WVN #512: Town faces tough choices on $1.2M penalty
- Dear Wayland Voter,
Facing a legal judgment of more than $1 million and a deadline for taking further action, Wayland selectmen next meet on Monday evening. They have held executive sessions since losing a suit filed by the Town Center project developer but haven't publicly discussed the choices they face.
Also in this newsletter:
-- Documents trace the path that led to the judgment against the town.
-- Tax bills have been issued. What caused the increase for most property owners?
DIFFICULT CHOICES ON JUDGMENT RESPONSE
Officials have until Aug. 2 to decide what to do about a $1.23 million Superior Court judgment against the town in a suit brought by the Town Center developer.
Twenty Wayland filed the suit in November 2011, asserting a guaranteed right to discharge 45,000 gallons per day of wastewater into the $5.6 million treatment plant, which was recently built by the town largely to satisfy the developer's needs.
Wayland's defense at the trial was that if the Massachusetts Department of Environmental Protection would approve enough capacity, the Town could meet its obligation. But the DEP and the federal Environmental Protection Agency regulate levels of discharge into the Sudbury River for specified periods, not as a permanent standard.
Wayland town counsel didn't contest the validity of a 1999 agreement on the 45,000 gallons, so the case boiled down to a simple breach of contract.
Superior Court Judge Dennis Curran wrote last Jan. 10 (see docket entry #29 below) in denying Wayland's motion to dismiss the sewer charge claim: "In the 1999 Agreement, the Town and the Commission gave Wayland Business Center, and now Twenty Wayland, rights under the contract that the average entity connecting to a wastewater plant would not enjoy. These terms were bargained for and represent a benefit that Twenty Wayland feels it is entitled to by contract."
Curran noted, "If the Town and the Commission did not wish to be bound to different terms with Twenty Wayland, LLC, then they should not have agreed to the terms of that Agreement."
The jury returned a verdict on June 11 after less than two hours of deliberation, giving Twenty Wayland everything it asked for except the full amount of requested damages. On June 24 Curran issued final judgment increasing the damages by more than $200,000 and requiring performance under the 1999 Agreement, which could cost another million dollars or more.
Though it didn't come up at the trial, the town's reliance on the 1999 Agreement is problematical. The Town Administrator, the Board of Selectmen and the Wastewater Management District Commission repeatedly expressed acceptance of the terms even though it appears that Town Meeting voters never gave them authority to do so.
Fred Turkington, town administrator since 2005, said in response to a July 2 public records request: "I reviewed the town meeting minutes since 1999 and did not find an article seeking Town Meeting approval or authorization for the Selectmen to enter into the 1999 (agreement)." He added his view that state law doesn't require that "each and every contract entered into by a town official or board must be authorized by a town meeting vote." Over the years Town Meeting has approved many other wastewater decisions.
In any case, town officials from 1999 on operated without asking voters or ensuring that voters knew what was going on.
The court decision on special arrangements with the developer in 1999 could affect other customers using the treatment plant. Twenty Wayland wasn't the only plant customer that paid fees for years without fully using the treatment plant. There are more than two dozen customers, residences as well as businesses large and small. Does the court's June 24 Judgment now mean that other customers paying but not using all of their allocation could now seek to be treated similarly? Are they also entitled to recoup those payments?
Town officials must now decide on the next moves. The only town official to speak to the public so far is Town Administrator Turkington, who told Wayland Patch that officials haven't decided whether to appeal the verdict. He noted that the town planned to achieve the discharge goal by creating a leaching field under the playing fields at the Town Building. That approval has been delayed because the wastewater commission applied for the wrong DEP permit.
And he acknowledged that, even though the wastewater commission is supported by customer fees, all taxpayers could be on the hook if the judgment stands.
Town Meeting voters had been assured in 1998 that because the wastewater commission was to be managed as a customer-supported enterprise fund there would be no costs to the Town at large.
