[Nicole Morell]: meeting notice Tuesday, February 21st, 2023 at 6 p.m.
[Adam Hurtubise]: Mr. Clerk, please call the roll.
[Nicole Morell]: President, six present one absent the meeting is called to order. There will be a meeting of the Medford City Council Committee of the whole on Tuesday, February 21st, 2023 at 6 p.m. in the Medford City Council Chamber on the second floor of Medford City Hall and via Zoom. The purpose of the meeting is a finance update, paper 22-604. The Committee of the Whole has invited Finance Director Bob Dickinson to attend this meeting. For further information, aids, and accommodations, contact the City Clerk at 781-393-2425. Sincerely yours, Nicole Morell, Council President. So as the notice states, this is for a finance update from Director Dickinson, who we have here, and we have a presentation in our hands as well. I'm happy to hand the floor over to Director Dickinson, unless any councilors have questions that they would like to start off with first. Seeing none, Director Dickinson, if you wanna, do you have something to share on Zoom as well? It looks like you do, okay. Give you a minute to get set up.
[Adam Hurtubise]: Okay. I'll bring it back. So I guess I'm sharing.
[Nicole Morell]: Share screen. Yeah, if you want to make bubble cocoa. He's under why?
[Adam Hurtubise]: Yeah, the letter Y. Councilor Caraviello, do you want to just repeat that?
[Nicole Morell]: Do you want to ask? Okay. Yeah, I didn't know if you wanted to ask it just on mic. We're just waiting for it. Okay, I'm sure screen.
[Adam Hurtubise]: Just talk to people. That working. There we go. Okay.
[Bob Dickinson]: And this is just here. Hi, Bob Dickinson, finance director of the City of Medford. Can you hear me? Yeah, we always have this problem with the height thing.
[Adam Hurtubise]: Do you want to give him that mouse box?
[Nicole Morell]: You can just prop it up on that.
[Adam Hurtubise]: Yeah, yeah, box. All right, do you want to sit? Yeah, just sit.
[Bob Dickinson]: No, no, it's just, it's easier this way. We could just, oh, look, he's got the mic. No, it's okay. I just had my hip replaced. It's not a big deal.
[Adam Hurtubise]: You're supposed to get food on that, though, right? Yeah. Are we on?
[Bob Dickinson]: Yes, we do appear to be on. All right. No, it's fine. If you need it. If we go more, I have to move around every hour, so in any event. It was a few weeks ago. The cane is mostly for balance, to make sure that I don't fall over. Because if I fall over, they have to do everything again. There you go. All right, so financial update. So I just wanted to obviously go through what the finance department has been doing for the last seven, eight months, work on the 2024 budget, go through Proposition 2.5, where we get the numbers from, all that sort of stuff. Obviously, if you have questions, let me know. So that's slide number one.
[Adam Hurtubise]: Here we are. Yes.
[Bob Dickinson]: Hopefully. All right. All right, moving on. So that's essentially what I was going to discuss today. First from, let's see, Mr. Knight is not here. Warrants, there was a big issue last meeting. You brought up the-
[Nicole Morell]: Councilor Caraviello.
[Richard Caraviello]: So you mentioned the warrants. We appreciate you giving us, we've gotten like January, February, March of 2020. That ship has kind of sailed. But I'd appreciate if you can give us all the 22s. I mean, at least the 22s will reflect where we are from last year.
[Bob Dickinson]: Right, you should have December of 2020. I know, but that's one month. Right, I know. So, yeah, I will talk about it.
[Richard Caraviello]: I mean, if you're gonna do all of 20 to 21, by the time you get to 22, it's gonna be the end of the year. I mean, no disrespect to you, Bob, because I know you got a lot in your plate, but I'd rather see the 2022 stuff. I will tell the mayor's office to... My other question is, in the four months you sent this, there's no legal expenses there. I haven't seen any legal expenses, and maybe you're looking at a different thing than I am.
[Bob Dickinson]: It would be in the legal department.
[Richard Caraviello]: I don't know, unless my other counsel have seen a legal figure there. I haven't seen anything for legal for KP Law. I've seen a couple of other odd law firms that do employment law and stuff like that, but I haven't seen a mention of KP Law in any of the four that you sent us.
[Bob Dickinson]: Well, I can look into that and get you that. I mean, if that's specifically what you want.
[Richard Caraviello]: We'd like to know where we are with them. Right. And before the sentence, it's not a mention of KP Law in any one of them.
[Bob Dickinson]: Okay.
[Richard Caraviello]: Unless I'm looking at it wrong, if you could tell me that I'm looking at it wrong.
[Bob Dickinson]: when I gave you, for instance, December 2022, that's literally every vendor that we sent checks to for December 2022.
[Richard Caraviello]: Well, I mean, escapee law is working for free, which is, then we got one hell of a deal.
[Bob Dickinson]: Because the lawyers do that out of the bottom of their heart.
[Richard Caraviello]: Right, unless they're doing work here pro bono, but I say, and I've gone through every page of every one, and I did see odd law firms, and they were representing the city on some other things.
[Bob Dickinson]: All right, I will look into that. I will talk to the mayor's office and we'll prioritize fiscal 2022. All right, fiscal 2023, pardon me. The next one is just, this is the issue here is that, Um, when you pull these reports, you really do have to go through them with a fine tooth comb to make sure that nobody's names are in it. That could be protected. That could be we could be, you know, legally vulnerable if we put them out there. So that's what the mayor's office is doing. I give them the reports, they go through it, they make sure that everything's, you know, and it should just be people's names. In this case, it's, you know, parents of students, it's transportation. But that's one of the things that takes the most time was actually doing this. But like I said, I will talk to them and I will make sure they prioritize fiscal 2023. And I'll look into what legal bills we're paying. That's, you know, that's easy enough.
[Nicole Morell]: president bears.
[Zac Bears]: Thanks. Thanks, Director Dickinson for being here just on the warrant. Something that I emailed the mayor about. I just wanted to see if you had a thought on it. Would it be possible to, if there's a few sections within each warrant or, you know, with each month's set of warrants, where there's a lot of redactions, would it be possible to simplify the work by giving us, say, a summary of veterans' benefits or a summary, you know, not include the individual lines, and then you wouldn't have to do so much work redacting them, or is it more complicated than that?
[Bob Dickinson]: It's a matter of how the system processes things. If you want to see the individual vendors, which I assume you do, you've got to check XYZ, then you'd have to do several reports and then you'd still have to go through it and make sure there isn't a random thing because a lot of this stuff could be charged. It's done by department, funded department. There are a lot of special revenue funds that deal with students. We wouldn't want those names to get out, you know, depending on what they were, et cetera, et cetera. So, you know, yes, I could generate a report that just summarized veterans for that one department, but still have to look through it and make sure. It really is that. you know, that type of thing that we need to do.
[Zac Bears]: Given that the main concern between us seeing the information and the ability of the administration to produce it is the time-consuming nature of the redactions, would it be possible for us to come in and see the reports here while the redactions are being made for them to eventually be submitted to us? Like, for example, a printed version that we could come to the building and look at or look at it on a computer screen or look at it in an executive session of some kind so that we would be able to look at it, but not necessarily take a copy out publicly and then there wouldn't be a concern about the public viewing a redacted item?
[Bob Dickinson]: I'd have to ask the mayor's office if that's, you know, if they think that that's possible and appropriate.
[Zac Bears]: because I do feel that we are, you know, I can understand the public concern and once a PDF gets out in an email, then there's, it's a public document, et cetera. But we are city employees, you know, we could come into the building and have a look at the information, even if it's taking time to create a version that could then be shared with us as on our, you know, digitally. So if you could bring that back, that would be, thank you.
[Bob Dickinson]: I will ask them.
[Zac Bears]: Thank you.
[George Scarpelli]: So anyway, the... Well, Zuniga's not here right now. She is. Why don't we ask her?
[Nicole Morell]: Madam Chief of Staff, are you able to respond to that question as far as options to?
[Nina Nazarian]: Sorry. No, good evening, President Morell, members of the council, Councilor Scarapelli, happy to do my best. I mean, in thinking about the question that was asked, my greatest concern is that I'd have to think through the component of the public body, the city council being a public body, anything that's shared with the city council would ultimately constitute to something that becomes a public record. And once a confidential matter becomes a public record, it can't be undone. And that's the reason for the redactions. So I need to think through it a bit, and I also need to speak with council, but there is a possibility. I just don't know, I don't wanna speak too soon on the matter and say, yes, that's possible or no, because there's a fine detail that needs to be thought through that I need to consult with Council on.
[Nicole Morell]: Thank you, Madam Chief of Staff. Vice Chair Bears.
[Zac Bears]: Thank you, Madam President, and thank you, Madam Chief of Staff. I think specifically, you know, the idea that may get around all of that would be if us as individual Councilors and employees of the city could view a copy that we could not take out of the building. you know, if that's the easiest option versus some of the options being requiring more time to think through, that would be something that could get the information to us much more quickly than is currently happening. And I think that would go a long way towards answering questions we have and making sure that we I think the longer it takes for us to get information, the more there's going to be a mistrust of why we don't have that information. So I think finding a solution that allows us access to the information as quickly as possible, respecting the capacity of the administration would be advisable. Thank you.
[Bob Dickinson]: finance department updates. As we know, we did an awful lot of work very quickly back last spring, getting the audit done, getting free cash for 2021 dealt with, and getting the budget into place. This summer, of course, there's lights on, which is budget transfer requests, cash receipts, cleaning up accounts, doing reconciliations that's underway and I'm I feel confident that we are making good headway with all of that stuff. 2022, we're almost closed on 2022. I have one reconciliation that I still have to do. After that is done and the journal entry are in, then that gets submitted to the state. I'm hoping, hoping, knock on wood, to get that done tomorrow and submitted. then we'll have to close the system out, generate reports for them, and see what they come up with a free cash number. 2022 audit was started in early February, so slightly ahead of where we were last year, which is good. The auditors are here this week. They were here all day today. They're getting their reports. I think we've got I think we have everything they need. They've done most of the actual invoice testing and the back end stuff that they need to do to be confident that our systems are in order.
[Richard Caraviello]: to the chair. This council has requested an independent audit in the past. Who's doing the audit? You or? Resilient Clark. Sorry?
[Bob Dickinson]: Resilient Clark. Okay. Just like every year, they are an independent audit firm.
[Richard Caraviello]: Okay.
[Bob Dickinson]: They are responsible to make sure that, I mean, just like every municipality.
[Richard Caraviello]: This group did ask for an independent audit last year. We've never seen the report of the audit from other years either. Okay.
[Bob Dickinson]: Municipalities in Massachusetts are required to have an independent audit every year. That's Rizzelli and Clark. They've been doing it for the last few years. I don't know who did that before. They did Nantucket. Before Rizzelli and Clark, it was Powers and Sullivan. All of that, the ACFR's annual comprehensive financial reports are all on the website.
[Richard Caraviello]: In the past, we've gotten a copy of those independent audits and I haven't seen one the last couple of years yet. Okay. I thought you weren't here.
