was a selectman this year we are out of sale or i wouldn't be here yeah so adam is also a member of the municipal light advisory committee and he's also on the permanent audit committee so he is so well informed about the topic and we look forward to reviewing the documents and maria we use a word about what i was just asking the question for the public and i stumbled on it myself but thank you floyd so in effect what happens is the like companies financials are closed out six months for the town and then i want to know for the public viewing are these documents posted anywhere yes website so they're on the municipal like companies where right as soon as they were run by a permanent so we're not having a presentation this morning we're we're going to go over the financials and then we're going to go over the control report so with that in mind i'm just going to get started i say good morning and i did when you walked in to the morning so first we have the independent auditors report and they have given us  selectmen and liaison to the light company for two years and i was on the permanent audit committee as well for two years so i have a fairly good understanding of these numbers but i want to start with the public we have until about ten we don't have to use all that time but i want to start with that with the public with regard to the independent auditors report what kind of opinion did you give us for this year i thought unqualified and qualified opinion ok problems that's what you want to hear and then in maybe twenty five words or less tell the public what that means it means we examine the financial statements that the status of the department we don't actually do the same as we look at them opinion i believe it's still management's responsibility for the financial status of statements is it not that's correct and by management do you mean the board of selectmen or the management of the light company well it would be  signatures right ok then with regard to other matters which is also in this opinion the required supplementary information tell the public what what that is  they want to cover that short there are two pieces the management's discussion and analysis which precedes the financial statements that's a report written by management of the light light we do not audit however we need it and make sure all the numbers tie into the audit if i need to statement so there are no conflicts i'm so the numbers are correct on the second day of the end there are required supplement to supplementary information for both and for our pension ok based on the new gas the requirements ok no with regard to the management discussion analysis we're going to we're going to go to page four which has the summary of net position in numbers there like numbers so we have  revenues in the calendar year two thousand and sixteen of twenty three point seven million and that's versus revenues of twenty five point five million in two thousand and fifteen and we have operating expenses in two thousand and sixteen of twenty one point five million and in two thousand and fifteen we have operating expenses of twenty two point two so the operating income which is revenues min expenses for two thousand and sixteen is two point two million and it was three point two million for two thousand and fifteen we have a net position which is  reflects the difference between the assets minus the liabilities because this is gap financing rather than this is a very forward gap so the net position for the town in two thousand six for the like department in two thousand and sixteen is fourteen million in two thousand and fifteen it was eleven and then we transferred in and we transferred out six hundred fifty thousand dollars in i think it's referred to as pilot payments but it it's really not a pilot payment would you consider to be a it's more there's a lot of work that's done on the town side as well for sexual expenses of up very high in addition to the pilot ok so the ending in that position was fifteen point nine million in two thousand and sixteen and fourteen point one million in two thousand and fifteen the i think what would be of interest to the public is why the revenue dropped maria for the  fall cost decreased significantly comparing to the previous year to fifty and that's why we didn't use our purchased found transmission adjustment as much as we used and fifteen that's why we collected less that's why that revenue back instead of collecting too much through p p t a rate and that's the result that's the key result ok no you use a couple but words there and i'm spending time on this because this is the income statement so i think it's important that people understand it so i have my electric bill and i think my rate is nineteen point eight cents is that close yeah and then what you're saying is you have a power purchase we've been collecting and how much with the and then again using this tool on offsetting difference is it fair to say that that's a smoothing mechanism or you're not trying to smooth you're just trying to reflect the actual what you're doing this year is you're redoing that budget in the senate for another five years that's correct it's in line with the cost of service study right doing so is it do you do the cost of service study first and then you set the rate obvious that and then how many people work in the like company thirty thirty in as we just have discussed before you have job descriptions you have policies and procedures approved by the board and then the one that we've done recently has not been presented to the board but did need to get straightened out real soon but that's in line with that's the lining us up for the cost of service study ok well  we also have a union contract that's going to go she added this year as well ok so my point is that the costs here there's no catch up in the cost in other words you know if the department was in different situation if you didn't know what your current salary ranges were and you didn't have it all in good order then these numbers may or may not be something we could rely on in terms of looking forward for i'm going to try to keep the people involved in this simple but we have other people here who can answer questions if we need to so this next question is why does the light department need a net position of fifteen million now that's that's where most of you in a position fall ok so that's a good segue into page three which is where we have the balance sheet so our current assets were thirty six million last year and fifty five million this year by last year i mean two thousand and fifteen our nine current assets went from forty five million down to thirty four million so that the total assets in two thousand and fifteen were