February 8, 2012 Capital Improvement Committee

February 8, 2012 Capital Improvement Committee

Postby Mary Wright » Sun Mar 11, 2012 3:03 pm

FEBRUARY 8, 2012

A meeting of the Capital Improvement Committee was held on February 8, 2012 in the Municipal Center Resource Room. Mr. Gonynor called the meeting to order at 2:00 PM.

PRESENT: Don Gonynor (Chairman), Mark Dunleavy (Vice-Chairman), Paula Brouillette, Ellie Chesebrough, Nancy Lane, Shirley Mosczynski, Kent Vinson, Mike Guzinski (Town Administrator)

1. Meeting with Department Heads to Review Capital Requests for Fiscal Year 2013:
Town Engineer: Mr. Bill Cundiff joined the meeting to review the following projects:
Library Project: The Library Project has gone through schematic design and the Building Committee and the Library Trustees have chosen Scheme G. The project is moving toward design development to get a solid price, and that may or may not happen by the May Town Meeting. The architect can have a price for the May Town Meeting. The project is 80-85% complete with the design up through design development. At this point, the cost estimate is $1.6 – 1.9 million. There are a few details still needing to be resolved, such as egress from the parking area.
Police Safety Complex: Mr. Cundiff has a draft RFQ almost in it’s final state. He hopes to have a final version for next Wednesday’s meeting of the Building Committee to forward to the Board of Selectman for approval in order to move forward with advertisements for designer selection by February 29th. The project will go through designer selection process through May 1, 2012. After May 1st, the design would begin.
School Building Project: Mr. Cundiff announced that the Board of Selectmen voted to award the contract to CTA Construction in the amount of approximately $35 million, which is under the expected budget. They are going through some of the subcontractor proposals. There have been a few requests to withdraw bids, and once those have been settled, the general contract can be finalized with CTA. Ms. Chesebrough asked Mr. Cundiff to clarify what he meant by withdrawal of bids. Mr. Cundiff explained the state law, which allows subcontractors to withdraw a bid if a clerical or mechanical error was made. There are two cases of contractors requesting to withdraw bids on this project, one on the electrical and one on the elevator.
Ms. Mosczynski added that the School Building Committee was able to also bid the track and water line extension and still be under the expected budget.
Mr. Gonynor asked if that meant that the town would be borrowing less on this project. Mr. Guzinski explained that the town took out a $20 million bond several months ago and once the project nears its end and it is known what the project will actually cost, the remainder will be borrowed. The town will get reimbursed as the project goes along. Every month the Building Committee and the Owner’s Project Manager (OPM) submit information to the town accountant’s office who processes it and submits it to the state. Within 30 days, the state will send the town their portion of the cost. Mr. Gonynor asked when we would know the full impact on the taxpayers. Mr. Guzinski replied that we will know the full impact next year, FY13. The refunding schedule has been set fairly level over the term, approximately $1.7 million per year. Mr. Gonynor asked how does bonding $20 million affect other projects. Mr. Guzinski replied that it does not affect the statutory debt cap as school projects are exempt. It is more a matter of policy as to how much the town wants to borrow.
Ms. Chesebrough asked if the cost of the project decreases, does that mean that the cost of the people working on the project, i.e. the architect, would decrease as well. Mr. Cundiff explained that essentially the fee for the OPM fixed, and the architect bills by task. Any changes would be looked at on a case-by-case basis.
Ms. Brouillette asked if the Building Facilities Construction Committee (BFCC) has considered the impact of having multiple projects going on at the same time. Mr. Cundiff replied that if all three projects were to undergo construction at the same time, it would certainly be a feat to sustain good oversight of all three projects. From a management and financial point of view, it would be good to stagger the three projects. Ms. Mosczynski added that the BFCC will have to look into how to manage these projects.