-- WVN Staff
RELATED PUBLIC DOCUMENTS
Selected public documents associated with the court case are available on an independent website and are described below:
Documents prior to the wastewater lawsuit are available here:
1999 Memorandum of Agreement was never authorized or ratified by Town Meeting. It's also missing standard language of "successors and assigns."
May 3, 2006 Special Town Meeting, Article 2: Voters approved adding a mixed-use overlay zoning district to the town's bylaw to enable the Town Center project. The March 28, 2006 Development Agreement that selectmen negotiated and signed with Twenty Wayland, LLC, including wastewater capacity language, appeared in the appendix of the warrant. It was never voted on by town meeting. Town meeting minutes, pages 139-162: http://www.wayland.ma.us/Pages/WaylandMA_Selectmen/TownReports/WaylandTownReports2006.pdf The Planning Board was split on recommending approval of the zoning article, citing explicit misgivings about the Development Agreement in a Minority Report on page 160.
March 28, 2006 Development Agreement and October 20, 2009 Amended Development Agreement were published in the November 19, 2009 Special Town Meeting Warrant as Appendices G and H, pages 42-60. These two agreements were never authorized or ratified by Town Meeting.
July 2, 2007: Letter signed by Town Administrator Fred Turkington to Twenty Wayland after a highly contentious joint board executive session with the Wastewater Management District Commission held a few days before. The developer's attorney says the 1999 MOA had been drafted by him and Wayland Town Counsel Mark Lanza. Lanza has been Wayland's Town Counsel for about twenty-five years, serving successive boards of selectmen; currently he reports to the Town Administrator.
The only powers selectmen have are granted by either specific state law or by a Town Bylaw (adopted by Town Meeting and approved by the Attorney General). M.G.L. ch. 40, Sec.4 speaks to selectmen making contracts for the exercise of the Town's corporate powers:
Examples of other wastewater decisions that have been brought to Wayland Town Meeting for informed voters to authorize:
April 1996 STM: Approved language for the Special Acts of 1996 (Chapter 461) under which the state legislature authorized establishing the Wayland Wastewater Management District Commission.
June 1998 STM appropriated spending $250,000 to acquire the land and the wastewater system (former plant) sitting on that land and borrowing that amount for the purchase.
November 2005 STM Approved amending Ch. 461 of the Special Acts of 1996 to add user fees language
April 2008 ATM Approved borrowing $5.2 million for construction of a new wastewater
April 2009 ATM Approved borrowing another $400,000 for the new treatment plant
April 2009 STM Approved acquisition & disposal of land for the new wastewater treatment plant (land swap)
Annual wastewater operating budgets
November 9, 2010: Letter from DEP to Town Administrator Fred Turkington, documenting the outcome of private talks. DEP understood the leachfield of the decommissioned septage facility (in 2013, River's Edge housing project proposed site) was expected to become available as an alternative groundwater discharge location for town center. Town Meeting has never been asked to authorize funding or construction of a groundwater discharge facility for the developer.
November 18, 2010: After disagreeing for three years with the DEP, Twenty Wayland LLC finally applied to the DEP for a phased sewer connection permit.
May 19, 2011: DEP Public Hearing for Twenty Wayland's sewer connection permit. Twenty Wayland attorney Daniel Dain delivered the developer's threat of litigation to the WWMDC later that evening. Page 2 of his prepared speech included that the wastewater capacity terms in the 1999 MOA and the March 28, 2006 Development Agreement had been affirmed by Town Meeting. Not true.
June 7, 2011: DEP's sewer connection permit for Twenty Wayland. Description of special conditions begins on page 12:
The developer's plan to build an on-site 9990 gallons/day septic system and the requirement to comply with the federal NPDES permit appear on page 17. Despite approval from the Board of Health, that on-site septic system of additional disposal capacity has not been built.
