MINUTES

WATERTOWN TOWN COUNCIL

REGU= LAR MEETING

WATERTOWN HIGH SCHOOL

TECHNOLOGY CENTER

MONDAY, OCTOBER 20, 2008, 7:30 P.M.

PRESENT: = &nb= sp; Elaine Adams, Chairman

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Gary Bernier

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Mr. Demirs

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Richard DiFederico

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Richard Fusco

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Carl Mancini

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Scott Marotta

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Raymond Primini, Vice Chairman

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Paul Rinaldi

ABSENT: &= nbsp; &nbs= p; None

OTHERS PRESENT: Karen Baldwin, Superintendent of Schools

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Barry Bernabe, Webster Bank

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Gina Calabrese, Chairman, Board of Education

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Lisa Carew, Recreation Director

&= nbsp; &nbs= p; &= nbsp; &nbs= p; John Chipko, Public Buildings Committee

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Elaine Ciesiewski, Fall Festival Committee

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Mary Colangelo, Secretary, Board of Education

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Sue Danaher, Fall Festival Committee

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Herm Desena, Deputy Police Chief

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Jeffrey Desena, Police Officer

&= nbsp; &nbs= p; &= nbsp; &nbs= p; John Gavallas, Police Chief

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Elaine Hazelton, Fall Festival Committee

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Kevin Killeen, Board of Education

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Tom Lambert, Board of Education

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Richard Mazzamaro, Vice Chairman, Board of Education

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Tannith McDonnell, Co-Chairman, Fall Festival Committee

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Gary Miller, Interim Director of Operations, Board of Education

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Janice Pond, Board of Education

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Robert Porter, Chairman, Public Buildings Committee

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Chuck Frigon, Town Manager

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Frank Nardelli, Assistant Town Manager/Finance Director

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Sorrina Salvatore, Fall Festival Committee

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Rick Sarandrea, Co-Chairman, Fall Festival Committee

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Chris Stanco, Fall Festival Committee

Watertown Town Council

Regular Meeting

October 20, 2008

Page 2

1.&nb= sp; Call Meeting To Order

Ms. = Adams, Chairman, Called the Regular Meeting to Order at 7:30 p.m.

2.&nb= sp; Roll Call

Ms. LaForme, Board Clerk, executed the Roll Call.

3. Pledge of Allegi= ance

&= nbsp; Ms. Adams, Chairman, led the Pledge of Allegiance.

4.&nb= sp; Recognitions

&= nbsp; A. Officer Jeffrey Desena

&= nbsp; &nbs= p; Ms. Adams: I’d like to ask Jeffrey Dese= na and Police Chief John Gavallas to please come forward. I look back on that morning of Oct= ober 5^th and I remember where I live, I heard the sirens, I heard more sirens and I thought oh boy, this is going to be big.&n= bsp; I remember saying a quick prayer and just hoping that everything was going to be all right that morning. As it turned out a family lost their house in a fire, but out of tha= t a family could mourn that loss, but that would be nothing compared to if they= had lost their child. I’m g= oing to ask Chief Gavallas to recall the events of that morning.

&= nbsp; &nbs= p; Chief Gavallas: Thank you, Madam Chair, for allowi= ng me this opportunity. On Sunday m= orning, October 5^th, at approximately 10:30 a.m., a call came into the <= st1:PlaceName w:st=3D"on">Watertown Police Communications Center reporting a structure fire on Edgewood Avenue in Oakville. The female caller was in clear distress. She could be heard attempting to locate her children in the burning home. Communications personnel immediate= ly dispatched Police and Fire apparatus to the scene. Officer Jeff Desena, the first arr= iving officer, encountered the resident running from the home with her 3 children. She told officer De= sena her 1 year old was still in the home which by now was considerably involved= in smoke and flames. Officer Des= ena, without hesitation went into the structure, located and retrieved 1 year old Lucas Park from his crib, and carried him to safety. His actions are a credit to him an= d all members of the Watertown Police Department.

&= nbsp; &nbs= p; Ms. Adams, Chairman, read aloud the following Proclamation:

&= #8220;Proclamation

&= nbsp; &= nbsp; Whereas, on the morning of October 5, 2008 Officer Jeffrey Desena responded to a hou= se fire at 25 Edgewood Avenue= in Oakville.

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Regular Meeting

October 20, 2008

Page 3

&= nbsp; &nbs= p; Whereas, Officer Desena, a 6 year veteran of the Watertown Police Department, arrive= d at the scene while smoke and flames were coming from the first floor of the ho= use while the homeowner exited the home with 3 of her 4 young children.

&= nbsp; &nbs= p; Whereas, Officer Desena placed himself in danger to save the life of the 1 year old child, carrying him out of the burning building to safety.

&= nbsp; &nbs= p; Be It Resolved, that the Watertown Town Council, on behalf of the community at large, finding that Officer Jeffrey Desena performed a truly heroic deed th= at saved the life of a 1 year old child on October 5, 2008, expressed profound admiration and gratitude to officer Desena for his extraordinary actions of= the highest order.

&= nbsp; &nbs= p; Dated at Watertown Connecticut, this 20^th day = of October, 2008.

&= nbsp; &nbs= p; Elaine H. Adams

&= nbsp; &nbs= p; Chairman Watertown Town Council”

&= nbsp; &nbs= p; Officer Desena: I’d just like to thank every= one for their support and anyone in the same situation would have done the same thing. Thank you.

&= nbsp; B. = Fall Festival Committee

&= nbsp; &nbs= p; Ms. Adams: We have a second recognition tonig= ht. We talked about life saving, I thi= nk now it’s time to talk about life giving.= We have a group in Town that was formed 30 years ago and has brought life to Watertown<= /st1:City> for a day every Fall, the Watertown Fall Festival Committee. I can remember the Town Festival b= eing held on Main Street, Davis Street, Deland Field, The Siemon Company property, Veteran’s Park, I may have missed 1 or 2 in going through all of this, Depot= Street, there’s probably more. = This group has held together for 30 years and this year is special. Not only for 30 years have they br= ought a spectacular festival to Town, complete with this year over 100 vendors no= t to mention my favorite, the fireworks, you have organized our community to come together, giving civic organizations and businesses a chance to either earn money for their causes, their non profits, or for businesses to show their = best foot forward. A special thank= s goes to your sponsors, which I know some of them have been with you for many, ma= ny years. At this time I’d like to ask the Fall Festival Committee Members to come forward, we have citizen recognitions for you. Basically they all say the same, b= ut this says:

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Regular Meeting

October 20, 2008

Page 4

&= #8220;Outstanding Recognition Award

H= onoring Rick Sarandrea

&= nbsp; &nbs= p; In recognition as Co-Chairman of the Watertown Fall Festival Committee celebra= ting 30 years, appreciation and gratitude bestowed upon Rick Sarandrea.

&= nbsp; &nbs= p; Dated at Watertown Connecticut, this 20^th day = of October, 2008.

&= nbsp; &nbs= p; Elaine H. Adams

&= nbsp; &= nbsp; Chairman Watertown Town Council”

&= nbsp; &nbs= p; When I call your name, please come forward to be recognized.

&= nbsp; &nbs= p; Rick Sarandrea, Co Chairman

&= nbsp; &nbs= p; Tannith McDonnell, Co-Chairman

&= nbsp; &nbs= p; Elaine Hazelton

&= nbsp; &nbs= p; Sue Danaher

&= nbsp; &nbs= p; Sorrina Salvatore

&= nbsp; &nbs= p; Chris Stanco

&= nbsp; &nbs= p; Elaine Ciesiewski

&= nbsp; &nbs= p; Peggy DiVito (not present)

&= nbsp; &nbs= p; Robert Ruscitto (not present)

&= nbsp; &nbs= p; Brian Stanley (not present)

&= nbsp; &nbs= p; Ms. Adams: Again, thank you for bringing life = to Watertown and all = your hard work.

5.&nb= sp; Financial Advisor Report

= ; Bar= ry Bernabe, Webster Bank

= ; Ms. Adams: Barry Bernabe is g= oing to give us an overview of the Town’s financial status. As we know everything that’s been going on with Wall Street with the Stock Marke= t, with money tightening up at the bank, there is concern where are we going, where are we headed, we have schools we need to build and we just sort of w= ould like you to give us an overview of where we are now.