School Department: Mr. Dean Iacobucci joined the meeting and presented a request to create a two-bathroom suite from a section of the library in the elementary school for the preschool, which will be moving to the elementary school permanently in September. The architect on site measured and roughed out the area with an estimate of $65-75,000. There are no plans or costs associated with this yet. Mr. Iacobucci was informed by the Finance Director that there is some leftover borrowing capacity with the high school project which Town Meeting could authorize to transfer so that it would not require an appropriation. The current library will become the preschool, and a classroom which was originally the library, will now become the library.
Mr. Dunleavy asked if the money were approved in April, would that be enough time to complete the project for the start of school in September? Mr. Iacobucci replied that he was told that this is a project that can be completed over the summer.
Finance Department Request: Ms. Cheryl Vaidya and Ms. Jeanne Lovett joined the meeting. Ms. Lovett presented the Finance Department’s proposal to upgrade their financial software, which would be on the Receivables side. Their current system is DOS based, which cannot operate on the newer computers, thereby disallowing any upgrades. The support is provided by one single person. Ms. Lovett must manually enter information into the general ledger, it cannot be integrated with the general ledger software. The auditors have been recommending an integrated software for some time.
Ms. Vaidya added that currently there is only one person who can collect fees. If something were to happen to him, no one could collect fees. This software would allow her to post multiple collections in one batch instead of being separated as they are now. Ms. Lovett added that this accounts receivable software was not purchased at the same time the software was upgraded to MUNIS years ago.
Mr. Gonynor asked if this software would allow all the town departments to be integrated. Ms. Lovett answered that her department, the Assessor’s Office, Collector’s Office and Water/ Sewer would be integrated. Right now, she does not have access to any customized data. She has to manually input all receipts, commitments and abatements to the general ledger. The Treasurer’s Department and the School Department have been added to MUNIS, but you are limited to the number of users you can have on the system. Ms. Lovett intends to add the Police Department and the Selectmen’s Office. The more users you have, the more you have to buy and the more you have to pay for support.
Ms. Lovett mentioned that there would be an increase to the Operating Budget because she now backs up her files with MUNIS offline, and she had to upgrade their version to maintain MUNIS support. Most users use version 9.2 and the Finance Department used version 6.5.
Discussion continued regarding having an IT Department in Douglas.
Administration Requests: Mr. Guzinski joined the meeting to request that his proposals for a new copy machine and phone system for the building be put on hold indefinitely. He and Suzanne Kane did some research and found that it would cost considerably less to lease these systems than to purchase them. It would only cost $400 more per year for a new leased copy machine and its maintenance. Mr. Guzinski’s operating budget currently budgets $1800 to maintain the current copy machine and it will cost $2200 for a new leased machine and its maintenance.
As far as a phone system, the current phone system was brought in the Municipal Center in the 1990’s as a used system. Mr. Guzinski is looking into several companies that will lease a phone system. Research is ongoing and he is not looking into getting a new phone system until next year.
Mr. Guzinski handed out an updated rating form, a revised request list from the Building Facilities Manager and an article forwarded along by Mr. Cundiff.
Fire Department: Chief Kent Vinson joined the meeting and began by updating the Committee on the status of the purchase of a second ambulance. The bid, including trade-in and a new Stryker stretcher, came in at $158,550. The Board of Selectmen have it on their agenda for February 21, 2012 to vote to award this contract.
Chief Vinson’s #1 priority would be to replace the 1987 rescue truck and the 1981 Farrah pumper with one rescue pumper for $550,000. To purchase a rescue truck and a pumper truck would cost $800,000 to $1 million. The new rescue pumper has a CAFS (compressed air foam system) which would make the 750 gallons of water it carries gives you the equivalent of a 3000 gallon knockdown. Buying one truck vs. two trucks would save the town on purchase cost, space and maintenance costs and would save the effort of trying to get two trucks to a scene as opposed to one. Chief Vinson found a rescue pumper already built with KME for $350,000.
Chief Vinson would also like to replace their Jaws of Life. The ones he currently has are 21 years old are not equipped to cut through the newer vehicle safety features. The cost to replace would be $31,000 from FireMatic.

