Board seeks higher return on Chester economic loan fund

By Shawn Cunningham
©2015-Telegraph Publishing LLC

Having speculated for several years whether a loan fund created to help Chester’s businesses could get a higher rate of return on its unused balance, the Chester Select Board heard a presentation by representatives of the wealth management division of People’s Bank at its Feb.y 4 meeting.

The Chester Development Fund is a source of loans for Chester businesses to use to make improvements that will help their economic sustainability and possibly create jobs. The fund was created by a community development block grant and loans from it are reviewed by the Chester Economic Development Corp. (a private, non-governmental organization)  which makes a recommendation for the Select Board to approve or not.

Loans from the fund have gone to Putney Pasta, Misty Valley Books, Chester Laundromat, the Heritage Deli, Salon 2000 and most recently to Barre Pinske for his bear milling machine. Approximately $50,000 of the fund was lost when Connecticut River Bank foreclosed on Martin and Joan Straub, the owners of 90 The Common, which they were renting to the owners of Alice’s Restaurant. All of the other loans have been repaid or are currently in repayment. Applications for loans from the CDF and the lending policies can be found here.

In addition to lending to businesses, the fund has also been a source of bridge financing for shortfalls in the water and sewer departments and for cash to pay for other expenses that have some connection to economic development.

The new town website was paid for with $10,000 from the fund with the idea that its business directory and other features would generate economic activity. In addition to paying the annual appropriation for Springfield Regional Development Corp. in 2013, the fund has been mentioned as a source of money in discussions of several other proposals. As of this week there is $64,648 out in loans and $312,000 waiting to be lent or invested.

In addition to lending to businesses, the fund has also been a source of bridge financing for shortfalls in the water and sewer departments and for cash to pay for other expenses that have some connection to economic development.

Board chair John DeBenedetti has repeatedly asked if an investment vehicle could be found to increase the yield of the fund beyond the small amount that comes from keeping the money in a checking account.

Town manager David Pisha contacted Gary Gibbs and Remus Preda of People’s Bank, which manages the portfolio of restricted funds under the control of Chester’s Trustees of Public Funds and asked them for a presentation to the board. Gibbs and Preda brought a proposal for growth of principal and a larger return. According to their proposal, the fund should yield 3.5 to 4 percent per year without losing principal in the long run.

“Have they been furnished a copy of our lending policy?” asked board member Bill Lindsay, noting that loans may be larger than the amounts mentioned in the presentation.

“What’s shown here is what we would do if we didn’t have all these other considerations,” said Gibbs. “That can be amended. What you have here is typical, no other conditional or policy issues.”

“I could email that to you tomorrow,” Pisha told Gibbs and Preda.

Gibbs and Preda said that in light of the lending guidelines, which they had not received when they were invited to present,  they would reformulate their proposal.

“Individual loans are fairly low,” said member Derek Suursoo. “But the point of the fund is to spur economic growth and if we had 10 applicants, that could change the whole game.”

Gibbs assured the board that the funds would be sufficiently liquid to handle any lending needs the town would have  and to do it quickly. DeBenedetti said that time would not be a problem. “Our procedure, in-house, for loaning this money is rather lengthy … time is not a problem,” said DeBenedetti. “You’d have time to send the money.”

“Lots of time,” added Suursoo

“I didn’t want to say it that way,” answered DeBenedetti.

Katherine Otto of the Southern Windsor Regional Planning Commission appeared to explain how the Transportation Advisory Committee arrives at regional transportation spending priorities. She noted that 85 percent of the priorities are decided by VTrans and 15 percent on a regional level. Otto presented the board with a spreadsheet of projects and the board asked questions about paving plans, repair of the rail crossing on Depot Street and bridge repairs.

“Good things are happening,” said Suursoo, who represents the town of Chester on the advisory committee.

Work on Town Pool

In other action, the board signed a resolution to apply for a grant from the Vermont Land and Water Conservation Fund to replace the liner at the town pool. The grant offers a 50/50 match for the project, which has been estimated on the high end at $50,000. The liner at the deep end has small holes that have been patched, but the concrete behind the liner is crumbling and needs to be replaced. According to Julie Hance, executive assistant to the town manager, the town will do the concrete work after next season, after which the liner will be replaced.

Fire Department policies

Before the board could take up the discussion of new personnel policies and wage and salary scales for the Fire Department, Fire Chief Matt Wilson was called away to a chimney fire. Returning near the end of the meeting, Wilson said the fire underscores the fact that the department is increasingly busy. Wilson noted that in 2013 the department answered 116 calls, while last year the number jumped to 166 calls. This year – with just a little more than a month gone by – the department has answered 43 calls.

Pisha pointed out that the new personnel policies were reviewed by the Vermont League of Cities and Towns “word by word and line by line” and that VLCT “changed quite a bit of it.” VLCT is the insurer of the town through its Property and Casualty Insurance Fund. Pisha also noted that VLCT’s legal department had looked at the policies as well.

The board then discussed – at length – the question of the town paying for dress uniforms for fire fighters. Arriving from the chimney fire, Wilson explained that the dress uniforms are a morale booster and are used for funerals and other occasions. To date the Yosemite Engine Co., a private, tax-exempt non-profit that raises funds for the department’s needs, has been buying and maintaining a stock of uniforms that are altered to fit the needs of current firefighters. Wilson explained that not many uniforms have been purchased lately, but estimated that the annual need would be for one to one and a half uniforms, costing less than $1,000.

The board then questioned how to establish that firefighters are eligible to have a uniform. Wilson explained that there are percentages of calls and drills that the department keeps to determine who is in good standing. He suggested that “good standing” be the bar by which these concerns are measured. The board suggested that be added to the policies.

“If I’m hearing right,” said DeBenedetti, “this is the only objection to the personnel policies.” The board then postponed the vote until a new paragraph regarding the issuing of dress uniforms could be added.

Looking at the wage and salary scale for the Fire Department, Wilson noted that in years past, employers not only allowed volunteers to leave their jobs to fight a fire, but the employers also paid the volunteers while they were away. That is not the case anymore. According to Wilson, if an employer lets a volunteer go to a fire, the volunteer won’t get paid. The department’s wage scale helps to replace some of the income that firefighters might lose by answering a call during working hours.

The board adopted the pay scales with little discussion.

Dog poop at Cobleigh Field

During public comment, Chester-Andover Elementary students Kagen Hance and Everett Mosher appeared before the board to report that playing soccer on Cobleigh Field can be unpleasant owing to the dog droppings left there. They suggested signs and plastic bags available for dog owners on the field. DeBenedetti thanked the youths for their concern and told them that the town ordinance says that dog owners have to pick up after their pets. Suursoo suggested that having a container of bags attached to or under the sign might help and that this could be a good Boy Scout or Cub Scout project.

In new business, board member Bill Lindsay asked that there be an update on traffic ticket revenues at the next board meeting.