= ; Mr. Bernabe: Good Evening. We have 3 major areas that I’= ;d like to go over tonight, a quick overview of interest rates, the Town’= ;s credit position, and the Town’s debt position. Instead of passing out a lot of spreadsheets and looking at a lot of numbers, we attempted tonight, working with Frank and Chuck, to just try and make it a little more visual so you g= et an understanding of the numbers.

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October 20, 2008

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We’ll talk first about the credit rating overview. Whenever a municipality borrows mo= ney, even though I work at Webster Bank, it’s not Webster Bank or any other bank that lends the Town money. The Town issues bonds for long term debt or notes for short term debt and when = you issue bonds you get a bond rating. Here is a scale of Moody’s rating from lowest to highest, and = you can see where Watertown is. Now the average rating in= Connecticut is an A1; Watertown has an above average rating o= f the AA3. What tends to happen is = the larger cities tend to be at the lower range of the rating scale and a lot of the wealthier communities tend to be in the upper range. The bottom line is the higher your= bond rating the lower your borrowing costs.&nbs= p; So Watertown has an above average bond rating which is great. The highest rating you could get i= s a AAA, there are 12 of them in the State of Connecticut. Most of them are in Fairfield County, with the exception of Avon and West Hartford. I have the A1 category circled there. That is the average ra= ting in Connecticut. Again Watertown is a AA3, above average, and = allows the Town to borrow at a lower rate than many of the other communities.

What determines the bond rating. T= here are basically 4 categories. T= he first is the structure of your management team. Now this is much more qualitative = than quantitative. What the rating agencies like= to see is continuity in the Finance Director position, they like to see someone who is independent in that position, they like to see the Finance Director transcend whether it’s mayors or town managers or first selectmen, someone who has a lot of continuity and Watertown has that with Frank Narde= lli, who has served the Town well over the years. The second is demographics. Greenwich is going to be Greenwich and Bridgeport and Waterbury are going to be Bridgeport and Waterbury. You really can’t control tha= t too much. Those are really what t= he Town controls, your financial performance and your debt management. The financial performance is very,= very important. They look at your capital position or your fund balance position and they look at that and th= ey like to see each town and city maintain an adequate financial cushion. Now that’s very difficult sometimes because a lot of communities say well our taxes keep going up, we have this reserve fund over here so let’s draw it down and reduce tax= es, but the rating agencies look at it different. They’re saying well every community struggles with taxes, it’s prudent to maintain a sizeable capital position in case of unanticipated events, and they like to see you manage your debt in a prudent manner, so those are what the Town really controls.

Now quickly going through a little rating comparison with Watertown, I took Watertown and added 9 other communi= ty that were a notch higher than = Watertown that were a AA2. Now there ar= e some colors on here, Bloomfield, Monroe, and Trumbull are in red because they were all downgraded within the= last year from a AA2 to a AA3. New Milford is highlighted in purple because even though they are a notch higher than Watertown, they’ve been put on a negative watch, meaning if they don’t turn things around they are at risk for a downgrade. So as a financial advisor to the T= own I try and take pride to make sure a lot of the communities we deal with don’t get downgraded. W= e try and do what we can to either keep your rating or try and get an upgrade.

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Regular Meeting

October 20, 2008

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Now let’s look at some metrics for Watertown compared to some of these other communities. What this graph shows is Watertown on the = far left in the solid blue. From a med= ium family income perspective as a percentage of the State average, Watertown is slightly above the state average. Now Connecticut has a high average cause = Fairfield County skews the av= erage, so your wealth is about average for the State and it’s in the median range of this comparative analysis, which is a positive. Current year tax collections, you’re a little over 99%, you’re among the highest tax collecti= on rate in this comparative analysis. This is a credit positive. Watertown does an= excellent job in collecting taxes.

Here’s an important one here, this fund balance or capital position, capital cushi= on as a percentage of your budget is about 10% which is where the rating agenc= ies like to see that average. Now= if your look at Bloomfield and Monroe, they were just downgraded recently and = you can kind of see why they were. What happens is they had trouble passing a budget so they start drawing down the= ir reserves to balance the budget, but what happens when you do that year after year, your reserve level gets too low and what’s going to happen is you’re going to get downgraded.

Here’s another chart similar to the one we just saw, this just shows your undesign= ated portion of fund balance. Agai= n, Watertown has had= strong financial performance over the years so this is a credit positive. Again Bloomfield and Monroe have d= rawn their reserve levels, that’s why they were downgraded, and it costs t= hem more every time they issue bonds, whenever they borrow for capital projects= .

This is not a comparison anymore, this is just simply Watertown’s fund balance, capital= position as a percent of budget going back about 6 or 7 years there. This is a strong chart. As a financial advisor, when we= 217;re down with Frank talking to the rating agencies this is a very powerful chart because it shows that you don’t have any big spikes in your reserve levels nor do you have any big drops. Now as your budget grows over time, the Finance people have done an excellent job here at keeping this at a relatively constant level. This is why I brought copies of th= e last credit report which I’ll leave tonight, they mention right in there t= hat the Town’s financial performance is very strong. I know you’ve had some budget difficulties over the year but still the Town has done an excellent job fro= m a financial perspective in maintaining this reserve level and it makes my job easier as a financial advisor when I have something like this. I use this chart with other commun= ities and say listen, this is what you have to try and do, keep things constant.<= /p>

Just quickly going into interest rates now.&nbs= p; Usually a benchmark for all interest rates is that the yield on the = 10 year U.S. Government Bond, everything just trades off of that, so I took the U.S. Treasury yield and I went back 38 years to give you a historic perspective. Back in 1981 tha= t rate was up to 16%. In 2003 it was= 3.3% so that little green circle on the far right was 2003. Since then we’re almost near= that 45 year low from a treasury bond rating which sounds good, but what’s= going on in the current environment, they say that spreads are widening, meaning mortgage rates usually are very close to treasury rates. Mortgage rates have gone up, treas= ury rates have gone down. Municip= al borrowing has gone up, treasuries have come down. Corporate borrowing rates have gon= e up, treasuries have come down.

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Regular Meeting

October 20, 2008

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So treasury rates have come down, but every other type of borrowing has gone higher, the spreads have widened. People are very, very risk adverse now. The safety investment is a treasury yield.&nbs= p; Everything else is perceived as too risky. In some ways it doesn’t make sense. What are the odds that Watertown or= Greenwich or any community is going to default on your debt? It’s very, very rare that an= ything like that happens, but still investors are flocking to safety now. Everybody wants safety.

The next chart kind of highlights that a little bit more. This is the treasury yield going b= ack to January 1^st of this year, the blue line. The red line is an index of munici= pal borrowing costs, so what happened in March of this year, Bear Stearn collap= sed, they filed for bankruptcy. Yo= u can see the red line very much from the blue line. In times of uncertainty the spread = widened. Then they went back to a normal sp= read between treasury and municipal rates. Right now it’s kind of off the charts. Municipal borrowing costs are skyrocketing and treasury rates are relatively constant in a way, so right = now we’re in a period of turmoil again Mortgage rates are going higher, corporate rates are going higher and municipal rates are going higher, while treasury rates either go down or stay the same. That, in a nutshell, is kind of the situation we are in right now.

