Town manager Jason Hoch addresses the school building committee on Wednesday at Williamstown Elementary School.
WILLIAMSTOWN, Mass. — Town Manager Jason Hoch on Wednesday explained to the Mount Greylock School Building Committee his rationale for assessing permitting fees on the district's $64 million addition/renovation project, including his words in an oft-quoted December 2015 email.
At issue is about $154,000 billed to the regional school district for permitting. In fact, the town is owed about $295,000, based on its standard permit fee schedule, but about half of that has been passed through to subcontractors on the school building project.
Hoch appeared before the committee on Wednesday to discuss the larger portion, the $154,000 which some argue should be discounted on the publicly-funded project.
At least two members of the committee remained skeptical of the town's justification after the meeting, which saw Hoch queried by one of the bill's harshest critics, committee member and Lanesborough resident Richard Cohen.
Hoch started by telling the committee that while the town was willing to be flexible with its fee collection in order to support the project, it was always understood that the project would be responsible for its bills unless it was in danger of running over budget.
"Going back to December of 2015, I was asked before that even where the town might be with fees on this project," Hoch said. "I was cognizant of the fact that you all had been working very hard and had just come out of the value engineering on the project, making tough tradeoffs."
At the time of his 2015 communication with the district, Hoch said, he was aware that the project was still trying to arrive at a budget that would be acceptable to voters and that the district was planning a project that involved renovations and all the uncertainty they bring.
"On the other hand, the town charges for projects," Hoch said. "We have one fee schedule, whether it's the homeowner with a garage or a college or a school. … The fee schedule is based in part on cost and in part on where the market numbers are.
"When don't we charge fees? When the project cost is borne 100 percent by the taxpayers of Williamstown — the library, [Williamstown Elementary School], the police station. That just generates a lot of paperwork. When the [then-Mount Greylock] superintendent asked me to consider it, I was uncomfortable with the notion of not charging fees. We hadn't had a practice for that in the town. We would have been going out on a limb to an uncomfortable place."
Instead, Hoch offered to allow the district to delay fee payments — which usually are paid upfront — until the end of the project and left the door open for a reduction in fees if the project ran short on funds at the end.
"If something happened along the way and the project ran short of funds, we would not want to stand in the way of achieving some critical part of the building program that would be deferred until our fees were paid," Hoch said. "We didn't want you to be in the position of: Fit out this lab or pay your fees."
"The offer of being the patient one and waiting until the end was to give another out. The intention was we would be one more layer of contingency [funds].
Now, with major construction completed and the new school occupied, the town approached the district to remind it of its obligation.
"I raised the question when we were going through our [temporary certificate of occupancy] checklist to make sure it was one everyone's radar," Hoch said. "Obviously, we didn't hold up the TCO [for lack of payment."
Williamstown resident Thomas Bartels joined Cohen in focusing on the language of Hoch's December 2015 email.
"To that end, it is my recommendation that we will track the eligible hours and costs through the project and assess those charges to the project at the end of the project IF funds still remain for permitting and inspection after other external charges have been paid," Hoch wrote.
"Rich is … telling us that he has documented that at some point two or three years ago, what you recommended and you, also, Hugh [Daley], was to do this on a cost basis, meaning we're going to charge you what we actually spent on the project timewise and send you an hourly bill with the expectation it would be lower than the advertised fee schedule," Bartels said, addressing both Hoch and committee member Daley, a member of Williamstown's Select Board.
"Also … as other regional school districts have demonstrated, it would be an act of goodwill to our neighboring community [to waive or discount permitting fees]."
Hoch explained that tracking "actual cost" is not reasonable. Town government does not operate like a law firm and does not track "billable hours."
"I think the actual cost piece is something that … if I could roll the clock back, I should have chosen different words, and I apologize for that," Hoch said. "Those words were my way of trying to be fair to the Williamstown taxpayers and my bosses, the Select Board. [At some point in the future] I would have to find a rational basis to say, 'If there was $50,000 left in the project budget and we were owed $250,000, I could say $50,000 was OK."
