00:00:00,530	S1:
Um. All right. Uh, so I'm looking at the screen and I'm seeing, uh, present is myself. Jeff. David. Robert. Danno. Emma. So we are missing one member, but I think we have a quorum. So I think we can start. So I'm looking at.

00:00:20,500	S2:
Here and say he had some kind of surgery, uh, planned today.

00:00:24,699	S3:
He might have. He had one last, um, one of the meetings he missed with the school, but I thought he said he might be out for this meeting as well.

00:00:33,729	S1:
Okay.

00:00:37,030	S1:
All right, well, uh, I think we can call the meeting to order 702 on, uh, 29th of January. Uh, present Finn Sprague.

00:00:48,270	S1:
Let's see. Present I see Dano. I see Bob, I see Dave. So we have a quorum. All right, so if I look at the agenda, we've, uh, we're starting with, uh, a public comment, which I'm perfectly happy to do now or to do later after. Perhaps there's more information, um, that might address some of the concerns of the public. Um, but I'll just pause here to see if anybody has any any public comment.

00:01:18,500	S3:
And as of now, we don't have anybody on uh, appears to be on that. It would be, uh, the public.

00:01:23,769	S1:
Okay. All right. Then we can move on to the next item, which is to start talking about the, uh, new elementary school project.

So. 00:01:34,870	S1:
Uh, I worked on the a couple of files over the weekend, and then, uh, sent them over to Jeff for his, uh, his thoughts. We talked earlier this week. And then, Bob, I saw that you responded, uh, back with a bunch of comments on it. I'll throw them up on the screen. But one of the things I was hoping to talk about was If you guys would have, would agree on sort of a likely process going forward. And we had talked about it a little bit last time around, which is that relatively soon, uh, this committee should expect to issue an opinion on the new school project, and then we're going to want to have some sort of document available to the public explaining our reasoning, you know, whether or not that format is, uh, fit into the warrant book or fit onto our website and mention in the workbook or whatever format is, is most appropriate. And then the third step is going to be some sort of discussion or presentation at the April town meeting. So those are the the three milestones that I can think of, uh, for this committee to be concerned about, uh, could I? I'm hoping to get some comment from other folks as they've been thinking about it.

00:03:08,800	S3:
Oh. There's Jared.

00:03:11,169	S1:
Okay.

00:03:12,500	S4:
Any other way to look at it? Thin. That looks. I mean, that sounds pretty logical and pretty much what sounds like we've been asked to do. The way you've outlined it.

So. 00:03:25,330	S1:
Cheers. Thanks, Dana.

00:03:30,330	S1:
So not hearing any other comment from other members, you know, that's going to be the the thing I'm aiming for. Uh, I'm not yet sure that the finance committee is ready to hit that first milestone and issue an official opinion, but I think everyone should be keeping that on their radar, something that you know you're going to need relatively soon. So one of the things that I'd ask for you guys to think about is what information, what more information will you need in order to render that opinion? We've been discussing the the deck, for instance, that I said we sent around earlier today. But one of the things that is missing that I think Jeff is ready to start discussing is, you know, the first few years tax impact that this would have have on a typical Wenham resident or, you know, per $1,000, you know, or percent increase those sorts of discussion. I think that's something that that we're all going to probably want to have, you know, in our hand, um, ahead of issuing an opinion. Does anybody disagree on that point?

00:04:42,470	S2:
I don't disagree, but I have a comment that, uh, I think part of that is, uh, the type of financing, whether you're going to front loaded or not, because I was going through the presentation from the Hamilton, uh, Sphinx and it looks like, uh, it looked to me like they were using the front end loaded financing because they were talking about sort of average impact over 20 years. And what's the impact of the first year in the last year? So, you know, that may or may not affect our decision, but it's certainly going to affect the the presentation on tax impact to, uh, residents.

00:05:20,199	S3:
Yeah. And I can speak to that, you know, sort of a high level. Uh, Bob. So that's definitely true. What they've talked about would be sort of a level principal debt structure, which would be higher loaded in the front side and lower over time. Um, in an effort to save total interest paid. Um, so that, you know, what we'll see is right now, um, you know, it looks to me, um, you know, over time, this is going to add something around, like $1.68 to the tax rate on average over 20 years. The issue is, as you mentioned, that it's it's sort of higher in the making, higher payments in the early years, which makes the early year, you know, tax rate impact higher. So, you know, you're starting off at, you know, let's say $2.16 on the tax rate. And by the end of the the term of the note, you're paying 1.19, you know, $1.19 on the tax rate. So that average is one $1.68 over the over the time frame. Um, you know, and just to give you a rough idea, you know, that average is about, you know, 1700 or so for the average tax, it's just under 1700, excuse me, for the average tax payer and just under 1500 a year for a median taxpayer. Um, but in year one, it's most it's probably closer to say, 2200 for the average taxpayer. And, um, you know, just under 2000 for the median taxpayer. Um, and I say that, like, everybody has an idea what the average and median taxpayer is. Um, the average single family household in Wenham is assessed at a million. Eight and the median single family home is assessed at 891. Um, so those are those are sort of where we're coming from. But as soon as we have the final, like, flushed out numbers, um, from the new MSBA funding and then the new loan documents, I think I think we'll be ready to sort of release that, that whole schedule. Uh, and it sounds like Hamilton is sort of moving towards a similar presentation to us with kind of this average over time, but letting people know what the annual annual piece is. Um, I think in a lot of the analysis, we've just been assuming sort of 20 year regular mortgage, just to keep it simple, but it may not, you know, be that way in practice. Uh, once, once we, you know, if we were to get moving on this.

00:07:42,970	S5:
So I ask a simple. Oh. AU. Go ahead. I get this.

00:07:46,930	S4:
Related question, so keep going.

00:07:49,199	S5:
No. Well, I just have it's kind of a coordination question because like, I think that there's likely going to be people who say, wait, why is the Wenham numbers different from Hamilton? And why is this like impacting us, like or in terms of even assumptions over the long term interest rate, kind of construction cost changes, like is there a world where we should be coordinating or at least having some kind of debate coming to a level that is consistent between the two towns from a finance committee perspective? Or should we think about it as like we're totally independent? These are our best faith kind of statements. And yeah, Hamilton may be making different assumptions in terms of their board. I don't know if I have the super strong view. I kind of don't want to follow them, but I just figure I'd mention that, um, if you have any thoughts on that.

00:08:32,100	S3:
The only thing I would say is it lends a lot more credibility to each town's finance department's recommendation if they to some degree, line up with the other. Yeah, the other town. Um, if you've got, you know, sort of different approaches floating around in each town, I think, you know, you know, that lends itself to more people having questions and potentially, you know, saying no, if they might have otherwise said yes because they're they're confused. So I think and I think Finn can probably speak to I know he's talking to John McGrath, you know, fairly frequently at this point. So I feel like we're working towards it. But I don't know if it's completely ironed out.

00:09:08,169	S5:
Okay. Yeah. My biggest question is because I believe in John McGrath. And this is some of the things we discussed kind of last week. But John McGrath seemed to have like a very kind of aggressive calculations for some of the interest rates and whatnot that like, yeah, I think arguably can make the new school look even more attractive than kind of like a just a straight kind of, um, construction, uh, inflation perspective and some of these other inputs. So, okay, I just, I just want to kind of get that out there.

00:09:38,929	S1:
Dano, did you have something before? I talk about coordination with Hamilton.

00:09:43,470	S4:
Sir? Yeah, it was more since we were talking about the impact on the average homeowner. I was just wanting to see if I was thinking about or it's relevant, I think because it's not just the impact of the school, but it's the impact of the 2.5% increase compounded yearly for ten years. And where are we going to be in ten years? And since I think about representing citizens and thinking about how are they thinking about this?

00:10:13,500	S4:
Is that simple approach that sound right to you guys, where you take the tax bill today and you grow it at 2.5% a year, compounded for call it ten years. And then you add on top of that, whatever this 2000 bucks, 1700 bucks, etc. is per year For the average or for the median. And that's kind of where a taxpayer can expect themselves to be in ten years. I get it's a function of valuation of your property versus, you know, changes in valuation of your property versus changes in the tax rate. But on average, across the whole town, we're going up 2.5% a year. So anyway, is that a is that simplified way of looking at it sound. All right.

00:11:10,730	S1:
What do you think about this. So as I think about what the finance committee is going to be asked to, to opine on or advise the residents on, there are really four things. Um, they're the first one is this new school project. The second one was the operating budget for this coming year. The third one is the capital expenditures for the coming year. And the fourth one is the kind of future looking comments and concerns that we think that residents should be aware of, right. And so you may recall, last year we had we were discussing the the trash bill contract coming due and, um, you know, PFAS in the water, right. Uh, it seems to me possible that we could, you know, fit into that fourth bucket. What you're talking about saying that, you know, if you look over the past ten years, um, you know, Wenham has, um, seen an overall budget increase, you know, operating expense, budget increase of X percent. It might be close to effectively a compounded 2.5%, or it might be lower. I think there are a few years where it it's been lower than that. But, you know, 22.5% over ten years is a 28% increase right in, uh, you know, the tax bill for, uh, a resident. Right. And so you could say, look, you know, this is the path that the town is seems to be taking.

00:12:49,100	S4:
Yeah, I think that works in the way you categorized it. You could even do it more simply, I suppose, and say, um, it's levy increases and then it's overrides. And the override.

00:13:05,470	S1:
Is a very good.

00:13:05,929	S4:
Point. Fast and fast and trash and. Well, I guess I was putting PFAS and trash and school and other things like that swimming pool whatever into the override category, but I guess they're not necessarily. Um, yeah. I think the thing I'm getting at is just for I hate it when we say this will only impact you a dollar an ex like, no, we say this, but what about this and this and this and this and this. And that's what we got to get in front of people. All of the things combined, the likely or the worst case, best case, likely case will impact you this and not today, but ten years from now.

00:13:46,629	S5:
You know, yeah.

00:13:47,700	S2:
It's going to be how you're going to do the financing. I don't know who's making the final decision there, but you know, you're either going to look at something that's level or you can look at something like a sawtooth, you know, jumps up when the the bonds come on. And then the it goes down over time until, you know, it's zero when they mature.

00:14:09,070	S4:
Yeah. I mean, I guess I would I don't know how many people can think beyond a six month horizon, three year horizon, five year horizon when people move, what people are thinking about for their families, etc.. I don't think much beyond a ten year horizon. So to me, I don't know, I I'd simplify it and smooth it out over ten years probably and just use the same I get I get your point depends on how you finance it.

00:14:32,529	S2:
Well, no.

00:14:33,200	S4:
We want to make it simple for the. We got to make it simple for the citizen.

00:14:36,970	S2:
No, I agree with you, but I think the question I'm asking is what's actually going to happen? Is it going to be front end loaded or is it not? You know, because that's going to affect whatever we present. And if we present the wrong version, it's going to make us look silly.

00:14:53,470	S4:
Yeah. I guess I was thinking it would, you know, if at the end of 20 years, we will have paid about the same amount of interest in present dollars, present day dollars or future dollars, however, we want to put it, I guess I was proposing we just divide by 20 and make it simple, but that doesn't really matter if it's super front loaded or super back loaded. Yeah, that doesn't work.

00:15:20,470	S1:
So I think we're talking about two different things. What you're talking about, Danno, is specific to like the presentation of the of what the Wenham Finance Committee kind of considered in the model we're using and whether it's front end loaded or straight lined as it's right now, as opposed to what it really will be. Um, you know, having to redo all of the time, all of those schedules for a, um, a declining balance, a declining annual payment is more complicated, right? Um, I had avoided doing that because I wasn't sure how close we were to to one way or another. And that's different, I think, than what, Bob, what you were saying, which is that you could come up with a, a, a graph that it looks like a saw tooth, right? That says, here are our current bond or override obligations for the next 10 or 30 years. And you would be able to see when, um, when our current things are would are going to fall off. Right. Um, because there are there are bonds out there that will will drop to zero after so many years. Right. And you could, um. You could do something. Like what? What John McGrath has done and said, you know, we are aware that we're likely to have to do a major investment in the, um, in the high school in ten years. Right. And so, you know, who knows what that number is. But around this time period, you could expect, you know, to have to have issue a new bond. So just as something else is falling off, you know, you're going to have something else showing up.

