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6 1 2012 Annual Report Town Manager ROLE: As the Chief Executive Officer of the Town, es- tablished in the Selectmen Town Manager Act, the Town Manager administers the policies and procedures of the Board of Selectmen, enforces bylaws and actions passed by Town Meeting, and prepares the budget and manages the daily operation of all Town departments. The Town Man- ager's Office also includes the Human Resources Office. APPOINTED by the Board of Selectmen: Carl Valente has served as Town Manager since July 2005. Budget The FY2013 budget process continued the collaborative effort among the Board of Selectmen, School Committee, Appropriation and Capital Expenditures Committees, and the staff. Five budget summit sessions resulted in consen- sus on a balanced budget for Town Meeting consideration that addressed many pressing needs and did not require a Proposition 2 -1/2 override. Following the Annual Town Meeting an additional $3.1 million became available for appropriation, primarily as a result of greater than estimated state aid, and lower than predicted employee health insurance costs. These additional funds were appropriated for the Town's pension obligation (81million), retiree health insurance liabilities (8500,000) and the Grove Street /Robinson Road sidewalk and inter- section improvements (81.5 million). Free Cash for FY11 was certified at approximately $8.1 million, which was available for appropriation to support FY13 capital and operating budgets. Leading up to the 2012 Annual Town Meeting there were a series of discussions about how to use "savings" in health insurance costs projected from moving all Town employ- ees and retirees to plans under the Commonwealth's Gen- eral Insurance Commission (GIC). The approved FY2013 budget included additional capital funding for streets, a re- duction in school bus fees, and a partial tax reduction that otherwise would have occurred due to the Bridge, Bowman and Estabrook schools debt exemption. Finance The Town of Lexington and the Public Employee Com- mittee (PEC) successfully negotiated a successor collective bargaining agreement covering Fiscal Years 2013 through 2015, which included transferring all health insurance sub- scribers to the State's Group Insurance Commission (GIC) program effective July 1, 2012. The Town projected reduc- tions in the health insurance budget as a result of premi- ums increasing at a lower rate than the historical average, and more progressive plan design approach under the GIC. Budget savings are projected to be $3,379,821 in FY2013 with health insurance costs increasing in future years at a smaller percentage than in prior years. In December, Moody's Investment Service reaffirmed Lex- ington's Aaa bond rating, citing the Towns sizeable and stable tax base, healthy financial position, and manageable debt burden among other factors. Lexington is one of only 33 Aaa communities in Massachusetts. The Town issued $19 million in General Obligation Advanced Refunding Bonds to refinance $22 million of debt issued in 2003. The bonds were sold at an interest rate of 1.749 %. This refinanc- ing will save a total of $2.4 million over the remaining life of the bonds. Performance measurement efforts continued in the Police, Library, and Public Facilities departments. A fall Special Town Meeting approved funding of major renovations for Bridge and Bowman schools, contingent on a positive debt exclusion override vote. In January 2012 the voters approved excluding the Bridge and Bowman debt, as well as debt to replace Estabrook School, from the lim- its of Proposition 2 -1/2. A Special Town Meeting in April authorized funding for replacing Estabrook, on a schedule sooner than originally planned because of the discovery of polychlorinated biphenyls (PCBs) in the school building. Economic Development Economic development remains a high priority of the Board of Selectmen. The top economic development ini- tiatives as outlined by the Board of Selectmen are to: 1) Enhance the vitality of Lexington Center; 2) Support small business development; and 3) Increase commercial invest- ment in the Hartwell Avenue District. Melisa Tintocalis, the new Economic Development Director, joined the Town at the end of January 2012 and immediately began imple- menting key components of these initiatives. A thriving Center is a reflection of the Lexington commu- nity and central to its identity. In recent years the Town has dedicated its efforts on improving the Center through public infrastructure enhancements, parking management, and creating a healthy business environment. The Center Streetscape Plan, designed to revitalize the aging landscape and infrastructure, continues to advance. The Economic De- velopment Director has worked with various Town depart- ments to support the implementation of the plan, in partic- ular the addition of new public space at the entrance to the Grain Mill Alley adjacent to the Bank of America, and the launch of the Center traffic study. In addition, the Econom- ic Development Director and Planning Department have collaborated on new efforts to leverage one of the Center's unique amenities, the Minuteman Bikeway. With nearly 4,000 users at its peak, the bikeway offers pedestrian and bi- cycle access to the Center. To promote bicycling and attract