Al to the flag of the States of America to the Republic for which it stands one nation God indivisible liberty and justice for all thank you um before we start everybody please make sure your
cell phones are off on VI vibrate please and I'm going to ask the board if it's okay if we take new public business out of order and put it as item number six so that we can accommodate Our Guest Mr L on Zoom is that all right that's fine
thank you uh approval of the minutes please from February 18th approval of the minutes of February 18th 20125 second discussion hearing none all in favor I I oppose none thank you welcome Mr Lynch we'll go right to your
report if it's okay with you that would be great thank you very much and uh it's a it's a pleasure to be here uh I'll be it virtually with you I appreciate you taking taking me up first and also allowing me to do this presentation to you uh via Zoom uh I'm going to go right
into the uh presentation though and I'm going to try to share my my screen with you try to at least um actually Rodney can you um rather than try to figure this out
could you uh put on my um presentation uh I can try I don't have it saved I apologize for this I usually sharing I'm sharing it's not yeah he's going have to go without the PowerPoint through you Mr chairman I'm
sorry we're having technical difficulties I if you want you proceed with the PowerPoint for now okay um let me um let me walk you through then what I basically what we um what we're here to do tonight and that's to announce the town manager finalists
um just by way of uh by way of background to uh refresh everyone's uh memory of how this U uh came about uh we were engaged by the town uh back in um
um I apologize back in November of uh 2024 to uh help with you the town manager search uh we moved forward to um identify the priorities of the um Town manager that uh that the the town had uh
and we did that through basically our own research working with the uh department heads and most importantly with members of the board as the chief elected officials of the town uh and we uh we conducted these stakeholder interviews in order to develop a
position profile uh that position profile we use as a a means of recruiting candidates uh but we think it's an excellent process for the town itself to go through as it starts to look at or think about what it needs or wants uh from the town man manager uh
moving forward the um ad position was advertised uh at the end of December uh and um we uh we began um conducting Outreach to to candidates
uh with a uh a deadline of January 29th the way we got the candidates just so um people understand the the extent to which we uh actually went out and uh found candidates for this position is we posted it on the the mass Municipal Association uh the international city
and county management association both those websites we also utilized all the graduate schools uh in the region that have public administration programs uh all in order to U try to develop as as much word out on the street as we possibly could we also took advantage of
the fact that the uh Massachusetts Municipal Association uh annual conference was taking place towards the end of uh January uh and that gave us an opportunity to to meet uh a one-on-one with a number of candidates uh in Boston
at that uh event in addition to that we utilize a database that we've generated over the years of potential candidates uh that have applied to us uh the uh other candidates that have reached out to us who are interested in becoming
managers uh and communicated with all of the managers and assistant managers uh and some of the key department heads here in the Commonwealth uh again focusing on those that would be appropriate for uh the town of dandas and we U conducted extensive candidate
specific Outreach uh to those people in the region of Danvers that we thought would be a good fit uh for the uh for the town uh our deadline was January 29th and we ended with uh 39 31 candidates that uh that came forward uh
which is one of the more um uh sizable pools that we've had had uh for a community the size of Danvers uh interestingly we've had uh some similar size pools for some smaller communities uh but in the case of Danvers uh we felt that we did a we were able to get a
really uh very good effective pool uh for the for the town so uh with those 31 candidates uh we then conducted the a summary uh a or a review of the pool uh with the uh screening committee um the
screening committee I might d uh was uh an excellent committee to to work with uh to refresh everyone's memory on that they were appointed by the board uh Corine Dy uh Steven Groff Eric Mitchell Arthur Schamus Walter tibert uh Dan
Bennett representing the the board uh and then Morin Bernard also representing the board and Morin served as the chair uh and uh the committee um worked extensively in reviewing the applicant pool that we uh sent out to them and uh
uh and then participated in uh uh a lengthy meeting uh where there was back and forth regarding the candidates uh and selected seven candidates uh that would be brought forward for interviews um in the course of two days uh the
committee did move forward uh to interview those seven candidates uh and the topics that we really focused in on were uh trying to get a handle from them uh of why they were interested in the town of Danver and in the town manager position by looking at their career and
how Danver would fit into that uh overall uh arch of their career uh we really worked with them to understand their leadership and management style and whether that would uh fit in with what um had been identified as the type of style that the board uh and the
department help felt was uh was necessary to be effective uh in the town of Danvers um we heard extensively uh in talking to um the stakeholders the board and department heads the importance of communication and collaboration and really building consensus uh around
various issues in which there may be some division within the community uh so we we spent uh quite a bit of time on that as well as Citi relation citizen relations and government transparency uh because like every Community uh there's you know there's some sense that there's just not an inform enough information
out there uh for people to understand what's happening in their in their town uh so we we spent some time with that again like many communities uh land use development and Community character have become uh the uh you know the
predominant issue that many people are focusing in on uh and uh that certainly is the case in Danvers uh that we identified when we were talking to people throughout the town uh that uh you know there's that sense of where is danver's heading uh as a community uh
and so we wanted to understand their their understanding of that issue and what they've experienced in trying to build consensus around those issues uh in the communities in which they've served uh personnel management and Collective barging is also uh an issue in which we spent quite a bit of time uh
that whole notion of how do how do we in municipal government now uh attract uh and retain employees um as well as uh the importance of uh an effective collective bargaining strategy financial management uh you can see is is
obviously an important one for every community uh daners is fortunate to have a good Finance team um so in other communities we work with that is higher on the uh the list uh we wanted to focus more on some of these relationships issues and a
consensus building issues um but certainly we can't ignore the importance of uh particularly in this year uh which many communities are struggling with their finances you know you need someone that understands financial management and understands Municipal Finance uh so
we wanted to test them on that uh and along with that uh the importance of infrastructure uh Investments uh so looking at Capital financing and project management um so uh and then you know at the end of the day the most important relationship uh that uh every town
manager has is with the select board itself so we wanted to get a sense of how do they communicate with the board what's the relationship that they have with the board in terms of policy setting and execution uh and uh as a result of that whole interview process
over those two days the committee um narrowed in uh after lengthy discussion and focus in on three candidates and those are the three finalists that we're presenting to the board tonight go to the next Slide the first uh the first candidate
is Jill Cahill um Jill is the current currently the chief administrative officer in the city of Gloucester uh right nearby uh she has an MS in public administration from Boston uh a BS in political science from Colorado State University in for Collins uh prior to
