Chester board delays budget decisions; discussed land purchase in questionable executive session

By Shawn Cunningham
©Telegraph Publishing LLC – 2014

The Chester Select Board took up the 2015 budget at its Wednesday Dec. 17 meeting, discussing several issues from earlier meetings. But it was agenda item No. 7 – the proposed purchase of  land  – that raised questions about transparency in the town government of Chester.

Town manager David Pisha introduced the proposed land purchase by the town of Chester. He said that — as part of a survey by engineer Naomi Johnson to prepare for a major upgrade to the town water system — the Dufresne Group has suggested alternate sites for locating a proposed second water tank, including land owned by Mike and Amy O’Neil  behind the high school. Pisha said that the O’Neil site could save up to $400,000 in piping from a town-owned parcel where it was originally planned.

Pisha explained that he had approached the O’Neils to ask about buying an acre or two from their parcel but was told that they would only sell the entire 139 acres to the town for $399,000. Pisha added that the plan would be for the town to buy the property, extract gravel from it to save enough money to pay for the land, then have a supply of gravel at favorable prices for years to come. The property is assessed at $303,000 and would be taken off the tax rolls, at approximately $6,000 a year.

No negotiations, but executive session

What was not said — until the board was asked later in the meeting — was that the idea of buying the land for gravel extraction was discussed out of public view during an executive session on Nov. 19. The board went into that session for the purpose of “negotiating or securing” a real estate purchase, which is legal under Vermont’s Open Meeting Law. (1 VSA §313(a)(2) ) But instead — according to board members – “the initial concept was put out” and the board discussed the “nature” of a purchase agreement. The session, therefore, may have been illegal.

The purpose of the open meetings law is to ensure that the public’s business is done in public. An executive session is allowed when some portion of a discussion would put the municipality at a contractual or legal disadvantage if it were revealed. For example, if a board was setting a maximum price for a counteroffer, that portion of discussing a real estate transaction could be handled in a closed session, but the actual discussion of the “concept” of buying land must be held in public.

During the Dec. 17 meeting, board chairman John DeBenedetti confirmed that there were no representatives of the sellers with whom to negotiate at the November executive session. Also, Pisha came back to the board, not with a counteroffer, but with a financing plan that reflected the asking price. As previously reported in The Telegraph, six of seven Select Board meetings between Aug. 20 and Nov. 19 had executive sessions representing 741 minutes — or more than 39 percent of the board’s meeting time.

As described by Pisha in the Dec. 17 meeting, the deal would consist of the Chester Water Department buying the 139-acre property using the Cyprus Mineral Fund of approximately $169,000, then financing the remaining $230,000 with $40,000 per year for five years derived from selling gravel to the Highway Department. The remaining $30,000 would be covered by “rate payers.”

Currently, the town buys about 8,000 cubic yards of gravel each year for $11.25 per cubic yard. Pisha estimates that the Water Department could have an outside contractor process the gravel for $4 per yard, and charge the town $10 – a savings of $1.25 per yard or $10,000 in the first year. The remaining $6 would be split — $4 would go toward paying for the property and $2 would go toward other costs including preparing the land, roads and reclamation.

While enthusiastic about saving money on gravel, board member Derek Suursoo questioned the assumptions of Pisha’s plan and asked for a formal business plan that would take into account a number of questions, noting that the purchase would result in a very large Water Department debt. These questions include whether the $4 processing charge was realistic, how much gravel is realistically available on the property and what the costs of Act 250 permitting would be. “I hear a lot of theorizing, and we’re really good at that,” said Suursoo, “but it’s got to be nailed down to what it really is.”

Cyprus Minerals funds may be used

“And the Cyprus Minerals money is general population money,” said Suursoo, “not just water users’ money.” Suursoo was referring to the practice of segregating the Water and Sewer accounts from each other and from the town’s general fund. This puts the responsibility for water and sewer in the hands of those who use them rather than the town as a whole. DeBenedetti asked where the Cyprus Minerals Fund came from. Board member Tom Bock, said that the fund is the proceeds (plus interest) from a five-year talc mining lease in Smokeshire a number of years ago. The fund is managed by the Trustees of Public Funds, but is controlled by the Select Board.

Suursoo objected to taking money from such funds without a plan to repay them, noting that in years past, a $270,000 Water Department reserve fund was “nickeled and dimed away because nobody wants to raise rates,” said Suursoo. “Now we want to tap into Cyprus Minerals.” Board member Bill Lindsay suggested that the solution lays in the full town paying for municipal water and sewer. “A deal can be struck to be fair,” said Suursoo, “but I’m not going to sit here and see funds bled away.”

