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APPROPRIATION COMMITTEE REPORT TO THE NOVEMBER 2012 STM The Committee believes that this is a prudent plan that will greatly soften the unexpected increase in pension assessments. As noted above, the pension funding schedule is reevaluated every two years, and future changes to Retirement Fund assessments will likely occur in response to those reevaluations. Hurricane Sandy Costs Hurricane Sandy resulted in many downed trees, power outages, and other problems. Employees of the DPW and other departments were mobilized to respond to the storm and its damage, which has resulted in unbudgeted expenses. $200,000 is being requested to supplement the affected line items and to cover these expenses. Property and Liability Insurance The request under this Article includes $15,000 to supplement prior appropriations for property and liability insurance because the premiums this year were higher than expected. Community Preservation Act The October 2012 State CPA distribution exceeded what was estimated last spring. It is proposed that the excess of approximately $160,000 be allocated to the unbudgeted reserve of the CPA fund so that it is available for use at the Annual Town Meeting next spring. Water and Sewer Enterprise Funds The MWRA's final FY2013 assessments were lower than its initial assessments, resulting in reduced costs to the Town Water and Sewer Enterprise Funds. The water and sewer rates set in the fall were based on the final assessments, and these budget line item changes represent minor bookkeeping adjustments. The Committee recommends approval of all items in this request (8 -0). Article 3: Establish and Appropriate Funds Funding Committee to Specified Stabilization Funds Requested Source Recommendation $1,600,000 GF Approve (8 -0) State law (M.G.L. Chapter 40, Section 513) permits the creation of multiple, separate stabilization funds for specified purposes. Any action to create a new fund, to alter the specified purpose of a fund, or to appropriate into or out of one or more of the funds requires a two- thirds vote of Town Meeting. In practice, specified stabilization funds supplement the general Stabilization Fund. Funds from the tax levy or from any combination of available funds may be appropriated into a specified stabilization fund. Interest earned on the balance in a stabilization fund remains in that particular fund. The motion under Article 3 will request the creation of a new specified stabilization fund (Proposed Fund) and the appropriation into that fund of $1,600,000 in presently unallocated FY2013 funds. The purpose of this Proposed Fund is to set aside funds for future capital projects, including but not limited to building renewal projects, and /or to mitigate the impact on taxpayers of debt service, both excluded and non- excluded, related to capital projects. There is no plan at this Special Town Meeting to appropriate any funds out of the Proposed Fund. At the time any such request is put forth, Town Meeting will have an opportunity to have an in -depth discussion on the merits of the particular proposal.