City Council - Regular Meeting

You're good.

There's a color at the case. This is how accurate That would be over. They try to make you happy. Yeah, I'm sure.

Don't mess up like the first session where you showed it cut off. Yes. Thank you. Is that right? person.

All right. I'm always

also The last game. I'll turn to the You ask me to church.

Yes. We had the first one at 15.

So for Whichever. Let me put this some So that's the one they wanted to get to. How are you guys?

Yeah. Thank you. Uh thank you all very much for attending today. Um this is DPW public listening session. This is the third public listening session. Uh I want to say thank you very much to the CFO and the entire team that is here. Uh to everyone watching at home. Uh we'll be going through a slide presentation about what is happening uh throughout uh Department of Public Works uh taking questions from anybody that has uh has anything from the audience or even probably checking in with the CFO. So at this time I want to say thank you again to the CFO, the assistant CFO for putting this together. I'm going to hand it back over to Mr. Baldwin and Mr. ball to start the presentation. Thank you all.

Thank you, Mr. Manager. And again, thank you everyone who's joining us here or or watching this now or later on LTC. Appreciate the partnership of LTC to bring these to folks uh at home. Uh as the manager mentioned, my name is Connor Baldwin. I'm the assistant city manager/ CFO. Joining me this evening, uh to my right is the deputy commissioner for administration and finance from DPW, Mr. Brendan Flynn. Uh to my left, deputy CFO Austin Ball, the chief utility officer Aaron Fox, and executive director of the wastewater utility Evan Walsh. Uh we're and we do expect uh the DPW commissioner to be with us tonight as well. Tonight is going to be focused on uh the DPW in the larger sense. So that includes the utilities. We're going to provide some information. Uh if there's any question and answer, uh we'd be happy to go through some discussion at the end. But the purpose of this in all of our meetings, this is the third of five uh listening sessions that we've scheduled for FY2027, is to hear from the community the priorities, but also to provide information on the budget to the community outside of the formal hearing process, which can be somewhat cumbersome or um you know later in the spring right before a vote needs to be taken by the city council. And so hopefully uh this information can be digested and then by the time we get to the hearing uh residents, business owners, interested community members um can come to the hearing with their questions in hand uh and we can have a more full robust discussion about the budget. So the goal of tonight's session is transparency. We want residents, taxpayers, and stakeholders to understand how the city funds and manages its public works uh including water and the sewer services. We also want to hear from you. So, please hold your questions and we'll open the floor at the end for question and answers. Um

so, first I'd like to walk through the agenda for tonight. Uh we're going to start with an overview for how infrastructure is funded at the city level. At the last listening session, we did a little bit more of a deep dive into debt and how debt works. So, part of the uh department discussion will include some capital um in DPW like roads, sidewalks, bridges, um and then in the the utilities there, capital projects for underground utility improvements. Uh from there, uh we're going to walk through the DPW operations and the general fund budget. We're going to focus on the numbers from FY2026. Uh we'll allude to some of the challenges in FY2027, but because the city council has not been presented with the 2027 budget yet, will we be using figures from the 2026 budget to put this in context? And then at the end, I'm going to turn it over to my colleagues uh from wastewater uh and water to discuss a little bit about the ongoing cso separation work and the enterprise funds in general. So, we'll we'll discuss DPW and the the enterprise capital plan, the multi-year investments being made in infrastructure by the city, by the administration, and uh with support from the city council. And then finally, we're going to open it up for question and answer. So, we have a lot of ground to cover, and we're we've tried to make the financial information as accessible as possible. So, if something isn't clear, please stop me. Um please stop me in between. Before we get into the specific numbers, it's important to understand how the city structures its finances because the accounting framework shapes everything that we do. So there's a sort of delineation on the screen between DPW and water. And this is an example of um you know they're they're separated into the two funds major funds or well three on the utility side that fund them. DPW

operations like road maintenance, parks, solid waste, engineering, facilities, and cemeteries are funded through the city's general fund. The general fund is the main operating fund for the city. It's supported by three primary revenue sources. One uh is taxes and that means property taxes, both real and personal property. uh excise taxes on a vehicle uh and m to a much smaller extent here in LOL boat excise and some of our uh neighboring municipalities along the coast that is a larger portion of their their revenue but here in l there there are some boats um and it's a very small amount of excise tax that we get for them but together they represent a significant share of the municipal revenue the largest share though comes from state aid and we talked about this in the first session but that is uh delineated into two major categories. UGA unrestricted general government aid uh which is what pays for everything other than the schools essentially and then chapter 70 education aid from the state that pays for education. It is only used for education. The city receives monthly dispersements from the state um from the local aid program. And so every month we receive one 12th of our annual appropriation from the state. Um the chapter 70 money goes right to the schools. It is one component of the net school spending formula. Um and that is a major funding source for the l public school district and for many gateway cities, most gateway cities and for most school districts throughout the the Commonwealth. And that was something that was initiated by the uh education reform act of uh the '9s and then further uh built out by the student opportunity act of 2019. The other major revenue source are what we call local receipts and that's sort of everything