eighty one million in the total assets in two thousand and sixteen were eighty nine now you could ask even though the the total asset number only changed by eight million dollars the  glaring differences in current and on current and i don't mean glaring necessarily i just mean in terms of the wide change what accounted for the increased from thirty six million and current assets to fifty five million current assets for the public mean assets that are that can be liquidated within a year so what accounted for that built for a little over forty five million dollars so the money for if i may was on the balance sheet is some of the first had not been used yet to pay down any of the debt ok that's a major reason for the fluctuation there ok and then for the public be claire is the transmission assets which was the transmission line that runs about a mile down the road to cambridge and so that was on our balance sheet previous yes correct and then the at the the substation building and the property that it sits on is owned by the town wholly owned by the town and the ever source has signed the building that is was all part of the purchase price for  had ok no you have to explain cup yes it has already shortfall at the town had we we were bumping up against the firm capacity limits for the town back in two thousand and ten when i took over which means we were using too much electricity it wasn't enough right there wasn't enough equipment our source of power coming into town to meet the needs of the demand that the town of belmont was facing at the time ok so the substation and transmission line that was finally built was the best solution to solve the capacity shock fault as well as power quality issues that we were facing because the modernization of the the distribution system in town we were unable to complete that project and because our quality issues that we had coming out of the station i'm going to interrupt what is the distribution system and isn't usually because you know the answer to that i'd say the wires on the on the pole yeah it would be a bomb on light is a load serving entity and we don't own transmission lines we only own the substation crippen which is a step down station so we step down the high voltage to a lower voltage and then we distribute that voltage to all the poles and manholes in town and then we have transformers on the system that then step it down again so that we have voltage that you can use in residential commercial ok so in your vernacular when you say distribution you mean the lines on the on the voltage lines in the street yes on all the transmission lines under the street absolutely ok yeah all right so what happened to the non current assets which are assets that can't be liquefied in less than one year  that would be the sale of the transmission equipment to not not the belmont transmission but the transmission between the substation and cambridge when you sold that to right to ever source and the reason that we were had on our balance sheet had to do with the original project that was approved in two thousand and twelve what we agreed to do the financing for fifty three point seven million knowing our estimating that twenty six point one would remain on our balance sheet and that eventually we would sell the rest of those assets back to over source under that purchase and sale agreement yes and no i guess would be the answer to that one either but it is with a yes it's yes it's yes with the original the original vote that was taken a town meeting in two thousand and twelve february two thousand and twelve was there get approval for the project and get bonding for the to work with you know every source to come up with the best solution right and so that's what we did for the first year and then we came up with the best solution and the best solution was the joint development agreement and the joint development agreement was presented to town meeting in may of two thousand and thirteen by selectman jones at the time and he presented to the tom meeting that we had to an agreement we had made agreement with ever source that they would purchase the assets which was going to reduce our costs basically at that time we expected to be in half and that's what it turned out to be ok so in a sense if you're trying to read these financials in your non financial person there's there's a lot of movement in here but the like company itself on an ongoing basis the variances are are not dramatic is shown this year because we have the substation buried in these numbers in the in the financing construction in the sale of the assets so this is something that i think of if anyone in the public wants to have a better explanation or more detail the explanation they can they can call who maria i think maria is probably the best  forster's on the committee but he's not he's not an employee so we'll go with maria all right so we're not going to talk about deferred outflows of resources because there's a lot of jokes  forgive me adam about fraternities i love attorneys don't get me wrong but this deferred outflow of assets is kind of the same problem for auditors that in the accountants that some of the legal jokes come in so we're just going to let that go there's a footnote in the financial statement you can read it in if somebody really wants to know what that deal is we will get you to bob and jim and heather to explain it to you so in effect then you'll see that the total assets in deferred outflow resources again moved about nine million dollars from eighty one to ninety most of that being the receipt of the forty five million from ever source in the fact that it remained on the balance sheet as of december thirty first two thousand and sixteen then we have current liabilities which were at thirty million in two thousand and fifteen thirty six million in  and sixteen and thirty five and thirty five for non current so that the liabilities the current liabilities went up seven million in the total liabilities did about the same there's another category here called deferred infl of resources and again that's one of those accounting things that you can talk to maria and she'll get you to jim or heather to figure that out  it has to do with future cash flows the type i've read it maybe ten times i'm an expert on cash flow i still don't get it but as long as it's not material i'm ok that's the way i look at it ok we're not going to go into the cash  flow right now we're on page five we've already talked about the revenues the expenses i think the net the next one that's interesting is debt administration where we are you able to discuss that ok so i'm going to summarize jim you mentioned the fifty three point seven that was authorized by town meeting in april