2013-03-ATM-AC-rpt - Laserfiche WebLink

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APPROPRIATION COMMITTEE REPORT TO THE MARCH 2013 ATM overhaul of the facility. Funding for design and engineering for this project will be considered under Arti- cle 8(c). The Board of Selectmen formed the Ad Hoc Townwide Facilities Master Planning Committee to perform a comprehensive long-range analysis of the needs and priorities for the Town’s various facilities. The re- port of this committee will be published soon, and the Committee is hopeful that it will offer critical in- sight and practical options regarding the Town’s capital planning. The Committee has made no Reserve Fund transfers so far during FY2013, however the Town’s snow and ice expenses for FY2013 may require a Reserve Fund transfer. The FY2014 Budget The Town Manager has proposed a balanced, level service budget containing some strategic program im- provements while adjusting to a significant increase in school enrollment. The budget does not require an operating override. Total revenue is projected to increase by $11,300,000 or 6.9%, a relatively large annual increase that is largely the result of an increase in non-recurring funds that will be allocated largely to cash capital and reserves. Total property tax revenue is projected to grow by 4%, and the average residential tax bill is pro- jected to increase by 2.8%. As seen here, the growth of revenue usually exceeds the growth of tax bills due to “new growth” from commercial and residential development which expands the tax base inde- pendently of the 2.5% annual increase allowed by Proposition 2½. The budget includes $1,600,000 in property tax relief for FY2014, and $2,184,000 set aside for future property tax relief and/or future capital building projects in the Capital Projects/Debt Service Re- serve/Building Renewal Stabilization Fund. Approximately $2,400,000 in unallocated funds that was initially set aside for possible appropriation at a Special Town Meeting in the fall of 2013 to fund the construction of additional high school classrooms was instead used to finance the purchase of the property at 33 Marrett Road. If the high school project proceeds in the fall, it will probably require debt funding. As always, the Town faces a challenge when crafting a budget in the absence of a firm commitment on the amount of State funding to expect, primarily in the form of aid under Chapter 70 (schools) and Chap- ter 90 (roads). This year, the situation is particularly volatile. The Governor has proposed major changes to the State’s tax revenue system and to the formulas used to apportion State aid. As presented, these changes would greatly increase the Town’s Chapter 70 aid, however the Governor’s budget must be rec- onciled with budget plans offered by the legislature, where it will most certainly be modified. So, it is very difficult to predict the final outcome at this time. In addition, the federal government has triggered a sweeping series of budget cuts under a system of sequestration that will reduce federal aid and grants to the State and Town. Due to this uncertainty in the State and federal budgets, $750,000 has been set aside for potential reductions in State and federal aid. A rapid increase in enrollment within the Lexington Public School system has put a serious burden on the School department. The Superintendent has requested funding for new staff to meet the legal require- ments and programmatic needs of the population. For the coming fiscal year, this funding did not require a deviation from the Town’s revenue allocation model. The Committee expects that the need to provide suitable classroom space for a growing school population and the associated staff will have a significant impact on future budgets. Finally, this budget makes significant investments in capital improvements to the Town’s buildings and infrastructure. The Committee agrees that this is a worthwhile use of funds while the Town is not under pressure to meet its basic budget needs. 6