Here is a history of the borrowing costs for the Town of <= st1:place w:st=3D"on">Watertown going back a couple of years.= August of 05 the Town issues 20 ye= ar bonds at a 4.09. January of 0= 7 - 4.03. September of 07 - 3.94.= January of 2008, earlier this year= , the Town issued 25 year bonds, typically it’s only 20 years, but because these= are school bonds, the Town has a lot of new debt coming on, the State said you could go out 30 years for school debt.&nbs= p; After discussing it we decided to go 25 years, slightly higher than = the Town has done in the past. If= you look at the trend here, each bond issue the rate has been going down, down, down. My projection now if th= e Town wanted to borrow, it would be around 5%.&n= bsp; So it’s not the end of the world, but it shows you that thing shave changed, interest rates have gone up over a percentage point for all municipalities. And those spr= eads have changed quite a bit too. We work with the City of Waterbury, if the City of Waterbury wanted to go out today they might not even have access to the market because as you go down lower on that credit scale, one of the earlier charts that I showed, invest= ors charge you a lot more to assume more risk, so in this current environment y= our bond rating is serving you well. The higher your bond rating, the lower your borrowing costs. Those spreads between each bond ra= ting now is much more dramatic, so the last thing you want to do is get downgraded. So looking at the Town’s existing debt we took the existing debt and we backed out self supporting water and sewer and also school grants for previously issued debt. For those blue bars on a fiscal year basis, on the bottom it starts at 2008/2009 and it goes out ove= r the next 25 years, you can see what the annual debt service costs are for the T= own of Watertown. It drops each year. And if the Town does nothing, never borrows again, 66% of your principal would be gone in 10 years. That’s a matrix that the rat= ing agencies look at, they like to see at least 50% of your debt amortized in 10 years. State law allows you a= lot of flexibility on how you structure bond issues. You could, and some municipalities = do, they do a bond issue now and they push the debt out for future administrati= ons, borrow it now, push it out. <= st1:City w:st=3D"on">Watertown histori= cally has not done that at all. And that’s reflected here in that your debt drops each year so as new debt comes on, it’s mitigated by the drop-off in the existing debt.

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Regular Meeting

October 20, 2008

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So what’s the delta or the change from one year to the next. So from the current fiscal year no= w 2008/2009 to 2009/2010 the change in that, and that’s that red bar, starts at z= ero and comes down, next year if the Town does nothing your debt service will d= rop a little over, about $350,000. The next year it would drop a little bit, the year after that it would drop more and drop more. This is a posi= tive chart too, it shows the Town has not pushed off debt service for future administrations to worry about, they borrowed money and they started paying= it immediately. It’s a big positive. So your existing de= bt drops abut $350,000 next year if you do nothing.

Here are the school projects that are approved.= The High School, you’ve got the total cost, underneath that we back out the estimated State grant, underneath that in red, the $8,100,000 = we back out what the Town has already bonded, and then the last row is what is remaining to be bonded. So we= ’ve got the High School, Judson, Polk, and then the total. Now those are rounded a little bit= , but they are pretty close, so roughly you’ve got $26,800,000 of remaining school debt that the Town has to borrow.

So here’s Scenario #1, sitting with the Finance Director based on the ca= sh flows that I guess you got from O & G, the game plan as it stands now i= s in January of 2009 to do a bond issue for $7,000,000, that’s the cash fl= ow the Town needs all for schools. In October of 2009 do another bond issue for approximately $11,600,000, and th= en in January of 2010 the remaining school bond issue of roughly $8,200,000, a= nd that covers the $26,800,00 for schools and then also in October of 2009 we = talked about $1,500,000 for communications systems, for a total remaining borrowing cost of about $28,300,000. So that’s what is on the horizon now for the Town, that’s what we = are looking at to try and analyze.

Scenario #2 – because of what we just talked about, the Town’s borrowing cost has jumped up quite a bit from the low 4% to 5%, we want to anticipate doing something called a BAN. That acronym stands for a Bond Anticipation N= ote, that means instead of doing a bond issue for $7,000,000, permanently financ= e it for 25 years, what if we just did a short term borrowing from January of 20= 09 to October of 2009, so in October of 2009 do a $18,600,000 bond issue inste= ad of the $11,600,000. So basica= lly what Scenario #2 anticipates is saying wait a minute, let’s buy some time, borrow on a short term basis and come October things will have settled down and will be closer to the normal rate. Now the risk with that is the rates= could go higher, rates could stay the same, rates could lower, nobody knows, I can’t predict that, but we’re just analyzing two relatively straightforward scenarios, so the total borrowing stays the same. In Scenario #1 you do what the Town historically has always done; Scenario #2 you do a Bond Anticipation Note f= rom January to October.

Ms. Adams: Can you explain a little bit more a= bout the bond anticipation notes and just what is entailed there?

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October 20, 2008

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= ; Mr. Bernabe: It’s just borrowing short term, so you would issue what we call notes in January 2009, the Town would get the money and they would come due in October when you wo= uld just have to pay interest on the $7,000,000, no return of principal, just p= ay the interest that’s due, but then in October you would have to do an $18,600,000 bond issue instead of an $11,600,000 because a bond is permanen= tly financed. It’s like get= ting a mortgage. You’re borrow= ing money and paying it back over 25 years.&nb= sp; A BAN is kind of like a construction mortgage, you’re getting money, all you’re doing is paying interest, you haven’t permane= ntly financed it so the strategy there is just to borrow on a short term basis, maybe on a 3% for the 7 months in anticipation that come October of next ye= ar long term rates will have come down to a more historic level.

Mr. Primini: On the Bond Anticipation Notice, ar= e we locked in for that period of time? If something came up, a lower rate in the meantime, could we get the lower rate?

= ; Mr. Bernabe: You are kind of = locked in. Once you borrow in Januar= y it will com due in October you can’t like refund it before October, you = have to wait until October.

Mr. Primini: I read in the paper and saw on the = news about Avon, that you were saying was one= of the best ones, they were looking to borrow right now but they didn’t = know if they could actually get municipal bonds, they might have to go to the general bond market. Can you explain that to me? I underst= and it might be a little higher rate.

= ; Mr. Bernabe: Things worked ou= t well for Avon. They went out into the market and they got a number of bids, they di= d a Bond Anticipation Note for 1 year and they’re borrowing cost was 2.5%= for one year, so they borrowed for one year.&n= bsp; Next year at this time they have to make a decision to do another sh= ort term note or to do a bond issue at that point. Avon is a AAA, they got a rate of 2.5, because they are a AAA3, I’m estimating around a 3% borrowing cost for a short term borrowing. One of those charts I showed previ= ously showed the spread between municipal rates and treasury rates has widened quite a bit. The concern in the marke= tplace was that even in Avon that was rated AAA= would not get a bid, but that didn’t happen. They did get people to bid on their rates and they got a favorable rate so I don’t think Watertown would have a problem doing a = bond issue now, the problem is it would be at a higher rate, it would be around = 5% instead of under 4%.

Ms. Adams: What does that translate into dollars? $7,000,000, $11,000,= 000, cause I can remember when we went from 4.03 down to 3.8, it was hundreds of thousands of dollars.

= ; Mr. Bernabe: It is, it turns = into a lot of money because it depends on how much you’re borrowing and the duration, so if you borrow $10,000,000 over 25 years, a 1 percentage rate translates into tends of thousands of dollars a year. It’s a lot of money, however= the Town has issued bonds in the past at 5%, even 6% and we refinanced them so it’s not about that Avon thing, a lot of people are concerned that it’s kind of like the sky is falling, in a way it is from the stock market standpoint, and a lot of concern out there that we’re not only= in a recession but it’s going to keep getting worse, but from a municipa= lity borrowing standpoint it’s not the end of the world. The bottom line is rates have gone = up for municipalities, it’s unfortunate, but the marketplace is still workin= g, just at a higher rate.

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October 20, 2008

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Mr. Fusco: When you do bond anticipation notes= , the amount of money you pay for interest doesn’t touch the principal at a= ll.

= ; Mr. Bernabe: Correct.

Mr. Fusco: Nothing can be moved from that mone= y so you’re just putting in money to borrow that.

= ; Mr. Bernabe: Exactly, youR= 17;re just paying interest on that, you’re not repaying any of the principa= l.

Mr. Fusco: It always ends up the same amount, = even though you started.

= ; Mr. Bernabe: Yes, you’r= e just buying yourself time. YouR= 17;re buying time by paying interest. Then again the only reason why we’re contemplating that is because the long term rates have gone up a percentage point so we’re saying would it make sense to buy ourselves another 7 months of time in the hopes that long term rates come back down.

Mr. Fusco: It’s a gamble.

= ; Mr. Bernabe: It is and I can’t tell you that they will or that they won’t because I hone= stly don’t know.

Mr. Frigon: There are several months before we = have to make that decision. We hav= e some time.

Ms. Adams: January basically we have to make a= decision based on what the buildings are going to need for O & G and the reconstruction.

= ; Mr. Bernabe: So we are lookin= g at Scenario #1 and Scenario #2.

Mr. Marotta: If you went to 30 years how much mo= re would the interest be?