twenty sixth of two thousand and twelve the town began to issue bonds anticipation notes and there was a general obligation bond of twenty six point one million issued on was that in two thousand and twelve as well two thousand forty two thousand and fourteen thank you and so the twenty six one and twenty seven six comprise the fifty three point seven in financing yes correct and when the substation or the transmission line between belmont and cambridge worse was sold ever source in two thousand and sixteen the short term debt the cash that's on the balance sheet as of twelve thirty one two thousand and sixteen a major portion of that was used to repay or will be used was used actually because now we're in you know we're in august you know we're in july still you know we're still in july but i think seven seventeen and if you if you looked at our balance sheet as of now then the cash would would not be fifty five money anymore to be fifty five and minus the twenty seven so there is a story here  the twenty six point one million what actually happened in my understanding and i think it's pretty good is that the substation project came in three point four million under the twenty six point one and there was a concern that we would have to refinance that long term debt but it turned out that we didn't have to so that twenty six point one we're going to see on the balance sheet for quite a while one more thing forward without bringing forward how long is that note that twenty six point one twenty years of thank you ok and that finances where the where the assets and the acids in the what is that twenty four point six finance the building that we retained ownership of part of that so core to me and the balance will be used to continue on with the project which we purchase most of our power up front so right now we purchase about eighty percent of our power in advance and and it staggers down to basically hedge ok you know for the public most light does not produce any power at all and you have a term for that it's called the load load serving and it's a load serving entity and so what the light department does is it goes out into the market and this is that you purchase electricity from independent system operator new england what is that that that is the grid operator they managed they oversee the electric market in new england ok so we basically what we do is we buy it wholesale and we sell it retail ok now since this is a financial review i'm not going to go into the renewable versus nonrenewable but can you just say generally for two thousand and sixteen since that's what we're talking about what percentage of our power purchase was renewable and what percentage was not renewable without looking at that document  contract a year ago of western mass and that was done in two thousand and sixteen and then we have hydro we have some hydro as well and what can you say about the residential solar since we're talking about renewable did that impact that seventeen percent you know it they're there to really not materially but they they're there  is we do notice that there is quite a bit of potential there and i think the energy storage has to come online one of the projects that we presented to back was the energy storage grant that we just submitted to the state and that's an exciting exciting project for us and what we're looking at right now is being able to leverage the energy storage with the soul which is the the ideal setup  then you can actually have more of a demand response type of a program where folks we will be able to sell power back to us when we need it and and they'll they'll benefit financially in that light  benefit financially because of it's a win win ok so seventeen percent is renewable eighty three percent is not but you're working on optimizing renewable as you can correct in right now we're also looking at you know as part of the cost of service study right now we're also developing an integrated resource plan which is like a twenty year plan which forecast  anybody that wants to get ball that obviously ah yeah i mean it's we've been working with these folks for years now on the energy policy and that's something that i mentioned to chairman clint on ski at the el back meeting plan to meet the climate the town's climate action goals it's going to allow all lined up together yeah i think that's something that people have been passionate about for a number of years we've been distracted with the substation project quite a bit and then we also had the destruction where one of my employees left i don't remember that you weren't at that meeting but some of the other folks in the room with at that meeting and she left as a result so we didn't have anybody in that position for only over a year those positions are very difficult a plan a long range plan to meet the town's climate action policy well you know i think that is something that we could get done by the end of this year i'm in the process right now of working on the integrated resource plan but with all this another part of the environment all right so now i want to talk about race and i know that the public has said that our rates are high but bob is it fair to ask you to talk about the the last time we set the rates you know we've talked about that before do you mind saying something about you can come up please and just pull a chair up there and taking maria's mike also recently and we're getting ready to finish the cost study then we're going to set the new rates yes that's the that's what i understand that's that's the plan yeah ok so we you tell us what happened last time did it work the same way the cost money was done then the rates were said yes but there was an additional consideration in setting those rates as i understand it which had something to do with the the blair street project and what was that because i think it's relevant to you know this perception that our rates are so high there's you know that in my m in my training the rates may be high they may be low or they may they may be high by comparison to other loads servicing utilities but if that's what it costs to provide the service then that's what it costs so that's that your deal however i do think there was an aspect of the rates that were affected by the blair street project and i wonder if you could just tell us briefly how that translated into the rate base yes there is the at present department pays a fee to have a source for electricity under a transmission service agreement and that power is coming into the old substations now  soon be coming into the new substation and helped the old substations but so and that fay is approximately a million dollars a year in addition to that and so that fee is was build into the rate in