Back to Board of Selectmen Meeting Minutes
March 3, 2009
Joint Session 7:10 pm
Mr. Riley, Ms. Burns, Mr. Rabuffo
The Board met in joint session with the Advisory Committee.
Mr. Riley advised the assembly that the Town has rescinded its approval to convey the Hersey House to developer Tom Hastings, dba Hastings Properties, Inc. This action has been taken in response to Hastings failure to permit the project as required by the Purchase and Sale Agreement. Mr. Riley also pointed out that the plans presented to the Zoning Board of Appeals moved the house 27 feet from it present location despite clear direction from the Board of Selectmen that the Hersey House must remain in place.
Voted - to appoint Terry Clarke a member of the South Shore Country Club Management Committee.
Bond Rating Discussion
Mr. Rabuffo said he had asked Mr. Alexiades to provide guidance on how to best communicate the importance of the triple A rating for the Town. It was decided to invite Mr. Tortora, the Town’s financial advisor and president of Capital Market Advisors, to explain the bond rating and its implications to interested citizens at a public meeting.
Mr. Tortora explained that when the real estate market and the equity market went bad there was a mass exodus to the US Treasury market which, in turn, affected the municipal bond market. Traditionally treasuries offer higher yields; this is no longer true. Municipal bonds are now higher than treasuries. This phenomenon has been accompanied by a flight to quality in the municipal bond market. Hingham has been rated at the absolute top by three separate rating services, Moody’s, S & P and Fitch. Less than 5% of jurisdictions are rated Aaa. In the rating process credit agencies look at four factors: economic and demographics, debt, finances, and management.
Mr. Tortora urged the town to protect the rating as much as possible. Recent Bond
Anticipation Notes offered by the town went at 1.78 percent in June; 1.13 percent in November and 1.28 percent in December. Other jurisdictions that went out at the same time, but had an A2 rating, went at 3.45 percent.
Ms. Burns asked if bond rating agencies evaluate municipalities on a regular basis and what could endanger the rating in the short term. Mr. Tortora explained that there is not a lot of active market surveillance. No one singular event should not trigger a downgrade or merit an upgrade. One year of an operating deficit would not trigger a downgrade. Rating agencies want to see tax increases, ability to pay and willingness to pay. If the Town were to ask for a tax increase and not get it that would be a negative. The rating agencies look for steadiness and management.
Mr. Rabuffo noted that the status of the Town’s reserves was a matter for discussion. Based on a triple A rating, there is an expectation for a certain level of reserves. Fund balance is an important part of the rating and the Town has gone from 28% to 12%. If Hingham were at 15% it would be fine. The rating agencies do not expect progress in building reserves in this climate but being steady is looked at favorably.
Mr. Tortora explained that analysts like to see plans, particularly recovery plans. If the money is being spent as “part of the plan” things are ok. The Town can spend the money if there is a plan to replenish. In the current climate, agencies are cutting people some slack. If downgraded, it would take at least a year or two to get back to a triple A. Agencies look at capital investment because you have to put money into things or they deteriorate. According to MMD, the difference between a double A and a triple A municipality’s rate would be 15 basis points. The main issue is access to the market.
Dr. Galo asked if there is an evaluation of the curtailing of services in the overall rating process. Mr. Tortora explained that the raters want to see taxes go up and fee income go up. The analysts view growth and the expansion of existing businesses as favorable and a failure to address urban blight as unfavorable.
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The Board recognized Ms. Foley for her efforts as interim town administrator.
Discussion of Community Preservation Committee Warrant Articles
Old Derby/Old Ordinary Historic Structures Report: Ms. Bucchanan explained that the master plan calls for work on both Old Derby and Old Ordinary. This project will serve as a guideline in the master planning process and it will present a comprehensive snapshot. The pre-development project will allow for applications to other grant sources, both federal and private. The Historical Society will not be contributing funds to this effort. Mr. Reardon explained that the applicant’s financial statements are reviewed as to financial resources, etc. This is not something the Historical Society could do within normal funding since this is an organization that depends heavily on the income from their endowment. Mr. Edmundson said the Committee looks for a balance when investigating an organization - enough money so that they cannot do it themselves but enough money that they can manage a grant. He also noted that the Committee is looking for organizations who would benefit the public at large rather than a small membership.