Cohen said based on the town's accounting of the hours spent on site and even taking into account other hours spent on phone calls, time in the office and research, he estimates the cost to the town for the bill at issue is closer to $30,000 than $154,000. That assumes 500 hours of work at $60 per hour, Cohen noted on a handout he prepared for Wednesday's meeting.
If the charge was $154,000, the same 500 hours of work would have be valued at $308 per hour, Cohen noted.
Hoch declined to get into a discussion of how many "actual hours" were spent and noted that all such discussions are speculative and based on assumptions on top of assumptions. The only real numbers, he has noted, come from the fee schedule that was publicly available when the building permits were pulled.
Committee member Richard Cohen of Lanesborough proffered a handout calling the fees a profit for Williamstown.
As for the issue of goodwill between Mount Greylock's two member towns — Cohen's handout refers to most of the permitting fees as "Profit to the town [of Williamstown]" — Hoch noted that the initial conversations about permitting fees were held against the backdrop of town meetings where Williamstown and Lanesborough had specifically addressed how to divide capital costs, and inspection fees are a capital cost, no different than architect's drawings or brick and mortar.
And the district's owner's project manager, whom Cohen has cited as a source for information that waived/reduced fees is a common practice on school building projects, provided a different data point at Wednesday's meeting.
"At Minuteman Vo-Tech, they were charged over $1 million in fees, and that was coming from the Town of Lexington," Trip Elmore of Dore & Whittier told the committee. "That said, the Town of Lexington, in towns that are fully within the town, they don't charge."
On Thursday morning, Cohen sent an email to iBerkshires.com arguing that the Minuteman example is not on point.
"Vocational schools are a very different animal, often with a dozen member towns and significant percentages of students tuitioned in from non-member towns," Cohen wrote. "They are usually not a partnership between two towns, as some like to think of our region."
Cohen argued that the four "comparables" he found in his research are better examples for Mount Greylock and Williamstown to follow. In Ayer-Shirley and Hampden-Wilbraham (Minnechaug Regional High School), the towns that hosted building projects of $57 million and $61 million, respectively, charged nothing for permits. In Athol-Royalston and Concord-Carlisle, projects were charged at a rate of 34 cents per $1,000 of project cost and $1.07 per $1,000 of project cost, according to Cohen's research.
If Mount Greylock pays the full $300,000 (including the $154,000 discussed at issue Wednesday), Williamstown would be compensated at a rate of $4.69 per $1,000 for the $64 million project.
"I purposely only researched 'Regional Districts' and as it happens, I think all the benchmark examples I cited are two-town regions," Cohen wrote.
Bartels also sent an unsolicited email Thursday morning, in which he argued that Hoch did not address the "eligible hours and costs" phrase in the December 2015 email.
"Another curiosity is that the permit fees charged overall add up to almost exactly the amount in the budget," Bartels wrote.
Hoch, for his part, said on Wednesday evening that the town continues to follow the "patient" approach it adopted in 2015. And he recognized there may still be unforeseen expenses and that the district won't know the final local cost of the project until after the Massachusetts School Building Authority finalizes its reimbursement level — as late as 2020.
"I'm more than happy to be paid now, but I'm happy to continue to wait," Hoch said. "The same logic prevails. I have been willing to honor that commitment from day one."
Likewise, Hoch said he would like a commitment from the SBC and the school committee, which ultimately authorizes payments, that the district will meet its financial obligations if the budget allows.
"Part of the agreement that we as a region in both communities already had is an agreement on how to allocate all costs for the project," Hoch said. "I'm not aware of any other charges that have been assessed at a different ratio.
"Have other vendors been asked to come in to explain actual costs? Or, as a public entity that tried to help you three years ago, is Williamstown being held to a different standard? Are there other vendors who submitted invoices and said, 'Pay me at the end of the project if you have the money?' "
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By Tammy DanielsiBerkshires Staff
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