Select Board October 6, 2026

Thank you.

Megan, I don't have the HD channel numbers.

I can pull it up yet. Hold on one moment. Sorry, my page is just loading here. Why is everything like this? It is, yeah. My computer's just running slow. 1073 and Verizon is 2139.

OK, everybody ready? Yep. OK. Good evening. I'd like to call to order the Select Board Meeting of October 6, 2026. The meeting is being held in hybrid format and being broadcast live on new HD channels Comcast Channel 1073 and Verizon Channel 2139, and will be available for later viewing on wellesleymedia.org. Select board members in the Giuliani Room at Town Hall our Tom Ulfelder Vice Chair, Colette O'Frank Secretary, Beth Sullivan Woods and Kenny Largess. And I'm Marjorie Freiman joining remotely. Also here in the Giuliani room are Executive Director Megan Jopp and Assistant Executive Director Corey Testa.

Corey, I believe we have at least one person here for Citizen Speak?

Yes, we had someone reach out to ask to join us virtually but she is not in the waiting room. I sent her the link yesterday.

Okay all right let's move on Megan, please.

Thanks, Marjorie. Just a few updates. I wanted to first of all thank all of the many residents that attended the North 40 Charette. We had approximately 250 individuals come to the high school last Thursday to participate And so we just began analyzing that data and wanted to thank everyone for their attendance, and they're incredibly active participation. So it was great. We have another public meeting coming up for similar style, for the Wellesley Square Improvement Project. And that is for looking at the wellesley square amenities so sidewalks landscape and lighting but also Parking, Roadways, Intersection Improvements. And so that meeting is scheduled for Wednesday October 14th from 6 30 p.m to 8 pm at the Honeywell Elementary School 28 Cameron Street

That will have a brief presentation that will begin right at 630 and it will look at project stations for people to share ideas and to vote some priorities. sort of a hybrid of presentation and charrette style meeting. The Climate Action Committee also wanted me to share that they will be having the Greater Need and Wellesley Sustainability Summit, excuse me, that takes place Friday November 6th from 12 to 5 p.m at Olin Hall at Babson College Further information and registration on that can be found at the Climate Action Committee calendar or on the community calendar. We also wanted to thank everyone that came out for the weekend to participate and discover Wellesley down in Wellesleys Square. We have some new business openings. We just had a new gallery, Clarendon Gallery open last week and we have Village Bank opening.

And so the square is thriving and we encourage people to come down and check out some of our new businesses. That's it, Marjorie.

Thank you very much. We'd like to thank Beth for working with the merchants along with Corey for the Discover Wellesley weekend and I'd also like to thank members of the planning committee for The Charette, the Wellesley media for conducting their recording. And also the high school custodians who were so helpful in making sure we had adequate seating for 250 people. We have two items on our consent agenda tonight First to vote a takeout food license for Claude Elias at the Lower Falls Gas Station and Repair Shop, Wellesley Repair at 46 Washington Street. They're requesting board approval to install coffee and slush machines and staff recommends approval of the license application. And second, to vote an application for an updated CV and alcohol license regarding operating hours at Magus Cafe

Currently, the cafe closes at 5 and they would like to introduce dinner service and operation for special events at their discretion and have the flexibility to remain open until 10 o'clock every day. and open at 7 a.m on the weekends instead of 7 30 staff recommends approval of this application too but I'll turn back to Megan to explain how alcohol license will work

So under this, the Maugus Cafe currently already possesses an alcohol license that has been approved by the ABCC. So it's within the board's jurisdiction to just extend the hours. So we're just asking for no change to the daytime hours and seeking to extend those from 5 p.m. to 10 p. m.

Does the board have any comments or questions?

Roger, I only had one question about the gas station. Does that have to be subject to Board of Health approval? Yes it does. Okay because I think we might need to add that. otherwise I'm looking forward to the MAGUS being opened for dinner.

OK, Colette, may we please have a motion?

Sure. So I think that we can just move to approve the consent agenda as amended. And I'm not sure we need any amended motions here. So i'm going to move to prove the consent Agenda as amended second

Beth, aye. Tom, aye, Paulette, aye Kenny, aye and I vote aye as well. Thank you everybody. Our next agenda item is a public hearing to approve the Verizon cable television license renewal, so I will open the public hearing. We have an opening statement. Good evening and welcome to the Town of Wellesley's public hearing on the Verizon New England license renewal October 6, 2026. By way of background for the public, state law requires the holding of a select board public hearing prior to final action on a proposed renewal license to allow public comment on town needs and the proposed renewal license.

Notice of this hearing was placed in a local newspaper for two successive weeks, and copies of the notices will be entered into the hearing record as hearing exhibits one and two. A copy of the proposed Verizon license, as negotiated with the town is exhibit three Based on information and testimony before us and the record of the prior public hearing, the Select Board may take final action and approve or reject the proposed non-exclusive Wellesley Verizon license renewal. comments from the public and other interested persons should be directed through me, and I will rule whether they are in order. Before getting started with accepting public comments we would like to recognize and thank James Joyce, Executive Director the local programming provider Wellesley Media Corporation and John Harrington, Verizon's representative

for their hard work and collaboration through a productive license renewal process. Now we shall proceed to accept comments from the public if any, and we respectfully ask that you keep your comments to no longer than four minutes. Thank you. Is there anyone who would like to speak on the Verizon license renewal?

There's no one in the waiting room. I just texted with Bill August, our attorney who will be jumping on. Here he is right here. Hi Bill, we just completed the opening statement.

Thank you, good. I apologize for being a little late. I had a problem with the link on the agenda at the Agenda Center, that a little technical problem could be my own computer challenged

I had a couple of questions that I sent you, Megan. Do you want me to go through them? Sure. So my questions were... really around the exhibit A, which is a list of buildings. I think there was a couple of buildings that I didn't see there. There was Tolles Parsons Senior Center and I was wondering if the public works complex included the MLP building. I saw some schools, and some private schools there but not Starr Academy I saw Newton Wellesley nursing home, but not Elizabeth Seton. So those were the questions I had and then my other questions were given the length of the contract if there are new buildings would they get free drops as well? So I don't know if you want to address that Megan

Sure, I can address it and Bill can fill in any comments. So between the Verizon and Cable typically you only have one provider so in the Comcast license the properties just identified are listed there Following the completion of the contract, we also have the ability to add sort of at will any additional drops. So any of the new buildings will also receive drops as they come up just pending on who may have the existing line to that. Bill, did I miss anything on that?

The license provides that we may add sites upon request of the issuing authority, as you mentioned. Also, it's common for Comcast to have a longer list of sites because Comcast was there first. and Wired, the buildings on the list. So when Verizon was being licensed years after Comcast was already in the town it would have been duplicative to have two companies bringing basically basic service to the same building. Usually, the building only needs the cable programming from one company.

And I confirmed with Verizon today when I saw, because I received the questions late yesterday regarding the difference in the lists, and John Harrington who's planning to attend but I think at 6 45. I don't know if john is on yet He confirmed and I forwarded the email to Megan that in his many years of doing cable renewals, he's a lead cable renewal guy for Verizon. he's done hundreds. He has never encountered an occasion where if it is a public building and if it's along the routes, that's the criteria under the statute which we're incorporating where Verizon did not add the building to the list. So, the list is not static. We can request additions.

There is one change in law regarding the courtesy service to municipal buildings In 2019, the FCC adopted a regulation called the in-kind benefit rule. And it said that any community that is receiving 5% of gross revenues which is the maximum allowed by the Cable Act as a franchise fee, and Wellesley is getting the 5%, then any in-kind benefits the company has a reserved right to charge for. So Verizon, both Verizon and Comcast put in their reserved right to charge for them. They've been doing that for about five or six years. To their credit, they have never exercised that right but they do have to put it in for various legal reasons.

Thank you, Bill. That's very helpful. I have no further questions.

Hi John, thank you for joining us. Just for the record to you and Bill, we don't always run ahead of time. So we just started a couple minutes early so we're very grateful that you are both here.

I have been watching on the other channel. I'm sorry.

No problem. Are there any other questions or comments from other board members?

So, I had an observation question similar to Colette's and I'm wondering if maybe some of those sites aren't on there just because at the length of our relationship with Verizon. and if we should add the additional sites just for completeness as we move forward, since there are only a couple places. I was curious about, we're doing a project at Morses Pond which right now is really only a summer site but we don't know down the road what it will be like and I don't if that's on the route or off the route, but it could be recreational. have brought a recreational usage and weather including that as a drop site might be valuable. So I appreciate that we have the capacity to do it moving forward and I would defer to you on whether it's better get up to date.

And I guess my last question related to that is if there is the capacity to charge for certain drops, is that something where the town can select the sites that are charged for versus not charged for? Is that within the contract?

Well, we have the right to not be charged for a site by not requesting service to the site.

Okay.

Yeah. John, before you came in to the Zoom meeting I was mentioning how you shared your experience Verizon has continued, you know, has always added the sites future sites as requested if they're along the routes and they are a true authentic public building.

That's accurate, Bill. And I've been doing this for 20 years. I've never seen it as an issue.

and recognized expert. I really appreciate it, but the experience is more important than just the knowledge in this case. And it's valuable that you shared that experience. Thank you.

So shall I just move to approve the contract, Marjorie? Or do you want me to building language as amended in case Megan wants to work with the Verizon team to make any edits, although I'm not sure I hear the reason to make edits.

It sounds like what we have asked for can be incorporated within the current contract language, Bill. Is that correct?

Yes.

Okay.

Well, the sites can be added under the current language. Right?

Okay. Is there any other language that a board member requests specifically considered for addition?

No.

Okay.

I just lost the audio on that. Okay, I said no Bill so I'm ready to make a motion. So moved as follows Oh, sorry. So move to close a public hearing.

Second.

Collette?

Aye.

Kenney? Aye Beth, aye. Tom? Aye. And I vote aye as well. OK, Colette?

Move as follows. Acting in its capacity as a statutory cable television license issuing authority Pursuant to Mass General Law 166A and finding that the cable license renewal proposal of Verizon New England reasonably meets the cable-related renewal needs and interests of the public and town, and finding that Verizon's financial and technical qualifications and Verizon's local programming channels, facilities and services are reasonable to meet the town cable license needs. The Wellesley Select Board hereby approves and shall execute the proposed Wellesly Verizon renewal license to be effective November 6, 2026. Second. Tom? Aye.

Beth? Aye. Colette? Aye Kenny? Aye And I vote aye as well, okay Bill and John, thank you both very much for joining us. We appreciate having the length of your experience and your professional expertise in helping complete this license renewal thank you both very much.

Thank you. I also want to just quickly thank Megan Jop for being so consistently accessible and responsive and helpful. And also thank John Harrington from Verizon, also his great negotiation partner and James Joyce from Wellesley TV, who was always available to review language and provide feedback that we needed. Thank you all. and the select board for supporting the whole process, which made it all possible. Thank you.

Thank You very much Bill and John have a good evening. Okay, our next agenda item is the FY28 budget guideline discussions and I'll turn that over to Megan.

So we are awaiting Dolores to jump on. I did just text her to let her know were moving forward, but just a few updates. So the board had a good meeting at the all-board meeting on September 29th and so for folks who might not have watched that, I did wanna just highlight a couple things as we continue to evaluate the guidelines. Rachel, and I will come forward at our next meeting following this COLA discussion depending upon your deliberation on some suggested guidelines or individual individualized guidelines for your consideration at the next meeting but so a couple things we wanted to just raise that continue to be considerations under the board All union contracts still remain open. We are hopeful that we may have several contracts settled for special town meeting, but we're working to get there.

The health care memorandum of agreement with all unions will need to be negotiated prior to open enrollment in April of 2027. So, we have not commenced that as of yet. We anticipate commencing that shortly. The Talmont Financial Plan currently anticipates an 8 percent health insurance cost. That's an unknown cost at this point that will not be set until February. I will have a better range in terms of active employees likely in November, December time period. We did just vote the Medicare rates today. Dolores is just coming in now. We did vote the Medicare rates today at West Suburban Health Group. And those were variable rates, so as predicted Blue Cross Blue Shield continues to perform better than Harvard Pilgrim and other plans for the retirees.

We currently have the rates of, and I think I have it up here. Okay. There's multiple programs, so for Blue Cross Blue Shield it's a range of two different programs. One was at 2%, one was at 5.6%. The Harvard Pilgrim Healthcare was roughly at 13%. These are for Medicare supplementals. and Fallon was low at 2%. So we have budgeted a 6% year over year increase so with the blend and the way we are proportionally directed towards Blue Cross, Blue Shield will be able to meet that target.

The other item I just wanted to address which was raised, we have several somewhat unanticipated software cost increases. So Munis who is our financial software vendor has indicated $100,000 each year for the next three years. So $300,000 total. We're continuing to negotiate with them on that We also anticipate both at town hall and the library has raised this as well, a subscription rate increase at 5% or greater. We'll be implementing our applicant tracking software. It's a capital project that becomes operational in FY28 with approximately $24,000 annually for town-wide use. Dave Cohen, DPW director had identified that the trash contract renewal is expected to increase between $75,000 and $100,000.

that water rates, although not taxed impact but certainly impactful to our residents are anticipated to increase 15% and that does play a factor into our own utility costs. Sewer rates anticipated to increase at 4%, which has been consistent with past years. The schools identified potential new state graduation requirements, they're currently in discussion at the legislature and those potentially would have cost implications. They also indicated the yellow bus contract renewal which we anticipated for FY28 will be up and certainly within past review of contracts there's generally a considerable increase in year one with more modest increases in the out years. The other item I did want to just flag for the board is 888 will be closing for the FMD staff as well as the land use divisions and we anticipate that cost, lease cost

almost doubling based upon the cost per square foot for rental, and there'll be a capital cost to move those departments and reestablish offices. We're expecting those to go out to bid in January, in order to have those costs back for town meeting. and I think it might even be backed up just a little bit but we've been obviously in discussions with multiple commercial property owners in town to evaluate space availability as that goes on. So just some highlights that we anticipate impacting the FY28 budget from the all board meeting. So with that, Dolores has joined us and Dolores is going to give the board an update based on the HR boards discussions with regards to the cost of living adjustment. Dolores, are you on?

Did she drop off because her image was up there and then it dropped off? I see her.

I may have stepped away and closed her video.

Here she is.

Hi, Dolores. Thank you for joining us.

No problem, thank you. Let me see if I can share my screen. Are you seeing anything at all? Yes. Awesome, I really hope it works tonight. I froze on slide one last night and had to work it differently. So we're looking at the cost of living Let's see. I've lost my mouse. Okay, it's frozen again. Let me... Try again.

