Selectmen hold emergency meeting on library bills, cash flow

By Susan Mustapich | Mar 19, 2019
Photo by: Daniel Dunkle

Rockport — A $125,000 invoice for construction services on the library project and a response from the Library Foundation that payment would be delayed until late April led to an emergency selectmen's meeting March 19.

Town Manager Rick Bates said the meeting was called by three of the selectmen after they found out the Library Foundation had refused to provide payment for the first invoices on the project. He said the foundation leaders told the town they would not pay for the invoices until bids returned on the project April 22.

The first invoices on the project are related to the design of the new building and demolition of the old library. He said the invoices have been paid. Select Board member Debra Hall, followed by Mark Kelley and Jeffrey Hamilton, called for the emergency meeting.

Construction of the new $3.5 million library is expected to start in late April, with the target for opening in June 2020.

The Rockport Library Foundation has raised about $1.45 million toward its $2 million goal for the project.

Rockport Library Foundation treasurer Bill Leone emphasized that the problem with the invoice was procedural.

"The foundation received an invoice with no details,"  he said.

The foundation needs specific details on the work completed for future audits, he said. The group is aware there are parts of the project that will be paid for by the town, and needs the details of the work, within cost categories, such as engineering.

He mentioned two concerns. One is “decisions that were previously made that we're revisiting. That concerns our donors," he said. The other concern is controversy, he said.

“We don't want to provide funds if we don't know the project is going forward,” he said.

After the meeting ended, Leone said the drama was unnecessary, and that the town's questions could have been resolved without the meeting.

Bates said the foundation's email stating that it was going to hold payment until after the bids for the library construction came in April caused a cash-flow problem for the town. He admitted the invoice was sent with no documentation of the actual expenses, and he acknowledged that documentation was needed.

Foundation President Ann Filley said she asked the town's finance director for more information, but did not hear back. Bates said that Finance Director Megan Brackett had been out on vacation.

Bates said the withholding of payment was not expected, and he spoke to the Select Board about the risk the town was exposed to in spending money that was not in the town budget, with the expectation of reimbursement.

Board member Debra Hall was the first to say she was not aware that the town was at financial risk for expenditures for the library. Hall said she has been a member of the Select Board since June, and said the board was not made aware of this risk. She said she was alarmed by language in the foundation’s email about not being comfortable about how the town is proceeding with the building.

Board member Ken McKinley disagreed with Hall's statement that the board had not been advised about risk, saying that the risk “has been brought up.”

"We've always been at risk for doing all the work prior to the bid process, and not having that approved," he said.

Hall and board member Mark Kelley both said they did not know that the town had spent $125,000 on the library project.

Kelley said he was aware only of the $32,000 cost of the demolition of the old library building, and said, “We were assured that we would be reimbursed for the $32,000.”

Kelley asked that department heads be made aware that spending on the library project should be put on hold immediately.

Board member Jeff Hamilton asked “if there is an agreement between the town and foundation.”

When Bates responded no, board members launched into a discussion about how there was a need for a memorandum of understanding between the town and foundation.

Hamilton said he was disappointed there is no memorandum. He followed up by asking Bates what expenses the town might incur in addition to the $125,000, between now and late April.

McKinley estimated that at most, there would be an additional $10,000 in expenses.

Board member Doug Cole agreed that a memorandum of understanding is needed. The foundation is working with the town as a partner, he said.

Cole said emotions were running high among Rockport's board members, but that "it behooves us to work together.”

To move forward, Bates and the Select Board agreed that a detailed invoice, with receipts for work done and paid for attached, would be prepared March 20, and forwarded to the foundation. Board members asked for quick cooperation between the town and foundation on drawing up a memorandum of understanding between the two entities, for the purpose of building the new Rockport Public Library.

Toward the end of the meeting Leone said that the Foundation would review the town's invoice documentation at its next meeting. He and other foundation members present at the meeting agreed work on the memorandum of understanding was needed, and they would participate in its drafting.

A member of the public stated that is was unfortunate that the emergency meeting wasn't publicized. He said they were talking about money that the taxpayers are paying.

“We voted on a $1.5 million bond, contingent that another $2 million would be provided by another group.”

He asked what would happen if there was an economic crisis and the fundraising could not continue. Right now, the citizens and taxpayers would be responsible, he said. He agreed that a formal agreement is needed between the town and the foundation.

“I think the people will be very satisfied with that,” he said.

Rockport Library Foundation treasurer Bill Leone said the Foundation's concern with a $125,000 invoice for construction services, sent by the town of Rockport, was procedural. (Photo by: Susan Mustapich)
Rockport Selectmen learned during a March 19 emergency meeting that the town and Rockport Library Foundation do not have a memorandum of understanding for the Rockport Public Library construction project. (Photo by: Susan Mustapich)
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