serving as the chief administrative officer in Gloucester she'd been the community development director uh for the city um and uh prior to that she held positions uh with a couple of nonprofits uh for-profit and had served
as Chief of Staff to uh Senator Karen spilka the current uh Senate President here in Massachusetts uh but you can see that she had uh background in that the nonprofit Pathways for children as a Communications and donor relations manager uh again focusing in on um we
thought it was relevant to her Communications and her uh sort of consensus building and development issues that she was able to U serve in that capacity uh and then of course she had her own company or worked as a with the the event company uh office and
event manager for that the second candidate uh is I could move up on the slide is uh Sean Fitzgerald uh Shawn has most recently been the Town Administrator for the town of swampit a position he held for nearly 7even years
uh um he's uh has a some graduate work that he's done at Salem State College uh but he has a bachelor in public uh in political science from Central Connecticut State University um his time in swamps as I said was about seven
years he left there in December uh and uh prior to that he served for about nine years in plastow New Hampshire obviously a smaller Community uh than Danver but uh a good long run in both of those communities uh and then also had served as the mayor's chief of staff for
the city of peebuddy uh from um 2001 to 2008 again a good seven-year run um and he had some additional time working for for the metropolitan area planning Council as indicated on his resume uh and uh serving as a regional services
coordinator when uh mapc was doing quite a bit of uh began really working at um more regional service delivery options so uh Sean comes with a substantial am of U uh Municipal Administration Municipal experience uh in all of those
communities and then lastly uh the third candidate is Patrice Garvin uh Patrice is currently the bont town uh Town Administrator position that she's held for uh about seven years um she has a master of education from Boston College
a BS in political science and sociology from suffk University uh again a a good long run in the town of Belmont um and but prior to that she served five years as the Town Administrator of Shirley um a smaller town but she was able to move
up from that uh into the town of Belmont and been successful uh in her position there uh she also has other Municipal experience working as the executive assistant to the town manager in gron for a period of about 6 years uh which she uh points to as being a really an
important period in her uh time of uh learning the role of Town Administrator uh Town manager um and uh uh you know learned a number of skills there uh as to uh uh executing on those uh
administrative responsibilities so those are your three candidates what I've provided to um uh to Rodney uh for distribution to the board tonight is a packet of information uh within that packet of the covered letters of these three candidates as well as their
resumes uh also provided a what I referred to as an interview guide to help with some of the questions and we can we can talk more tonight or before the interview on the 12th about how you want to go about utilizing some of those questions and obviously you may have
your own questions um but um we've also included the the U we've done Corey checks on all these uh finalists uh We've verified their employment um and we've spoken to uh their references uh
we have um when we I was describing to uh I believe the committee uh when we met before we spend as close to as as much time with each reference as we do with the uh applicants themselves so in each case we've spent 30 to 45 minutes
uh or more uh talking to their references trying to get an understanding of uh the skills of these candidates their um their backgrounds their uh style the types of projects that they've worked on that could be informative to the uh board as you're
making your decisions and we've summarized all of those comments into a um a report that uh you have with the resume and the cover letters um and um we think that those will be helpful to you in understanding uh exactly what these these candidates are all about
uh and so that's in the finalist report that I've uh provided to you along with the questions and the um some prohibited questions if you will uh just some recommendations of questions that you should not ask or we should not ask uh when we meet uh next week uh due to
liability issues that we we want the town to avoid uh but um uh hopefully all of that information will be helpful to you and um I stand ready to uh speak with each member of the board uh between now and the time you make your decision
uh as to between now and the interview certainly helping with any questions that you uh think are important that uh be focused in on uh and helping you uh work with those uh developing those questions uh and then um you know
understanding the candidates more uh behind if you will the reference report that you have anything you want to talk about regarding the candidates and their interest in this position um and and then ultimately after the interviews if you uh need any U additional information
for me I'm prepared to to work with you on that uh as individuals um the board interviews are scheduled for March 12th from 6:30 to 9:30 uh one hour for each of the candidates 6:30 7:30 and 8:30 uh
that my understanding is that you're planning to hold that at the Danver Senior Center uh Ry and I have talked about this the uh and so about the issue of uh uh the having televised interviews uh so
my understanding is it has been arranged that there' be a tape delay uh following the conclusion of the interviews then it will be broadcast for residents that are interested in watching that uh but um so as to avoid any concerns that the one of
the candidates might be watching and seeing the questions uh there will be a tape delay uh and then the selection of the Town manager that night uh which is possible uh or after discussion if need be uh putting it off till March 18th if required uh and then following that uh
selection uh the commencement of contract negotiations and um for that uh the board will need to uh determine who will be doing those negotiations uh but I will um be available for technical assistance to help mediate through any
um disagreements or any um hurdles that uh that may arise during those contract negotiations so um I will you can take down my presentation at this point Rodney I'd be happy to answer any questions that people uh may have thank you Bernie D any questions
for Mr Lynch uh not not at the moment um okay David than can not Dan at this moment no thank you Mike uh not tonight thank you Moren um I first of all wanted to thank Bernie Lyn um for everything
he's done and all the applicants that did apply as he said we did have 31 down to 11 down to seven down to three um the subcommittee was great um you know we did really interview them and ask them a lot of questions you know what it is
that why would you want to come to Damas about the land use as Bernie said the Community Development the budget um collective bargaining um and we want you know to us also it was how well will you work with the residents in the and uh the employees of our town um so I just
wanted to thank everybody and um I hope that we picked the right one and um I I I believe that Bernie and you can correct me if I'm wrong but if any residents might have questions they could possibly email the questions to Dan and copy us um so feel free if
anybody does have questions to please email us and uh we'll propose those questions as we see fit thank you thank you more rain well done um Bernie thank you I guess we'll see you on the 12th I will be there on the 12th you're available to any members of the board if
they have questions yeah um everyone um should have my email address and um I know that Rodney has my phone number and I'm happy to take questions or calls uh anytime uh over the weekend whatever whatever works uh to to help the board to get to the right decision okay thank
you so for the public to repeat we're going to meet Wednesday the 12th at the senior center at 6:30 thank you Bernie great thank you three you Mr chairman I just want to just point a clarification that is a public meeting the Public's welcome to
attend in person we just won't be broadcasting it live until after the meeting for as the reasons Bernie mentioned thank you okay the board will hear from the town's independent auditor for the fiscal year 2024 uh good evening Mr chairman members of