Dolores, I may be able to put it up.

I'm wondering if you can... New computer, new monitors. Something's not connecting. It keeps freezing on me.

I can put it up to earth.

Awesome. Thank you. Thanks, Megan. Sorry about that. I practiced yesterday and it was fine, and then it hasn't worked since. There we go. Okay, so we're projecting the cost of living for the FY28 fiscal year. So the first slide The key indicators that I've been looking at for the last few years are the CPI for the Boston, Cambridge, Newton area. As of July, that was at 3.7. That's down a little. Actually, that's up from last year we were at 3 point 1. The personal consumption expenditures index is something that the Fed looks at for inflation. As of August, that was at 3.4%.

Then I also looked at the Federal Reserve of Philadelphia that does a survey of over 1,000 economists who are way smarter than me. and they've forecast a 2.3% for 2028, and also 2.34 2000 For the rest of 27 and for all of 28 that's what their Projecting. The first half of 27 is part of our fiscal year, the second part is part The other thing I always look at is what the state and other local governments, what it's costing them for wage growth. And that's 3.4 as of June. and then I look at our comparable communities. And right now they're pretty much at 2.5, next one Megan?

So this just shows last year we were looking in September at the COLA and it was starting to go down, so we are looking pretty good. and then unfortunately we went to war, so we couldn't have predicted that. And that caused the cost of living in our area to go up to 3.7%. Next one. the Personal Consumption Expenditures Price Index that was 3.4% in August, same as it was for July. Next one And you can see from this one, the personal consumption expenditure. It's going down very slowly but at least it's going Down The next release isn't until the end of October so that's a little far out but we'll see what it is then Next one.

So the consensus inflation outlook from the Federal Reserve Bank of Philadelphia survey is projecting 2.3% for 28, calendar 27 and calendar 28 so that's part of our fiscal year Next one. Our comparable communities, what we're looking at right now is a 2.56 some of the key communities that I would normally look at including Arlington, Dedham and Needham. have not started yet looking at that. They are planning to put numbers on the table, but they can't tell us what yet One of our unions asked specifically for Ashland. I was talking with them today. They can't tell us yet what their cost-of-living increase is going to be, not for union or nonunion right now. Next one?

So this just highlights where they are. The average is 2.5, the median... I'm sorry, the average is two point five six. The median is 2 point 5 and there's only a few that are looking at three. I know a couple of the ones that are Police or Fire Department got to all employees, including non-union. Next one So this is just who's there. And as I said, we're waiting to see what Arlington, Ashland, Dedham and Needham do. Sudbury a little bit, but I'd really love to know what Arington, Dedhem and Needam do. Next one. Okay, so our board looked at the numbers last night and they voted to recommend a 2.3% to 2.5% COLA.

So that's it for now. Okay, Megan want to pick it up from there?

So we've also looked at a couple of other, or I should say Dolores has also looked that a couple other factors that I have forward to the board. in addition to COLA for our merit pay employees, so for our salary and hourly employees. So our hourly employees based upon the new Payskill that was created, many of them are almost all of them still within taking steps and those are at 2.75%. in addition to that, we unlike many communities will continue to have the merit pay pool. So last year on average We, the merit increase was approximately 2.9% on top of that 2%, which is a 4.9 percent increase so when you look at total compensation the hourly employees were at

4.75% last year, and our merit employees were at essentially on average 4.9%. So I think that when Rachel and I have discussed it, I know the HR board is looking at from a COLA adjustment, the 2.3 to 2.5 but if we look at the total compensation Rachel and I's recommendation is closer to two percent based upon the potential cost.

Because you're making because you're adding the 2% to the two point seven five steps and the merit pay pool as well. So, the effective increase is not only the COLA?

That's correct.

I know Beth and I both have comments. Margie, I don't know who you want to call on.

Yes, please go ahead. I wasn't sure if Rachel wanted to jump in now. Go ahead, Colette.

Rachel's coming up to the table but so do you want to go first Beth? So I think when I'm thinking about this, I'm sort of thinking of a couple things. What can we afford, i.e., how can we balance the budget and not adversely impact other budget obligations? what is reasonable given the key indicators for cost of living, what are our peer towns doing and what happens when the HR board and the select board recommendations differ. So before, Megan just laid out what I was hoping to hear. So I do want to say that Megan had given us some information to say quarter of a percent increase in the COLA has a knock-on effect of about 25,000 increase in numeric pay compensation. So there's kind of a domino effect here we have to be aware of

so when I'm thinking about what can we afford, I'm hearing from staff that 2% is more in the range of what we can afford and we're mindful that we haven't closed union negotiations and even without that we know that there are we're looking at an operating budget gap and the capital spending range for cash capital and inside the levy borrowing has still not recovered from being squeezed two years ago to meet the budgeted operating needs constraints. So I think we really have to be mindful of what we can afford. The second consideration is what's reasonable given the cost of living indicators. And what I'm seeing as the key indicators from the HR board presentation that's been between 2.5 and 3.7%. That's in slide two. The personal consumption indexes are 3.4%, but they seem to be dropping, and the consensus inflation looks like it's dropping to 2.3%.

So given that, I do feel that a 2% COLA plus merit pay with the overall average between 4.75 to 4.9, that's reasonable. I think overall the picture is reasonable and then the third consideration, what are our peer towns doing? I think the average is 2.56 with some important data points missing that Dolores talked about but I feel that, like Megan said, not every town has the merit people so we're not comparing exactly apples to apples. We should look at whole compensation And so the last consideration, which is what happens when the HR board and the select board recommendations differ. When the HR board recommends a higher COLA than the select board, the salary tables move in such a fashion that would maybe set the department outside the select budget guidelines and cuts might be needed, but I don't think that we're there yet. I'm not seeing that.

And also the HR board is taking steps to introduce a group 16 to deal with the one case where that might have been a problem to us So I think that's okay. And I think in some cases, given what we talked about that total pay is cola plus merit but the tables are moving just by cola it might actually be appropriate and we should keep a finger on this that the HR board recommendation is slightly higher than the select boards. and so I'm comfortable with what staff are recommending at 2% HR board needs to do their own thing to make sure the tables are okay and I hope that members had actually read the minutes of the policy subcommittee because this is essentially what we talked about, a policy sub committee. We're trying to develop some guidance in the handbook because this complicated

I find this really challenging to get my head around every year but the minutes are right on point with us to say you know what should we be thinking about and what happens when the boards are different HR board is really trying not to compress this table so It's a long way of saying I'm comfortable with 2%, I'm comforatble that HR has to do something different and I guess I'll pass it on to Beth now.

So Dolores, thank you for doing the work to get us all those figures. I think it's really important that HR bring us an accurate and so forth. I think it's a good kind of independent reading of what is going on in the market in terms of COLA, and how the salaries are moving across our peer communities because we do want to fairly compensate people. I am however concerned, and I think Colette this is where you were going also that looking at COLA as the sole barometer of Compensation, and using that as a way to compare us to peer communities is misleading. And we don't have on the Table, what is happening in terms of bottom line compensation? And I did a quick look at the Bureau of Labor Statistics and the numbers on your first chart, Dolores, are actually

and Gross Improvements in Salary for the Workforce in our community. So it's a bundled COLA Merritt and Raises, et cetera. And so it seems that total compensation improvements are tracking COLA and for us we do COLA and then we have the incremental pieces which I think is a good way to think about it because you're giving us the honest look of what should the total shift in compensation look like, to keep our employees whole. But given how Wellesley's structure is different we need to think about how much of that should be fixed on a COLA basis and how much if that is covered in steps, longevity, merit et cetera because right now we're saying

were gonna be a couple percentage points higher on average than our peer communities in salary increases. and even if we went with the COLA, you're recommending all the other is incremental. So I am... comfortable recognizing that Wellesley does it differently, and therefore what we call COLA is not necessarily COLA. It's part of the core compensation improvements but we have many ways to keep our employees whole. And that's our job of what's the total nut, that we can ascribe to compensation as opposed to rethinking it and putting it all on COLA and getting rid of everything else.

Thank you very much, Beth. Tom, Kenny.

The question I was going to ask of course was answered which is the effect that our merit pay program has as well and I think we've now talked about that satisfactorily to the extent that a 2% COLA is I supported 2% COLA. But I think there's another comment I want to make as well, in the past week or two We have been getting a very clear message about concern over the impact on the cost of living in Wellesley from our capital improvement program. What we understand on this board is that Article 8 in the total town budget includes an operating budget as well. and so we have the capacity to watch spending on the operating side in addition to the capital side. And I think that's important because

We cannot slide back into a period of deferred maintenance as a way to save money. We saw this most graphically with the old high school, which was simply unsustainable as a capital asset and we had to build a new high school regardless of whether we should have. It's an excellent, new building but my point is that I think we're being sent a message that we need to watch are total expenditures. And I'm saying that that's not just capital, that's operating as well for a total budget that we present under Article 8 at the annual town meeting. So certainly I think it's a good start to go no higher than 2% in the COLA.

Thank you, Tom. Kenny?

I don't really have anything to add to what was just said other than I support the 2%. And while I find the COLA interesting, it's only a piece of the puzzle and without knowing the total comp. compared to other towns it's in the vacuum I don't know that it tells us that much.

Well People have pretty much said what I have said, and I think it's complicated for our HR board and for the Select Board because we are looking at slightly different indicators and our compensation package is very different than many other communities. We've been working very hard to get our salaries competitive, and bring all of our employees up to the median. And I like Tom's message about counterbalancing keeping our staff at appropriate salaries with also being very careful of our operating expenses because the personnel costs are very high, but operating costs aside from personnel are where we can make some difference as well.

And I've been hearing, as Tom has and I'm sure everybody else says that taxpayers are very concerned about the increases in costs projected for the number of capital projects we have over the next number of years and the projected debt exclusions. So I'm with the rest of the board and would support 2%. Dolores, when you hear from the other towns what they decide to do. Megan is there anything you or Rachel anything you would like to add?

I was just gonna suggest, but it's sounding like the board is leaning towards that 2%. I think we were just discussing earlier if the board were to go higher. for Kohler on the 2%, then we would just evaluate the merit. So again, we have that pool of funds, $275,000. We may need to evaluate maybe merit would be less than 3%. and again, would work with HR on that. But it's sounding like 2% is ultimately the recommendation so we may not need to take that path.

Megan, anything else?

No. We're continuing to pull together the various components. Paul Manganaro has spent this week largely pulling together all of based upon any projection outside of COLA, you know stepping people up et cetera to see what that would cost so we can fine tune our guidelines. I think we'll have continued discussion next week is one of the strategies I think Rachel and I are going to recommend to the board in addition to evaluating the individualized guidelines, in particular because there's so many different departments that continue to be in negotiations and some likely, a good many of them that we're gonna bring to annual town meeting not special town meetings so establishing the budget becomes even more complex.

is also in looking at the operating budget, really focusing on many of the departments on either flat expenses or nominal expense increases. We certainly have to identify some of the departments as DPW indicated they're going to have contractual increases that will impact their expenses. but otherwise we think we're going to, and we're looking at that as we evaluate each of the budgets. And based upon some of the all board comments obviously some IT components will have to go up There's going to be, in anticipation of the personal services increases a reduction in expenses.

And we also signaled at the old board meeting last week that it's not going to be a big year for strategic initiative expenses as well, and that will be looking at cash capital. Yes.

And I was just going to add, as Paul's been working through updating the budget templates and I think you may have noted this earlier but as for the number of Pay days or pay periods, we've usually been seeing the 52.2 but there's what is that every seven years? We see that shift so FY28 it's actually 52.4 so that's around a .39 or 0.4% extra, so again we will be seeing that. That can add up, so it is just something to be aware of So again, we set a 2% COLA. We're actually going to be seeing the year-over-year budgets for those nonunion departments to go up on average it would be if they don't have any steps 2.39 or 2.4, so just wanted to note that.

I think the other thing we all need to be mindful of is the majority of the operating budget is personal services. So pinching expenses doesn't get us as far as we might hope, just because personal services is really where our massive investment is as a town. So can I just ask a question? Are you going to model out what 2% looks like for us before we vote on it? Are we gonna see kind of how that looks

So yeah, for the 2% for the non-union staff. And Dolores did that include your model? Did that include the steps or no? That was just the straight, yeah. So the straight amount is what I sent to you all with the merit.

Was it this afternoon?

Hold on, I can tell you what it is.

Was it with the 52.4 weeks?

Dolores, was that at the 52.4? That was just taking the salary and adding the 2%. So it would be slightly higher with a 52.5. So we can come back with that. Yeah, I would not recommend the board vote on that. We would vote as a package. We have direction from the board in terms of the guidelines but yeah we're not seeking a vote on the COLA tonight we would look at that as a total package for the guidelines

I just want to take a minute to recognize that this is an extremely busy time for Dolores and Rachel and Megan. We're in the midst of all budgeting and union negotiations and wanted to thank you all for the level of detail and work that you're all putting into this. This is one of the most important decisions we make at this time of year. And we couldn't do it without all of your hard work and information, so thank you all very much. So Megan will pick it up again next week.

Yes.

All right, Dolores. Thank you very much, Rachel. Thank You very much as always and please extend our thanks to your staffs for all their work as well. We know you work his team so we appreciate their work is well All right, if there's nothing else on the COLA we'll move on to our next agenda item which is special town meeting preparation. We have a few things to discuss, and first I'll turn to Colette please for the discussion on Article 5 Capital Stabilization Fund and the associated policies.

Thanks, Marjorie. So I know there is a lot of interest in this item from many perspectives and understanding that there are always new board members and new town meeting members, I do want to spend a little time level setting. So I apologize before I start here, I might go on a little bit. So just a reminder of where we are in the process. The board has been discussing revising the financial policies, including the capital financing policy the reserves policy, and establishing a capital stabilization fund policy in response to several things. to plan for the operating budget capacity that may be freed up from future pension and OPEB funding streams. to more effectively plan for known significant pressures in identified capital projects, to respond to feedback from ratings agencies regarding national trends and reserve balances being closer to 20-25%,

and to respond to feedback from advisory committee regarding more clarity around intended uses for reserves, and long-term capital planning. and as a result the establishment of a capital stabilization fund is included in our work plan. It's certainly something that I've been working on for some time So the Select Board Policy Subcommittee took up initial discussions of debt management and capital stabilization strategies on July 30th, 2026. On August 17th, the board agreed that establishing a capital stabilization fund was a high priority and included that as a placeholder on the warrant for town meeting action. I will note that the select board policy subcommittee is kind of winding down its operations. We've got other committees that we're establishing this year and creating bandwidth for those committees

and we also felt in our discussions at the policy subcommittee that the debt management and capital stabilization aspects, now that we've done some initial legwork and research really needed to be discussions of the full board. So the full board had an initial discussion on September 8th, and I was tasked with bringing draft policies and more analysis to the Board for consideration. So the draft policies and further data is included in the packet. Some financial modeling remains to be conducted, particularly the impact of potential debt management strategies on projects included in 5-10 year termite capital plan So tonight in the packet, there's a lot of information. And I don't propose tonight reviewing the policies in detail and kind of getting feedback line by line on the policies but rather to discuss at a higher level the intent of the policy amendments and areas of focus for the board as we start our review. So again, I've got a lot to say here.

