Hamilton officials feel the 10 percent administrative fee that is paid for Wenham to administer the Hamilton-Wenham Library is too high and are working to renegotiate it.
"We feel it is not justified at the high rate," said Town Manager Michael Lombardo.
The fee amounts to about $50,000 per year, Lombardo said. That's essentially the salary of a full-time employee but Wenham has not hired a Town Hall employee to administer the finance, insurance and human resources functions of the library, he said.
At issue is the so-called "indirect costs," and not the pay or operating cost for the library. When the two towns runs a combined department, one town takes the lead and charges the other town a 10 percent fee to cover the "indirect costs" with administering the department.
The other departments that fall under similar arrangements include the Council on Aging van, Recreation Department and the Emergency Center dispatch. Wenham will be leaving the dispatch center this summer to go to the new Essex Regional Communications and the amounts for the other departments are much smaller than the library - about $16,000 for the Recreation department and a few thousand dollars for the van. Hamilton is the lead for the Recreation Department and dispatch and Wenham is the lead for the senior van and library.
For the time being, Hamilton has not paid the fee portion of the library costs to Wenham until negotiations are complete. The negotiations should be completed soon and cover fiscal 2013, which ends June 30, as well as fiscal year 2014, Lombardo said.
"We're very close to having an agreement," he said. "Hamilton feels it is something we should so for the current year."
Concern about the fee was first raised about two years ago but discussions just began in earnest in recent weeks. Lombardo said the discussion involves himself, Hamilton Finance Director Deb Nippes-Mena, Finance and Advisory Chairman John McWane, Finance and Advisory Committee member Scott Maddern, Wenham Town Administrator Mark Andrews, Wenham's outside finance team and Finance and Advisory Chairwoman Catherine Harrison.
The regional agreement between the two towns, attached to this story as a PDF, says the fee can be renegotiated without the entire agreement being renegotiated.
"To date, it has ever been done," Lombardo said.