the board uh my name is Scott McIntyre I am a partner with Markham although um and the audit report is signed off by Markham um but if perhaps Rodney's indicated to you um on November 1st of last year Markham was acquired by cbiz
used to be known as Century business uh so we are now part of cbiz which is one of the largest CPA firms in in in the world there kind of a lot going on in the business of public accounting right now uh just a couple of years ago we were here as malanson last year we were here
as Markham guess technically we're here as Markham uh because your audit report is signed off as Markham uh but subsequent to the issuance of this um we have become part of cbiz so well welcome again Scott after so many years of
coming before us thank you it it I can't remember how many years ago I was last here others in The Firm have had the privilege of coming to address the board uh it's always a good meeting I think I'm not going to walk through a tremendous amount of detail I'm going to
give you the highlights tell you about the audit process and then I'll take any try to answer any questions that uh the board may have uh what I'd like to do is I'd like to start with the the governance letter uh it's the the about six or seven pages I'll get into your acfr or your annual comprehensive
financial report in in just a moment uh but the the governance letter and let me first explain why why I call it a governance letter our Professional Standards require that we report to those charged with governance the results of the of of the audit so it's
maybe it's a little bit of a slang term but we call it the governance letter because our Professional Standards requireed we report to those charged with governance tells you a lot in here I mean historically I've kind of walked through the highlights of of of the audit now it's been essentially codified in in in the governance letter it tells
you the auditing standards that we followed we followed both generally accepted auditing standards in the United States and also generally accepted government auditing standards a lot of similarities but there are a few differences in in those on on top of page two it tells you actually at the
bottom of page one it tells you what that what we audited at the top of page two it talks about your required supplementary information and your supplementary information with you preparing an acfr there's a lot more in here that might be present in a uh
governance letter for someone that doesn't prepare an acfr at the top of Page Three uh we have identified a significant risk for material misstatement not to be it should not be thought of as alarming uh We've we've judged that management
override of your internal controls is a significant risk for material misstatement and I can tell you with certainty that we identify that in every single audit that we do essentially the auditing standards require that we
identify management override of controls as a significant risk and again I'm required in this governance letter to express that to you so uh after that some significant audit matters uh what we're really talking about there are significant estimates in your financial statements they're highlighted by those
four bullet items they are not the only estimates but they're in our professional judgment they are the significant adjust significant estimates they deal with depreciation they deal with your ibnr or incur but not reported liability as well as your net pension liability and your net OPB liability and
the Rel related accounts that go along with them um at the top of the the next page it talks about difficulties encountered in performing the audit you'll note that that's a very short sentence there um it basically says we encountered no significant difficulties
in dealing with Management in completing our audit after that as a paragraph on Independence is something a little bit new in in here this year uh and that deals with what I'll refer to as non audit Services you we hired P primarily to audit your your books in records
related to that we do it in danvas we do it in virtually 200 audits you know in throughout New England probably more uh we assist in the preparation of your annual comprehensive Financial uh statement that's a service that we provide that's not an audit service and
again my Professional Standards require that I express to you that we do a service in addition to the audit that we consider to be a nonattest or non- audit services so um that's really the highlights of of the of the governance letter uh it goes on for a little bit
longer uh but um basically it's a what I would call a a a clean governance letter it doesn't tell you that we identified significant uh deficiencies in internal control it doesn't say that we identified material weaknesses in in in internal control and it doesn't tell you
that we needed to make a whole bunch of adjusting journal entries in order to for your your financial statements to be materially fairly presented so a very straightforward uh governance letter uh in the type of report that a community in my opinion uh would would like to
receive moving on to the uh acfr or the annual comprehensive financial report uh the financial statements if you will I'm going to begin on on print page 12 someone has a PDF it's PDF page 22
but the print page is Page number 12 um this is our independent Auditors report this is predominantly what you you you pay us to do goes on for several Pages I'll summarize it it's thought of as a clean opinion or technically it's called an unmodified opinion but most people
refer to it as a clean audit opinion it goes on for several Pages because it tells you again the Professional Standards that we followed tells you about the work that we we did uh and it gives you the basis for for our our opinions and um but is essentially thought of as a clean or unmodified
opinion in other words your financial statements are materially fairly presented in accordance with uh generally accepted accounting principles here in the United States so I'm going to skip all the way over to to page 29 print page 29 I'll take a second and
remind uh the board and anyone else who who may be following along um that there are essentially two sets of financial statements in in in the reporting model for state and local governments here the United States what I'm looking at here on page 28 and 29 is what I would refer
to as the long-term perspective balance sheet technically it's called your your statement of net position I'm just going to talk about this a little bit because in our professional opinion no conversation about a local government's financial statements in 2025 um is complete unless there's at least a brief
discussion about your net pension liability and your net opep liability so if you look on page 29 in that First Column of numbers it's just easily a little bit easier to focus on the the governmental activities about halfway down that First Column of numbers on page 29 you see a net pension liability
with a 94.9 million balance as of 630 2024 uh that's that liability uh is down from about 99 million in in the prior year uh and the reason for that is predominantly uh more favorable investment earnings uh for calendar 23
that liability is actually measured as of the year end of your retirement system which is 123123 and investment earnings in that calendar year were significantly greater than they were in calendar year 22 as they were in virtually every system here in in the Commonwealth so um right below
that is your net OPB liability OPB or OPB stands for other post-employment benefits by other they mean other than pension what it really means is retiree healthc care that the benefit that is earned by the employees here in danvas uh while they're providing service to
the town and its citizens and the benefit they'll receive of of of the of of health insurance when they retire at 63024 uh the governmental activities had a net opep liability of just under $122
million uh that's up a little bit over over the prior year mostly driven by by experience changes uh actuar determined experience changes so um back on real quickly on I I meant to when I was
speaking about the net pension liability for those that might be interested uh for the measurement period of calendar year 23 used a 7% discount rate where in the prior year used seven and a quarter so you've brought that down um most
governments here in Massachusetts have been bringing that down the discount rate is essentially what you expect the future earnings of the plan investments will be so you can discount your liability by those F future earnings so Danver actually brought that down which is really quite consistent with many other communities uh throughout the
