Confusion Reigns At March 27 Council Meeting: No Decision Made On Using Reserves For The School

Report On The Special Town Council Meeting Of March 27, 2023

This meeting was held in hybrid format and was recorded. It can be viewed here. This was a joint meeting of the Amherst Town Council and the Finance Committee.

Present
Councilors in the Town Room: Lynn Griesemer (President, District 2), Mandi Jo Hanneke, and Andy Steinberg (at large), Cathy Schoen (District 1), Jennifer Taub (District 3), Anika Lopes (District 4), and Ana Devlin Gauthier (District 5).

Participating on Zoom: Michele Miller (District 1), Pat DeAngelis (District 2), Dorothy Pam (District 3), Pam Rooney (District 4), Shalini Bahl-Milne (District 5), and Ellisha Walker (at large).

Nonvoting members of the Finance Committee: Bob Hegner and Matt Holloway. Bernie Kubiak was absent.

Staff: Paul Bockelman (Town Manager), Sean Mangano (Finance Director), Kim Mew (Principal Assessor), and Athena O’Keeffe (Clerk of the Council)

22 members of the public were present on Zoom.

Disagreement On The Purpose Of The Meeting
At the start of the meeting, Council President Lynn Griesemer announced that the purpose of this special meeting of the Town Council was to hear about financing the proposed new elementary school in relation to the town’s plan to complete four capital projects (new elementary school, Jones Library expansion, new Department of Public Works headquarters, and new fire station). She said no votes would be taken at this meeting. The town is required to have a public forum to discuss bonding for the school project. That public forum is scheduled for April 3 at 6 p.m.

Councilor Ellisha Walker (at large) responded that she thought the purpose of the meeting was to continue the discussion about funding of the school that began at the March 20 council meeting and not to hear another presentation. She also said that Griesemer had previously indicated that councilors could put a motion on the floor at any time, and she reserved the right to do so at this meeting. Griesemer replied that the presentation will include updated information from the Finance Department and that the meeting would begin with that presentation. She did not comment on Walker’s statement that she would put a motion on the floor at this meeting.

How Using Reserves Will Affect Tax Payers And Other Projects

The estimated reimbursement from the Massachusetts School Building Association (MSBA) to the town for the school is $3 million less than previous estimates because the number of low-income students in the schools is less than in previous calculations.

There have been two proposals for using some of the town’s approximately $24 million in reserve and stabilization funds to lower the increase in property taxes  that would be approved via a debt exclusion override for the school. Councilor Cathy Schoen’s (District 1) has suggested using $5 million from reserves to lower the amount of borrowing necessary for the school. It is expected that a good portion of this amount would be recouped by federal and state energy credits received as a result of the school being built to “net zero” environmental standards. Walker has proposed using an additional $5 million in capital stabilization reserves for the project in order to further lower the tax burden on Amherst residents so that it is more affordable. 

Finance Director Sean Mangano’s presentation showed the implications for construction of the fire station if $5 million or $10 million was taken from the reserves. According to the previous plan, the fire station was to be constructed using reserves, rather than borrowing, so if the reserves were used for the school, and the plan was still followed, it could delay that project from FY28/29 to FY30/31, or require borrowing. The Jones Library and DPW buildings are slated to be built by town borrowing. (see p.6 of presentation) 

The estimated reimbursement from the Massachusetts School Building Association (MSBA) to the town for the school is $3 million less than previous estimates because the number of low-income students in the schools is less than in previous calculations. With no use of reserves, taxpayers would pay an average of an extra $496 per year on top of the expected 2.5% annual increase in property taxes. Using $5 million from reserves would lower that average annual increase to $451 ($45 less of an increase per year per taxpayer). If $10 million were used from reserves, the average increase every year would be $406 ($90 less of an increase per year per taxpayer).

Mangano highlighted the efforts of the Elementary School Building Committee to decrease the cost of the school and also efforts of the town to make the town more affordable to renters by encouraging construction of lower-cost housing units. He noted that 1,000 new housing units have been built since 2015,with 30 affordable units created through inclusionary zoning in the past four years. He also cited available tax exemptions for seniors, legally blind residents, and veterans along with temporary relief for hardship. There is also a rental relief program funded through American Rescue Plan (ARPA) funds that will end in 2026.

