Board of Finance - Special Meeting

Yep.

Wonderful. Then let me call the meeting to order at 7:02 p.m. Um what's on the agenda? Is it just discussion? So the the order is called and the only uh item on the agenda is uh to consider um recommending to a town referendum or to a town meeting referendum. What are the right words? um the uh uh motion that was or the the amendments that have been circulated to you which would increase the the the bonding authorization for the town. Can you can you put that in more articulately uh either Jim or uh Martha? What is it that the board of finance is being asked to vote on?

The approved approval of the amendment resolution related to the Sound View Beach and Miscellaneous Town Area B sewer project which would in appropriate a total sum of 20,528,486 for the cost of construction and installation of the Gravity Sewer System. And okay, but we're not that all we're not voting to approve that. We're voting to send it to uh a town referendum. Correct. You are you're sending it to a town meeting which will immediately send it to town referendum.

Okay. So the the important distinction that was made clearly at the board of selectman meeting that I attended only in part is that this is not a vote to approve or disapprove the underlying concept of whether the um uh the money should be bonded or whether the sewer uh project is currently described should go forward. It's merely a vote to send it to the electorate to the town voters for them to decide whether they want to do this. So although I'm happy to have discussion regarding the merit of the uh the sewer project if you wish uh because the merit of it does uh is obviously related to the wisdom of sending this to the the town electorate for a vote. Um the two issues should be distinguished. So be before I ask for a motion, let's just talk about it. Who wants to say something? Martha or Jim, do you want to make some comments?

I think that Jim would like to just um make sure you're aware of the Betterment Assessment. So he's online. He's there up. Yeah, Jim. Sure. Um,

thank you BJ. I just would like to speak to the notion of the betterment assessment because I think that will pertain particularly to the board of finance in terms of what they may potentially be obligating the town to in terms of covering part of this sewer project. Uh as you know the sewer project is presented as being self-funding in that the totality of the construction costs after uh the clean water funds and the forgivable loan from deep are applied uh whatever that difference is will be borne entirely by the end user. uh in this case, in the town's case, the people of Sound View in so-called miscellaneous town area B. Uh and that's the way this has was presented in 2019 at referendum in that people in the town that weren't part of this project, that weren't in a sewer, you know, potentially sewered area, we're told, don't worry, you'll have no financial obligation. This may look like a big scary bond, but this will all be paid for by the people of Sound View. Uh what and talking to council today reaffirming something that we've known for quite a while. There is a state statute uh section 7-249 uh assessment of benefits that stipulates that a property owner can't be assessed for charges in excess of the improvement that his property will uh will will benefit from in terms of real estate value um by virtue of having a sewer. So,

put plainly, if you have a $600,000 property and uh your sewer is going to increase the value of your property by $60,000, uh that's your benefit, $60,000 for having a sewer. and you can't charge that person more than $60,000 because it exceeds the benefit that uh that person will derive from having sewers. Uh what does that mean practically for the town of Old Lime? Um it means that most of this project as it sits right now, uh it's an $85 million project for 900 houses. Uh, and it's it's $61,000 per edu in Old Lime in the Old Lime part, town of Old Lime part of it, which is Sound View. Um, that's per EDU. Some will have two EDUs, so we can double that. It's $120,000. Uh, they're going to far exceed their benefit assessment. and the benefit assessment in 2020. Uh the last time we did a survey of it, there's two reports uh that we commissioned. Uh sorry, there's a little bit of feedback. Um anyway uh the two uh reports that we commission in 2020 said that properties between%

uh we Jim may ask everyone to mute except for Jim. Thank you. Everybody needs to mute. We still have a couple of people that are not muted. [clears throat] Somebody's phone number starts with 91. One 91. I can only see partial numbers, but please mute. 144 mute

and 144. Whoever starts with the numbers 44, please mute because we're getting feedback and the people online cannot hear Jim. Hey, try again Jim. Okay. Um um so practically speaking in current terms if we were to apply that betterment that we have from those reports to our current property about 87% of the property would exceed that valuation.