[Bob Dickinson]: No, I'll go on the website and print them out or I'll email the PDF to you. Literally, they are on the website. There's links on the finance page to go look at all of the stuff they do. The annual comprehensive financial report and the single audit of federal funds. Okay, thank you. If there's more auditing that this council needs, we can talk about how to do it. It would be silly to, well, not silly, but it would be a conversation about duplicating work.
[Richard Caraviello]: No, like I said, in the past, we had gotten them and we don't see anything anymore.
[Bob Dickinson]: All right, well then, yeah, no, they're on the website. I'd be happy to send them to you, so.
[George Scarpelli]: If I can. Bob, thank you. I just want to make sure we reiterate as before we keep moving on that why this is important and why we need to see actuals. I think it's important that we've been getting money papers and we've been asking to approve this and approve that, but we haven't seen anything that shows the day-to-day budget that we're working on. So I know you're presenting something, but I, we still don't, you know, I know what we're asking for 2022. And, you know, I brought this because this is what we see as department heads in my community. And it shared online where we actually see the actual minute. Yeah, so that Munis works. It's a, it's, But it's where we see where every penny's going on a month-to-month basis. We get reports month-to-month now. So where I'm having a problem with is I'm trying to do the business for the people that put me in the seat. And all we keep hearing is that next year is going to be dire. It's going to be, it's a scary budget. I mean, I know you mentioned something last year that we were starting from behind and we're trying to catch up. And we're talking about, you know, we don't know what the free cash is. We don't know what we're going to have for spending. So it's a little scary as we're trying to do our work. So, and I think that this is why having this meeting, and I think that, I know, I wish Councilor Knight was here, because he really, you know, was one of the people that really pushed for this, but understanding that where we are financially, so we can make the decisions that's needed day to day. And I know it's been very difficult for you, and I'm not saying it's you, but I still don't see, there's nothing that I can revert back to and look at. In the past, we've been able to look back at our finances and say, this is where we are financially, this is where we need to be. So it gave me the sense of security when it came to voting on $100,000 paper or looking at someone's, I know that we're holding off on some caps because we don't see the budget. We don't know where the money is. We don't know what's happening. So with people that, should be getting upgrades, I can't approve anything until we know where we stand financially. I only say this, you don't have the answers right now, I know that, but this is the reason.
[Bob Dickinson]: I don't have the reasons for you.
[George Scarpelli]: No, I know, I'm just saying, the reason why I'm just saying it, I'm just letting you know that for one Council, this has been very frustrating. Again, this isn't one person's fault or this is something that, Here we are in almost beginning of March. We have March, April, May, we're gonna start the process in June, we're gonna have to vote on a budget that we have no clue about. And I think this is what's frightening for residents is when they ask me or teachers ask me or police or fire ask me or custodials ask me, George, what's the budget look like? We don't know, do we have any, any failing from the administration, we don't know. So here we are, when we finally get everything that we need, and I know you're doing your best to get that, I feel like it's gonna be in the 11th hour, and we're gonna be sitting here again at one in the morning, and it's gonna be even dire than it was last year. At least that's the rumors going around. And I hate to do the business of the city with rumors and innuendos, but we have no communication. And I know that what's frustrating for me is that as we're asking you things, you're saying that, well, I have to ask the mayor's office and then, but we don't have, there should be somebody here. Don't you agree that should be here with the city that we can get to the bottom of these issues so we can understand the city's budget so we can help or, you know, at least stop the rumors, stop the discussions that are going on in this community because people are in fear right now. I got parents that are calling me saying, George, are there going to be cuts in the public schools? I don't know. That's what has been said back and forth by some parties. If that's the case, I'm not sending my child here. These are big decisions people want to know. So it's just, you know, and again, I just needed to... say what I needed to say, because I think this is where I am as one Councilor, where we are with the financial outlook of this community. It's still very foggy. I appreciate what you gave us. Understanding proposition two and a half, I think we know that. You know, the finance department, I think we understand, but I just, it's just frustrating. And I hope you understand, I'm sure you're frustrated as well, but this is, I've never done business this way, where I work or, where we were my first 14 years on this council and school committee. It's just very disheartening. Thank you, Madam President.
[Bob Dickinson]: These reports are available. I will talk to the mayor's office. We'll figure out what reports you need to get. terms of year-to-date. I mean, this is a simple year-to-date budget report. We look at these all the time, obviously. And just to reassure you, we have no intention of springing any budget stuff on you on June 28th this year.
[George Scarpelli]: We didn't get a budget last year, so I wish you do, at least we get something. But this is where my frustration comes in, when people say, George, what do you see in the budget so far? And the answer is, we don't know yet. Because we still didn't vote or anything. All we did is got by last year at one o'clock in the morning. So that's what's frustrating. That's what I'm trying to tell you. So it's not, you know, there was nothing here to prepare this council to be prepared for a budget. There's nothing here. This doesn't prepare me for the budget, my friend.
[Bob Dickinson]: there will be long before we're actually voting on this stuff. I didn't like being up till two in the morning on June 28th either. That wasn't fun.
[Nicole Morell]: So in any event.
[Zac Bears]: I think you got through most of the slide, but just in general, I just want to jump back on two things really quickly to Councilor Scott's point. And then I have a question about, I think the last bullet point on this slide. Number one, I think the issue here, or at least an issue here, is an issue of communication. hearing that there's, you know, year-to-date budget to actuals that we could look at, you know, that you're looking at on a regular basis, you know, having a high-level version of that sent to the council every month would go a long way. And then we can see, you know, I mean, I'm a sucker for data. I'd love to see it compared to the last five years of budgets versus actuals. That's probably a lot more work, right? But, you know, having something I'm just saying it'd be nice to be able to look at the trends over time. But even just having, you know, here's what the budgeted amount was for fiscal 23. Here's where we are year to date. And having that come to us every month for each, you know, department or top level account, but not the sub accounts.
[Bob Dickinson]: Yeah. That would be... This is a problem with all software and how it's cut up, but... It would, what would, to my mind, what you would need to see is the budget to actuals as voted. So for instance, the finance department, you voted last June for X amount of money for salaries. Then as of December 31st, this is what we've run through. So you can see all that stuff. I mean, that's getting that together with Tying that back to the actual votes because of things like how the DPW is entered in the system takes a little bit of effort. So trying to do that back five years or so, because I'd have to trace it back to the actual votes the council voted. So that would take some time.
[Zac Bears]: even just a document like that to start with every month, knowing that something more detailed would take more time, just saying this is the year-to-date spend across the city and having that every month. And I'm just speaking as an example. I think what we're looking for, and we've kind of gone after it a bunch of different ways, We've sent a resolution asking for a presentation. We've talked about the warrants. We've talked about this and that. We're just looking for kind of a consistent package of information where when we receive it, we feel comfortable knowing the fiscal state of the community. I think I don't want to speak for everybody else, but I think that's basically what we're asking for. And to me, that's a It's really a question of communication. It sounds like, at least in some form, the data is clearly available and could be brought to us, but it's just about getting here specifically what we want and here's the schedule to send it on that needs to happen. And I think that would smooth things over a lot. The other thing I just wanted to throw out there along those lines is, you know, I agree that I want to see the warrants for everything. I think for for this council most at least for many members that the biggest thing is is legal expenses. And again, this is just a suggestion I don't know if it's to you or to the administration that maybe if we're talking about a significant amount of work on getting all the warrants over to us since January 2020. Councilor Caraviello was saying let's prioritize the current fiscal year. I think that makes sense. I think another thing that could make sense would be to give us all the legal stuff for the past three years and then just redact that and send that over to us. And then, you know, if it takes more time to get us the entire package and redact that, those could be delayed. So I just want to put out, you know, there's kind of a communication and a prioritization thing here, where if we make a few little tweaks to what people are prioritizing first and getting us information and having a clear schedule and kind of calendar of what we'll be getting when, when it comes to budget information or financial information, year-to-date actuals, et cetera. That could probably smooth this out quickly, more quickly than if we're sitting here waiting, you know, we're waiting on April, 2020. Well, nobody really wants April, 2020 now. We want the legal bills from January, 2020 to now, you know, that seems to be the biggest priority. So if there's some way that we can either communicate with your office or with the mayor's office or a combination of those two, So just clearly list out, here's what we would like every month. Here's what we want prioritized on the warrants. Then everyone's using their time most effectively. And then we're not coming back here again and having, like I hear you on when you say there will be, and this is better than what we've had so far. So I really, really appreciate this presentation. I'm hoping we can go through it because I have some really specific questions later on. But I just think like getting that, that line of communication really ironed out and clear will help us all, you know, not be feeling like Councilor Scarpelli is feeling, or quite frankly, how I've been feeling when people say, what's gonna happen next year? And I can say, well, what I'm hearing is one thing, but when I look at free cash, I see another thing. And, you know, I don't get a monthly or quarterly set of data that I can, you know, that's enough information for me to make confident statements to members of the community. And this is now a long-winded monologue, but I think you get what I'm saying.
[Bob Dickinson]: No, I hear you.
[Zac Bears]: Okay.
[Bob Dickinson]: We'll talk to the mayor, so I'll talk to the administration and try to get you what you need.
[Zac Bears]: Great.
[Adam Hurtubise]: What was your final question?
[Zac Bears]: Just if what I sounded like, just like getting clearly ironing out the line of communication, the information that should be coming and when it should be coming. if there's just some way we can sit down and do that, so that the capacity of the city is being used to its best and our answers are being, the answers that we want prioritized fastest are being answered.
[Nicole Morell]: Madam Chair and staff, are you able to respond to that question?
[Nina Nazarian]: Thank you, President Morell, and through you to Vice President Bears. I guess if I understood the question correctly, it's just figuring out an opportunity to essentially determine what exactly the City Council is looking for so that they can be prioritized accordingly. Did I understand that correct, President Morell?
[Zac Bears]: I think both that and what the administration can provide. I think it's both sides of the coin.
[Nina Nazarian]: Through you, President Morell, sure. I don't see a reason why we couldn't do that. I mean, I just, if I may, I'd just like to kind of point back. We do obviously have a budget book. There's a comprehensive budget book that was created the past two fiscal years, or maybe, I believe the past two fiscal years, Um, is a new version. It contains a lot more information that has historically been provided, even for last year's difficult budget that did, you know, no, one's going to deny it happened in the 11th hour. Um, but there is a comprehensive budget book there and hopefully, you know, I'm, I'm certain that the council's looked at it, but hopefully the community is looking at that. Hopefully the council's referring back to that when members of the community are asking questions, because I think that's a good starting place, but certainly, um, we can make modifications and try to figure out a better path forward.