The intent of the policies The board has been sounding a clarion call for more than two years now as major capital projects have blossomed. The five-year capital plan in the major project financing schedule presented in the spring of 2023 totaled just shy of $93 million. that number grew to 260 million as costs greatly escalated for air conditioning, roofing, HVAC systems and increased significantly for some major capital projects in particular a new preschool, a change in the approach to the DPW campus and the addition of costs related to the fire department master plan. that's what's included in the one pager and that we're all familiar with in the townwide financial plan. That's just building projects, that is not civil insight projects like roads and playing fields and it's not enterprise funds.

And those projects like PFAS remediation, MWRA projects et cetera which run in the tens of millions of dollars per project The total capital picture facing taxpayers and ratepayers approaches $400 million. So the approach that this select board is taking, I describe as three legs of a stool. The first leg is to establish a town-wide capital planning committee to evaluate projects in a structured way and to make recommendations to the select board and allow the select board, town meeting members and voters to look at projects holistically. Not individually has been the case. This leg of the stool is well underway with the Capcom policy established and Capcom has two meetings deep into its first year. The second leg of the stool is to establish debt management parameters to allow the board to be more proactive rather than reactive in capital planning. How much is too much?

How much should voters be asked to bear proportionally what makes sense in terms of spreading the burden between operations and debt service We're in our second full board discussion of that now with a good understanding of the tools available and recommended by the Government Financial Officers Association or GFOA, the Department of Local Services or DLS and what other towns do through the 351 town data sources from the DLS dashboard which is a dedicated section on debt and reserves. the two common strategies recommended are limiting general fund debt service as a percent of gross revenues likely 10% or below if we follow best practices that we see in our peer towns currently Wellesley stands at 9.21% and total outstanding debt as a percent of equalized values which is the value of assets that we derive our taxes from mostly real estate That's likely to be 3% if we follow best practice that we see in our peer towns.

The law maximizes the amount at 5%, and Wellesley currently stands at 1.15%. before we finalize those parameters, we should model out the interplay of the parameters with non-capital projects. And as a side note in my research for this in the Tang Mai financial plan that was presented to Annual Time Meeting in 2007, there's a slide dedicated to these exact metrics. This is something the board has considered before as an important indicator. The third leg of the stool is establishing a capital stabilization fund to direct available funding towards long-term strategic planning. The town amortizes debt on a level principle basis, which allows the rapid reduction of debt but has higher costs in the initial years of repayment. Establishing a capital stabilization fund can have a dramatic effect on ameliorating the high years by applying reserve funds to smooth the payments out.

but it's critical that we funnel available sources to the Capital Stabilization Fund to be applied across multiple important capital projects until we are in a more reasonable position with capital proposals and the 10-year Townwide Capital Plan. The available sources we have are current free cash and in the future pension and OPEB funding capacity. I will note that despite our best efforts, OPEB funding capacity anticipated at 200 to 250 thousand per annum has so far significantly been eaten up in closing the operating budget. So even when the capital stabilization fund was excuse me, sorry. So the OPEB funding has been really significantly opened up in the operating budget so that may not be available to the capital stabilization fund as we hoped. Free cash to close the budget has actually increased by 500,000 from FY26 to FY27.

So we have to build the capital state stabilization fund up to allow us to pay for capital projects and as much as possible to live within our means for capital budgets. The capital spending range last year I wanted to point out was 5.79% last year, so that's below a range of 6.2-6.8% of the budgeted operating revenue. Okay, so in establishing the capital stabilization fund we need to think about reserves much more broadly. What feedback do we have from our rating agencies? As we know, they've been reporting national levels closer to 20% to 25%. What are the trends that we see in other municipalities? I will note that the 351 town data shows average reserve levels at around 20%. Every town's different, but that's the average. What do we have available to use already to plan prudently, i.e., free cash?

And what are the pressures on free cash to close the budget What budget unknowns are there? We're in the middle of union negotiations. There's a lot to be settled on health care, there's other proposed free cash uses and then finally, what is the appropriate level for Wellesley with our strengths? Pension and OPEB funding, solid residential property tax base and our challenges. which is operational budget squeezing, the capital spending range and some very large capital projects on the horizon. So as a reminder, it's best practice to review our financial policies every three to five years as things change which is exactly what we're doing right now. We are in a very different position from when we established the reserve policy back in 2012, when reserves were 14 million or approximately 8% of our budgeted operating revenue. and it has taken years to build up from a low of 1.8 million in FY03

When we revised the policy in 2023, our reserves were running high as a result of COVID. Our financial preparations for that unprecedented situation unprecedented interest earnings of approximately seven million due to high borrowing for major capital projects, the schools combined with a rapid increase in interest rates elevated turn back from hiring freezes followed by a difficulty in hiring, and ARPA funding of $3 million. At that time, we seriously considered an upper level of 15%, but decided instead to build into the policy emergency buildup and emergency drawdown provisions. We were more focused on global volatility than on capital pressures as significant projects were not in pipeline at that time. So the way I've structured the proposed policies are as follows.

The proposed revision to the capital funding and debt management policy is fairly straightforward, It includes language to reflect Capcom, and it proposes two debt management strategies as discussed. The general purpose and unrestricted reserves policy again is fairly straightforward It's really asking the board about the upper level of the policy in conjunction with the establishment of a capital stabilization fund. We could maintain the current 8% to 12% of general purpose and unrestricted reserves or increase it to the upper level of 15% as we have been considering for some time now. The capital stabilization fund is all new, my approach here was to bifurcate the general purpose and unrestricted reserves and capital stabilization funds rather than have a combined reserve policy. The policy was drafted drawing from GFOA, DLS and existing policy languages regarding reserves

So depending on the upper level of the general purpose and unrestricted reserves, the capital stabilization fund would take up the balance in a recommendation for a combined level of those two reserves at 25%. The initial discussions with the CFO indicated that 25% was considered to be realistic to achieve meaningful smoothing of the proposed capital projects. Given that we are attending advisory committee tomorrow, we have significant policy issues to discuss and some modeling to complete. So that's really why I'm recommending we hold this to annual town meeting but I do think it's important that we have this discussion. We share our thinking, we share the history and I wanted to get initial board feedback at a very high level and then perhaps members can submit red line comments and edits to Rachel and we can continue the discussion So I apologize, I know that was long.

I know it was a lot but there's a lot of history and thinking and strategy in here so i'll turn it back to Marjorie um and to take some comments from board members

Thank you very much, Colette for that in-depth introduction. And also thank you for all the work you've been doing on the policies and with Rachel and Megan I know your Capcom Packett for yesterday was, I don't know 250 pages which represents a huge amount of time and Effert. I'm going to open it up to other board members for their comments as well, and then I'll add mine at the end. Who'd like to start?

Go ahead Beth. I'll kick it off, thank you for the tremendous amount of work Could you clarify for me who's working on this? Because I thought it was the policy subcommittee, but then in the notes it said you and Marjorie were doing it. So are all three of you doing it?

No, so it's a good question. So Policy Subcommittee did some initial research. Well I did some inital research and then Rachel attended Policy Sub Committee to talk about that with Town Council Megan, Kenny and I. And that was the basis of what we brought forward to our initial board discussions on September 8th so the boards had a number of discussions on september i think it was eight and i can't remember the other date then I was charged with developing policies to bring back to the board. We've kind of wound down policy subcommittee so that's not ongoing anymore and so I've been working on drafting the policies with Rachel, Town Council and then as we get ready for tonight with Marjorie but that's mostly Rachel and I with Town Councils input and then some edits from Marjories

That's where we are now. I guess I missed that policy subcommittee wound down, so thank you for that. I just missed it. You may have told us, I just didn't know. So at a high level I'm not sure I'm ready to give you red line comments because I think we need a deeper philosophical conversation about where we're going and how we're trying to get there. We fundamentally have a structural imbalance. We have our core revenue going up at tax base, going up 2 1⁄2% a year and we have our salaries going up by close to 5% a give or take, right? So that right there is a problem if you think about salaries being the largest part of our operating costs.

So it's not clear to me that smoothing the capital is going to address the structural imbalance that we have that is eating up the wind down of the OPEB. and the pension funding. So that, I think I need a chart to see that but my gut is that it's not gonna... The offset isn't going to be there. It leaves us as we have been for awhile dependent on the economy and the other sources of revenue, excise taxes, meals taxes, new growth. et cetera. And those are the engine that fuels our ability to sustain and our capital projects.

So that was one kind of observation I think we as a group need to kick around how much we think live within our means and not use the freed up capacity for pension and OPEB to deal with the structural imbalance. The second piece that was not clear to me, was our vision for the capital stabilization program. The concept of smoothing and helping alleviate the pressure of those payments is very attractive. My assumption on these major capital projects is that they're debt exclusions. So I'm not sure how we're going to smooth something that the taxpayer is paying as part of their tax bill.

So that, I'd like to understand better how that is going to work. I understand the smoothing if we're financing inside the levy and how that would free up capacity. But at the same time, I think it has the opportunity to limit our flexibility in the short term because it won't have unless part of when I was reading this it seemed like we were going to funnel all of the, I don't want to call it free cash but all the savings, the surplus Cash into this account over 12%. But I don't think it's going to build up fast enough to pay for capital projects. I think it will just hinder our capacity to stay within the 8 to 12%.

So I need to see how in practice, so I think we need to do some what if games on how you envision and I'm sure it's clearer to you than it is to me but I was having some dissonance on how that would work.

Can I maybe address that, Beth? So I like to use the DPW. So if you were going to borrow $100 million for... 25 years at four or 5%. I think it's, I think at 5% we did it out. It's because we always base everything off of level principle It basically is a diminishing amount, right? So you would start year one at the $9 million in terms of your debt payment. Year two, 8.8 million, 8 point 6... it diminishes by about $200,000 a year. So I think $4 million or something in that time period. So how capital stabilization fund would work is you would go out to debt exclusion but you would make a commitment that we're going to hold your debt payment at a level.

So if I pick 8 million, so I'm gonna hold eight million for five years it might drop down further than that after that based upon another analysis and so year one we would take a million dollars from capital stabilization to pay off that peak. Year two, we would 800 thousand, 600, 400 and so it's basically a $5 million hit that would smooth out over five years, and maintain a level payment for the taxpayers at an $8 million rate rather than at a 9, 8.8, 8 .6, et cetera. So you could factor that in. In tranches, it would be more upfront to hold you at a $6 million annual payment. You can do the math on that. but that's really when we say, that's why I like the term shave the peak although it confuses people because of our electric.

But that's what it does is you are going out to borrow but you're heading off the major borrowing years, like those top years where it's the most painful to the taxpayers and decreasing the annual payment and making it consistent because As we all know, if you have that consistent payment undoubtedly your operational costs are going to increase. So the tax payments gonna continue to increase but it's not jumping in tranches each year for the taxpayer. That's really the theory behind it.

Okay, so I think this is where like a visual would help me because I think about as shaving the peak by phasing our capital projects so that as Capital Project One starts to tail off on the tax bill, Capital Project Two comes up. And then it tails off and Capital Project Three comes on so that is the way we keep more level tax over premium tax charges as opposed to shaving each project. I guess in my head, I would think that the total is going to rise over time because each one's gonna be shaved a little bit but it's not gonna tail off as much as the next one coming on. So does that make sense?

I'd have to see how it worked in practice because it feels like we're giving up a lot of flexibility of not going out for debt exclusion on certain projects. what could result in maybe not as high, but high for longer.

I think I need a chart. Yeah, we can show you the chart because keep in mind the other projects which we currently have from outstanding debt exclusions they're also tailing off so so we're feeding that tranche in and then trying to maintain it with the capital stabilization

So, I'd like to model what we think it would look like and does capital stabilization count as free cash when we go out to Moody's or does it not count?

I mean, that's something that the board would decide for the reserve policy whether they want to include the capital stabilization fund but when Moody's is looking, they're looking at our free cash general fund reserves. They're looking the general purpose stabilization and they are looking at the enterprise funds but we wouldn't consider that again those reserves are for the self-sustaining funds but so no Moody's would not be looking at our other special education reserves injured on duty compensated absences they wouldn't be looking Capital Stabilization.

Can I just jump in there a little bit? Sure, yeah. So my understanding, Rachel, and that I think you can confirm if I'm wrong When Moody's is looking at our rating, they look at all of our reserves. But aren't they looking at all the reserves across town including at the enterprise funds and things like that? Yes. Yeah. Yeah, so well I don't think it's considered free cash. It's certainly part of the reserves that they factor into a rating.

What I've heard recently, I thought is that free cash plus the capital stabilization fund is what Moody uses for their recommendation of 20%. so that the capital stabilization fund specifically is seen in a positive light by Moody's in our bond rating.

I see what you're saying. So later, I was going to share the free cash balances that are a part of the ACFER but again if we were to, if the board were to establish Testa, Ulfelder, Wellesley, Councilor the board, I think Colette alluded to this. When we're looking at our overall reserves percentage would we because currently we're only looking at the general fund certified free cash plus the general purpose Stabilization Fund. We're not picking up our other stabilization funds, so that's what I was alluding to. That would be a decision by the board where we want to revise the reserve policy to also include the capital stabilization reserve.

and the way I've kind of set it up is, I bifurcated it so you're giving yourself some guidance for the two reserves together. And I wanted to ask one of your questions, answer one of our questions that was basically if you create a capital stabilization fund is it going to cannibalize essentially the your free cash and your general purpose reserves. No, because the policy is written such that the hierarchy is to meet our policy for the Unrestricted and General Purpose Reserves first before we then put anything else to the Capital Stabilization Fund. And I did want to touch on one of the other questions you have, the structural imbalance.

Can I just follow up on that? So if we had had a capital stabilization program when we did town hall, we would not have been able to do town hall with free cash.