nineteen an annual amount and an annual on the other end ok and so i think it would be fair to say that the current rates have both a fee for the transmission service agreement and the debt service that the department is pay so the electricity comes into the blair pine substation through the transmission line it's been built later this year there will no longer be a transmission service agreement for the one million goes well so the one million would go away now that doesn't mean that the rates are going to be lower it just means that that one million goes away and that that was part of the rate setting process in two thousand thirteen when when the rates were less that's right it's ok so i think that's helpful for the public and i think it's helpful for all of us to understand  we could talk about demand side management and we can talk about community outreach but i'd rather focus on the numbers if but if you don't mind because i think a lot of those those issues are  already in the public eye on page eleven if you want to understand the like company you can realize that we have about ninety million in assets employed we've already talked about the current assets which are fifty five million and about forty five million of that fifty five is cash that was on the balance sheet that was received from ever source but had not been used to reimburse the debt as we've discussed then in terms of non current assets we have  depreciation fund the rate stabilization reserve fund and he had to leave the planet assets that total thirty four million twenty one million or twenty two million of the thirty four are utility plant assets net and what that means is that their cost minus their accumulated depreciation is twenty two million dollars so this balance sheet is inflated would you say that fair jim it's inflated by the cash payment yes yes yes exactly ok so the ninety million forty five million is cash which we're using to pay down  and reimburse other aspects of the project the rate stabilization reserve fund is different than what you described with regard to the power purchase vehicle and could you tell us how the rate increases the purchase fall costs we could use our internal resources without increasing the rates fall customers right and the rates you reset every five years or every three years or every way every three to five yeah every three interest you why's that that's the best so what what this reserve does is that it avoids a great shock then because you can change the prices every three months as we discuss yes but you don't want to have to do that because you don't want to keep your customers now the customers brings up another topic for me and that is we know that there are about eight thousand five hundred homes in belmar but how many businesses so i think that's important to note that you see the light department actually has a levon thousand let me rounded up because i'm a banker eleven thousand five hundred customers yes customer accounts that's it on the asset side and it's hard to get a clear shot or a clear idea of what the normal balance sheet would be because of the distortion of the project and i think everybody at the table agrees with me on that so if we look at the total liabilities we're going to find that the total liabilities are seventy one million and the net position is about fifteen million but of the seventy one million short term debt is twenty seven point six which was repaid in may as void has told us and then we have some other things that we need to go into even though i've been told i can not talk about o eth i can't avoid it because it's on this balance sheet and i can't say it pleases me but it is something that i've been following for four years  on the non current liabilities we have the bonds payable which jim commented on that how we finance the plan and we are financing the build out and then we have a net pension liability of six point six million and the other post employment benefit obligation of four point one which makes the total liability seventy one million i say that we can subtract the short term debt and we can subtract about thirty million of that is just to get a normal b forty million in in liabilities and it with a net position of fifteen now on that on that particular point that would make the total liabilities in the in the total net position about forty five a million yes which would be about right for the asset size  yes ok so but isn't a net position of fifteen million a lot for a balance sheet of over just forty five million or is there something special about it like company that requires that much capital of the municipality for example why can't it be zero because you have plans for a a plant you have all the transformers apolo that transmission system you've developed over the years and that's an  good reason for that because in two thousand and fifty we had to bring on to the net position or as a reduction the accrued pension liability yeah so that kind of fooled around with the the net position ok so go back just a minute and say that our if we were the net position of fifteen million includes property plant and equipment so if you expand property plant and equipment  and you pay for the the net position goes up if it if it's doesn't it if it exceeds the depreciation but now we have this pension liability coming on the balance sheet and we have the liability coming on the balance sheet and these are related to employee benefits and you have a choice on employee benefits you can fund them when they're incurred or you can wait until they're in and try to pay for them at that point now with regard to the pension liability i believe that that first came on the balance sheet in total for the town in two thousand and fifteen very and then this six point six million is a number that is the light department share of that liability that came on the balance sheet and then with regard to that liability what the municipal accounting board decided in the state actually because in this case we have to make those payments they want treasurer's department allocates the light department expense of that payment that payment schedule but what shows on here is the light department's percentage of the total obligation right because it's on balance sheet so does anybody have anything in this group do you do i think that the pension situation is under control because we work with spare ak we work with the retirement board last year we were able to reschedule the funding schedule by two who years from twenty twenty seven to twenty twenty nine in that that steered about fifteen million away from in payments away from twenty twenty and twenty twenty seven because we're facing other projects that we need to we're going to need that cash