= ; Mr. Bernabe: The interest rate would go higher, probably from 5% to about 5.25%, so the total interest that you pay over the life of the 25 or 30 years would be more, but the benefit = to going out 30 years is that each annual payment would be a little bit smaller. That’s why whe= n we discussed it earlier we kind of (inaudible) we went from 30 years to 25 yea= rs.

Mr. Marotta: So 5%, amortized over say 25 years,= out of that $28,325,000 (inaudible) how much would the Town have paid?

= ; Mr. Bernabe: I don’t ha= ve that with me, but it’s about . . . .

Mr. DiFederico: It’s a lot of money.

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= ; Mr. Bernabe: It’s about= half that, whatever the bond issue, you pay about half, $13,000,000. So to show Scenario #1, I took your existing debt service, which is the blue bar, you saw this, now Scenario #1 would add new debt for schools which are those red bricks, the green up on = top is the $1,500,000 for communications. The green goes out 20 years, the red goes out 25 years because we as= sume 25 years, so in 2008/2009, where we are right now, the debt service is roug= hly $4,800,000. In 3 years your d= ebt will go up to $6,800,000, so in 3 years it’s possible that your debt = will go up $2,000,0000, assuming interest rates stay at 5% and we follow through with Scenario #1 If you look = at from the first bar to the second bar to the third bar (Tape #1, Side A ended – may have missed some) increase or decrease each year. Now what would happen in the next = fiscal year, we’re in 2008/2009 now, if we do Scenario #1, 2009/2010 your de= bt service would go up approximately $300,000. Now really your debt service would= go up $600,000, but if you remember your existing debt service is going down about $300,000 so when those 2 get mixed together, the net effect is an increase = of about $300,000. And then in t= he next year the debt service would go up again, in 2010/2011 about $1,200,000. Then in the 3rd year, 2011/2012, it would go up again another $500,000 and that would be the end of the borrowing, and if the Town did nothing after the 3 years, your d= ebt would drop each year after that. So that’s Scenario #1, the biggest spike is in the second year cause that’s based on the cash flows, when the biggest bond issue is going = to hit, I think it’s about $11,000,000.

If we look at Scenario #2, which is the same amount of borrowing, your debt service is going to go up to the same point, but what’s the difference from one year to the next. If= you look at the second year there, next year your debt service would actually go down. If we do the BAN issue = next year, if we look at 2009/2010 your debt service would go down, and then in = the next year 2010/2011 instead of it going up $1,200,000 it would go up $1,700= ,000 because we would do a short term borrowing to get it out of next year but it would just hit you in the following year, so in a way just looking at this = by itself, an argument can be made that Scenario #1 might be better, because t= hat spike in 2010/2011 is kind of hard to have your debt service go up $1,700,0= 00.

Ms. Adams: That’s just debt service, that’s no other . . . .

= ; Mr. Bernabe: Nothing else, th= is is just debt service.

Mr. Fusco: If you transfer that to mills, you’re talking 4 mills?

= ; Mr. Nardelli: Well about 1 mi= ll, 1 mill is like $1,600,000.

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Page 12

Mr. Bernabe: Just that year. So there is a challenge out there.= There is the remaining school debt= and the communications and the goal is to try and get the Town to absorb it. What I see happening a lot, I work= with a lot of other communities, what happens sometimes is they’ll pass a school project and the Finance Director will say let’s do BAN issues = for a couple of years, so they’ll go out 3 years, and then in the 4^t=
h year they’ll do a bond issue and push all of the debt out so that the Town doesn’t feel it for 5 or 6 years, and then when it goes up people say why is our debt service going up $1,200,000. I’ll say well it’s for= the school project and they’ll say but the schools happened 5 years ago.<= span style=3D'mso-spacerun:yes'> State law allows you a lot of flex= ibility to push things off. Historica= lly Watertown has not= done that and you can see your existing debt.&n= bsp; You borrow it and it hits the budget. In a way that kind of makes sense,= you borrow it and you associate the project with the increase.

= ; Mr. Mancini: I saw a couple of things on the chart that you mentioned the communications systems and you referenced communications systems and now you just mentioned communications systems. The last time I knew= the communications system was voted down. Does anybody know something that I don’t know?=

Mr. Frigon: I had asked that that be shown on t= he chart because at some point in time it’s a system that we’re go= ing to have to address.

= ; Mr. Mancini: Well I think there’s a lot of things that have to be addressed in time but . . . .=

Mr. Frigon: We’re not suggesting that it = go out to referendum today.

= ; Mr. Bernabe: We colored that = in green by itself so you can see how the communications impact the debt servi= ce and the red is the schools and the blue is your existing debt. There are literally hundreds of different scenarios that we could look at but we would be here all night. We just wanted to keep it relative= ly straightforward and show two scenarios.

Just 2 more. Here’s the chan= ge in debt service, this is Scenario #2, in 2010/2011 there’s a big spike of $1,700,000 if the Town were to follow this scenario. The last couple of charts here are= just on an existing basis, right now the Town’s outstanding debt, 3/4 of i= t is for schools, 17% is just General Purpose Town Project, Water 3%, Sewer 5%.<= span style=3D'mso-spacerun:yes'> Now after the next 3 years when the schools come on, those ratios will change, the schools will comprise about = 83% of the total debt of the Town, General Purpose is 12%, Water and Sewer about the same, so this kind of wraps it up.&nbs= p; Some of these charts, to me the summation here is that interest rates unfortunately have gone up, but it’s not the end of the world, the To= wn has issued debt at 5%, we were fortunate enough to refinance a lot of that = debt and save the Town a lot of money. What really drives this are the cash flow needs from O & G. My job is to work with the Town to= try and coordinate that, to try and mitigate the impact as much as possible. Without getting a downgrade, by ju= st pushing it all out, which historically the Town has not done.

Ms. Adams: So what you’re saying is if w= e push this debt out we have to go to Scenario #2, when we got the bond anticipati= on notes is that we run the risk, because of the huge dollar amounts, is our rating could possibly go down a little bit?

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= ; Mr. Bernabe: I don’t th= ink by just doing a BAN issue that you’re at risk of a downgrade, no.

Ms. Adams: I mean if we were to just keep on t= hat path because of extremely high interest rates.

= ; Mr. Bernabe: Right, I think t= hat the main reason we’re contemplating looking at the BAN issue is just = in anticipation that long term rates will come down by October that all the volatility will work = itself out and the Town can do a bond issue in October hopefully at 4%, but itR= 17;s likely that rates might not go down, so you could do a BAN issue to October= of 2009 and rates could stay at 5%, they could go up to 6%. So you run the risk if you do a BAN issue that rates will not come down to where they’ve been historicall= y so I’m not ready to really make a recommendation at this point. As Chuck said we have a couple of = months here to see what happens in the marketplace and we’ll cross that brid= ge when we get there.

Mr. Frigon: We watch the cash flows on a weekly basis, we build them in and as we work closely with those hopefully (inaudi= ble) more.

Ms. Adams: Okay, so the money is out there bas= ically if we’re willing to pay the interest rate.

= ; Mr. Bernabe: Exactly. The Town definitely has market acc= ess, is what it’s called. Waterbury is havi= ng trouble. Waterbury would have difficult because = your underlying bond rating is more important now than ever. Because you have an above average = bond rating, that allows you to make sure bidders will bid on your debt, just as they di= d on Avon.

Ms. Adams: So as long as we keep our general f= und balance healthy, we (inaudible) crazy spending anymore money, on keeping our tax collections up . . .

= ; Mr. Bernabe: Right, thereR= 17;s a lot of positives. Your tax collections are strong, your demographics are strong, your grand list is strong, your financial performance is strong, so it’s kind of a good = story here. The Town really has don= e everything right.

Ms. Adams: We’ve got our foundation (ina= udible).

= ; Mr. Bernabe: Yes, the foundat= ions is very . . . .

Ms. Adams: The money, you feel, will be there = for us whether we go on a regular bonding or we go bond anticipation notes, that we’re not going to have any problems there.

= ; Mr. Bernabe: Correct.

Ms. Adams: I don’t want to (inaudible) schools, it’s too important to the Town. I don’t want to shut anythin= g down here because we can’t get the money.