So I think, we should talk about that separately because... But that's what this says right? Well so this is not designed to fund any one project in entirety. Not that we have written it. with free cash. But I think if you want to talk about Town Hall, we should talk about that separately because it was very different.

No, I wanted an example that would have limited our capacity to do a significant project that we believed should be funded inside the levy instead of going to the voter.

Well, this has got nothing to do with the inside the levy borrowing at all. So the Capital Stabilization Fund is designed to assist all projects not directed at one specifically and so that it's good This has got Nothing To Do With Inside The Levee Borrowing

Well, it takes away resources from free cash. Right? Takes away resources for paying for a project within the levy.

So free cash isn't inside the levy. Free cash is separate, but if you're saying it's... I think your question is, if it's in the capital stabilization fund, is it more restricted than being in free cash? Yes, that's the purpose. you're actively doing financial planning for long-term multiple large capital projects and so you would therefore need to spread the wealth amongst all the projects that we think are worthwhile. as a board and as a town, each project would have the ability to have assistance from this fund.

But the other thing just to add to that point Colette is if you had, so you would still have free cash balance and you would also have capital stabilization right because your incrementally putting in there's nothing that would preclude you from potentially saying okay before we put this out to debt exclusion were going to absorb some amount in free cash. Then this bucket, say we put $3 million... I'm making this up too...$3 million into a project to reduce the overall borrowing, and then we put it out to debt exclusion. And then on top of that say, and we're gonna use X amount from capital stabilization. So I think there's... It's not a one or nothing option. There's really a lot of hybrid different solutions that could be employed on any given project.

And before, I'm just going to pause you. Before in the hierarchy it specifically says we're going to fund free cash use as we've determined are appropriate then we'll make sure the 8% to 12% policy is addressed before capital stabilization. So you're going to look at all those things first. If you feel that you want to apply free cash to something as a board, then they can before you decide what you fund in capital stabilization

I just want to say, I think Megan's point is critical. Two financial goals can coexist. This is the point we would not have drawn down We were in a position to make that But here, in any given year you can decide how much your diverting to the capital stabilization fund knowing what capital projects you might want to pay for outright out of free cash. You have flexibility.

I would also say another thing about Town Hall is that we did not have the list of capital projects ahead of us at that time as we do now. And I would argue that putting money into the capital stabilization fund is a better way to do the planning than just looking at what you have in free cash and saying, we have this amount of free cash now so we could spend it for this one project. the Capital Stabilization Fund, working in conjunction with Capcom is looking at the sequencing and the prioritization and the funding altogether holistically across the town. And planning how we're going to deploy different kinds of resources for projects that are two years out or four years out and building up the capital stabilization to have it there when we need it.

Go ahead, Claire. I just want to be clear. I do agree with that. I'm just going to say one more thing, Beth. And that's what I was alluding to in my comments is the five-year major capital planning table used to have $93 million on it. We're in a very different place, so sorry about that.

I just want to be clear. I'm not saying this is not a good or strategic plan. play out the what ifs to understand how to manage the model. Because I think about the good things we've been able to do by building up our cash reserves. I just picked Town Hall because it was large, we also did the Warren HVAC which was another large project that the way I read this, and the reason I want to do the what ifs to understand how to better flesh it out is because I didn't see that we would be able to accumulate appropriate free cash balances within the 8% to 12%, and do a project like that, just because of how it's currently structured.

concept isn't a good one. I just would like to pressure test it a little bit.

And I think that the modeling is helpful, but the way that I've written it is to allow for those things specifically that they are priorities that we would address before you would funnel money into this Fund. But I did want to talk a little bit about the structural imbalance. Could I just say one thing? Yeah, yeah.

One thing. If we had the list of capital projects ahead at the time that we made the decision about the Warren Building and Town Hall, we wouldn't have made the same decision. So you can't go back retroactively to a time when we didn't have the list of $400 million ahead of us and assume that we would've made the same decision in those two instances.

So I'm not trying to revisit our decisions. I think it is always good to learn from where we have benefited, to make sure that we maintain flexibility as we move into the next uncharted water territory so it's not a rethink what we did, We benefited from flexibility in looking at what will we have for flexibility and what will be need for flexibility.

So I'm going to go back to your structural imbalance comment of 2.5% Prop 2 1⁄2 versus salaries at 4% or higher, and then I think we can get some previous history and run data We and many other towns really expect to have closer to 4% when you have 2.5% plus new growth, so I think There might be a structural imbalance, but it's not the range between 2.5% and 4%. And so I think we need more information on that so we can get a better handle on what we think that might be but I'm not sure that's necessarily as big as it might seem. Anyway, I wanted to get other comments and I see that Kenny...

So my comments really are focused on the process of doing, how we're going to do this. I would like to hear from Hilltop, I would actually like to here from Moody's exactly what is going into the ratings for Wellesley. Best Practices, or what another town is doing. It's again an interesting data point but unless we understand the why they're doing it and why they are setting at a certain level its not really informative I'd like to know what the rating agencies think about the debt levels that we should be carrying. the cash reserve levels that we should be carrying and what is their definition of a cash reserve? Is it free cash, is it free-cash plus the general stabilization plus cash reserve. You get my point.

I would like to know all of these things before we tackle writing a policy because this, to me is the most critical piece of information for two readings. It obviously affects our borrowing costs if the rating goes down But these people are also pretty good gauges of what good financial management is. The entire market relies on their ratings and while they're not perfect, they're pretty good at it. So I think that would be informative to us, to say how does somebody on the outside looking at this say for Wellesley this makes sense? Not necessarily Is it 3%, 10%? What do you think, 8-12? It's more based on our situation. as it currently stands. So I'm positive, I'll have many comments on the actual documents but I would like that before we go into making those comments because I think we could end up going in a very different direction

and one thing I think I've kicked around, does it make more sense to have three policies or does it makes more sense that one? And I understand why three makes sense but we have to be really careful because there's cross references all over the place and if you tweak one We could throw this whole thing out of balance, so we have to really think that particular thing through. I fundamentally agree that putting cash away for these type of projects is a worthy exercise. I understand it reduces flexibility, but I think that is worthwhile reducing our flexibility here and one thing I think is important, and correct me if i'm wrong but it takes a two-thirds vote of town meeting to get money out of the capital stabilization fund so you know

it's probably, I don't know does that make it harder for your example to have to go and take a million dollars out? Take a million out. I mean there is a higher vote threshold but

No, because I think you would establish it as a program at the time of the debt exclusion. So you'd set your debt payment schedule?

That's my two cents.

I totally agree with both of your points and we did send these drafts to Bond Council and Moody's and didn't get a whole lot feedback from them, to be honest. So I think that's worthwhile going back to them and see if they'll come and talk to us and then how many policies, I honestly struggled with that. Some towns have consolidated financial policies and honestly I think sometimes it's for towns that haven't got quite as sophisticated a financial department as we do so a lot of the policies are internal to the department and yes, I nearly went blind cross-referencing things and making sure the cross references were still accurate. I'm open to consolidating or having separate... I really don't have a strong position on that.

Just one thing on what I was requesting. So, I would like to see something from either the rating agency or Hilltop in writing saying these are the things you need to consider when you're talking about percentages whether it be for the debt or for reserves Here's what we recommend for Wellesley, and here's why we recommend it. And you know if it's an outlier that may be explaining why. But I want to really understand that before we put this on paper because this is obviously a very important topic.

Thank you. Tom?

Just one last comment for me at least, and that is that I am just terribly impressed with the quantification of a number of these questions. and I think it's very important in guiding decisions that we're going to make. But, I think we can't lose sight that there is a human component to taxation in the municipality as well and there is always going to be a question about what does the taxpayer perceive they can pay in terms of taxes. in a losing position if we're telling them that the numbers say that they can afford more taxes when we don't know, in their personal life what expenses they are incurring. So I think we have to take a look at what these calculations and numbers tell us. I think it's critical to help guide us in the decisions that we're debating,

But I think at the same time, we have to be extremely mindful of the residents and the businesses. And what they can afford and what they're telling us they can't afford in terms of decisions that were going to make

I completely agree with that. I think we need to be mindful of not just the property tax, but a lot of people in this town make a lot money and they were hit with another whatever, 5% tax on their income tax. And the federal taxes could go up. All these things could affect how much people pay and it's not an isolation like you're saying. it's an individualized thing and a compounding problem. And I agree with what Beth said, there is a structural imbalance between Prop 2 1⁄2 and what we're probably paying. The fact that we're pulling money out of the cap, you know free cash every year to fill an operating Deficit is clear evidence of that fact. And I think this is all extremely helpful, I think addressing the structural imbalance is helpful and I think

stepping further back and looking at the entire picture holistically in saying, wait we're spending 400 million dollars to do X Y & Z. Do we need Is there a way to outsource this entire operation? And is that, from a cost benefit analysis, is that a better way to do it? there's towns in Georgia, Sandy Springs, Georgia that literally outsourced their entire operation and they're a town similar to Wellesley. I'm not suggesting that what i'm saying is we should it feels like things are just running away from us cost-wise. And we have $215 million, we're talking at 400 million which I think is going to be a way higher number if we did everything on that because of the cost escalation We're looking at six, seven hundred million dollars to more.

And if we just keep going this way people are gonna have $50,000 tax bills and I don't think that people are going to like that very much So we need to think about this in, I think a holistic way and say how do we rejigger this whole thing so that people can keep living here? My soapbox.

You're singing my song, so go ahead Marjorie.

Kenney's comments and Tom's comments draw me back to the position we were in when maintenance at the time in 2012 because the infrastructure assets had fallen into disrepair across town. So, with the balancing of what the taxpayers can't afford, what kinds of services we're delivering, keeping our assets in reasonable shape and figuring out the way to maximize everything we have. it all rolls into this and we need to keep that amount of pending financial capital expenses ahead of us because Kenny's right, the 400 million is not the end. in 2046, we're looking at building a new middle school.

So it's actually kind of the beginning and we have to think very far ahead in terms of managing all of this you know, making it possible for residents to stay here and deliver our services.

Okay so I think i've got loads of feedback Thank you very much Colette

and we will pick this up again, and we'll all have some more time to look at the policies more specifically and bring you more specific comments. But I think you have a good start here tonight. So next on our special town meeting prep is Article 7, Kenny. The Town By-law Committee Amendments to Articles 2, 2A and 3

So just a quick update on that. We did the presentation of your advisory, took their comments in. Some I thought were very good and we've been working to revise The proposal, it's not substantively different than what you saw. It's probably just making a little more streamlined and even shorter So the bylaw review committee is going to review the proposed changes on Tuesday morning. with the goal of sending it to the select board for approval on Tuesday night, this coming Tuesday night. So that's where we are on it and Like I said, there's nothing substantively different than what was in the last version but it's an iterative process.

So Kenny, we won't have a motion tonight.

Correct.

We'll expect to have it next week. Okay. Very good. Great. Is there anything else right now on either of those two issues? Okay, so I'm just trying to find my place in my document. Okay, The next issue is the free cash requests at special town meeting. And again, I'll turn it over to Megan and Rachel to kick it off

Thanks, Marjorie. I wanted to just give a brief update. I've also asked Joe McDonough here to address some questions as well. Joe if you want to jump up we can also touch on that. So I'm gonna give a brief update and then I'm going to turn it over to Rachel to give some information, and then i'm goingto turn itover to Joe before we open it up to the board So I wanted to just touch on a couple of the free cash appropriations and, in particular, the town-wide financial plan. this was something in a cash capital that we, we was not ready for annual town meeting so we pulled that out as an Free Cash item, slightly higher than we had initially put in the capital plan at $250,000, 325. Staff is supportive of that. Comprehensive plan, as the board's aware that was in town-wide financial plan with appropriation of free cash. That happened to fail at annual town meeting.

They've reduced the cost and are returning to special town meeting staff is supportive of that amount as well . Article 14, so motion one. So the design for the four schools staff is supportive of that motion That was anticipated in our capital plan. We actually had a higher amount, up to $2 million for anticipated design and in the Tamwad Financial Plant, we actually left initially this open as we had it potentially as a referendum inside the levy or free cash. and I think at one point we actually had it as a debt exclusion, but we had in the capital plan appropriation of free cash essentially at the end. So staff is supportive of that.

The question with the acceleration, without going into the merits of the project is the fact that that then has potential impacts in terms of how that would be funded to make that actually work. and that has been mentioned that it has to be free cash. That's not accurate, you could borrow that inside the levy it could be a hybrid of some free cash, some inside the levy. So there's other options for that that exist for the board in terms of your consideration on that. the citizens petition, which I know the board isn't necessarily addressing again on the merits. But if that comes forward for a motion to appropriate free cash for construction for all of the project, I've heard some of the projects, I have heard all of

it's unclear because we haven't had a motion ultimately submitted with financial numbers in it that would have detrimental impacts and so to our town-wide financial plan So under our capital planning within the bylaws, we work with the boards and committees. We don't as part of our financial planning anticipate citizens' petitions because there's not really a mechanism to anticipate that it sort of happens at the will of people. but I do think it's important that we were talking about Moody's, we were looking at policies and procedures because we have those in place as part of our plan. and we go to town meeting each year when we present that plan because it is amended each year, and we ask for acceptance. And town meeting accepts that plan, and then we work to implement that plan. So this is a deviation from the plan.

And so I wanted Rachel in particular to touch on what that deviation potentially can mean to us, in terms of our long-term financial health and outlook and then I want Joe to address, you know they've talked a bit about the risks but given Joe's over 100 projects in public procurement. I really wanted Joe to give his professional opinion to the board as your staff not the PBC staff as the select board staff so that you understand where we think there might be concerns.

Can I just jump in here before you turn it over to Rachel? I just want to make a couple of comments. It's clear that certain aspects of the school committee's article 14 in the citizens petition could be intertwined. Schools Committee is expected to discuss tonight whether they might amend their motions in some manner in response to last week's advisory meeting. That could be to include some requests for construction funding or something else, and since their meeting is running concurrently with ours we won't be able see the outcome of their meeting until tomorrow. If members of our board have not watched the segment of advisories meeting last week, I encourage you to do so. The Select Board's role in these articles is not to make substantive decisions and we're not going to be polling the board on personal positions on the articles. We are all town meeting members and can vote on the substance of the articles at town meeting.

