June 9, 2024

The Lowell City Council held a special meeting on Tuesday to consider the city’s FY2025 budget. Although the meeting lasted more than three hours, the council mostly just ratified the budget proposed by City Manager Tom Golden. In a way, this meeting was a legal formality since two things that happened long before Tuesday night were primarily responsible for this budget. The first was the council’s selection of Golden to be city manager. The second was the many demands for expenditures made by councilors throughout the year.

Under Lowell’s form of government, it is the city manager who runs the incredibly complex entity that is the city of Lowell. The city manager is like the conductor of an orchestra who ensures that the chosen music is performed as well as can be given the talent and capabilities of the musicians on stage. To carry my analogy further, just as the trustees of an orchestra select the conductor, provide the conductor with a budget, and even select the piece of music to be performed, city councilors hire the city manager, provide the city manager with financial resources to run the city, and establish a Master Plan to set the overall direction of the city. But when it comes to the night of the performance, the symphony trustees sit back and listen to the music. If they don’t like the result, they replace the conductor. When it comes to running city government, that’s what city councilors are supposed to do.

However, too many members of this and the prior councilor are wanna-be city managers who week after week try to micromanage city operations. It’s as if the symphony trustees stood at the elbow of the conductor and repeatedly interrupted the performance with demands for “more violins” or “less percussion.” That’s not how an orchestra works and it’s not how a city under the Plan E form of government is supposed to work. If city councilors think a proposed budget is inflated or fails to carry out the strategic plan they set, then their recourse is to replace the city manager. Their recourse is not to spend three hours trying (unsuccessfully) to whittle away a few thousand dollars here and there in a budget of $520 million. Doing that is just performance art masquerading as fiscal responsibility.

The second factor that sets the city budget long before June is the many demands for expenditures made by councilors throughout the fiscal year. As City Councilor Rita Mercier correctly put it in her opening remarks on Tuesday, “If you want it, you have to pay for it; you can’t have it both ways.” City Manager Golden tactfully alluded to this when he praised councilors for “championing these transformative improvements,” most notably more road paving and higher salaries for employees. Both of those come with higher costs so it should be no surprise at budget time that taxes and fees must go up.

One fee that won’t be going up as much as first thought will be the cost of trash collection. Golden’s initial proposal had that fee rising for most residents from $125 to $325. After considerable pushback from councilors on the extent of that increase, Golden rolled back the jump to just $225. Because this fee is set by city ordinance, procedural rules prevented the council from finalizing this on Tuesday. Instead, the ordinance was referred to the city manager so the public hearing process can begin anew.

Related to this, a member of the public spoke on the need to clarify the eligibility of residents whose homes are in trust for the elderly discount. Councilor Wayne Jenness picked up on this and made a motion that the language of the ordinance clarify eligibility requirements in this situation.

This is an important issue. For most people, the home they own is their most valuable asset. As a homeowner ages, it’s natural for them to take steps to preserve the home so it can be passed on to the next generation of the family. There are two strategies commonly used.

The first is to create a life estate. Here, the homeowner executes a deed conveying the property to themselves “for life” and then to their children. Once that deed is executed and recorded at the registry of deeds, the elder retains ownership of the property for as long as they live but the children have an immediately created “future interest” in the property. That interest is to automatically become the owners the moment the elder dies. It is joint ownership divided by time with time measured by the life of the elder.

The second method is to create a trust and convey the family home into the trust. The essence of a trust is split ownership with the trustee of the trust holding “legal title” and the beneficiaries of the trust holding “beneficial title.” Typically, the trust names the elder as the trustee with one or more of the children as successor trustees, and also names the elder as beneficiary with all the children as subsequent beneficiaries upon the death of the trustee. Legally, the trustee signs all documents related to the real estate, but the beneficiary gets all the benefits from the property. In the case of a house, that means the right to live there rent free.