Possibilities for further tax relief include using Community Development Block Grant (CDBG) money for rental or mortgage aid, and supporting state advocacy to increase PILOT (payment in lieu of taxes) from Amherst’s colleges and the university. Mangano said that, unlike other municipalities, Amherst’s tax-exempt land has 20,000 residents who need services living on it. He also cited possibly lessening the added tax burden by expanding the tax base through more construction in general and minimizing the construction costs of the school through less use of contingency fees, the funds set aside in the construction budget to cover cost overruns . 

Nonvoting member of the Finance Committee Bob Hegner noted that delaying the firehouse and DPW projects would mean larger overall costs due to inflation. Schoen pointed out the urgent need to replace the over 100-year-old DPW headquarters. Mangano replied that the other projects would proceed when there is enough flexibility in the capital budget to obtain more funds through borrowing. An average of $1.5 to $2 million is added to the capital stabilization fund annually. 

Griesemer pointed out that the plan presented does not account for repairs to the aging buildings, but Mangano said that the budget includes $100,000 to $200,000 for repairs and uses free cash for emergency repairs and Joint Capital Planning Committee funds for larger repairs. Mandi Jo Hanneke (at large) claimed that the $15 million estimated for only repairing the Jones Library is probably an underestimate. Mangano replied that there is a group of officials working on a repair plan with phased repairs at a reduced cost to borrowing a large sum of money all at once. Pat DeAngelis (District 2) said the town should balance healthy buildings for town workers against saving 10 to 20 cents per $1000 valuation in property taxes. Andy Steinberg (at large) said that seniors on fixed incomes, who would be burdened by increased taxes, rely heavily on fire and DPW services, and wondered how they would feel about delaying those projects by using some of the reserves for the school.

Mangano showed a chart with rough estimates of the increased costs to renters in large apartment complexes based on the increased taxes to the property owners (p.12). Walker, however, pointed out the fallacy of these estimates, noting that many renters do not qualify for the affordable units and many do not live in large apartment complexes. Also, there is no reason to assume that landlords would limit their increases in rents to the increases in their taxes, unless the town has some kind of rent control. 

Anika Lopes (District 4) said, she has family members who have owned houses for hundreds of years and whose houses have now increased in value so that their income does not match their increase in property taxes, which are based on assessed value, but that if someone cannot afford a $500 increase, she doesn’t think that  lowering it to $450 (by using reserves) would make enough difference to allow them to stay in their home. She also took aim at Walker’s remarks at the March 21 Finance Committee meeting, saying, “We have councilors saying there is only one councilor that has experience with Section 8 [housing vouchers, and I would never presume that to be true for the rest of us.” She also said, “I hope we can make sure that we are lessening the burden for all of our residents.”

Walker defended herself, saying that in her opinion her statement is correct, and pointed out that sharing this vulnerable information was uncomfortable for her. She urged any other councilors (who have experience with Section 8 housing) to do the same, and support her. She said she spoke to more than 20 people, but not one of them would be coming to this meeting to state how the debt exclusion override will affect them financially. “I’m trying to make these statements to bring awareness in a room full of people who do not have the same experience that I have…to be in a situation where I cannot feed my family. I am not sharing this for negative purposes. I am sharing this because I want my town to do better. I want you to understand what people in this town go through on a regular basis,” Walker added. Lopes said that her comments were not a personal attack.   She went on to point out that sharing one’s finances is a personal decision.

Public Comment
The public comment session included statements from five residents.

Carol Gray noted that no one had mentioned the current impasse between the school committee and the educators’ union regarding raises for teachers and paraeducators. She asked how the town can consider four capital projects, devoting two to three percent of the town’s revenue to them, when teachers are working-to-rule in protest of their treatment. She noted that the town has lost $3 million in state funds because there are fewer low-income people who live in Amherst now. She felt that all four capital projects should be put to a vote of Amherst residents to determine which are the most important to the public.

Vincent O’Connor said that he will vote for the school, even though his landlord indicated that his rent will increase by $100 per month next year. He urged the town to follow Boston Mayor Michelle Wu’s lead and take measures to address high rents.

“People buying lattes should not be telling those serving the lattes what they can afford.”

District 5 resident Maria Kopicki

Jeff Lee said he is trying to be supportive of the debt exclusion, but that it will be a hardship for him, and he wonders whether, if the library project does not proceed, could the $15.8 million slated to be borrowed for it could be used to ease taxes. He suggested that the library should be fundraising to support repairs, in case  the larger project is defeated.