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= ; Mr. Nardelli: We were actually going to go for an upgrade with Moody’s before the financial market k= ind of turned.

= ; Mr. Bernabe: Yea, the rating agencies were in the process of re-evaluating how they look at municipaliti= es because the Attorney General actually sued the rating agencies saying listen you’re rating municipalities too difficult. The odds of any community, even a = Waterbury or a Bridgeport defaulting on their debt is very, very low. The rating agencies had a AAA on E= nron a month before Enron filed for bankruptcy so the rating agency said you know what, we’re going to re-evaluate the way we look at municipalities. The Town’s financial positio= n is strong, I think the next time the Town does go for a rating there is a good chance for an upgrade because they’re reassessing it. They were about to do a revaluatio= n on all municipalities, but with all this volatility going on they said we̵= 7;re going to slow down and wait until things slow down a little bit, but any ti= me the Town borrows Frank has to get on the phone and talk with the rating agencies and go over the debt, the finances, the demographics, the tax collection, the whole thing, so you have to stay in front of them all the time. But there are a lot of positives here, all those charts, all positives. The only downside is you’ve = got a lot of debt, what I call on the horizon, and it’s going to hit, it’s going to hit next year, or if you push it off it’s going to hurt twice as much the next year and it’s going to hit in the third y= ear too. It’s going to be o= ut there. I see this all the tim= e in communities I work with. They= passed a project, a number of years go by and the debt goes up and people wonder w= hy the debt is going up because that project was 5 years ago. Well you don’t borrow it all= right out of the starting gate, it’s over time, so unfortunately I see for = the next 3 years your debt service is going up. You have some tools, some flexibil= ity to kind of push it to the next year, but it’s only going to make the pain greater in year 2 or year 3 if you do that.

Mr. Marotta: If we had a AA2 right now, what wou= ld be our interest rate delta? (Ina= udible) what would it be about?

= ; Mr. Bernabe: Your borrowing c= ost right now? About 5%. If you got upgraded to a AA2 from = a AA3 your borrowing cost would drop down to maybe a 4.85%. It might not sound like too much, = but it is. If you borrow $28,000,000= over 25 years that little, those base point changes add up to real money.

Ms. Adams: Any other questions? Anything you want to add, Frank or Chuck? We’ll see Barry = again in January?

Mr. Bernabe: Sure. I appreciate your time and hopeful= ly it made sense and hopefully I didn’t go too fast or too slow.

6.&nb= sp; Public Participation

None

&= nbsp; Ms. Adams, Chairman, Closed Public Participation at 7:55 p.m.

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October 20, 2008

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&= nbsp; Mr. Fusco: Point of Informati= on, I was informed today that we are going to have an executive session for somet= hing that we’re not supposed to talk about. I would like to make a motion that= we go into executive session prior to that executive session so we can get some information for ourselves. I can’t say too much more because under executive session (inaudible) so I’m making a motion to go into executive session prior to that hearing that was called for that was never voted on. It’s complicated.

&= nbsp; Ms. Adams: Yea, and I donR= 17;t see where it would have any merit at this point.

= Mr. Fusco: Well I’m making a motion (ina= udible) Council thing.

&= nbsp; Mr. Mancini: I’ll secon= d the motion.

= Mr. Fusco: For information only, investigation (inaudible).

&= nbsp; Ms. Adams: Well I would think= if you wanted to add to the agenda you need 2/3 of the Council to do that.

= Mr. Fusco: Okay, I would like to do that so th= at again . . . .

&= nbsp; Ms. Adams: I don’t understand.

= Mr. Marotta: What’s the purpose?

= Mr. Fusco: The purpose is for investigation, S= cott, we’re doing something without any information from one side and I can’t say too much because we’re under executive (inaudible). I’m saying let’s go in= to executive session so we can talk about it and have the person who is being accused here maybe we can save a lot of lawyer’s fees. We just talked about a lot of mone= y, let’s see what we can do.

&= nbsp; Mr. Mancini: On both sides.

= Mr. Primini: From a Freedom of Information plan = I believe you have to state exactly what it is.

= Mr. Fusco: Not for executive session.

&= nbsp; Mr. Primini: Yes, you do.

= Mr. Mancini: Well if something was brought up in executive session when we were told we couldn’t use the person’s name or talk to anybody about it, how can we talk about it now?

= Mr. Fusco: We can’t, this is why I’= ;m saying I’d like to go into executive session . . . .

&= nbsp; Mr. Mancini: That’s why he’s asking for a meeting to discuss (inaudible).

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October 20, 2008

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&= nbsp; Ms. Adams: We are on a very slippery slope.

= Mr. Fusco: Yes, boy are we on a slippery slope, that’s why before we get into it too deep and lawyers are getting involved in this, I’d like to have an executive session with the pers= on and investigate, that’s all I’m asking. Maybe we might not have to go into= a hearing.

&= nbsp; Mr. Bernier: At this point I = want to move the question. This conversation (inaudible).

= Mr. Rinaldi: Hold on, stop the wheel. I have the same problem, I donR= 17;t know what the motion is on the floor.

= Mr. Fusco: The motion is to go into executive,= not to have a future executive session.

&= nbsp; Mr. Rinaldi: We have to vote = to amend the agenda first.

= Mr. Fusco: That’s what I’m asking for. To amend the agenda, I w= ant to go into a future executive session, at the call of the Chairman, so we can = investigate the other executive session we’re going to have. I can’t go into it too much = deeper than this, Paul, that’s why I said I (inaudible) all I want to do is = some investigating and I think we owe that to whoever is happening that’s = why I asked to put it on the agenda.

&= nbsp; Mr. Rinaldi: Put it where on = the Agenda?

= Mr. Fusco: Wherever the Chairman wants to put = it.

= Many people talking at once (inaudible).

= Mr. Fusco: We don’t need a motion to ame= nd a future meeting. We just have = to put it on the agenda.

&= nbsp; Ms. Adams: Why don’t we= move on.

= Mr. Fusco: Are you cutting me off, my motion?<= /p>

&= nbsp; Mr. Bernier: No, we’re = on a very slippery slope.

= Mr. Mancini: He made a motion and I seconded it,= why can’t we vote on that? = If you want you can deny it, but at least take a vote on it.

&= nbsp; Mr. Bernier: Is it for tonigh= t?

= Mr. Fusco: It’s a future motion to have = an executive session at the pleasure of the Chairperson so we can do some inve= stigating.

= Many people talking at once (inaudible).

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October 20, 2008

Page 17

= Mr. Fusco: I know you’re not happy with = it, I can’t say much more.

&= nbsp; Ms. LaForme: First I thought = he said he wanted the executive session before this executive session thatR= 17;s on the agenda tonight?

= Mr. Fusco: No, this has to do with a future executive session.

&= nbsp; Ms. LaForme: Okay, then I misunderstood the motion.

= Many people talking at once (inaudible).

= Mr. DiFederico: He wants to have a meeting prior to= the executive session.

&= nbsp; Ms. Adams: Guys, you know wha= t?

= Mr. Fusco: The reason I’m having a probl= em is because I’m under executive order and I can’t say much. Yea, it’s important that we = do this, I’m talking about investigating. All I want to do is have an execut= ive meeting in the future (inaudible).

&= nbsp; Mr. Mancini: (Inaudible) to h= ave a meeting if not tonight, then another night, but be willing to talk about it before we have the hearing.

= Mr. Fusco: That’s it.

&= nbsp; Mr. DiFederico: That’s exactly what he’s saying.

= Mr. Mancini: Can we talk about it before we have= the hearing, to save lawyer’s fees on both parties? That’s all he’s asking= for.

&= nbsp; Ms. Adams: Well it would be 2= /3 to amend the agenda to take a vote on this.

= Mr. Frigon: You’re not amending the a= genda, you’re just agreeing to put it on a future agenda.

&= nbsp; Ms. Adams: No, but we have to= amend the agenda (inaudible). It takes 2/3 to amend the agenda.

= Many people talking at once (inaudible).

&= nbsp; Ms. Adams: If he wants a vote= for that you have to amend this agenda.

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Page 18

MOTION: (Mr. = Fusco, sec. Mr. Rinaldi) to Add Agenda Item 11J, to have a meeting prior to the ex= ecutive hearing.

