any reason to go out of order. We'll just, uh, start with the first one here. So I, we have public comment as the first thing here. And I'm happy to take comments, uh, from folks that are on the phone. Um, also, uh, happy to throw it at the end of the meeting. It may be that some of these questions that you have, um, or concerns might be addressed, but I'm happy to, um, start with any public comment.

00:01:03,399	S3:
Jared is on now too.

00:01:05,670	S1:
Happy to wait till the end.

00:01:06,769	S4:
If you'd rather have it that way.

00:01:08,900	S1:
Cheers. Okay. Well, thanks. I think, Angus, you are the only member of the public on the on the line. So we will make sure to come back to you. All right. So, uh, the third thing we have on the agenda is the discussion of the Cutler school building project. Um, I think, uh, Jeff would have sent along to the finance committee members a, uh, a draft of the deck, um, with a whole bunch of changes that we had discussed last week. Um, one of the things I'd like us to do is to scroll through it, uh, think about, um, what we're seeing. Any open items that are left and, uh, kind of agree on the, uh, the central, uh, model assumptions that we're going to use in coming to a, um, an opinion or recommendation for, uh, for the Select board. I, uh, I'd like us to, um, consider, uh, uh, setting a motion to vote, um, on that opinion. Uh, during this, uh, this meeting. But, uh, depending on how the discussion goes, I understand we might end up having to delay. So I don't know if, um, other committee members have any other comments before I start going through the deck. Any new news? Um.

00:02:34,800	S5:
You know, uh, miss Bob. Uh, uh, Jeff sent out, uh, a debt schedule with impact, and I was wondering what the rate was for that so we could compare that to the rates that you used in the deck.

00:02:53,099	S1:
Jeff, I think, um, Jeff and I spoke. I backed into it and saw that it used a 4.5% rate. So, um, I have updated the model, um, in the Excel model, but not necessarily all the, um, all the sensitivity analyses that are in the or the discounting, uh, cash flow that's in the deck instead. Um, realizing that I was just going to spin my wheels and have to to change it again and again and again, if we decided to change our central assumptions, I thought we would, um, keep the model open, the Excel model open. And, uh, you know, as we're going through the deck and perhaps, um, uh, you know, if there are any other changes, um, we'd put that into the, uh, Excel model before I go and redo all those sensitivity charts.

00:03:47,500	S5:
Just wanted to confirm, uh, the rate that, uh, Jeff sent out was 4.5%.

00:03:55,699	S6:
That's it. They didn't give me the specific rate, Bob, but that's much like fin. That's what I sort of backed into. Um, I do have a request into, um, Vinnie, just to get the the actual true interest cost that the tick rate, uh, that we typically get. Um, but I believe it's four and a half is what we're looking at with a, you know, level principal payment structure.

00:04:15,270	S5:
Thank you.

00:04:17,000	S7:
Um, are we going to go side by side, or are you just looking for, uh, comments?

00:04:23,300	S1:
Uh, so you'll notice, um, that I took all the red flags that we put on the slides last week. Right. And where I addressed them, I turned them green to kind of show to you, you know, version control that. You know that the comments that you had for me, I incorporated into the slide. But there are a few red, uh, tags still yet to be addressed.

00:04:47,670	S7:
The the only thing I'm I just in scrolling through it, I just I thought we agreed that one of the illustrations was going to be a sample. Maybe I missed it of, you know what? The increase in the tax rate was going to be for a sample home.

Um. 00:05:05,129	S1:
Yeah, that's one of my red tags still in the deck is I, I wasn't I didn't have that, uh, to hand when I, when I sent the, the latest version to Jeff.

00:05:16,930	S7:
Okay.

00:05:18,230	S6:
Yeah. And, you know, we do the, uh, I sent something, uh, I don't know if it was yesterday or today, um, that showed, you know, the bond amortization schedule. Um, and then shows the, um, you know, the annual tax rate impact, uh, you know, over each year, the bond payment, uh, and then an average sort of blended rate as well. And then I actually have something, um, in a Excel I'm going to be showing tonight that that is has a very rough start at what, you know, it does for this year and also projects out for, say, the first ten years.

00:05:53,000	S7:
Okay, okay. And then, um.

00:06:00,769	S7:
A, a fellow citizen had commented to me that, um, they were concerned about the assumption vis a vis the demographic, you know, percentage, Wenham versus percentage. Hamilton and I get. At what point do we make a cutoff as to what or does the respective towns, you know, do a a demographic calculation and say, okay, uh, 40% of the students were from Wenham, therefore we have 40% of the cost versus 60% from Hamilton.

00:06:38,800	S6:
Yeah. So this is currently based on, um, a 34.08 Wenham allocation and a

00:06:47,329	S6:
Um, Hamilton allocation, which is, um, what they're using as the apportionment factors right now. Um, you know, that, you know, could change, uh, between now and when the bond is actually issued. Um, I haven't, you know, done an exhaustive look into this, but I don't, you know, I don't think there's been a stretch where, you know, Wenham was at 40, um. You know, or that Wenham was at, you know, 27 or 28 either. I think, you know, this is sort of ballpark where we're going to be. But the apportionment gets looked at at the, you know, at the time we actually execute the bond.

00:07:24,699	S7:
Uh, so it's it's literally done at the date of the execution of the bond.

00:07:29,870	S6:
Yeah. I'll double check it in the, in the agreement. Um, you know, in, uh, I know in Manchester, in Essex when we did it, it was actually each, um, you know, so we did multiple I think we locked in like $30 million right up front. And there was one apportionment factor. Then when we locked in the rest of the debt, there was a different factor, which, you know, in our case, it didn't work out as well for Essex. Um, but, you know, so you could also have that, um, that issue here. But, you know, we could go up or down as well, depending on, um, you know, my sense is here, we'll just keep rolling short term bans, given where interest rates are at, uh, and, you know, wait till the very end to lock in, uh, an actual bond, um, you know, going to market because, you know, rates are, um, rates are higher now. Um, and you hope they're going to drop at some point. Uh, we had the reverse in Essex where rates were low.

00:08:26,470	S7:
But if highly theoretical. But if during the term of a bond, let's say it's a seven year bond, um, the demographics go, you know, we we end up with 40% of the students in the school. Do we adjust the debt service or is it fixed as of the date of the issuance of the bond? This is what this person asked me.

00:08:48,169	S6:
I will I will double check that for you. Um, I believe if you know, my experience in the past is these things are locked in at the time of the bond. Um, which there can, you know, obviously. Yeah. If, if we were to lock in when we were at 37% and then, you know, we saw a shift down to 30, that could be problematic. Um, you know, I know we've we've experienced this year we're experiencing an uptick in apportionment. Um, and, you know, and it's somewhat painful, but it's, you know, we're, you know, it's not like we're talking, you know, going from a 66, 34 split to a, you know, a 60, 60, 40 split in most cases. But yeah, we can we can get a more definitive answer on the out of the school, um, agreement for that.

00:09:34,470	S7:
Okay. Thank you.

00:09:36,429	S6:
Yeah.

00:09:42,299	S1:
Um, any other comments before we start going through this deck?

00:09:47,799	S8:
All right.

00:09:49,230	S1:
Throw it up on the screen. I'm going to save it as today's date.

00:10:00,029	S9:
What is today? Today is this.

00:10:02,200	S8:
Okay. All right.

00:10:04,570	S1:
So like I said, the way that I typically run decks when I'm doing stuff for work, right. Um, when I put a flag up on the right, I don't get rid of it. I turn it green to tell my boss I'm done, right. And then he. He doesn't lose that. I he asked for something to be changed. Right. So this is the same sort of thing, right? So, um, there were no comments here about the background, right, that we're finance committee and that we're, um, just looking at the finance aspects of these things. Right. So the the comment here was that we needed to do not a straight line bond, but a the flat principal plus interest bond, which is the Excel file that um, Geoff sent out to everybody. Right. So I changed the model to point at that instead. And I kept it in. I kept the old numbers in here. Just to give you a little bit of contrast about how that's different. Right. So a straight line bond for $92 million at 4%. Right. Um, was 8.6. Let's see. That should say 4.5. Guys, I'm sorry about that.

00:11:09,830	S8:
Right.

00:11:10,629	S1:
Let's go back into the Excel model. All right. Basically when you do this straight line bond, the point is that we, uh, materially increase the amount of money that is due from the, um, the citizens in the first year.

00:11:27,769	S8:
Right.

00:11:28,629	S1:
Um, so 4.5 is, um, a $7.1 million annual payment And, um, if you go and you do the, uh, if you do the level principal, right, it starts at, um, 8.79, 8.78 and then drops over time. Right. So here's.

00:11:54,769	S8:
Here.

00:11:55,470	S1:
Is the model as we've got it out there. Right. So here's the level principal. Right. It starts at $8.79 million. And then it drops every single year until in the in the year 20 it's a it's nearly half as big as it was in year one. Right. That's very different from, uh, a level a level debt payment where you're paying $7.1 million every year, right? So, um, I kept it in. I kept this this line in here just to give you that insight as we thought about, um, this, uh, this thing here. So my plan is to basically, I don't know if you guys have any comments, but my plan is to just delete out this row and keep the one that's currently in yellow and get rid of that highlighting.

00:12:44,070	S8:
Right.

00:12:44,870	S10:
Yeah. One one kind of question on my side would just be for pure clarity perspective. Like I obviously understand the full context. But you know so we know Hamilton residents uh Hamilton Wenham residents would issue a bond for 92 million. Um, but I could suppose somebody could read the 8.28 million number and say, that's when I'm sure. Um, I don't know if anyone has any concerns on that.

00:13:17,299	S10:
I can't decide if I'm overthinking that or not, but you're just trying to be very clear to the taxpayers of Wenham.

Mhm. 00:13:28,100	S1:
Right. So, um, would issue a bond for 92 million, right? So we could put in some sort of comment here about, um, you know, only about a a little more than a third would actually, if I can stay vague here. Right, because we're, we're staying at the, at the high level. Right. We're saying for the entire project for most of this stuff. Um, um, of which, uh, a little less than 40% would be, um, one of those responsibility.

00:14:12,029	S1:
All right. Um, so basically it's a it's a much higher payment in year one. Right. And then, uh, the other comment here, right, is that, um, is about the consolidation of the schools and the economic savings related to that. So no, no major changes here.

00:14:32,700	S5:
Then I think we need to be careful about the percent you're putting there, because 40 is is quite a bit higher than 35. And people may start rippling that number to apply it to other things.

00:14:45,769	S1:
Okay.

00:14:56,700	S1:
I mean, the, um, the fact of the matter, the way we've written this is that, um, it doesn't matter what Venom's responsibility is or Hamilton's responsibility. We're talking about the cost of the project as a whole.

Right. 00:15:09,570	S5:
Right.