But we have to explore the Articles of Financing because our job is to take into account the big picture and the capital public service and public safety needs of the entire town, and the entire Town staff. And how requests at special town meeting can impact all the careful planning we've done. The approach of allowing or agreeing for the design cost to go through free cash has a drawback in that residents and voters may not be aware of the later median tax impact of the construction phase of the project currently projected somewhere 17, $18 million. And that construction phase how it is funded as Megan just said and we'll continue to discuss has long ranging

and serious impacts on the town's financial position and fiscal planning. So with that, I'll turn it back to Rachel and Joe. And thank you, Joe for joining us tonight.

Before Joe starts, can I just seek clarification? Megan are you saying that the school committee articles both motion 1 and 2 the staff supports use of free cash for those because we had budgeted two million dollars in free cash

So it's within the confines. Staff doesn't necessarily support motion two because of what I want to go into in terms, it is misleading under that sentence. Because I wanna go through with the implications Potentially could be of the use of complete free cash, which is essentially the premise that if you accelerate, although I would argue you don't have to just use free cash.

So I want to just detail that. So that's what I wanted to ask you, using free cash versus inside the levy borrowing? is that something we're looking at as options for any of these proposals? Yes. Rachel's going to detail that.

Those are great questions, Beth. That is part of what we'll walk through right now so that's a great segue. Great. So thank you again this evening for having me. So I did want to highlight really just some concerns, just reiterating with Megan said moving forward with an accelerated design would ultimately mean accelerated construction, and again as the citizens petition alluded to use of free cash. McKinney, you had flagged when we're talking about reserves engaging with Hilltop. So when it comes to the air conditioned project, we've had multiple conversations with Hill Top. We had thought that there could be a potential ask of free cash to fund the full 18, $18.5 million. And again, that's the current estimate Joe's going to speak a little bit more about what the full cost could potentially be. But because we were aware of this, we've had conversations with Hilltop How is this going to impact our potential bond rating?

And what are your thoughts? So I did want to share some of that.

Can I just interject one thing? Yeah. So we're talking about $18 and 1 half million dollars of free cash to pay for four schools' construction of air conditioning, Right? Well that's what Rachel was just talking about, right?

I would say... That was our worst case scenario. So there is no motion

to do that right now, right? So I don't want to mislead the people listening to this to think we're having a discussion with bond council ratings agencies about using $18.5 million of free cash to pay for a project that nobody's even talking about right now? That is in the future. The current proposal is to fund two schools with free cash, to the tune of four plus million dollars.

Yeah, and that's important context to say correct. We are looking at town meeting for design but we can't really ignore the fact of what those repercussions would be so again I want to talk through some potential

I think we need to be very specific about what we're talking about.

Well, and we're going to be specific but I think the reason we've looked at looking at the total because that's what we heard. I heard it advisory members themselves say we should look at funding both projects constructing them with free cash

And motion two in the citizens petition is exactly that.

So I didn't hear that, I heard funding Fisk and Bates so all design and Fisk and Bates, and then I heard All Design, Fisk, Bates and Schofield. I never heard middle school with free cash. I don't know if somebody else heard it, but I didn't hear it.

I certainly heard Ronnie indicate that the entire project should be constructed with free cash. That was a comment I heard from advisory. I'm happy to pull the transcript for the board.

and a couple of other advisory members too. But the motions we have...

I believe Citizens Petition is asking for free cash for all four projects because they want the funds to be transferred, appropriated to PBC so it's within their custody and control as they go through design. So I think they want the cash on hand. in other words that what Rachel and Megan have done with Hilltop is entirely appropriate.

I completely disagree, I mean I'm looking at the motion right there one is for two schools one is designed for the others

I don't believe there's been any, I watched advisory a couple times because I wanted to understand it and watch school committee. I have never heard funding construction of the middle school now. I just haven't heard that as an ask and it's not in any of the language.

Not now, but advisories certainly discuss the equity of making two schools go to a debt exclusion two schools not go to a debt exclusion, indicating that and one advisory member advised the citizens petition writer to amend their petition to essentially say all four schools should be addressed with free cash.

Okay, so I heard it as Schofield.

Well the other question is in motion too. It specifically states to appropriate an unknown sum for design engineering permitting and the advance of early procurement of equipment and materials including Lonley items and for utility service in electrical capacity, and for cost incidental related thereto in connection with air conditioning and related improvement at the Schofield and Middle School.

Look, the point is we need to discuss and have in front of us considerations that could come up. School committee may amend their motions. The citizens petition proponent may amend her motion and our job is to figure out the financing aspects. So we're not exactly sure what the final asks are going to be, But it would be irresponsible of us not to talk through all of it now and see what our experts have to tell us. So we're going to let Megan and Rachel continue.

Okay, great thank you. So again as projects just to reiterate when we're looking ahead each year for our Inside the Levee borrowing we engage with Hilltop throughout the year to get a sense of here's our projects, here's the potential borrowing. I do a cost out, I have them to accost that as well because we need to identify those inside-the-levy borrowing costs so again we do engage with them throughout the year When it became evident that there was going to be a citizen's petition, we engaged with them. What are some options? So what are our funding options? Again one option is using free cash to fund the entire project so When we mentioned that to Hilltop, they were very surprised. Again I know the conversation needs to happen but they were surprised that the town would even consider using reserves at that level because the town-wide financial plan, as Megan had alluded to

that's ultimately accepted at town meetings. So for us to deviate from that, Hilltop was concerned that it would be better to consider other options. They were also concerned what the reaction of Moody's would be because again, they value our forward financial planning. So again if we were to deviate from that town-wide financial plan it would be concerning and again Kenny, I think you alluded to having those favorable borrowing rates. So again when we flagged this as a potential concern Hilltop said well what about a hybrid approach? So another approach could be funding part through free cash and another part through inside the levy debt. Again- And that was for the phase one, that is actually before us? Correct.

So we did model some numbers, but again having to better understand what the design and construction for phase one, again FISC and Bates. We did some numbers using, I think it was the 4.1. Could we use a portion of free cash? Could we used a portion inside the borrowing opposed to all free cash so those are conversations that the board is going to need to have again Hilltop was advising that if we were to move forward, if the board were to decide to fund the entire 18.5 million that would have, an expenditure of that magnitude would impact our overall reserves and we've modeled that out so I'll pull that up in a minute. they were concerned about the future financial flexibility again we've alluded to potential 400 million in capital projects in the out years.

So again, drawing down reserves of such a significant balance would raise concerns about what is our financial plan in the future? again, would limit our financial flexibility if we were to do so. And again potentially impact the town's credit profile. I did want to again reiterate what Megan had just said, the Townwide Financial Plan. We've always planned two million for design for all four schools. And then again, as a timeline financial plan stands we would have been asking or planning to ask for debt exclusion for all 4 schools construction. We did discuss the reserves policy earlier. So again, I'll pull this up in one second. I wanted to walk through if we were to use free cash our current needs along with funding

design and construction, where does that bring us with the eight to 12% of reserve policy? Again Hilltop was concerned that we've been hearing as Colette alluded to earlier, having higher reserves upwards of 20% or 25%. So what would this have an impact, or how would this impact our overall reserves? did want to also, because I think this came up a little earlier. What would Hilltop recommend in maintaining adequate reserves? So through multiple conversations they've alluded to around 29 million is where the town would want to maintain our general fund portion of reserve. So real quick, let me just share my screen I wanna... bring this up and we can talk through what the reserve balances would look like.

And certainly for the construction aspect of it, this would be part of the town-wide financial plan. For 28, the board will have to determine because construction funds It's unclear under the citizens petition at this point, but if we go under the board discussion based on the school committee's motions that would be at annual town meeting with bids in hand.

so again as the board knows and was included in your Friday Nail packet we did receive our free cash certification for June 30, 2026 that's $38.4 million we also updated are General Purpose Stabilization Fund, again that's a balance as of June 30. So that brings total reserves to 42.6 million which represents just at 21% of FY27 revenues. And again, that is higher than our reserve policy however as the board will continue to evaluate is there a higher threshold that we'd want to consider? Megan already highlighted the current uses that are gonna be proposed at special town meeting, the comp plan for 350. Ulfelder, Wellesley, Councilor Williams, Library, Lighting for 250. Williams, library, Lightings for 250 again we're including these were the most recent numbers cost for the accelerated portion.

I believe those are recent numbers that Glenn just shared with us, and then we want to highlight the town-wide financial plan. We're always utilizing a portion of free cash to either balance the budget or support other needs in town. So again, snow and ice. We're estimating this year a million dollars as included in the financial plan. Two million to balance the operating budget, again Megan alluded to this earlier we have a potential $100,000 of immunis increase, unsettled contracts, potential health insurance increases. So there could be additional needs to balance the FY28 operating budget with free cash. But for this exercise, we're just using the $2 million because that's what's been in the town-wide financial plan

again highlighting the school facility strategic plan for 200,000 fire station feasibility for 750 preschool visibility 500 we remove the War Memorial Sprague Tower that use of free cash, again looking at that timeline. That project would have to be deferred if we were to move forward with the AC design. So here's where we're building in. Again, to echo Megan's comment, worst case scenario. If the board were to decide to fund the entire project with free cash, the most recent numbers we have Fisk Bates Construction 4,069,000 and then Schofield Middle School almost 12.8 million. We are estimating turn back of 8 million again we had really favorable turn back particularly from personal services, particularly from the school.

It's too early in the year to know what our turn back is going to be for FY27 so we're keeping that very conservative at 8 million. I did want to flag, too, the number here which we're using our preliminary operating revenue projections. We talked about revenue projections a few weeks ago. We'll be reevaluating these throughout the year so this is our current number I do want to just note, if we review our local receipts and decide to increase are revenue projections. As we increase that number, it's going to have an inverse impact on our free cash So the higher our operating revenues use are, the lower our reserve balance is going to be. So I just wanted a flag that so modeling out the known costs modeling out the use of free cash for all four schools for construction.

That would bring the projected reserve balance to 12.9%, just under 13%. that again is our general fund free cash certification along with the general purpose stabilization. If we were to carve out just the general funds certified free cash, Bounce, that would bring us to just under 11%, 10.96%. So it is important to see what the impact could be now again discussions with Hilltop, is there an opportunity and we can certainly model this once we have a better sense of the numbers. What would a hybrid financing look like? Some free cash some inside the levy. and then we wanted to present this scenario. I also wanted to share, so again using Testa, Ulfelder, Wellesley, Councilor

Depleting Our Reserves. So I wanted to just share if we were to look at, again this is from our ACFER so we completed... It didn't change? Oh shoot, I have to reshare. Okay, let me stop sharing. Let me reshare. How's that? Did that work? Okay, so again in the previous modeling of the use of free cash it would bring our reserves to just under 23 million. So again, based off Hilltop's recommendation they would be looking for the town to maintain around that 29 million which is what our balance was in FY25 if we were to draw down to 23 million, that would revert us back to around our between our 2020 and 2021 levels. In 2020, we were at 18.3 million

2021, we were at 25.8 million. It's just important to note if you're looking at this trend once we're drawing down free cash and then replenishing it, it's about a million dollars per year that were able to replenish free cash. So again, Hilltop strongly recommended if the town were to move forward and fund this project fully with free cash they must have a plan. How are you going to replenish your free cash, excuse me, your reserve balances. So that was a point again they are helping us identify different strategies. They're able to help make recommendations So it's just important to note that it takes time to build up those reserves. I also wanted to flag that if we're looking at these totals, if we were to bring reserves down to about that 22-23 million at a million a year it could take 10-15 years to get back

to these levels. So again, just caution such a large use outside of the Townwide Financial Plan.

Can we go back to the spreadsheet? Sure.

I think I have to stop sharing and reshare one moment.

Well, you're pulling that up. I've said this three times now. I'm going to say it a fourth time. We're talking about $18 million of free cash that nobody is proposing to use. So all of those numbers are based on something that nobody's proposing to do right now. So, do me a favor and zero out Schofield in the middle school

So Kenny, what if you leave $2 million in because of Scofield?

What's that, 19? Correct. And what's the dollar amount that we'd be at in free cash?

of the general fund portion 35.7.

Okay, so that's what's actually being proposed right now. Now do me another favor go to estimated turn back and increase that to 12 million dollars

I would highly caution being that aggressive at this point.

No, no, I'm not saying that's going to be the term. What I'm saying is we've budgeted what $900,000 for interest? A 650. 650. So in the last five years, we've averaged $4.9 million of interest and if you take out which was about $190,000 of interest. You're in about the six million dollar range so what I'm trying to show there is if we simply earn interest on our cash balances this year at what we've done in the last four years, we'll call it five. You have another $4 million and that is very conservative because at a much lower interest rate than the world is yielding right now. So when you look at that number, When I put in that $12 million, now the number is $39,748,000 which is very close to what we are today.

The reserve level is literally within four basis points of where we are today.

But you're also counting on money you don't have. Yeah, and I just wanted to share real quick because that's great feedback regarding the interest earnings so again We've been very cautious to adjust our interest earnings budget, looking back to COVID.

By the way, I agree with that approach 100%. As we talked about it last time. Sometimes when you have these big deltas between the actual and the budgeted, that could be an opportunity for a one-time use of that cash and if it's four million dollars over that 650, that pays for those two schools.

Well I think the 4 million is one of the reasons I wanted Joe here to talk about that that is a feasibility number and that we have real concerns about an actual number. So I think that's actually a perfect segue to touch base on that.

And I'd also say that number you're quoting for interest was based on us having all that money borrowed from the schools. That's gone now. You're not going to get that level.

So Cheryl took as much as she possibly could into the bank. When was that all repaid? Because it's been carrying for three years, four years now.

So we've been petering it out. Those funds have been exhausted, I would say at this point. Correct. We have the new borrowing that just occurred which is a lower delta for the general borrowing The Road, Warren and something else. And then we've been carrying high free cash so this to your point, this is also building the reserves. So diminishment of this also diminishes the reserves

And again, interest earnings has been declining. And it will continue to decline given our reserve balances if we draw down and our reserves to fund additional projects that just limits how much our interest earnings would be.

Rachel, can you go back to the spreadsheet for a minute? Which one Beth? The one you just changed numbers on. The free cash calculation or the interest earnings? The free-cash calculation, I can't do the interest earning so... I recognize that I may have heard it differently, but I thought the middle school was next fiscal year not this fiscal year.

So in the School Committee's plan yes.

but I think there has been debate at advisory about Schofield. So what I was gonna ask is if you, that Schofiel line, if you put two and a half million dollars in

Well, we have Joe here.

No I know but I just, I think it was around two and a half right? Okay, Joe you get into it. I just wanted to see what would happen if we put a decent contingency Let's let Joe talk about the project first.

