2015-11-02-AC-STM#2-rpt - Laserfiche WebLink

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APPROPRIATION COMMITTEE - NOVEMBER 2015 STM #2 Revenue has notified the Town that for its FY2016 tax rate to be approved, the Town must demonstrate that it has funded this deficit. The $662,194 from the HCTF referenced above will be the source of funding this deficit. Financing of the deficit does not require action by Town Meeting. Town staff have begun to audit all transactions posted to the withholding account since its inception on July 1, 2012 in an effort to identify the source of the deficit. That audit is ongoing. After accounting for the financing of the withholding account deficit, the proposed adjustments described below and the proposed tax levy financing of the Fire Station Site Study under Article 6, the amount of un- allocated FY2016 revenue remaining available for appropriation will be approximately $132,000. Operating Budget A number of minor changes to the FY2016 operating budget will be requested under this article. They are described in the following paragraphs. 1) In FY2015, the Town received $575,000 in settlement of a claim that a fire engine purchased in 2010 was defective. The $575,000 was not available for appropriation but flowed to free cash at the end of the fiscal year. At the March 2015 special town meeting, $500,000 was appropriated to buy a replacement en- gine. A $475,000 bond anticipation note was issued in June 2015 to finance the purchase of the replace- ment engine. It is now proposed that $479,608 of free cash be approved as a supplement to the FY2016 debt service budget to retire the principal and interest on the note when it comes due. The net effect is to apply the settlement proceeds to finance the purchase of the new fire engine. 2) A supplemental appropriation of $6,000 will be requested from the tax levy to the line item for Town celebrations to allow the purchase of staging for use during the Patriot's Day parade. This equipment can also be used at other Town events and will be available for possible rentals as well. 3) A supplemental appropriation of $10,000 will be requested from the tax levy to the line item for DPW expenses to allow the Engineering Department to obtain bid documents for renovation of significantly dete- riorated sidewalks immediately adjacent to Cary Library. Accelerating this design work will provide a basis for obtaining more accurate cost estimates prior to seeking an appropriation for reconstruction of the side- walks at the 2016 annual town meeting and allow the project to be completed on an expedited basis. 4) The original FY2016 budget for the Facilities Department approved at the annual town meeting did not include funds to cover an annual "capacity charge" and a solar "carve out" charge that are required to be paid annually under the Town's long -term contract for the supply of electricity. the amount necessary to fund these charges is approximately $179,000. A supplemental appropriation in this amount is being re- quested to cover these costs. Enterprise Fund Budgets Several adjustments are proposed to the water and sewer enterprise fund budgets. 1. Adjustment for Final MWRA Assessments. The MWRA component of the original FY2016 Water and Wastewater Fund budgets was based on preliminary assessments. The MWRA's final sewer assessment, issued in July, was slightly lower than the preliminary assessment, resulting in the reduction of Wastewater Fund costs by $71,540. The water assessment was unchanged. The FY2016 sewer rate set earlier this fall was based on the final assessment and the proposed budget change is a bookkeeping adjustment to reflect the change in anticipated costs. 2. Adjustment of Appropriation for Rate Relief During FY2015 the Town of Bedford, which purchases its MWRA water from Lexington on a pass - through basis, again drew an extraordinary volume of water from Lexington. As the result of an earlier contamination problem, Bedford decided in the fall of 2014 and spring of 2015 temporarily to shut down several Bedford town wells for maintenance. Because those wells are ordinarily used by the Town of Bedford as a supplemental water source, the shutdown significantly in- creased Bedford's use of MWRA water. The excess usage by Bedford resulted in surplus FY2015 Lexing- ton water fund revenues of approximately $406,000. 7