Commonwealth so now if I could turn your attention all the way over to page 32 page 32 if the last couple of pages we were talking about with a long-term perspective page 32 is the shortterm P perspective it's not two sets of books
one set of books just looking at it on a modified acral basis and in a cruel cruel cruel basis page 32 is uh probably the first P place 99% of the readers of your financial statements will turn and they'll first look at that general fund
column before I do I just uh we we're going to really focus on the general fund uh to the right of the general fund column is your Capital project fund it was determined to be a major fund as as prescribed by the accounting standards uh and then you have your non- major governmental funds and one account that
I do want to point out in that title that column titled non- major governmental funds about halfway down you have an unearned revenue of $1,153 th000 as of 63024 that was the unspent r
rper money uh it's called a unearned Revenue because you received it but you can't technically enter Accounting Standards recognize it as Revenue until you do with it what you said you were going to do which is spend it on eligible items so now back to the uh to
the general fund that column as I mentioned is the is really the first place that most will turn and one of the first places they'll look in that column is the second number Up From The Bottom the total fund balance with as of six June 30 of 2024 had a balance of 40
million. eight almost $4.9 million that's up about $8.4 million o over the prior year and we'll see some of the reasons for that in just a minute uh more in that $4.8 million is broken into three categories you're unassigned
assigned and in committed most people are going to focus on on the unassigned but the assigned and committed are I think are equally as important the unassigned balance as of June 30 24 with an account balance of $21.9 million that's up about $1.5
million o over the prior year June 3023 was 20.4 Million it's jumped up to $21.9 million it's also important to look at that 29$ 21.9 million uh and look added as a percentage of your expenditures
what do you have in unreserved or um sorry unrestricted unassigned fund balance get my terminology a little mixed up there pardon me the unassigned fund balance as a percentage of your general fund expenditures represents a little bit more than 18% which is thought of as it's an appropriate
percentage for a community rated the way danverse is is is is rated so last bit on on this on the $21.9 million it's highlighted in your footnotes uh but I think it's important to remind readers that that really is
broken into two pieces in Rodney and Heather's ledgers they have a general fund and they have stabilization accounts it's prescribed that way by uh the divisional local services for the common wealth of mass but Gap or generally accepted accounting principles takes those two funds that are in the
town's ledgers and puts them into one okay and so the 21.9 is really broken into the general fund piece of about 6 16.8 which is the starting point for certifying your free cash and your general stabilization account of 5.1
million so I just wanted to point that out it is highlighted in your footnotes but that 20 21.9 is really broken into into two pieces so so I I want to hop all the way over to um I'm going to skip over the general fund statement of revenues and expenditures and I'm going
to go all the way over to to page 38 page 38 deals with your um Enterprise funds and I'm taking you to the statement of cash flows I'm for your Enterprise funds I'm purposely skipping over the the balance sheet or statement of net position in the statement of
revenues and expenditures I'm not saying those are unimportant but in my professional opinion I think from an Enterprise fund standpoint readers should focus on the statement of cash flows I don't want to get too technical here but if you look at this page right here and you from the top down if you
look at the first subtotal of numbers the net cash provided by operations if I focus on the water fund for a minute the First Column the first subtotal net cash provided by operations is about 3.5 almost $3.6 million financial institutions and red
credit rating agencies going to look at that number and they're going to make sure that it covers your p&i your principal and interest on on the on the debt service and you see those two numbers further down that First Column of numbers on for cash flows from capital and related financing activities
okay in the water fund if you look at the net cash provided by operations it more than covered the principle and interest on the debt in those funds generating a surplus if you will of about $1.2 million that that can be used for for Capital infrastructure and
things like that and you see that that process if you look at all all three Enterprise funds there you see that the net cash provided by operations covers and and actually exceeds the principle and interest on on the bonds payable in in those funds and that really is the
key metric that financial institutions and credit rating agencies look for on an Enterprise fund lastly um I want to turn all the way over to page 96 uh this gets into your budget versus actual uh uh re results which are a
little bit different than the general fund um on page 96 if you look in the lower right hand corner just getting to the bottom line if you will in that fourth column the variance column uh it tells you that revenues came in greater than in anticipated greater than
anticipated in the budget by $9.6 million if you look up and down that column you can see that the majority of that uh is from motor vehicle excise taxes investment income and in what what is known as other or non-recurring which is really just some the the landfill Fe
fees uh in calendar pardon me fiscal year to 2024 that's the revenue side of the equation if you turn over to page 98 and look in that lower right hand corner of page 98 you see on the expenditure side uh about 2.9 I I'll round up and call it
call it $3 million in unspent Appropriations uh unspent and unencumbered Appropriations so if one takes those the sum of those last two numbers the revenues that came in greater than budget of about 9.6 plus the expenditures that came in less than
budget of 2.9 you get about $12.5 million so now I want to go one more page and then I'll I'll stop and answer any questions I want to go all the way back to page 22 and towards the bottom of page 22 you
see a little chart that has those same fund balance categories and what they looked like as of 63024 and 63023 and you can see that unassigned fund balance went up about a million5 but committed fund balance went up
almost $6.2 million essentially all that budgetary Surplus that we saw on the budget versus actual page 96 in '98 when it came time for town meeting uh towards the end of
fiscal year uh 24 a lot of that Surplus was in that that that that had generated free cash was put towards Capital spending so that's why the Surplus if you will that you see on the budget versus actual Pages doesn't directly translate to a dollar for- dooll
increase in the unassigned fund balance a lot of it is going to that committed fund balance last thing I'm not going to read it but I would want to draw your attention to the paragraph right above the chart there towards the bottom of of page 22 um the town has tried to put into
words uh the the a sort of a Reconciliation if you will budgetary performance was positive by 12 A5 million and here's what we did with that Surplus and as a result our unassigned fund balance went up by a mill Mill 1 roughly 1.5 million million that
paragraph right right above that is a good resource to go back to at a later point in time to understand the positive budgetary results and I want to say only I don't mean it only but um it but generating only a $1.5 million increase in the in
the unassigned fund balance that paragraph tells the reader it connects the dots if you will between budgetary performance and and changes in your unassigned fund balance so that is a super super quick walkth through of of uh our audit and your financial
statements there's really a wealth of additional information in the financial statements or the acfr the annual comprehensive financial report a wealth of footnotes I talked briefly about pension and OPB there's probably 20 pages of footnote footnotes on on pension and OPB everything you could
ever want to know about about them uh your report also includes combining what we call combining schedules I focused a little bit on that non major governmental fund column there are there's a some pages in the back of your acfr that detail all the individual