flow for and i've course wanted it to go to twenty thirty two but that didn't work but you know we can come back and talk to them again so from my desk i think the six point six million is is manageable and understand that we have a funding schedule that's eleven years ahead of the requirement we're making the payments every year out of operating cash flow it's a big number for us unfortunately but that's just the way it is and i also want to cover with you some people don't understand that if you offer a benefit and you don't it in the year that it's incurred that becomes a liability you know some people just don't understand that the way i talk to people about it is i say ok you're going to send your grandchild to college and you have a choice of funding it when they're a baby or you wait until eighty they're eighteen if you do it when their baby you know it costs to ten cents on the dollar if you wait it's going to cost you one hundred cents on the dollar so this works exactly the same way and what the actuaries have done is they've calculated the amount of cash that's necessary to defeat this obligation going forward and we're going to be finished with it in two thousand and twenty nine and it it's it takes about ten million of our of our eighty three million in real estate taxes so it's a pretty significant number but that's just the way it is other people don't understand the matching principle and the matching principle as i understand it correct me if i'm wrong is if this report is for calendar year two thousand and sixteen which means everything that happens between january first and december thirty first is in this document now if i have an employee benefit that i've provided to my employees and they vested that year and if i don't pay for it it becomes a liability which reduces my net position right it's as simple as that every year that you don't fund what years of what you're supposed to be you know in the period that you incurred the expense it's going to go on the balance sheet as a liability and that's what happened with regard to these two liabilities because they were off balance she i think how many municipalities do you cover but he eighteen and you've seen this over a period of twenty years i think that if something's off balance sheet it's off balance sheet so people don't pay much attention to it but once it comes on balance sheet all of the sudden it's there every year and you have to deal with it opec is the same way opec meaning other post employment benefit obligations with the single exception that i believe and this is my personal belief even though i have a finance background so it's sort of professional as well the pension liability is something that sounds could have expected to have to pay because socially people want to know the belmont for example is in good financial condition and you know obviously i think i can say this come hell or highwater will pay its pension obligations but not every town  municipality is in that position and not every company's in that position which is more in my space so what's happened is you have to fund these obligations as you go forward and that when i think makes sense open however is a different animal because that's about health care expenses and only recently has of been thought that that same treatment needs to be given to open so jim this number four point million is not the same number that the net pension liability is because the net pension liability is the light department share of the total town liability which is on the balance sheet and we all understand it but this one is an annual cruel is it not in the whole balance sheet treatment is going to come in either two thousand and seventeen two thousand two thousand and seventeen or two thousand and eighteen it's correct there is a new ga newest rule that beginning in eighteen the entire obligation is going to be brought out of the books ok now from the footnotes which are in this document that what is that number for the ten million seven hundred fifty thousand so it's only three million but it's only three million more and then we are in right now we have a we have been ploy by the same actuarial firm that handles our pension obligation to take a look at the old have obligation with the opec committee which happens to be head headed by route jones and we're expecting a report in november i also understand so that we can take a look at what our strategy is going to be going forward i also think that with regard to this number we're going to have the new strategy when is it going to come on the light department's balance sheet because i think of the town level as i understand it you could put it on two thousand and seventeen which means if we decide to do that do you coordinate with the town with regard to this then because you wouldn't want to situation where well so the issue is we don't want a timing issue to happen like it did for guys the sixty eight so right now we've been telling me i'm a c p a meetings and trying to coordinate the fiscal year towns with the county year by departments and housing so it will be for calendar year eighteen for the light ok and that's when i expect it but there may be that it needs to go on in seventeen or early but there's two different pieces so there's a lot no one thing that we don't know yet what we do know is going to be on seventeen it's going to or it's going to be me but an idea about the open ocean is that the enterprise funds should make sure that their pain pain what is called what is the name of the amount that you're supposed to pay in in the year in order to do in your required the normal cost is that off it's the normal cost now do you in gym do you expect and maria you expect to put the normal cost into this  cost analysis so that can flow into the rate studies of the you guys compare your normal cost and then the other thing is adam i i don't know if they got into this within the permanent audit committee or in your other when we went over this and he read the minutes of the meeting as saying as being unclear in his mind i thought it was very clear that three point four million you know the money i'm talking about that money should have been put into the open fund which would then defeats some of the soap obligation not only here but at the town level now we decided not to do that sammy and mark i guess it's possible you know what i thought i heard that you said in this you know we're also lekman you know three of us are selectmen and so in my mind it doesn't matter who's chairman who's vice chairman everybody's got one vote and i would like to see this this situation revisited in we'll do that in connection with the actuarial study of of the towns open so we can understand what to do with