else. Things like permit fees, fines, departmental revenues. These are um if you use a service with the city and have to pay for a permit uh building permit maybe or a a license of a of any sort those all get lumped into this category we call local receipts. Um on the expenditure side general fund spending is divided into two major categories. Uh personal services is one and these are statutory. We didn't make up these names. These come from the general laws of the commonwealth. Personal services is what we call everything that's a salary. So those are salary and wages permanent salary and wages overtime. Some departments have different salary types. Um I'm thinking of the police department and fire department that have lots of different types of pays. Those all together are what we call personal services. Um in those other departments, things like uh shift pay or shift differential um you know certain buybacks etc. those are all personal services. And then everything else, all the expenditures of the department for pens and paper, uh, machines, equipment, rental, um, etc. We call all of those things ordinary expenses. So, if you were ever to look at the appropriation order for the city in any particular year, you'll see that each department is broken out into two categories on the vote for personal services and ordinary expenses. Now within the budget and within the department details we break those up into further classification um but the the general categories are personal services and ordinary expenses. There is also capital items that um you know in LOL we do not to a large extent fund pay as you go capital from within the operating budget. We fund that uh as we mentioned at the debt listening session through the capital budget and through uh the issuance of loan orders

and the issuance of general obligation bonds. Those are authorized separately as I mentioned through loan orders and we'll touch on those a little bit tonight. Um so on the other side, you know, that's all about DPW and the general fund. The general fund is what also pays for, you know, uh general government. Please counselor, if uh if you could I'm sorry. uh if you could step to the microphone so that the folks at home could hear you.

Thank you. Um I just have a quick question. When does the city participate in like consolidation of older equipment, auction it off? And if so, does that go back in towards say capital expenditures or is that general fund and then it's allocated?

Great question. Uh so we do uh and we so the disposition of uh of all surplus uh equipment uh real estate etc is governed by chapter 30b. So the process by which we dispose of equipment etc. Um we have to do a bid for it. Those uh receipts from the sale is a general fund receipt. If it however there's a caveat if it were a piece of equipment that belonged to the enterprise uh so if the enterprise one of the enterprise funds whether it was water sewer or parking were the fund that acquired the equipment or the um the asset if it were some other piece of equipment I suppose hypothetically we could be selling a garage in and some kind of hypothetical example then that revenue from the sale would belong to the uh that particular fund but most of them are general fund receipts. Uh, and we do, you know, we we do that. Um, you know, there are there are other sort of caveats that I'll mention where sometimes we can enter into cooperative agreements with other communities where either, you know, this is something we did successfully with firet trucks um where we entered into an agreement with another community either to buy or sell um a piece of equipment that maybe is uh beyond its useful life to us because maybe we've purchased new equipment, but another community may be in need of that. So there is a carve out to 30B for intergovernmental agreements and we could dispose of certain pieces of equipment in in that manner with a direct agreement with another community. Now that only applies to either municipal to municipal or we could do a similar agreement with an agent of the commonwealth meaning the state or one of its sort of uh uh sub agencies like the

community college or the university which are all uh components of the state. But a very good question um it does not generate a significant amount of income. Um usually we use things as I think you know counselor we use them well past their useful life. So by the time uh they go up on the the auction block, they're not worth all that much. But we do, you know, if you think of the the high school project as an example, there was a lot of we bought a lot of new equipment um as part of that major capital project and the equipment it was replacing, the classroom equipment, uh from desks to, you know, furniture, anything that's not attached to the ground. uh we did dispose of that and you know there's a process as long as you clear the 30B process if nobody bids on it then it can be uh essentially junked um which which did happen in some cases but we did uh we did go through that process for a lot of surplus equipment on the the high school project. So good question. Um please

just a real quick followup.

Does it make sense to look in the future forward planning for capital improvements to try to position replacement of larger scale? So say for example non non-enterprise accounts. So like say a backhole where it it's a big ticket item for say public works and average lifespan depending on usage is about 10 to 15 if you're lucky and not stretching it. Does it make sense to kind of try to auction those off or is there any kind of programs available to municipalities where seven years in you get a decent trade in value towards the purchase of a new or do you have to auction it off at that point and then purchase new after you receive that?

You don't have to. Um there are I mean what it what I'm hearing from your question would sound more like a lease uh like a leasing program where you know and we have had discussions in the past about you know partnering with um and I I want to say it's enterprise uh

yeah yeah not enterprise meaning enterprise fund or enterprise bank but enterprise the rental uh they have a leasing finance organization uh and and we haven't done that but there is a program that they offer and that others offer some of which are on the state contract ma which makes procurement uh more simple and straightforward whereby you know we are acquiring new uh we're leasing so it's an acquisition but it's a lease and then we turn them over so that we're always at you know the target being that we don't have any equipment that's over a certain age. So,

does that assist with the fixed cost because you know, okay, this is the cost for the lease. I have it for six years. At the end of the six years, our price isn't going to really increase. It's going to remain consistent, but the equipment lifespan is going to reset at the end of that time period.