= D= iscussion: None<= /p>

= In Favor: &= nbsp; Mr. Demirs, Mr. DiFederico, Mr. Fusco, Mr. Mancini

= O= pposed: = Ms. Adams, Mr. Bernier, Mr. Marotta, Mr. Primini, Mr. Rinaldi

= A= bstained: None

= M= OTION FAILED (5-4-0)

7.&nb= sp; Minutes=

&= nbsp; A. Regular Meeting Minutes – October 6, 2008

= ; &n= bsp; MOTION: (Mr. = Bernier, sec. Mr. Primini) to Approve the Regular Meeting Minutes dated October 6, 2= 008 as presented.

= ; &n= bsp; Discussion: None<= /p>

= ; &n= bsp; MOTION PASSED UNANIMOUSLY

8.&nb= sp; Chairman’s Report

A.&n= bsp; = ; Correspondence

Ms. Adams: We rec= eived the following thank you card:

“Thanking you sincerely for your thoughtful kindness at a time when it was deeply appreciated. To the Watertown Town Council Members: Thank you for the beautiful plant = that was sent to our house. Your kindness and support during this difficult time= is greatly appreciated. Sincerel= y, Mary Dzioba and Family.”

Ms. Adams: Tonight we do not need an executive session regarding Catholic Cemeteries Association and the Archdiocese of Hartford, Inc, versus the Town of Watertown, Dino Radicchio, Building Inspector Town of Watertown. This had to do with the fact that Catholic Cemeteries could not get a building permit for the mausoleum/chape= l. They claim the Planning and Zoning didn’t have the right and has no jurisdiction over doing this. Subsequently Planning and Zoning, = it is my understanding, has agreed that they did not have the right, so tomorrow = the building permit will be issued so there is no need for the executive session tonight.

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October 20, 2008

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1. Letter from Karl= Kuegler, Resigning from the Public Buildings Committee, dated October 7, 2008.

Ms. Adams: “This letter is to inform you= that I wish to resign from the Watertown Public Buildings Committee effective today. I have enjoyed being a= part of this committee for many years. The Committee has always conducted itself in a bipartisan manner so = that the Town’s best interest were always served. Now that our family spends five to= six months out of the year in Flo= rida, I feel that I should step down. Please inform Committee Chairperson Bob Porter, Town Council Chairpe= rson Elaine Adams, and Town Manager Chuck Frigon of my decision. Thank you for your attention to th= is matter. Karl P. Kuegler”= ;

Karl, I know, served quite a long time on Public Buildings and he will be missed.=

2. Letter from Remo Ceniccola, Resigning from the Public Buildings Committee, dated October 15, 2008.

Ms. Adams: “Please accept this letter as= my formal notice of resignation from the Public Buildings Committee, effective October 15, 2008. The associa= tions I’ve made during my appointments on the committee will truly be memor= able for years to come. Sincerely,= Ray Ceniccola”

9.&nb= sp; Subcommittee Reports

&= nbsp; A. Public Works

= ; &n= bsp; Mr. Primini: We met last Mond= ay night and (inaudible) was the street light program and we had a couple of people that are feeling some of these decisions and the process for that is= to go to the Public Works Committee and then go to the Police Department for a= ny of their concerns. We explain= ed to some of the people we’re actually going to be adding some lights on a= reas we found were a D.O.T. requirement where there has to be illumination at intersections, so in some cases we’re merely moving a street light ov= er 50 feet to be in compliance with that. We are reviewing that right now. We have received about 2 dozen req= uests so far. The other thing is It= em 11G, consider the Town Manager to execute a personal services agreement with the America the Beautiful Grant (inaudible).

&= nbsp; &nbs= p; Mr. Demirs: We have a Public Buildings Committe= e meeting this Wednesday, I haven’t had a meeting since our last Town Council meeting.

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October 20, 2008

Page 20

10.&n= bsp; Town Manager’s Reports

&= nbsp; Mr. Frigon gave the following report:

Ordinances

We have begun some work on the goose poop, the dog poop, and the hybrid vehicle tax exemption so we are putting that together.

Water Main Break

There was a major water main break on Sunnyside. The break occurred directly under t= he culvert that is scheduled to be replaced through an (inaudible) grant that = we have applied for and have received, but that project won’t start for another couple of years. Water & Sewer was able to install some valves, isolate and close that section= of pipe and re-service Sunnyside Hill through Skipper. Also on the agenda tonight which w= ill be no action required, we’re not quite ready to come to the Town Council= at this time, we have presently budgeted some funds to extend the dead end Fal= ls Avenue at Sylvan Lake, up Sylvan Lake Road towards the Cercemaggiore Club. That was budgeted, approved, and t= he design intention there is to connect all of the dead ends as you go up Sylvan Lake Road towards Cercemaggiore. The re= ason why I had asked that it be put on the agenda tonight, but we don’t ha= ve a firm number yet, is we had asked Brennan Construction, who was the low bidd= er for the Sylvan Lake/DiNunzio Road water main extensions, if they, for the s= ame unit prices that they did, also do the work going up Sylvan Lake Road which would facilitate getting redundant service up Sunnyside. That would also take care of all t= he dead end mains that are in that section as well which we intended to do, but this would get it done sooner. Brennan has agreed to do that, but we haven’t completed the engineering on it yet which they’re going to be doing in the next few days so we’ll get a firm number of what that will cost to bring to the Town Council. No action requi= red for this evening.

11. &n= bsp; New Business

A. Appointments to Boards and Commissions

&= nbsp; &nbs= p; 1. = Consider the nomination of Mark Guerrera, 136 Oak Drive, Watertown, as a member of the Public Buildings Committee, to fill the Unexpired Term of Remo Ceniccola, Term to Expire January, 2009.

<= span style=3D'mso-tab-count:1'> &= nbsp; &= nbsp; &nbs= p; MOTION: (Mr. = Marotta, sec. Mr. Primini) to nominate Mark Guerrera, 136 Oak Drive, Watertown, to the Public Buildings Committee, to fill the Unexpired Term of Remo Cenic= cola, Term to Expire January, 2009.

&n= bsp;

<= span style=3D'mso-tab-count:1'> &= nbsp; &= nbsp; &nbs= p; Discussion: None<= /p>

&n= bsp;

&= nbsp; &= nbsp; &nbs= p; MOTION PASSED UNANIMOUSLY

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&= nbsp; B. = Consider a Request for Retroactive Approval of Form M-65-1, Manufacturing Machinery = and Equipment from DriveSol Global Steering, Inc. for the 2007 Grand List

&= nbsp; &nbs= p; MOTION: (Mr. = Marotta, sec. Mr. Primini) I move to approve the Request of a Retroactive Approval of Form M-65-1, Manufacturing Machinery and Equipment form for DriveSol Global Steering, Inc. for the 2007 Grand List.

<= span style=3D'mso-tab-count:1'> &= nbsp; &= nbsp; Discussion: Ms. Adams: I spoke with Sean Williams about this. Last year we had approv= ed to put this forward. It was pass= ed in the Senate, not only this, but other towns or communities who had this same issue. It passed in the Senat= e, but unfortunately it was like the last week of session, the House ran out of ti= me to be able to vote on this, so what they’re doing now, of course now we’re talking we’re going to have a new Legislature in there, t= he whole process needs to start again, we need approval for the Council to put forward, well Sean will be there, to bring back to the Legislature.

<= o:p>

<= span style=3D'mso-tab-count:4'> &= nbsp; &nbs= p; &= nbsp; &nbs= p; Mr. Fusco: This comes out of our Grand List, r= ight?

<= o:p>

<= span style=3D'mso-tab-count:4'> &= nbsp; &nbs= p; &= nbsp; &nbs= p; Ms. Adams: Well part of it does.

<= o:p>

<= span style=3D'mso-tab-count:4'> &= nbsp; &nbs= p; &= nbsp; &nbs= p; Mr. Nardelli: No, this is not going to cost us. We’ve already sent them the = bill now, DriveSol, we’ve been talking to them and they are trying to set a schedule of payments to us because they have to pay the bill. Remember now they have to go in li= ke February and March to try and get a retroactive and they have to get a refund from u= s, but no, at this point they have to pay us.