it so there not much else to say about this right we have but this is a non current liability that's net of the assets that we've contributed and it just is what it is but i hope we have to pay our expenses as we go we know at some point in time somebody is going to say ok you have to start making these these payments which is not true  now but at some point it's coming so to protect the future if we think twenty five years into the future we have to do that or else they're going to have to pay that obligation in the same way that we now have to pay the pension obligation because we didn't find it in the policies the footnotes to the financial statements are important a lot of people who do financial analysis such as myself and marie in that other we start with the footnotes yes i mean we are so boring the nothing to with the kind of policies ok so the accounting policies are they are what they are when do the account the accounting policies are no one right yet right no two is future input imitation of get over that we've covered that right great stabilisation we've covered that depreciation fund we just talked about that in terms that three point four million was put in there but what is is is where in the in the enterprise find you take three percent of the total cost you plant in your city transfer that kashmir pretty into a special segregated hi do five percent because you're building the reserve because that runs through the income statement which affects the rate ok but so five but i remember from the past that one reason for that is that you're trying to build these reserves because about one point two million now that that foots out was my world because if we saw a corporate that the property plant and equipment was less than depreciation we would worry about it you know because that means their plant is deteriorating but that's not the case here right the plan is not deteriorating ok so then we have utility plan assets we've already talked about that net investments in capital we talked construction in progress we all know about  there thank you very much bond into some patients notes that we discussed we discussed those in those were paid off lloyd that's right isn't it floyd carmen shaking his head yes and then the bonds payable we've discussed that crude expenses why would we be of crewing sales tax but no don't answer that question it's only eleven thousand dollars ok risk management that's regard to health workers comp and auto insurance ok cash in investments were right there you don't have any investments on your balance sheet do you and that's all done at the town level  ok we've talked about the purchasing power adjustment but let's look at commitments in contingencies what is this about there's an extensive note on opeth in the pension plan but basically it's an actuarial estimate of what it would take to fund the health care obligations of the town in there's actual calculations that tell us what that number is and we're makings some contribution towards that but we're we're going to depend on our engagement with our actuarial resource to the other now what's interesting about the discount rate is that that's the assumed investment rate and it was seven point seven five long time but that's backed up by data you know and there's like a twenty five year data set that shows you that you can you may not think it but it shows you that seven point seven five is the right number so what we did on the pension liabilities was when we extended the payment by two years we agreed to reduce that rate to seven point five percent and then for those who were this is something that needed to be understood because the employees fund after a certain date they they pretty much fund their entire retirement is what it amounts to so everybody can see great you know that wonderful except if the it's better for everybody actually except the investment rate is in effect guaranteed by the town so if they missed the seven and a half percent which they did in two thousand and fifteen they only got two point two percent that combined with other changes that we made increase the liability by twelve million dollars so you can think oh my gosh you know we can never catch up you know it's in some people i've talked to think that that liability is going to be on the balance sheet for years and years and years even though you're still making these significant pain but what it amounts to is that in effect we are insuring the return that's what it amounts to so what you're referring to here is that if the average return goes down to six point five percent this liability go jump by two million and if it goes up to eight point five it will go down by a million i think that a real number that some people who are in that pension liabilities space they think six percent would be a better number you know we see six and a half percent here but the way i look at it is last year they had an eight point nine percent return and this year they're doing pretty well as well but it doesn't necessarily reduce our liability because if they exceed the seven and a half percent they take the one point four percent and park it on the side to do kind of the same thing that you're doing on the rate so they might have on any given year they might have a couple of million sitting over here and then if the return is down then so one of the things we're going to talk about going forward is what should the town's policy be around i don't want to call it a miss but a return lower than the discount rate assumption you see what i mean because as we go along if we make up you know from real estate taxes or other sources of funds that we have which is pretty much that that's it for us if we make up the shortages as every year goes than that that liability will go down with certainty and once that is in balance we will probably get about twelve million back into the operating fund which would be terrific obviously and i know that i think watertown is in that position where their their last payment is next year and they'll have  would you mind if we just look at this turtle oh absolutely but one thing before we do that you first i want to compliment you on this being an excellent primer i think on the life apartment finances if anybody out there watching didn't understand all the ins and outs of the light department i think that they would now thank you secondly if they have a chance you know and i thought it was done in a way that was pretty understandable because this can get awfully jargon you know i thought you were you're good about explaining what these things were so thank you for doing that just because not everybody watching has this document in front of them going back to page five we've kind of talked about the