Ms. Mosczynski made a motion to approve the minutes of January 11, 2011 as amended. Ms. Chesebrough seconded the motion. Vote: Unanimous.

Other Business
Ms. Brouillette brought up the discussion of scheduling debt projects. As a committee, how to we want to look at these projects and make a recommendation on how to proceed with regular capital projects over a multi-year and focus on the current year. Starting with the school, for the next 5-10 years there will be construction projects going on in Douglas.
Ms. Chesebrough asked if there are different ways to fund these projects. Is there a bond that you would pay off from your Operating Budget year after year? Mr. Guzinski replied that you could do that, but it is a matter of what that annual payment would be and would the Finance Committee and Town Meeting feel it would fit within the budget. There are a number of different funding mechanisms. If the economy improves and the revenues get better, it is something that could be looked at. It is hard to add significant debt payments within the 2.5% cap.
Ms. Chesebrough asked if free cash could be used toward a capital project. Mr. Guzinski replied in the affirmative. The original goal was that 2% of the Operating Budget would be used toward annual capital items. Ms. Brouillette added that 2% was always envisioned for items less than $100,000 or $150,000, such as trucks and vehicles. Rating agencies will look at how much of a town’s annual expenses go towards paying off debt. When the school project is added, the town will probably be close to 10% of the Operating Budget going to pay off debt. The town’s Operating Budget is $25 million and when the school is added, the debt payment will be $2.5 million. For years, the Capital Improvement Committee has been trying to get some financial policies in place, for example, they attempt to fund 2% of the operating budget and allocate within the levy to pay for capital projects. The town’s number would be $500,000 and when you take out the debt projects we add up to $513,000. The town does spend roughly 2% on debt projects. The Moody and Standard & Poor (S&P) standard is 6-10%. Some of the town’s smaller debt projects are dropping off. Ms. Brouillette suggests maintaining a level of building new infrastructure and maintaining infrastructure. The more the town can pay for things with cash, the more that can be saved and reserve borrowing funds for projects that cannot be funded any other way. Mr. Guzinski said that S&P does an analysis for the town every year.
Mr. Gonynor said that the concept behind the Capital Improvement Plan is to always use cash. A school project always takes up a lot of cash. We can try to educate the taxpayers as to keeping to 2%, but some do not want to hear that. Ms. Mosczynski agreed with Mr. Gonynor and added that if we do not maintain the buildings and equipment, it will end up costing the town more in the long run. Mr. Gonynor stated that that is what we have been seeing in the last few years. The Capital Improvement Committee had always had a financial package in front of them for the big ticket items. He agreed with Ms. Brouillette that free cash should be spent to keep the departments running, not for lowering the tax rate, otherwise the tax rate will go up tenfold down the road if we do not purchase these large items now.
Ms. Mosczynski mentioned needing to maintain the stabilization fund to use as a safety, in case something happens. Mr. Gonynor stated that we do not even know what the financial picture is yet for this year. Mr. Guzinski would recommend meeting in three weeks, February 29th at 2:00 PM. In two weeks he will forward a revenue estimate for this coming year to the committee. Mr. Gonynor agreed and said the committee could rate the department requests at that time.
Ms. Mosczynski asked Mr. Guzinski for a list of what projects are dropping off when. Mr. Guzinski will provide the committee with the most up to date schedule.
Ms. Chesebrough said that someone pointed out to her that the annual Town Meeting and the Town Elections come right after the tax bills are received. That may have an affect on how taxpayers vote. Mr. Guzinski appreciated hearing that comment. Mr. Gonynor pointed out that each project is voted on at town Meeting and the taxpayers have the final say. The Capital Improvement Plan has been successful when they have come before the town meeting with a plan.

Ms. Mosczynski made a motion to adjourn the meeting at 3:28 PM. Ms. Brouillette seconded the motion. Vote unanimous.

Respectfully submitted,

Mary Wright
Recording Secretary
Mary Wright
Posts: 461
Joined: Thu Jan 12, 2012 8:56 pm

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