[Zac Bears]: know, thank you for that, Madam Chief of Staff. I think there's some intent there, but and I understand how you feel about the issue, but specifically as regards to the budget book, you know, The what's in clear gov did not come to us until very late in the process last time if at all and I don't think it was ever presented to us physically, maybe that last week but I don't even think it was. And it's not to not to nitpick here, but I go on clear gov all the time and there's stuff in there that's not accurate stuff that hasn't been updated based on votes the council actual figures that aren't aren't accurate and I'm not trying to demean or nitpick at the specific work but it's it's. I hear what you're saying that you feel that you've put together something that explains to the community what the budget does and I think that there's been versions of that over the past three fiscal years that are pretty, pretty strong but last year's version came very late and even as I look on the online version today, you know there's actual figures in there and some of the charts that are generated by clear gov that just aren't accurate and, you know, again, how we can work through that, so that that process doesn't happen again so that it's not being generated so late, and we're not playing catch up, you know, that's what I'm talking about on the, on the go forward communication front so I really appreciate your comments on on being able to arrange that and set that up.
[Nicole Morell]: I do have Councilor Tsengalo right here, Councilor Scarpelli.
[Justin Tseng]: Thanks. Back to Councilor Bears' point about, and Councilor Scarpelli's point about the year-to-date budget, I think that's something that I, as a Councilor, would like to see, and I think it's something that, I was actually at a municipal event earlier today, and something I learned from that event was that it's considered best practices, in terms of resident engagement to put that year-to-date budget on their city website, and that different municipalities have actually found that it builds more trust with the city government, and it engages communities that haven't really been involved in city government before. And that's all to say that I actually do think it I speaking for myself, and I would think my fellow councillors might agree, I think putting that year to date budget, not only giving it to the council every month, but putting it on the city website would be helpful.
[Nicole Morell]: Thank you.
[George Scarpelli]: Councilor Scarpelli. Madam Chair, through you to the Chief of Staff, I know that what Councilor Villes also mentioned, what we're hearing over and over again, different people that come to this podium, different members of the community, they're asking, you know, the question about our legal budget. And what, I mean, that's probably one of the biggest things that this council is looking for. And we've said over and over again, where we stand the last few years of what we've paid out to KP law. And then you hear different people come to the podium and announce all of these outrageous settlements. And that's what is alarming when you're talking about a budget and people coming up talking about quarter of a million dollar settlements, it leaves people uneasy. And when we don't have the papers in front of us, and we don't understand what they're talking about, there is no way that we can either support our body or this community or agree with them. So I think that's the biggest piece right now. Because right now what we're seeing is everything is going toward KP Law. And unless they're giving us a big discount, and if we are, that'd be great. Because I know this council voted on a $5,000 a month. fee. Wasn't that? I don't remember voting. That was that was I believe that was the first year that they would be on as a retainer to to for $5,000 a month. And I know for sure we're doing way more than $60,000. So I mean, that's the biggest answer. Can you can you give us any insight on that? Madam Chief of Staff?
[Nicole Morell]: I see your hand up. You want to go ahead?
[Nina Nazarian]: Thank you, President Morell. I had my hand up for another matter, but happy to answer Councilor Scarapelli's question. As far as the legal budget that was approved for fiscal 23, and I believe the prior fiscal year as well, but I'd have to double check on that. The retainer is $6,800 per month, and it's a retainer. And so that retainer covers general legal services. As far as specifics, there's four broad categories of what that covers. General matters like things that are general legal services, such as ordinances would be one, review of ordinances, proposed ordinances. Another category is procurement. So contracts in particular that need review by council are part of that retainer. Other general legal matters, just broad ones would probably fall under general and I'm trying to think Labor is under the umbrella of that retainer, so long as it's not in any part of litigation. And the same goes for any of these categories. So long as it's not part of litigation, it's billed under the retainer. So the city doesn't pay a dollar extra. And I will tell you, having gone through the legal bills, we more than get our fair share of services through that retainer. Um, that's so it's $6,800 per month. There's any, if there are any expenses, mileage, I mean, predominantly a lot of things are being done by zoom these days. So that's certainly helpful. If there's any cost for reproduction or otherwise, those are added as with any business or any consultant. Uh, and then there's one other category I'm not bringing to mind right now, but I can certainly find it and advise if that's of interest this evening. Um, you know, as far as, you costs, you know, we do have some litigation. Those matters, obviously, the city wouldn't discuss matters of litigation, and I know you all know this. I'm just stating this for anyone else who's listening, but the city wouldn't discuss matters of litigation, obviously, in any public session. But certainly, as was discussed earlier, we can discuss what level of information is needed, how to prioritize it, and provide it in as timely a fashion as we can. But the reason I had my hand up earlier was, I wanted to, I was just kind of reflecting on some of the comments that I was, part of why we're here tonight is at the city council's request to present a financial update. And there's some information that I hope and believe that the city council will find helpful through this presentation, but we actually have to get to that point in the presentation. In particular, maybe you're looking, maybe the city council is looking for year to date expenses, and on a regular basis, for instance. But I do believe Finance Director Dickinson has prepared as part of the slide work and slide deck information on year-to-date expenses for this fiscal year. And perhaps it's not at the level of depth that the council may be seeking, but to my knowledge, I don't know that we've received year-to-date expense requests. And the last comment I'll say at a very high level is, communities who are able to produce year-to-date information and post it online Most of those communities have an automated system. Our systems are pretty antiquated. They've been antiquated for decades of years, as far as I can tell. I believe that the city has been on, and Director Dickinson can certainly correct me if I'm incorrect, but the city's been on its current financial software since the late, late 90s, if I'm not mistaken. Maybe it was later than that, but we're talking about a substantial period of time, and the city has quite a bit of work to do to get to the point where we can present information at the same level of depth and sophistication, quite honestly, that other communities can because their tools allow it.
[George Scarpelli]: Thank you, Councilor Falco. So thank you for not answering anything I just asked. I find it, Madam Chief of Staff, lately, when we're asking a question, you are very defensive. And all we're trying to do is get questions that are asked by our constituents to answer their needs. And for me to ask a question when I feel like I need to ask a question, whether our financial director hasn't gone to it yet, That's too bad for you. And I can only say that in the nicest way. But I will tell you, you still didn't answer the question about KP Law. So if we request payments or all billing and invoices from KP Law, with everything you're saying, you're telling me publicly, that it falls in a $6,800 retainer, not including traffic or gas or mileage. I just want to make sure that's what you're saying.
[Nina Nazarian]: President Morell, through you, no, that's not at all what I said. I said that as long as it doesn't include matters of litigation, then it would be inside that $6,800 retainer.
[George Scarpelli]: Well, I'll do it due respect, Madam Chief of Staff. This is the question we have. We have questions because even ordinances that we're asking for, there's still question and doubt stating that if those aren't reviewed by representation for this council, then it's not legal. because KPR has already stated they don't work for this council, they work for the mayor. So there's so many different issues. So litigation, that's exactly what we're talking about. We need to know as a community, how much this city has spent for legal fees from soup to nuts. I think that's a public record. If that has to be done a different way, it will be, but that was all I'm saying. So thank you.
[Nicole Morell]: President Bears.
[Zac Bears]: Thank you, Madam President. Yeah, I mean, we can talk on the details all we want. The issue here is an issue of trust and an issue of communication. Communication hasn't happened, therefore trust hasn't happened. I said this in June. We're still where we are. We can put blame to whomever we want to put blame to, or we can throw pointed statements around in either direction. It's not going to get us anywhere. I agree with Councilor Scarpelli that we need more information. I understand, Madam Chief of Staff, where you're coming from on the capacity. That gets to my next question, which is the bullet point on Director Townsend's presentation around upgrades to existing software usage and new software package. Last June, when you were here, we were talking about uh you were talking about how you just come in and you came into a financial system that doesn't talk to each other across different areas of the city school side city side treasurer finance that the systems that we have in place don't really communicate well with each other and that creates for example the issue that we had around the ARPA reconciliation where things were double counted and that that then created three more weeks of everything else that had to happen and and lots of kind of revisions and adjustments that needed to be made. And I just saw the reaction you had. I think it's this reaction that I have, the reaction all of us have to what happened there. You mentioned that you thought, and again, if I'm misquoting or paraphrasing you incorrectly, please feel free to correct me. probably a high six figures, low seven figures capital expenditure needed to bring our finance systems up to snuff. Is that still where you're at? And how close are we to that? Because that seems to me to be like priority number one, to helping you have increased capacity in your office, as well as the ability to communicate information to us and to other parts of the city better.
[Bob Dickinson]: Okay, just leading up to that, this is leading up to that, a whole, one point to be made about things like posting year-to-date budget reports to city websites. Sometimes it's a matter of resources. If you are fighting with your computer systems, if you're, you know, you don't wanna put something out that's incorrect, But reconciliations have to be done between the treasurer's cashbook and admins, soft right admins. What the chief of staff was saying was what I heard was back in the late 1990s, the finance director got irritated with SoftRite and decided to get admins for the general ledger, but the treasurer stayed on SoftRite. That's a bad decision. It's just silly. And then you have something that all communities throughout the Commonwealth have, where your chart of accounts was put together by different people over many, many years. So obviously, you know, the situation in we're in right now is ripe for upgrading the software we're using. I've reached out to one software company, there's two others that we would definitely talk to going into details. And yes, the software package What you'd have to understand about that is that the software package alone is going to be pushing seven figures. Then you have yearly costs that we'd have to investigate. How much are we already paying for software and admins and harpers to do payroll and vision to do the assessors stuff? How much are we already paying for those versus how much it would cost? But still upgrading the system just so you know. you're talking three years. Yeah, easily three years, it would take to do that. And so my, my plan going forward was to talk to these software providers, this year with the idea that we make a choice, bring it before the council figure out the funding sources for it. And then starting in the winter of 2024, that's when we would start looking to build a new chart of accounts. We would make a choice, build a new chart of accounts, start getting everybody to train on how to use the new system. We probably need to hire an outside consultant to help with putting together the chart of accounts. And then down the road, we'd start adding the modules, payroll, and you know, payroll collector, all that sort of stuff. So that's basically the quick version of that last bullet point. That's what we're looking at. These systems cost, I think admins alone is $100,000 a year that we pay them for software and support. So we're talking a significant amount of money. Of course, you know, we are keeping track of, or attempting to keep track of, you know, several hundred million dollars a year. And then in terms of getting reports, like I say, you know, it's where we need, you know, the first things on my mind every week is we need to pay everybody. payroll has to go out. We have to make sure we have enough cash. We have to keep the lights on. And then we have to allocate resources after that. I have to get the 2022 audit done. I have to get 2022 free cash. And so it's resource allocation. I think we can really, with some talking, we can work out what we can get you and that shouldn't be a problem down the road. So that's basically what I would say about that.
[Zac Bears]: Yeah. And just if I can on that, you know, I'm glad to hear that there's kind of a timeline in place. I myself am doing a, I'll be at much, much smaller version of this at a nonprofit organization. We're doing our charter accounts, et cetera. It's one system. It's a lot easier. But even we're talking about, you know, We're implementing a next fiscal year. There's a nine month timeline. So I understand it takes time. I think for us, you know, and I understand you have to cost it out. I really appreciate that outline. I think, you know, and then this goes back on the, on the communication side of things. And I'm not saying it needed to be for today or it needs to be for next week or, you know, at some point having that process written down somewhere and shared with us so we can, we can discuss what our role needs to be in it. Or if anyone asks questions about it, we can get to them, you know, answer those. That would be helpful. Cause I think, um, you know, for me, and I'm guessing for you, you know, it's, we can, that making this a priority for our capital spending is important, because having this system work better means everything else starts to work better.
