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APPROPRIATION COMMITTEE REPORT TO NOVEMBER 2011 STM Introduction This report includes the Committee's advice and recommendations regarding all appropriations of Town funds that are anticipated in the Town Warrant, and other municipal matters that may come before Town Meeting. The report is published and distributed to the members of Town Meeting as a printed document and as an electronic document via the Town website. The Committee also makes presentations during Town Meeting, including recommendations on appropriations and other matters for which the Commit- tee's formal position was pending at the time of publication. Developments since adoption of the FY2012 budget Work has proceeded on the design and engineering for the proposed renovations at the Bridge and Bow- man Elementary Schools. The November 2011 Special Town Meeting (STM)will consider the appropria- tion of funds for the construction phase of this project under Article 2, contingent on the passage of a debt exclusion override. Work on the design and engineering for the proposed replacement of the Estabrook School has also proceeded on schedule; however, the appropriation of funds for the Estabrook project will not be requested until the annual town meeting next spring since the final cost and the share to be paid by the Massachusetts School Building Authority (MSBA) have yet to be finalized. A debt exclusion referen- dum covering both the Bridge and Bowman and the Estabrook projects is expected to be presented to Town voters in late January 2012. The Town endured two significant bouts of severe weather: Hurricane Irene in late August and the early snow storm of October 29. Each produced widespread power outages and extraordinary damage to roads and trees. The Board of Selectmen have requested an appropriation under Article 4 to cover some of the costs of the recovery. The Board of Selectmen will also take this opportunity to propose various adjustments to the FY11 oper- ating and capital budgets under Article 4. Changes in Estimated FY12 Revenue since 2011 ATM The Town enters this STM with approximately $2,820,000 available for appropriation. This is comprised of$1,700,000 in revised revenue estimates above those presented at the 2011 ATM, and approximately $1,970,000 in reduced expenses, less approximately $650,000 for the FY11 Snow and Ice deficit, and less $200,000 used to increase the overlay account. The major driver of the revenue increase is attributable to "new growth" in the property tax levy being $1,465,000 greater than the original estimate. New growth is subject to final approval by the Dept. of Revenue which is anticipated in late November or early December 2011. The other large factor is the re- lease of the set-aside of$300,000 for the anticipated FY11 Snow and Ice deficit. The reductions in expenses result from two events. With Town Meeting approval, the Town will recog- nize a savings of$1,250,000 on town employee health insurance costs that were lower than predicted due to reduced claims in the prior year. The Town will also release the set-aside of$727,628 intended to off- set any reductions in State Aid for FY12. This set-aside is technically similar to the FY11 Snow and Ice set-aside, but for presentation purposes it has been treated as an expense in this analysis. State Aid was reduced by only$67,214 and the Town received a supplemental payment of$93,726 from the State which negated this shortfall. These positive events were modestly offset by a reduction in estimated FY12 Local Receipts of$124,834. This reduction is driven by a more up-to-date analysis using the actual experience from FY11,but rough- ly one third of the shortfall ($46,000) resulted from the School Committee's decision to reduce school music fees by 50%. Page 4