funds that the town has that go into making non- major uh governmental funds uh and then there's also statistical uh pages in there statistical Pages or Stat tables are generally 10 years worth of trend information um those are the
things that are in your report that um another community that only prepares what is thought of as a basic financial statement it would not include things like a your combining schedule and your statistical T statistical T tables Danver has done it for many many years
gone above and beyond the basic reporting requirements and done this annual comprehensive financial report so there's really a wealth of information in there so I'll pause there turn it back to the chair and and try to answer any questions that the board may have thank you Scott R do you want to introduce staff that's here that's
responsible for this let me see where they are I have Heather Russo Our Town accountant is presence and also who helped work on this audit who I don't see right now but Jill Summit our Town Treasurer Nick naen our assistant uh treasure collector assistant Finance director as well
helped uh throughout this process and help in general doing the hard work that gets the good results that we have here today well thank you to all for that work we'll start with David questions thank you know it was very thorough presentation I don't understand it all
but my father was an accountant so I get the gist thank you Mike I'm glad you said that Dave there's a lot of this was Latin to me too although it does look like we're uh we're headed in the right direction um
that's all I got thank you thank you laen um thank you um Scott and thank you staff for doing it um just from what I see um the management override is at risk
but you said that's common um so we want to make sure that we uh tighten that up a little bit um to me it looks like our investments are doing well because we've had the high interest rate environment now I think rney will you know hedge those
funds a little bit more carefully now that we think maybe rates will be coming down um I think it it's helpful that the viewers see that we're slated to have the um pension um fully funded by 2035
right Ronnie okay which that will help um the OPA money can you touch touch base about the OPA money you mentioned about that that that that amount um the oper Grant um came to State States and local
governments differently than virtually not all but virtually all other grants normally um grants state and federal grants are what we refer to is expenditure driven meaning you have to spend the money first and then you seek reimbursement so
you spend the money you seek reimbursement you can recognize that Revenue kind of the matching principle if you will spend the money match it with the revenues with arpa it was a little bit different where Danvers and other governments got the money up essentially up front you had the cash um I mentioned
it because there's that liability called unearned revenue and I I often get questions about it what does what does that mean um it means that you had it was like a million dollars a little bit more than a mill million dollarss that's so as of 630 24 you had about a million
dollars in Opa money that hadn't had yet to be spent and because you haven't met you have you haven't done with it what you said you were going to do with it which is spend it on eligible items you can't recognize it as Revenue so you will match when you spend it you'll
match the revenue so that liability once you spend it becomes Revenue that's all I was trying to highlight okay through you Mr chairman I would also add that as of December 3 we still have some accounting work to do to finalize but all that money has now been spent as cor my next question thank you um it's nice
to see I mean it's it was a lot it's good that we' had these this two weeks in advance to go through um but it's nice to see that what was it 29.7 million in New Growth in residential which was good um and then 25.8 in commercial growth I
like that um and then I think like we said the one of the key thing is planning for the long-term budget drivers such as the healthare and the Personnel cost that's that's usually a big budget item um and then I just wanted I know there was one other note that I wanted
to mention um I should have put the little tabs there on page where is it on page 32 when you were talking about that unassigned mhm
um that 219 number can you can you explain that again too is that because of the general fund piece what was that last part the general fund piece is that what is that yeah I I was um the the the 21.9
essentially repr represents um a fund balance that has no constraints on it whatsoever if it's committed it means that town meeting is said we're going to take some of that Surplus and we're going to spend it on Capital so there's a purpose associated so this the constraints are identified
do they have to say what they're going to spend it on uh I believe town meeting said cap capital is considered a a purpose constraint I'm getting pretty technical here I usually don't but there a it's a purpose constraint uh it's it's
committed for a particular purpose and that is C Capital there's some other things too but capital's the the big one in in danvas the assigned fund balance that really represents um monies from fiscal year 24 that have been encumbered
and essentially brought into fiscal year 25 okay the unassigned is fund balance or Equity that has no constraints on on it what what whatsoever and I was pointing out that that
21.9 I just like to remind people that it needs to be thought of in two pieces there's two different funds in Heather's general ledger she's got a general fund and she's got a stabilization fund she does that like every other
community in the Commonwealth however there's a differences between how the State Department of Revenue wants you to keep your books and Gap or generally accepted accounting principles so very simply those two separate funds that Heather has in her Ledger get Consolidated into
one for purposes of Gap and I the 21.9 is broken down again I'll the general fund piece is about 16.8 the General stabilization is about 5.1 and then that figure next to that that 2,645 mhm that went out from what 99 202
from last year approximately and the reason for that reason for that I'll if I may just clarify that the question I think what you're asking is that's got parentheses around it yes to indicate that it's it's in a deficit right if you look further up in that column of
numbers that the column is the capital project fund you see a note payable of $4.5 million mhm Danvers like so many governments in the Commonwealth you you wish you oftentimes will issue short-term debt a bond anticipation note if you will it's
considered a short-term debt so it's a a liability when you convert that short-term Bond anticipation note to a long-term Bond I'm 10 20 years I don't know what off top of my head I don't know what you did for from a time
constraint but that 4 and a half million I'm going to say it becomes Revenue not technically a revenue but so it'll wipe away that deficit that deficit exists because you're not permitted by the accounting standards to recognize that $4.5 million
not not to match the expenditures but you're not permitted to recognize it as Revenue if you will until you permanently Finance it it's a timing issue timing issue and account through Mr chairman again so this is solely tied to the landfill project right so that 4.5 was the money that we appropriated
last year at town meeting to pay off that note so okay good thank you Rodney y okay and um I mean when you said which was good um Revenue was up 9.6 million due to the
mo motor vehicle um excise taxes and things like that and the Investments and the landfill fees yep um I think what was that I I think I had just I think that's it thank you thank
you Morin you D thank you for the report um I'm not going to go through the numbers 97 pages of numbers oh come on it appears to me that the only findings um that was kind of like
cautionary was the management override of controls can you elaborate on that what what does that mean um as that's something you that was the significant risk that you found what is
that when they use the word controls in that phrase management override of controls controls really means internal controls which are the policies and procedures the risk assessments the evaluation of of things uh the
evaluation of what could go wrong internally here not that's done by us but that's done by by management those are the set of the internal controls that provide the framework for financial reporting and safeguarding of assets and things like that um it's deemed a significant risk