[Bob Dickinson]: Yes, I, you know, I'm at the chief of staff's behest, I've started to put together notes on the various things that our computer systems don't do that, would be better if they did. I ran a report recently for somebody who's doing some forecasting in admins, and it's just literally snow and ice for the last four years. What are all the transactions? It took six minutes to run that report. And the way admins works Once you turn it on and tell it to do that report, you can't do anything else in admins until it's done. Unisa would have taken 15 seconds, and even if it took longer than that, you can be doing eight other different things. You can be looking up POs, you can get into, that's the environment I'm used to. I had something else that just totally escaped my mind on this whole point. It's left my mind. We'll find it again. If it comes in, I will let you know. So anyway, next one, we're talking about budgets. to alleviate some of your fears. We are active. We have been actively working on the 2024 budget already. Um, chief of staff and Courtney, um, Cardello, my assistant finance director, who has been a godsend. Have met with all the department heads. They've gone you know, be had. We're looking forward getting data on employees' step increases for several years out. So yes, the goal is to start really submitting 2024 budget stuff by the end of April, so you will be able to see it and actually process it for a while.
[Nicole Morell]: question relates that do we know when the school side they're going to be working with that number because I know they usually start much earlier than us.
[Bob Dickinson]: I know we're working on getting a good number to them for what the city will be able to do. All of this is, we want to be fair to the schools, we want to be fair to the employees, but at the same time, we have to be careful that we have the money to do it. So we're trying to be fair to the city itself and the citizens of the city. you know, part of the, actually the next bullet point speaks to that. Last year there was a big variance between what we had for state, we don't have cherry sheet money for next year. We don't have estimates of that yet. That's an important part of our revenue stream. So, you know, when I'm doing the budget, I'm literally taking the budget requests, and then I'm making the 2024 tax recap off of that. So I have all the revenue. This is what we need to spend. This is where we're gonna get the money. I don't have the cherry sheets yet.
[Zac Bears]: That's because the new governor, it's delayed till March 1st versus usually end of January for Gov's budget cherry sheets.
[Bob Dickinson]: For whatever reason, I click on it, and it's still got 2023.
[Zac Bears]: The reason for that is the governor's budget hasn't been submitted yet because it's a new governor.
[Bob Dickinson]: In any event, we don't have that.
[Nicole Morell]: Do you have a question, Vice President Bears?
[Zac Bears]: I can let Bob finish, then I'll ask.
[Bob Dickinson]: OK. So that's one of the reasons that we have to be, you know, we can't get you a fully fleshed out budget. that quickly. But it will be well before June.
[Zac Bears]: So on that point, you met with all department heads. Have you met with the I mean, I know that Mr. Murphy's left, but have you met with admin and finance at the school system as well? Or is he temporarily still?
[Bob Dickinson]: He's temporarily still working there. And of course, Michelle is there. So honestly, chief of staff and the assistant finance director really have taken this mostly off my plate. I've been reviewing what they have. So it's for us right now, it's general fund city. I don't believe they've made preliminary talks with the school yet.
[Zac Bears]: Okay, okay. So that's Chief of Staff and Assistant Director. Do you know if they've met with, and if the Chief of Staff can talk about it, have they met with boards and commissions, chairs of boards and commissions? Because I know I've been receiving some real concerns from boards and commissions around this.
[Bob Dickinson]: I think those budgets are probably come from last year. Okay. I can certainly look into that and ask them last one's a little self serving but.
[Zac Bears]: President Morell and I, if you were to gracefully include me in such a meeting, have not been met with about the legislative budget yet. So that's another one for the list.
[Adam Hurtubise]: All right.
[Bob Dickinson]: Well, noted. And we will get those. I'll work with Courtney to make sure these are addressed. Great. Yeah.
[Zac Bears]: And I know, again, I know it's the chief of staff and the assistant finance director, but I know the school system, especially the school committee, would like to know sooner than later, at least some idea of where they're going for the next year.
[George Scarpelli]: Real quick Bob, so as we're going through this budget, are our department heads able to see what they have actuals, so they're being able to manage their budgets?
[Bob Dickinson]: Oh yes. Okay, thank you. That's another thing, just so you know, talking about software systems, which brings up the point that I wanted to make beforehand that I forgot about, is that you know, while we're looking at these new software systems, we're not using the software systems that we have effectively. There have been times when people have come to me and said, I won't name the department and said, hey, you know, I can't see my budget. And that's a permissions thing in admins. Yes, you can see, you should be able to, people should be able to look, department heads need to be able to look at their budgets, they need to get slightly more complicated than that due to the way things are voted, but people need to do that. I recently ran across a huge, well, for me, a somewhat irritating issue where tax bills get loaded onto SoftRight, and abatements get loaded on the SoftRight, but all of that is put into admins by hand. It's like, let's make the computers do the work that they can do.
[Adam Hurtubise]: Munis is phenomenal.
[Bob Dickinson]: You know, I come from a Munis environment, which is why I'm trying to be very careful about just saying, hey, we should have Munis.
[Adam Hurtubise]: Hey, we should have Munis, I can say it. Right, okay.
[Bob Dickinson]: Yeah, no, there's a lot that Munis does that's very good. I haven't played with other software systems, so I played somewhat with SoftWrite. You know, one of my issues right now is that there's stuff in SoftWrite that I can't see. I'm the finance director, I should be able to see everything in SoftWrite. And it's just a question of, you know, same thing as uploading tax bills. It's just a question of, okay, we have to talk to the SoftWrite, I have to get permissions to do this, we have to get them a file that can be uploaded, we have to allocate resources so those files do get uploaded into admin, so I'm not doing journal entries by hand to put stuff in there that should just go in there. It's as simple as that. So anyway, the other thing that we have been working very hard on, and again, Courtney has been just absolutely great on, is we're working on spreadsheets that actually can calculate not only percentage increases in pay, but also take into account what employee's step level is, which means having all of the employee CAF tables in the spreadsheet so that we can say, okay, if say we give them, say we decide we were working on non-union employees, but this would actually tell us more about how to do union negotiations. So say we say, okay, we want to give a 2% COLA because non-union employees haven't had cost of living increases for, several years now. Say we do one back to January 1st of 2022. Well, you have one employee, they're at a certain step level. Their step date is in the middle of August. So if we do that, then they get the step increase in the middle of August. How much does it actually work out to? It's actually a very complicated spreadsheet. But once we have all the information in there, we can make much better decisions. We can look going forward to say, OK, how does this affect the budget 2024? How does it affect it in 2025? For non-union employees, I think there's 38 of them. If we do a COLA based on January 1, 2022, that affects the 2023 budget because the CAF table goes up by whatever percentage we're saying. We need to know that because then we have to say, okay, you know, we didn't budget for that for 2023. So we have to know how much more. So that's one of those things that I've been hoping to get done. And it's thankfully very much on the way to being done.
[Nicole Morell]: We have a question from Councilor Caraviello.
[Richard Caraviello]: Thank you Madam President. I have a question. How have the other budget directors done this in the past? And why are we having such a problem now? I mean, we've always, when we did our budgets, we've always saw a year to date spending and actuals. Did the software deteriorate that much in the last three years that we're at this point where the software just doesn't work anymore?
[Bob Dickinson]: It's not that, it's more complicated than that. The thing is that if we do a 2% COLA now, we have to take into account for the 2024 budget, who actually gets step increases at that point in time. That's not in the system. That's actually taking the CAF tables of each individual employee, figuring out when their hire date is, it makes a difference, because you get your step increase on your hire date. So if your hire date is June 1st, versus August 1st.
[Zac Bears]: It's a big difference. I don't think that's what he's asking. I think he's speaking more in general.
[Richard Caraviello]: Yeah. My question was, we've always gotten budgets in a timely fashion before with year to dates and actuals. Why is it that we're struggling now to get that information now? It's coming in so late and so, I mean, is your department overwhelmed? What's the reason for the backup for everything? And I know the department's been empty for a bit too. I mean, is that part of the problem too?
[Bob Dickinson]: I would say, quite frankly, that's a lot of the problem. Every time I try to do something, I see something else that needs to be reconciled. That takes time. And then, yes, we did not have a lot of resources. Obviously, there wasn't anybody. There was just Tyler in 2022. Then Tyler move to greener pastures.
[Richard Caraviello]: Courtney's been great but we had a lag for, you know, several so this city has no problem spending money for consultants to do all kinds of things. The department is probably one of the most important departments in the city, and we can't seem to get you any help to get you up to date. Is that a, is that a factual statement. We spend money on consultants to do everything in the city and all kinds of things. I say your department is probably say a key department here. You should have, I say, even if they had to bring in temporary help to get you up to date, that should be done. You shouldn't be struggling doing two years ago stuff now. I mean, I don't know why that's not done. I mean, let's say, like I said, we have no problem spending money for other things. And this is a very important thing that our budget is, that's our Bible, it's what we live by.
[Nicole Morell]: The Chief of Staff has her hand raised.
[Richard Caraviello]: I'm sorry?
[Nicole Morell]: The Chief of Staff has her hand raised. Okay. Madam Chief of Staff, did you want to speak to that question from Councilor Caraviello?
[Nina Nazarian]: Sure. Thank you, President Morell. Councilor Caraviello, you know, I just want to kind of take back. I know everything happened so late last year that, you know, frankly, if we did mention this, you know, I don't remember when it was mentioned or what time, but just in the buildup to the FY 23 budget, the city did hire a firm to act as finance support and essentially do fill the vacancy where there was the finance director vacancy. That consultant determined that there was more pressing needs that hadn't occurred back in 2021. So that work was rerouted, their assignment was rerouted to the more pressing work, specifically reconciliation of the FY21 budget. We also did hire an interim finance director, interim finance director at the time, who helped us close our books. This council met, I believe, with that finance director at least, had some capacity. I'm not even sure if that, to be honest, finance director came to a meeting, but his name was Bill Fowler. He supported the city for a short period of time for the setting of the tax rate and worked with former chief assessor, Ellen Bordeaux, our current interim chief assessor. And subsequent to that, we also hired CLA to provide further support. And we've offered to the finance department, and I think Bob could probably speak to it more in depth, and it's part of this presentation that will come up later. The support we've asked from CLA, an accounting firm who also assists the city with matters relating to ARPA.
[Richard Caraviello]: So if we hired all these people to do all this work, why are we still playing catch up? Why are we still playing catch up? You just said you hired a half a dozen people to do all this work. And our finance director is saying he's still playing catch up as of today. Why is he doing that? What did those other people do that we paid them? Did they not do their job?
[Nina Nazarian]: President Morell?