00:16:57,799	S2:
Yeah. And he had that in his package. I guess my question is more basic is do we know at this point whether we're going to front end load or not?

00:17:07,500	S3:
That's what the indications are. And, and all the ones I've been involved with, if folks tend to do it, I think the, the saving, the overall interest savings becomes compelling. But I do think there could be some conversations too. I mean, if for whatever reason, they come back once we get these final numbers from MSBA and, um, you know, maybe those first year payments. You know, just look, you know, a little overwhelming. You know, maybe, you know, folks would have some conversations and say, you know, it would be nice to be more aggressive upfront, but, you know, we just don't know that we can, you know, make that work. Um, so, you know, my hope would be there would be some discussions around that. But, you know, if it's if it if people think it's palatable, it certainly saves, you know, you know, lots and lots of interest, uh, by doing that. Um, I mean, just getting back to Daniel's point, what I've been sort of working on and envisioning was probably an overly detailed ten year breakout of, you know, that would capture that kind of descending bond payments and some things rolling on and off and all that. Um, and I, you know, the way my mind worked, I didn't think about it in sort of the much simpler terms that that fin was talking about. And, you know, that probably resonates more with a lot of people. But, um, you know, maybe we could look at that as sort of a hybrid, you know, fin almost like we were talking about today with the with the deck where, you know, page one or, you know, we could just show the very simplified, you know, this is roughly how it would look if you want to get a more detailed look of the actual, you know, year over year changes or whatever, you can look at the table on the next page. I had been envisioning sort of one table that was just this is just when it's going to keep moving forward for ten years, you know, so your tax bill is going to look like X at the end of year ten just under normal operating conditions. And then the second table would be now here's that same table. Except now we've labeled, you know, the The Cutler Project. On top of that you know that extra two grand a year or whatever it might be. So people could kind of see the difference. You know, very clearly, you know, at the end of ten years under just, you know, the baseline, I'm at $23,000 of taxes. But on the, you know, the Cutler model, I'm at $26,000 of taxes or something like that.

00:19:25,670	S1:
Okay. Um, so I'm going to, you know, unless there's any other comments, I'm going to put the, uh, the file up on the screen. Um, and, uh, start taking comments from you folks about it. Um, the way that I had thought. Let me see if I can put it up on the screen. Um, is this is a, uh. It's definitely a work in progress. I have been kind of hesitating to, uh, try to make it look as polished as the end result might be. Uh, because I'm not quite sure what everybody else out there is, um, is thinking about it. Um, and, uh, rather not spend a whole lot of time doing rework. Um, if, uh, if this is not it, you know, my my my thought is that this is a file that would, uh, would meet that second deadline that I mentioned that we have a public facing document, uh, available to folks kind of concurrent with the warrant document. Right. Explaining our process and explaining the, uh, the numbers that we we saw as we looked at it. So I have thought about it in the idea that this is really just a six or so slide deck and that anybody that wants to challenge an assumption or wants to understand it better can find details in an appendix. But you can just look at five or so slides, 5 or 6 slides and get, you know, a a summary of what we thought of all the options we considered and our and our final recommendation.

00:21:10,700	S1:
So, um, so I'm just like I said, I'm just going to throw some of these red boxes in the upper hand corners here with with your comments. Right? Rather than trying to fix this live or change it live. Right. Um, so the first one I heard from David was, you know, trying to figure out where Hamilton lands on these assumptions and trying to be consistent wherever possible across the two towns.

00:21:42,170	S1:
So this one we're talking about, just an introduction to the taxpayers of what we're doing. We're being asked to weigh in on costs and assumptions that we're a finance committee and talking about the likely cash flows. And alternatively, what will be spent if we do if the project is not approved by voters. And then this caveat and this language is something I've been playing around with a lot, uh, this is the idea that we're only considering the financial stuff. We're not considering non-financial benefits or problems, and residents will have to consider these forecasts is just one point in their decision making process individually in casting their vote. I like the way.

00:22:23,900	S4:
That's set up.

00:22:27,369	S5:
Agreed.

00:22:28,869	S1:
So.

00:22:31,599	S1:
First one, we're basically overview of the numbers that we have for the new elementary school project. Right. That's opening 2028, 142 million, net of a grant of 50 million and a bond of 92 eight. Bob, I don't have your email up in front of me, so please make sure that you interrupt me if I when I pass by something, a slide that you had a comment on.

00:22:55,599	S2:
Okay, I'm trying to figure, uh, yeah, I can see the slide numbers. Yeah, I've got my list here. So yeah.

00:23:01,200	S1:
And I thought I was pretty good at PowerPoint, but I cannot figure out for the life of me how to add slide numbers in the bottom right hand corner. So, um, I've got a I've got a brush up on that. I even went to Google and it couldn't figure it out. Um, so I guess the first question that we're going to have to do here is, do I need to redo this entire the model to assume in something instead of a straight line payment?

00:23:29,670	S1:
Right. The, the declining balance that, that Jeff just mentioned. I think for consistency sake, I probably have to. It's just it's going to be a lot of work.

00:23:42,269	S6:
When I'm, uh, when in the decision making process, is that actual decision made? Um, in other words, is that something that's going to change one way or the other? You know, three months down the road or a year down the road? Uh, if so, we should probably simplify this as much as possible, notwithstanding the numerous options that are potentially available.

00:24:09,869	S1:
There's a question for Jeff.

00:24:11,430	S3:
Yeah. So I was thinking about that. I think I think it. You know, we're really not going to know for sure, Jared. Until probably, you know, 27, 28. Like whenever they go to market with this and know the real you know they're starting to get the advice on the real, you know underwriting that that's when they'll, you know, make the decision for sure. I would say they're inclined to um, the level principle model, you know, as of now. Um, but yeah, so we won't actually know for a couple of years.

00:24:40,000	S6:
But but that implies then whatever we put here is highly theoretical and therefore could be as simple as possible, i.e. what's I like what's written here now.

00:24:56,329	S3:
Yeah. I mean, I would agree with that. I think, you know, as Ben and I talked about offline on this, you know, to me the big thing is what you folks are doing is, is sort of stress testing this thing. Um, and if you just use that same assumption, you know, just level funded or whatever. Um, that allows you to do all this testing you want to do. I mean, it won't, you know, be the exact, you know, thing that will happen three years from now, but it will be a good faith effort to evaluate the three options. You know, with the similar debt financing. Um, you know, I think we could do that. The tax rate impact, um, on maybe the more accurate way, because I do think it's important to, you know, people for people to understand that, you know, if you tell them that it's going to be 1500 a year or 1600 a year, and then in the first year it's 2200. Um, they're not going to be real happy about that. Um, but I think we're sort of keeping it simple is it probably makes more sense.

00:25:53,670	S5:
Yeah. I mean, does it not like overly wordsmith? Does it like, make sense. Just had like an average of 6.8 million annual payment. Like I know it's not actually that's not true but just like allows that caveat. But that might be like overthinking it. I think I agree with simplicity.

00:26:13,730	S2:
You know? I think the argument that would be made at the time the decision is made that given all factors, that it's more attractive to, uh, do a level of principles. So in a way, we're giving them the simple solution, and someone's going to have to make the argument that it's more attractive to do something else.

00:26:36,869	S1:
You know, I, I can I can imagine a Excel model that would do this, that I could figure it out, a way to do it. I just can't imagine yet a way to do it dynamically that would allow us to mess around with all the assumptions. Um, sort of like right now the model kind of assumes that that on days or on on year seven, uh, you know, we can get back into the MSBA loan with some of these options. You know, if we if we wanted to switch that to ten, the Excel model that does that automatically is is significantly more complex. So, um, it may be something that I can do once, once we've all settled on, um, agreeing on on what the, the numbers we're going to use for all these assumptions, the central numbers. Um, and then I can we can do it because I suppose Jeff is going to or Jeff, you're going to have to do it right at 92 million. Right? Uh, the yeah. You know, we got all these other options with different, different profile payment profiles.

00:27:42,099	S3:
Right.

00:27:42,700	S1:
So what I was thinking about in here is that at the bottom of these slides, there would be a, uh, uh, a note here that would simply say, you know, any questions? You know, questions about the assumptions. You can go to a page X in the, in the appendix, right where it, it talks about all of these assumptions, right? Um, and so we're not explaining how we handled how we settled on any one of these numbers. Right. But in the appendix, it says, you know, this 142 number came from, you know, uh, you know, such and such document from the Hamilton Wenham school district on such and such date. Right, where they said this is the latest number we have.

00:28:32,130	S2:
Sounds good.

00:28:33,329	S6:
I think that's a good idea.

00:28:35,569	S2:
Are we, uh, actually, uh, being supported on the half million dollars in consolidation savings because I thought there was a little bit of a waffle there from Eric the last time we talked with him.

00:28:47,730	S1:
There's definitely a waffle there. Um, so we haven't we have an email from him that says he would support a quarter million to half $1 million. Right. But that's just an email from from our superintendent. That's that may be the only thing we get.

00:29:03,930	S4:
Yeah, I feel like that's a I also feel like that's a relative to the bigger scheme of things and relative to the story we're trying to get across. That just creates room for questions and confusion and misunderstanding and whatnot. I mean, the only to me, the only value of trying to shoehorn that in somewhere is to have it documented and to have some accountability associated with it, but I don't think it'll carry that much weight anyway. So we can always refer back to the email exchange or refer back to whatever whenever we want to, if we want to try to introduce some accountability around that. I mean, putting it on this slide is probably going to create more confusion than help.

00:29:45,500	S5:
But like, part of me wants to put the $250,000 number on there and say, Eric, we're just putting your email in the appendix. If you're not going to give us something more legitimate than that.

00:29:57,069	S2:
Well, you know, I think there's a benefit to having This here because it suggests to residents that there are some benefits from the new school. It's just not all expense. And I would add that we might want to consider somehow separating the consolidation from the savings that come from having a new structure. Uh, because in some of our options, uh, alternatives there, uh, there are new school, uh, there are new buildings, and that is going to have maintenance and operating savings, uh, just because they're new, not because they're consolidated. So that was one of the things that as I went through, it seemed like we, you know, we might need to add as another category so that we can then provide, uh, those kinds of savings on the other new, new construction.

00:30:47,900	S1:
You know, the, uh, I think I recall the language that I, that I've, I had I kept this up, this, uh, assumptions page at the bottom, even though I'm not sure that this is the final format of it, right? It may just be a table of contents that just says, go to page 13 for such and such and go to page 14 for this other assumption. But this, this comment here is, I think, what you're referring to, Bob, right where right now I don't have any numbers from any authority that would that I can drop in here for, you know, savings we can expect for running a new building versus having to run old buildings. And and I don't know how to quantify that off the top of my head. So, you know, by not including them at all, we're basically saying that the, the cash flow is essentially the same or it's already covered by some other expense.

Right. 00:31:48,369	S2:
We could be saying that, but my comment on that particular bullet was also a little different in that because of the fact that you're getting some of these benefits at different points in time. Uh, they don't actually wash only at at a single particular discount rate. That's probably equal to inflation. So, uh, that was another comment, you know. You know, I'm not sure we need this comment, is what I was saying because it opens up. The question is if you're comparing building this new school now, building a new school, uh, uh, seven years, ten years from now, in which case the ending point is going to be pushed out. It's different from each of the options. So but that was my point is that, you know, you know, that on that particular item that uh, the timing affects, uh, the cash flows when you discount them and therefore they're not comparable.