Good evening, thank you for having me. I appreciate the opportunity. I have some prepared remarks that may address some or a lot of your questions but at the end of this it's about 10 minutes worth of presentation open it up and try to answer whatever questions you have that I haven't addressed So before I begin, I want to be clear about the capacity in which I'm speaking. I am here as the department head who reports to the executive director and to this board I am not speaking for the permanent building committee and I'm not speaking from my design and construction staff who provide technical support to the PBC as you know. I have great respect for PBC's members and the volunteer time they give the town. Nothing I say tonight questions their good faith or expertise.

My goal is simply to make sure this board has the full risk picture as it weighs the funding questions on the accelerated school air conditioning project. I'll cover four things briefly. Where things stand, why I see the accelerated schedule as a high risk, what that means for funding and staffing in a safeguard that the board may want to consider if it chooses to move forward. First, where things stand today. Right now, neither FMD nor PBC formally owns this project. It sits in the space between the study that was completed by FMD and the design that PBC would start upon appropriation approval. And we are working jointly with school committee to secure that funding. FMD has raised scheduled concerns consistently for the last two months, since mid-August. We first flagged them in writing on August 13th after The Citizen's Report came out

we followed with a draft response and detailed schedules to PBC on August 21st. And I summarized our concerns for school committee at a presentation on August 25th At PBC's request, my design and construction staff then prepared an evaluation of what it would actually take to deliver an accelerated two-bid package approach. Under that approach, Bates and Fisk would be built in the summer of 2027 in the middle school and school field in the Summer of 2028 with potentially the Middle School extending into the next summer. That approach is essentially the school committee's Article 14, Motion 2. It requires $170,200 in additional designer fees. It also assumes that Bates and Fisk Construction would be funded with free cash at the 2027 Annual Town Meeting.

PBC reviewed my staff's evaluation at its September 10th meeting and concluded that the accelerated schedule is feasible and very doable. I want to be precise here, PBC did not vote on whether the town should adopt it. They found it achievable with caveats they discussed openly including reduced design review and no schedule contingency or float. understandably the school committee and the citizens group heard that as a reason to move forward so where do I see it differently? It comes down to one word PBC answered an important but narrow question. Can all the required steps fit on a calendar? The answer is yes, my own staff built that schedule The question before this board is broader. How likely is it to succeed and what happens to the town if it doesn't?

I think of it this way, something is possible if it can happen even if the odds are small something is feasible when it is practical and likely to succeed with time, money, and people we actually have. In my professional judgment the accelerated schedule is possible but carries more risk than I would call feasible. This is not a disagreement about the facts, it's a difference in how much risk is reasonable for the town to carry and that is ultimately a judgment for this board and Town Meeting. There are four reasons I see the risk as high, and they build on one another. The first is that the design is compressed. For Bates and Fisk, design would run from notice to proceed in late November to final construction documents in mid-February. That's about 12 weeks. The designer's original proposal assumed roughly a year

to make that work, standard review periods and the 90% cost check are skipped. The second is that the construction window is compressed. Bids would come in mid-March. Intel meeting would vote at the end of March, April After that, the contractor has about nine weeks to process submittals and to order and receive more than 100 air conditioning units. Talking about FISC and Bates in this case, and electrical materials. Then there are about 10 weeks on site from late June to late August before school opens. The third is that these are existing buildings. Renovation always carries more unknowns than new construction, conflicts above the ceilings, asbestos and window framing that is not the same from room to room. The fourth is scale. Across four schools, the work touches roughly 325,000 square feet

Any one of these is manageable on its own, but every step in the schedule hands directly to the next with no float in between. A single slip can cost us the summer, a late submittal, a long lead time on the new transformers that MLP has asked for at all four sites. and there is another review in the chain. Adding over 350 window units in the entire project to highly visible school facades will certainly get the attention of the design review board and having been to the design review board a number of times, we had an air conditioning project two units on the roof that could not be seen from the ground, and we had two meetings at the DRB for that. They could not even be seen form the ground so we don't know what that design number of meetings would be there.

Over 44 years, I've been directly involved in hundreds, several hundred public sector projects for my private career as a consultant and my public career. Under Mass General Law Chapter 149 we must award to the lowest eligible bidder. This is the phase that concerns me most, it's the bidding phase. This is not an attractive project for a general contractor. Most of the work is going to go to an electrical filed sub-bidder, so the general contractor is mostly managing someone else's work it will be bid in a busy market, which is Summer Slammers with a very short schedule and there'll be liquidated damages. Liquidated damages are financial penalty if you don't meet the schedule in the contract splitting it into two smaller packages makes it even less attractive. The likely results are fewer bids, higher bids or in the worst case no bids.

A rebid effectively ends any chance of summer 2027 construction. A bid protest to the Attorney General's Bid Unit could do the same. We have a recent example. The school committee's team room building at Honeywell Field was estimated at $1.1 million and it was bid with complete plans and specifications. Six bids came in. The low bid was over $1.8 million. The high bid was nearly double the estimate. and this project too was considered to be simple, 1600 square foot locker room building modular. That brings me to the issue most directly facing this board how a construction appropriation would be set Today, neither PBC nor FMD can give you a construction cost estimate for this project. What exists is the feasibility study figure that Megan referenced. That number was a placeholder for capital planning.

It was never intended to support an appropriation. Citizens Article 15, Motions 1 and 2 would fund construction on that basis To my knowledge Wellesley has never requested construction funds for a major building project based on a study estimate. Never. Compare that with the high school and the Hardy School. For both, funds were requested only after a complete schematic design was prepared. A construction manager at risk which is a much higher level of contractor was on board early able to give input before design. and the town had a guaranteed maximum price. So there is really no comparison between what's being proposed in the town, the way the town high school was procured and the new Hardee was procurred. Under School Committee Article 14 Motion 2, bids would be in hand about two weeks before Annual Town Meeting.

That is a real safeguard but it means the Board can decide some things in advance If bids come in well over, is free cash still a source? Is there a ceiling? What is the effect on our reserves and our bond rating which we talked about earlier. The last risk is squarely my responsibility as department head staffing. Our design and construction group is in transition. Our current design and construct manager retires in a couple of weeks, at the end of this month. His successor steps up on November 2nd. Filling the project management position he leaves behind could take several months haven't even had an interview yet. Haven't had a application that would take us to an interview. Today the project manager assigned to this project splits his time about evenly across three projects, school air conditioning, construction administration on the RDF and the Hardy & Honeywell Solar Project.

to run the accelerated schedule in-house with our staff as OPM, we would have to go from about 30% of his time on air conditioning to about 100%, in my opinion. that leaves no one to manage the RDF or the solar project, where only a very minimal level of effort could be expended on those projects. I want to be constructive. If this board decides to support funding for acceleration, FMD will work hard with PBC and school committee in the designer to try to make it successful. The board could consider a possible safeguard and that is decide the bid overrun approach now. Agree in advance on a ceiling for free cash, and what happens if bids exceeded? To sum up, PBC is right that the accelerated schedule can be laid out on paper and my staff did exactly that. My concern is that it leaves no room for the things that routinely go wrong on public building projects.

Hidden conditions, high bids, bid protests, long equipment lead times. Combine that with a funding request that has no design estimate behind it and the staff already stretched, and the risk to the town is significant. For those reasons, I would respectfully describe the accelerated schedule as possible but high risk rather than feasible. Whatever the board decides, FMD will give it our full effort and thank you and I'm ready for questions.

Thank you very much, Jo. Who'd like to start with questions?

I have a question. So if, and thank you for that because none of us are construction experts so it's really helpful to understand the context. and there is, I think a lot of emotion around this project. There's a lot pent up desire for this project it addresses the needs of our youngest residents. So I don't think we can debate that there's urgency to it, With all of your expertise, how would you accelerate this project? Is there a better path to acceleration?

My recommendation is Article 14, Motion 1. that's not acceleration. That is actually acceleration from the standpoint of every other project in this town has taken 18 months Ward of the designer contract, the town meeting until award of the construction funds. It's typically two town meetings, 18 months for every other project We propose 12 months. So we significantly, it's already accelerated from 18 months to 12 months and now it's being proposed to go to four months. That is what I'm saying is risk that I would not accept

So there is no way that you think is... Feasible, is that the word? You said one's possible and one's feasible. There is no feasible strategy to accelerate this project create the healthier learning environment for the kids?

I think that's the question we're all getting asked. But I can only speak, I can't speak to the value of accelerating the project. How much is the town worth? How much

Yeah, I just want to know how you would do it. Whether we would pay for it or not? I believe that there are risks and I believe you know far more than we know. I just wanna know if it's a problem to solve I also believe you would know how to solve it better than any of us. If we said, we want the children to be in a cooler learning environment next fall, how would we do it?

That's a great question.

Well, that's what I'm asking.

Beth, I think Joe has already answered that question.

I think he answered the question. His team prepared the accelerated schedule, so that's how it on paper works. I think what Joe is saying is He's itemizing the additional risks. And so I think on paper, to his point, to get there, to that fall

I respectfully, I respect Joe's answer. I'm asking how would you build a different mousetrap? is there an outsourcing solution? Is there some other way that we could improve reduce the risk and improve the outcome that works, maybe it costs more money. I'm just looking for how does one do it?

I think what you're saying is that motion 1 is already his version, his best recommendation for an accelerated schedule. to try to do this in a way that creates a feasible path forward, that's responsible financially and in terms of the quality of the end result. So that is Joe's recommendation for an accelerated schedule, is motion one.

I did respectfully, I did hear that. I was asking if you had to do it is there a better way to accelerate than what we're looking at on the table now?

Well, we do have to do it. Our department is going to provide design and construction staff to PPC to do so we will have to it. And I feel like this is the best way

There may be alternatives to get there that do not involve construction the way it's proposed. Several questions have been posed to schools and to the superintendent about other ways they could accommodate children in and other air conditioned schools or change their schedules or redistrict. And every request has been met with the answer no, so there may be internal solutions to the school district that are separate from a construction Solution, but Joe's answer is clear. Article 14 Motion 1 is the best construction option.

Marjorie too, I want to point out the school superintendent stated that they would look at interim measures and I don't think we've heard yet an interim measure. The answers as you say have just been no to every suggestion.

Well, all I heard was that they were doing what they could. They were turning off lights and lowering shades and bringing in fans. That was part of what was shared last spring. but there was nothing else the schools could do. That's what I heard.

Joe, thank you. That was very helpful. laying out the risks. And like Beth said, none of us are construction people so we don't know what those risks are and it is good to know that somebody who really does is able to articulate them. and this is not your place to do it either. So I'm not asking you to, but one thing that nobody has talked about is what the risk of not doing it is. We should really keep in mind what we're talking about here. We're talking little kids who can't regulate their body temperature, who are going to school which in this country we place an incredibly high value on. I don't know what we spend but it's over $20,000 a year Per Child to educate them, which is a good sense of what our values are. And so the way I understand it these kids are going to school for upwards of a month of the school year in

conditions like you said they pull down the shade everybody stays quiet and the teachers are babysitting for 20 plus days of a year So in K through six, that equates to 130 days which is roughly two thirds of an entire school year. When you study what you're compounding the problem by not Learning. If you don't know how to add or subtract, it doesn't get better in second and third grade. You just keep getting worse at it. So there's a significant risk. There's also obviously health risks to doing this. Everybody I think is probably, shouldn't say everybody but most people I think or believe that the temperature's not going to get colder and so this risk is gonna exacerbate. So there's a risk that kids were going to lose another year because of where their parents bought a house in the town. They're paying the same tax rate as everybody else, but now they're gonna have

Suboptimal Conditions for Learning, something that is incredibly important for them to do. And I was thinking about this in other contexts 22 days, so town meetings how many nights? Say six nights in June. It's at the middle school sometimes Right? Not in June, in early April. Would we ever ask town meeting members to show up to 22 nights of town meeting for six hours in the Middle School Auditorium in June without air conditioning? And would we ever ask our staff to show up on the third floor of this building, in the middle of June for 22 days and say Sorry, you know it's not going to be your best work but just show up. You know pull the shades down. It's gonna be okay. We would never do that and we're gonna do this to little kids because I understand there's a risk of going too fast, but there is a serious risk of growing to slow.

I'm sorry Kenny, I have no idea what benefit a litany of emotional triggers adds to the fiduciary responsible we have for this town. and I want to point out that I don't even know where these numbers came from. The Mass Teachers Association uses 85 degrees, and when that's applied to the Wellesley school temperatures that were recorded it led to about 10.7 days

Yeah, it was if you look at a 10-year period and itís a good point. This data was all in February 26th, 2025 presentation I made to advisory on this project and it included, slide four talked about how many public schools had some no air conditioning partial air conditioning. And we presented a significant amount of data that Alan Hebert our operations manager collected And to your point, Tom. One of the questions was what is the heat index that should be used to calculate how many days are potentially considered health issues. So we know that the school committee used 80 degree heat index we know that the Mass Teachers Association uses 85 degrees. We know that healthychildren.org uses 90, which is the same as

Noah, and the National Weather Service. They have a chart. So depending on whether you're using 80, 85 or 90 gives you a certain number of days above that heat index. At 80, for a 10-year period using local data from Logan Airport, Norwood Airport, Bedford Airport for a 10-year period, 80 degree heat index resulted in 22 days. 85 resulted in 16 and 90 resulted in seven. The 25 year lookout was six days. I guess the question is, when this was presented it was a schedule. that is the option one schedule. So what's changed from when this was presented? That's a question you would have to ask, that what's change that justifies spending that money, that additional money and taking on that additional risk?

versus the option one plan. So that's not a decision for me to make, I would suggest if you want more fact-based information on the heating degree days cooling rate look at that presentation.

So to be clear, the data that I was looking at was from the school committee which is consistent with what you said. The 22 days is what the School Committee presented.

So I want to be clear. I think one of the things that changed is we invested and we clearly as a community believe we should provide cool learning environments for our children in warm weather. and now we're in a situation where we have gross inequity. We have schools that have air conditioning, and schools that do not have air-conditioning So we have an unequal environment. This is a community, we have invested how much in diversity equity and Inclusion, and this at its core is about equity and health. And equal health and healthy learning environments for all of our children.

So I think one of the things to change, Joe is we have far more cooled environments that we have invested in for some children but we don't have We don't have a plan to get the other children more quickly into the same, at least atmospheric temperature. of a learning environment. I think that has been a big shift that has happened and at the same time, this school year, I don't know if I'm imagining it but it seems like it's getting a little longer in the hot months and so the heat, and it's getting hotter. It seems like the kids are getting hotter, so last year there was

I don't know what kind of star we were living under, but all the last day of school assemblies were on a tremendously hot day. So we had the parents and the kids together in the schools which also I think made the situation realer than just picking your children up and having them red-faced. I think it exacerbated and brought home the condition.