[Richard Caraviello]: I don't know. You tell me.
[Nicole Morell]: Please, Madam Chair, if you.
[Nina Nazarian]: Thank you. Again, I think I hear your frustration. I don't know how exactly to answer the question other than to say that there was work that predated even the vacancy and finance director. And so we are in a process of trying to determine exactly what work, you know, like systems and existing needs in terms of resources. And we're trying to put resources in places to make sure we're getting to where we need to be. But again, our software is holding us back. And I'm not saying that we should go to any specific software, but I am saying that we need to look at how that's affecting our resource constraints because it's adding burden to the work that's needing to be done. Because there's catch-up work that pre-existed even the vacancy. So I don't know what more I can say at this point.
[Nicole Morell]: Thank you.
[Bob Dickinson]: And if I may, you can hire consultants all you want, you still have to get them the data so that they can work on it. And we've been trying to leverage the availability of consultants to do things, for instance, ARPA calculations for revenue replacement, which are important.
[SPEAKER_08]: So we have an ARPA director. What's the job of the ARPA director then?
[Bob Dickinson]: she's keeping track of all the spending and all the applications for ARPA funding. But again, there's a limit to what you can do with an outside, just from my personal experience, there's limits to what an outside consultant can actually do because you have to say, okay, take this piece, do X with it. Then you have to get them the data so they can actually do X with it. So we're in a much better place than we were. And I'm going to keep working on getting everything done. But, you know, as Chief of Staff pointed out, when you're going through the books and things pop up, you have to, I have to, I'm a pointy headed accountant, I have to sit down and I don't like it when I'm off by five cents. Unfortunately, that type of that type of detail takes time.
[Richard Caraviello]: So Before you came, we had a budget director before you. So are we saying that she left here in a mess? Is that what you're saying? Or was there a mess when you, I mean.
[Bob Dickinson]: I hesitated to say. She managed to,
[Richard Caraviello]: balance every year we got a budget on time. And then, you know, when she left, or whatever date she left, and then we went all that time without any kind of money sitting in the offices, are you saying that that's still we're still doing that from when when the past budget director left until now?
[Bob Dickinson]: I hesitate to comment on my predecessor or the work that was done while she was not here. I'm just saying I am still cleaning up stuff that's happened in the last two years. So I don't know what more I can say than that. Unfortunately, these things take time. And when something crops up that I have to look into, I have to look into it until I'm satisfied that I'm correct. So I had hoped that I would be more ahead of the game now than I am. But I'm not, and that's simply a function of what I have to reconcile.
[Nicole Morell]: You wanna go on, Bob? You wanna continue?
[Bob Dickinson]: Oh, that's pretty much it.
[Nicole Morell]: To me... Oh, with the presentation, though, as far as... I think we still have some numbers to go and... Oh, yeah, sure. I know we're taking you up, down, and sideways, but I want to make sure we get through your presentation.
[Bob Dickinson]: Yeah, I assume everybody here knows about Proposition 2 1⁄2. You've heard of this. This is determined to be in detail. Oh, man, I could... Oh, yeah, no, I had a wonderful conversation with a friend whose mother owned a house on Nantucket about Prop 2 1⁄2. Because all of a sudden her tax bill doubled and I had to point out to her that, you know, the neighborhood she was in doesn't have comparable sales. And then somebody else went and bought a house right next to her mom's house for roughly twice as much as her house was assessed at. And she's like, it's proposition two and a half. How can it go? Well, that's, it's the total amount that you can take in plus certified due growth.
[Zac Bears]: just to this point and again it's not anything that's your fault. I have this discussion a lot with people who are saying well my bill went up by this it's proposition two and a half. And, you know, and then I try to point them to DLS or explain how two and a half works myself. It may be worth between you and the assessor's office, having some sort of like one pager on the city website that's like this is what two and a half means for a person. I know that's like priority 12 right now, but it It does come up a lot where people are really confused about it, especially with how valuations are growing so quickly.
[George Scarpelli]: Right, yes, no, especially in an environment where- Wasn't it what the assessment was, we're actually, our taxes went down, but the assessments went so high.
[Zac Bears]: The rates go down.
[George Scarpelli]: Right, and we were getting phone calls that, you know, that their taxes went up and we're trying to explain to them, no, your home has been assessed. You know, maybe the last time your home was assessed was five years ago in this climate now. I think that's a big piece to understand. So I think the council is right.
[Bob Dickinson]: Especially in an environment where property values have been going up astronomically. So it's hard to explain. It's like, well, somebody just built a beautiful park right next to your house. And then houses in your neighborhood suddenly are worth more. So certified new growth is Something that we will get into on the next slide, actually, but these are the big chunks of where revenue comes from. Obviously taxes, motor vehicle excise, building permits, et cetera, et cetera, et cetera, which is local receipts.
[George Scarpelli]: I'm sorry about that. With that, Bob, I know that one of the things that really stuck with me was the new growth. when in last year's budget, I believe it was 1.8 million, that's what we were projected. And I believe the question was that a lot was gonna come from fees and fines, projection from traffic and parking, if I can recall.
[Bob Dickinson]: That's not new growth.
[George Scarpelli]: No.
[Bob Dickinson]: No, that's local receipts. Local receipts. Yeah, local receipts are run through them. Motor vehicle excise tax, boat excise, meals, rooms, pilot payments in lieu of taxes, et cetera, et cetera. We've seen a great deal of growth in that as big projects come online.
[George Scarpelli]: So what was that line for new growth that we were projecting last year in the budget? Because I recall that, that was the number, which, cause it was so low.
[Bob Dickinson]: Right. In 20, if I off the top of my head, they were again, again, you know, when you're, when you're doing these projections, obviously I've said this, I said this last spring, you do these present projections when you're coming out of a pandemic. you have squirrely data. The projections, the new growth on, not the new growth, the local receipts on the fiscal 2022 recap were very, very conservative based on what had happened the previous year. When we were presenting the budget this year, I said, okay, I think I can based on what I've seen for the first five months of 2022 I think I can up that and the number I that we used was 18.5 million for local receipts, local receipts. One of the things to remember about municipal finance is that it always lags a year. You're trying to be conservative, you're trying to make sure that you've got all your I's dotted and your T's crossed, and it's gonna lag a year. So I projected 18.5 million in local receipts. When we're putting together, as I said, I do a recap based on how much money we need to raise. It looks like 2022, we're way on top of that. But when we're looking at this, when we're actually putting together the recap, we've based the budget on the 18.5. Should mean that next year I will be able to And when you're in my position, if you come up with some wild number for local receipts, DOR will look at you and say, okay, that's great. Show me the first six months of this year. Do you think you're actually going to hit that number? So you need to be conservative. You need to make sure that you've got, you know, you've got room so that you're actually hitting those targets or else you get a revenue deficit.
[George Scarpelli]: And that's a- I think my concern was at the time was new growth. that we're seeing in neighboring communities, they were going through the roof on two and a half on the new construction construction. Right, that's that's where I'm trying to get at. Okay, so what do we see? Is there a trend that we're seeing that it's, it's we're gaining? Okay, good. It's going up.
[Bob Dickinson]: So I knew there was a question about where excess levy capacity came from. This gets into nuts and bolts. Okay.
[Zac Bears]: Yeah, I saw the DOL website has, I think, this figure up there, which I was like, wow, we have excess levy capacity. That's great, because we can raise the levy and bring that money in. And you're saying it's new growth.
[Bob Dickinson]: Yeah, I have some slides on what that is. You know, when I look at that, I'm looking at okay, that's great, we have headroom in the levy, that's good. Bond people love it, auditors love it, because that means if something comes up, you actually have some headroom in your levy capacity. Where it comes from is, again, when you're putting together your recap, you're trying to be reasonable across the board. When we put together the budget for fiscal 2023, we made assumptions. Once we've made that budget, we've decided we're going to raise X amount of money. If we actually have more headroom and the levy limit, then I have to put it somewhere on the recap. Because the number that this council voted for budgets, that goes in there. What the actual numbers for what the cherry sheet charges are, those go in there, et cetera. What we're raising for snow and ice go in there. there's limits to where I can put, actually capture more of that. If you look at the next slide, this is actually what we estimated for our levy capacity when we were putting together the budget, but once we put that in, it actually was $670,000 more. And then on the next slide, you can see we got much more cherry sheet revenue than we had projected, right? And then our cherry sheet expenses were much less. We also estimated, I think 1.5 million or something that for new growth, it came in at 2.2. That's something we couldn't have known last spring. But then once we get the final number in, so when you look at the $1.8 million in levy capacity, that's where that number comes from.
[Zac Bears]: Just to that point, just because I'm, just want to make sure I get everything right. So on the slide one here, the 131,972, Is that what was budgeted for for the two and a half for the property tax levy for the fiscal 23 budget?
[Bob Dickinson]: Yes.
[Zac Bears]: And then when DLS came back and said, this is what your actual, all your actual figures are, it was really this 133,790.
[Bob Dickinson]: Yes, that's what we could have raised. We already put the budget in place now.
[Adam Hurtubise]: Right, right.
[Bob Dickinson]: When you're looking at these numbers, I mean, then I could go into, I suppose I could go into local receipts and say, hey, we're not gonna make an extra million dollars in local receipts. But then when my 2023 local, when my 2022 finals come in, my revenues are, like a lot more than 18-5, you have to say, is that a good idea? Also remember, in terms of the voting public, everybody pays property taxes. That's where this comes from. If you have headroom in that, property taxes are slightly lower. Right, right. That's, that's good for the residents.
[Zac Bears]: Yeah, you know, you know, so the context of an override and the answer is what we could do an override or we have headroom, you know.
[Bob Dickinson]: But to me, the idea is that you keep some headroom, right, and then when you're looking at the override, that allows you to say, I'm gonna use this override money to do X. It's not just, I need more money. You can use the override to say specific things. We need to fund 10 new firefighters down the road. That is gonna be, that's gonna cost X amount. and that's gonna stay on the books for years.
[Zac Bears]: And then you still have the headroom if you need it. I just wanna just, I appreciate the detail. I just wanna make sure I have all this right. So 131,972 is which was in the fiscal 23 budget. DLS says our levy limit was actually 133,790. This 133,120 estimate, what is that on the second slide?
[Bob Dickinson]: I believe that's what we were estimating. Oh God, I'm gonna have to look at these again. I think that's what we were estimating for the levy limit. And then it actually came in that much more.
[Zac Bears]: But we still were leaving about a million in headroom between the levy and the levy limit for FY23? Yes. OK. And then on slide three, I'm seeing we got about 700,000 more in state revenue than we expected, and we had about 700,000 less in expenses. Now that would be like 1.4 million difference, but that would just be money that would go to free cash, right? That wouldn't affect the levy limit because it's a cherry sheet thing?
[Bob Dickinson]: No, it does because that means when you think about cherry sheet expenses, they were $700,000 less than we estimated. So we're using the estimated number when we're making the budget, but then when we're actually doing the tax recap, it's less. We have more cherry sheet revenue. That means that goes in the revenue section. We had estimated 29 million for cherry sheet revenue. It came in a little over 30. So Now it's 30, so that other number down here of what we actually need to raise in taxes in order to fund the 2023 budget that we voted on.