00:32:47,799	S1:
Okay. I seem to recall somebody at the last or at the last presentation by saying, you know, these smart systems that you're installing at in the school are expensive to maintain, right? Um, and, uh, I don't know if that's a wash against the increased insulation that you're going to have and therefore reduce, you know, HVAC costs, you know, to run the building.

00:33:23,170	S1:
It's, uh. I have no data.

Yeah. 00:33:31,329	S2:
But in terms of six, uh, you know, I think, you know, we could live without that comment.

00:33:36,470	S1:
Sure. Okay. I've got my flag up here on the right, and I'll work on that later. Okay. Um, so, um, I will, I will I will end up doing a declining balance model at some point. Um, and we'll. We'll see what I can do once, uh. Once we've kind of settled, agreed on all the assumptions I'm going to be using here. So I only have to do it once. That's a lie. I'm never going to only have to do once. But I can pretend to myself.

00:34:09,269	S1:
All right. Um, so I, uh, the major change versus the one last one you saw was discussing the MSBA grant here in at this point, and so I can pull out repetitive wording in later slides. So we need an alternative plan if it's rejected. And the MSBA grant is available only for this proposed school, it's not like we can just lift and shift it over to a to a two school plan immediately. So historically, MSBA has excluded towns from reapplying for 7 to 10 years. And, uh, we're going to have to we're going to have to fund any CapEx for the next seven years with no help from the state if we go. If we voted down. And then these are our most likely scenarios and I think comment from you Bob was hey, these these have changed orders in the, in the Dec versus places. So I gotta um.

00:35:08,170	S2:
Keep the easiest thing might be to just uh, uh, put the renovate, uh, as number one and then, you know, it'd be consistent with the appendix of be consistent with the attachment.

00:35:20,570	S1:
Okay.

00:35:21,900	S6:
Uh, yeah.

00:35:23,170	S1:
I'll work on it.

00:35:24,369	S2:
It's just that, you know, in terms of cleaning it up and make it easy for people to read, because I noticed that when I jumped back to look at the Excel file, I was often looking at the wrong thing. And I was wondering why the number is different. It's because the order was different.

00:35:37,530	S1:
Um.

00:35:38,369	S2:
So, you know, and also on the appendix, another comment, you know, you might want to continue the option label throughout the appendix so the labeling is consistent, not just the description of the option but the but the option number.

00:35:57,699	S1:
Okay.

00:35:58,269	S4:
And I was just going to add for clarity or somehow reference. It's like option one try for a single new school again in seven years. Option two replace Cutler and Winthrop on the two sites in seven years. Option three Renovate Cutler and Winthrop.

00:36:19,570	S4:
Just having consistent nomenclature. So if we're going to reference locations sites I don't know. I'm just going to think option one, like try for a new school on the Cutler site in seven years. Uh, replace Cutler and Winthrop on their existing sites in seven years, renovate Cutler and Winthrop.

00:36:45,230	S4:
And so that's obviously going to be if it's a renovation, it's on their existing sites. So try for a new school on the colour site again in seven years, replace colour and once they're on two sites. Yeah okay. That that clarifies.

00:36:58,030	S1:
Okay.

00:36:59,400	S2:
Well I'd suggest removing try for just make a new school on the Cutler site.

00:37:17,969	S1:
Okay.

00:37:23,099	S1:
So having introduced the three options.

00:37:26,530	S4:
And one on option two, it's I mean it's new school on the Cutler site in seven years then it's essentially option two is new school on the Cutler and Winthrop sites in seven years. Right. New new schools, two new schools, I don't know.

00:37:57,400	S1:
Schools.

On. 00:37:58,900	S4:
On the. Yeah. In seven years.

00:38:07,329	S1:
Okay.

00:38:10,199	S1:
So option one. One of the reasons I have option one first is it's easiest to kind of transition from. We were just talking about one new school as proposed. And we're talking about one new school in seven years. Right. So this assumes that that we're locked out of the MSBA grant for seven years. Towns will wait until the grants are available. Right. The redesign and reapply the MSBA costs will be about $3 million. Is something Jeff and I were talking about earlier today. We hadn't acknowledged before this point that the Hamilton Wenham school District had, uh, had to go to the town and ask for this, you know, millions of dollars to, to start the MSBA process and the in all the costs and design work. To date, we've been considering that it's like a sunk cost. Right. But if we have to do it all over again for a one school plan in seven years, or a two school plan and in seven years, then we're going to have to shell out that money again.

00:39:14,829	S1:
And then. And I think, Bob, you had a comment here that I was being inconsistent with this number. I think it comes from is that we've got this limp along, um, limp along these 2.5 million.

00:39:30,369	S2:
Well, I think it was 3 million on the next page. That's that was a comment. And the model has at two and a half in both for both options.

00:39:40,500	S1:
Yeah. All right. So, um, essentially we're going to as a town, this option assumes that we're going to be doing this again in seven years. So all we're trying to do is keep minimal investment going in these buildings for seven years until we can get that, uh, the new school together. And, you know, this $15 million number is something, you know, I had started with when I asked Eric, he said 20, right. I thought that, uh, the the two towns shelling out $3 million a year for $20 million for essentially as if it was a $20 million bond. You know, that was something that was just not likely to be approved by the voters. That's why I said ten. But, um, so I'm I'm showing here 15. And, and I think you guys probably saw this in the appendix. Um, you know, I started saying, all right, well, we'll figure out where it is. Uh, sensitivity pros cost. This is the the sensitivity analysis of of what happens if you add another five or subtract another five to that limp along model. Right. So if with the 15 million that I have in the model right now, you see what these 6% discount rate cash flows are. Net net right. And if you add another 5 million right. It affects these these two models here. Right. Another 5 million here or 5 million fewer here. And it also affects this retry two schools scenario as well.

00:41:27,170	S1:
So I have that 15 million. And the backup I source for that is is Eric saying 20 and me saying I don't believe it. Um, you know, I don't I don't think that's reasonable. So that's how I end up with 15. I don't know what your where your heads are at.

Guys. 00:41:51,699	S7:
All right.

00:41:52,670	S1:
Well I'll just move on to the next one. Right. So I thought about whether I would just say construction inflation is going to be 3%, you know, and ending it there and saying if you got a problem with that, go look in the appendix. Right. Um, but I've got more language here. Right. Saying that it was 3 to 5% pre-pandemic but spiked to just, you know, 50% in four years. Right. And this is where John McGrath's uh, uh, graph would come in handy. In the appendix, we'd show 3%, 3 to 5%, you know, for the for 15 years. And then all of a sudden Covid, you know, spiking it like crazy. And here we are at the top of that spike. Is it going to be up like this. Is it going to be more moderate or is it going to be flat.

Right. 00:42:39,269	S1:
And so I'm just saying we'll assume inflation returns to normal. I think uh. David, you had said let's do 3%. So that's what I've got in the model right now.

00:42:52,130	S6:
I think that's reasonable.

00:42:57,500	S1:
All right. And so as there would be a single school, we can expect the economies of consolidation to recur.

00:43:05,469	S1:
So option two try for two schools in seven years. And I think we decided to change this the the title in here. So I will highlight that as the language I'm going to change. Right. So similar option one we have to wait seven years. We have to spend $3 million to get into the grant program. Some option one we have to fund a limp along of about. And this is 2.5 million per year

00:43:33,800	S1:
To replace both schools least expensive estimates for Cutler and Winthrop, and we'd find that in the appendix if they wanted to see where that came from. And if construction inflation returns is 3% to a nine is 257 or 167 million. After the MSBA grant bond for 20 years at 3.5% interest, I'm assuming a reduction in interest from what we're seeing now in the market yields an 11.7 million annual payment. And as there would not be a single school, we won't enjoy the half million economies of consolidation.

00:44:12,000	S1:
Guys, please speak up. All right, I'm going to just keep going.

Um. 00:44:15,969	S5:
So this one, I mean, my my only question is on assumptions around the interest rate on the bond. Like, um, I'm not sure I'm comfortable over, like. Well, I'm just trying to call where interest rates will be in seven years versus just saying these 4% is the assumption or whatever number that we're using elsewhere.

00:44:35,699	S1:
Right. So my source for this is that I went and and found a, you know, a, a graph that said, here's what triple A bond averages have been for the past for, you know, 30 or 40 years. Right. And that they were typically 3.5%. Right. And so right now we're at an elevated interest rate. And to give these future alternatives the benefit of the doubt to be, you know, to make them look better against the proposal, the proposed, you know, elementary school. I say we we go down to the historic, um, interest rate.

00:45:18,030	S5:
Okay.

00:45:24,900	S1:
Um, and again, the idea of putting that in the appendix so that we don't have to. I don't have to try to shove it and shoehorn it into this, this single slide here.

00:45:37,730	S1:
So option three renovate Cutler and Winthrop. So this one gets a little bit annoying, right? So the cost to bring Cutler and Winthrop up to code are about 94 million. But that does not include increasing capacity utilization, HVAC, security, modernization, you know, anything like that? That's the $209 million option from option two, right? So here we are starting now saying we're not going to do that. We're not going to be, uh, doing a big project, uh, to renovate those buildings. We're going to start with a, um, a.

00:46:26,199	S1:
You know, the Ada compliance and the code compliance and that's it. And then seven years, we're going to do it again right with the other school.

00:46:34,099	S2:
Would it make sense to, uh, since we're telling you what, you're not getting to maybe just have a sentence that says what you are getting?

00:46:43,000	S7:
Okay.

00:46:48,469	S7:
This is the wrong place.

00:47:06,670	S1:
The thing that and I'm going to the thing that I'm really struggling with here is I'm not sure that I like the the model as I have it now. I'm not sure it's reasonable. And I'll explain to you why. Right. So when I talk to Eric about this and I said, okay, All we do is bring them up the code. And he says, well, you're going to have to renovate them over time anyways, right? You are going to have capacity issues, right? Security issues, HVAC issues. Those things are going to happen, you know. And you can't just say, we'll just bring em up to code and that's it, right? He says, you know, the difference between the 94 million and the 109 million is another $115 million worth of work that need that would have to be done on these buildings over the next 20 years. Right. You can't just get them up to code and think that's going to work. I'll move over to the model and I'll just show you what I mean about why. I'm kind of not sure how to handle that. Right. So here's the model. Here's the bring to code option. Right. And so I've got the $48 million for I can't recall. I think that's Cutler and 46 million here for for Winthrop. Right. And we are going to be getting a, you know, Grant but a much smaller grant, we're assuming from um, from SBA in 20, 34 and seven years that 26.6. So the question I have here is, is this number right here. Right. Long term maintenance that's going to have to be invested in Cutler and Winthrop if they're only brought up to code. But we still have to replace their roofs and we still have to replace their, their HVAC. And we still have to deal with security concerns. And we still have to just, you know, have a replace the playground and the grounds, you know, all that stuff, right, of both buildings. And, and when I said, okay, well then let's just, let's just take um, the difference. Right. So 209 million, less the 46 and less the 48 means that you have to put another $115 million into those buildings over 20 years, right. And increased maintenance versus a, uh, a new building and, you know, all these other things that are happening. Right? And if I say, okay, well, what is how much does that cost? Right. What is the rate? So the rate in in the future is 3.5%. Number of periods is 20 years. Right. And the amount of money that we're going to have to invest in a present value, right. Is that oops. Is that 115. Right. That says that we're going to have to put an annual bond like that's it's like investing $8 million every single year out of pocket without any help from the state like that. I don't see the town doing that. I don't see the town coming up with another $8 million, which is, you know, even more than this as proposed, right? That, you know, 92 million versus one. Like, I don't see that as it's something that anybody would choose to do. Right. And so I said, well, I don't I don't know what to do with this number. You know, Eric saying we're going to have to put in a lot of money in the town in that in those two buildings. I said, well, what if all if we decide, you know, we're only going to do half that much? This is you know, this is just trying to come up with something that might be palatable. Right. And that's that 405 that you see here.