Yes. And I would imagine to take that one step f further and I I agree with your sentiment there counselor is that we would be a that would help our maintenance costs on the vehicles because it would help bring down the average age of the fleet. Um you know one of the challenges there for the city of LOL that is historic and um is that we sort of manage the fleets of each individual like division of DPD independently. And so I think as we're able to and this is something that the city has made progress in over time. It was more siloed when I started here. Um but you know the more we can centralize the fleet uh the more we can take advantage of opportunities like you're you're sort of referencing here because if uh you know the parks division of DPW and the streets division of DPW are only focusing on their individual pieces of equipment maybe there's an opportunity um that either the you know the mechanics at one can work on another to you know bring it a little bit further along uh And so I I think you know there is a lot of literature out there on the benefits of a centralized fleet management um that I think would benefit citywide.

Okay. Um and and I think if we were to move in that direction, it would provide some significant financial benefits to the city for the reasons that I think you're you're sort of hinting at here. Perfect. And do you know did did we purchase any kind of maintenance plans with the significant investment in the fire apparatus that we embarked on?

Not that I'm aware of. Uh I'm not sure that there are products that exist for fire apparatus of that nature. But I if there are I don't believe that those were sort of baked in. Although I would want to confirm that with the fire chief. Some companies do offer um service packages so to say where they come to your location and run the service and and repairs right on site. So and maybe in the future it is something

certainly something we'll follow up on. I think it's something to talk to the fire chief about. Um because it is a you know, as you know, counselor, that is a it's great for us now that we have all those new fire apparatus, but I think we've talked about this. They're all going to just like the MSBA schools that were built in the '9s. They're all going to hit a certain point at a uh at the same time, and that's going to cause a significant impact our finances. Of course. Of course. So to to dive back to uh water and sewer, those are enterprise funds. Um and I I use that word. I'll I'll define it a little bit for the public. Um under Massachusetts general law, chapter 44, section 53F and a half, a city is authorized to establish enterprise funds for utilities like water and sewer. There are other um eligible activities, although they're not limitless under the law. So, the city also operates a parking enterprise using an enterprise fund. Um, recreation is another type of enterprise fund that other communities use. You will find smaller towns in Massachusetts that operate a a golf course as an enterprise fund. Um, we don't do that here. But coming back to water and sewer, it's legally designed to be a self-sustaining revenue self- sustaining revenues collected from rateayers. uh those meaning your water and sewer bills. Uh those are expected to cover all the costs of the enterprise including personal services like I said salary and wages, ordinary expenses, uh all of the costs of uh professional services, maintenance contracts, etc. And in the case of the enterprise funds, also the debt service. So any capital that you'll hear from uh Mr. Walsh and Mr. Fox later for what they're doing uh to comply with the consent decree from the EPA that will all of that debt that's incurred to comply will be

serviced by the enterprise fund and the rates of each uh of the sewer enterprise specifically. So this structure means that water and sewer customers are in effect paying the full cost of those systems. We bill them to together. And I I think most residents of LOL don't necessarily think that they're going to two different places because you get one bill. You get one bill where you pay for your water, your sewer, and your trash all in um all on one piece of paper. Uh but it goes when it when you cut us a check or you make your payment online or if you come in and pay cash, that is then diverted to the right home by the treasurer's office and by our accounting system. So that's enough about enterprise funds. Let's talk a little bit about the DPW organization. Please, Mr. Faria, how you doing today?

So I just had a quick question. Um, and I don't know if you touched on it yet, but I think one of the fairly large items that are in an enterprise fund are indirect costs and generally those are things like, you know, maybe if a enterprise fund has to use any sort of legal services or other services that are generally out of the uh general fund, they get build to the enterprise fund. Can you talk a little bit about that and like maybe what percentage of the enterprise fund that might be?

Of course. So, it's a very good question. Thank you. Um, you know, the indirect costs are for each enterprise calculated separately pursuant to the city's enterprise fund policy, which is something that's included in the budget. Um, and the the math behind it to try to put this at a 101 level is just as Mr. Faria mentioned there are certain city departments that support the enterprise funds. They can't operate uh alone entirely and so you know there are you know these are things like overhead. So you know the uh the treasurer's office that collects the bills the the city auditor's office that pays the payroll and deals with the accounting. um my office, the purchasing department because they they utilize uh our purchasing director a lot with all the things that they buy um etc etc and there is a you know those are all laid out and for the uh for the wages there are also indirect expenses so same departments but rather than the personal service it's the ordinary expenses we take a percentage and I'm forgetting oh health insurance and retirement. So those are the other two major components. Um and those are set on a calculation where we take a percentage of you know whatever the average plan cost is uh multiplied by the number of employees in each department. Uh there is an indirect reimbursement to the general fund. Um and then there for retirement the same kind of thing. So, you know, those employees of the enterprise funds also participate in the LOL retirement system. This is the same in any um uh any municipality. And so, a portion of their those retired employees

that we pay the parak assessment for comes back as an enterprise fund because those costs are incurred in the general fund. So, it's an interfund transfer. Um am I forgetting any? No.