[Zac Bears]: is low is lower. So we're so so because of the difference in cherry sheet.
[Bob Dickinson]: We're raising the levy by less than we had budgeted for, we are, we are raised, we don't need to raise as much in taxes to fund the fiscal 2023 budget, the levy, the levy limit increases, raised on two and a half.
[Zac Bears]: So, and the but the levy rate increases based on the tax rate, right.
[Bob Dickinson]: The actual The tax rate is what comes out of the tax recap, basically. So that's the tax levy, yes, that comes out of the recap. The levy limit increases by new growth in turn half. The point is that because of the way we voted fiscal 2023's budget, because of the numbers we were using to do that, we didn't actually need to fund what we had voted. We actually didn't need to use as much. We didn't need to go straight up to the actual levy limit for fiscal 2023. If you look at fiscal 2022, there was practically no heavy at all. That's because We allocated $1.9 million into allowance for abatements.
[Adam Hurtubise]: Yeah.
[Bob Dickinson]: Our allowance for abatements numbers are healthy. So I, you know, this is another six of this half dozen the other because those abatement numbers are healthy. I talked to the assessor to make sure there's nothing out there that we're going to have to abate millions of dollars for. Right. We only actually raised, I think it was $577,000 in change this year to put it into the allowance. Because when you do that, you're basically soaking up. we could have put in another 2.3. Right. It's the 577 plus 1.8. Right. And then we would be right up to the levy limit. We wouldn't have spent it. But then we have a whole bunch of money in allowance for abatements that we can't, that we would need to vote to release.
[Zac Bears]: Into free cash or?
[Bob Dickinson]: Yeah, it would essentially fall to free cash.
[Zac Bears]: Yeah. I guess my question is, and just so it's, you know, The way I generally understand it is the revenue side of the general fund is basically the levy local receipts and state aid, for lack of more, making it more complicated than that. Sure. Yeah, if the complications are where this question runs off the rails that I'm happy to make it more complicated than that. What I'm seeing is. So, you know, local receipts, we estimated 18.5 million, we may have revenue above that, but we don't know. Well, let's say that's 18.5. The state aid, we received 700,000 more and spent 700,000 less. Is it fair to say that there's 1.4 million more in that bucket than we thought there would be or 700,000, let's just say the revenue side, we received 700, you know, that
[Bob Dickinson]: Yeah, well, yeah. Oh, yeah. The 1.4 there. We need because of the new numbers, we needed to raise $700, $700,000 less, right? And we thought we were then we had budget that we thought when we were right.
[Zac Bears]: Okay, this is this is where I'm getting confused. So we said we needed to raise and this is mostly for my edification. I apologize to everybody else. But I think it's important to know. Um, Are you saying that basically because of that change we rate the levy went up, we, the levy for the levy element the property, the property tax element of the revenue on the general fund side was less than it would have been if we had not received or had.
[Bob Dickinson]: Yes, yes.
[Zac Bears]: Okay. Yeah, that's, that's just that so that's a component of the reason that there's so much headroom.
[Bob Dickinson]: Yes.
[Zac Bears]: Okay, so and so it's not that we just received more and therefore there's going to be a bunch more money going into free cash. It's actually that because we the cherry sheet was about 1.4 million off, we just raised the levy less than we thought we were going to.
[George Scarpelli]: Yes.
[Zac Bears]: And does that flow back to anybody? Or does that reduce the rates that we have? Does that affect the rates that we approved?
[Bob Dickinson]: that affects the tax rate. Okay, x rate isn't as high because you're not totally at the levy limit.
[Zac Bears]: Right. But I guess what I'm saying is like we approved a tax rate in December 2021 for the year 2022. And then we were approved to tax rate in December 2022. For this calendar year 2023. We approve
[Bob Dickinson]: This is good old municipal finance in Massachusetts. This is where I'm getting locked up. The year starts as of 7-1.
[Zac Bears]: Okay.
[Bob Dickinson]: Right, July 1st. We do a preliminary tax issuance in July and then another quarterly one in October. Right. And the actual tax rates get for fiscal 2023 get set on the fiscal, on the 2023 recap.
[Zac Bears]: Okay.
[Bob Dickinson]: And that's what we're talking about. And when would we vote on that?
[Zac Bears]: When we voted on that this past December 2022?
[Bob Dickinson]: Yes.
[Zac Bears]: When we said, OK, got it. So it's the one thing that doesn't have a lag?
[Bob Dickinson]: Yeah, no. OK. Yeah, but all the calculations that we made in order to fill out the recap were based on the information we had last time.
[Zac Bears]: All right. All right. But so basically, I guess just to narrow it down, essentially because reality was different from the estimates that we made in June of 2022, that the numbers were different. They said here, both the tax rate was affected that we set in December 2022 and the levy limits were different than we thought they were. The amount, the levy itself was different than what we thought it was going to be.
[Bob Dickinson]: Yes.
[Zac Bears]: Okay. Thank you. I apologize for all that questioning.
[Bob Dickinson]: No, no, it's, it's, it's, you know, welcome to my world. It's, it's, it's complicated.
[Zac Bears]: I'm just trying to see if we should think of this as extra money or a free cash is going to be bigger or if it's really just about how much levy we want to raise next in the 24 budget or when we're looking at the 2024 budget, we're going to now we have a new
[Bob Dickinson]: right? We have a new number for a levy limit. Obviously, we're going to add 2.5% to that.
[Zac Bears]: Right, it's going to go up 2.5% plus new growth. Right, plus new growth. Yeah.
[Bob Dickinson]: And then another little bright piece of news is that we're looking at, from going forward, looking at forecasting, we're probably looking for fiscal 2024 with more on the order of $2.5 million worth
[Bob Dickinson]: Which is, you know, good for funding the budget.
[Zac Bears]: Right. So we're talking about like a five million increase in the levy around there. Yeah. Let me limit. Sorry. Let me limit. I'm going to get all the terms right eventually.
[Bob Dickinson]: So in any event, this slide ties a bunch of these things together. CLA is the consulting firm. They're doing the forecasting models. This is why we're trying to develop the spreadsheet with all the employees on it, with their step increases going forward, et cetera, et cetera. And this is how we're trying to leverage the resources that we have. So we have a better idea of what we will be seeing in the future. Obviously, none of this is perfect, but as best we can, we want to see how much our expenses are going to grow and want to see how much we can actually predict on the revenue streams. That's what we'll see. been special revenue funds. This is another issue that came up that took a lot of reconciliation times. Um, as you know, Medford gets a lot of money and grant funding. Um, and, um, and for the fiscal 2020 2021, the last free cash number. We took a hit to free cash of about $700,000 because of deficits in the special revenue fund. For this year, that's gonna be significantly more. And this is because these special revenue funds were not vetted on a regular basis in fiscal 2022. We have developed spreadsheets on this one to find the balances, figure out exactly what balances are negative. I've talked to the auditors about this. This generally just to, it's not, this isn't a situation where we're not gonna get the money in. It's just we're not getting the money in in a timely manner. So it's making sure that when the grant says, hey, I can give you $100,000 to do X, I'll pay you back when you've done that. It's making sure that that paperwork is filed. Um, in a timely basis, you have a 90 day window at the end of the year to get the revenue streams in. But sometimes that just there's some projects where that just doesn't happen though. You know, we'll spend money on a certain project, it'll be a lot of money. But because of various things that doesn't actually close out for maybe several years. At that point, you have a hole in your special revenue funds. Eventually, you're going to get the funds. That's one of those things I wanted to bring up, we have this spreadsheet, we're populating the spreadsheet with the people who would be managing these specific grants. And then we're going to work on it in March. Once I get 2022 done in March, we're going to be sitting down with people and saying, okay, where's the money for all those projects and making sure it's all correct. So I just wanted to bring that up because it did take a lot of time this summer to actually put this all together and to actually get the names in there of what the project is for, who's the granting authority, what's the grant, you know, what was the grant contract, so we can actually manage these correctly.
[Zac Bears]: Thank you, Madam President. So I see this as really important for a bunch of reasons. Number one is that traditionally in the budget every year the city budget. It's really just general fund and enterprise, and it doesn't have any of the additional revolving special revenue accounts? I don't know if, is special revenue and revolving a synonym or are they different things?
[Bob Dickinson]: They're slightly different, but different legislations. In general, the reason that we don't set up there aren't votes. Grant money can be spent without voting. So if I get a grant for underground to put trees in a park, I can, you know, once we've set it up in the system, we can do that.
[Zac Bears]: For example, there may be an ARPA special revenue fund.
[Bob Dickinson]: Oh, yes.
[Zac Bears]: Yeah, yeah, yeah.
[Bob Dickinson]: ARPA is a big, you know, it's not in the deficit. Right, right, no, I know.
[Zac Bears]: I'm just saying, because my first point here, and then I have a couple of specific questions about the deficits and also how it relates to stuff, I think that the public and the council would significantly benefit if all of these were also included in some form in the budget. I know that's a heavy lift. But I think when we just look at the general fund and the enterprise fund, we're not seeing the full picture of what the city is bringing in and what the city is spending. And I would love to be able to point to residents say, no, we get 5, 7, 8, $9 million in grants because our city staff is going out and getting these grants in addition to what taxpayers are putting down. And I really think if we want to present to the public, and this may not be recommended practice either. So I'd be happy to look at a different way of reporting it if that's better. I don't know. I don't know. I don't know. But I think if residents want to really see the full scope of what the city is doing that these are important pieces that should be included.
[Bob Dickinson]: Um. That bears thinking about. Certainly I know where I came from. Nantucket doesn't I don't know of. I'll ask. I
[Zac Bears]: Even an addendum or a separate document that could be released at the same time?
[Bob Dickinson]: Obviously, you know, part of the special revenue funds, the community preservation.
[Adam Hurtubise]: Right, right.
[Bob Dickinson]: But I mean that one appears to be relatively well managed linkage funds. It's part of the work that you're doing because it's like, you know, linkage funds get voted, CPC funds get voted. We have to make sure that those projects are actually properly recorded in the system. And that means tracking down the votes because there's a lot of stuff like that that simply wasn't done in 2021. So I'm going through past council votes and bothering Adam all the time to make sure that I have all the past council votes that involve money. And I'm trying to put that together into a comprehensive spreadsheet that said, okay, this one, you voted this much money to do this. So I'm working on that. So I'd have to think about how, you know, how to present that. Some of them, revolving funds are a special revenue fund, but they're, you know, that's like the content rank. It's run as sort of a mini business. Revenue comes in, it pays for people to, you know, shave the ice.
[Zac Bears]: And again, I know it's work that maybe it's not going to happen for this budget, but, you know, I think people would be, we report on these things discreetly and kind of, you know, right, you said the CPC is in the budget, but, you know, ARPA is not, right. And those aren't the same thing because CPC is here forever and ARPA is temporary. But in any case, having some sort of full accounting, whether it's actually in the fiscal 24 budget itself or an addendum of some kind, or if it's fiscal 25, because that's how long it's going to take to pull something like that together. I think there's a lot of information that people could really glean off of it.