Right. 00:50:57,969	S6:
And I'm sorry. Who is Eric?

00:51:00,769	S1:
Eric's the superintendent.

00:51:02,670	S6:
Okay.

00:51:05,969	S1:
All right. And I'm saying, okay, I just I don't see the town's investing $8 million a year, you know, on in those, you know, fixed code, build the buildings once they're up to code. I just I don't I don't see it. So I cut it in half. But I don't even know that I believe $4 million, right, is something that the town would happily elect to pay every year for 20 years. Right. And and I said, well, what happens if I mess around with this 4.05 number? Right. And that's that is this sensitivity analysis in the back here, right, with Cutler and Winthrop, where I said, um, sensitivity of the proposed to change the, um, Cutler and Winthrop Annual self-funded. So that's the 405 in the model. If it goes all the way down to $2 million a year. Right. You can see that it's it's a $30 million decrease in the net present value. Right? It's another $30 million if you go from four to to six. So this is a number that I have like the least confidence of in our model. In my model. Right right now is how to handle the fact that you have upgraded these buildings, but it costs $3 million to do an HVAC in one building. Now it'll be another $3 million to do it in the other building. In the second building. Right. What are you saying? It is right now, Jeff, for the much smaller town hall and a new HVAC is going to be $1.2 million.

00:52:38,800	S3:
Yeah. I mean, what will what you'll see on the capital list is technically more than that, but just the replacement of the existing system is going to be, you know, 1.2 to 1.5 million.

00:52:51,869	S1:
Like, how do I, you know, how do I do this? Um.

00:53:00,969	S1:
So I'm not even I'm not even sure that I, I like I'm not sure I like it because I have it accelerating with, with construction inflation, which maybe is not the right thing to do.

00:53:12,570	S1:
Like this can't be right.

00:53:13,829	S5:
And like, what would make you feel better about your assumptions? If Eric just, like, literally gave us a list of these are the line items that we're going to have to invest in. This is the number.

00:53:29,269	S7:
What would I make? What would make me comfortable?

00:53:31,199	S1:
Um.

00:53:32,829	S5:
Because I agree. Like, it's just it's so like you're putting your, like, I think you're making, like, good faith assumptions here, but, like, you're being given nothing to work on.

00:53:44,969	S1:
Like, I'm just saying. I'm just saying. All right, well, we've gotta we've got to invest another $115 million in those buildings over 20 years is the only guidance I've got.

Um. 00:53:55,800	S6:
And, uh.

00:54:00,570	S7:
You know.

00:54:01,199	S1:
How how would we handle that? Would we assume that we get, you know, 50% grant to to fix the building from MSBA for small. For this project in the future, like I'm trying to come up with a viable option here.

00:54:19,599	S5:
Yeah, I just like I sit here, just say that like I agree with you also though, where like this just seems like a really unserious number we're being given from the school district. And this is not me saying, like, you know, it's really 65 or something. It's just it just feels like a number that just throw out that's really big.

00:54:38,099	S6:
My naive assumption was that that's bringing it up to code was what all these costs were all about. And I'm, I just I don't understand I, I now I now no longer understand what quote bringing it up to quote unquote actually means relative to what the superintendent is throwing out.

00:55:01,369	S1:
So let me let me see if I can understand, explain what my understanding is, right? That none of the the buildings as they stand now comply with Ada. Right. And so, you know, door widths are wrong. There's no ramps access. You know, safety, those sorts of things. Right. And so to to you know, I, I believe it includes stuff like making it safe like asbestos removal right from the buildings. But if you, if think you've, you, you've experienced with these schools. Right. You've walked through these these schools, um, you know the classroom doors some of them to, to go to the next classroom, you have to leave the building. Right. Um, and you know, they're not they're not built like a modern school is with controlled access, right? Uh, they are not. We have kids, I think, in the, in the Winthrop School where classrooms are actually on the stage of the auditorium because they they don't have any classrooms. They don't have enough classrooms as is. So you'd have, you know, to upgrade to, to build a new to to do this full to school upgrade in seven years. That includes basically making the school large enough to handle the number of kids that are currently there so that they all have a classroom, right? There is an art room, like there's no library at Winthrop because they've gotten rid of it and and turned it into a classroom because they need a classroom.

00:56:38,570	S7:
Right.

00:56:39,670	S1:
So the difference between the 96 million here, this additional 115 million across the two schools is, you know, right sizing the school and dealing with some of these security concerns that we have now in schools.

00:56:55,369	S2:
Would we be better off staying with what you have now, which is conservative from the point of view of, you know, recommending this option? And then in a narrative address. You know, the potential future costs because it already fails. If if anything, that looks better in presentation than raising all the expenses and someone can say, well, you know, you raised the expenses for the purpose of destroying the option, you know, so if you stay with a more conservative number, with a narrative that these all these things could happen, I think it actually plays out better in terms of explaining to people.

00:57:32,199	S6:
Yeah, I agree that I think I was that's where I was going with there's a breakpoint there, I guess, like even if you cut, if you take the number at face value from the superintendent and cut it back by 50%, I'm speaking off the cuff. It's still as as Bob said, it still fails, right?

00:57:52,900	S7:
Yeah, it does still fail.

00:57:54,170	S1:
It's.

00:57:54,469	S6:
Yeah. So so that being the case by by basically saying in the in in your graph, F. Um. Okay. And I'm paraphrasing. Given these, you know, the school is estimated that the additional, you know, over and above, you know, code, uh, improvements, you know, will cost an additional X 100 million over the next ten years. Full stop, even if we if that number is, is cut back dramatically by, you know, such a, you know, 50% of the expenditures required to maintain the facilities, you know, pending, you know, a new a new school are still, you know, still, uh, render the the option of a new, a brand new school today. Uh, better.

00:58:47,269	S7:
Mhm.

00:58:48,670	S6:
In other words.

00:58:49,230	S4:
I think that's what I'm getting wrapped around the axle. On to. It feels like we're doing a lot of detail work when it's. Yeah it's a no brainer given this significant number.

00:58:57,130	S6:
I wouldn't want because unless the break point was like well if we, if we cut this back by 10 million. The break. You know, the break point makes this a better option. Then we have to worry. But it doesn't. We're not even close to that.

00:59:09,869	S7:
Right?

00:59:10,400	S1:
So if I. So for instance, if I, I could change, I could I'll mess around with the model and I'll try to two things I think one of them is is this number starting at eight. Right. And, and then maybe um, I might do straight line at eight where it's eight all the time. Right. Because this is lower. This is above eight by the time it gets to the end because of inflation. Right. Um, so assuming that it, it, it does what you guys are describing, it's, you know, cutting it in half already, kind of still still doesn't help doesn't solve the inherent unreasonableness of this of this option.

00:59:51,699	S6:
Yeah. It doesn't render it a superior option.

Yeah. 00:59:56,329	S7:
Yeah.

00:59:58,530	S1:
Okay. All right, let me go back to this deck here.

01:00:06,269	S1:
All right. So, um, I'll. I'll wordsmith in here on that, uh, on this section here.

01:00:17,730	S1:
About the, uh, $4 million annual investment. All right, so this this is the cash flows with the numbers, as you just saw on that, on the, uh, Excel file that I sent over to you guys. Right. So this is basically saying 113,000,234 255 161. These numbers are undisputed. And these are different discount rates that that are out there that you might, as a resident say, you know, how much money is it? How much more value do I attach to keeping the money in my pocket now, as opposed to paying some time in the future? Right. And so as I as I think about these numbers here. 3% is the inflation rate that, you know, that the US government is kind of in targeting 3% or lower inflation rate. Right. And so we were we were at that or better for, you know, a decade. Right. Um, 8% is the long term rate of return of the stock market right. Pre-tax. Right. 6% might be the post tax rate of return. Right. And then you got these these much higher numbers. That might be the inflation numbers. Or if you're a person who just wants the money in their pocket now and doesn't, doesn't care about future you, you know, future me's that future me's problem, you know. Um, so I've put this box around this middle one because that's the one that I'm running with is I, I had to pick something to do. Sensitivity analysis on.

01:01:53,070	S7:
Uh, where.

01:01:53,869	S1:
Where your heads are at on these and these discount rates.

01:02:01,170	S4:
I mean, it's 100% debt finance. So then wouldn't you use the rate of the debt.

01:02:06,599	S1:
So that's like three and a half to 5%.

01:02:11,869	S4:
I'm just thinking of the whack and whatever my back to finance class and our investment banker friend on the phone probably has a lot better insight than I do.

01:02:25,230	S5:
So, yeah, I mean, I think just from consistency sake too, if we're assuming construction inflation's like 3 to 5. Yeah. Bonds. Yeah three and a half to four probably makes sense. Like oh why isn't it six. And like not that it actually really materially changes the numbers but um or the final decision but probably makes sense. Go a little bit lower in terms of discount.

01:02:52,099	S7:
Box up here.

01:02:54,000	S1:
So one of the one of the reasons that, uh, I've, I've pushed the discount rate out towards 6% is that the, uh, as proposed becomes less competitive. The further you push that discount rate off. Right. So you are hamstring the as proposed. The further to the right you make this right. Um, you can see for instance between 6 and 7%. They, they flip right. Um, and you probably have a lot of residents that are really interested in keeping the cash in their pocket and just pushing the problem out seven years.

01:03:33,500	S7:
Right? Um, so.

01:03:34,929	S1:
If we.

01:03:35,199	S7:
Said, hey.

01:03:35,599	S4:
The other way to think about it, it's sorry to interrupt you, but it's it's not it's not how much the it's not how the project is financed. It's how we as investors in the project are looking for looking at our money and what the whatever risk adjusted rate of return is for our money. I don't know how to think about it, actually, because if you do that, then it's way different.

01:03:57,900	S3:
Yeah, well, Bob actually raised that point to me that really, you know, every single person with a vested interest in this project has their own, you know, discount rate. You know, you know, and it's like, well, yeah, that is really kind of true. Um, but obviously it would be tough for us to model that.

01:04:13,329	S2:
Well, the problem.

01:04:14,269	S4:
I guess what I'm saying is the project itself bears a return for us, the citizens. And it's it's the it's still the project risk profile that drives the discount rate. And we're all individually investing in it. So I'm just flipping what I'm saying and let's say let's call it 100% equity financed by us, basically. In which case, if I was investing in a government building that I had a benefit from, I don't know, maybe it's still a low interest rate, maybe it's still a low discount rate.

01:04:54,630	S4:
Sorry. I'm just talking myself in circles.

01:04:58,469	S2:
Jeff and I talked. The thing that I tried to do was view the, uh, town as a pass, a pass through organization. And it gets us back to how, uh, individual folks look at it. And, you know, you've got people who are living around inflation, people who are in CDs, maybe getting a little more people in the market, uh, getting ET. And then you've got, unfortunately, the people who may have a real high ineffective discount rate because, uh, uh, we're taking, uh, with the project, taking, uh, food off their table. And I was a little disturbed to see the fraction of one over 12, uh, residents or households. And one of them are a food challenge. So, you know that, you know, in terms of getting the project, the, uh, you know, looked at by the residents, you know, people can have a whole spectrum of how they look at the thing and what they're willing to give up for the future. So, you know, I just wanted to share that.

01:06:00,699	S7:
Right.

01:06:01,099	S1:
If you need them.

01:06:01,800	S6:
The other.

01:06:02,099	S7:
Thing.

01:06:02,400	S1:
Now, you'll push it out to that 12%. Your own personal thing is I need the money now.