<= o:p>

<= span style=3D'mso-tab-count:4'> &= nbsp; &nbs= p; &= nbsp; &nbs= p; Mr. Frigon: The State of Connecticut reimburses depending on the (inaudible) so it doesn’t cost us anything.

&= nbsp; &nbs= p; MOTION PASSED UNANIMOUSLY

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&= nbsp; C. Consider an Appropriation from the General Fund for the Remittance to the State of Connecticut, Department of Public Safety for the Town of Watertown Educatio= nal Training Fee in the amount of $9,384; funds have been deposited into the General Fund through permit fees to the Building Inspector’s Office

<= span style=3D'mso-tab-count:2'> &= nbsp; &nbs= p; MOTION: (Mr. = Marotta, sec. Mr. Primini) I move to approve an Appropriation from the General Fund = for the Remittance to the State of Connecticut, Department of Public Safety for= the Town of Watertown Educational Training Fee in the amount of $9,384.

<= o:p>

<= span style=3D'mso-tab-count:2'> &= nbsp; &nbs= p; Discussion: Mr. Nardelli: We have money budgeted every year t= o give back a portion to the State on this but this was such that the schools, this basically is, the school project fund pays this to the Town and the Town ha= s to remit some of that back to the State and it’s a large amount, we did = not budget this amount of money and Richie can tell us what the State uses this money for.

= ; &n= bsp; = ; &n= bsp; Mr. Fusco: This is for the tr= aining for the fire marshals and the building officials and for contractors. Any contractor, like a nurse can g= o to a training seminar, free of charge and it’s all taken care of. Normally we charge the contractor = for this and they give us a check out of the money that they appropriated, that they bid on the project, this should come from the contractors, it should n= ot come out of our project.

<= o:p>

<= span style=3D'mso-tab-count:3'> &= nbsp; &nbs= p; &= nbsp; = ; Mr. Nardelli: Well it comes f= rom the school project, when the contractor bid the price it comes out of the price.

<= o:p>

<= span style=3D'mso-tab-count:4'> &= nbsp; &nbs= p; &= nbsp; &nbs= p; Mr. Frigon: Whoever pulls the permit, the cont= ractor pulls the permit . . . . (inaudible).

<= o:p>

<= span style=3D'mso-tab-count:3'> &= nbsp; &nbs= p; &= nbsp; = ; Mr. Fusco: Well why are we (T= ape #1, Side B ended – may have missed some). their permit fees, not anybody’s permit fees. = It’s working.

<= o:p>

&= nbsp; &nbs= p; MOTION PASSED UNANIMOUSLY

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Page 23

&n= bsp;

&= nbsp; D. Consider an Appropriation from the General Fund to the Police Department Overtime Ac= count in the amount of $1,983. Fund= s have been received from the State of Connecticut, Department of Transportation f= or D.U.I. Enforcement

&= nbsp; &nbs= p; MOTION: (Mr. = Marotta, sec. Mr. Primini) I move to approve an Appropriation from the General Fund = to the Police Department overtime account in the amount of $1,983. Funds have been received from the = State of Connecticut, Department of Transportation for D.U.I. Enforcement.

&n= bsp;

&= nbsp; &nbs= p; Discussion: None

&= nbsp; &nbs= p; MOTION PASSED UNANIMOUSLY

&n= bsp;

&= nbsp; E. = Consider Authorizing a Bid Waiver for the Purchase of Three AutoCAD Map 3D Licenses = with one-year subscriptions to be purchased from DLT Solutions, Inc. for an amou= nt not to exceed $9,956

&n= bsp;

&= nbsp; &nbs= p; MOTION: (Mr. = Marotta sec. Mr. Primini) I move to authorize a Bid Waiver for the Purchase of Three AutoCAD Map 3D Licenses with one-year subscriptions to be purchased from DLT Solutions, Inc. for an amount not to exceed $9,956.

&n= bsp;

&= nbsp; &nbs= p; Discussion: Mr. DiFederico: These are the computer programs, r= ight?

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&= nbsp; &nbs= p; &= nbsp; &nbs= p; Mr. Frigon: Right, they are engineering design programs.

&n= bsp;

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Mr. DiFederico: We need 3 of them?

= ; &n= bsp; = ; &n= bsp; Mr. Frigon: Yes, we actually = need more, but we only have 3.

&n= bsp;

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Mr. Mancini: Were these put in the budget for5 2008/2009?

= ; &n= bsp; = ; &n= bsp; Mr. Frigon: Yes, they were.

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Mr. Mancini: And they were denied? They were cut from the budget?

= ; &n= bsp; = ; &n= bsp; Mr. Frigon: There were additi= onal licenses in the budget that were denied, for the renewal of our existing it= was not denied.

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Mr. Mancini: Well here it says for the purchase= of, not for the renewal of.

= ; &n= bsp; = ; &n= bsp; Mr. Frigon: Well you’re purchasing new licenses, you’re purchasing the renewal of licenses.

Watertown Town Council

Regular Meeting

October 20, 2008

Page 24

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Mr. Mancini: Was that in our budget for 2008/20= 09?

= ; &n= bsp; = ; &n= bsp; Mr. Frigon: Carl, I’ll = be honest with you, I did not check it, I’m making the assumption because it’s here, and I believe that it was (inaudible).

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Ms. Adams: Line item (inaudible) AutoCAD, and= I guess we saved (inaudible).

= ; &n= bsp; = ; &n= bsp; Mr. Frigon: If it’s not there, Carl, then you’re going to see a transfer later or it’s = not going to happen.

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Mr. Mancini: Yea, but what I’m trying to = say is if it was in there and it was taken out of the budget, now you’re try= ing to, not you personally, it seems like we’re back-dooring things after= the budget was approved with cuts.

= ; &n= bsp; = ; &n= bsp; Mr. Frigon: Yea, under AutoCA= D we have $11,500 approved.

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Mr. Mancini: And this is coming out of that $11= ,000?

= ; &n= bsp; = ; &n= bsp; Mr. Frigon: I don’t hav= e the purchase order in front of me, but I (inaudible).

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Mr. Nardelli: Yea.

= ; &n= bsp; = ; &n= bsp; Mr. Mancini: So if we approve= this it’s coming out of that $11,000 that’s been approved?

&n= bsp;

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Mr. Nardelli: Yes, that’s correct.

= ; &n= bsp; = ; &n= bsp; Mr. Bernier: Then all we̵= 7;re (inaudible).

= ; &n= bsp; = ; &n= bsp; Mr. Frigon: There is a little history behind here so we all understand.

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Ms. Adams: Yea, it should be noted that this = price is approximately 35% lower than the standard price we received and this off= er expired October 15, 2008. I&#= 8217;d like to commend Joe Millette and the Information Technology people involved= for obtaining a significant cost savings for the Town. This is what $11,000?

= ; &n= bsp; = ; &n= bsp; Mr. Nardelli: $11,500?

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Mr. Mancini: Another question, if it’s in= the budget, then why are you coming to us?

Watertown Town Council

Regular Meeting

October 20, 2008

Page 25

= ; &n= bsp; = ; &n= bsp; Mr. Frigon: For a bid waiver.= The bit of information I wanted to= share with you, Elaine just pointed out that the offer they have given to us has = expired, but I don’t believe that 6 days is going to be a show stopper here, I= ’m sure they will honor that price.

&= nbsp; &nbs= p; MOTION PASSED UNANIMOUSLY

&n= bsp;

&= nbsp; F. = Consider authorizing a Bid Waiver for Water Main Extension at Sylvan Lake

&= nbsp; &nbs= p; MOTION: (Mr. = Primini, sec. Mr. Bernier) I move to Table a Bid Waiver for water main extension at = Sylvan Lake.

&n= bsp;

&= nbsp; &nbs= p; Discussion: None<= /p>

&= nbsp; &nbs= p; MOTION PASSED UNANIMOUSLY

&n= bsp;

&= nbsp; G. Consider a Resolution authorizing the Town Manager to execute a Personal Services Ag= reement with the State of Connecticut, Departmen= t of Environmental Protection regarding the America the Beautiful Grant

A= UTHORIZING RESOLUTION

&= nbsp; &nbs= p; BE IT RESOLVED, that the Town Manager, Charles Frigon, be and hereby is author= ized to act on behalf of the Watertown Town Council in executing a Personal Serv= ices Agreement with the State of Connecticut, Department of Environmental Protec= tion regarding the America the Beautiful Grant.