[Bob Dickinson]: I will add, Courtney and I are going off to the three-day Massachusetts Municipal Auditors and Accountants Association annual meeting in March, where I get to hang out with a bunch of municipal auditors. It'll be fun. But that's an interesting point because one of the things that is very different for Medford versus Nantucket is that Medford does get a huge amount of money in grants. And they can be yearly grants, they can be grants that are for specific things, donations, and each one of those, it's an enormous amount of work because each each grant can have its own specific language for it. Is it reimbursable? Did they just give you money? What kind of reporting do you have to do? Who's in charge of it? Who's going to do the reporting? It's all that sort of stuff.
[Zac Bears]: So that goes to my other two questions here, Bob. What you're saying about their special revenue funds and deficit, does that mean that I think how you described it, I just want to make sure it's accurate. The city spent you know say we got a, we got a grant, we had an expenditure the expenditure came because it's a reimbursable grant, for example, so they won't give us the money till after the expenditures made. And again, correct me if I'm getting anything wrong throughout it is that basically mean like we're spending money out of the general fund to pay for it and then they're reimbursing it so we are, we're covering that and then eventually the special revenue fund pays the general fund back for that expense.
[Bob Dickinson]: Not quite. When a grant comes in, we set up a specific accounting structure in admins. Yeah. Don't worry about the boring details, but it'll have, this is a revenue line, this is expense lines that you need for the grant, right? That will show at the end of the year that specific program, because it's a program code, if we've actually spent money and haven't gotten enough revenue in by September 30th of the next fiscal year, that will show a deficit. When you give that to DOR, DOR says you have a deficit there. So they say, okay, we're going to reduce your free cash that we're giving you. that you're allowed to use by that amount in case you don't get the money in. You're essentially borrowing from yourself. Accounting-wise, it's not accounted for in the general fund. It's accounted for in a special way.
[Zac Bears]: But it's just reducing the amount of free cash we can use. There's not necessarily a transfer that happens.
[Bob Dickinson]: No, no, there isn't. Essentially, you're borrowing from yourself.
[Zac Bears]: Yeah.
[Bob Dickinson]: If something happened in a situation in one of those situations, if literally they spent too much money, or the granting, whoever decided to give you the grant, went belly up, then you would properly what you would do is you would especially if it's a prior year that you spent the money, you would have to come before the council and say, hey, we need to cover this deficit. It's a hit to free cash anyway, so it's- Right, you're making a free cash transfer. Basically borrowed from yourself, so you do a free cash transfer into that specific line.
[Zac Bears]: Okay.
[Bob Dickinson]: That's the boring account.
[Zac Bears]: No, no, no, I appreciate it. I don't know if everyone else is happy with me, but I'm learning a lot. I apologize. Boards and commissions, does every, so say a board or a commission gets a grant, is that always going to be a special revenue account for that grant? For example, I've heard from a commission that there's money that they got in a grant, and they didn't spend it in the prior year, and now they don't know where it is. Is that, could that be, is that an issue with admins and SoftRite, or is that an issue with how revenue funds are set up? I'm trying not to get more specific.
[Bob Dickinson]: OK, put it this way. If a border commission got a grant, the grant would have strings attached. You can spend on this. The purpose of setting it up is a special revenue fund. It's precisely to make sure that when the granting authority says, hey, did you spend it on trees for the park? You can pull it up in the system and say, look, vendors, trees, harvests, tree care, whatever. Um, and then you can keep track of the revenues that are coming in. So it would be set up separately. Um, that said, I had this problem in Nantucket. Um, it does happen frequently in towns, municipalities all over the state where there are Um, there's funding in these grant accounts that for whatever reason is not spent.
[Adam Hurtubise]: Yeah.
[Bob Dickinson]: Somebody, you know, they just didn't know where it is. That's, that's the whole point of doing this type of work is to say, okay, this is the grant, right? from my point of view, I'm looking at the books. It says there's $15,000 left in this thing, and when you're dealing with an accounting system, the accounting system, the actual name on that account can be very uninformative. So I need to know who got the grant, when the grant came in, et cetera, et cetera, et cetera, who's the person I need to talk to about making sure that that's It's like, you got the grant, go spend the money. I love to have people spend money like that because it gets them off my books. I don't have to look at it anymore.
[Zac Bears]: Can it carry over from one year to the next?
[Bob Dickinson]: Grants do carry over to the next year.
[Zac Bears]: Is it possible that grants were booked as general fund revenue when they should have been in the special revenue?
[Bob Dickinson]: I would be very, very, very upset if that happened.
[Bob Dickinson]: I have not seen that. Okay. It's one of those things that we do look out for. Yeah. Can't say what might have happened in the prior years. I mean, we have cash reconciled through Cash is actually pretty much reconciled through December 31st. I mean, there's some issues that we have to work out, but we know where they all are. That's not to say that things aren't technically misbooked to the wrong revenue account. But in general, yeah, that's one of the things we look out for.
[Zac Bears]: If I get more specific than that, I'll ask you.
[Bob Dickinson]: Yeah, no, and if a board of commission, if somebody says, You know, it's sorry, how long did it take to get this only in regular session.
[Zac Bears]: I think we all just learned a lot. Listen, I'm So thank you, Madam President.
[Bob Dickinson]: This is actually the last slide. You know, revenues 83.3, expense of 87.3. We've used 57% of the fiscal year 23 budget as of December 31st. We can give you more detail on this. The reason it's 57% is because you actually pay for the of Medford retirement in full because you get a big discount. So that money, which was $14 million came out as of July 1st. So we're pretty much on track to be our expenditures are as of December 31st are about 50% of what's budgeted. So that's good. I think I was told early on my first classes on municipal finance never to say what free cash will be until DOR has said this is what free cash is, but I expect it to be higher than it was last year, even with more deficits in the special revenue funds. Then ARPA revenue replacement, this gets a little complicated, but the, if I could wax into math a little bit, under the ARPA legislation, when you're calculating revenue replacement, they're using a 5.2% growth rate, which is more than the city has ever seen. Um, when you compound that over three years, and then we have recalculations on the calendar 2021 revenue replacement number and the prior year, there's leftover money from that from recalculations. I still have to go through that with a fine tooth comb. The bottom line is that our revenue replacement availability for the 2024 budget should be actually very large. And that's simply because of the 5.2 growth rate that we get to use because that's what the ARPA legislation said. So we should have plenty of, you know, there's obviously issues involved with using revenue replacement, but one of the good things about it obviously is that it's a lot less paperwork because there's a lot less strings attached to that. So, and that's what CLA is working on. And we should have that number available in the next couple of months in a very firm, this is what it is. Again, because of cash reconciliations, cash is king. If your cash is reconciled, if my cash is reconciled, I feel a lot more comfortable and I'm feeling a lot more comfortable these days than I was when I first got here. So.
[Zac Bears]: Great. Thank you, Madam President. Just two questions on this. On the ARPA one, given what you were just mentioning, I think you were saying, you were kind of noting where I want to go with this, which is, sounds great. We're going to have a big ARPA revenue replacement for FY24. But you know, eventually, there's gonna be no ARPA revenue replacement because the legislation is gonna expire. And this, you know, maybe it's a mayor and chief of staff question, maybe not, I don't know, you can determine that. But I guess would it be recommended that we have the revenue replacement in there, but maybe not budget some, you know, not budget operating expense, you know, try to budget all of our operating expenses into the non ARPA side as best we can.
[Bob Dickinson]: And then be wise to wean ourselves from one time funds.
[Zac Bears]: Right. And then my second piece of that is if we were to do that, let's say the 200, 200 million, again, these are random numbers, I'm just trying to use something for easy for creating a hypothetical without being able to write it down. Let's say we had a 200 million in operating expenses, 200 million in revenue, and then 10 million in ARPA revenue replacement. If we were to budget it that way and have all of our expenses covered by non-ARPA revenue, would that 10 million go into free cash?
[Bob Dickinson]: No.
[Zac Bears]: No, where would it go?
[Bob Dickinson]: You would ARPA funds need to be either spent or allocated by December 31st of 2024. Yeah, they need to be fully spent by December 31st of 2026. So again, we're talking calendar years. So it's doesn't quite line up with everything. But um, the bottom line is that if you don't spend it, they're gonna take it back. So we can't just say, okay, when we do the tax recap, we can't just say, oh, you got all this revenue. We don't need to use ARPA funds for it.
[Zac Bears]: Right, can we do it the other way around? Like do ARPA for 10 million and then have 10 million in local receipts go to free cash?
[Bob Dickinson]: I don't know if my brain's able to do that right now.
[Zac Bears]: That's okay, that's all right.
[Bob Dickinson]: we would end up, we would have to put it, we would have to figure out where it would go on the recap so we would generate, would we? I guess mostly what I'm saying is- Well, what would end up happening, and the other thing to remember, okay. The other thing to remember is that the feds would take a dim view of this. Right, right, right. Is if we say, okay, we're gonna use revenue replacement to fund $10 million of the police salary budget. Right. We transfer that money in, then the police salary budget comes in $10 million below what we had budgeted. because we use that ARPA funding to cover that, we physically move those expenses on the books out of general fund into ARPA, special revenue fund, then yes, that money would all fall to free cash, but I don't think people would like that.
[Unidentified]: Yeah, no, I hear people.
[Bob Dickinson]: Yeah, the feds would not would take a dim view of that, in my estimation. Okay. And then, you know, the thing about the revenue replacement, and in terms of looking about, you know, there's, there's, it's, it's not like you're going to find that there's, I don't think we're going to find that there's a problem spending the money on things that the city needs. The good thing about having it be revenue replacement is that then I don't have to have, I don't have to put it in one of those ARPA categories and say, we're using it for this, which then gives you all these strings attached to how you can spend the money.
[Zac Bears]: Right. My concern with it is around weaning off of the use of one-time funds for recurring expenses. And that's the piece. I mean, if we can find, say ARPA revenue replacements, 10 million, and we can find 10 million in one-time expenses, then it's fine. That's not what we've been doing the past three budgets right we've been paying for recurring expenses one time funds. And basically, you know, I'm, if I guess my question is, is there a way to do it where we can spend this money outside of the arbor categories or does it really mean because we're not going to need it in the same way that we're just going to dump that back into, you know, into having to spend it within the categories outside of revenue replacement.
[Bob Dickinson]: I think it's the same difference. We can't divert the money so it falls to free cash. I mean, I think the way they look at it is if we divert the money so it falls to free cash, then we're just thumbing our nose at them and saying that we were supposed to have it allocated or spent by December 31st, 2024. If we throw it in free cash, we can spend it down the road whenever we want.
[Zac Bears]: Yeah, I think I'm testing my colleagues' patience.
[Nicole Morell]: So I'll just- I have a few folks that, yeah.
