Medical Marijuana Cultivation Sites - Amesbury Host Agreements

Mayor Ken Gray recently signed community host agreements with both of the companies that have received provisional licenses to cultivate medical marijuana in Amesbury, the Alternative Therapies Group (ATG) and Green Heart Holistic.

Both agreements took up and extended the negotiating framework that Mayor Kezer had started late last year, as his term came to an end.

Mayor Gray forwarded copies of the agreements to the City Council today.

I have posted them here:

• Alternative Therapies Group
• Green Heart Holistic

 The agreements are different in technical terms but appear to be the same in the essentials [caveat: I'm not a lawyer]:

• Both companies agree to make unrestricted contributions of $50,000/year to the City for 5 years
• Both companies agree to make additional contributions to Amesbury charitable organizations of at least $5,000/year
• After 5 years, both companies agree to make unrestricted contributions of $50,000/year, with increases chained to the Consumer Price Index
• No end date, save the point that either business either loses their DPH license or moves out of Amesbury
• Both companies agree to be treated as non-tax exempt entities, for the purposes of local property and personal tax, irregardless of how either the Commonwealth or the local Assessor determines they should be treated (given their Chapter 180 status as exempt organizations)
• Both companies agree that they will not seek DPH licenses to dispense medical marijuana in Amesbury

First, let me saythat I'm pleased that Mayor Gray has continued Mayor Kezer's pragmatic and non-sensational approach to these businesses and their coming to our community.  

Assuming that both ATG and Green Heart's provisional licenses are made permanent by DPH, Amesbury stands to realize at least $100,000 a year in unrestricted income.  When we are talking at the level of individual positions (as I believe we will be in this year's budget), that kind of income from two businesses is significant. 

The tax status provision is also significant.  Opinion on how these businesses will (or won't) be taxed locally has been all over the map.  Our own City Assessor has indicated that, in his opinion, these entities (organized as 'Chapter 180' tax-exempt organizations in MA), would not be subject to local property and personal tax.  The MA Dept. of Revenue has officially taken no position on this.  And former Mayor Kezer and other have not considered them to be tax-exempt.  The tax status provision nails this down and says that these businesses WILL be subject to local property and personal tax.  Practically, this likely doesn't mean TOO much, in terms of tax revenue.  Businesses are only taxed on property if they own it.  Both ATG and Green Heart will be leasing space for operations but they may own their cultivation and fabrication equipment, meaning the latter will now definitely be taxable.  Again, not a ton of money but not nothing.

Not having an effective end date is a double-edged sword.  On the one hand, it guarantees all parties a stable and predictable framework.  Budget Directors like this and businesses like this, as well, in terms of predictable obligations.  On the other hand, there is no room to change the arrangement, if circumstances change (save the narrow escape clauses).

Finally, both companies agree not to pursue licenses to dispense in Amesbury, taking that issue of the table for now, at least as far as these two companies are concerned.  

FY15 School Budget Development Process

The City Council received a presentation tonight from Assistant Superintendent Deirdre Farrell on the development process for the Amesbury Public Schools FY15 budget.

First, some important dates.  The School Committee is finalizing its own FY15 budget recommendation for presentation to Mayor Gray by April 1^st.   

The School Committee’s Finance Committee is meeting every Monday through the rest of the month: 3/10, 3/17, 3/24 and 3/31.

The Finance Committee’s Public Hearing for this first draft of the APS budget is on Tuesday, March 18^th, 7:00 p.m. at the Amesbury High School Library.

The Mayor will then take that budget and include as part of the overall City budget for presentation to the City Council in May.  The Mayor’s draft may or may not be the same as the School Committee’s draft presented at the end of March.

Ms. Farrell’s presentation to the Council can be found HERE.

The focus was on explaining how the APS administrations derives a baseline ‘level services’ budget from year to year, as a starting point for the budget.  ‘Level services’ was defined as providing the same level of programs and offerings for students as the prior year.  As we know from our experience last year, even maintaining this baseline level can be a financial and planning challenge.

And ‘leveling’ APS services does not mean ‘level funding’, primarily because the student body in our schools year to year is a very dynamic and changing population.  Each year, an entire cohort matriculates out and during the school year itself, students move in and out of the community, as families relocate and make educational choices for their children.  You have shifting populations across 12+ grades, at 4+ sites, with shifting needs.  You have tens of types of SPED needs – all requiring unique and heterogeneous interventions – for students spread across all grades and locations, in an ever-shifting configuration.   

To construct a picture of the system’s needs the school goes through a series of steps, as outlined in the presentation:

• Reviewing enrollment projections (including SPED and other needs
• Reviewing structural requirements (state and federal mandates, contracts, educational standards and guidelines)
• Align staffing needs with enrollment and requirements (who/where/why)
• Evaluate administrative and support staff needs
• Assess facility and operational expenses, and, finally,
• Review Elective Opportunities

That process would yield a baseline expense picture.

Looking at revenues, there are several variables, all but the local contribution out of the City’s control.  You can read more about the APS revenue sources in THIS document.

• State Chapter 70 aid
• Choice-in tuitions
• South Hampton tuitions (High School)
• Special Ed Circuit Breaker contribution from Commonwealth
• Fees (sports, transportation)
• Grants

Budget drivers:

• Health insurance (good news, we’ve kept costs very low in recent years)
• Contracts 
• SPED costs
• Transportation

Finally, in terms of our local appropriation, we once again face a year where Proposition 2 ½ will limit our budget growth to about $800,000.  You might recall that we were unable to meet the ‘level services’ budget proposed by the School Committee last year, because of still-low tax base value growth.  

BOTTOM LINE: this year’s school budget will likely be as challenging, if not more so, than last year’s.  Same budget drivers, same revenue limitations, same Prop 2 ½ cap.  Everyone should stay informed and involved through this process.  Let me know if you have any questions.

Other materials provided to us:

• Summary Recommendations from MA Assoc. of School Superintendents on Chapter 70 Reform (Ms. Farrell was on the Task Force that recently released this report)
•  MA Assoc. of School Superintendents Chapter 70 Report (full)
• APS Tech Infrastructure presentation
• APS Aspen/XS presentation