&= nbsp; &nbs= p; Dated at Watertown, Connecticut this 20^th day of October, 2008.

&= nbsp; &nbs= p; &= nbsp; &nbs= p; &= nbsp; &nbs= p; &= nbsp; &= nbsp; &nbs= p; &= nbsp; &nbs= p; &= nbsp;

&= nbsp; &nbs= p; &= nbsp; &nbs= p; &= nbsp; &nbs= p; &= nbsp; Elaine H. Adams, Chairman

&= nbsp; &nbs= p; &= nbsp; &nbs= p; &= nbsp; &nbs= p; &= nbsp; Watertown Town Co= uncil

&= nbsp; &nbs= p; MOTION: (Mr. = Marotta sec. Mr. Primini) I move to approve a Resolution authorizing the Town Manag= er to execute a personal services agreement with the State of Connecticut, Department of Environmental Protection regarding the America the Beautiful Grant.<= /p>

&n= bsp;

&= nbsp; &nbs= p; Discussion: None<= /p>

&= nbsp; &nbs= p; MOTION PASSED UNANIMOUSLY

Watertown Town Council

Regular Meeting

October 20, 2008

Page 26

&n= bsp;

&= nbsp; H. Consider a Resolution authorizing the Town Manager to execute a Memorandum of Agreem= ent with the Emergency Management and Homeland Security for the protection of a home located at 1024 Main = Street, Watertown, Connect= icut from Flooding

A= UTHORIZING RESOLUTION

&= nbsp; &nbs= p; BE IT RESOLVED, that the Town Manager, Charles Frigon, be and hereby is author= ized to act on behalf of the Watertown Town Council in executing a Memorandum of Agreement with the State of Connecticut, Department of Emergency Management= and Homeland Security, regarding Hazard Mitigation Grant Program Flood Control Project with respect to a structure located at 1024 Main Street, Watertown,= CT.

&= nbsp; &nbs= p; Dated at Watertown, Connecticut this 20^th day of October, 2008.

&= nbsp; &nbs= p; &= nbsp; &nbs= p; &= nbsp; &nbs= p; &= nbsp; &= nbsp; &nbs= p; &= nbsp; &nbs= p; &= nbsp;

&= nbsp; &nbs= p; &= nbsp; &nbs= p; &= nbsp; &nbs= p; &= nbsp; Elaine H. Adams, Chairman

&= nbsp; &nbs= p; &= nbsp; &nbs= p; &= nbsp; &nbs= p; &= nbsp; Watertown Town Cou= ncil

&= nbsp; &nbs= p; MOTION: (Mr. = Marotta sec. Mr. Primini) I move to approve a Resolution authorizing the Town Manag= er to execute a Memorandum of Agreement with the Emergency Management and Home= land Security for the protection of a home located at <= st1:Street w:st=3D"on">1024 Main Street, Watertown= , Connecticut from flooding= .

&n= bsp;

&= nbsp; &nbs= p; Discussion: Mr. Primini: This is a project we’ve been working on for at least 7 years now. 1024 Main Street, the Luciani property, has been flooded out in the past. This grant is 75%.

&n= bsp;

= ; &n= bsp; = ; &n= bsp; Mr. Frigon: Yes, for $109,000= .

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Mr. Primini: And the homeowner has to make up t= he difference of the other 25% which would remediate the property for flood control (inaudible). I know the problems the homeowner has been going through. I remember talking t= o Phil Deleppo and it was going on for a few years before that.

Watertown Town Council

Regular Meeting

October 20, 2008

Page 27

= ; &n= bsp; = ; &n= bsp; Mr. Frigon: This is actually a result of a charge by previous Town Councils that we look into funding mech= anisms that would allow the Luciani’s to remediate their property from flood= ing and that would not cost the Town anything.= We looked at several different grant opportunities and this is the o= ne that made the most sense. This grant does allow $103,000 to be paid for by FEMA and with an additional $3,= 000 and some odd dollars to be reimbursed to the Town for administrative and engineering costs. The additi= onal 25% or $30,000 some odd dollars is going to be paid for by the Luciani̵= 7;s, so in theory this should cost the Town absolutely nothing.

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Mr. Mancini: They finally agreed to do this?

= ; &n= bsp; = ; &n= bsp; Mr. Frigon: They verbally agr= eed that they would do this, FEMA has committed to it, so it looks like we are = in a position now to help them and get their property repaired.

&= nbsp; &nbs= p; &= nbsp; &nbs= p; Mr. Marotta: I think it’s great that we w= ere able to do that, help the community out and help them out.

&= nbsp; &nbs= p; MOTION PASSED UNANIMOUSLY

&n= bsp;

&= nbsp; I. &= nbsp; Consider a Resolution authorizing the Transfer of Funds between line items for Fiscal Year 2008/2009

RESOLUTION

&n= bsp;

WHEREAS, expenses in the 2008-2009 fiscal year require the Transfer of Funds.

NOW THEREFORE, BE IT RESOLVED, by vote of the Watertown Town Council, that the following actions are taken relative to the transfer of funds:

WATER AND SEWER

AMOUNT: $975 &= nbsp; &nbs= p; NO: 1

FROM: &= nbsp; 017-50318-075-0467 – Pumping Equipment Maintenance

TO: &= nbsp; 017-50318-075-= 1276 – Generator Service Contract

REASON: Additional funds required.

WATER AND SEWER

AMOUNT: $975 &= nbsp; &nbs= p; NO: 2

FROM: &= nbsp; 015-50318-074-0467 – Pumping Equipment Maintenance

TO: &= nbsp; 015-50318-074-= 1276 – Generator Service Contract

REASON: Additional funds required.

Watertown Town Council

Regular Meeting

October 20, 2008

Page 28

GENERAL FUND – TRANSFER STATION=

AMOUNT: $1,502 &= nbsp; &nbs= p; NO: 3

FROM: &= nbsp; 010-50529-033-2146 – Landfill Improvements

TO: &= nbsp; 010-50415-033-= 10000– Equipment Parts

REASON: Obtain replacement tires for roll-off transportation truck.

Dated at Watertown, Connecticut this 20th day of October, = 2008.

&= nbsp; &nbs= p; &= nbsp; &nbs= p; &= nbsp; &nbs= p; &= nbsp; &= nbsp; &nbs= p; &= nbsp; &nbs= p; &= nbsp;

&= nbsp; &nbs= p; &= nbsp; &nbs= p; &= nbsp; &nbs= p; &= nbsp; Elaine H. Adams, Chairman

&= nbsp; &nbs= p; &= nbsp; &nbs= p; &= nbsp; &nbs= p; &= nbsp; Watertown Town Cou= ncil

&= nbsp; &nbs= p; MOTION: (Mr. = Marotta, sec. Mr. Primini) I move to approve the Resolution authorizing the Transfer= of Funds between line items for fiscal year 2008/2009.

&n= bsp;

&= nbsp; &nbs= p; Discussion: None<= /p>

&= nbsp; &nbs= p; MOTION PASSED UNANIMOUSLY

&n= bsp;

12. Public Participation

= ; None

&= nbsp; Ms. Adams, Chairman, Closed Public Participation at 8:45 p.m.

13. Executive Session=

= ; A. Catholic Cemeteries Association of the Archdiocese of Hartford, Inc., vs. the Town o= f Watertown

&n= bsp;

= ; &= nbsp; Ms. Adams: Executive Session = is not needed.

&n= bsp;

14. Adjournment

= ; MOTION: (Mr. = Primini, sec. Mr. Marotta) to Adjourn the Regular Meeting at 8:46 p.m.

<= /span>Discussion: None<= /p>

<= /span>MOTION PASSED UNANIMOUSLY

Watertown Town Council

Regular Meeting

October 20, 2008

Page 29

<= /span>Regular Meeting Adjourned at 8:46 p.m.

Respectfully submitted,

Elaine H. Adams, Chairman

Watertown Town Cou= ncil

Approved: _______________________________

Lynn M. LaF= orme, Clerk