January 10, 2013: Judge Curran issued a Memo and Order (docket entry #29) denying Wayland Town Counsel Mark Lanza's motion to dismiss Twenty Wayland's sewer charges claims:
One cannot be sure of all that was in front of the judge at the time of his memo explaining his view of Twenty Wayland's right to argue its claims.
June 21-27, 2013: Documents #37, #38 (Judgment) and #39 entered into the court docket show the post-trial steps taken by attorneys for both sides and the judge:
-- Linda Segal
WHY TAX BILLS ARE UP
By now property owners should have their tax bills for first quarterly payment of Fiscal 2014.
Keep in mind that the first two payments are estimates based on the budget voted at the April Town Meeting. After the tax rate is certified by the state in December, adjustments will be reflected in the last two quarterly bills.
Town officials estimate that the tax rate -- $17.89 per thousand dollars of assessed valuation in fiscal 2013 -- will increase by about 8.3%.
The largest changes in the budget in the last few years came from the debt service for the new high school and the changes in use of free cash.
The high school debt service began to be paid in FY12. Total debt and interest in FY11 was $5,011,331; in FY12 it was $7,730,470. The difference could be accounted for mostly by debt service for the new high school.
In FY11 the total Wayland budget was $66,948,207 and in FY12 it was $69,983,564. The percentage of the budget to pay debt and interest went from 7.4% to 11%.
Each year after FY12 the debt service for $42.37 million in bonds for the high school and some other items is reduced somewhat. The term is 25 years, but the bonds are callable beginning in 2022. However, new debt service for small capital items like trucks and for large capital projects like the anticipated and costly public works building and a municipal building at the Town Center would keep the debt service total at about this level for some time. For example, the debt service appropriated in FY13 ($7,665,964) and requested (without the DPW building) in FY14 ($7,348,946 in the 2013 Town Meeting warrant) did not decrease significantly from FY12.
At the special 2011 fall Town Meeting (in the first half of FY12) taxpayers petitioned when it was found that the amount of free cash on hand was far above Finance Committee guidelines. Thus the increase in the budget from the high school building debt service was mitigated by the use of free cash. The amount of free cash used to pay town expenses in FY12 was $4.5 million and in FY13 was $4.8 million. But the amount proposed and approved at Town Meeting for FY14 was only $2.5 million because the amount of free cash available had decreased. The Finance Committee goal for FY14 was a free cash balance of 6.5% to 7.% of the town budget.
The budget for FY14 was calculated using a goal of level services. Increases in operating expenses were mostly due to steps and lanes (salary increases on account of longevity and increased educational achievement). Some new capital expenses (like trucks) were approved and others "came off the books" -- debt paid. Basically, the FinCom tries to replace worn out items and make improvements without increasing the debt.
The decrease in the amount of free cash used to pay expenses, combined with the continued payment for the high school, resulted in a higher tax in FY 2014 for most residents. This is reflected in the tax bills just sent out.
No FY14 benefit is expected from increased commercial property taxes from the Town Center project. Some benefit (but not enough to offset the high school building debt service) may occur in FY15. The financial impact of the recent Superior Court judgment against the town and Wastewater Management District Commission, as a result of the Town Center developer's lawsuit, is currently unknown.
-- Betty Salzberg
BOARD OF HEALTH FLUORIDE PUBLIC HEARING
Monday, July 8, 7 p.m.
OFFICIALS ASK PUBLIC'S HELP TO REDUCE MOSQUITOES
Wayland's Health Director, Julia Junghanns, has published an appeal to the public to help reduce mosquito breeding habitats. Routine maintenance steps on one's property can help Wayland reduce the reliance on chemicals for mosquito control. Click here to see "mosquito proofing" tips: http://www.wayland.ma.us/Pages/WaylandMA_HealthNews/01B3E229-000F8513
In Newsletter #511 WVN incorrectly reported the date of a scheduled program on Wayland's geographic information system. The correct date is Wednesday Sept. 25.
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Wayland Voters Network
Michael Short, Editor