If the elder must go to a nursing home and have the fees paid by the state through Medicaid, the trust, if properly drafted, will likely prevent the state from seeking reimbursement for that care from the value of the home after the elder dies. This allows the elder’s wealth in the form of their residence to pass to the next generation of the family. (Remember this when future newsletters discuss “red lining.”)

Back to the trash fee. The city offers a discounted water rate and a reduced trash fee in the form of an “elderly discount.” Here’s what the city’s website says about who qualifies: “Applicants must be 65 years of age or older and own and reside at the property which must be a single family dwelling.”  

The problem is caused by the word “own” because legally, a person who puts their residence into a trust no longer owns the property. The owner is the trustee. Even if the elder/former owner is now the trustee and the primary beneficiary, they are no longer the individual owner of the property. Most people like to blur the distinction between the two but as Councilor Mercier said in another context, “You can’t have it both ways.” If you want the protection that comes with putting property in a trust, you must acknowledge that it is owned by a trust and not by you as an individual.

That said, it seems equitable and appropriate to clarify the language of the exemption so that people whose residence is in a trust but who otherwise qualify for the discount would unambiguously qualify for the discount. (The issue here is only around trusts; an elder with a life estate is the owner of the property and should qualify for the discount under the current wording.)

(One legal disclaimer, please don’t read the above paragraphs and conclude you should immediately put your residence in a trust. There are benefits but also detriments in doing that. A prudent person interested in this would make an appointment with a Massachusetts lawyer to determine what should be done.)

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One final comment on the budget:

Several Councilors have expressed recurring concerns that newly created employee positions are being funded by Federal ARPA funds. Those funds are temporary and will no longer be available in future years. How will those positions be paid for when ARPA funding ceases? City Manager Golden has said the benefits of creating the positions now outweigh the challenge of finding new funding for them in the future. This “We’ll cross that bridge when we come to it” approach requires the discipline to make cuts when the ARPA funding goes away. However, those positions and the people who fill them will become embedded in city government which will make cutting them for lack of funding very difficult, although not doing so will risk exploding the portion of the city budget funded directly by taxpayers in the coming years.  

During the budget hearing, another risk inherent in ARPA funding became apparent. Not only is ARPA funding new positions, it is also paying for some normal operating costs, particularly in the water and sewer departments. While a legitimate use of ARPA, these costs would normally be paid from their respective enterprise funds and cannot be cut in the future when ARPA funding expires. This use of ARPA funds, while understandable, artificially reduces the cost of operating the city’s water and sewer services. When the ARPA funds are no more, the amount paid by city residents for those services will likely go up substantially to fill the gap.

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In a recent newsletter when discussing the trash fee increase, I suggested the city could do more to promote composting of food waste which constitutes a significant portion of non-recyclable trash. A reader helpfully pointed out that the Pollard Memorial Library is already addressing this.

On Saturday, June 29, 2024, from 1:00 to 2:00 PM in the library’s ground floor meeting room, there will be a free Composting 101 Workshop hosted by Bootstrap Composting and Mill City Grows. More information about the event is available on the library’s website.

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Every two weeks or so, Lowell resident Belinda Juran sends an email listing an incredible number of events and activities happening in Lowell. As Belinda often writes, “What an amazing city we live in! Please enjoy and support all the great work going on in Lowell.”

With Belinda’s permission, I have pasted her most recent newsletter into a blog post so it is available to non-subscribers. Here’s a link to it.

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This past Thursday was the 80^th anniversary of D-Day. To commemorate that, I posted on richardhowe.com the stories of seven servicemembers from Lowell who were killed in Normandy, either on D-Day or in the weeks that followed. All are buried in the American Cemetery at Normandy. They are John J. Shaughnessy; Paul J. Nadeau; Joseph J. Lachance; Alphege L. Laporte; Edward Desmarais; Robert M. Gauthier; and Armand Masse.

If you haven’t already read the post, please check it out. The short sketches of these seven individuals are compelling. Even more compelling is the knowledge that approximately 400 others died during the war. Each has a story that deserves to be told and remembered.