expenses twenty fifteen versus twenty sixteen but i think it's probably worth calling out the four numbers that are called out in the chart here just so people have the figures that from fifteen to sixteen the power costs were six point seven percent decrease and we discussed the reasons why i will go into him again distribution expenses decreased one point five percent customer count costs increased twenty seven percent that says due to meter maintenance and license fees for new software in changes in lean accounting in general admin expenses increased by nine percent due to increase of admin salaries for new executive assistant higher pension and benefit expenses not side service expenses h r services i just  was more that this was increased of admin salaries as this new executive assistant hired and that's his pension and benefits expenses i get that and outside service expenses h r services so the number pieces are in there but the new executive assistant hire the h r services did mean i wasn't trying to trap you on the numbers i was just wanted to find out the reason for the you know executive assistant hire and what these increased h r services were for right and like i said i don't have an answer for you right now to get back to what was a position open in the position was open because we get one laurie mentioned early quit in two thousand and fifteen f three f that beating she took the position was unfilled and so we didn't add any new employees so i'm really not sure why that know he saw the nine percent we understand that a lot of it is the employee pension and benefits but you know i think you know this other discussion we should take offline and when you need to get back to to us on yet we need to go to the internal controller board ok  and again it's it's an industry wide problem collections because you know there are people know all the ways of nothing in their life bill if they're renter you have no recourse except for this small deposit if you keep a deposit there are a lot of medical reasons why people can not pay their light bill with a medical note so it's it's really a problem in the industry we just suggest try to you know stay on top of it so just little bit of interaction with the town to to to reconcile what lead to still outstanding ok whether paid not there's one more but with regard to the accounts receivable collection and customarily floyd would you have a minute to talk to us about that the lien process since it's not that the light or the level and we need to give floyd a chair a microphone know floyd tell everybody who you are because i know you're famous and they know my cabin time treasure ok know this just give me a second if you don't mark this is the internal control report and this comes with all financial statements for the eighteen like companies that you are and what you're saying here is that you performed the audit and that was for the limited person purpose of producing these managements responsible meaning employees in the normal course of performing their duties to prevent or detector correct misstatements significant deficiencies a deficiency or combination of deficiencies in internal control that is less severe than a material weakness yet important enough to attention so what we're looking at here are significant deficiencies now is that true for the drafting of financial statements comment is that a significant so that's considered significant ok now with regard to that one at the town level we have one of these documents but there's a response in the document so we should we expect that the management gives us a response to this or makes a proposal about how they're going to improve it because even though i have all this power as the chairman of the board of selectmen or the chair of the board of selectmen i can't do that stuff i mean this is not my work people who report to us should do this work so where would you sit where where where where would the response come from the responses in the report are optional so we have opted over the last couple years not to include responses because when it comes to the end of the audio we're trying to show them that it takes a long time to get everything analyzed  so because it's optional we actually several years ago removed responses and just report it as our findings and then you management does what they were like ok however the light board is being asked to sign the documents so i'm going to need a as as a board member i'm going to want a proposal as to what can be done and what can be done to address this issue because i would prefer to see it go away well we can and we should but i want to hold of the signing that the view i understand ok that right now on accounts receivable collection jim and i have talked about this over the past couple years and particularly since april as i understand it the accounts receivable collection is under control so what does this mean and i'm not saying that in a challenging way i'm just i don't know how is to ask the question because if i'm talking to our management i understand but the accounts we know with the accounts receivable or none of them are allowed to be more than ninety days old or they're going to go to doctor carmen here and so where is the significant  is particularly or specifically protected cosmic conscious evil so the normal collection policy is being followed and isn't in good order the problem comes when it's protected so you can no you cannot shut protected medically protected they have to get a doctor's note every year so as soon as they send that into the light department light from a cannot shut the power off and there's no limitation they can use unlimited amounts of power so the problem that you have with medically protected is that it gets a little bit tricky because they're protected by the g p u but you still were recommending we've seen a trend over the industry including at belmont light but over all the massachusetts that the medically protected on the rise and huge dollars  individual customers can have balances in fact i remember this from last year's discussion and we know what the number is for medically i don't know the total dollar but there were a few i mean thirty thousand dollars one resident so we tested several of those and the issue was growing not declining so we felt it was last year we had a verbal discussion this year we've put it in almost every light department because it's just on the rise so we want to warn you guys that floyd we're told is what you do when you get one basically what happens is we get a list from the various sent the price funds that goes through the assessing department in the park comes part of their  fiscal year third quarter bill which is two on february first so it goes