by Frank Schroth

When it comes to Town Meeting, you never know what is going to trigger a vigorous discussion. At last Tuesday night’s session it was Milton’s leash law, whether or not to capitalize the word “enterprise” when referring to a fund, and a motion to deny an appropriation for studying the potential uses of the DPW yard that resulted in a standing vote. That last being Article 17, articles 6 – 16 all passed.

A discussion on whether “enterprise” should have a capital E was the first major question of the night. The issue came up due to a minor change in how a line item was labeled. In article 6, which concerned the amount of funds to be appropriated to capital items, the list allocated items to “Water fund” and “Sewer Fund.” This caught the attention of Town Meeting Member (TMM) Katherine  Dunphy. She pointed out that historically the warrant referred to this as “the “Sewer Enterprise Fund” or “Water Enterprise Fund” and she wanted to confirm that the money was being handled consistently year to year. It was confirmed that it is but the issue didn’t end there. Diane DiTullio Agostino pointed out that the recent report done by the Dept. of Revenue at the request of the Town Government Study Committee recommended the town “adopt enterprise fund accounting for its water and sewer operations. Despite reference to Milton’s water and sewer operations as enterprise funds in the annual town meeting warrant, they are funded through special revenue funds established under special acts dating back to the late 19th century.” (See full text of DOR recommendation at the end of this post.) The use of a capital E in “enterprise” was not an accurate statement. TMM Ella Welz said it was not a trivial distinction as these terms are defined in statutes and have legal meaning. The label was changed and the Warrant Committee accepted the change from a capital to lower case e throughout the warrant wherever referenced.

Article 6, which requested $1.8 million in capital items that included but were not limited to smart boards and computers for the schools, trucks for sewer and water (i.e. DPW) and meter replacements, passed.

Article 12, which was an appropriation for public safety included a leash law line item for ~$75K.  TMM Earl Fay wanted clarification on what that money was used for and how one reports an off leash dog. Police Chief Wells explained that it is principally the salary for the animal control officer as well as some associated costs incurred to support her in her line of duty. Wells noted that dogs off leash is a civil infraction that is challenging to enforce and that the reality is “people don’t like to leash dogs.” TMM Steve Morash noted that he found it “strange” that the town spent substantially more on its leash law than emergency management (ie. $75 k vs $10.6K) and that if  “we are going to do it (provide emergency management), then let’s do it.” TMM Bob Hiss asked how the chief was able to keep the adjustment to his salary and wage line item so low. Chair of the Warrant Committee Ted Hayes pointed out that it is because those adjustments are not in that portion of the budget. The comment in the warrant notes that salary increases when negotiated should be covered by set- asides contained in Article 8. Article 8 sought an appropriation of $558,695 to cover in part items not included in department budgets because collective bargaining with non-school unions have not been completed.

All articles up through Article 16 passed. Article 17, which is still open, brought the session to a close. The article seeks $35,000 to fund a “feasibility study of the DPW yard.”  This article generated a couple of different discussion threads. Some members questioned the cost of the study and argued that the town appoint a committee (residents, town officials) to perform the work free of charge. TMM James Mullen made a motion that no appropriation be made. TMM Fruzzetti agreed saying the project would be appropriate for the new assistant town planner (an earlier article passed that included funding for an asst. Town Planner). Mullen provided a refreshing light moment when he quipped (presciently) “I don’t need any help.I can go down in flames by myself.” The motion failed on a voice vote. A standing vote was prompted (the ruling on a voice vote can be challenged by 7 or more Town Meeting Members standing). The result of the standing vote was 136 to 68, defeating the motion.

TMM John Cronin spoke and requested a committee be formed to assess the issue as that is in keeping with how the town typically addresses these issues.  He questioned who would be in charge to the money. He felt a committee of 5 appointed by the Town Moderator with a chair would be a better way to approach the issue. TMM Morash rose to question whether that was within scope of the article. Moderator Walsh said it was and that town counsel supported him on that. (At a previous town meeting, Mr. Morash had sought to increase the size of a study committee membership being proposed in an article and it was ruled that his recommended change was out of scope). A number of sidebar discussions among selectmen etc. took place when Town Moderator Walsh called the meeting back to order. TMM Peter Mullin made a motion to adjourn due to the late hour and to give members time time to think about the issue and return with clear heads.

Town Meeting resumes this evening.

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from The DOR report

10. Establish Enterprise Funds and Develop Written Indirect Cost Policy 

We recommend that Milton adopt enterprise fund accounting for its water and sewer operations. Despite reference to Milton’s water and sewer operations as enterprise funds in the annual town meeting warrant, they are funded through special revenue funds established under special acts dating back to the late 19th century. Enterprise funds were adopted as a successor accounting methodology to the earlier special revenue funds and enable a community to identify the total cost of providing a service and to determine if rates being charged are sufficient to cover that cost. They allow payments for indirect costs to flow from the enterprise to the general fund to reimburse the town for the time spent by town employees on enterprise activities. If a surplus, or retained earnings, is certified as available (similar to free cash), it may be used to fund operating, capital, or debt service costs associated with the water or sewer operation. Retained earnings funds accumulate interest, and can be methodically built-up over time to finance anticipated capital projects.

To establish enterprise funds, town meeting must accept M.G.L. c. 44 §53F. to supersede the special revenue funds. Water and sewer expenditures would remain in the line item budget, and a separate article for town meeting approval should provide general expenditure information and greater revenue detail. An enterprise fund is merely an accounting methodology and does not create a new department. Additional information can be found on our website at: http://www.mass.gov/dor/docs/dls/publ/misc/enterprisefundmanual.pdf.

Also, the Bureau of Accounts (BOA) recently completed an analysis of enterprise funds across the state to determine the reasonableness of indirect cost calculations. As a result of that study, BOA will begin reviewing indirect costs reported on the tax recap sheet measuring allocations against prior year amounts for consistency. They might also establish other baseline criteria for reviewing how communities arrive at these figures going forward. To limit future scrutiny, we recommend that Milton develop a written indirect cost policy and calculation worksheet. Agreed to by department heads and approved by the board of selectmen, the policy should be reasonable and have long-term applicability in a way that produces a fair and consistent annual payment. Relevant costs to consider include salaries and wages, employee benefits, property and casualty insurances, debt and other overhead-related expenses.