00:15:11,129	S6:
Yeah. I mean, does it make sense to just kind of put that disclaimer right in front? You know, sort of this is a this entire analysis is a sort of a macro level analysis. And the, you know, the Wenham taxpayer impact, uh, you know, will be provided, you know, as part of sort of the other, um, you know, documentation, but you're just doing it at the, you know, the much more global level here.

00:15:35,529	S5:
Well, Jared had said he wanted to add a tax light at the end.

00:15:39,669	S7:
Yes.

00:15:40,429	S5:
So we need those two would be sort of incompatible.

00:15:44,929	S6:
I mean, you could put something that says, you know, in the appendix, you'll find, you know, a projected, um, tax impact schedule for one of residents. But I think I'm just thinking in the body, it will be hard to keep kind of bouncing back and forth and, um, referencing some stuff at the quantum level and other stuff at the global level.

00:16:05,730	S5:
Right.

Oh. 00:16:07,830	S1:
Okay. So, um, one of the things here, right, is we might just say we're assessing the project as a whole. We're not separating the town's responsibilities until the very end, you know, say after the recommendation page where we might throw in a slide about impact to, um, Wenham residents.

00:16:31,700	S1:
Okay. Uh, so the only comments here were to put the, uh, keep the options, uh, one, two and three in order constantly through the deck. Right. So, uh, I've gone through and done that. Right. So, uh, here we are talking about a, um, uh, let's see. This is three and a half, right? So this option one, right, uh, is talking about the limp along, basically showing that at $15 million or $2.5 million a year. Right? Um, again, I've, I have done this. Right. So these are, uh, essentially that we have a, uh, a bond immediately. Uh, sorry. Let me let me say that we have that limp along, uh, for seven or so years and then come back in seven years. And we are giving the benefit of the doubt to say that interest rates kind of drop, um, down to a more, you know, historic levels of, of 3.5%. Right. But again, it's, um, you know, it's a it's interesting again, when you do the, the straight line, it means, you know, a lot less payments in year one, right. So we'll get rid of that highlighting here.

00:18:00,700	S1:
So, um, one of the things I wanted to point out, right, is this 3% inflation, right, that we're assuming, um, on the construction, you know, as I went down and and started saying, all right, well, this is the source that we used to determine, um, inflation rates in the future. Uh, I remember I think it was Dave. You were saying that in the projects that you've done, you were using a kind of a flat assumption of about 3% a year. Right? And that was sort of the normal, the norm pre-COVID pre um, pre inflationary time period. Um, but when I went down and and started actually grabbing some of these slides that are common with, with uh, the town of Hamilton's presentation, I couldn't get anywhere near uh, a five, a 3%. Right. This was this was closer in multi-family housing, right? Probably a little bit more, um, in your experience, perhaps. Um, but this MSBA cost per square foot, you know, from 2010 to 2019, the cost inflation was a was 7%. And then it in 2019 it jumped to 12, which is the craziness we've been feeling recently. So I kept. I kept the comment about 3% in the, in the, in the, uh, in the file here, but I, I wanted to have us revisit that in that comment. I mean, 3% I think is is not been something that MSBA um has seen um, in at least since 2010. I don't know if folks had comments on that or thoughts.

00:19:52,630	S7:
Well.

00:19:54,200	S10:
Uh, my 3% number was purely based on conversation I had with people in the construction industry. I, I frankly don't have anything to say. That's the right number. Wrong number. Um, I personally kind of like it because it is, like, fairly conservative and I think gives a good shot to the other options. Um, but I'm not wedded to the number at all. And I think your numbers are. Yeah. Don't have any material issue.

00:20:21,730	S7:
I agree with that because otherwise if we take the alternative, um, you know, and use the historical numbers, you know, we'll be potentially be accused of padding, you know, trying to pad the case for the new school, whereas we're reinforcing the case for the new school by using a number that arguably is too conservative.

Mhm. 00:20:49,730	S1:
All right. Well I've got the, the inflation model I mean uh just using again. Now this is, this is using 4% not 4.5% on the loan. Uh, for the as proposed. Right. But you can see that every, every 2% adds, you know, a little less than, um, what is it, a little less than $10 million, um, to the to the one school in seven years and adds, you know, 15 million or more to the to the other two options. So it's pretty it's it's a material assumption, right? It's one of the more material it's got the highest sensitivity, um, to, uh, to this variable. But I'll keep I'll keep it in here for now. Um, and then go back to where we were talking about it. Right. So this is the resubmit the school. So we still have the 3% inflation right in this this model. So option two right. Again we grabbed this. This is that you try for two schools in the news sites. Two sites in seven years right. We still have the the seven year wait $2 million to get into the grant program again. Uh, limp along and the $2.5 million a year, we replace both schools with the least expensive, expensive option that that we have. There is basically a combined $209 million, right. And a straight line bond at a much lower interest rate than we're experiencing now. 1% is $11.5 million in annual rate versus, and the flat principal is starts at 14 and declines to a little more than nine. So much much bigger numbers here. So we'll get rid of that highlighting.

00:22:36,000	S1:
All right.

00:22:39,529	S1:
All right. So option three is renovating Cutler and Winthrop. Right. Um, we're asking, what are we getting for the 94 million? So got in here, right? The 94 million. It basically covers the Ada compliance, like ramps, um, hazardous material removal, but won't include any increase in capacity utilization. HVAC. Right. To do all that is really the $209 million option from option two. All right. So we are saying that we would go and do immediately the Cutler. Um, right. Which is I think about 44 million or 40. Uh, let me double check that Here she goes. I've got 46 here and I think that's a correction. No. Cutler. Cutler. Winthrop. Right. 44 million. So it's not 46. Take that and correct it here. All right 44 million. And then this is 46 respectively. And so this is $90 million total. Right. And then um construction and all right. So we took this down number down. So we'd have two bonds. Right. And that gives us um for 20 years basically we've got two different bonds. So it's the language starts getting a little complicated here. Right where we start in year one payments of 4,000,003 million. But there's seven years offset. Or when they'd start. Right. And they drop to two and a half and 194 in year 20.

00:24:13,099	S1:
All right. Um, and then the, uh, the final comment here about, you know, we'd be bringing these two schools to code, but, um, for them to last, you know, 20, 20 plus years, we're going to need to kind of put in another $100 million over the next 20 years, um, in, uh, in maintenance and improvements to handle, um, you know, the, uh, the seven currently 70 year old buildings. All right. So I'm going to drop in the the number here. Like I said, I did not go through and and take these, um, these values and put them in. Right. So if I take you'll see here. Right. I've got the 4.5% interest rate, the 3% construction inflation. Right. 44,000,046 million for um Cutler and Winthrop in the two code option. Right. If we drop this in right, you can see where we land currently.

00:25:24,869	S1:
Right. So with another, when you when you add another half a percent of interest to the bond schedule. Right. For the as proposed, it takes it so that there, uh, it's actually $1 million more. Right. I think it adds two, $2.5 million of, um, of cost at a 6% discount rate to the as proposed.

00:26:00,130	S1:
So and then there was a discussion here about adding a discount rate discussion slide in the appendix so we can go to that next.

00:26:15,970	S1:
If there are any thoughts or comments here.

00:26:18,700	S10:
I. I think we get to the right answer no matter what. So I'm not going to quibble too much, but I think the real rate is close to like 4%, 3.75% for the interest rate. Now for like a 20 year muni. That's literally over at our Muni desk today asking that question. So it's kind of my caveat I'm okay 4.5% because again, I don't think it changes the final answer here.

00:26:42,569	S1:
Okay. All right. Uh, so this this language all change here, which is basically that the, um, the as proposed, it stays the least expensive until about 5.5%, um, a discount rate, right?

00:27:02,369	S1:
Right around here, it switches when the, uh, delay for seven years. Option becomes cheaper fiscally. Right. And that these two years bring the code or two schools in seven years are never competitive financially. Right. So with these assumptions. All right. So let me go to the, the uh, the discount rate discussion. Right. And obviously I didn't drop in the the new number here either.

So. 00:27:42,930	S1:
So there was you know, you're basically asking for, uh, discussion about how do we decide which discount rate we're going to use as the baseline base point for our sensitivity analysis, right. So just explaining briefly what the discount rate is. Dollars worth less in the future than it is now and that residents really have to discuss consider their own situation as they review the chart above. We're electing to use a 6% rate as reasonable and for the base for the sensitivity models, right? And so if you believe that, you know, inflation is going to get down to 3%, right. And that's your metric for determining, you know, a discount rate, um, then you'd be down here if you are a resident who's thinking about, you know, the cash that you send to the to the town in the form of property taxes could be used instead to for your own savings, right? Then you might be at this 6% rate, which is kind of where the stock exchange has yielded over the last few decades after taxes. Or if you're a resident that's, um, you know, needs them, would select a much higher discount rate because of their short term cash needs. Or you believe that inflation is going to increase or, um, some other reason where you'd elevate your desire to to delay the investment in the school system.

00:29:06,599	S1:
But basically, it still stands at the two schools or the bring to code, or never as competitive as as a single school now or in the future.

00:29:22,400	S9:
So we'll get rid of that flag here.

00:29:27,730	S1:
Uh. Let's see. Um, this, uh, I kept this flag here on the interest rate assumption slide because I, uh, I wanted to to figure out, you know, where to where I could, you know, what the right, uh, source document is for this? Uh, Jeff, is this just as I've written here, that the owner's project manager advises a proper interest rate is going to be 44.5%. Is that sufficient as a source document?

00:29:59,769	S6:
I mean, technically it's probably, um, like Hilltop Advisors or their, you know, their their bond, their bond advisors. Um, but the owners, project managers is actually getting that info from them. So maybe that I think owner's project manager is probably fine.

00:30:17,599	S9:
Okay.

00:30:20,369	S1:
Get rid of that flag here. All right. Let me go back up to the top here.

00:30:28,000	S1:
All right. So this is the flag that you're asking about, Jared, right? Um, we still need a slide that basically says, all right, once we've made a recommendation, right. For, um, in this case, the as proposed. Right. Then I think we need a slide here afterwards, it says we're making a recommendation, and the impact of the taxpayer is such and such.

00:30:53,400	S7:
Uh, yes. We we definitely, in my opinion, need to have that in there.

Yeah. 00:30:58,099	S9:
Mhm.

00:30:59,900	S6:
Um and Jared, do you think that's the, the one pager I sent out there would be just sufficient to drop in there.

00:31:07,000	S7:
Absolutely. As long as it just somebody gets to see at the end, you know, a $500,000 house with a with a current tax bill of X is going to have as a result of this, all all else being equal, an increase of x percent or X and or X dollars.

Mhm. 00:31:31,130	S7:
You know, with the assumption, with the assumption that again the a concern was voiced about you know, when do you do the split. You know the cost split. Um, and I understand you don't want to confuse the macro presentation, but at some point you have to tie the cost to the taxpayer and the cost split between the two towns, because a concern was voiced to me that, you know, Wenham is going to have increasingly more kids and therefore we're going to pay more, more in taxes. Um, because of because of the cost split, whether it's adjusted annually or whether it's simply fixed for the, for the term of the bond.

