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10/29/15 AC Minutes Minutes Town of Lexington Appropriation Committee October29,2015 : ParkerRoom,Town OfficeBuilding,7:30p.m. : Glenn Parker, Chair; John Bartenstein, Vice Chair and Secretary; Kate Colburn; Alan Levine;Beth Masterman; Eric Michelson;Andrei Radulescu-Banu;Rob Addelson (non- voting, ex officio) Members Absent:Mollie Garberg; Richard Neumeier Others Present: Jessie Steigerwald, Chair, School Committee; Margaret Coppe, School Committee; Elaine Ashton, Town Meeting member The meetingwas calledto order at 7:32p.m. Liaison Report: 1.Ms. Colburn reported on the first meeting of the Town Manager’s Working th GrouponSchool Capital (School CapitalWorking Group) held on October 29.The group discussed parameters for afinancial analysis that wouldhelpevaluate the potential impacton the taxpayer of the myriad school and town building projects currently being considered, as follows: The Term of the Debt: The Town usually issues 20 year bonds; a longer term could impact the Town’s AAA credit rating and would increase the interest rate. Regarding the former, the Towns of Newton and Concord recently issuedbondsfor school projects, 30 years and 23 years respectively. Their bond ratings were not affected, indicating that Lexington’s risk is minimal. The potential impact on the interest rate will be explored.The Finance Working Group agreed that 20 and 30 year bondsshould be modelled. The Specific Projects to be Included: TheSchool Capital Working Group agreed that the following projects should be included: Diamond and Clarke Middle School renovations/additions,the purchase and renovations of the Armenian Sisters Academy on Pelham Road(a secondary access road was not discussed), the Lexington High School heating, ventilation, and air conditioning upgrade, remodeling at Minuteman Technical High School to accommodate the pre-kindergarten program, remodeling at HarringtonElementary School, a new Hastings Elementary School(Hastings)without MassachusettsSchool Building Authority(MSBA)funds, a new fire station,and a new police station. It was agreed that anew high school wouldnot be included because the date is unknown and will bemore than fiveyears hence, but aprominently displayed referenceto this potential project will be included. TaxpayerTolerance: There is general agreementthat there shouldn’t be sudden, large, tax increases.The School Capital Working Group agreed thatinitial models will attempt to limit thetax increases attributable to excluded debtat1%annually. Drawing on the Capital Stabilization Fund: The School Capital Working Group considered the strategy for drawing on this fundto control peak tax rate increases or to control the annual rate of increasegenerated by the school and town building projects being contemplated. 1