01:06:09,300	S7:
So go ahead.

Jared. 01:06:12,230	S6:
Well, I was just going to say that the retry one and retry two. Um, I think those discount rates are are even 12. Uh, in terms of risk, reward is acceptable because, you know, it's not a slam dunk that the government approves the grant. I mean, who knows where the Commonwealth is going to be in, you know, 7 to 10 years? Not in a good place. It would be my sense. So I, you know, are you real? Are you are you willing to run the risk for your children and grandchildren that you got no building. You limp along for 7 to 10 years and get nothing.

01:06:56,469	S6:
So that that militates. In other words, I know you want to tie. Perhaps tie the discount rates to a debt to the cost of debt. But the uncertainty around, you know, the put option to the MSP, whatever. The state is fairly high in my opinion.

01:07:19,869	S6:
And that can't be quantified. But all the more reason, you know, not to, um, not to go there.

01:07:31,429	S1:
I don't have anything explicit in the deck right now about the about, you know, we don't know anything like we can't be sure about, like, the macro. Right? I think in the at the most I've said, um, is, uh, you know, that there's risk, right? I think in the recommendations. Right. Right. Um, you know, the town has to assume additional risk related to cost, inflation, interest rates and the timing to be allowed back in the MSBA. Like, you might argue that we need to have stronger language. They're warning people about, you know, the uncertainty of expecting, you know, to be able to to predict what's available, what our options really are in seven years.

01:08:12,000	S6:
I think if you replace timing with what I think, you hit the nail on the head, just replace it with on high with a high degree of uncertainty or uncertainty as to, you know.

01:08:24,970	S6:
Because timing implies, you know, hey, you know, we get in line again, you know, we say hi and they hand us a check.

01:08:32,100	S3:
I might actually say the uncertainty around future MSBA funding because there's a couple pieces. Right. There's are we even going to be allowed back in? But even being allowed back in. We don't know what it's going to look like in the future. Maybe it would be at 80% or something. It could still be a reduced amount.

01:08:49,699	S6:
Yeah, that's what I was trying to say.

01:08:52,329	S5:
Well, yeah. I almost wonder, like you want this discussion that we're having, like as a group in the appendix saying, like, we would actually argue the discount rate for these projects should be higher. The current project, because you have the grant in hand discount rate should be lower. We're using consistent number just so that it's kind of clear for everybody. But in our opinion the discount rate should actually be higher. Making these, you know, the punter putting off projects less attractive.

01:09:22,270	S5:
Put it down like more discussion on kind of the thought process of the discount rate.

01:09:27,029	S1:
Yeah. So so the way I was thinking about it, David, you were you were cutting out a little bit at the end. Is that the my own personal discount rate as a voter is not not the food insecurity type person. Right. Um, but it's also not all the way down here at nil inflation. Right. I'm. I'm. If I had a dollar in my hand. Right. Um, and I like, you know, if I could put it in the market, I could expect to get a net 6%. Right. Right now, which is where I'm. I'm kind of my own. You might set your own personal discount rate. The the question about the uncertainty is more about like, is this $161 million? You know, how reliable is that? Right? That may be that there is no grant. Right. And that's more like $261,000 million.

Right. 01:10:19,369	S6:
Um, that's what I was trying to say.

01:10:23,470	S5:
Yeah. So put some discussion of that into an appendix. Just saying uncertainty around these other projects, just even higher than we're kind of like making good because like, I think your, like, chart does a really nice job laying out for kind of people at different levels. I'm probably a bit lower than you on 6%. But yeah, I see your point. So there's a lot of people to make their own choices.

01:10:47,270	S1:
Okay.

So. 01:10:51,600	S1:
Different uh, residents um, also um, riskiness of uh, riskiness of.

01:11:08,369	S1:
Yeah.

01:11:10,600	S3:
Yeah. Because I don't know if there's almost like a bandwidth there. Like if you look at where it flips, you know, the, the proposed projects at 68.4 and the, you know, the, the retry one school is 66.4. So you know, you're looking at a $2 million difference. And given the volatility like is that $2 million difference. You know do we have enough certainty in the future outcomes that that you know we'd make some make our our pick based on only, you know, only a $2 million difference between the two projects. You know, I know, like. I think they're really closer than the 2 million difference because of the volatility around, you know, a bunch of different variables.

01:11:49,069	S6:
That's exactly the point I was trying to make. Is that the.

Yeah. 01:11:56,529	S6:
I mean, if somebody actually reads this and says, well, wait a minute, it's only 66 as opposed to 68. Uh, to which I would immediately pop up. Yes. But you know, but as you have a new school, you don't necessarily have a new school under that option.

Yeah. 01:12:18,869	S1:
All right. So I'll put, I'll put a page into the, uh, appendix. And I'm sure we'll be wordsmithing that in the future. All right. So this is the the recommendation page. All right. So here. Uh, least expensive path as proposed is more known. Stable, less risky costs assume additional risks related to cost, inflation, interest rates, uncertainty, availability of funding. And then this is uh, Jared sort of the your your point right. The towns will still have to bring Cutler and Winthrop up to code at the same cost, right. As if they had just one school. Right. Or outlay more than twice as much to fully renovate them. Right. And so rendering the opinion based solely on the cost. We vote yes or we recommend yes. And then any I don't know any comments on that before I go into the next.

01:13:13,529	S6:
Oh, um, I know we're going to do a slide that, you know, ties everything together vis a vis the cost to the taxpayer. Uh, you know, on a hypothetical, I don't know, $10,000 tax bill. Um, but I would Ultimately, I think once that slide is prepared, there might be a sentence that goes in on the, you know, on the recommendation that says, um, based solely on the cost of the project, you know, the incremental tax, you know, it's it's the my, the least bad option, meaning that the incremental tax liability, um, uh, benefit cost is worth the benefit that we're going to receive once the slide is prepared on the, on the tax, uh, cost.

01:14:05,529	S4:
Yeah. Maybe we're getting that similar things with what you just said. But I'm going back to what I said earlier in the previous meeting about falling on my sword. Like, I don't want to stand up and say that I vote yes to approve the new school. So and I know we don't have to be unanimous on this, and that's fine, because in principle, I don't support moving ahead with the new school. I support making this kind of the hill to die on us. Figuring out how to make our town viable for the long term with massive changes somehow. So, um, it'd be nice if there was a way to kind of caveat that, or soften that, or revise that language along along the lines of what you just said.

01:14:52,770	S4:
To make it explicitly clear, like we're looking at these cost trade off alternatives and you kind of do that in there. But, um.

01:15:02,100	S1:
Yeah. So the language right now is with the alternatives that we've articulated, we're not aware of a cheaper way.

01:15:11,569	S1:
Right.

01:15:12,199	S4:
Um, that's different. That's a different statement from we approve building the new school.

01:15:22,029	S4:
I'd be open to saying our math shows that there's not a cheaper way to achieve these outcomes. Well, Of the alternatives we've looked at, but I still wouldn't vote for for building the new school or any of the options that we've addressed.

01:15:39,569	S6:
Something to the effect of all we we we acknowledge that all of the options represent a substantial increase to the tax rate for the citizens of Wenham. Full stop. However, um, we vote yes because of the, the benefits, uh, you know, because the new school option, while providing additional cost, provides us the tangible benefit, uh, of a new state of the art educational facility. In other words, we're getting something for the the money out the door as opposed to just, you know, handing, shoveling cash into the operating account.

01:16:23,930	S1:
So, Dana, I, I know you've expressed this opinion in person and in in meetings. On this topic or others. The the thing that I'm, I'm going to challenge you on. Right, is that as as we've gone through this process, you haven't you haven't disagreed with the numbers that we are seeing are the the other viable options to date. Right. The costs of X or Y or what have you. Right. Your your your objection I think is just the fundamental increase that's occurring throughout, you know, throughout the, the, the town and, and the cost to, to live here, right, in terms of property taxes. Right. But I don't I don't hear from you. Another alternative. Like if someone comes up to you and says, why didn't you vote for the new school? And if your answer is because it was too expensive, right? I don't have a lesser expensive option for you like I don't have. I don't have anything I don't have, like you're. It would force us into more expensive options if you vote no.

01:17:47,100	S4:
Yeah, mine. It is the least expensive options of the ones that we're considering. But what I shared in and I'm not going to like. We don't need to argue about this. It's okay. I'm pretty. I'm good with where I'm at. But. And I don't have to agree that, you know, we don't have to be unanimous on this, so that's okay too.

Um, 01:18:10,300	S4:
right. I'm saying we as. Yeah, we as two towns need to do away with our small school system and district and merge it with another major town in order to remain viable as a town. And now's the time to do that. And we should figure it out really fast.

01:18:33,970	S4:
And this is a great forcing function to force us to do that.

01:18:43,000	S1:
All right. I'm just trying to think about what what, uh, what you might be able to put together in a reasonably short period of time that demonstrates that as a viable option, either just financially.

01:18:57,600	S4:
Well, I mean, just the just the just the sniff test of get rid of our entire school district overhead and have all our students under someone else's district overhead. You just saved all that money. And so.

01:19:13,000	S1:
When you say.

01:19:13,470	S4:
Over capacity utilization of another district's buildings.

01:19:18,399	S1:
So that would be just to. I'm just trying to explore this further. To. To figure out how to how to handle this. Right. So like there are other schools in, uh, in surrounding towns. Right. Of uh, from Hamilton, Wenham and uh, assuming they have capacity. Right. The idea would be to send all of our kids to those schools, and we, of course, would get a bill from those, those, uh, other districts for educating the kids. But the major benefit, I think, would be that you wouldn't have the administration of a school district, so you wouldn't need a superintendent. And, you know, all of that sort of stuff on top. You would still need incremental number of teachers and, and what have you to, to that. So the, the consolidation, the economies of scale would be at the top right.

01:20:13,270	S4:
That plus the capacity is not optimized in a smaller A number of schools, you have way more opportunity to optimize capacity with CapEx and features and everything else. If you have 1000 schools, then you do if you have two schools.

01:20:31,329	S5:
So thinking about one of the things that I, somebody from the school committee said, one of our quintuple meetings was if somebody's school choice is into the district or no, if we somebody school choices out of our district, we pay something like 30,000 of them, actually. I think the quantum is kind of right. Whereas like the cost to actually like educate somebody in our school district is like $25,000 or something. It's more expensive for us to send somebody out of district than it is to actually teach somebody in district. Is it like, first of all, like, does anyone? Is what I'm saying. Like, correct. Am I I'm remembering kind of you.

01:21:10,970	S1:
Cut out a little bit there.

01:21:11,899	S5:
Dave.

01:21:12,930	S1:
I think you cut out there. I don't know, Jeff. You've got some numbers in your head.

01:21:16,130	S5:
Okay.