No. Okay. So those are laid out in each one of the enterprise fund budgets. Uh they are an expense to the enterprise fund and a revenue to the general fund every year. Um those are audited by our outside auditors when they do the ba they prepare the basic financial statements every year. Um and then you know same for water, sewer and parking. So I hope that addresses the question. Um and those are I think detailed out in the budget but happy to talk more about that uh if there's an interest. So to talk about the DPW organization on the chart here is the the org chart of the different functional areas that fall underneath uh the DPW uh overarching structure. Uh it's one of the largest departments in city government both in terms of the budget as well as the scope of services. So they do a lot. Uh Mr. Saintier oversees all of it. Um all of the departments and divisions that make up LOL's public works. Uh so it's organized into I think it's 13 functional areas. Uh and I'll just sort of recite them. Uh the administration, cemeteries, electrical, engineering, facilities, finance ad, well I guess that's sort of the same thing. finance and administration, lands and buildings, parks, recreation, snow and ice, uh, solid waste and recycling, streets, and sustainability. So, sustainability is one of the newer add-ons to DPW, as is the facilities department. Um, the wastewater and water utilities sit alongside these divisions, but as I mentioned before, their financial structure is a little bit different than the others. Um the the organizational structure reflects the breath of services DPW provides. Everything from picking up your trash to

maintaining traffic signals, plowing snow, mowing parks, uh caring for the city cemeteries. Uh this functionally the department that touches residents lives the most and on a day-to-day basis. So when most people think of what it is that we do, they think of DBW. Um so let's talk about the numbers and then I'll I'll try to wrap up so we can um we can move to some other areas and hear about the utilities. So you know in looking at FY 2026 and to scale this and put it into perspect perspective uh the total DPW uh budget inclusive of public works and culture and recreation which is classified this way in our clear gov budget. And I guess before I forget to mention this, for the folks watching at home and for those of you here today, please um visit our website and take a look at the interactive budget book, the digital budget book through cleargov. Uh there's a link under the budget page. So if you navigate to finance uh I'm sorry, departments finance and then budget. The first link that comes up when you go to the budget page is a link to the digital budget book. All of this financial information we'll be presenting today and in the subsequent sections is there. Please take a look at your own. If there's questions that come up for you later on, please let us know. But that's where the information lives. So the total of FY2026 was just under $26 million 25.8 or 25.9 um which is not a huge increase over the prior year's original budget of 24.6 million. uh it's about 5%. Uh so to put that growth in historical context, the DPW budget was $21.1 million in 2023 and $23 million in 2024. So this uh this trend is it's reflective

of the inflationary pressures that have been on us uh for contracts, supplies, and services. DPW buys a lot of gas. Gas has gotten more expensive. Things of that nature. the the stuff that they buy, the the tools, the supplies that they use have all gone up. That hits our budget just like it hits anyone's budget at home. Um but also the addition of uh c certain new divisions to address the changing needs of the community. So the facilities department to try to really ramp up our uh and attack our um issues with school facilities. So for many many years there was a deficit in the um you know some of the heating and HVAC and building needs and so we've we've tried to address that organizationally as well as financially um and those additional costs have been incorporated into the budget. So the three largest cost centers in FY 2026 were number one solid waste and recycling. So, in in 2026, I think it's $8.3 million, the single the single largest line item reflecting the cost of trash collection, uh, recycling programs, the disposal contract, as well as the individuals, the staff in DPW that administer the program, administer the contract, uh, the enforcement officers that are out there making sure that folks aren't putting the wrong stuff in the recycle bin, um, or, you know, leaving their lids up when they're not supposed to. those those salaries are paid from that division of DPW. Um and number two is parks at $2.8 million. The parks division maintains the city's 75 plus parks and green space. Uh and then the streets division at number three uh at $2.1 million. They cover road maintenance, patching, uh potholes. This is a very busy time for the streets crew now and into the next uh you know

two months or so. They'll be very busy cleaning up what uh this year's snow season has left us. Um and they deal with all street related operations. Of course, during the snow season, they are the ones out there in the plows plowing the roads, making them safe for our residents. So, other notable line items include the facilities at 1.35 million, electrical at 1.1 million, and engineering at just over a million. the snow and ice budget, which I'm I'm going to t on in a little bit, uh is at 1.35 million, which we've held flat for many years, and there's sort of a legal rationale, and uh but I'll I'll touch on that when I get into snow and ice in a few minutes, and it only tells part of the story. So, next we're going to talk a little bit about capital. Um, and on the screen there is a selection from the FY.