Uh and I'm trying to play with the feedback here I keep hearing. So little slow and methodical. I I I just unmuted myself because I can't make out what you're saying. Martha, do you know what? Don't mute all because it'll mute us. Say what? Oh, sorry. Never mind.

You're coming through better. Martha, can you repeat what Jim just said? Jim, I'm gonna try to do this in a very quick basically if it's a $600,000 house and the cost for that $600,000 house, let's say, is one .edu. Currently, our edus are coming in at about $68,000. Therefore, they can only be assessed the betterment factor. So, if it says 10% that would be they could be assessed $60,000. That means the town would be responsible for the additional $8,000.

Martha, I thought Jim was saying that in 2020 there was a study that estimated the percentage of the betterment. It did. It did. It did. It was between There are two studies and it was between seven and 10%. between seven and 10%. Okay. Correct. But be but BJ that fluctuates all the time. So we can't No, I I understand but it gives us a frame of reference. Yep. Okay. That was before. So if we applied those numbers today the seven to 10%.

Which we don't think will be much different. They may be a little. And if we apply to our current valuation, that's $5 million that the town would be on the hook for. If property values continue escalating at the rate they have been when this project is underway and the homeowner will be given their bill. It could be that the property values have so far exceeded

the uh betterment assessment that the town will owe nothing. If property values crater, if we have another crash, or if property values simply come back down to earth, that $4 million, $5 million figure will increase, if we have another 2008, for example, that could double. That could be a $10 million bill.

And I think the board of finance needs to grapple with the burden that will put on the town tax and the town budget potentially depend you know in the next three or four years depending on how this plays out. We know essentially close maybe to what the number will be in terms of construction, what the charge will be. We don't know what property values will do and what that benefit assessment is going to be in two or three years.

But the board of finance is uniquely equipped to game this out and to assess the risk to the town's budget. Thank you, Jim. Thank you, Jim. Let me let me say that the board of selectmen to a to a a person, the three of them

in their public comments indicated nobody was happy with this project. But each of them thought it was appropriate to send the matter to a town meeting for a referendum to let the taxpayers decide rather than for the board of selectman to not uh to [clears throat] to unilaterally kill it by not sending it to a vote. because the downside of not having the referendum would jeopardize the DE uh proposed financing.

Jim or Martha, would you explain that risk?

Well, [clears throat] we are under the Connecticut General Statutes and we just took oaths last week that we'll follow them. And the statutes are that when this project comes to be that you send it to referendum and the people speak that the town the town's people speak. And yes, by holding it back, then we as the municipal leaders would be not following proper procedure. So we have still unanswered questions. We still have some information that we think could be slightly a skew because there's escalation costs that will be coming forward to us when we go to sign contracts. Um you'll notice on the bottom of that sheet that old colony has asked for a lastm minute demand and Jim announced at the meeting that that has gone up. Um, and Jim, you might tell what was the total cost that they want for those seven properties.

Uh, the latest, and I found this out, uh, in the meeting itself, uh, at about 510, they're uh, demanding $100,000 for the seven properties. So, that gives us $14,000 per property. uh split among the 270 edus and sound view that's approximately $450. Uh a little bit more maybe $481. I don't have the paper right in front of me, but uh so we're going to come up on $68,000 rather than that $67,000 figure. Um and and to explain that a little further that we had concluded the negotiation of the CSA, a very contentious negotiation in a way that was satisfactory to all the parties including the town um and including myself representing both the neighborhood and the town. uh when Old Colony Beach made a lastm minute demand that seven properties who are going to be tying into the Old Colony system rather than having grinder pumps um are to be charged one full edu to join that system which was in our estimation outrageous is in the estimation of the chair of our WPCA outrageous. Um, and there have been fits and starts and negotiations that I was not privy to. Uh, the last uh offer from Old Colony was that $100,000 figure to have those properties tie in. Uh there's one further thing that I neglected to do in our selectment meeting which I it pertains to your meeting as well that I would like to address um because it was a question from several of the uh people who spoke uh in public comment and it's a question