00:32:13,670	S6:
I think that I mean, unless you're going to sort of like I mean, that seems to be a little dicey for us to be trying to project out what our split of the district will be in ten years. I mean, I agree, I get the concern, but I agree. But you model that.

00:32:30,470	S7:
I don't know and I agree, but I guess all I'm saying is, if you can tell them that the cost split this this presentation assumes a cost split of X, okay. Um, at least so it's laid out there. And then if somebody says, well, how do you get the number and how is it going to change over time? I assume there's a procedure on an annual basis. uh, to address that? No. For at least for the operating budget.

00:32:59,670	S6:
Yeah. I mean, usually it's like a three year average, um, of a couple different factors. Um, you know, in the my one pager does reference the 65 or, you know, 65, 66, 34 split. Um, and, you know, we certainly could put something in there that says, you know, this, you know, this does change year to year. Uh, and we could pull, you know, whatever the last ten years, um, you know, apportionment factors and sort of average them out and say, you know, just kind of give people a range. You know, I mean, we we range from I don't.

00:33:32,099	S7:
Know.

00:33:32,170	S6:
If.

00:33:32,470	S7:
We go that far, but or that's if that's not a huge lift that that would be of interest. Um, but it's more a question of at least, you know, in the town meeting, somebody says, how did you get this split that we have? As a factual matter, we can say it's done in the following fashion.

00:33:52,069	S6:
Yep.

00:33:56,829	S11:
Uh. Let's see.

00:33:58,769	S7:
And then my only other question was, um, did we I mean, I got on the call late, but did we get the final numbers from the school committee?

00:34:07,670	S6:
So the one pager I sent you is the most recent MSBA negotiation, and then a new bond run on that. And it's, you know, honestly, very, very close. Um, the total cost of the project went up about 488,000. Um, net. Okay. Um, but, you know, when you pull that out over 20 years, incorporated.

00:34:31,000	S7:
In this document.

00:34:32,730	S6:
What's that?

00:34:33,730	S7:
Is that incorporated in the the deck that Finn has just done?

00:34:36,900	S1:
Right. Yeah. I took the numbers from, um, from Jeff. Right. Uh, one 4227 and a grant of 4978. Right. And the, uh, the 4.5% interest rate.

00:34:49,929	S7:
Okay. And then sorry, my last comment would be um, and this can be dealt with in the form of an of an appendix comment. Somebody, you know, in the two public meetings that I've been to, a construction engineer or somebody who, who, who purports to be one has gotten up and said, made the generic comment, these costs are crazy. Um, and, and we all agreed when we started this, um, project that we were not construction engineers, we were not going to opine as to the cost per square foot calculations that were done. Those are done by the, uh, the owner's rep and the architect. And, um, we should just be have something that makes sure we deflect that argument, you know, to to the owner's rep, because we're not construction engineers.

00:35:51,400	S6:
Yeah. And I remember the gentleman you're talking about that spoke at the meeting at the high school. Um, you know, there was.

00:35:56,929	S7:
Also one at one of the five board meetings that did the same, but anyway.

00:36:00,969	S6:
Okay. But, um, but yeah, I would question whether his, you know, experience is completely in the public, you know, domain with, you know, the procurement laws we operate under and things like that. Uh, and I think these school projects are MSBA, these MSBA school projects are, you know, they're higher than normal. Uh, I would say, um, you know, it's just the nature of the beast. Um, but yeah, I think we do have to address it because I do think some people, you know, just look at it and say that this is pie in the sky numbers. It can't be right. Um, which is why, like, I thought, us kind of just saying, you know, our, you know, HVAC, um, our HVAC at town hall, you know, just how staggeringly high that is. Uh, just because of the world we have to operate in. Well, it's.

00:36:45,730	S7:
The magic two words. It's prevailing wage. As as Dave Nigro said at the the presentation. My, my and my point is to we should deflect. Just say please refer to Dave Nigro and who will explain prevailing wage to you if you wish. In other words, we don't we don't want to even touch that one and say, well, trust us, it's really expensive. We don't we? That's not the kind of argument we want to be making.

00:37:16,070	S7:
I'm just trying to make sure because I like the I like the presentation very much, and I just want to make sure we don't end up in a rabbit hole in some public forum over construction costs.

00:37:33,070	S9:
Okay.

00:37:34,030	S1:
Um, all right. So I'll put that in the comment and I'll probably put that in the background, uh, figure out how to fit that into the background here at the opening statement, right about what the the process is that we're going through, right? Okay. Um, all right, let's see these other flags we have. Right. So I'll update this. Um, this summary of the cash flows. Right. Slide with the new new values. Right. You can see that I dropped in this, um. Um, actually, sorry, I have dropped it in with eight, four and a half, and I just got this flag here because I kept the flat principal or the straight line in the very last slide. Right. To contrast how different it is. Right? It really front end loads the cost of the project, um, when we do this right, adds a million or more dollars, um, in the first few years in all these options.

00:38:28,269	S5:
So then did we talk about putting, uh, the option numbers on the, on the choices?

00:38:37,300	S1:
Uh oh, you wanted the option numbers here.

Okay. 00:38:39,869	S5:
Um, yeah. And that might. uh, that might affect your title. It says for options because beginning you had you gave three. So, you know, you could just drop the four and say four the options and then put, you know, or the new school now and then. Option one, option two, option three.

Yeah. 00:39:03,800	S1:
Right.

00:39:11,329	S1:
Right. Okay. I'll, uh I'll, I'll put that over here on the left, you know, as proposed. Right. And go through there. This flag is, is just something that I figured that we might be adding or removing slides on, on all the assumptions. Right. And so I just wanted to flag to remind myself not to, to mislabeled those as we change those around. Right. And then, um, the, uh, the only one that I don't have, I don't have a source document for is the commitment from the school that they're going to open the doors on September of 2028. I couldn't figure out where to get that. I know, Jeff, you might be able to send me some document that I can source that from.

00:39:51,800	S6:
Okay.

Absolutely. 00:39:54,769	S9:
All right.

00:39:55,800	S1:
Um.

00:39:59,230	S1:
And then, uh, let's see. Right. And so this was, uh, the correction, uh, by about $2 million and each one of these, uh, schools down from, I think, 46 and 48 to the 44 and 46 you see here. Right. And I want to emphasize that all these numbers, all these models here, um, haven't been updated because I wasn't sure where our, um, assumptions were going to go during this meeting. So I've just been invaded by a small child. I'm in a meeting, I gotta go.

00:40:27,469	S9:
So I gotta go, okay.

She's. 00:40:30,730	S5:
You know, it might be.

00:40:34,630	S1:
I'm sorry. Go ahead.

00:40:36,099	S5:
I'm sorry. I was going to say it might be worth just using putting this on two slides and making it a little bit less cluttered.

00:40:47,530	S5:
And it would also make the boxes bigger so that when you know the presentation is made, people in the audience can see it better because some of the stuff the school committee put up, put up wasn't readable, even from the first couple of rows of the audience.

00:41:01,769	S9:
Mhm.

Okay. 00:41:08,730	S1:
All right. And then these two are the slides we're going to get rid of. They're just the old straight line bond schedule and the uh the old assumptions table contents. So getting rid of those. All right. So we'll add another slide or break that that this, uh, Cutler and Winthrop cost slide in half. And that should take us to, um, how many slides total here? We're talking about about ten slides in the body and about ten slides in the in the appendix. Um, uh, in the when we talk about the size of this deck.

00:41:50,000	S1:
I hope we can keep people's attention that long.

00:41:54,099	S5:
Isn't it possible? Somebody's going to ask us as to why, uh, uh, we're using level principal versus, uh, level payment.

00:42:05,469	S1:
Um.

00:42:10,969	S1:
I think I think one of the things that Jeff and I were talking about here was that, um, you know, how, you know, if your personal discount rate is very high or very low, you'll prefer a straight line or principal plus interest. Um, bond in some cases, right. If you have, if you really have a personal discount rate that's very high. You need cash now. Then you are not going to want to have accelerated, you know, payments. Right. You'd prefer the straight line bond that, you know, pushes the, uh, a lot of the payments out to far in the future. But if you have.

00:42:51,400	S5:
No. My question was, uh, uh, if somebody asks why this is the only alternative included. You know, do we want to have we covered ourselves on a disclaimer that, you know, that's not one of the things within our purview, if that's the case.

00:43:09,829	S9:
As to.

00:43:11,400	S1:
Why? Uh, so we are we're using the the bond schedule that the owner's rep provided us. Right.

Essentially. 00:43:19,230	S6:
And technically, it's the it's the finance office at the school has provided it. Um, so I think, um, you know, we can only I think what we would say about is we, we can only go with the information that's provided to us. We're not the the the actual client. We're not the one working with the bond advisor. Um, if this is how they typically do things, um, we're analyzing the information as we're, you know, it's given to us. Um, you know, I think we do have some ability to have some input when, when we actually get to the point of issuing bonds. Um, I know in my district it works that way. The finance committee and, uh, treasurer, uh, in each town, uh, were involved with the decision on whether to go level, uh, level principal or not. Um, but that's something that may change in, you know, a couple of years and we actually actually issue this. But I think right now it's the only it's the information that's been provided to us. And so that's the information we're running with right now.

00:44:15,170	S5:
All I'm saying is I'm not saying that we should get involved. I'm just saying to make it clear that that was a given to us as opposed to something that we're opining on.

00:44:24,829	S6:
Yeah. Yeah, I think we can throw a, you know, a disclaimer in there. It just says, you know, But at debt service schedule, you know, as provided by, you know, owners, project manager and, you know, school, school building committee. Um, and leave it at that.

00:44:43,300	S1:
Yeah. Okay. I'll grab a box and put it in there. Maybe we'll fit it in here.

00:44:52,929	S1:
Uh, in the first. New school as proposed. Oops. Did it again.

00:45:14,630	S6:
In Jared, I'm reading through the school district agreement right now, and they actually amended the agreement, um, at one point so that the capital cost, which would include debt payments, would be allocated in the same manner as operating costs. But there's an additional paragraph that says, uh, the committee shall consider circumstances at the time of any proposed debt. Um, to use essentially another apportionment formula. So I think this is a question.

00:45:44,530	S7:
Um, well, that's a time bomb.

00:45:47,670	S6:
Yeah. Um, you know, and I think, you know, and, you know, to some degree Hamilton as well could look at this and say, you know, we'd like some stability over this that we don't want to, you know, have, um, you know, sort of, you know, annual payments that swing dramatically due to apportionment changes. Um, so I think it might, might be worth, you know, both to both towns to at least explore the option of tying in, you know, at the time of, um, at the time of issuance. Um, you know, and they could probably make it as, you know, as, uh, you know, specific or sort of flexible as they want. So, you know, you could, um, you know, you could use larger. A lot of times things are based on three year, um, three year student population rolling averages. You could, you know, we could, you know, propose that maybe for the purpose of this, you know, you use 6 or 8 year rolling averages, so it smooths it out a little bit more, and you don't have such pronounced, um, you know, swings and apportionment factors throughout the, throughout the debt payment.