Oh, I'm sorry, councelor, if you don't mind just going back. How come on that uh DPW financials you have the lens and buildings listed twice for two separate amounts? So line one 594.

Yeah, good question. Uh, so some of these things, uh, and I I'll there's a simple answer, but I'll give you the long answer first if that's all right, counselor. uh as we've transitioned to clear gov it you know we dump our data from munis into clear gov and it consolidates everything in a m much much nicer cleaner easyto read format but uh the answer to your question is because of the city messenger department which formally is part of uh the lands and buildings division. So the messenger department used to be a real functioning department here in city hall with staff etc. Uh and as that has sort of transformed into lands and buildings, the the cost code or the org center for the electricity and the heating budgets m so they're coded as messenger in the system. And so those costs that you see listed as lands and buildings for an actual it's the very top one under public works 600,000 400,24 631,000 that is the cost not for schools but for other municipal buildings for their electricity and heating and natural gas. Um so as we you know make progress in dealing with um uh the clear gov tool we'll we'll make it more clear about that. But that's I I hope that makes sense. That's what that is. Um it's not a separate department. It's uh it's just coded differently and so it appears twice on the list. So to talk about um and I guess while I'm talk while I'm on that note uh because the city uh does also pay for the electricity and um uh heating for the school buildings, those are coded under the city manager's office. So the

electric and the gas budgets for the schools. um if you were to look for them in the city budget, you would need to look in the city manager's department and then you would find them there. So there are many nuances to the budget um that's part of why we're having this session. Hopefully someone will watch this and that information will be useful for them sometime uh when they're looking at that. But those are this is just for city buildings that are not schools

of course. So uh the organization of if you could go to the next slide. Uh I'm sorry, no, the capital plan. So beyond the operating budget, uh this city council, the the prior city council has made an incredible capital investment in the city uh through the capital budget. And I'm going to focus on the 2026 capital budget. But the last few years, 203, four, five, six, and then moving into the 2027 budget. Uh there has been a a a real investment in infrastructure, in facilities, etc. Uh so I'm going to try to highlight some of the examples from 2026, but I I'll address that in in more detail later as well. So the total capital plan for 2026 was 36.9 million. 30 projects citywide. DPW general um is how it appears in the the capital plan version of the budget. Uh and that's the single largest requesting department at 13.8 million which was about 37% of the total requests. Uh the other ones and this is another nuance of clear gov come in under the city manager's office. Uh those represent things not because the necessarily although they are priorities of the city manager, it wasn't city manager Tom Golden that put those in as requests. Uh those are 7.6 million, but those include things like uh ADA improvements, etc. Those fall under the city manager's portion. uh but of the DPW projects uh the funding plan for that is mostly general obligation bonds but there is also a component of it that includes the chapter 90 uh state highway funds. Chapter 90 is the name of the program uh of funding from the state for roads common throughout the commonwealth uh and that is a component of our uh our

capital plan as well. So, I want to take a minute before I turn the mic over to my friends at Wastewater to talk about snow and ice. Uh, because it's that time of year, but also because it is the one thing that is of this nature. Well, not the only one, the one that is most frequently thought of. There are other instances where comm uh municipalities can deficit spend limited number, public health emergencies, um natural disasters, those are other sort of but those happen less frequently, thank God. um it snows almost every year. So, it's something we're more accustomed to dealing with. So, I want to explain how that works a little bit. I don't know if we have a slide about Okay, so I'm just going to talk a little bit about that. So, Snow and Ice is budgeted at $ 1.35 million in 2026. Um and like I said, unlike every other expenditure in the municipal budget, the city is legally permitted to spend beyond that amount without prior city council approval. That is something that changed. Um the the mechanism by which we deficit spend changed with I think it was 2016 municipal modernization. Prior to that uh there was a requirement even in a plany form of government for a vote of the city council to authorize deficit spending. It was sort of a pro-forma vote that would happen every year but we would bring it in you know October November before the council. Now, um enough municipalities got together and lobbyed the state that relief was provided in the 2016 municipal modernization act. Um and so just a letter to the accountant uh the town accountant or city auditor is required uh to deficit spend. So the the exception derives from Massachusetts general law chapter 44 section 31D and that provides that a city or town may incur liabilities for snow and ice removal in excess of the amount appropriated in the annual budget. It requires the excess to be certified and charged to the fiscal year in which it

was incurred and it must be funded through a supplemental appropriation either in the current year or raised on the tax rate in the subsequent year. Now, I say that because that is most commonly what happens. If it gets really bad, sometimes the state will come through and pass special legislation that will allow communities to amortize that debt. That happened in 2015. Uh folks may remember, I I think NEMO was the name of the storm. Uh at the time, we spent upwards of maybe four or$5 million on snow and ice operations. uh as did most communities in the Commonwealth and the the state passed special legislation to allow communities to amvertise their outstanding liability over three years. But in most cases, if you can't cover it all within the year in which it was incurred, you can raise it on the next year's tax rate. Um and that is something that the city of LOL has taken advantage of. Uh but it is it is a exemption exception rather that is worth noting. Councelor, did you have another question?