that certainly has always been raised in Sound View over the last 40 years that I've been living here. Why the hell are you having a random in the middle of winter when no one is here? Uh, and it's a, you know, no one is here in Sound View. There's about 20 families that are here right now. Um, and it's going to be impossible to contact all of them and to make them aware that this is going on. And I wanted to address it because I've been involved in this and the timing of this is not deliberate. Obviously, um I've been trying to get this CSA negotiated since the early spring and no one wanted to come to the table until September and I have the emails to prove it that I've been trying to get this process moving. Everyone's been on the boat, everyone's been on vacation, everyone has this and that. And finally in September, everyone got their head in the game. Uh so the CSA didn't get done until October. In fact, Miami Beach still has has to redo their referendum. That's not decided. Miami Beach had a bid that came that they had no bids for their project. Deep took six months to retool their uh their bid package and go back out to bid. Uh their bid came in just recently. So, we didn't we weren't even certain that we had a any sort of a project until October. Um and then of course at the same time we have uh very del you know concerted threats from deep uh not spoken directly to us mostly through the press and through old Colony Beach that if you don't move and get on the stick we will really make you feel some pain. Um and finally what really is putting uh the

cudigra on this is that the bids expire. Our bid for the portion expires in December. So if we don't take action now and send this to referendum, by default, we are defeating this project and preventing it from going forward which may violate our fiduciary obligation because we have signed agreements or they were signed before uh by the previous administration that obligated the town. uh to this project. So uh that's why this comes in December,

which is very unfortunate timing.

Thank you. Um I think there's there's no doubt that this problem I'm sorry that this project is faced with enormous challenges and problems at this point and [snorts] whether or not if we were writing on a clean slate it should go forward. But that but that isn't the decision that we have to make. The narrow decision is whether or not we send it to a town meeting uh for a referendum. And I would like you, Jim, and Martha to articulate in more detail the downside of not doing that and to explain to us why each of the members of the board of selectmen decided it was in the town's best interest to send it for the vote, notwithstanding the fact that it seems to be a terrible project. Let me also mention that the uh if the referendum is voted down, then the project doesn't go forward. If the referendum passes and other beach communities drop out, then I assume, you know, it's a whole new ball game. So that the decision at the referendum won't be dispositive necessarily of whether or not the project goes forward. but speak more narrowly about the logic or or the reasoning of the board of selectmen in sending this to the referendum.

Uh I'll start real quick and then Martha can jump in. Um Old Lime Shores going from east to west. Old Lime Shores uh is ready to move forward, but the way their referendum was written, if anyone drops out, they can't move forward without going back out to referendum. um it'll not only increase their costs, but their referendum is predicated on all four uh entities participating in the project. So there they are a yes ready to go uh pending approval from the three other entities. Old Colony has been ready to go. They're the ones that have been historically driving this project. Miami Beach recently had a referendum that was cloudy uh and they will have to from what I understand I don't have direct communication about this but from what I understand they will have to go back out to referendum and reaffirm that and that from what I understand is going to be the day before R's proposed referendum on the 16th. Um, the reason that uh I voted yes and I could have voted no because it was a two to1 vote at that point and I want to vote no. So why did I vote yes? Because if I were to position myself as the leader of the opposition and bring this forward and oppose it from even going to a vote, I would have to game out exactly what the alternative is and how we would achieve our goals. There is no one that I've talked to who can tell us that. There's no one I talk to who will support us in that.

there's no ally in this game. Uh so the risk of the town precluding a vote uh seemed to me to be unwise uh to take that risk. Had I known had could I game out what the al I know what the alternative systems are but I know that deep will has put up a dictatorial hand of shut up and do it. They will not listen and we cannot find people outside of that ring to support us and having alternatives considered given the situation we're in. the fact that if we say you can't go to referendum, we'd also be precluding communities that have already approved and are ready to go forward from proceeding like old shores. It opens us up to an incredible amount of uh legal liability. It opens us up to um indecision. and I would be willing to take a lot of risk uh had I seen a clear direction forward but I don't if the voters turn this down it's a very different story that means everyone has to retool because the will of the voter is paramount you know the board of selectmen acting petulently to prevent a vote I think is a much riskier position to be in

that was my that was my reasoning Thank you. Martha, would you explain your thinking?