The presentation said that over the last 50 years, uh, the local temperature, the median annual temperature increase was two degrees over the

I have a question for Joe Marjorie. Can I just ask Joe a question? Yes, please, Colette. So, Joe, could you give me a sense of... I see in the... in the data, that the contingency that was built into this was 15%. What is a reason? I remember seeing contingencies higher than that. I think we had a higher contingency on town hall because it was historic what's a reasonable contingency percentage for something like this where there is more risk?

I couldn't give you a contingency based on feasibility study. the approach I would recommend is bids in hand and apply a contingency to that. That is the safest, securest way.

Okay because we are hearing with the further accelerated program, there is no doubt. There's going to be enhanced change orders and so I think applying a 15% contingency in my mind doesn't make sense that's one question I just wanted to engage in a little bit of conversation on what Kenny was saying. I think a lot of what you're saying is definitely resonating with the community. However, I think that the question for us is, is there an extra premium for the acceleration that might not be guaranteed is a fiscally responsible approach for us. And so one of the questions in Capcom specifically asks, is it an alternative operational program we could take, or is it a smaller capital project? And remember, we're talking about one year's acceleration.

So the plan for air conditioning is already on the capital plans. It's not like it's not planned for. This is about accelerating at one year. So if we accelerate a year, there's a few things slip which I think is entirely okay to assume that few things will slip. maybe we missed the first week or two of school. Therefore, we've missed the hot shoulder season in the fall so we've got one part of the shoulder season that we're trying to attend to that good chance will not even address that. The other thing is, is there something else we could do operationally? And there is something else. And the citizens petition proponent talked about this a number of times the New York educational law has basically asked the school to develop policies to deal with this and our school department has developed some of these policies which is blinds, lights lower doing different things

but what it didn't develop and I think what it could develop, certainly if New York can do it, I'm sure we can do. Half of the schools are not air conditioned so other school systems are dealing with this responsibly is to develop a policy to remove children on days, and in New York's law it's 88 degrees. Any day hotter than 88 degrees you have to have a plan to remove the children from that and whether that is putting them, we know we have capacity a fair amount of capacity in all of our schools. We should be able to develop a plan to do that operationally for one year, to get a plan that we have thoroughly vetted to air condition the schools. That's been socialized and it's in my mind is much more fiscally responsible so I think that that's something that's not being adequately discussed because that would address what you're talking about this of health

care for the children, but would also be much more in my mind fiscally responsible.

Thank you, Colette.

I'm in no rush to spend that money but so if you could move them all to a different school for a year but as Tom said these have all been thought about and the superintendent said you can't do it

but I don't think, I'm not talking about moving to another school for a year.

I'm saying on the hot days... No, no, I mean moving them for those 10-20 days.

So I'm sure it's 10- 20 days. We never actually got any data from the last couple of years on the counts and in one conversation, I can't remember which meeting this was. Somebody asked about basically the dehumidification, the effect of de-humidication of the pilot. And one of the answers was, well we think it's okay but we're not really sure because we didn't have a whole lot of data points so the number of hot days was less than expected So I don't know how many hot days we're talking about. No one knows because the weather is not predictable, but we have dealt with snow so if there's a really hot day and I would argue that if there's a hot day, you should be sending children home or sending them to places air conditioned for that one day.

I don't disagree with you, but you have teachers unions you have to deal with. You have 180 day school requirement that has to be out of school by July. There's all kinds of impediments I agree with you. There should be a solution in the short term, but right now we're not being presented with a solution. So this is what we're...

I think it's a policy discussion that they should advance further and we've dealt with it with snow. We know how to do it with

I agree with you. The one thing I would challenge is I don't think there's much debate, and you could get in real trouble if you debated, is that it's getting warmer

We're not being asked to debate the merits of this, it's the fiscal responsibility.

I'll give you two examples of two things they could do tonight. One is a return to the original holiday schedule which, and even if they wanted to do that temporarily. And the other is just stop calling school off when there are two inches of snow. And I can think of every year, there are at least two snowstorms where many schools were going to school. One of them being where our sons went, which hardly ever cancels and I'm not asking that this become a gauntlet to go to school but that would be approximately four days that would be in cooler weather where this wouldn't be a problem.

But what we're saying is that under the model that Colette suggested, which seems very practical when it's too hot don't go to school or have another plan kids at three of our elementary schools, I'm gonna put the middle school to the side. Three of the elementary schools don't go to school so they have to keep going to school longer in June till they get to July one and the other kids go to school.

I mean, it doesn't- I think that what I've heard when they discussed this in concept is one of the reasons they didn't want to pursue it is you would cancel school for everyone just like you do for snow

and so, I mean. Okay, so everyone has to go to school or stay home? And then the parents that are working that have jobs are kind of up a creek but

That's what we deal with with snow.

I wanted to answer your other question Colette in terms of the premium and Joe, I'm sure you can correct me on this It sounds like the premium we're paying is the two-bid package premium. Putting the risk aside, the premium is around $200,000 right?

You're talking about total project cost premium?

Yeah, Colette was saying how much are we willing to pay to accelerate. And it sounded to me like the premium to split the bid package to accelerate was $200,000. Is that right?

170, 200,000. That's just for the designer. Just for the designers.

The whole project could be enormously more where you can't even calculate the contingency.

Please let me finish my thought first and then we can talk about it. if it's $200,000 and then even we gross it up for contingency. And you divide it by the number of children that are going to be in a cooler environment a year earlier you're talking about $300 or $400 a kid, I think. That's how I break it down and so then you've got 20 days

So PBC will not give you a number. FMD cannot give you an number, so how are you going to come up with an appropriation number? That's the question. The only way that I see you could do it is with bids in hand reliably. Anything else would be just making stuff up, like we said with the teams room came in twice, the high bid was twice the estimate. and I laid out all the potential things that could go wrong. Maybe none of them will go wrong, maybe it'll be perfect. I haven't seen very few public sector jobs where they go perfectly so $270,200 is peanuts in terms of what the real risk could be, financial risk. That $4.1 million construction number that's a placeholder number from this study. We're not going to know what that number is until we have bids in hand. even when we get to 90% design, will have a professional cost estimators.

Opinion of probable costs is what they call it but we will not know with any security, any level of confidence what the cost will be at least until we get bids in hand. Anything else? Is it a 50% contingency, 100%, I don't know but PBC has said they will not give that number. We cannot give that numbers.

So just to clarify, when you say PBC will not give that number. Do you mean literally they will not Give us that number or they can't actually come up with that number?

Well, I don't want to speak for the chair but I know he said in a number of meetings that he cannot give you that number because he doesn't have...

Okay so it's not calculable. It's not calculate-able. Not that he doesn' t have that number.

Well, yeah. I think it's both. Nobody knows you. There is no number.

Because the design hasn't been completed.

There's been zero design just to study. And again... don't rely on that study number. That's a placeholder that we use when we talk to Rachel about, OK, we want to throw this in with 10 other or 20 other projects. That's really the intent for something like that. It's an initial placeholder, it was never intended to be used for an appropriation request There's a lot of work that happens before we get to that point.

Jo, can I ask you another question please? Last week at advisory there was a private sector project manager who characterized this job as fairly straightforward. Could you explain differences between private and public construction?

Sure, so as a consultant I did private fast track design build and it's totally different from public bid construction. Chapter 149 Mass General Law and it starts from the design all the way through the bidding during construction. So just as an example, this job is going to require a two-bid process. and the second phase is filed sub-bids. There's 23 trade disciplines that have their own bids. The biggest will be electrical, they have their plans, specifications, submit bids then there's a where the general contractors will take typically the low bid from that phase. There's time requirements to go along with that, there's prevailing wage rates right you have to pay higher rates than on private side, contractor qualification is different.

There's a DCAM certification for 149 construction for CM at risk which is 149A there's a higher level of certification and then this is one area where I've seen a number of costly change orders over the years, is information related to filed sub bids. if you don't show exactly what the electrical contractor's work is on his drawings and his specifications Say you show it on drawings for the general contractor, then the town picks up the difference. The town pays that because the electrical contractor says even though its electrical conduit wasn't shown in my drawings or in my specs. So that is so typical in a project like this where 80% of the work, 75-80%, it's electrical. There's one particular just to take it the next step there's one particular contractor, electrical contractor who has worked in Wellesley.

He is outstanding. Great quality. but also known to have a staff of engineers and contractors that scrutinize the plan looking for every possible error or omission. and sometimes they bring it up during the bidding phase. Sometimes, they bring in up during construction through an RFI. in the public sector, you need to show every detail. You need to specify every piece of equipment. You needs to show the run above the ceiling when it turns left and goes right whereas in the private side, on a design build you can turn the contractor loose and say well we have to get the conduit from this point to that point. You figure it out. So you have to be precise, specific. You have to detail technical specifications. You can't just go by the air conditioning unit you want even though we tested the Friedrich Unit

Master Journal Law 149 requires that you have three or equal manufacturers. So we have to, part of the design work is to go out and find three manufacturers besides two besides Friedrich that can perform like Friedrich did in the pilot. So, that's just design and construction. It's incredible difference between public and private. Thank you, Joe.

And another, a follow-on question. You said that one of the concessions of the accelerated project would be to forego 90% design? Can you tell us what typically happens at that phase?

Yeah, so the whole design review process is there's schematic design development, 60% construction documents, 90% construction document and then 100% bid documents. at every one of those phases, we review technical specifications and drawings. We put them up on a program called Bluebeam and everybody in our office looks at them, comments on them, marks them up, gets them back to the contractor then or to At the same time, there's a two-week lag. We get the cost estimate information. We align the cost estimates with the work, see if we're still on track. So all along the way you're checking to make sure that whatever the project budget is, you're working towards that. Most of those reviews are being eliminated completely, so you're kind of flying blind. You're just hoping that wherever you started at design development that in 12 weeks when you get to the bid period, you're going to have a solid set of plans and specs. So 90% is dotting the I's, crossing the T's.

That that's when you're going into looking at the front end documents of the project manual. You're looking at general conditions, supplementary general conditions Williams, you're looking at the bid form. You are looking at insurance certs and what's in the appendices and making sure that the drawings agree with the specifications and making 90% is really the hardest part of the job because that's where you catch everything. Because 60%, you're not spending a lot of time, consultants plan on getting it done by 90%. So I think it's one of the more critical phases of design in construction.

Thank you very much.

The one thing, Madhuri, I just wanted to add too which I think is a critical point with public construction in particular here is that keep in mind if there are change orders and I know PBC is looking at this to assign potentially a member it has to go to a board which is also you know major decisions have to go back to the body so it's not like you're going back to an individual and saying okay this happened in the field today what do you want me to do we have to by monthly to execute this. So I don't know if they plan on meeting weekly or how they're going to do that, but it's posted meeting decisions. Our staff doesn't have the capability, well they have the capabilities but under the purview of our governance structure determinations are made by the body. So that is also a distinction that I feel has not had enough discussion.

So Megan, will the change order work on that particular item stops until the change is approved?

Joe can speak to that. I think PBC sometimes authorizes up to a particular amount.

Yeah, they could designate for example Steve Gagosian to work with one of the PBC members and authorized them up to a certain amount that they can, in emergency situations, authorize it. But typically all the change orders go back to the board. Sometimes they'll ask for a head nod to move forward if it's time sensitive

You know, Joe, I've been through projects. Sat through a lot of PVC meetings and I believe that the electrical contractor you're talking about who is excellent One of the comments one night about a payment due is go ahead and pay it because they'll stop work. So I think that's the other risk, is when you get down below the level of contractor that's building our schools and our major buildings and did the work here. You are at risk for different behavior when it comes to challenges in terms of the contract and cost. This somebody was fully under contract and was obligated to do the work, but there was a disagreement about a change order. You know I do want to say that There is nothing that I'm saying that should indicate or should be misconstrued to suggest that I am against air conditioning entirely.

I realize that what Iím asking for is one more hot year, but I believe in exchange for we will have a properly vetted and designed project with the known cost that allows this board in town meeting to act responsibly from a financial point of view but more importantly from the quality of the project so that I just, I know what happens. You say some of the things I've said tonight and suddenly you're the worst person in Wellesley, and you don't want air conditioning. You don't care about kids even though I have four of them and that's just ridiculous. I just believe that we have a process that has been tested, that is work year after year after the year. That's all I'm suggesting we need to follow here.

I have a couple comments. I'm going to really condense it because of the time but all the free cash applications, I was thinking about this and my own sort of Q&A to myself is what does our plan say and is the request aligned with the town goals in the financing financial planning? What do we know, do we enough to make a sound decision and is it fiscally prudent decision on behalf of taxpayers. I'm not going to talk about the plan, we know it's not part of the plan. I think I'm gonna summarize...I don't feel comfortable that I know enough to make a certain decision there's too many risks here. We don't have a hard construction number, we know it's all going to come out of free cash and I would say when we talk about equity we have to... And I understand that the citizens petition is looking just at a subset of the schools School Committee is just looking at the schools. Our job is quite different, it's across the whole town and we need to think about equity across the town.

We have a number of capital projects that are very important I would say three of them have significant health and safety issues. We know about the skulls, we know about cancer and again with Tom here I don't want to sound hard-hearted but it's a seasonal issue. It's not 24-7, 365. The fire station is 24- 7, 365 and I've asked Dave Cohen to maybe give us a sharper answer on the health and safety issues at DPW. To your question, do we ask staff and time meeting members to bear these conditions? used to sit in an air-conditioned auditorium. And let me finish though, and the DPW last year I think it was last year for quite some time that air conditioning didn't work these are manual laborers who work in the height of the summer in physical labor when you know the advice to them is to work for so long and then go into space when you can be cold and they didn't have that space. And then, you know

when we're talking about applying free cash to one project, that is fundamentally inequitable across town. And so again I don't want to seem hard-hearted but things happen differently in the public sector because we have a different process, because we're thinking about the last question which is, is it a fiscally prudent decision on behalf of taxpayers and are they having a voice in this decision? So those are the things I'm thinking of. And we might have different opinions, and I totally respect your opinion but I'm just trying to put some other color to it.

Well, and to Colette's point about equity. A couple of people at advisory raised last week the issue of requesting free cash for these two schools and subjecting the other two schools to a debt exclusion which under certain circumstances could lead to the next request for the next school to also be under free cash. and then you're not giving the voters a choice about spending multiple millions of dollars as was the original plan. So, I mean people need to think about all these things and not just necessarily one motion that's in front of them now. They need to think of the follow-on implications, what they're going to be asked to vote on next and also in context with all the other capital needs that we have in town.