00:46:55,570	S7:
Um.

00:46:58,469	S7:
Geoff. Well, a thank you for looking that up. And B, did I hear correctly that basically there was a one sentence at the end says we can we can do this any way we want in the future if we if we feel like it, I.

00:47:14,230	S6:
Do I mean we. Yeah. So the, the last sentence says provided, however, that the committee shall consider the circumstances at the time of any proposed debt and may initiate for acceptance by the member towns as provided under section six. An amendment to this agreement calling for some other apportionment formula specific for the specific capital cost. So there's a this sentence here that says capital costs will be allocated based on operating apportionment. Um, you know, so if you know, if you had a whatever, a $50,000 improvement to the cafeteria, you would just, you know, lump it in and apportion it like, um, like any, any other operating costs. But when you have something of this magnitude, you could, um, agree under the terms of the regional agreement to try to find something to, you know, to maybe tighten that up, um, because you could. Yeah. For us, you could be looking at a swing from 33 to, you know, 36% and, you know, and then the flip would, would apply to Hamilton as well. So, you know, my thought is either you lock it, you know, we propose we lock it in at that rate. But, you know, some might say that's not fair either. So maybe the the interim, you know, or the kind of middle ground solution is to use a longer rolling average student population, which would smooth out, you know, the variability a little bit.

00:48:39,329	S7:
Well, I don't disagree, but I think just can I, I think the select board needs to be made aware of this to make sure that they that, that it's their understanding that they on, on behalf of the town have to agree to whatever revision to the formula is made.

00:49:02,170	S6:
What I can do is send an email to, um, you know, tomorrow morning or tonight referencing this paragraph and saying, you know, the Finance committee discussed this tonight, and we would like to get some clarity around the potential, um, apportionment options as it relates to this, you know, to this debt.

00:49:19,369	S7:
In other words, I don't think it's appropriate for the school committee to simply decide on behalf of the two towns how that apportionment is going to be made. I that's a that's a decision that the town needs to make or needs to agree to.

00:49:34,269	S6:
That's all I mean by operation of the agreement. It's the school committee that does that. But you would have you would have to have input from the from the member towns. I mean, obviously, if the select boards were putting pressure on the on them to do it, they're going to to do that. I mean, there's no real impact to them in terms of it's not, you know, if we're moving forward, whether it's really just, you know, who's paying what share, they should be willing to work with the select board. So I think putting it on Steve's radar in the Select Board's radar, I think they need to talk to Joe and the select board over in, in Hamilton and sort of iron this out ahead of time. Um, but I think it's good, I agree.

00:50:13,099	S7:
Thank you for for uncovering that.

00:50:18,630	S6:
Sure.

00:50:23,369	S1:
All right. We've gone through the whole deck. I'm going to drop in the the sensitivity analysis. You know, now that we've updated the where the baseline is, and, uh, we'll get that out to everybody. Uh, probably after, uh, Jeff has kind of dropped in the tax implication to this box here. Um, I don't know. Jeff, could you throw, uh, the tax implication work that you've been doing onto the screen?

00:50:48,670	S6:
Sure. Let me switch over to here and, uh.

00:50:59,429	S10:
And then I was quickly looking on the FAQs on the Hamilton one. Um, like, school elementary school project. They say they expect this school to be used by for the 2028, 2029 year.

00:51:12,099	S1:
Okay. All right. I'll go grab that.

00:51:16,500	S10:
Yeah. It's the H.W. schools dot net H.W. Elementary Project FAQs.

00:51:21,929	S1:
Okay.

Thanks. 00:51:23,929	S6:
All right. Um, I think I've switched over you guys seeing, uh, the sheet with the blue, uh, grid here. Um, so this is actually sort of the way I did an Excel. It's it's backwards. So page two is sort of a place to start, but this is the background of how we how we got to the numbers. So we're going to see in a minute. Um, so on the third we got an email. Uh, this is the, the end product of the, uh, for those of you who weren't there or didn't hear, uh, the change that was made was, I guess there were some changes made between the cafeteria space versus the space of the gym. Uh, at the suggestion of the MSBA, uh, we made those changes to the plans, submitted them it, you know, increased the project cost a little bit. Um, but at the end of the day, the project is now, you know, just over 142 almost 142 Two three. Um, you know, the reimbursement is just about 49 eight. Um, and you can actually see the reimbursement rate up there. 51.28%. Um, and it's not 51.28% of the project. It's just 51.28% of the of the cost that they deem eligible for, um, you know, for reimbursement. So, you see, we move from the 142 number down to the 92 for 88 number there. Um, then we used the apportionment numbers that are part of this year's operation, operating budget to 65.92 and the 3408. Um, and based on that, you know, this is the amortization schedule. Uh, that works out. Um, you know, you can see that's the level principal there. Um, and so those are your, you know, and actually, I did throw down the bottom there too, that you can see before it was going to be about a $92 million bond. Um, so the project, you know, the net bonding has gone up, you know, just under $490,000 over time. So this is sort of the background that goes to page one. And so here I think I might rejigger how some of this is laid out. To put it into the into the deck. But this is just showing you, you know, what's the allocation of total debt service. Uh, you know, principal and interest. Um, you know, in the middle here, you've got, you know, this is the FY 25 certified town values in, in Wenham. Um, you know, the total values, what drives the tax rate? Uh, and then you have your average, you know, single family in your, in your median single family home. Uh, and so I think this is what makes the analysis, um, a little more complicated to present to people because it's this, you know, it's this descending payment. So, you know, the worst case scenario is year one, where the, you know, the tax rate impact is $2.18 $0.18 on the tax rate. So in year one you're looking at, you know, just under 2200 for someone living in an average single family home, which is slightly over $1 million assessed value. Um, for the median taxpayer. It's, you know, it's just under 2000. And that's for a nearly, you know, about $891,000 home. Um, and then, you know, we add this per $100,000, uh, for folks, so you can at least do a, you know, a down and dirty kind of calculation for yourself. You know, I have a $700,000 home. You know, it's going to be seven times 218. It's, you know, probably a $1,500 increase for me. So we carry that through for the whole year when you can see the difference, you know, year one it's 2200 by the the final year it's, you know, just over 1200. Um, and you know, then down the bottom here, we just throw that average, uh, for folks to see, um, that, you know, over time it's about $1.69 on the tax rate, um, you know, in about 1700 to the average taxpayer and 1500 to the, um, to the, to the median. Um, you know, the big sort of caveat here is that this is all based on, you know, the, the FY 25 certified valuations. So, you know, you know, as any of you have looked at your tax bills in the last 2 or 3, four years. No. You know, your personal experience relative to the valuation of the the town is going to change over that 20 year period. You know, probably multiple times. So this is really just a snapshot in time of, you know what we think. You know, the the, the the taxpayer experience would be all things being equal. But it's going to obviously fluctuate over that 20 year timeframe.

00:55:55,530	S7:
But but it's the best you can do. And I think it's very well laid out. Um, it's this is showing that all other things being equal, this particular project as proposed are going to have the following, you know, cost effects. I think it's great.

00:56:12,000	S6:
Yeah. This is how I tend to do things. I think it's, you know, sort of, you know, it's obviously easier when it's just a one time, one year simple thing and you can just lay it out. But but yeah, I mean, you know, the best you can do is lay it out for people and, and, you know, and, and, um, you know, I'm not trying to minimize this at all. These are absolutely, positively material impacts on, on, on a tax bill. Um, and, you know, certainly there are going to be much higher for some people and, you know, slightly lower for others. Um, but yeah, I think, you know, obviously, you know, I like the approach you folks have taken, um, you know, this kind of global level look at the project that Finn's kind of, uh, spearheaded. Uh, and then, you know, then you come down to saying, well, if you move forward with it, you know, here's what we think the impact is to you. Uh, and as I mentioned, there's a spreadsheet I have that then sort of tries to extrapolate this out over sort of a ten year period. Um, to, to sort of to Danos point of, you know, what you vote for today is not, you know, that's not it, that you, you, you know, you, you want to understand what this looks like, you know, five years out, ten years out. Um, you know, I think that's helpful to people, too. And, and I, you know, frankly, this is the largest, you know, spend I've ever been around, either as a finance committee member or a town accountant. Um, so I think the more information we can throw at people, the better.

00:57:34,400	S5:
Jeff, you know, I think it'd be helpful to, uh, someplace at the top indicate that this is a level principal, what the interest rate is, and also state that the term is 20. Uh, even though, you know, somebody could figure it out by looking at the table. Uh, the second thing is for the slide, you might want to consider, instead of having all 20 years showing, uh, do it every five. So the thing is actually more readable on the slide.

00:58:05,829	S6:
Okay. Yeah, I'll noodle around with that. I mean, it's always a, um. You know, I just went through this with the with the, um, capital slides I put together for the select board. Um, you know, how to how to get stuff in, you know, in a way that's, that's, you know, useful yet readable for people, uh, which I'm sure Finn has been struggling with in the on the deck we've been looking at tonight. But yeah, I can um, I can, you know, sort of work it up a little bit, Bob, and even, you know, send it over and, you know, you can give me your thoughts back on, uh, you know, if that's kind of what you're looking for. And, you know, if you have some other suggestions on how to make it more, more readable, um, you know, my, my big thing is just not wanting to say, you know, well, on average, uh, it's going to be $1,700, because what you don't want is for someone to get the first bill for $2,200 and say, that's not what you told me at all.

00:58:55,130	S5:
Um, I don't know. Uh, I understand, I'm just trying to make something so that people, you know, the presenter doesn't have to say. On unreadable slide seven, you will see that the numbers X, which is sort of the way some of the slides that have been presented on this project fall, you know, that the slides are unreadable to anyone at any distance from the screen.

00:59:20,170	S6:
Right.

00:59:30,070	S1:
So my I think my goal is to like I said, we're already at nine, nine or so slides in the deck in the in the body of the deck. So, um, trying to get this communication down to a single slide is going to be my priority.

00:59:54,070	S1:
Okay. Um, just going back to the agenda and looking at this. Right. So we said we were going to discuss this school building project. And you know, we've gone through the deck. I think the the biggest change that I would say is that when we added the half a percentage interest rate, um, up to 4.5%, it at the 6% rate, it moved it so that it was slightly less expensive to wait seven years. So let me go back to that slide, throw it up on the screen. So, um, you know, my sense is that it's basically changing the language, talking about the way that, David, you were talking about it, where we've given these other alternatives, you know, every advantage we can, right, by keeping inflation, you know, back down to the what it was pre-COVID, um, giving them expecting, uh, interest rates to be much lower in the future. Right. All of these other things. And as a result of that, it basically becomes competitive at the 6%. Right. Um, and uh, and then kind of offsetting that with in the recommendation language. Right. What we've already discussed about how all of these future looking values or assumptions are all.