Lauren Mills said she is not supporting the new school because she thinks it is too expensive and none of her three children will be in elementary school when it is completed.

Maria Kopicki advocated for using $10 million of capital reserves, out of the $24 million of total reserves, for the purpose that it was created. Although the town can advocate for money from other sources, the council should focus on what it can do to ease the burden on residents. She added that she hoped the council won’t go down the same road as the Finance Committee in telling other people what is impactful for them, saying, “People buying lattes should not be telling those serving the lattes what they can afford.”

Concerns Voiced About The Debt Exclusion
Councilors continued their discussion about using reserves for the school project. Dorothy Pam (District 3) said she has noted an “enthusiasm gap” developing about the project. She said the building committee has done as much as they can to reduce the cost of the school for taxpayers, and the council should do the same. Walker agreed and reminded the council that much of the financial plan consists of estimates. Using reserves may cause a delay in other projects, but new funding might be found as it becomes available.

Ana Devlin Gauthier (District 5) countered that assumptions are being made on all sides, and that we don’t know how changes in property taxes will be passed on to renters. She was more comfortable, she said, with the assumptions in the financial models, and does not want to create a future lack of funding by using town reserves now. She noted that lowering the debt exclusion will benefit those who own expensive homes more than those with less expensive ones, because their taxes will decrease proportionately, and that she would rather use other support systems to help vulnerable residents.

Pam Rooney (District 4) pointed out that $5 million of the $10 million that would come from the reserves will be reimbursed by energy credits. Jennifer Taub (District 3) agreed, noting that these rebates would most likely be received by the time construction begins on the fire station or DPW. Hanneke disagreed, indicating that the town is taking a risk using even $5 million of reserves when reimbursement is not guaranteed.  She cautioned that another debt exclusion may be required in the future if money from the capital fund is used.

Walker Wants To Make A Motion: Confusion Ensues
Walker said that if the debt exclusion for the school does not pass, it jeopardizes all of the other projects, so she asked to make a motion for the Finance Committee to consider devoting $5 million in reserves in addition to  the $5 million previously recommended to the school project. Although she is a member of the Finance Committee, her schedule would not allow her to attend the 3 p.m. meeting the following day.

Griesemer noted that this meeting was announced as a discussion, and no action items were listed on the agenda. According to Hanneke, pen Meeting Law requires that the council and the public be given fair notice of actions or other discussions that might take place at a meeting. However, Michele Miller (District 1) dissented, saying that  she does not see any such requirement in the Massachusetts General Law section on the Open Meeting Law. Council Clerk Athena O’Keeffe said  that the council has been putting action items on the agenda, which sets a precedent, even if it is not required by law.

The discussion about whether Walker was allowed to make a motion continued for over an hour. Griesemer insisted that Walker could not put forward a motion at this meeting. She and Schoen offered to make the motion at the Finance Committee meeting. Walker was not satisfied that this would actually happen. 

Miller then moved to appeal Griesemer’s decision not to allow Walker’s motion to be discussed.  Her motion  passed 6-4-3 (Bahle-Milne, DeAngelis, Hanneke, and Steinberg voted no, and Griesemer, Lopes, and Schoen abstained).

Walker’s motion — for the Finance Committee to consider the additional $5 million in reserves —  also passed 6-3-4 (Bahl-Milne, DeAngelis, and Devlin Gauthier voted no, Griesemer, Hanneke, Lopes, and Steinberg abstained). DeAngelis said that the discussion felt “manipulative” and made her “uncomfortable” because councilors had been told that no vote would be taken at this meeting. She said she did not want to influence the Finance Committee discussion. Walker explained again that councilors have been told that they have the right to make a motion at any time, and that she can not be at the next Finance Committee meeting.

Next Steps
The Finance Committee must issue a recommendation on the Town Manager’s financial order for the debt exclusion borrowing. The council must then hold a public forum on the topic. The public forum is scheduled for 6 p.m. on April 3.

After the public forum, the council must vote to approve the Town Manager’s financial order. It can lower the amounts on the order, but cannot increase them. Because the Finance Committee did not vote on the amount recommended to be taken from the reserves in the financial order at its March 28 (add link when available) meeting, the way to proceed at the April 3 meeting is unclear. Legal opinion is being obtained. 

This meeting adjourned at 10:15 p.m. The next meeting of the council is April 3, beginning with the public forum at 6 p.m.