01:21:16,670	S3:
Yeah. So so, David, I think you're kind of referencing sort of the discussion about school choice. And so school choice, um, is, you know, when a kid from Ipswich can, through the school choice program come to school in Hamilton, Wenham. And the way that the state handles that is we would receive $5,000 from Ipswich for that student. Um, you know, the district did throw out something around 24, $25,000 a student as what the Department of Education calls us cause our per student, um, cost. Now that number, it can be somewhat misleading because if you have a classroom, if you have a second grade classroom that has 17 kids in it, and we can have, you know, up to 22 kids, um, there's very little extra cost to that student being in the room, uh, going from 17 to 18 students, your cost doesn't really increase, but you get $5,000, uh, where you run into problems with school choices. If you let too many school choice kids into your district, and then you have a spike in your own student population, and you now have the you know that next year you have 26 kids and now you need a whole other classroom. You know, in part because you took that $5,000 student. Um, there's a disconnect there. Um, to, to get to sort of what Danno is talking about a little bit. I guess I could use, um, Nahant as an example here. So Nahant only, um, educates kids, I think now through fifth grade. I think sixth grade through 12th now goes to Swampscott, um, public schools. And it's not a school choice arrangement. It is something the town's negotiated where Swampscott has agreed to pay. Uh, or excuse me, Nahant has agreed to pay Swampscott something like $16,000 a student to send their students there. Now, the per student cost for Swampscott is probably 24 to 25, just like it is for us, but certainly then receiving 16,000, uh, you know, rather than five is, you know, is is a material difference for them and it makes it sort of worthwhile for them. And they clearly must have the capacity and things in their, their buildings and everything, um, that, that allow for that to be viable. Um, so, you know, to sort of come at it the way I think Dana was describing, if you were to say, you know, Danvers or Beverly, who some other district next to us that has more capacity, if we could enter into an agreement with that district and say, would you take all Wenham students at, you know, $16,000 a student? Um, you know, we could in that instance, you know, save, you know, anywhere from, you know, 8 to $9000 a student on our end. Um, and, you know, get rid of, you know, a lot of that overhead and building maintenance and everything, like, Danno is, um, you know, sort of describing the a couple of challenges there, just, you know, sort of logistically, you know, we are in a district with Hamilton. So, um, you know, there's more to it than just saying, okay, well, we think, you know, we think we're going to do Danvers next year. We'd have to negotiate with them on how, you know, you know, sort of splitting up the district might work. Um, I think what could be challenging is, you know, when I'm as a as the smaller part of the district, you know, we probably could absorb into Beverly or Danvers or something. Um, Hamilton is a much bigger part of the district, I think merging the whole our whole district into another contiguous town would probably be difficult. Um, just because that would be a pretty large load of schools, I don't know if, uh, you know.

01:24:47,930	S4:
We also don't need to. We're also married to this shared district concept. And whatever rules we're agreed to between the two towns related to the district, and there has to be one school in each town and stuff like that. Like, let's just rip that all up and start over again and say, where should all the kids go to school to optimize their education and economics?

01:25:10,399	S3:
Yeah. Yeah. I guess I was just thinking maybe it would be we'd almost be better off on our own than we were together. Like, certainly, I think when I'm. We'd have a much easier time as a smaller district to part and go somewhere else. Um, because I.

01:25:22,329	S4:
Think I'm agreeing. I think I'm saying the same thing, Jeff. Yeah. Like, let's let's just assume that we could find a way to negotiate that with Hamilton, either by extricating ourselves from this partnership or we do it mutually or however we want to split it up. But it's just paperwork and negotiations.

01:25:39,329	S3:
Yeah. And I and I think, you know, and this is probably kind of your point is, you know, if if you know, if you believe the model doesn't work, you know, this is the time to make that decision before you commit to another 20 year, you know, bond or whatever that you know is going to be, um, you know, you need to pay, um, because that is the other thing. You know, if we take on that debt, um, you know, you you couldn't in a year get out. I mean, you could you could negotiate your way out of the district, but at that point, you would be legally obligated to, you know, your whatever 35% share of that debt over the next 20, 20 years. And there's really not a whole lot of return. You you do own a share of some of these buildings, but, you know, if they depreciate and things like that, you'd be on the hook for a lot more debt than you would be, you know, getting money for, you know, a share of a building or things.

01:26:28,899	S4:
I mean, that's what I would argue. Yeah. Now, once we're pregnant, then we're down the path and it's going to be hard to revisit this. And this is now everybody's desperate because the schools are falling apart. And I'm not a brinksmanship kind of negotiator. And I know this is pie in the sky. What I'm talking about, because I don't think it's going to go anywhere. But this is the time because of all the confluence of the variables, to really pressure the towns to get serious about what they're going to do with their future and the future of the district and the buildings and everything else, like, or, hey, we're not going to do this. Sorry, Eric. Sorry. Citizens like we need to have a real hard conversation about how to change our trajectory before we do this. Now, in all reality, if we did build a building and we did have the debt and we did want to still merge with some other district, then we would just have a new building to contribute to that partnership, and that new building could become utilized by their students, or however, it could still get parsed out somehow. So but it does seem like a

01:27:36,029	S4:
a good time to have this, you know, have a come to Jesus kind of session. If there was a time it would be before we built this building, seems like.

01:27:51,069	S1:
Okay. Um, I'm just I'm just not sure how to incorporate that into into a discussion and, uh, kind of a, uh, uh, I'm not sure that there's a. this is not like there's a dissenting opinion at a Supreme Court where you get to kind of explain your reasoning. Um, it's just going to be that there's, you know, one out of the the five, uh, finance committee members has voted against it. Right. If there might be another person on the on the committee here hasn't spoken up, but.

01:28:24,630	S4:
Yeah, I mean, I suppose you could I mean, with the math, Jeff just did you could throw together an option that says $22,000 a student versus $16,000 a student and merge with whoever. And our net savings is, you know, we have a net. I mean, you could throw it up there as a conceptual option because it's a it's the best option from a cash flow standpoint.

01:28:50,329	S6:
Well, I.

01:28:50,770	S4:
Go back to the goal scenario.

01:28:53,399	S6:
I go back to our original remit, which is keeping in mind that we are appointed, not elected. And I completely acknowledge Daniel's point about, you know, the future of the district. Um, but that is a topic for our elected officials. We are our remit is the cost of what's been proposed. Um, it's not, um, reject based on, on a qualitative, you know, decision that we have to basically change the district. I mean, I'm not elected. I'm appointed to analyze the costs. So I don't think it's appropriate for us to backdoor a legitimate political decision as part of this analysis.

01:29:42,329	S4:
Yeah, I don't disagree. That's why I was saying maybe there's just a way to revise the wording on this and say that what we're voting for, or what we're agreeing to is that the math is calculated correctly, and that option one is the better.

01:29:56,130	S6:
That's what I thought.

01:29:56,729	S4:
We were doing of the of the three options. Well, it's different from that last statement says approve the new school.

01:30:04,329	S1:
So what language might you propose here? Can you help.

01:30:08,100	S4:
Me? Just that just a very, very much exactly representing what we're doing or what we're saying we're doing, which is the fin com.

01:30:23,569	S4:
So then com agrees that the lowest cost option is to build of these options is to build a new school now or whatever.

01:30:35,470	S6:
Well from I would say from a cost benefit perspective, uh, uh, it is the, the, the best option for the taxpayer.

01:30:48,029	S1:
That of the options uh available or considered.

01:30:55,329	S6:
Yeah.

01:30:56,500	S4:
I mean, I do struggle with it a little bit, but because, I mean what I'm saying. It is an option. It seems impossible and it's political backdoor. Like you said there. But, um, but it's an option. It's an economic option.

01:31:16,470	S4:
So I'm not pushing to include it. It just sounds a little disingenuous if we say this is the best economic option because we're not really it's not necessarily we just haven't presented the more radical option.

01:31:40,430	S1:
So Jeff.

01:31:41,170	S6:
Can you agrees from a cost. I like the wording cost benefit because again, we're.

01:31:47,369	S1:
Making benefits.

01:31:48,170	S6:
Here in a building.

01:31:50,569	S4:
That's the benefit is you have a new building like.

01:31:52,430	S6:
The benefit is you have a new building. And so from the other options. You may or may not get a new building. And so from a cost to benefit, it is a cost benefit analysis, not just a cost analysis.

01:32:05,869	S1:
Right. As long as we're talking about only financial benefits.

Right. 01:32:08,430	S6:
Because I'm yes we are we we we made that clear from the start that we weren't debating the qualitative aspects of 1 or 2, two schools.

01:32:20,369	S1:
So can you give me that that sentence again please.

01:32:24,229	S6:
Okay. Let's see.

01:32:27,029	S6:
Okay.

01:32:36,130	S6:
I would say rendering an opinion based solely upon the cost benefit, a cost benefit analysis of the options proposed by the school committee and our elected officials.

01:32:48,770	S1:
Well, we've made up these three. You the we have not like, um, these these three we there are 12 other options, right, that they went through. We've we've picked these three as the, as the most viable.

01:33:05,600	S1:
Right. They didn't the select board didn't tell us, um, didn't say, hey, if we reject this, uh, pick these three, you know, tell us about these other three.

01:33:15,670	S6:
They said no, no, but they did. Okay. We were given a bunch of options, and we were asked to evaluate them. Right? Yeah. By the by the school committee and our elected officials.

01:33:24,970	S3:
Can you just say of the options evaluated here.

01:33:28,270	S5:
Or the most viable options evaluated or something.

Yeah. 01:33:47,529	S2:
I think most viable doesn't really address what we did because we didn't reject any other options as being non-viable.

01:34:00,470	S1:
So is this.

01:34:02,729	S6:
Analysis of the options presented to the the numerous options presented to the finca?

01:34:14,000	S2:
You know, I think you're mixing up the options that the school committee considered versus the options that are left having already gone ahead and applied to the state. So we're using data from the options they considered, but we can't go back to the to all the options because we can't apply tomorrow and just replace the current proposal with, say, a proposal for one new school.

01:34:43,529	S2:
So there are new options, even though we're using old data, because the old options apply to the decision that was made by the school committee.

01:35:01,430	S5:
But I still think from a pure viability perspective, like in my mind, like you have these choices. It's the renovate, wait a couple of years, do the super school again or kind of do the two school like I'm not sure any taxpayer would say like, oh, there is something else that's been presented after resigning from our board.

01:35:21,470	S6:
I mean, I, I don't think anybody's going to criticize us for saying, well, there were 25 options presented and you only discussed three. I don't think anybody's going to do that. So I do, I do, I do, I do think it's as Jeff said, people want to know that the income, you know, tested everything. So we did okay. So renting an opinion based solely on the cost benefit of the various options Presented to the Finicum. Okay. You know, you don't have to make a distinction that. Well, guess what? We only pulled out three. If they want to have that debate.

Fine. 01:36:00,970	S2:
But I think presented.

01:36:03,970	S6:
Is presented.

01:36:04,699	S2:
Because they weren't presented to us.

01:36:07,630	S6:
Yes they were, they they were. They were presented to the entire world. They're on their on the website of the school committee. I pulled them all off and looked at all of them. Okay. And and they're. Yeah, well, they could have done a better job explaining why they chose what they chose. We are where we are. And we we did have access to that information.

01:36:30,600	S2:
That's true. But at this point, some of the things that are in that set are not really options.

01:36:39,369	S1:
There were more expensive Cutler and Winthrop options. Right. We've just picked the least expensive right to make it.

01:36:47,029	S6:
He's going to criticize us for that.

01:36:48,800	S1:
Right? Right.

01:36:49,800	S6:
Yeah.

01:36:50,729	S3:
Watch this and say with, you know, with, you know, options presented with, you know, with some assumptions made, you know, by the income like to. And that's how you sort of get around like it's not exactly what was presented to us because we, we, you know, the 20 versus 10 million or whatever. Um, you know, assumption like we, you know, Finn worked his way through that. Is that your work around?

01:37:16,430	S5:
I think like, why.

01:37:17,369	S4:
Do you agree? Like, we don't we want them to think we didn't go out and just look at the universe of possible ways to optimize our school district. I think that's worth like we took options that were.

01:37:29,000	S6:
Presented to.

01:37:29,630	S4:
Us, presented to us, given to us, available to us somehow, like within our our scope to consider whatever.

01:37:37,970	S1:
You want to say, like in scope options or something like that.

01:37:43,369	S6:
I would just say various. I mean, every anybody who's really interested in this thing knows has all the decks that that are on the school's website. Okay. They know that there were there were, you know, 20 different things. If they're like me, they read the April minutes and they know that there was a meeting where the school committee itself narrowed down the options and then threw them over the transom to us.