Um, looking at the DPW 26 capital plan here, the itemized requests, that slide there, something that that's So, this this would be all of these figures would be recommendations that would be budgeted pretty much out of the upcoming budget, correct? 2026. So, we're looking backwards. Oh, backwards. Okay. Yeah. So, these were funded uh last year. Yeah. And so we will bring a a new a new one for 27 before the council. My question would be so I noticed last year y we put a million dollars in the in the budget for the neighborhood pocket park program. Yep. But yet

I don't believe we we pursued utilizing any community preservation funds where I mean we've been looking for open space projects. Wouldn't that have been able to offset potentially that million that we requested in the budget? It's a good point. Um, and yes, uh, the I think this question has come up uh in in prior council meetings and I think the DPD addressed this that their focus was on managing the ARPA projects and then once those were completed, they would start submitting requests to the community preservation committee for parks uh, funding. But yes, it would it would help offset these costs to the tax base for sure. Um, and we see it again this year.

Yeah. We don't see any requests y internally for open space or green space improvements out of this. And there's aformational to the tune of 2 million being allocated. But again, um, if if we have a million dollar request for parket parks, Mhm. Why wouldn't we pursuing uh pursue any other baskets of money to alleviate that that burden from the taxpayer? That's

a good question. I think it is a good financial strategy to employ as many outside funding sources for projects that we need as we can to help mitigate the impact to the taxpayer. So whether it's community preservation act, which for anybody who may be watching this that doesn't know what that is, um you know, the city of LOL in 2019 adopted the community preservation act at a 1% search charge. So on everybody's tax bill, you are also paying a 1% search charge into the community preservation fund. Uh and there is a requirement under the statute for that to be split up between affordable housing, parks, and historic preservation in buckets of 10% minimum. Um and the question from the councelor was should we be pursuing that as a funding source for parks improvements? Uh to which I would say yes. Um and it takes you know there is an application process. I don't I I do believe that the community preservation committee which has sort of initial jurisdiction although it is a multi-jurisdictional body because the council also has to vote and appropriate the funds those will be coming before you very soon as you mentioned there's anformational item um it is and must be part of our uh ongoing future uh strategy to fund these and maintain these sort of historic investments that have come from ARPA Um, so it's it's well taken. Uh, there's an application process, so hopefully the staff and DPD can, you know, start up that that trajectory soon.

Okay. Thank you. You're welcome. Very good point, though. Um, so I I got through what I wanted to get through on snow and ice, so I think, you know, being mindful of time, let's let's talk about wastewater.

All right. Thank you, Connor. Um yeah, so getting into wastewater and the water departments. Uh just a quick overview. And so for the wastewater department, um four four main things uh as part of that uh department is one's Doc Island treatment facility that is a 32 million gallon uh day facility treating waste from the city of LOL and uh the surrounding communities of Tingsboro, Chumsford, Tukbury, and Drake. And so it's also one of the biggest um treatment facilities in New England. And so as part of that, we not just maintain the treatment facility, but also I mean operate it, but also 226 miles of sewer and 64 miles of storm water pipe. When we say storm water pipe, that's that's pipe that doesn't go to the sewer, but is discharged directly to a receiving body. So So it's not treated by the treatment facility. where is the 226 miles that will go to the treatment facility. Uh we have 14 pump stations, nine diversion stations. The diversion station is where a uh we call combined sewer overflow takes place. And so this is when there is a and it's important as we talk about the consent agree to understand this concept. When it rains in the city of LOL, a percentage of those 226 miles of sewer uh will fill with storm water. uh the treatment that can gets to the point where it can't be conveyed to the treatment facility and also the treatment facility can't handle that amount of flow and so it gets diverted into the Marramac River at these nine diversion stations. Um uh the utility also um oversees the Centerville flood reduction system. And so this includes the Beaverbrook stop log uh assembly and also the uh emergency pump station uh located along um route 110.

So just a quick um overview of some of the financial details for the department. a a couple of the biggest expenditures and a couple things to focus on is one being the salary. Um 50 employees at the utility and so that I said is going to be one of our biggest expenditures and when we get into the ordinary expenses I think it's important to understand where a large portion of that budget goes. uh utilities as seen in the top bullet there. Um that represents all the gas and electricity used at the utility. I can't quite read the number from here. So 1.8 million.