01:01:14,230	S1:
You know, really uncertain compared to the project as it's given now. Right. That we know what the price of the new school is. We know that we can get back into the MSBA loan. Right? That we can do it right. We don't know all that stuff. 7 to 10 years from now. Right. So that's how I'm I'm thinking about kind of tweaking the language with that shift that you're seeing on the screen now. Right. It used to be green here. $2 million less, right. And smaller than this proposal.

01:01:43,670	S7:
I, I agree, and I like somehow the wording of at some place in here I mean all the other options involve shoveling money out, continuing to shovel money out the door cost with no quote unquote final result. At least in the case of the school, you get a state of the art physical asset.

01:02:08,300	S7:
You know, hell or high water. And it's I think it's hard to not to overemphasize that value.

So. 01:02:20,769	S1:
Okay. Uh, like I said, I'll, I'll, I'll tweak some of the language in the recommendation to, to align with what we just talked about there.

01:02:28,570	S7:
Yeah. The new school option. In my mind, it would be something along the lines of the new school option, uh, secures a, a valuable educational asset for the town for the next 50 years at a fairly, you know, quantifiable cost. The other options do not. You know, something like that is what I'm struggling with.

01:02:53,969	S1:
Okay. Yeah, I'll work on that language and get this hopefully final tweaks. Uh, so I don't have to keep doing it.

Um. 01:03:05,670	S1:
Um, okay. So I think what I'd like to discuss now is, is a motion where the finance committee would, would take a stand on the proposal. And, um, I'm thinking back to the language that we started talking about, uh, like last week. Right. Um, that was basically saying that, you know, we're rendering opinion based solely on the the costs and assumptions that have really been handed to us from these experts right in the field. Right. And taking them at at face value. Right. Um, and we have the owner's rep and what have you, but we're, we're we're given these options really and you know, of these three options, we think that the as proposed is the least expensive option for the town.

Right. 01:04:00,800	S1:
Bob, I think you're talking.

01:04:02,000	S7:
About a valuable physical asset, you know, for future generations.

01:04:08,769	S5:
So no, but you mentioned the options. I think it's the same thing that we had before that, that the current proposal is recommended above any of the three options looked at, because you don't want to fold it back into four options again.

01:04:28,670	S5:
Just strictly wording.

01:04:30,769	S1:
Okay.

01:04:33,829	S1:
All right. So I'm going to I'm going to need some help on a on a on motion language that we could all. I'd prefer that all of us support. And Dan I haven't heard too much from you tonight. Um, so I'm. And I know you, you have some of the most pointed kind of concerns here. So I want to work with you. I'd prefer to have a motion that is unanimous, but if we can't get there, I understand.

01:04:59,369	S2:
Yeah, I've been thinking about that Finn since we talked last. And then tonight, just listening to everybody, I kind of. And I appreciate you guys, uh, you know, listening or respecting my point of view on the stuff. I feel like you try to do accommodate that with some of the verbiage in the presentation, which I appreciate. Um, but as I've listened and thought through it today, like the general tone is that, you know, this is the right thing to do for the town, these would be the alternatives. And we could wordsmith and kind of say, well, we're just looking at what was given to us. Or we could say we're just analyzing costs or whatever, but the general tone and the general sense of it seems like most of the folks on the phone is that this is the best option for the town, and I generally don't think it is like, I think you know what Jeff said about the Nahant example or some other example that much more drastic. It's much more difficult to implement. It's it would take. I don't know what it would take, but I don't think it's been sufficiently considered by the select boards. And so I think it'd be easier for you guys and for me to just let me vote against it and be, you know, 4 to 1. And that's okay. I don't think we have to be unanimous. I think that would be more. Staying true to how I really feel, and also not trying to water down how you guys really feel.

01:06:23,500	S2:
Anybody thoughts on that?

01:06:28,170	S6:
Dan I was just going to say that I did sort of like knock around a little bit of like numbers and things on the Nahant example. Um, and so, you know, I looked at it real quick and, you know, we if we could enter into a tuition agreement like Nahant has with, you know, Beverly or Danvers or something like that, you know. What would be the impact? How much could we save? Uh, and and if I said we, we would spend, say, $18,000 a student and we have, you know, 500 and something students. Um, you know, you could potentially save, you know, two and a half, $3 million over what we spend on the school budget. Now, at a, you know, high level, um, the one challenge I would say we face. I mean, there's, there's a few different challenges, but one of the challenges we face is that Nahant is only sending, you know, 140 students to Swampscott. We would be, you know, because their model is they they teach K through or pre-K through two through five. Um, if we kept things in our own district, uh, up until, say, fifth grade and then went to middle school somewhere else. Um, you know, that might be more appealing, but it would be difficult to, you know, even for a Beverly to say, you know, do you have room for 540 students. Uh, you know, in a couple Septembers. Um, it could be challenging. Um, but certainly there could be savings there. But that all would be predicated on that. Someone would take you in at 18,000 a student. Um, it could be that it's, you know, 17. It could be that it's 19 or 20. Um, but the challenge you might face is that it's a large enough number. Uh, that, you know, it could require them to outlay capital, too. Um, but the thing you said that I had never really thought about before was, jeez, if you move forward with the project, suddenly Hamilton, when it was a, you know, might be a more appealing partner because they come equipped with a brand new, uh, you know, state of the art school, uh, so that you might almost way I, I felt like it made you less flexible moving forward. But I suppose you could make a case. It could make you more flexible because you would be showing up with this new school. Um, but, um, you know that that was just my quick take when I looked at it the other day.

01:08:45,170	S2:
No. Yeah. Thanks for looking at that again, Jeff. But I think that's the kind of analysis that we need to do that not in the finance committee, because it's like you guys said, it hasn't been presented to us as an option. It's more of a political question. It has massive political implications. And I don't think the town would necessarily support it because we, like those of us on the phone, have a vision for what our town is supposed to look like, but I don't think that vision is viable ten years from now or 15 or 20. It's definitely not viable for the holistic, diverse and healthy community that we aspire to. So anyway, I just don't think enough considerations be given to that option. And yeah, like you said, maybe it is just the kindergarten through fifth grade that makes it work. Or maybe the assumptions are 25,000 versus 18,000 or 16,000. We haven't done that math. And then you got capital savings and other savings and repurposing and converting to mixed use and all kinds of upsides of not having some capacity utilized buildings and and you could you could change the way you manage the district etc., etc.. There's all kinds of options. It's just the bigger general point is our town is too small and people are having fewer babies and fewer people are moving into Massachusetts in general, and everybody in the state is going to face this. They're already facing it. We're going to face it more in the next 10 or 20 years. And we're just lobsters in a boiling pot. And so anyway, that's my little, uh, that's my little soapbox.

Sorry. 01:10:16,300	S1:
No, I hear you, Dana. I know we've been I have been hearing your concerns. And you've been clear about them, um, since we started working together. Um, and, uh, I, I know that, uh, you're interested in, in a wider scope, um, set of responsibilities for the fin com. So, um, you know, I think we we probably want to take that up, um, you know, to, to honor your interest here. Uh, you know, we can get through maybe, uh, the, uh, the time crunch issues we've got now.

01:10:52,569	S2:
Yeah, 100%. And I do think we should just carry on, and I should just vote against, you know, the recommendation, and I think that's fine. I mean, whenever you do a warrant, you don't have to have unanimous get a vote on all the all the items in the warrant. And sometimes it's four one, sometimes it's three two. And our vote is just reflective of our general sentiment. It's not an actual it doesn't carry weight necessarily. It doesn't have, uh, you know, it's not a yes or no for the town. So I think it's okay for us to not be unanimous on this.

01:11:20,970	S1:
Sure.

01:11:22,899	S4:
Tim, may I just ask, when might there be a opportunity to ask a couple of questions or comments? Do you want me to wait?

01:11:29,630	S1:
Uh, no, I was just thinking about that, I guess because, uh, you know, we're coming to a motion pretty soon here, and I wasn't sure what you were particularly interested in commenting on. Is it school? School related, I assume.

01:11:40,300	S4:
Then it's all school? Yes. Okay.

Just. 01:11:43,470	S1:
Yeah. Go ahead. I'll give you. I think it's appropriate to give you three minutes. Uh, okay. And if you have any questions, I'll try to respond and not.

01:11:50,470	S4:
It's mainly questions in a couple of comments. Um, having gone to the joint presentation, the number that stuck in my mind was and, and the numbers that Hamilton put together was the percentage increase that the project would cost Hamilton. And it was it was eyeballed at 11 or 12%. It looks to me if you could make that schedule, Jeff, that you're working on shows not just the dollar, but what's the percentage increase that represents that first year and last year to the taxpayer? I know you got a median versus an average, but that would be very succinct number for people to put their teeth into and understand the consequences. Um, and but I should have preamble then. What you've done here is wonderful, and I'm very impressed by this slide deck, because it's going to reassure a lot of people that the numbers have been crunched by the fin com, which is what what I wanted to see. And I'm very impressed by what you've done here. Um, I should have said that at the outset. So one is what you walk away with is, okay, this is the best that you can come up with and it's going to cost me. It looks to me like 15% increase in our town tax tax bill. Uh, on the basis of number. Uh, number two, I think and this is going to be a hard one for you guys, but that December slide deck you put out with the longer term debt service and the drawing down of the 2.3 million free cash and the spike in 28 in our debt service. Rolling this analysis and having your hands around by the time of the town meeting of what this is going to look like two and five years out. And I know there's a lot of moving parts, but the new union contracts how they feed through the $10 million DPW building. Uh, if you can put the school in context so we're not hiding from the taxpayer what Wenham is facing. And I think you're coming up with the best recommendation you can in a very difficult situation. But let's not gloss it over so the townspeople at least know what they're voting on. And I'm going to vote for this thing. Um, but I think you want to have people fully informed. Two just other minor points. Um, I do think this, uh, the proportion that we pay is really critical because I think the demographics for the first time in some time, if you look at the last three years versus the last 10 or 20, is Wenham is rising as a proportion. And to Jared's point, if this is going to be something the school committee is apportioning, and then going back to the, uh, um, select boards in five years time when we're up to, you know, 45% and they say we want 45% of the of this $90 billion budget instead of just our, uh, 34%. It's going to be material. So I hope you guys button that one down. Uh, and maybe the last comment, uh, was I do think people are going to be wondering how do we accept the as is number? Is that $90 million? Uh, I realize because Hamilton did not even show it on its options of having Winthrop upgraded, and it made some of us suspicious because they had been planning to pull the rug out from under us in two years and not have Winthrop renewed its lease. And as you I'm sure have seen, Hamilton is going to save somewhere between 7 million on capital upfront from selling Winthrop, uh, 14 acres and a half 1 million to 1 million lower expense to them. That will be the case for us. And so they're 12%. Maybe. Why? It's that extra half 1 million to 1 million that they're going to have off of Winthrop. Just just be aware that some people are wondering, are we dealing with. Are they really being straight with us about like the upgrade costs? And I realize that's all you can take is what they've given you. That's all I ask.