01:38:10,699	S1:
So so we've got these various options. There are 14 or so. Right. The difference between what they've done and what we're doing is they've narrowed it down to one and saying it's happening now, and we're saying, okay, to walk to any of the other options that you have considered. These things will have to happen. And they're.

01:38:32,600	S6:
Right. We did a very, in my opinion, very good faith analysis of, you know, prove it to me, so to speak, by looking at the other options.

01:38:44,270	S5:
And frankly, adding any more modifiers to the sentence I think would just somewhat discredit the work we've done.

01:38:53,229	S5:
Like having read like bond opinions and stuff. It's just like the more of these you add, the worse it is.

01:39:02,430	S1:
All right. So we're at we're at 1041 right now. So how about we I'm not asking you guys to vote on this yet. Um, I think it's probably within a week or two. Um, I've got a bunch of red tags here in the upper right to work on. Um, my plan is to figure out how to put numbers in the bottom right hand corner so that I can refer people to slide X, right. Um, and, uh, I'll work on these sensitivity analysis pages to, uh, give us some more, more space in the appendix to work on some language.

01:39:36,229	S2:
Then can I make a just a general suggestion about the appendix?

01:39:39,699	S1:
Sure.

01:39:40,899	S2:
I would make even if you end up with more pages. Make the items bigger because one of the problems if you go through, you know, various presentations, you can't read them. So we want people to read what we've got. Uh, and.

01:39:56,470	S1:
Okay.

Understood. 01:40:01,699	S1:
Put this at the very top.

01:40:04,069	S3:
Hey, Finn. Uh, on the, um, PowerPoint, if you just go to print. When the print thing comes up, there's edit header and footer as an option, and you can insert slide numbers there.

01:40:18,100	S1:
Okay.

01:40:19,800	S3:
But I guess that won't do it on a screen though.

01:40:23,800	S1:
Yeah. Okay. I saw I knew it's supposed to be in header and footer somewhere, and I could not find the header and footer button anywhere. So. Sorry, guys. Okay. Um, is there any further discussion that folks want to have about the The New School project.

01:40:42,229	S5:
Now, the one thing I'll say on my side is I think I'd have a preference to vote on this next week. But we're comfortable on the numbers.

Um. 01:40:52,829	S5:
Partially for kind of personal travel reasons, and partially because I think it's just be helpful to, like, have something ready to go and kind of be out in the community sooner with our information.

01:41:05,399	S6:
When are we getting the final numbers from the school committee or did they come in?

01:41:09,529	S3:
They probably won't be in until, um, right at the end of this week at the earliest. But I've got an email into Vinnie on, um, the, um, issuance costs. Uh, David brought that up last week. And so when I follow up with him on that, I will ask him, you know, hey, do we have those numbers yet? And I think probably Finn or I will need to, you know, try and coordinate with Hamilton to some degree, a little bit to, to, you know, get back to being a, you know, at least at a high level, being at sort of on the same page.

01:41:41,729	S5:
I'm.

01:41:46,329	S1:
Sorry. Cut out there, David.

01:41:49,869	S5:
No, I said my timing may not be possible. And that's fine.

01:41:54,470	S1:
Okay. Well, we might might try to get your, uh. Well, we'll need to get your vote officially somehow, so we'll work on that.

01:42:01,130	S5:
Yeah, yeah.

01:42:04,300	S1:
Okay, so it's been, uh, an hour and 45 minutes here, guys. Um, sorry for going way long. Um, I don't know if we've got two other. I've got one other thing on the agenda, which is talking about the operating budget. And, uh, I think the the major news here would, you know, is not a change in the numbers, but the work that that Geoff's been doing to, uh, help compare the, uh, the cost of running the the town versus our neighbors. And there's a file that you sent over, Jeff.

01:42:39,369	S3:
Yeah. And I've had discussions with a few folks either in, you know, on the phone or via email. And so, uh, you know what I sent around the other day, very much like first pass, uh, you know, I would I would explain it as that's the sort of easily available information that the state provides. We all report up to them and they report it back to us. So you can compare and contrast. Um, you know, a few of you brought this up of, you know, the next step I think now is, you know, so let's just use West Newbury as a town that's by, you know, by us, um, has a similar population. Um, size wise, they might be a little bit bigger. Um, but they sort of they, you know, compare favorably to us, uh, you know, they tend to seem to have lower cost structures in a lot of areas. Um, and so I think, you know, what I want to do is I, you know, I think I, in the summary notes, kind of gave you guys some instances of, you know, these communities are favorable or we're favorable to these communities and not others. I want to sort of reach out to these people and get a little bit more, you know, real direct knowledge of, you know, staffing at the police, staffing at town hall, why, you know, what leads to them being maybe less expensive in certain areas, but also comparing and contrasting town policies where, you know, I think I've mentioned before, Wenham has some commitments to open space and trees and and things that, you know, cost us money because the town has at some point or another voted towards policies and actions that are committed to these types of things, which maybe some of these other communities don't have. But I do think there's a point where if we could quantify, well, it's good to have a commitment to open space or it's good to want to have a nice library or whatever. But, you know, maybe these decisions were made, you know, years ago, several years ago, a few years ago, whatever it might be, you know, does anybody actually know the, you know, the cost of having a more robust library, or having a bit more commitment to open space and maybe allow residents to reevaluate. Well, yeah, I thought the library was important to me, but I realize all those extra hours at the library or something like that are costing me, you know, and this would be an outrageous estimation, but, you know, it cost me a dollar on my tax rate to have a more robust library. You know, maybe I'm not committed to it as much. And I'm not I'm not trying to single out any particular department. I happen to like Kim and thinks she does a really nice job over there. But, you know, I do think maybe, as you know, we've heard on this call tonight, you know, folks are concerned about what is the long term trajectory of this town. I think it's helpful to maybe start understanding what are some of those cost drivers. And in a majority, what are the what are those, you know, sort of policies, policies and, um, things that that folks want to continue to support. Um, and ones that maybe they're not as interested in supporting, uh, you know, to try to rein in, you know, what looks like the the ongoing growth of the of the, um, you know, running the town. Um, so, you know, I guess a long way of saying, you know, that was kind of the first pass, but like, that is my sort of plan is to maybe talk to some of my counterparts to figure out, hey, how are you doing that? Cheaper than us. What are, you know. Um, and maybe, you know, certainly maybe there are things we can learn, you know, from another town that we can implement. And there may be things that we look at and say, well, given some of the policies we have in one of them, there'd be no way for us to, you know, reach that level of staffing or something like that. Um, but, you know, I think certainly, like I pointed out, like a town like Boxford, you know, in total dollars spends less on police than we do, and they're double our population and double or triple our size, depending on road miles or land area. You know, certainly that's worth exploring, you know, and we could have, you know, chief DiNapoli, you know, look at that and talk to his counterparts. And and there may be, um, you know, I know there's a lot of sort of 95 that goes through Boxford. You know, the chief could come back and say, well, yeah, you have to understand that the state police cover a good chunk of Boxford, and that's why they're able to operate at a at a lower cost. And, you know, that's not an option for us. But I think, you know, we sort of owe it to residents to start, you know, figuring out why there's these variances and explaining them in a way that, you know, hopefully, um, you know, the residents understand and accept or, you know, I think there will be some where they say, no, we'd like to see you make a change here. You seem overstaffed or we, you know, we should be committed to something a little, you know, less robust here or there. So that's sort of my take on it, but I'm happy to hear other folks take.

01:47:13,369	S1:
I guess I'm looking at three deadlines again, Jeff, which is, you know, we've got a, a, an official vote by this committee to approve the operating expenses of the town, right? We've got whatever we're going to be putting in the warrant book and then whatever we're going to be saying in April and, um, in if, uh, if we are going if we're going to be using this information you've collected, like how, how and when are we going to use it? Right. Because I feel like we're we're a less than a month away before we really have a deadline for this. Those first two items, an opinion and whatever goes in the in the warrant book. Um, and so, uh, I want to see I want to have that discussion. I want to see it up on the screen. I want to talk about, you know, you know, us versus these other school, these other nut schools, these other, uh, towns. Right. Um, and, and figure out like, is that does that inform our vote? Right. Does that inform our budget this year or not? Right. Or is it just informational stuff that we'd put into the warrant book and say, you know, this is just lately become available to us, but and we have no comment on it yet. You know, besides the fact that, you know, we recognize some of these, these these towns are more or less expensive than us and we'll be investigating them for next year.

01:48:38,670	S3:
Yeah, I think I might look it at, look at it as it's maybe a little bit of a multi-year thing that, you know, you're not going to be able to dissect every single department under our budget and affect some sort of change by, you know, the end of February or whatever. But maybe you could pick 1 or 2 things where we could take some of that information and make a recommendation back saying, you know, we, you know, based on this, we think we maybe could make some of these changes. I mean, you know, you'd obviously run into some potential resistance from, say, the select board because they, you know, as Jared mentioned earlier, you know, they're the elected officials who create policy. And some of our recommendations might be sort of, you know, treading on that policy. Um, but I still think, you know, it might not be a huge change that it impacts, you know. But I think on some departments we could it could impact what we do before we make a final decision. Um, but it certainly it could go into, you know, this is what came up with Jeff Calder last year in terms of what made it into the warrant booklet, which is what gets mailed out for town meeting, and then what is going to be this budget software sort of budget supplemental budget data. We have much more free reign to create the a much more detailed budget, um, supplemental budget document that folks could view. And we could start to lay out some of these things, you know, and maybe it's not we've fixed them or made final recommendations, but here are things we're looking at. You know, there's a whole section for comparative stuff where we could say, you know, here's here's what we've recently learned, what we're working on, you know, fleshing out, uh, and what we will, you know, we look forward to, you know, over the next year or 2 or 3, whatever it is, is, you know, adjusting our budgets to understand better why we're higher or lower in, you know, in various areas. I mean, there might be some departments where I think we do pretty well, and maybe we, you know, the comparisons sort of prove that out. And then you sort of say, well, how do we how do we take what you're doing? You know, let's just say in DPW and, you know, and move that into other departments. But I guess just, you know, that's the long way of saying, you know, I don't know, it's going to make a huge change for this budget, but I still think there's a chance it can make some.

01:50:46,000	S5:
Have we gotten the estimates from any of the you know, we asked kind of a couple of meetings ago like on the -5% budget.

01:50:53,369	S3:
Um, yeah. So I do have those I can actually put up on a screen right now for you folks. Uh, I think analysis now, it's this next page reductions. Um, so let me just share my screen.

01:51:09,270	S5:
Because like, I mean, I, I agree that it seems like we wouldn't be doing justice by trying to say we even reviewed these numbers in a serious way. Unless it's leveraged to push one of the like, you know, somebody who's coming in very high to accept this 9 to 5% thing actually effect like a real change. So that makes sense.