Are there any other questions for Joe? Kenny, did you have a... I have a question for Rachel. When you look at the funding Free cash is what people have been talking about, right? whether it's the board wants to support taking all of that out of free cash for this project or not. is it in your opinion more practical to do a combination of inside the levy or free cash because I would imagine the citizens petition school committee doesn't care as long as it could be funded at the close of town meeting and they could proceed. So what would be your recommendation on that?

Sure, so excuse me. Given the impact of funding the entire design and construction cost from free cash based off this preliminary analysis Let's do the elementaries.

The four million, the 1.5 million. That's just two schools. Seven.

Let's say seven, Rachel.

That's not fair. I'm asking Rachel. But that's not . It's my question.

No, it's a hypothetical with no basis and we have been told by MLP that the switch gear and the equipment needed for Schofield is what leads to the delay. So it's not fair to ask our chief financial officer a hypothetical that isn't even on the table.

As a board member, this is my question. I would like to know if it was $7 million or seven or 10 how would you recommend funding it? and I don't think it is a hypothetical because having watched all the meetings, and having looked at the motion language there's no discussion of a request for the middle school right now. There has been discussion definitely about full funding of construction for Fisk and Bates, and there has been Discussion about considering Schofield. So I'm going with the largest ask that I've heard, and I would like to know how one would deal with that. And I think that's about seven or eight million dollars. I could be wrong Joe but I'm just working off the estimate we have that's not solid.

Right? I can't give a number

No, I know. But I'm just going off the report. I think it's around $7 or $8 million.

I don't have that. That's with no design.

We do have a test going based on the study report, the BLM? Anyway, Rachel. If it was $8 million how would we recommend funding?

Again, I would have to model that. I haven't modeled what 8 million would look like so I'm happy to take that back and model that but I can't really do that on the top of my head.

No, that's okay. if you could send it or we could talk about it at the next meeting, that would be amazing.

If there is muddled out I'd like to see what else is squeezed out of inside the levee borrowing because you're not We're still going to have to borrow for something. And then so the question of equity comes back again is like we'll be pushing out probably road resurfacings or roofs on buildings. I mean, it's not magic. It's money in, money out.

Colette, I understand that and just asking the question because if this goes to town meeting We are going to be asked our opinion about financing. And I would like to know our choices.

Well, I think we should do more modeling than just 8 million because from what Joe's saying, 4 million for Bates and Fisk is not a number we can rely on. So I think we should have 8 million and on up in two or $3 million increments probably till about 12 or maybe even more. That seems hypothetical too.

I'm just going to say it's not a real number. Let's just say we take BLM.

$18 million that this whole conversation led with under that line of thinking was hypothetical. Nobody's talked about $18 billion, and we led a conversation with a hypothetical that doesn't exist anymore.

I didn't say 18. I said start with 8 million, but if the 4 million for Bates and Fisk is not a final number let's just do 10 million and 12 million just so that Rachel can model it, so that if we're asked, we can provide some information that Rachel has given us.

So if I could add discussion points. The other thing is as we do our town-wide letter, I know that's an upcoming component, to advise the town, and we may not have to do that necessarily at this letter because We presumably will have a better estimate as we get to the town-wide financial plan for the construction, but it's unclear to me what citizens petitioners are asking for till I get that actual motion and the school committee also is having that discussion tonight so we don't know the answer to that. But as a body, we're going to have to put together something to inform the residents on it might not necessarily be what a vote but what the town's position is financially on this matter.

And Megan, could we also discuss the assumptions about projects that would be delayed and projects that move forward at that point once we know what we're looking at because...

The only project is War Memorial.

I know but we've kept on feasibility for the preschool and some other projects that perhaps there's a deferral on some of those other school related projects in deference of accelerating this one.

So I would just like to have that more fulsome conversation. But I also would note that this body has also contemplated potentially doing dual track feasibility study, which would double the cost of what we currently projected for fire station feasibility. Also a point of discussion. not to belabor the point.

OK, are there any final questions for Rachel or Joe on these issues? All right, Joe. Thank you very much for coming. We appreciate it. Appreciate your sharing your perspectives.

I'll see you in about a month and the bad news is I have not even started my capital. I'm usually done with my capital at this point. I haven't even started it. Of course, this project has been occupying the last two months of my time along with Capcom. Capcom I knew was coming. This I did not know so Hopefully we'll see you with a decent presentation next month. Thanks.

Thank you, thank you and thank you very much Rachel. We look forward to having some more information to take I want to say when you can fit it in, because I know you're so busy. But I know that you'll get it to us as soon as you can.

Are we discussing White's Pond at all Marjorie?

Oh sorry, yes.

I can quickly give you my thoughts on that. I'll be like lickety-split. I mean, I applied the same three questions I've asked myself before. Is it... What does our plan say? Is it aligned with the town goals? What do we know? Do we know enough to make a sound decision, and is it fiscally prudent? I'll be really quick. It's not on the plan.

I'm a little concerned because we did have bullet points under special time meeting preparation. I'm not sure if we can discuss this.

It's there. Thank you. So for White's Pond, it's not on the plan and the cost of her legal title and what may presumably follow which is remediation of structural issues water quality issues and dredging are nowhere in the capital plan, Capcom has no placeholder for it. This is the exact opposite approach of what we're trying to establish as a best practice for the mountain of capital projects and the petitioner's asking town meetings to consider it an isolation What do we know? As staff noted, we are talking about what is really undefined. The initial estimates from the proponent for legal work were 25 to 50,000. Town Council has indicated it's extremely complex and it's recommending 100,000 with a caveat that is really unknown and this is possibly the most complex title challenge they've seen The long-term costs, both capital planning and operating are not clearly defined.

And I note in the proponent's presentation he cited that the environmental reports are not raising any immediate or obvious problems but I respectfully disagree There is a supplemental report indicating the potential structural issues and surface level testing indicates PFAS. And so, the cost of addressing those issues really needs to be factored into the discussion Again, is it fiscally prudent? I think this petition is for legal costs to resolve a private matter. If the town ultimately decides to accept the purchase of the property or if it declines to accept the purchase of the property, that's a lot of money to benefit a small group of residents. I think it needs to be much clearer that the petition is really asking the town to apply public funds to resolve a private matter and there's not really been enough discussion on the point of what the alternatives are. How can residents contribute? Could the conservation land trust contribute? Is CPC funding available, although I'm conflicted in that as well because that is also taxpayer money So that's really quickly where I stand on that.

I just think that's important for us to think about when we're thinking about applying free cash to legal costs.

Anyone else on White Pond? Well, I agree with everything Colette has said. And another question that Megan raised for us is whether substantial commitments of free cash should be made through individual citizen petitions. Colette already mentioned that it hasn't gone through the Capcom process or been evaluated with the town's other needs, and I would also add The citizen petition doesn't go through the normal board processes, so I would add that caveat as well. I don't know how to answer the free cash question.

We don't have an amount that we're looking at, and I completely agree with Colette. should be not solely on the town to solve. That it should be a more creative, because there's no clarity, even if it's resolved at the end that it would be gifted. And so I don't see the town fully investing in resolving a title issue not knowing where it's going to lead to. So I think there should be, what's the term? Skin in the game for us to even considerate myself but I guess that's, I don't know how to make a determination given there is no McNeil, Quantified ask about it. And the thing I wanted clarity on is

would this go through Capcom? Because I think it's under the budget amount.

So two things, Capcom looks at the entire project cost not the initial ask which is a hundred thousand so if you factor in 100,000 for legal plus the cost for the capital to fix the structural problems that we've identified, dredging of I think it could easily top two million dollars. The other alternative is if the executive director thinks its complex enough that it should go through Capcom, then it goes through CapCom

Okay, any other comments on White Pond? Okay, so on to our next agenda item is administrative matters. The first of which was to discuss the draft townwide W letter from the select board. Megan gave us the beginnings of an outline and I want to know just high level for now because we are running late whether there are major issues that anybody thinks are missing, and we should include in our consideration and then ask the board to please go through the list much more carefully and send Megan and Corey some comments in the next couple of days.

And we will, we have been working on that. Corey has been working We'll send that out as soon as we have it. But if there's anything missing, that's really the key component because The turnaround time on this will be, we may be able to look at it on the 20th but we'd really need to get it to the printer like the 21st.

To me, it's really I need to see not the list but how you word the articles on the list. I think within the current environment and the comments that we're hearing about capital projects and, and the budget generally. I think it's how we're writing about these projects and the message that we are sending that is more important to me than just and I know you didn't mean the list to be approved and go ahead and write it without our review.

I agree, Tom. And I think what I might ask is when Stafford drafting this particularly with capital to say that we've been kind of sounding this alarm for two years and we're taking this three-legged Stulipoach, whatever you wanted to say. But it's not that we're just running Dunathelma and Louise off the Capitol Cliff. It's that we've got these three things that were trying to bring into place here to rationalize this. We don't think this is sustainable. We can do all these debt exclusions, we need to find alternatives.

I will tell you so as part of the North 40 some of the emails you've received about fire station master plan etc that is certainly like i'm a Are these people reading the letter that we sent to their residents? Because we detailed this twice in terms of things to watch for. So we will certainly look at the framing on that because that's one of the critical components in this letter is to really draw people's attention, but that we want you to pay attention these are critical financial issues that are facing the community and so you know good bad indifferent feedback is what we need.

And choices that they will have to make difficult choices for all of us

So on the financial policies update, my assumption was that it was that we were creating more structured guidelines but not We had a lot of depth about the guidelines and structure at this point because I thought as a committee, a board we have more work to do. More like a heads up, watch for it. It's coming as opposed to the level of detail.

Hood concepts, not detailed but I think you can see we're working on these concepts. Debt management and a capital stabilization fund and potentially higher reserves.

and for those in particular, we had started with a much more sort of in depth. Corey had a more in-depth write up that were working to sort of step back because the boards that would be more in the second letter for annual.

Okay, Megan, thank you for- Is there anything anyone sees that we're missing that we need to add to the list? That's the most critical question because we want to get you a draft soon. No. All of you. Okay.

Nope. Okay. We look forward to seeing that draft, Corey. The second the next issue under administrative matters is to discuss and vote minutes we have two sets of minutes

there were no further edits sent out after I re-sent the drafts yesterday, so those are the most up to date in terms of what has been edited. And then I think Kenny and Colette will talk about policy subcommittee minutes.

You want to address that, Kenny?

So there's one, and I apologize Corey. I don't know where it is right now but I think it's when you corrected Ms. Jop from Megan Jopp or something? There's a Jop Ms.Jop somewhere in here and I can't

I just can't find it.

So for the policy subcommittee minutes, we have minutes drafted of our July 30th meeting but As I mentioned earlier, policy subcommittee is essentially on hold for the moment because of board member capacity. So what I'm proposing is that those minutes are accepted by the select boards so we can post them in the same way that we accepted the minutes for the Townwide Capital Planning Committee Interview Subcommittee. So, we have minutes of September 8th and September 15th to approve and then minutes of the Policy Subcommittee of July 30th to accept.

I second that.

Okay, Beth? Yes. Kenny? Yes Colette? Aye Tom? Aye Okay, and I vote aye as well. Okay, the next item is the chair's report late breaking news The school committee voted tonight not to bring a motion under Article 13, the bus contract. And there was a substantial discussion tonight which any of us can watch tomorrow. So Article 13 will not move forward at special town meeting. They were also going to be voting membership for the facilities task force tonight and then discuss next steps with the select board staff.

The budget has been updated since annual town meeting for the schools and there is a net increase of FTEs, although they are not all new people. We don't have details yet but some are increased hours on existing staff I'm not clear exactly how many are new benefited positions. At least some of the increase comes from increased numbers of students in special learning programs at the elementary schools, Some is due to increased complexity in specific students cases, and some may be new students to the district. enrollment figures were due on October 1st and the analysis is not final yet, but there appears to be a slight decrease from last year. Although still slightly higher than originally projected and that seems to be pretty much across the board at all three school levels.

The administration is also studying MCAS data elementary students scored very well in ELA, math and science. And there was a large number of national merit finalists. Other analysis is ongoing There is a concern about attendance at the high school. There's been a concentrated effort to address it and those efforts continue. from advisory. Advisory will hold their public meeting on the STM tomorrow night, depending how motions develop. The chair has led it to be a supplemental advisory report, which will be circulated electronically as soon as it's ready but which may not be available for town meeting members in hard copy until shortly before or at town meeting. and again, that depends on changes in motions.

Some town meetings are now being broadcast by Wellesley Media on an HD channel as we announced at the beginning of our meeting So those of you who know people who watch meetings or for your liaisons may want to let your liaison boarding committees know to make sure what channels their meetings will be on. so that viewers can find them. And advisory committee members are working on writing their sense of the report, and it's going well. And Megan gave us a breakdown on the Charette So I will pass over that. Colette, did you want to report anything on Capcom?

I'm actually going to just say one thing. I'm working and I'm almost finalized on the minutes and we're gonna post the minutes as draft and I will say they're excellent minutes. So thanks to Corey and Rachel for pulling them together, and I'm not going to recap it now because of the hour but if anyone wants to know pretty much what went on, the minutes are really a great reflection of the meeting so I'm just gonna leave at that given Marjorie.

Thank you very much. OK, our next agenda item is executive session with apologies to Town Council Tom Harrington for the late hour. I request a motion to enter into executive session with respect to negotiations with the Wellesley Superior Officers Association and Dispatch Union, as well as to conduct strategy with respect to litigation regarding 40 Oakland Street.

So move to enter Executive Session under Mass General Law, Chapter 30A, Section 21A, Exemption Number 3. to conduct strategy with respect to negotiations with the Wellesley Superior Officers Association and Dispatch Union, and to conduct strategies with respect litigation regarding Forty Oakland Street. and to invite Executive Director Megan Jopp, Assistant Executive Director Corey Testa Human Resources Director Dolores Hamilton Police Chief Scott Whittemore Town Council Tom Harrington Higgins, Town Council Eric Russell and Special Counsel Nicholas Shapiro to join the meeting. Following the close of executive session, the board will return to open session for the sole purpose of adjourning the meeting

Tom?

Aye.

Kenny? Aye Beth? Aye Colette? Aye and Aibo Ai as well. And I just want to let you know that I am not within earshot of anyone else for the executive session. Okay, Megan R.

and others.