I agree with everything that Jim said just in order to move the meeting along, but we followed this the process. The process was the project was brought before us. It was we've we've done this before. We have two or three other times that Jim and Jude and I discussed the possibility of going to referendum, but at that time we did not have all the numbers. We went out. We asked for more information. We um pushed to have the sewer ordinance brought um brought to up to date which it is there and with a tweak here and there that it will be ready to go. We asked for the numbers to be updated and [clears throat] we asked for the cost sharing agreement to be um ready to go. We are 99 I'd say 98% after the information that Jim received during the meeting tonight uh ready to go. But so with a tweak here or there, all three, as Jim likes to put it, the legs of the stool were are we're on steadier ground than we were. Maybe not perfect, but we are on much steadier ground than we were this past summer.

John, I see you in the audience. Would you like to would you like to uh express to the board of finance your reasoning?

Sure. I'll just come up to the mic so that you can hear me. But I think strategically um we need to move this to a referendum and if it's a no vote by the town in a in a form of direct democracy then we have a stronger standing to say no to deep and I think by saying the alternative of saying no we're not going to move it forward puts us in a bad position and puts us in a perilous position. Deep has a big stick and a big carrot and I don't want to be the recipient of the big stick.

Will it, you know, will they use that? I don't know. I don't want to be the test case. I don't want the town to be the test case. We have uh a lot of money that can benefit the town in this case if it has voted yes. I don't want to miss out on that. I don't want the bids to expire and be in another goound of where do we go from here. I I think it's important to move the ball down the field and that's what we did tonight and I hope you will too.

Thank you, John. With that, I would uh entertain uh a motion uh from the uh the board of finance. Uh we'll get it seconded and then we'll have discussion at the board of finance uh among the board of finance members before we vote on it. Do I hear a motion from some somebody has to unmute him or herself and make a motion to approve or not to approve. I'll make a motion to approve the uh amendment as presented at the board of selection meetings and approved today to move that on to referendum. Is there a second?

I'll second that. That sounds like Kim to me. So, um so then discussion and please you have to unmute yourself if you want to say something. I don't think we're approving the amendment. I think we're correct. We're just approving sending it to a town meeting that will be followed by a referendum. Right. But Anna's Anna's motion was to approve the amendment. And so to approve the it was to approve the amendment to go to referendum as stated during the board of selective meeting. the resolution

approve to go to ref just to be specific so the language is in the minutes properly. We're approving the the um not the rather than modifying amendment, right? We we want to say we're approving um moving this to a referendum for the town to vote on the amendment itself. Correct. However, how however that gets done, I just want to make sure that whatever vote comes tonight is not construed as an approval of the amendment itself. So, David,

it's just because the the way the bonding attorneys have written this is that it is an an amended resolution. You already voted on the resolution in 2019. This is an amended resolution to in increase the cost and that is why you're voting on the amended resolution. No, but we we're all in agreement. We're not we're not voting on the substance of the amended resolution. We're voting on sending the amended resolution to the voters for a vote. Correct.

Yeah. Any other comments or questions from the board of finance members? I this is Candace folks and um I really value all the um salient things that Jim and Jim shared with us and the other select men supported and I just wanted to the one thing that sticks out in my mind is that it's just really unfortunate that this is happening in December and regardless I I understand that that's not intentional and that huge efforts were made to get this done in a timely fashion But the look still is ugly that we [clears throat] are doing this at a time when the people who are impacted are not local.

They can vote by absentee ballot though. Of course. Yes, we understand that. But I think we should make a really really big effort to try and reach out to them in any way we can. In 2026, we should have the technology to find these people and and let them know that this is going on. Is there a fact sheet that's going to be made publicly available prior to the referendum?