01:51:29,069	S3:
Right? Yeah. And I think that, you know, you could use some of these budgets I think have been allowed to grow over time and haven't maybe been challenged in this way. So this could, you know, be the time that you say, you know, you're really pushing back on this 5% cut. But boy, when we compare you to some, you know, some local, you know, what we consider comparative departments, they seem to be, you know, meeting that target already. What is it? What can we do to, you know, why? Why is it a dire cut to everything and when them. But you know, someone else two towns over is operating at a lower cost than that already. Um, you know, and there's multiple factors that go into any of these different departmental budgets. But this I'm thinking you're seeing on the screen now, just it should be about 160 something thousand dollars worth of changes. These are what have been put forth by various departments so far. um, you know, and they, they range in sort of impact. So like, if I look at this first one, um, you know, the Council on Aging, uh, Jim, the, the head of the Council on Aging and said, well, yeah, I mean, to to get to $8,000 of cuts we could cut back on, you know, the van driver budget, drop it from 31,000 down to, you know, you know, 24, 25,000, something like that. Um, you know, that's a that's a real cut in their service provided. And so, you know, the question would be is that, you know, is that something that we would, um, advocate for or not? Uh, you know, are we so, um, you know, committed to a 5% sort of cut that, that that's what we would do or would we look at, you know, sort of the seniors who are, you know, to some degree in underserved portion of the, the taxpaying base, um, and, you know, hit their, you know, hit their van service pretty hard in the grand scheme of things. Um, you know, maybe that, you know, everyone will have different feelings on that or whatever. Um, and then, you know, just some other ones. I mean, you know, in my department, um, you know, for me, what it would come down to was a choice between cutting one of my staff people at half time or getting rid of this new budget software we just bought, you know, to use this year. Um, you know, if as department head, I'm going to choose to getting rid of the software, which is, you know, more of a, you know, a just a presentation tool than, you know, cutting one of the staff people that we just got added, you know, within the last couple of years as a full timer, um, you know, that would be 20,000 land use, which is really conservation. And, um, the planning department, uh, we do have two employees up there. One of them is part time, um, you know, to to get a 5% cut, you'd probably have to cut her. You know, she makes about 53. You'd have to cut her 7500 or so. Um, so that's dropping down to 4500. Um, we do have some options there where she does a lot of work for the one, um, of affordable housing trust. So maybe we could offload some of that. You know, that hourly charge to them. Um, you know, it is probably, you know, probably should be moved over there. It's a more direct, um, cost of her time is directly attributed to that. Whether affordable housing, one of the affordable housing trust, which for those of you who don't know, um, in addition to us, like contributing to things like, um, maple woods and things like that, we do also own, um, I think three properties now, um, that, you know, the town owns and rents out at an affordable housing, uh, you know, sort of rate, uh, and a bunch of Margaret Margaret's time is spent on that, you know, managing that, um, you know, or whatever. We do have someone who, like, collects the rents and that kind of thing, but there's just a lot of time. So that might be a way we could save their, uh, the library. And I think you guys heard her on the, uh, you know, the Saturday presentation we did. They've already made, you know, as many cuts as they feel they can make, uh, Before they would start losing state funding and losing the ability to be part of the consortium that allows us to share, you know, share, um, you know, materials and things like that. So they're I don't think, you know, they don't feel it's viable to cut any further than they have. Uh, police is looking at making, you know, potentially.

Um. 01:55:32,170	S3:
A total of about $33,000 with cuts. Uh, the biggest one being they have a part time sort of retiree who does a lot of the inventory control, uh, work over there. And he does a lot of sort of just he's kind of the, you know, just kind of the gofer that does a lot of sort of tasks that would otherwise be done by an officer, uh, you know, at a, at a rate that's almost, you know, double, um, in some cases or more if it's overtime or that kind of thing. So, um, you know, they probably prefer to keep that. Um, but if they had to cut something, they would cut that. They also think they could probably save another, you know, 7500 and, you know, miscellaneous and uniforms there. Um, fire.

01:56:26,029	S3:
Fire would cut about 70,000. The majority of that is they they do have a new firefighter in the in the budget. This year, a new full time firefighter. Um, they would cut that and they would also cut back on, uh, overtime and replacing some batteries in the AEDs this year. Um, but generally speaking, you know, and we I haven't gotten full, you know, sort of cuts from, you know, like all the town hall departments and things like that yet. But, you know, this would be $162,000 the concert wouldn't it wouldn't be nothing. It would, you know, probably reduce the tax rate, you know, whatever, 12, $0.13 or something like that. Um, but that's, that's the start of it. We're still, you know, trying to get these folks to, you know, other other folks to hand this in. But that's, you know, you know, I think what most people are going to come back and tell you is, you know, this will be a detrimental, you know, cut to our services. Um, you know, and whether that's true across the board or not, you know, I don't know. Uh, that's where I think the comparative data is helpful. Um, because you can say, well, you know, they're able to do it here and here. Um, you know, we we must be able to find a way to do it, and then it'll be up to them. And do what you explain why we can't, um, why our cost structure is higher or whatever. I mean, we do have, unfortunately, you've got contractual obligations, union contracts, things like that, that if, you know, if our union contract is worse than one of these comparative communities, uh, you know, that's sort of our reality, whether we like it or not. But I think it has to be, you know, evaluate it as well. When we're in negotiations again, you know, we can now see how much more we're paying than, you know, sort of comparable communities in our area. We know we need to address this in our negotiations. Um, you know, so I think that's, you know, that's the very quick high level summary, uh, on on the cuts. I mean, certainly there's more that could come, but, you know, all in, you know, maybe you're getting to, you know, 200 to 50 on the 5% cuts there. Um, when everybody kind of turns their stuff in.

01:58:29,569	S5:
Okay. Thank you. All right.

01:58:33,130	S3:
Um, yeah, I was going to share tonight. Bob has a really nice spreadsheet. He, um, he did on the overall budget. That kind of gives you some trends on what's increased over, um, you know, the three year period from the actuals and, you know, sort of what the expected inflation rate was versus how things grew. I don't know if we're already at 901 if we want to, you know, delve into something, uh, of that level at this point, I'm happy to do it, but I don't know what other folks are feeling. Uh, and the only other thing I have is that we did pull together the capital schedule today. Um, you know, we didn't have capital on our on our agenda. We only had operating budget. Um, but I think just generally speaking, you know, I'm going to send out the capital budget as soon as we get off the meeting. Um, typically, we fund capital, and when I'm through free cash, uh, our free cash was certified, uh, a week or two ago at a $2,000,071, 71,000. So, you know, just under 2.1 million, uh, the total capital requests came in. Uh, right now they're at, uh, a little over 1,000,002. Um, so we certainly could absorb all of that under free cash. So there's, you know, there's no, you know, concern that we'd have an override or anything like that to handle, uh, the capital. And that's also not to, uh, imply that we would, you know, approve, uh, you know, every single one of these, you guys will have a chance to evaluate the projects, question folks to determine whether you think these are, you know, absolutely necessary or not. You know, whether they're you know, I always used to call it kind of once versus needs analysis when the departments came to me in Essex. Um, you know, and some stuff was a clear need and other stuff, you know, I would sort of say, well, this falls into the would be nice to have, you know, category. Uh, but the biggest thing on this spreadsheet here that you see is about $1.2 million. There's $500,000 in here as a placeholder. Um, because we're expecting to get a $500,000 grant for the HVAC system in this building. Um, but we do sort of have to have a backup plan on how we would fund that if the grant were to fall through. Uh, they are competitive grants. Um, you know, we've opted to go with a geothermal heating system here at Town Hall because it increases the odds of getting a grant. And if we get the grants. Um, even though the geothermal is a little bit more expensive. Um, the grants doing it makes the grants more likely to, um, for us to win those. So the net cost of going geothermal with the grants is really no more than just doing the sort of the traditional system that we have here now. Um, and then it would also that would create, you know, longer term, you know, cost efficiencies for us down the road because the geothermal is more, you know, more efficient overall. Um, and then, you know, Wenham has a pretty strong commitment to, um, you know, going green, as it were, uh, moving forward. So, you know, I think even part of the master plan might touch on that. So, um, so the hope would be that the, you know, the grant comes through and we don't even have to use that. And now we're only talking about $729,000 instead of, you know, 1 million to 29. Um, but I'll send this out and, you know, we'll be we're building out a deck that, you know, kind of gives you pictures and explanations on each of these, these items that's been requested. And, you know, we'll put it on the agenda for next time to, you know, to walk through any questions you might have on those. Um, so that was what I had. Like I say, I'm happy to talk in more detail about Bob's, um, you know, sort of analysis of the trends if folks want to stick around and do that.

02:02:12,470	S1:
But I would propose that we, um, we put on the agenda for next time so that it can be officially discussed what you've got on the screen here, the the CapEx. Yeah, we have a file about where we are kind of collecting the future, uh, um, future expenses that we want to have the town's, uh, the townsfolk aware of. Right. That fourth thing on my list. Right. And then we can also take a look at the file. I think you said Bob put together for you.

02:02:51,399	S1:
And then, of course, we'll keep talking about the, uh, um, the new school and maybe be ready to take a vote. Uh, so I'll be working on, um, working on the model and the deck, but I'm not sure that those are 100% required for your vote. I think they're required for the for the warrant book and for communication out. Uh, but I don't know that they need to be in a final condition, but I think we all agreed that ahead of agreeing on on a vote, we'd want to have something hardened up with the numbers. Jeff. So, yeah, assuming those numbers become available, you said late this week or perhaps early next week.

02:03:32,529	S3:
Yeah. I mean, they were supposed to meet with MSBA on Monday. Um, and then, you know, it could be that MSBA takes, you know, a couple of days to, you know, come back. You know, the the big thing was it was around the size of the cafeteria and the size of the gymnasium and how that would impact, you know, what was reimbursable space versus what wasn't and all that. So I mean, it's not a big number in the grand scheme of things. So hopefully that should be fairly quick. And we can get, you know, if they've got a number by the end of the week. I mean they can hand that to their advisor, fiscal advisor who helps with the bond. Um, and get that turned around. But yeah I'm in a ping Vinny again tomorrow on the issuance costs anyway. So I will I will throw that out there as well.

02:04:16,600	S1:
Okay. So that I'm proposing that we put these other things we've just discussed on the schedule for next week, perhaps at the same time. Yeah. And uh, I don't know if any, any, any other topics we want to discuss or burning issues from now or, um, I don't know if there's still anybody from the public on the call.

02:04:36,800	S3:
Um, I think just. Emma. I think she's still here, but. But, yeah, I think she was the only person we had.

02:04:42,699	S4:
Is there any way to go a little bit later, next week? Possibly. I'm just going to be on the East Coast again. And so my. It'll be tough for me to make 7:00.

02:04:52,670	S1:
So start a little later. You're saying?

02:04:54,770	S4:
That would help? Yeah. Still can't guarantee I can make it, but I will try.

02:05:02,069	S3:
Yeah. And David later was okay for you, right? Yeah. Gets more of the early. Stuff's harder.

02:05:05,829	S5:
For you. Later. Is always better for me. So I can make any time later work.

02:05:11,470	S1:
What do you think? Daniel was is at 730 or 8:00 for you. Be better.

02:05:16,630	S4:
I guess eight would be better, but, you know, it's getting late for everybody here, so.

02:05:22,100	S1:
Okay, so I'm okay with 8:00.

02:05:25,300	S5:
Okay with it?

02:05:29,130	S6:
This could be the fifth.

02:05:31,329	S3:
I know I was like, I think that's where we're in February now, right?

02:05:34,369	S4:
Yeah.

02:05:36,869	S1:
February 5th.

Yeah. 02:05:40,670	S1:
Let me just double check my calendar here as well. I think I've got kids birthday party I have to do on the fourth.

02:05:58,100	S6:
So I can do that.

02:06:00,600	S1:
Have you do the fifth?

02:06:04,229	S1:
Okay, so I'm looking for, uh, a motion to close the one, um, finance advisory board at 9:08 p.m. on the January 29th.

02:06:14,069	S6:
So.

Moved. 02:06:15,229	S1:
Uh, Jared's move. I need a second. Looks like Bob's raising his hand for a second. And, uh, any discussion? Not hearing any discussion. Move to a vote. Um, Finn says I.

02:06:26,770	S2:
I said I.

02:06:28,069	S6:
I.

02:06:29,000	S1:
David, I David, I.

02:06:30,770	S4:
Know, I.

02:06:31,869	S1:
Know, I. Okay. Uh, any against. I don't think there's anybody else that gets to vote. Um. No. Abstentions. Not hearing any. I call the meeting to close. Thanks, everybody. Appreciate your.

02:06:43,029	S6:
Time.

02:06:43,270	S3:
Thank you.

02:06:44,430	S5:
Thank you.

02:06:45,270	S1:
Thanks, guys. Bye bye.