[Zac Bears]: Finally, just my last one, and I will say nothing else unless anyone- Sure, can I actually take Councilor Collins first?
[Nicole Morell]: She hasn't asked a question. Sure. Councilor Collins, then we'll go back to vices and bears, and then we're on the road. Councilor Collins.
[Kit Collins]: Thank you. I had more of a concluding thought than a question, so I'm happy to let others budge in front of me in line.
[Nicole Morell]: Back to you, vices and bears.
[Zac Bears]: Just very quickly, when you say high free cash amount, when I looked at the DLS website, it looked like it was 15 million plus. Is that not including the latest certification?
[Bob Dickinson]: That's last year.
[Zac Bears]: Right, so that's last year. So it'll be higher than that. Do you have any idea?
[Bob Dickinson]: I'm just not gonna say. Before, I mean, I have a number in my mind of what I think it's going to be, but I really have to look at it.
[Zac Bears]: Higher than 15 million.
[Bob Dickinson]: I believe so.
[Zac Bears]: Okay, great, thank you.
[Nicole Morell]: Councilor Caraviello, then Councilor Scarpelli.
[George Scarpelli]: I mean, the biggest thing as we're going through, our financial outlook so far is still out there without getting the understanding of what the state has to share with the cherry sheet and everything else. So we don't know where we are financially. where we stand right now. I mean, if you look at where we are and what we're gonna be next year, and this is what the whole understanding is. Ultimately, Bob is getting an idea of where do we stand financially? Are we going to be in this financial quagmire come June? Are we gonna be looking at some difficult cuts? These are the things that ultimately as this progresses is where the biggest question, the easiest question, that it's not so easy. So that's probably, as we move forward, my question to you is, in your professional opinion, how do you see our financial health right now?
[Bob Dickinson]: I think we're, honestly, you know, I hesitate to, I wanna stick my nose in the big spreadsheet before I say what I think. Like I said, this is the beginning of it. I think looking at, you know, you took a look at the positive points. We have been very constrained on budgets. So that's in terms of financial health, that's good. We're trying to get the budgets in line with the city's revenue. We have positive new growth numbers. It was more than we thought it was gonna be for fiscal 2023 recap. We think it's gonna be higher than that for fiscal 2024 recap. We have ARPA funding that we can use to smooth out revenue stuff down the road. I think that When the big projects that I've been hearing about around here actually get online, then new growth will be even higher.
[George Scarpelli]: And something we've touched on in the past, free cash. Where do we stand with free cash?
[Bob Dickinson]: Well, as I was saying, it was 15 million last year. I expect it to be more than this year. But free cash is what DOR says that once I get all the paperwork in, which will hopefully be tomorrow, and then they have to digest it, et cetera.
[George Scarpelli]: So I apologize for being redundant. I just want to hear it again.
[Bob Dickinson]: No, no. It's true. Thank you. Literally, the first classes I took,
[Nicole Morell]: Councilor Tseng touched on that, so. Councilor Tseng, then we'll go back to Councilor Caraviello. Councilor Tseng.
[Justin Tseng]: Thank you. I just have two motions out of what we had talked about tonight. I think focused on building trust and showing our residents that we're being as transparent as possible. And I just wanted to get some things on the record. So the first motion, I, you know, language to the clerk. First motion is to ask the city administration to post the year to date budget report on the city website to update this report monthly and to send it this monthly report update to the city council. And if this is not possible, the council asks the administration for a written report, a written update about how we can make this possible. a timeline to acquire the technology to do so, and for regular written updates as we acquire this technology. So that's the first motion.
[Nicole Morell]: Um, do you want to take them both together?
[Justin Tseng]: Yeah, we can take them together. Um, the second motion is to ask the city administration to consider asking, uh, adding information about grants, special revenue funds and special revenue funds, deficits to the budget book or report to the city council during the budget process and to report back about the inclusion or lack of inclusion in the budget book or report.
[Nicole Morell]: Thank you. So on the, I'll take the first motion. So on the motion of Councilor Tseng second by vice president bears, Um, second. Okay. You want to take that together? So you'll combine those?
[Adam Hurtubise]: Yes.
[Nicole Morell]: So it's okay. So we have the one motion, uh, combined, uh, from Councilor Tseng, uh, second by vice president bears, uh, Mr. Cook, please call the roll when you're ready.
[Nicole Morell]: Yes, six in the first and then I have one absolutely motion passes. Councilor Caraviello.
[Richard Caraviello]: Thank you, Mayor President. Well, you know, if we keep using the upper money for revenue, I mean, for revenue replacement, doesn't that kind of change the purpose of what the upper funds is for? That was for more for community use, I would think.
[Bob Dickinson]: There is a component of it that has to be used for community, as I understand it.
[Richard Caraviello]: I mean, I see other cities using their upper money for a lot better things than what we're using it for. I mean, revenue replacement, I don't know if that was what the main intent was for, but I don't think that's the best use of it.
[Nicole Morell]: Okay, well- They're different buckets, correct?
[Bob Dickinson]: Well, just to be clear, just because you're using revenue replacement as the justification for spending the money doesn't mean that you could use revenue replacement saying, okay, I want to totally redo a park. I want to do stump removal. I want to repave the streets. If you say, if you have the room to use revenue replacement for that, that means that you can do what you want without having it be in a specific ARPA budget bucket that has strings attached. It doesn't mean that we have to use revenue replacement for funding the city's budget for the next year. That's, we can, but we don't need to. it doesn't constrain it. It's the least constrained way. Now, from my point of view, obviously, revenue replacement, when you're looking at the general fund budget, and you're looking at the city's budget, if you have that hole that you're forced to cover every year with revenue replacement, you want to make sure down the road when you don't have that option that you can cover your budget. And that's what we have been, that's what I've been raising alarm bells about. And the administration has been working on for the last two budgets, for the upcoming budget and last year's budget. So yes, but just saying it's revenue replacement.
[Richard Caraviello]: But you are raising the alarms that we are using that more than we should, is that what you're saying?
[Bob Dickinson]: Well, I think that would be somewhat obvious if you have to take one time funding to cover your operating expenses that, it's like, you know, you don't go to the, you don't put stuff on your credit card and leave it there, just in general, but we are definitely working on that. I mean, some of it's unavoidable, but some of it, but you know, we need to look down the road, not just at fiscal 2024, but 25, 26 out there and see where we need to, you know, how we're gonna make that work.
[Richard Caraviello]: make a resolution that the council request that that the budget director request that the mayor start giving us the one articles for the, for the year 2020, I'm saying 2022 so we can get a better handle on what was spent last year versus 2020 we can catch up in those later but if we can do that, and I think council is probably made the motion to this point that more specifically, we'd like to see where our legal expenses stand. So if we can get an answer on our legal expenses for 2021-22, so we know how much we overspent on legal.
[Nicole Morell]: So- So on the motion of Councilor Caraviello, seconded by Vice President Bears, Mr. Clerk, please call the roll.
[Kit Collins]: Yes.
[Adam Hurtubise]: Yes.
[Kit Collins]: Yes.
[Nicole Morell]: Yes. Six in the affirmative zero in the negative one absent the motion passes Councilor Collins.
[Kit Collins]: Thank you, President. Thank you so much, Bob for this whole presentation we really appreciate you. being here and walking us through so much content. I wanted to save my comments for the end just because I know you had a lot to get through. Just in closing, I think that conversations like this are really helpful for helping us get clear on what data we need and hopefully articulate that in a way that you and the administration can act on to make sure that we're actually in communication, not just passing notes. You know I think ultimately we're here to talk about what we need to see as Councilors and based on the questions that we get from the community. You know kind of touching back on what were for me the highlights of your presentation spoke about you know i'm really interested in that year to date spend i'm interested in revenue forecasting. The snapshots are useful, but we need both sides of that coin, the snapshots and the trends. Residents do come to us to inquire about, quote unquote, where the community is headed, and we need the information to speak to that. Even the slide, like this final one that you're sharing, I think is very helpful. It has the touch points on major updates. It has a bit of forecasting, what's been budgeted, how deep we are into appropriations as a percentage of total budget at a relevant point in time. You know, comparing that to just looking back at the plan that we pass in June of each year, when we're looking for meaningful updates on how we're doing, this feels substantively different in a useful way. And I think that this could be really valuable, especially if these data points were comparative going back three or five years. But, you know, in either case, I think that this is the type of information that I've been really wanting. I think in terms of what we're asking for going forward I'm really glad that special revenue funds have been a part of this conversation alongside the general fund because I think you know if we're asking for context, seeing that whole pie chart is really is really necessary. you know, and I'm glad that we're getting to a point where we're able to better articulate why more specifically we're looking to see, and hopefully we can, you know, be working together to make sure that we're getting that information, even if it's not always as soon as possible. One of my main takeaways was, you know, building up your department, you know, making sure that we can be building up the finance department's capacity. Clearly there's some specific bottlenecks. I think that we all want to see them prioritized. You know, I hope that we can get to a point where we don't have to be self-censoring and what data we're asking for, you know, for ourselves and also for the community. And part of why we want this data broadly is so that we can know, you know, if we're not able to invest more aggressively in capacity like the finance department, you know, why is that? And how can we kind of be partners in addressing it? Obviously, there are a lot of issues orbiting this conversation like a comprehensive capital needs assessment. That's a piece too. I know it's outside the scope of this conversation and not just because we've been talking for two hours. But I think that, you know, overall, we're trying to build this up on a lot of different layers. what we can expect from our next budget season and the next one and a budget scenario and future planning that goes even farther than that. But conversations like this make me feel a lot more optimistic. And I think that this council wants to be able to know how to effectively voice support for in certain capacity where it needs to go in order to get the data that we're asking for, in order to make that data easier to come by. And hopefully, you know, as a corollary or as an accessory, articulating that long term needs assessment. That's like, you know, that very related but separate project. So thank you. I really appreciate that. Lots of takeaways from this. And thank you to my fellow Councilors for their time.
[Nicole Morell]: Thank you, Councilor Collins. Any further discussion from the Council? Seeing none, members of the public wish to speak? I have a motion to adjourn. I have a motion to adjourn.
[Adam Hurtubise]: I have a motion to adjourn.
[Nicole Morell]: I have a motion to adjourn. I have a motion to adjourn. I have a motion to adjourn. I have a motion to adjourn. I have a motion to adjourn. I have a motion to adjourn. I have a motion to adjourn. I have a motion to adjourn. I have a motion to adjourn.
[Adam Hurtubise]: I have a motion to adjourn. I have a motion to adjourn. I have a motion to adjourn. I have a motion to adjourn. I have a motion to adjourn. I have a motion to adjourn. I have a motion to adjourn. I have a motion to adjourn.
[Richard Caraviello]: I have a motion to adjourn.
[Adam Hurtubise]: I have a motion to adjourn. I have a motion to adjourn. I have a motion to adjourn. I have a motion to adjourn.
[Nicole Morell]: Yes, 16 in front of zero negative one absent motion passes meeting is adjourned.
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