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is 2013 AKinual 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, proposes the operating and capital budgets and manages the daily operation of all Town departments. The Town Manager's Office also includes the Human Re- sources Office. APPOINTED by the Board of Selectmen: Carl Valente has served as Town Manager since July 2005. Form of Government The current Town Manager /Selectmen /Town Meeting form of government dates back to a 1969 Act of the State legislature based on a plan developed by the Town Struc- ture of Government Committee. Lexington had previous- ly operated under a Selectmen /Executive Secretary plan. Three hundred years ago, shortly after incorporating as a township in March of 1713, the first Town Meeting (com- prised of adult male property owners) "selected" three men to conduct the business of the Town between Town Meet- ings. The Selectmen /Town Manager Act brought major re- alignment of responsibilities including changes in methods of appointment, closer supervision of administrative func- tions, and centralized control of purchasing. The changes were so significant that after the Selectmen interviewed 66 candidates for the new Town Manager position in 1969, they decided to bring in a brand new person rather than promote their Administrative Assistant for the previous six years, Al Gray. Only three Town Managers preceded Carl Valente: Walter O'Connell (1970- 1976), Robert Hutchin- son (1976 -1987) and Richard White (1987- 2004). Budget The FY2014 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 consensus on a balanced budget for Town Meeting consideration that addressed many pressing needs and did not require a Prop- osition 2 -1/2 override (the last Operating Budget Override was approved for FY2008). Major budget issues include the Towns unfunded pension liability and the other post - employment benefits (OPEB) liability for retiree health care costs. According to the lat- est actuarial study, the Town is at 80% funding of its pen- sion liability, down from 88% three years earlier, due largely to a required change in actuarial assumptions. Lexington's Retirement Board has extended the schedule for full fund- ing to 2030. Unlike the situation with pensions, the Town is not required to pre -fund its OPEB liability of roughly $250,000,000 - 8300,000,000 over the next 30 years. How - ever, Town Meeting has appropriated funds for six consecu- tive years toward this liability and the current balance in the OPEB trust fund is approximately $2,500,000. A Special Town Meeting on November 19, 2012 autho- rized an additional $2,600,000 for the new Estabrook School, supplementing the $39,724,248 previously appro- priated for this project. It also appropriated $1,500,000 for school access improvements, largely for Grove Street and Robinson Road. The FY14 budget provided $1,600,000 in property tax relief to offset a portion of the Proposition 2 -1/2 debt exclusion related to the Bridge, Bowman, and Estabrook School capital projects. The 2013 Annual Town Meeting also appropriated $2,184,000 for a new Capital Projects /Debt Service Reserve /Building Renewal Stabili- zation Fund. Free Cash for FY12 was certified at approximately $12.6 million, which was appropriated to support the FY14 capi- tal and operating budgets. Finance The Town has begun negotiating collective bargaining con- tracts on a staggered schedule, so that they expire in differ- ent years. This will provide less uncertainty in budgeting for future personnel costs, as some bargaining units are likely to have settled contracts at any given time. In February 2013 Moody's Investment Service reaffirmed Lexington's Aaa bond rating, citing the Town's sizeable and stable tax base, healthy financial position, and manageable debt burden among other factors. Lexington is one of only 30 Aaa communities in Massachusetts. In 2013 the Town issued $48.7 million in General Obligation Bonds. The bonds were sold at an interest rate of 1.886 %. In Febru- ary $2.9 million in 1 -year Notes were issued and sold at an interest rate of .22 %. In June 81 million of 8 -month Notes were issued and sold at an interest rate of .31 %. On March 18, a Special Town Meeting approved purchase of almost ten acres of property at 33 Marrett Road. This property is being sold by the Scottish Rite Masons, who will move their offices into a new addition to the Museum of Our National Heritage. The Town plans to locate a com- munity center in the major building on the property, which we expect to take possession of toward the end of calen- dar year 2013. This purchase is a significant decision by the community and the creation of a Community Center will involve the efforts of Town staff, boards and committees over the next several years.