Mr. Edmundson said the Committee is attempting to approach some requests as “block grants” rather than individual projects. The Hingham Historical Preservation Projects Fund is administered by the Town Treasurer. This proposed grant would allow the Historical Commission to respond in a timely manner to needs and/or requests. Some money would be directed to surveys. Once completed, these surveys would allow application for funding from various sources. Ms. Burns said that she has been a proponent of packaging projects this way for some time. The Committee then reports each February on the projects. Mr. Edmundson noted that the individual project are reviewed before the meeting with Board of Selectmen and Advisory Committee. In addition there has been a discussion on what to do with unspent funds. If any appropriation is made at town meeting and not spent in full after 18 months, the Committee would consider taking back the funds into the appropriate “bucket”. This would allow the committee to take back funds that have remained unspent.
Ms. Johnson asked if the money were “block granted” to the Historical Commission would the individual projects would have to be paid on an invoice-by-invoice basis by the CPC. It was noted that there was some discomfort with the notion of “block grant” last year because there was some concern that town meeting was being dislodged. Mr. Edmundson responded that the CPC had been trying to find the right answer over a number of years and it is necessary to get away from some of the level of detail. Dr. Eldredge asked what would be the threshold level for a project needing to stand along rather than to be “bucketed”.
Mr. Reardon said another “bucket fund” recommendation is $100,000 for Conservation Fund. He explained that the first significant funding for the Conservation Fund came with a transfer of $50,000 in 2005. Foundry Pond has been a major drain on the fund. The pond must be dredged and the project requires approximately $86,500 of the proposed $100,000. The remainder of $13,500 would be for land-related purposes. This is something that qualifies under CPA legislation and addresses a need for the Town. Mr. Chapin said the Foundry Pond proposal is a lot of work for the amount of money requested. Foundry Pond is the single largest watershed in Hingham and there are flooding implications if the work is not done. It is estimated that there is a total of 12 – 15,000 cubic yards of sediment which means that water cannot be spilled when necessary. The permitting phase will take a year and a half or two years. This project would bring back Foundry Pond to a functional pond. The fish ladders were redone last year at no cost to the town. Mr. Chapin said that this is a good value for the amount of CPC funds requested.
Open Space Acquisition of the Cushing Property: The historic homestead, which is on the National Register, sits on what appears to be a nine acre parcel on East Street. The wooded backland is on the far side of Route 3A. Mr. Cushing has offered the Town the 4.14 acre field at a price significantly reduced from its recently appraised value.
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He is also willing to gift to the town a 5.5 acre parcel adjacent to the Foundry Pond as well as to donate a historic preservation restriction on the buildings. Historically it is highly significant. The Historic Commission hopes to get National Landmark status for the property. Mr. Cushing noted that he had investigated selling to the Trustees of Reservations but he found that they were authorized to sell the parcel so the field could become a parking lot.
If purchased with Community Preservation Funds, the four acre parcel could be continued to be used as it has been by Mr. Hornstra. The Trustees, Mr. Hornstra and others have agreed that there would be no cost to the Town for maintenance of the parcel. Additionally, the five acre parcel adjacent to Foundry Pond which has been assessed at $50,000 will be given to the town. Mr. Riley thanked Mr. Cushing for making a most generous offer to the town. Ms. Burns commented that this is what Community Preservation is for. This is consistent with the open space master plan.
Thaxter Park Boilers
The Housing Authority has put in a request for funding to replace the boilers at Thaxter Park. The Housing Authority has not received an increase in its operating budget for 15 years; it does not have a capital budget and is not allowed one. The only way a request for replacement of boilers that has been honored by the state is if they fail. The present boilers have high operating costs due to their age. The Community Preservation Committee’s recommendation is for $88,000 to replace the highest priority items. Ms. Burns said she had read some sort of advisory that indicated that anything in this area might not be allowable. Mr. Reardon said that he had found that full replacement seems to be allowed, while repair would not be allowed. The Housing Authority indicated that these sorts of requests are being heard and honored around the state. Ms. Lauter asked if this would set a precedent for Lincoln Apartments and the property the Housing Authority is planning to build. Mr. Ellison asked why there has been no budget increase for 15 years. Mr. Paicos said that Housing Authorities are state-funded organizations and he is concerned with spending town money to fund state obligations. He noted that however laudable the project is, the questions remains if it is appropriate for the citizens of Hingham to supply the state obligation. Mr. Friedman said that when a boiler did fail it caused two buildings to be emptied over night. The Housing Authority then went to the state and got emergency funds. Mr. Rabuffo recommended that the Board get some opinions on this to make sure the Town is not taking on something that it should not.
Mr. Edmundson noted that there are other projects that have not yet been voted by the Committee but may come back at a later time.
Voted - to sign a Memorandum of Agreement with the Hingham Police Superior Officers Union for the period July 1, 2003 through June 30, 2007.
Meeting adjourned 10:50 pm
Betty Foley, Clerk