Yeah. So 1.8 million. Um our largest line item is sludge removal that I think it's believe that's 6.2, right? 6.1. Yep. So 6.1 million and that's a byproduct of the treatment facility. So once the treatment So once the treatment happens um it produces a material called sludge and that needs to be hauled out at roughly 90 tons a day. Um that is a item in the budget that has gone up every year. It is becoming more difficult each year to dispose of sludge um in New England. There's less places uh uh there's less landfills for it to go. It can no longer be land applied. And so that that's something we're looking into. Um f future cost controls there, but like as um it's it it's just notable as our largest line item for uh for the utility. Um another large item is chemicals. And so we have to uh treat and so part of that treatment is uh chemical uh usage. And so that is over $2 million. I believe it's like Yep. and and so those are some of the largest expenses for the wastewater treatment facility or the uh the utility in general.

So I have a question um that kind of goes back to my question earlier on indirect costs. It looked like in the fiscal year 25 budget there was about $7 million worth of indirect cost being transferred out of the enterprise fund to the general fund and that went up to 9.7. So quick math tells me that's about a 38% increase year-over-year from 7 million to 9.7. what um what changed in that fund that would uh would require an extra 2.7 million you know being hit by the rate payer instead of the general fund.

Sure. Uh well that's a good question. The what happens when the budget is set is that we produce the calculations according to the formula and then we have to go through a sort of gut exercise as to whether the enterprise fund can afford the indirect cost. um for many of the years uh last few years anyways as Mr. Ball and I have prepared the budget it was the case and this this leads into some other somewhat esoteric uh financial discussions but I'll I'll bring them in because they're relevant um you know the the enterprise fund can only uh draw down an operating deficit up to as much retained earnings as it has. Retained earnings are what we call free cash for the enterprise funds. It's essentially the same thing. It works in many ways the same uh but it's it's called something different under the uh department of revenue rules and regulations. So if and this is what happened I I believe for both water and wastewater uh and maybe parking as well. So if we go through our calculations and the amount that is the true amount is more than what the enterprise fund can afford then we will apply essentially a discount to uh to the enterprise fund and I that is what happened. Um and now you know the the fund for wastewater has rebounded. Uh, you know, one of the things that we're looking at this year as we're preparing the budget for FY27 is is a good news story that uh all of the enterprise funds are performing better. And what that means is they can afford their which provides um commensurate uh relief to the general fund. They can now afford that which is a good thing for both sides of the budget. uh but in those years where it

can't we have to make a sort of strategic decision and we try to apply you know maybe it's 75% of the formula maybe it's 50% of the formula I don't remember what it was off the top of my head but that that is an annual exercise that happens with the enterprise funds as to whether they can afford the full freight of the indirect cost allocations

can you go to the next slide also Thank you. Yeah. So, one of the big um cap or the biggest capital expenditure for the utility is driven by the EPA consent decree. So, in May of 2024, the city entered a consent agree with the EPA and this was to reduce combined sewer overflows to the Marramac River. And what uh what this um document does is it lays out specific projects and timelines that the city's required to meet um to achieve this reduction. And so this chart here shows what those different projects are, their costs, and right now the uh $175 million loan order supports these projects. Um it and so like some of the big ones in there or or well they're all very large projects uh we have collection system maintenance uh what we call uh INI reduction that's flow into our sewer service to uh uh sewer system to try to reduce that. The Centerville sewer separation project this is the large project going on right now in H Centerville. it has started construction. And then what we're calling phase three is the Lower Highlands sewer separation project. And so we have um essentially moved all of our sewer separation projects into these two large projects. So Centerville and Lower Highlands. Lower Highlands is in the design phase right now. In the first phase of that project is up to bid. um the underground storage tank over on Douglas Road. Uh that's a $14 million project. The upgrade going on to the Duck Island Duck Island uh wastewater treatment plant and then uh storm water compliance. So if you want if you can go to the next

page now I'm going to pass it over to Mr. Walsh to talk about these projects. Thank you. So I'll talk question. It's tough to work like this, but a couple questions. Um, on your accepted sewer and your unaccepted first, when you separate, are we separate and unaccepted at the same time? Yeah. So, we'll separate the sewers within that area. Yeah.

You one one other question. state reporting back a few years back said that you had 188 miles in 2019 of accepted and um for the storm water 41.3. Is this the growth that we've seen in the city since then in the last seven years that has changed or is there a number like 40 miles more were added? Nothing's really changed. It's we've improved our GIS system over the last couple years. So it's better accounting for what we actually own. Okay. So So it's the same numbers. It's just the state has a different reporting because we just couldn't accurately report it. Okay. Thank you.