because as I mentioned earlier auditing standards essentially require that we call it a significant risk and as a result we have to design audit procedures to make sure management didn't override I think that's probably an important part but now back to what we really mean by that is if there's a
control that's designed to prevent something management could sometimes over you know bypass that control and therefore making it ineffective so it may be a well-designed internal control but not effectively
operating so we need to because we need to design testwork to make sure that management didn't override the internal control structure the standards require that we not only look at how well it's designed is it properly designed we have
to test whether or not it's effectively working that's help it does so in our case is it properly designed yes um it's it's for the period under audit and I just need to that's something I have to say for the period
under audit we found that the system was both well-designed and effectively operating if that's the case why do we call that as a significant risk because Professional Standards require you require us to report to you when we find
a risk that designs us that requires us to go above and beyond what might be more this is not a technical term but standard audit procedures okay we got to go above and beyond basic procedures and do something additional to make sure
that that identified risk is mitigated to a point where we can still give an opinion that your financial statements are materially fairly presented okay perfect now does so between now and next year is the possibility that we don't
have this as a significant risk and what are some of the steps that we would take to get just want no yeah no I just want to clarify so this isn't unique to Dan ver I think in probably almost all your I won't speak for you Scott but almost all that is the significant risk identified that's not a thing where it's an improvement we need to make it's just
if something was going to go wrong in the opinion I won't put words in your mouth but now I'm going to in the opinion of Scott that's where it would go wrong so in other words we have procurement laws in Massachusetts where could things go wrong quickly if I said to our procurement officer well I don't care about that just award this contract over here that would not be
good for me professionally or personally but like that would be so that's what they and every year when they're reviewing to make sure that we're following those procurement laws purchasing laws Etc that's the stuff they're checking but that's what would be if something was going to go wrong that's what they've identifyed is most
likely to go wrong okay is that I get it now thank you so you were asking what would you have to do would it go away the answer is no okay not going I get it I get it uh you use the word in your opinion several times maybe 17 times during your
presentation different kind of in your opinion professional opinion are this audit and this is just uh curiosity and general understanding are they based on numbers or interviews or a combination of both
now did did you say I just want to make sure I understand the question in in the first p I started was with the independent auditor report are you referring to that or just okay yeah um well
that's that's what as a as a CPA firm that's what you're hiring us for are this the the skills knowledge that we have to be able to design tests test your internal control system test your account reconciliations you're you
you're asking us to opine as to whether or not the financial state are materially fair Fairly presented um we base that um and you hire us to do that because of the professional auditing standards that we we follow I think it's
in paragraph three on the first page there under basis of opinion it it's the two ba B it's the two sets of auditing standards that we were required to follow I'm going to ask one more time did I want to make sure I so that professional opinion is still based on
our actual numbers that's that's what you look at the numbers and you say based on my expertise this is what I'm seeing it's not just that how you feel is based on these numbers and do you also do interviews uh does that playing role in
your assessment we yeah um tonight I've talked a little bit or actually a fair amount about the internal controls and management override when we look at the internal controls and we we test those we do a lot of interviews of of people we do a
lot of transactional testing we don't look at every single transaction that goes through the books books and Records but we do representative sample testing of expenditures and and revenues as as as well um so it's it's it's it's our opinion based on following the
Professional Standards okay thank you very much no F question thank you dve thank you Scott a couple of questions still I have um if I could ask you on page 30 mhm just explain operating grants and
contributions of 30 million doll sure um I I'll first start and I'll answer that question but um you know this is a very different looking income statement uh normally and I'm that that's not a governmental accounting
term but usually you start with revenues and subtract expenditures the purpose of this statement is to start with expenditures and subtract related revenues and those re related revenues are really there three types there's charges for services operating grants
and contributions and capital uh grants and contributions and the question uh Mr chairman was on the the operating grants and contributions the $30 million if I may I want to focus on that that column of numbers the third number down from
the the top the education Row in operating grants and contributions of $ 20.6 million I I I can get more specific if I focus on a functional Revenue category than just operating grants and contributions as a
whole L the largest piece of that $27.6 million in operating grants and contributions for the educational uh fun functional expenditures is things like chap Chapter 70 aid from the Commonwealth that's designed for uh the the the school department um and that
that's the the big piece that's in there I will also tell you there's a there's a piece in there that um the Commonwealth of Massachusetts contributes um on behalf of danvas and the teachers here in danvas to the Massachusetts teachers retirement system
that's not cash that flows in and out of danvas but it's a transaction that is recorded in your books and Records so in addition to Chapter 70 being a large piece of that $ 27.6 million the Revenue you get you
don't you don't get the cash but you recognize revenue for the contribution that's made by the Commonwealth of Massachusetts to the teachers retirement system on your behalf those are the two largest components of there hope that helps that does thank you
on page 67 there's a lot of questions going around about the opad settlement funds that we've received and haven't expended yet but the number here for the opiate settlement
is 374,000 so that money will sit in this fund balance until we expend it uh yes yes I had to find find the number that you were looking at there yeah okay so I can't ask you how to
spend it but we'll find out later page 68 I don't know if this is a question from you but the town's restricted net position comprised of numerous items but there were additional items
last year mhm I'm curious the change um should I mention the ones from last year sure um water mitigation water use mitigation a million Child Care 700,000 student athletic fee
600,000 911 Department support 600,000 mhm um everything my my short answer without doing some analysis is we've tried to pick some of the largest compon
components here we we do segregate per permanent funds out um because they're a different type of fund uh but the majority of these things are what are your special Revenue funds so we've tried to select some of the largest ones um everything else sort of falls into
that that other category if you will um so I think there's there's still restricted that position associated with the account counts that you outlined I was trying to take them down I didn't get them all down but I can compare with the prior the prior year financial
statements but it probably is all captured in that other at the bottom there through you Mr chairman part of the budget process we can also those are all segregated funds so we can provide an update on the ones you know year-over-year the change on that as part of the budget if that that's good