into the real state because it includes become part of the real estate tax rate and subsequently if they don't pay their problem comes out of a good program several years ago the accounting or two years ago the accounting internally at belmont light became better and through discussions with management historically bad debts including any liens they were looked at as bad debt so they were written off the second they went to the town and if and when they were collected and found out about they receive the money from the town they were recorded back in to profit losses from bad debts recovered that's not really what they are so now you know through the process we get the recommendation was taken and now my light has implemented the correct accounting which means you take it out of accounts receivable customer and put into a count  experience significant delays of turning requested audit documentation  communications throughout the audit process provide ample time to process our request they're designed to allow us to conduct our audit field work around the procedures also did not have the necessary information from the town  complete several months of monthly accounting procedures resulting in the department being unprepared for a schedule for the field work so what's going on there right so this is not new it's new that we had to put it now in writing because it's getting worse again not better the several years in a row we need obviously open and pension reports from the actuary at the actuarial actuary and the auditor auditors those are and we were working to issue an order he actually were working with the open committee to get them to tell us what the results were as a result of the work that they've been doing and this became an emergency because of the light department's need with regard to december thirty first so we actually had to hire our then current actuary to produce an so another issue was the year before for the audit for the pension study we were waiting to finish the thirteen two thousand fifteen audit the pension for both fifteen and sixteen has come down to to the last minute and for fifteen it forward the previous numbers that we use didn't match the study so then you have to dig into that so we first of all got it lay and second of all there was a revision that wasn't communicated to belmont lite do you know who's responsible for that that at the end of that assignment of the resources that we're working on had fallen behind by six months and data so again floyd and chito we had to have they came in and helped too so we had we actually had for lack of a better term or maybe it's not a great term a kind of like a swat team you know to organize the pension because otherwise we wouldn't have made it at all you know so we were we regret that situation but i'm i'm confident that both of those are under control and that you won't see that problem again i can just add in the in the in the industry which is not not relevant to the moment but it's a point to know many of our though as to why it how it's a significant issue is this is an the prize fund so they actually have a profit and they are regulated not to have a profit over certain amount so by not knowing what the this wasn't the only other pension every year the pension has been late so the light department is getting the study after the year is finished not used on this for seventeen years and you're saying every year the pension report is late pension is just two years because it just started so i understand that ok so in the overhead there is historical you know my balance sheet and fifteen so really what we're trying to say is we're pointing out it's a significant issue because if suddenly you have a million couple million dollar impact the timing impacts the other things you know floyd another question because jim raised the question of the impact of qualified opinions on the bond issue and capabilities of  the towns that are affected do you see this internal control report as it's not an issue for us so it's not an issue now ok i'm i'm going to ask  yeah but i can send them back doesn't need to have all three saying that doesn't mean ok now before mark little he i called this meeting because i didn't know you know what was going to be required and we only have this week we only have three and a half days left because we have summer hours and next week we only have four and a half days left so i was you know i like my signature i learned that in the navy is so i i was i wanted to be sure that we had enough time to go over this information for the for the board because we're being asked to sign for mark he was disappointed that he couldn't be here and i told him i was disappointed he couldn't be here too but he actually said he was disappointed that i scheduled the meeting today when you know there could have been another day but i have no idea what other day and i wanted to have enough time to do the work so if you're i think i'm comfortable signing to understand these numbers anyway i'm happy with this report as long as we and so i'm i'm ready to sign for mark i suggested to him that he could view the video which he can and i also suggested to him that he can call any of the people who are directly involved himself if he has certain questions after reading the documents we have course can't read the documents for him but we can fight him with the with the video and with the minutes of the meeting a and also invite him to call anyone that vote can we vote when we have a core meeting but we do ok all right so are you making a motion you know i would move that we approve the financials from the belmont light to the department of public utilities of massachusetts for the year ended december thirty first twenty sixteen as presented by second own favor  that is that you guys so i i want everyone to understand that i didn't schedule this meeting without mark with any malice or forethought it was just the idea that over the next three and a half days and then the next four and a half days we weren't scheduled to meet again until july thirty first although we're going to we may have a meeting on the twenty eighth but at that time i didn't know that we were going to have a meeting on the twenty eighth so if we met on six o'clock on july thirty first we would meet and miss the deadline so that's the reason that's what i was hearing here yeah ok well thanks everyone for attending in appreciate your cooperation thank you all for a great job we were happy with the way things have worked out and you guys have a solid financial situation so congratulations to everyone in one of these at some point we should probably catch up on minutes for the light board as i like don't think since i've been on the board that we've