Pisha was asked by the board to come back with a business plan for the operation. No purchase can be made without a vote by the town and with a large number of details to work out, it will not be ready in time for the Jan. 19 warning deadline for the March 2 Town Meeting Day.

Suursoo noted that the question of whether to put an article on the ballot eliminating floor votes at Town Meeting was to be on that night’s agenda. Suursoo said he was not comfortable discussing this since voters have not been warned. The board decided that at its next meeting it would take up the idea of all articles being voted by Australian ballot, in effect turning Town Meeting into an “informational session.”

Budget items to be considered at Jan. 7 meeting

Looking at the budget, the board noted that it comes down to a list of issues, but that no decisions were made on these. Instead, funding levels were “penciled in” and the list will be considered and finalized on Jan. 7, the last meeting before the budget is due. Here is the list and the current funding levels going into the final budgeting meeting:

1. Part/time office person: to help so that Julie Hance, assistant to the town manager, can concentrate on assisting Pisha. Currently, it is envisioned as a 100-hour per month position at $10-$12 per hour. Board members reminded Pisha that they had asked for a job description for the position and noted that the town office should stay open until 5 p.m. rather than the current 4 p.m.
2. Full-time police officer: After a discussion of the number of police cruisers and the replacement schedule, board member Bill Lindsay asked Police Chief Rick Cloud which he would prefer: a new cruiser or another full-time officer. Cloud opted for the officer, who will be added for part of the year, and the new cruiser for 2015/2016 will be eliminated.
3. Paving budget: The board added $55,000 for a total of $105,000 and discussed funding it as a capital expense so unused paving dollars would roll over to the next year rather than becoming part of a general fund surplus.
4. Capital plan: Several members saw leasing trucks and other equipment as pushing the costs into the future to keep taxes low now. The amount of equipment and replacement schedule was questioned. DeBenedetti wondered what happened to the experiment to keep a truck past its replacement schedule and to see what the financial difference would be over time.
5. Library: Pisha had continued the reduced funding in his budget packet, but two board members objected. “Every other department is up,” said Jonynas, “and yet the library is taking the cut.” Bock suggested penciling in the $5,000 that the library lost in the 2013 budget.
6. Hearse House: DeBenedetti said he had heard that the fundraising had been disappointing and that the town did not have to accept the grant if it came in.
7. Proposed hiking trail behind Academy Building: Hance pointed out that the match in the hiking trail grant was in-kind and that she requested that the grant fund contribution not be cut since it acts as seed money for a lot of different projects. While most of the board expressed a desire to have the trail but not pay for it, it remained in the budget to be sorted out later.
8. Fuel purchases: The board asked Pisha to look at reducing the budget for fuels in light of recent reductions in fuel prices. Pisha was hesitant to do that, saying that he had seen different projections on the direction of oil prices.
9. Andover revenues: The board is raising the annual fee for fire coverage for Andover from $9,300 to $20,000, but wondered whether Andover can pay the assessment. The board said that it should have raised the assessment in the past when the amounts would have been less. Since the 2007 budget, the figure has been $9,300 (up from $8,280 in 2006). “It’s our fault,” said Bock, “we let this slide for 10 years or more. It’s on us.”
10. Salary/benefits packages: Board member Arne Jonynas asked that the total pay increase reflect the increase in benefits. According to the budget, health insurance (including all out of pocket expenses) costs $326,634 or an average of about $17,000 per employee. These lines are up $38,440 over the 2013 budget, a 13.3 percent increase.
11. Dispatch: Springfield Dispatch was briefed on the problems that Chester Fire and Ambulance have had with the service, but Fire Chief Matt Wilson feels that the best course is to make the $23,000 in antenna changes discussed at the last meeting and switch to Hartford Dispatch.
12. Springfield Regional Development Corp. DeBenedetti once again said that he wants to know who in Chester benefited from work done by SRDC and the monetary value of that. The SDRC has repeatedly said that information on its clients is confidential.

“The number is going to grow to a scary number,” said DeBenedetti referring to the next cut at the budget. “We’re going to need a heavy pen.”

“Everything is in flux,” said Jonynas.

The meeting at which the board will finalize the budget will be held at 6 p.m. Wednesday Jan. 7  and go as late as it takes to finish. Before it begins work on the budget, the board will discuss whether to bring an article to Town Meeting to eliminate voting from the floor at Town Meeting beginning in 2016. If such an article were to pass, all articles before the town will be voted by Australian ballot on Town Meeting Tuesdays and the Monday night meeting would be for information only.