Yes, there is. We We will get work on that in the next day or two, but because of the holiday, it probably won't be posted until next week, and it has to be checked by the lawyer to make sure that it is um just factual. I I would recommend if if it's contemplated um hopefully that the the betterment issue is um addressed. Okay, we'll we'll do our best to include that. Any other question? Any other questions or comments? Yeah, I I have a question.

Yeah. Along [clears throat] the lines of the information that you're going to send out, um is that going to include the consequences of um what'll happen if the referendum is not passed so that people understand, you know, the consequence of that?

Well, that that's an interesting that's an interesting question, Fred, that we have not discussed. I don't know if the board of selectman discussed it either. We've discussed the risk if we don't send it to referendum that's going to violate our obligations, Deep will go crazy and it might, you know, jeopardize 15 million bucks. But if the referendum is voted down, you know, it goes to referendum but it's voted down, what happens then? That is I would say that it is a I know that I think Jim is still on but that is a big question and we don't know the answer to that but it is basically just like when the other private beach associations held their votes they could have voted down their referendums and that would have taken someone out of the running. So if we drop out and take us out of the running how does it affect the others? We've already heard that O Lime Shores if we drop out then they're out because they have to have all four beaches going forward.

Let me sit down

if from from the a 10,000 foot level and without any expertise here um the the uncertainty is is predicting what will deep do. I assume what the town wants to do and what the beach association would want to do would be to go back to deep and try to find a more palatable alternative. And whether or not, you know, that ultimately will be successful, we can't predict. If I if I may jump in here quickly, um I think we have to be careful in how we craft our information sheet because at this point having passed this in the board of selectmen, we can't really appine on uh the referendum at all, you know, or or weigh in on one side or another.

I think the betterment assessment I I agree needs to be there. Um the financing mechanism needs to be there to the extent that we say this will be a self- financed project by the end user with the exception of uh section 7-249 which obligates the town to excess charges over the betterment assessment so people are aware. Um, I don't know that we can speculate on the downside of voting no without it being, you know, um, biased in one way or another. So I mean what what I see with that I mean I can give you a personal opinion but I think at this point it'd be very difficult to convey that uh within a referendum information sheet what the downside would be. Um, we have, as we know, very intelligent people in town who are very capable of analyzing the project themselves. And what I've tried to do is give them as much information as I possibly can and not hold anything back because it was inconvenient information either to my perspective or to the perspective of people who are yelling at me. Uh, that all of that has to come out. um and that we leave it to the voters of old line to to analyze uh what the prospects are of a yes vote or a no vote, both of which carry uh or are heavy with implication. You know, I app I appreciate you need to be impartial in that information sheet and um I don't know if it's you can say something more general as to some possible scenarios if it's not passed so

that people understand what we're getting into if we don't don't pass it because my understanding is deep is hellbent on letting us do this. And you know if it's not passed then people need to be prepared for that that decision that they make. and have some understanding of what we're getting into. Would it would it be safe to say it will not cost money? That's the safest thing anyone said tonight. Andy, you know, John, did you want to say something?

There there is an enforcement schedule that Deep uses and it culminates in a project or enforcement being handed over to the EPA. So I think that is factual and that is something that could be uh included in the fact sheet.

All right. Well, we'll certainly rely on the board of selectmen with the advice of council uh to uh and I think you [clears throat] really should because there's exposure here and liability make sure that Susman Shapiro and Battello or whoever you want to consult um signs off on it. Uh any other questions or comments? Then let me call for a vote. And because of this I I see unidentified people, I'm going to ask for you uh by name to cast your vote. I'll start with Anna. Yay or nay? Yay.

Andy, yay. Um Kim, yay. David, yay. Candace, yay. And I'm I'm yay. So, it's a a unanimous vote in favor of sending this to a town meeting for ushering to the referendum. Thank you all very much. This is um I I think among the most complicated and difficult problems that old line has faced for some time and it it's been going on for years. So stay tuned.

You need a motion to adjourn. So moved. Second. Meeting is adjourned. Thank you all.