01:15:45,100	S1:
All right. Well, I appreciate your input, Angus. You know, I was just trying to make sure I hit the points back here, right? So, you know, uh, first of all, yeah, I appreciate your comments on the deck. The goal is to make this, uh, to do what you described, to explain the process that the com went through and explain, you know, the alternatives to the proposed, uh, school, um, and kind of show how we've come to the conclusion that they are more expensive. Um, the comment about Winthrop, um, you know, we we do not have a number that was ever vetted by a, um, an expert. You know, as you said, that was never a part of that, that process for one reason or another. It was just never considered as. As viable. Right. So we have used a number that's pretty comparable to Cutler. Based off of, you know, comments by, you know, by Eric the superintendent and uh, and the, uh, you know, the folks there at the school district, right. To say that, you know, it's probably going to be about the same because it's larger than Cutler, right? And so it's got more of the same problems. But, you know, we have had to, um, you know, make some assumptions, right. Um, and then.

01:16:57,399	S4:
Disturb you a little bit that they didn't because this is where it sort of smelt when they said, oh, they're going to make this money off of selling off the district, the building so that.

01:17:06,270	S1:
Yeah, I, I obviously I do wish that we had that right. So that we could give it as a viable option. Um, but you know, you can see that if you, um, in the sensitivity analyses in here, if you add or subtract $10 million to our, to what we assume it costs, it doesn't change the, you know, the conclusions that we would draw. Right. Um, if it is, if it is not 40, you know, 46 million, it's 36 million. It doesn't change it. If it's 26 million, it still doesn't change it, right? Um, so the sensitivity analysis tells us that it's it's, um, it's something I wish we had, but not having it doesn't mean we can't come to the same conclusion.

01:17:48,130	S4:
Okay, so can you show that on Jeff's schedule, that one page schedule, that simple percentage, so that we have something that we can hang our teeth, put our teeth in? I think it was $2,000 on a what what does that rate work out to on the average rate for a taxpayer in the next fiscal year?

01:18:06,670	S6:
So, you know, in in year one it's about a 13.4% increase. Um, but that's modeled by that being the highest year. Um, you know, if you were to look at, um, you know, The average tax rate impact is $1.69 over the over the 20 year time frame. We're looking at a $16.16 27 tax rate, potentially for FY 26. Now. So you know over time it's really closer to about a 10% increase. But it's a much larger increase in year one. I don't think John McGrath's deck gets into this nuance. It's much more just an average, uh, you know, amortization schedule. Um, so his would probably be more in line with our average per year tax rate increase of 1.69. So we might be slightly lower, uh, at, you know, something closer to, um, you know, like 10%, a little over 10%. Um, I'm trying to get back to that screen, but that's just I'm just doing a quick calculation. It's not on that, not on that slide. But, you know, we could certainly add it.

01:19:15,100	S4:
Great.

Thanks. 01:19:16,930	S6:
And, you know, on the comment about Winthrop. Um, you know, I would agree there is a little bit of, you know, it doesn't quite smell right or whatever, but the only devil's advocate, you know, argument I might make is that, uh, you know, we have one piece of property in the district, uh, and they have three large pieces of, of property in the district. So they, they have quite a bit more skin in the game than we do in terms of the property they've put in. Um, so that's just, you know, my $0.02 on that. But I agree it would have been nicer to have, you know, all of that information on the sort of up to code, uh, you know, in our hands so we could, you know, not be making a few assumptions here.

01:19:58,529	S4:
And fin that long term debt that you had in December, are you going to have anything like that to show how you pull these parts together? Um, it was one that showed a nice decline over the last decade in our debt service as a percent of operating budgets. But, uh, and putting off a spike by two years, 2627, but in 28 it surged back again.

Um. 01:20:23,000	S1:
Right. So there are, uh, four responsibilities that I believe the, the fin com has this year. Right. It's usually just three. The, the the standout one is is an opinion on this. Right. Um we're going to we're going to be covering the operating, uh, expend budget, uh, kind of the typical budget of the town, the capital expenditure budget and informing the, uh, the citizens of, you know, sort of call it management's discussion, analysis or forecasting of things that folks need to be concerned about or thinking about. Right. And so I put that what you're describing as, as something that I'd like us to have, um, available at, you know, uh, at least uh, in the, uh, uh, for the town meeting. Right. Yeah. It may be some fit in the warrant, so that's great.

01:21:10,199	S4:
Okay. Thanks. I'm done. And thank you for giving me the time.

01:21:13,170	S1:
Sure thing. No problem. All right. I'm going to go back to the finance committee. Nuts. There isn't anybody else on the line. Let me just double check. I don't know how to check that. They're just.

01:21:24,770	S6:
Participating. I don't there's nobody else logged in or trying to log in.

01:21:28,229	S1:
Okay. Um, so I've tweaked this motion language here, folks, and I'm looking for your thoughts ahead of moving forward with it.

01:21:42,970	S1:
And I'm going to make it bigger guys.

01:21:47,630	S7:
Good. Thank goodness I got my had my cataract surgery.

01:22:03,899	S7:
I like it.

01:22:09,100	S10:
I'm happy with the language.

01:22:13,270	S1:
Now. Bob, do you have any thoughts?

01:22:24,170	S1:
No, Bob, I can't. I don't know if you have any thoughts before we go.

01:22:26,829	S5:
Uh, it looks fine. No, I was interrupted by someone who came in. I'm out in New York state. So we're visiting, so. No, that looks fine.

01:22:36,630	S1:
Okay. So I'm going to ask for someone to, uh, propose this motion.

01:22:44,000	S7:
I move that the when I'm finance committee, uh, conclude that the alternative available to the town and based on the cost estimates provided by the experts engaged by the Hamilton Wenham School district, the proposed new elementary school is the least expensive and least risky path to secure a viable long term educational asset for the school district.

01:23:07,670	S10:
I'll second that.

01:23:09,130	S1:
Thanks, David. Any comments before we move to a vote. All right. Uh, then we'll go to a vote. Uh, Finn I.

01:23:18,899	S7:
Jared, I.

01:23:20,569	S5:
Buh bye.

01:23:21,800	S10:
David I.

01:23:24,729	S12:
Oh, nay.

01:23:25,970	S1:
Yeah. All right. Thanks. And then, uh, we don't have any other members to to abstain. So, uh, we've got it passing by 4 to 1 vote.

01:23:36,600	S1:
Okay. Any other comments? Uh, before we move to the next item on the agenda, I've got a little bit more work here to, um, clean up the deck, but that's the deck that I'm hoping that we will be able to, um, uh, kind of approve either via email or, uh, through the next meeting as to go out with our with that motion.

01:24:00,899	S10:
Thank you for all your work on that.

01:24:02,569	S7:
Yeah. Thanks, Finn.

01:24:04,329	S1:
Cheers, guys. All right. Well, you should be seeing the agenda on the screen. We move to the next item, which is the fiscal year 26 operating budget.

01:24:14,029	S6:
I am going to steal the screen from you now. I'll throw up a Excel spreadsheet with the budget.

01:24:32,569	S6:
Right. And so, um, I tried to sort of retool the operating budget, um, spreadsheet, uh, based on some of the work, uh, that, uh, Bob had done. Uh, and so what you're looking at here is just a quick assumptions page at the front of this spreadsheet. So Bob had gone back and found, uh, you know, actual CPI numbers for, you know, the last few years to come up with a two year or a three year actual CPI to then use. So to take either FY 23 actuals and carry those out three years at a CPI of 17.91%, or to carry out the FY 24 number. Actual numbers at 11.97. The two year CPI number. Uh, and that is something I tried to do, you know, in the past. But I think the way Bob does it, I really liked the way he sort of showed what was out of sort of the normal CPI bandwidth. Um, and so I sort of rejigged the, the model we have to show to show that, um, so what I'm going to send out to you folks tonight, uh, is this model that you can sort of work with? Um, and it basically has this assumption tab, which isn't really a whole lot, but it does lay out those, those Cola assumptions. Uh, and then also the assessed value, uh, from FY 24 and then 25, and then using the same numbers for FY 26 for illustrative purposes, as well as the single home Average family home and the median single family home to. You know, help you to understand where the the sort of tax rate and tax impact numbers are coming from. Um, I've tried to dumb this down into just a, you know, a few tabs instead of the other one had, uh, you know, 30 tabs or something like that. Uh, and so what we have here is, you know, we moved from these assumption pages and, uh, move over to, uh, what I call the tax rate recap page, uh, which is this just gives us the high level analysis of what we're spending, what money we are receiving in terms of receipts and state aid and those type of things, and then what money needs to be raised by, by taxation. Uh, and the bottom section here is showing you what are you actually allowed to tax. And then finally determining whether you are, you know, over or above the prop two and a half levy limit. Uh, and then down below here, uh, breaking out, uh, those, you know, tax rate impacts and the and the in the, you know, the average median and the per 100,000. And note that this is, you know, the actual FY 26 budget proposal that does not include the Cutler debt, as that won't really hit this year, but is obviously a big part of our our work to date and the discussions we've been having. Um, this has been built into sort of a pivot table and table kind of model. So we've got a couple of things here just to break it down real quick by, uh, you know, general government, public safety and things like that. But what we've done, uh, based on sort of Bob's work, is to show you, um, you know, how does the budget compare, um, you know, to the prior year, um, the FY 25 budget. Uh, and so, like, in this case, general government is down, you know, $38,000 over the prior year. But it also shows you, well, how does it compare to that FY 23, that three year cola target. Um, and you can see it's, you know, it's actually above where we thought we would be just based on normal CPI and same for FY. The sum of the versus the 24 target, which is a two year CPI where above there as well. Um, and so there's another tab here which is kind of a, a filtered page where you can go through and you can see, um, you know, you can select something like finance and or not finance advisory. You can select finance department, my department. And so you can see we're a department that we're up over. Um, we're up over where we would expect to be, um, in the the reasoning for that. There's a I should point out there's one, one downfall to our accounting software, which is we don't capture wage detail. Uh, based on the way our our general ledger is set up, it's something I want to address and fix, but for now, we're stuck with it. Um, so, you know, if you look here, it looks like, you know, I'm way over budget compared to 23 and 24 because, you know, we don't have actual GL numbers for those. So in theory. Um, you know, we're really we're up about $27,000 in wages over, over the target for 23. Uh, and sort of what I've tried to do for folks is to put in, in here some notes, which is, you know, the a decision was made to make the assistant town accountant position, which was a part time position, uh, a full time position in FY 24, uh, before I got here. And so that's actually what puts us, you know, ahead of schedule, uh, ahead of the cola schedule. So, you know, as you, you, you know, use the filter here and look at different departments, you know, things that are out of the range. Um, you know, hopefully there'll be some notes there that explain, you know, why why we are out. Um, you know, I'm open to feedback, but it's I thought this might be a more concise model to use with some good comparisons there. Um, so I'm happy to go through anything tonight you want to, but I thought, you know, it might just make sense to, you know, we've focused on the Cutler project. Now. We've kind of come to a conclusion on that. And now it's time to turn our attention to the the operating. So I thought, you know, giving you this tool and having you, uh, able to play with it for, you know, a week up until our next meeting and have some feedback, uh, you know, it would be the kind of the way to go.