Uh so getting into some of the larger capital projects going on right now as part of the consent decree. The first one is what we're calling the Centerville sewer separation program. So this was bid out. We had a notice to proceed in November of 2025 for what we're calling phase one which is shown in red. So that is within the consent decree and it has a deadline to be completed by the end of 2027. So that's why it's such an aggressive and short timeline to do this work. Uh the utility's been proactive about public outreach for this project. We've attended all neighborhood meetings. We have our own dedicated social media site and we have a a website built out for this project and all future projects, lalwater.com. So within the Centerville area, we're separating roughly 400 acres um in Centerville. This will account for roughly 2 to 10% of our daily flow coming to the plant, which could have pretty big impacts on chemical usage and other ordinary expenses in the future once all these projects are done. Uh, as part of this project, I think Aaron alluded to or Mr. Fox alluded to, we had roughly 64 miles of drainage pipe. This project alone will be eight miles of drainage pipe being added in Centerville. Um, next project, big project we have going on is in the lower highlands. So this is the other sewer separation projects. Each one of these projects is broken up into three different phases within the project. So this is occurring around the Boys and Girls Club, Clemente Park, and an offshoot of that. This will be roughly 80 acres of sewer separation going on. And we'll be adding three miles of drainage pipe. The first phase, phase 3A, which is shown in green on this map, is currently going out for bid right now with bids closing in April and construction will be starting roughly around August. All these sewer separation projects as well as reducing flow to the treatment plant also have benefits to the environment reducing csos as well as within the lower highlands specifically

there's been some known sanitary sewer overflows which is sewage on the streets. So these projects will address street flooding basement flooding as well as cso control. The last project I'm going to highlight that was mentioned is the storage tank on Douglas Road. This is located in the Collie Stadium parking lot. This is a 1.83 million gallon treatment or treatment tank or just not treatment but tank to store flow during wet weather events. There's significant flooding that usually occurs on Douglas Road and this will store flows up to a 25-year storm. This is currently underway. The concrete slabs have been poured for the floor of the walls and they're currently working on the roof. the tank uh the big hole that's if you're driving by right now will be covered and filled in around May June time frame. So that's the current plan operational by the fall and that's when the neighborhood will see the realized benefit of this project. Moving over to the water utility um water utility treating over uh providing clean drinking water to uh the residents of the city. Uh and we're producing o over 4 billion gallons annually, about 11 million a day. Um we're maintaining 215 miles of distribution mains. So those are the large pipes that bring the water to people's homes and along of uh roughly 2400 hydrants. And so in there there's 26,000 service connections. So that's the service connections that go from from the mains to people's homes, uh, residents and businesses. And so we also manage treatment plant filters, um, pump stations and water towers, uh, throughout the city. And that kind of makes up um, our water utility.

similar to the wastewater utility um personnel is a large portion of the um operating budget and some of the other items include uh electricity as one of the larger um and I I just can't see the number unfortunately on the page. Electricity. Yes. 1.2 million.

Yeah. So 1.2 million for electricity. Chemicals I believe that says 1 7 million is another one of the very large budget items. And um just to point out, we also do carbon filters and those are about $200,000. And so those are all various treatment um items and some of the larger summary of some of the larger budget items for the utility. And so with a $99 million loan order, um the city or the utility is moving forward with several capital projects um over at water and that includes an upgrade to the water treatment facility. And this upgrade will center around um all an electrical upgrade. Uh that'll include generators and power switching and uh really an updating of uh old electrical equipment um along with meters and um some treatment uh for chemicals. Um so uh there are Ror bridge water manes. So, this is a water man that'll run um over the new Rock Bridge uh supplying water to that side of the city and for um that at $10 million. Uh water main improve general water main improvements. Yep.

Just add to the work bridge project real quick. So, the main over the bridge, it's going to be broken into two phases. So, the main over the bridge isn't going to cost 10 million. There's going to be a second phase as part of that project to connect it to an existing 20inch line. And that's what the realized benefit will occur with that project.

So also water main improvements, uh distribution improvements. So uh the city's going to be doing a lead service line. Uh where we'll be identifying lead services within the city um and removing those lines. Uh we're going to do a large meter replacement project. Um and we have money set aside for vehicle uh replacement within that capital balloon. So I think that's it.

Okay. So uh being mindful of the time again uh just going to sort of wrap us up here. Just want to thank everybody very much who who came to join us or who's watching this at home. Uh hopefully this was informational for those interested in DPW. Uh we will be having the public budget hearing in May. our projected date to bring the first is that the public hearing?

Yeah, the 19th of of May is our projection date for the public hearing on the budget. Uh our next listening session for uh as we continue on our traveling road show is April the 7th. Uh at 5:00 p.m. here in the mayor's reception room, we'll be talking about the department of planning and development. Uh some of their capital projects, um etc. Some of the projects they're working on. Uh we did get a note um that there was an extended warranty purchased on the fire apparatus which was a question that came up. So uh wanted to provide that for the folks here. Uh but I want to thank you know the utility uh DPW for helping present uh and compile all of this information. Mr. Ball uh for bringing this idea and program forward to you all. And just want to thank you again for joining us. We'll see you next time. Sorry.

Yes. I'm just I'm just