cuz I don't think student athletic funds disappeared no it did not neither did I one per okay so we can go over that during the budget season here thank you page 96 you answered that question thank you about rsis not being audited
and what they are those are my questions Scott thank you very much and if anybody in the audience have any specific question for the audit Kevin hi Kevin bar 34 popler Street
uh Dan to your to your question you asked about those year-end fund balances I think one of those was Recreation revolving so last year I think I brought up how I think Rodney said oh no we're zeroing that out that goes back to free
cash and then town meeting appropriated that million or so dollars for playgrounds right we closed a portion of the fund out that was that appropriated for play not the entire fund no not the entire fund so a million was still a million was still a million or so was
still left yes thanks okay than anybody else Mark you all set no I'm not thank um my major question has listening to this report and I look at it every
year and um Mr Conley is going to be requested to uh Supply this report just like every year uh my question is come up to the
free cash last year was um 12.5 this year is 13.7 and before that it was down in the three and $4 million amounts and like I
have always been concerned is that our budgets are inflated to receive the maximum real estate taxes that are available according to 2
and a half my question is probably not for the auditor but it's more for the board of Selectmen we seem to be having a large free cash that's a misnomer like
we all know but that number becomes larger and larger every year mark may I interrupt you you may thank you it's been pointed out a number of times in the last year and a half that the free cash number is high because of the
landfill funds and when that landfill comes online that will be brought down and on the IDS of March we're going to hear the budget and you'll see that the expenditure um expectations is closer
into line what it is this year we won't have that big number on free cash but we still need to have some free cash in order to support the capitals well my major concern has always been and you know that is that we have a lot of this
cash floating around and we use it for certain pet projects that happen they may be in my opinion pet projects in your opinion may be different no it's Town meeting's opinion if they vote to pass the warrant
articles or not I know but it starts right here at the board of Selectmen so all I wanted to do is raise the issue that our free cash or our unspent money is growing every year which is good but
the thing is I'm concerned about is that we're punishing our real estate taxes because our taxpayers are paying to the maximum that's allowed by law and then we have this money floating
around so this is government this is not Private Industry we'll address it in the 15th but I remember when they voted a policy at this board to have some free cash because they didn't have any well well that's that's a business
decision that was made yes absolutely but it was 1% it wasn't I don't think I I don't remember the number I'm not going to million my memory isn't that good I thought it was a million dollars not 1% but that's okay the final question that I have
is this is an audit of our financials inside our government there's been some indications like d mentioned that there is a a warning sign
someplace was it as a result of finding something because I went through audits in a large company and you can work your way around any audit findings so what I'm asking is are there
any indications that we're doing something different than we should be there would it would have been in the management letter well it's not and there's nothing in the management letter because there's nothing to find thank you you're welcome thank you anyone else
Scott thank you very much appreciate you coming out tonight thank you making the presentation thank you have a nice evening everyone you too all right we're going to go to the public hearing will be held in accordance with
chapter 8 82 to lay out the following private roads anticipation of a vote for the acceptance as public ways at the May 25 annual town meeting Hunt Street Crane Street Franklin Street chadam Lane and
col coli Drive Mr manager I will refer to our town engineer Stephen King who was here to present on welcome Steve thank you uh Mr chair and good evening everyone on the select board um my name is Stephen King the town engineer for the engineering division Department of
Public Works I'm here tonight um as part of the process for laying out and accepting streets as previous private ways and becoming public ways within the town of Danvers as the chair previously mentioned we have chadam Lane Colin Tony
Drive Crane Street Franklin Street and Hunt Street um the step in the process uh we we hold a public hearing for the select board to lay out the street uh the next step after the the motion is is approved we go to town meeting for town meeting to appropriate and allow the
select board to take the streets um that we have listed here um for tonight then once the once town meeting approves that we'll come back to the select board and the in the summertime we'll do the order of taking which is the ne process where you actually take the by domain the
RightWay of the street as it's laid out by the surveyors then we record that document and the register your deeds and that becomes a public way in the town which and then turns back into are are allowed in modelage for our chapter 90 funds that we get for the state for our
rway Paving uh Management program thank you questions d uh no no questions and hopefully I don't get in trouble for saying this but I like your be Morin hi Stephen great job thank you Michael I know thank you very much David
Dan may I make a comment about uh the town engineer and the uh work of that department while um the gas company has been ripping our roads to shreds um and I just want to acknowledge that I believe there's an enormous pressure on
the engineering department to attempt to get the contractor to put the roads back in sensible conditions so I just think that's an enormous part of the work of that department that doesn't happen every year but it's been really torture for everyone and so I want to say that
thank you thank you Stephen thank you this is a public hearing anyone in the public have questions Bill Brad [Music] street Bill Brad street town meeting member Precinct one the streets and ways
that have to be accepted how many of them are there are they left five less than last year I'm looking for I'm sorry I'm looking for a number I I know I hear what you say how many how many are left does the town have to pay for these
exceptions by by our money or was it or is it supposed to be paid for by the developer who created that street away Stephen can you answer that you Mr chair uh the answer to the
first question we have a potential of 82 streets still remaining to potentially become uh public ways in the town of Danvers and for streets or roadways that are currently private these are roadways that we're already essentially providing services on we've been plowing we've
been picking up trash recycling uh they're they're previous to the subdivision control law um so therefore the developers are no longer existent that we can go after them for the funds to to do this work so in the best interest of us getting the money for chapter 90 funds and and already we're already providing the services on the
street those are the ones that we we typically pick on this list tonight there are two that are have pre or post the subdivision control law that's chadam Lane and Colony Drive we had performance bonds for that work they completed all the work they've been in front of the
planning board for acceptance and we were basically closing that straight out we've got all the documents from them and the town has not paid any services or fees for those two streets okay thank you anyone else motion to close the public hearing
please I'll make a motion to close public hearing second discussion May none all in favor I I oppose none thank you what's the will of the board one I'll to um I move that the select board lay out the following
roadways as public ways in the town of Damas and recommend to the town meeting that the following roadways be accepted as public ways in the town of Damas Hunt Street Crane Street Franklin Street chattam Lane col and Tony Drive said lay
layouts being particularly described in the respective layout description to be executed by the select board was there a second second discussion Aon and all in favor I oppose none thank you Steve for coming tonight appreciate it thank you Mr chair I like