01:30:29,500	S6:
And then I'll show you, um, what's also built in here, uh, is that I've tried to model out just ten years. It's not, um, it's not fiscal 26 through, uh, you know, fiscal 35. It's just year one through year ten, uh, which basically takes the FY 26 proposed operating budget. But it it says let's, you know, let's pretend that the year one, um, Cutler debt uh hits hits the where to hit the budget in year one. How does that look. And so that's where you can see you know, we're projecting to have a 1627 tax rate. And the impact of that first year debt service is to is to bring that up to 1845. So that's, uh, you know, that 13.4% increase I was referencing with Angus a little while ago. Um, but I think this, you know, is, you know, it's not a finished product and it will definitely need lots of, um, you know, disclaimer language to, to say, you know, this is for illustration purposes only. And, you know, we're, you know, lots and lots of assumptions have been made. You know, ten years out. But you can see, you know, you're at 16 and you know, you're at you could be at, you know, almost 23, um, by the end of the ten year period. Um, you know, the reality is we won't be at 23 because valuations will change over time. Um, and, you know, the amount of taxation raised will be the same. But you know, this number will be. You know, probably wont be that high, uh, because valuations uh will continue to. To, to move upwards hopefully. Um, but um for illustration purposes, I think this sort of got to what Dana was talking about. So I'm open to sort of feedback on that as well.

01:32:20,399	S5:
If would be this be an appropriate place to introduce, uh, some of the comparisons that I started doing based on median household income for the various comparables. Or do you want to hold on?

01:32:33,670	S6:
Sure. Um, I guess I'll defer to fin a little bit on that. Um, in terms of, you know, whether we want to open up, um, at 935, a more detailed discussion on that type of thing.

01:32:48,630	S5:
I was thought maybe just introduced the concept rather than, the details.

01:32:53,130	S6:
Okay, let me, uh, let me just pull it up.

01:32:58,569	S2:
If you haven't sent that around yet or you have.

01:33:01,569	S6:
Uh, no, I was going to send it out after the meeting. I was going to kind of quickly introduce it here and then send it out.

01:33:06,699	S2:
Got it. Make sure I didn't miss it.

01:33:10,000	S6:
Nope. All right. I'm having a little.

01:33:13,729	S5:
Well, he's doing that. Basically, the idea was to see how our expenses in total and in various categories compared to our comparables, when you plotted them out in the scatter diagram based on the median household income of the communities, and then run a simple regression line through it. Uh, one of the general observations, it looks like if the median household income is higher, people are spending more in many categories. It may be because the costs are higher in the community. It may just because, uh, that the communities that hire MH. I just want to spend more on on culture or other things.

Uh. 01:33:58,569	S1:
I'm just trying to to read this. Is this the right tab to start with?

01:34:04,930	S10:
You can.

01:34:05,229	S6:
Certainly.

01:34:06,199	S5:
But I would go to the chart. Uh, you know, it's farther down.

01:34:10,869	S6:
There you go.

01:34:12,470	S5:
I found the charts more interesting and.

01:34:17,569	S1:
Okay.

01:34:18,270	S5:
But, you know, I think there are a number of potential drivers. One thing is population density, which we have the data that we could compute and bring this into a discussion. The other one is, uh, what part of, uh, the tax, uh, for a community is covered by residential because some of these places may, in fact have a greater, uh, commercial revenue. So this was just to start thinking about what are the potential drivers, and you can do straight regression. The other thing you can do is multiple regression, trying to understand how things like area and miles and the number of people in the MHI density and other things contribute to see if you can get a better idea of how we stand to comparable communities when you consider the income level in the community.

01:35:13,899	S5:
And I would just leave it at that as it's kind of a, you know, a point of looking for more metrics so that we can have a better handle on as we look at departments and maybe in some cases, not beat ourselves over the head too heavily because we're doing actually okay compared to other, uh, comparable, uh, communities in the same economic situation. And on the other hand, you know, that doesn't say because you have the money, you have to spend it. So we still could be looking at ways to reduce our costs.

01:35:51,100	S1:
Okay, so, uh, what I'm hearing is, is, Jeff, you're going to send this, uh, work paper along with the the one that you showed just a minute ago, uh, around to the group so we can take a look at it.

01:36:04,930	S6:
Yes.

01:36:05,369	S1:
Out of a call next week.

Okay. 01:36:10,670	S6:
And we have started to, um. You know, I've reached out to the the police chief to, you know, try to run down some of the information on some of the the communities that we identified that, you know, larger communities that were actually spending less than total dollars, uh, you know, than we were, um, just to get a sense of, you know, what, what the differences might be. Uh, I've started reaching out to some of my colleagues to, to, you know, compare and contrast my department and, and things like that. Um, you know, as I might have mentioned, those like Bob, um, you know, the this is the harder part as it is, you know, talking to every single town directly and understanding how they're how they're staffed and how they're, um, you know, what their sort of layout is, uh, in terms of how they're staffed and how their departments are structured and things like that. But, um, you know, we'll work to try to get as much information as we can on that to, you know, to figure out what is it that a town like West Newbury does? Um, you know, to be, you know, to, to have lower spending, you know, sort of across the board, um, you know, than Wenham does when on a lot of levels there are very similar community. Um, you know, I think, you know, as I said, you know, moving forward, we're going to need to, you know, be able to show that. So either we have to prove, you know, we have to cut back because, you know, what they're doing works, or we have to show what it is we're doing differently that that, you know, is a larger cost driver.

01:37:34,600	S1:
So would you say it's still, uh, something, um, that you would say, you know, that we're going to be able to include in the warrant book or something like that. This go around a, uh, a per capita expense.

01:37:49,770	S6:
Um, we can certainly include per capita. And I think we can, you know, work to try and at least begin on some departments to to answer some of those questions. But I think, you know, we can put it at least get it out there in the, in the public space that, you know, these are the numbers, these are our comps and these are what they're doing. Um, here are some of the differences. We've we've noticed and, you know, it's going to be I think, you know, a good amount of work over the next year or so to, you know, to get every department where you can say, we completely understand our comparison to, um, you know, who are legitimate, comparable communities are, um, you know, I think there's plenty that we'd say, you know, we we, we are very similar on population or land size, but maybe not very similar on economic, um, you know, factors and things like that. And, um, you know, I would imagine you folks in the Selectboard would have a lot of in input on what, what are the most appropriate comps. And I think, you know, certainly we have comps that we use, um, for compensation. So when we're hiring new people, you know, who is it we look at, you know, that we need to be thinking about when we're hiring a DPW person who are our competitors for that person. And you know how those are the folks we have to be, um, you know, on a, on a, a similar pay structure as to, you know, to lower that DPW worker to, to Windham instead of Danvers. Um, but yeah, I think there can be some I don't know that it would be, you know, as fully blown out as we'd maybe like. But I think we can we can start the process, and I think we have to have to do that.

01:39:27,399	S1:
Great.

01:39:31,569	S1:
All right. Do we have any other topics or, uh, things to cover here? Is as we on the operating budget.

01:39:41,000	S1:
Okay.

01:39:41,500	S6:
I think I'm good at this point.

01:39:44,199	S1:
All right. So I'm I'm hoping that we can pivot to more about that, these sort of metrics, um, for our next our next call here. All right. Um, all right. So then the second or the next thing after the operating budget is the capital budget. I think, again, Jeff, you've got a whole bunch of data to show us.

01:40:07,670	S6:
Yeah. So there is let's go look at that.

01:40:10,300	S1:
By the way, everyone on the phone. I'm planning on being done before 10:00. In case you're wondering how long we're going to, we're going to keep you on.

01:40:20,130	S6:
I thought that was intermission.

01:40:24,899	S6:
All right, so, uh, let me just.

01:40:37,399	S6:
All right, let's pull this up and hope so. I will send I will send this around as well.

Um. 01:40:47,800	S6:
Uh, I'm hoping I can get this. Uh, there we go.

