2011-03-CEC-ATM-rpt - Laserfiche WebLink

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CAPITAL EXPENDITURES COMMITTEE REPORT TO 2011 ATM Capital B Lexington allocates appropriate resources to needed capital projects by considering them in four categories: • Big-ticket projects (greater than$1,000,000); • Small-ticket projects (between$25,000 and$1,000,000); • Enterprise & Revolving Funds projects (greater than$25,000); and • Community Preservation Fund projects (any dollar amount). The Capital Expenditures Committee: • Assesses capital needs brought forward by each department (municipal and schools) as well as the Community Preservation Committee(CPC)through the annual budgeting process; • Works with those departments and the CPC to identify their anticipated capital needs during the next five years; and • Independently examines public facilities and prospective longer-term needs, as well as issues and capital facilities not being addressed within any department. • Through this report and in presentations, this Committee advises Town Meeting about the necessary and prudent investments to maintain, improve, and create new facilities required to serve Lexington citizens safely, effectively, and efficiently. During the year, Committee members also work with and advise staff members in various departments, consult with other public committees, and make our views known to the Selectmen and School Committee, in an effort to shape a responsible capital budget for Lexington residents. Please note these important caveats: • All cost figures are estimates. The degree of accuracy varies by project. Those projected several years into the future are the most uncertain. They are subject to refinement as projects are designed, bid, and built. Even relatively near-term work is subject to cost uncertainties until projects are bid and contracts signed as material, labor, and contract-management costs are often highly variable even over a period of just a few months. • The scope of future projects is often highly uncertain. Accordingly, project budgets are subject to significant revision as the work is defined through the political and budgeting processes. • Dates for appropriations and taxpayer impact of financing projects are given in fiscal years, beginning July 1,unless otherwise specified. Big-Ticket Projects Big-ticket capital projects typically cost at least $1 million; for financing purposes, they satisfy the conditions under which the Town is permitted to borrow funds for at least 10 years (their expected service life is at least that long). Such projects obviously require both careful analysis and budgeting, and broad support. The Town Manager and Selectmen's capital policy has generally maintained that such big-ticket projects (but not necessarily including those proposed for funding under the CPA) will be funded through borrowing, consistent with their expected life and with responsible annual budgeting for operating needs. Further, this borrowing is generally done through voter-approved"debt-exclusion" overrides, which place the costs of financing these projects outside the Proposition 21/2 tax-levy limit. The latter goal has not always been satisfied. The Town's share of the costs to renovate Cary Memorial Library, for example, was absorbed within the operating budget; so were certain additional costs associated with the renovation of the secondary schools (this project was originally approved by voters in a debt-exclusion override). In each case, it was imperative to proceed within the time available for the projects to qualify for substantial 9