to recognize Renee hunter from my office she's done a lot of the leg work for the past 20 years starting with Rick and then myself will me up with these these projects so very appreciative of our help every every year doing this Rene thank you for coming to support Steve thank you who's the other assistant that
you have with you Mr K that's that's the younger Mr King govern good thank you all right thank you good night all right we'll go back to New public business if anybody in the public has anything to
offer Mark want to go first oh okay I'll decide who goes first well that's okay thank you thank you the reason I'm here tonight sitting through
this uh dissertation about our audit and everything else is I always learn something from that but what I'm here today is I have been here since December 17th which at the meeting than I
requested or you volunteered to provide a um some kind of a documentation whether Mark if I may staff is working on a document subject to input from this board the thoughts that they presented
forwarded to the town manager uh staff is working on it I can't give you a timeline well at this moment well the I'm here because my patience is dwindling and I believe that danas residents deserve a position from the
board of Selectmen because the activities at the airport are continuing and we're still awaiting for a decision by meepa in regard to the hanger
location and I think a letter or some kind of a supporting document that supports the damers residents that they're finally fed up with what's going on at the airport on the Danver side thank you thank you
thank you anyone else oh that's it okay Mr Town manager through you Mr chairman um as we touched on a little bit earlier and we've received a couple emails inquiring about our opioid settlement funds so for
those unfamiliar back in 2021 the State Attorney General negotiated settlements with several Distributors and pharmaceutical companies related to the opioid epidemic um each Community gets an allotted amount for damas over the next it's a couple years in but through
I believe it's 2038 we'll receive a total of $1.5 million and funds restricted for opioid harm reduction mitigation Etc um to date we have received $374,000 out of the funds that were just talked about in FY 24 we've received an
additional payment in FY 25 as well um we have not cut checks on a majority of that money I set up a meeting to talk to the health director and the public uh health nurse Frank jacalone and Judith Ryan who are handling that process they have been coordinating planning they've
had discussions with Danver Public Schools our Public Safety uh divisions they're also looking into some Community engagement as part of that process as well we've made some smaller purchases but the key part is These funds do not go away they're ours to use there are restrictions on how we can use them and
that's part of their planning process as well as talking to the state on what's considered an eligible use and what they would consider ineligible but I think probably sometime this spring I think it might be good to have uh the health director come and present on sort of what the long-term plans are for those funds and again we're happy to take any
input but I just wanted to clarify that we don't need to spend them right away it's not use or lose it and they are well underway in a planning process not just for the existing funds but how to use them over the next 101 15 years so I'm very confused about the the
direction the state is sending us we have to strengthen rather than supplement resources for prevention can you explain that a little bit I don't believe I can but I would
Hazard a guess that again they want to make sure that we're not just taking costs that were already utilizing and just charging it off but again I would have to dig in a little bit deeper on that to provide a more thorough answer I would appreciate you we can also involve Town Council as well to determine make sure that we're and what I'm hearing is
we'll put together some strategies and how to use these funds going forwards correct because I think it's important that we do have some type of interaction with individuals that have
issues and help keep them healthy is that possible to so I think there's restrictions on we couldn't give out individual grants to a select individual but however we can partner with other organizations that can essentially do that okay thank you any questions from
the board numbers on this on the op um no not that particular okay uh I I do have one uh is it my understanding that oh to you is that okay Mr chairman I'm sorry go ahead is that okay yeah please uh is it my understanding that
future funds will not have to go to town meeting for approval is that correct so what happened was as is common the case we get Revenue before the do dictates how they'd like us to account for it and appropriate it so in this case we got the funds in the first
178,000 uh came in and closed out to free cash so that's why we had that first time appropriation of that 178,000 directly into the now uh opioid fund the do clarified that moving forward it doesn't require appropriation uh can be spent as the funds are
received um so we have a seg graded fund where that Revenue will go in and come out of okay thank you okay anything else Rodney um couple items the FY 26 budget as we've talked a little bit about tonight um March 15th Saturday we'll be here for our marathon budget session
which should be uh very thorough and fun dare I say um the budget is currently online under the budget section of the uh town website we also have a link to the school's budget as well which is also available on their site as well as ours and again we look forward to seeing
everyone on Saturday for that and then lastly we have a couple birthdays we have two people whose birthday it is today one is my son William he turned six oh wonderful but more noteworthy uh Anita Hughes who is a damis resident currently at Bright View
turned 100 today a wonderful so we issued her a centenarian certificate that was delivered by Matt Mitchell our director of senior services at brigh view this afternoon so we wish her a happy birthday as well good thank you thank you okay all set yes thank you can we a motion on the
consent Calendar please I'll make a motion Mr chairman to consider the consent calendar I as they appear below is there a second second all in favor I I thank you correspondents new business comments David would you start please
yes thank you um I received some criticism um that I am not attentive at meetings and that I'm fumbling with my phone Etc I apologize to members of the board and and the audience um if that
appears to be in attention number one I'm half de and I have to go to my phone to control my what do you call it and the other thing I'm doing 13 or 14 hours of various Health Care during the course of the week because I'll be 83 next October
and I got to tell you it is a monster of a job managing that and so sometimes I get distracted so if it looks like I have been inattentive to the business of the town this has been 51 years of paying attention to the business of the town and I don't mean to ignore it or
anything thank you Mr chairman thank you Mike um Dan is it appropriate I had come up with a bunch of questions for tonight and I my questions are for Rodney um I didn't want to take up the audit his time is it okay to ask them why don't
you reach out to Rodney if that's about the audit because we've already heard it and might be he might be able to answer your questions okay and if there's anything that he feels this Board needs to know he'll let us know okay all right thank you anything else uh no thank you
okay Morin um thank you Mr chairman I just want to say that um there was a bunch of us that attended Falcon Fest um at the first annual Pancake Festival it was great um thank you for everybody that volunteered they do a terrific uh job
remember they're doing this for our community um and uh they're always looking for volunteers I think they meet look at their website once a month so uh they're looking for any donations or funds that would be great and I also wanted to extend my sympathy to the
citry family an a citry the cetri have been uh in this town forever my mom actually worked at clri years ago and uh I'm very sorry Tony you'll tie you too um so I just wanted to say
that that's it thank you d uh looking forward to the interview and the budget discussion it will be a busy week next week that's it folks when you see a veteran please
thank him or her for their service to our country and our community and if there's nothing else to come before the board this meeting is adjourned good night danvas for