01:41:02,529	S6:
Uh, there we go. All right. There you go. Um, so I'm going to send this around to you as well. I am trying to get this deck on the Capitol, uh, lower than six, six megs. Uh, so it's not blowing up everybody's email. Um, I was told today there's another, um, one more small capital project for $2,000 that's going to be added. I guess they want to add some additional signage, uh, on some trails. Um, uh, At some of the walking trails or something like that. I'm waiting for more info, but obviously not a big material number. Um, we didn't roll out this presentation completely at the select board meeting last night, but, um, you know, we have sort of a way we approached the capital, as you know, we kind of lead off with, you know, looking at last year and sort of what's the status of those projects? Uh, so you'll see that these are, you know, largely either done or pretty much underway, uh, in most cases. Um, the second page here is just this is the capitalist, you know, minus that one $2,000 addition that is coming. Um, the big ticket item, uh, is the the the town hall HVAC project. Uh, we are trying to do a geothermal system with, uh, with solar, uh, at town hall. The reason being, uh, there's lots and lots of grant money available for geothermal projects. And if you back them up with a. With a solar electrical component that makes you more likely to get the grants. Um, so we're taking that approach. The issue we have here is we're putting a potential $500,000 free cash use into the capital budget. In the event that the green communities grant from the state of Massachusetts does not come through. Uh, and some of this is just protection against, um, potential backlash from three a, uh, it is possible that, you know, communities that aren't three a compliant, uh, you know, may or may not be looked at as favorably as, as, uh, communities that are, uh, so we need to have something on town meeting, um, floor to, to address that. If the, if the grant doesn't come through, uh, in what should be in the next few weeks to, you know, 3 to 4 weeks, I think, uh, that's the biggest ticket item here. Uh, a couple of other big ones. Uh, there's $150,000 restoration of the ladder truck. I think I might have undersold it before. And David happened to mention, um, and had some questions on it. But basically we have an older ladder truck, and we've reached a point where we would either, you know, improve that and bring it up to, you know, full code for, you know, 2025 or buy a new ladder truck. And so because they've maintained this one, well, uh, they'll, you know, send this out for a free, uh, complete engine rebuild, a rebuild of the front axle. Uh, a lot of the systems to get those up to what? You know what what is the I think it's the the the Napa is the acronym for the folks that, uh, put forth the safety regulations around, uh, fire equipment. Uh, so for $150,000, you'd have a vehicle that was restored to be used for another ten years or so. Uh, and just to put that in context. When Essex just bought a ladder truck for 1.2 million two years ago or a year ago, and Manchester just had a, I think at 1.6 to $1.8 million ladder truck delivered earlier this fiscal year. So this 150,000 is, is certainly, um, you know, helping us avoid a much larger, uh, purchase. Um, under land use, you'll see, um, there's two big studies that they're asking for funding for, uh, both related to, you know, implementation of the, the master plan. Um, the, the one here that says master plan implementation. The true, um, description of this is a, uh, economic and housing, uh, Comprehensive Economic and Housing study. Uh, and upon completion of that, uh, is the second, uh, follow up study they want to do, which is this downtown vibrancy. Plan again to try to drive more economic development into town. Um, I'm trying to think of some of the other big ticket items here. Um, the police, you know, add a new cruiser every year. That's sort of the policy they adopted, you know, 15 years ago or so. Uh, they've been using Dodge Durango as dodges getting out of the business of police SUVs. Uh, so we are going back to the Ford Interceptor, which is a, you know, sort of like a Ford Explorer kind of base model with all the, um, all the Police Interceptor package with the, you know, the the, uh, turbochargers and the handling, uh, you know, built up into it, uh, that's in there for 75,000. And talking to the chief, he thinks would get 10 to 15,000 for the 2019 Tahoe. We're going to trade in. So, you know, net, there might only be 60 or 65, uh, for that. Um, and there's slides for all these afterwards that you'll see. Um, the tasers, which are, you know, about ten years old, are failing. Uh, we can't get parts for them anymore. Uh, and so the chief is, you know, determined we need to upgrade those. And so this would be a five year lease purchase slash maintenance plan on on new tasers here. Um, but, you know, that's a $16,000 outlay for the next, you know, this year and for for, uh, for more years after that. Uh, there's a handful of just small, you know, exterior painting at the fire department. Uh, you know, doors and windows at the fire department. Uh, some small work at the Council on Aging. Um, in all in, you're looking at 1,000,003, uh, in capital. Um, one of which is a is a pickup truck in the water department that they'll pay for out of their own reserve. Uh, and, you know, just about 1.26 million will come out of free cash, uh, as is when a typical policy is to fund capital with free cash. Uh, you know, we had free cash certified at 2,000,071. Uh, so this leaves, you know, essentially $700,000 or so of free cash, uh, available, uh, after capital, should you decide to, you know, recommend at each and every one of these things after looking over these slides and, um, you know, determining if you have questions or, uh, you know, whether you do or don't support them. Uh, so this is just the high level look at it. But I'll send this deck out and you can, you know, look at the individual slides. Uh, let me know if you have any questions. Uh, and then we can we can move forward with, with that. But no, no tax rate impact here.

01:48:01,229	S1:
Jeff, I do have a few questions. Can you go back one slide? I just want to look at the total of of the ones we approved last year was only $800,000. Right. And so the big big lift here is, is you might call it the $500,000. Right. Is the, the big the major cause in the significant increase In in capital. Now, if I recall correctly, um, we we had, um, when you have free cash that is not being used right now. Um, we have the ability to kind of return it to the to, uh, we can return it to the, to everybody, um, you know, by reducing the tax rate. Right. Or we like last year we, we took that free cash and we, we put it in towards the pensions obligations, that sort of stuff. Do you have any of that sort of you sounded like you had a 2 million versus 1.2 million. So that's like $700,000 or so of unused free cash. Do you have any of that kind of reserved in order for us to achieve the below 2.5%, um, uh, growth in, in operating expenses?

01:49:16,199	S6:
I don't have anything earmarked for, like, let's call it that extra 700,000. I think that will be, you know, once we we'll I mean, right now we're under an override. So we're not in a situation where, um, you know, we have to, you know, necessarily use free cash to, to get under an override. Certainly you folks as a committee can, um, talk about if you wanted to use, um, free cash to, to reduce the tax rate, you know, you could decide, you know, you would like to move some money just to help reduce the, you know, the tax rate impact. Um, we'll also look at, you know, if you recall, last year, a lot of, uh, OPEC, we just made sort of a decision to, to put money, you know, I think it was about 300,000 extra dollars towards that. You know, the idea being to lock it up rather than just have this $300,000 that was out there able to be spent and, you know, you know, burning the proverbial hole in your pocket. Uh, so we took that and lock that up in OPEC, um, to sort of help us catch up, because that is one area where we haven't, um, you know, really, uh, you know, we've got a plan for OPEC, but it hasn't been super, super aggressive. So I think we took an opportunity last year to sort of, you know, help correct that a little bit. And then we made a move to try to get the stabilization fund up to, you know, a target of, um, you know, something in the range of 5% of operating budget. So I would say, well, once we've kind of solidified the FY 26 operating budget, that will adjust what our target for stabilization would be. And so I may at that point say, you know, whatever, $80,000 would help us get to our stabilization target. So I would recommend we, you know, we do that. Um, we do have one other use of free cash, which is likely to come up, which is probably, I'm thinking at this point, is probably going to be $50,000 of free cash, which would go into a brand new revolving fund for the ambulance. Um, the ambulance A revolving fund is a fund that is accessible for very specific purposes, as laid out in the revolving fund. So in this case it would be, um, money would be available to pay essentially any, any bills related to the ambulance service. So, um, you know, we pay a billing company to do our billing. We pay, uh, when we have an when someone rides in an ambulance in Wenham, um, 87% of the time it is what they call a BLS call, uh, which is, you know, so there's either an ALS call which is advanced life support or, uh, BLS, I don't know what the acronym stands for, but it's less than advanced life support. Um, which is really just the ability to run IVs and do those types of things when M is not allowed. You know, we don't we're not certified to do that. So when on the 13% of our ambulance rides that involve an ALS service, that's when, you know, we share that with a Beauport or an Atlantic or some other ALS ambulance service. So we have to pay. When we get paid, we have to pay them their cut of the, the, the ride, so to speak. And so having this revolving fund would just give the, the ambulance the ability to, um, rectify a timing issue we have because we might give the ambulance ride in FY 25 and we might not get paid for the ride until FY 26. And what ends up happening is you end up hitting your current year budget for, um, things that happen in a prior year. So this revolving fund would rectify that, and it would also help them save money towards a new ambulance and also help them, you know, in a pinch by supplies or things that arise related to the ambulance. So that's one use of of free cash that is likely to come up. Um, there's not many others. I think the rest of them would be decisions you folks would make in terms of how you wanted to lock that money up. Um, you know, another part of that discussion, Finn would be, you know, as we've heard in some of the meetings we've had over at Booker, um, you know, next year might be particularly challenging. Uh, and, um, you know, so we may want to reserve some of this, just hold some of this, um, to help with, uh, you know, kind of mitigating the tax reading increase next year. Um, so that that might be something. And then also, uh, as we work towards settling this trash contract, um, that's going to be, you know, we, you know, we already in talking with just the folks who, um, what we call the tipping fee that people who take our trash, you know, that's looking to be, you know, probably a 12 to 14% increase, um, next year. Uh, so we may want to set aside some free cash that will help us buffer the, the one time large increase, use some free cash to kind of buffer that over a couple of years to kind of normalize that big increase for, for taxpayers. Um, so that, you know, that might be something else we want to consider is to have some of this available, either to use to offset the tax rate in 26 or potentially 27, 28, 29, as some of these, you know, other, um, issues come up, uh, like trash, uh, which we know is a big one that's coming down the pike. Um, so but yeah.

01:54:30,329	S1:
I appreciate I appreciate that. And I'm just looking at the clock, so I just, I want to give, uh, some of the other committee members any, uh, an opportunity to react. Can you go to the next slide to this list? Um, I think I'd like you to send it out so that we can have it in hand.

01:54:46,600	S6:
Um, yeah.

01:54:48,500	S1:
But I just, like I said, I want to give the committee members, um, any sort of reaction.

01:54:56,699	S1:
First. First pass at this. So if, uh, if there aren't any reactions, and I, I really want to just go and try to schedule the next meeting and try to get us to, uh, close this meeting before you go on around 10:00?

01:55:11,899	S1:
So, um, I don't know where where people's heads are at for. When's next Wednesday meeting? Are we going to try to do 8:00 again?

01:55:26,170	S7:
I mean, I prefer earlier, but I'm retired. I understand people have commitments.

So. 01:55:33,229	S2:
You're saying next Wednesday?

01:55:35,829	S1:
Yep.

01:55:43,270	S1:
I think the, uh, the week following is a school vacation week. Um, I'm going to be out of the country, so it might be difficult for me to attend.

Um. 01:55:56,270	S2:
I'm open next Wednesday.

Anytime. 01:55:59,829	S5:
It works for me.

01:56:02,600	S10:
I'm somewhat tentative for next Wednesday, but I'm planning to attend. But probably 5050. But moving it won't help me.

So. 01:56:13,270	S1:
Okay, so is there a preferred time? Otherwise we do 8:00.

01:56:17,670	S10:
Seven for me. But I'm happy with eight. Whatever works for everyone else. But again, don't plan around the guy who's 5050.

01:56:26,130	S1:
All right. Jared, you were saying you prefer a little earlier. So we want to try to do seven.

01:56:30,029	S7:
That would be great.

01:56:31,529	S1:
Okay. All right. So Jeff, if you would, uh, get ready to send out a, a, uh, a placeholder for the clerk of meeting laws, and, um, I think probably what we'll see on there is hopefully a final version of the deck. Um, and, uh, we won't spend much time on it, hopefully. And, uh, then we'll go into the operating and capital budget topics.

01:57:00,130	S6:
And, um, I would just say on the operating, you know, as you're as you're playing with a spreadsheet and you have questions, you know, don't hesitate to shoot me an email, text me, call me whatever, and I'll try to answer as much as I can in real time so, you know, we can make it productive for you folks next week.

01:57:16,270	S1:
Sounds great Jeff. All right, guys, um, I'd like to, uh, like, I will make a motion to, uh, end the and close the one in finance advisory Committee meeting at 10:00 Wednesday, February 25th. Looking for a second?

01:57:32,470	S7:
Second.

01:57:33,899	S1:
That's Jared. Give me a second. Any discussion? Not hearing any discussion. We'll move to a vote. I'll say I.

01:57:41,300	S7:
Uh, by.

01:57:43,300	S10:
David I.

01:57:44,329	S1:
Day by.

01:57:45,869	S2:
Daniel.

Yes. 01:57:47,170	S1:
Daniel. Yes. All right. So that's five I votes. Um none against, no abstentions. Thanks very much. Motion carries. So I think we're closed. Thank you guys. Thank you for all of your time here, guys.

01:57:58,930	S12:
Have a good night.

Thanks. 01:58:00,770	S1:
Bye.