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CAPITAL EXPENDITURES COMMITTEE REPORT TO 2022 ATM& STMs 2022-1 & -2
<br /> goal was to avoid any further borrowing until a substantial portion of the current obligations was retired.
<br /> The CPC anticipated that it would have a fund balance of $3,115,061 after payment for all projects
<br /> proposed to this year's Town Meeting (assuming all pass), its debt-service obligation, and allocation for
<br /> its administrative needs. However, when Article 10(e) reduced its request, and Article 10(k) was IP, the
<br /> fund balance became $8,650,061. While the CPC's policy had been to maintain a fund balance of
<br /> approximately $2 million, currently the CPC considers that potential large projects in the near future
<br /> make it advisable to keep a larger balance on hand.
<br /> The Town, the CPC, and this Committee are mindful of the additional taxes which the CPA imposes on
<br /> our community at a time when our tax burden is projected to rise to pay for essential capital projects like
<br /> the new Police Station and a new or renovated Lexington High School. To lessen the impact on
<br /> Lexington households, particularly those with smaller homes, the Town has adopted a provision in the
<br /> CPA law that exempts the first$100,000 of home value from the CPA surcharge.
<br /> As is clear from the Table in this section, by choosing the maximum 3% surcharge, Lexington has
<br /> received the maximum supplement allowed paid from the State for every year since 2007. As of FY2022,
<br /> the Town has received$17,989,705. Had our participation been at the 1%level,not only would our initial
<br /> proportional distributions have been lower, but we would not have received the second and third round
<br /> distributions, and our total supplemental receipts would have been less than a third of what they were. For
<br /> relatively small contributions per household, the Town has realized enormous benefits, and will continue
<br /> to do so, even with the lower percentage supplements of recent years. For these reasons this Committee
<br /> continues to believe that Lexington should maintain its CPA participation at the 3% level, and that not to
<br /> do so would be "penny wise and pound foolish."
<br /> See the CPA Summary in the Brown Book (Appendix C, Page C-8) for a summary of the CPF status,
<br /> including projects that have been funded from the CPF since its inception in Lexington and those being
<br /> requested for FY2023 under Article 10.
<br /> Enterprise Fund Projects
<br /> The Town operates three enterprise funds (EFs) for revenue-producing activities funded outside the tax
<br /> levy by user fees: water distribution,wastewater distribution (sanitary sewers), and certain Recreation and
<br /> Community Programs (R&CP) services, such as the golf course, swimming pools, and tennis courts. The
<br /> costs of these activities are normally funded out of their respective enterprise funds. Unlike property-tax
<br /> revenues, EF fees are not subject to a limit under Proposition 2'/2. Recreational playground restoration and
<br /> equipment, in contrast, are not fee generating and capital investment for such equipment is therefore,
<br /> normally funded as part of the small-ticket program of the General Fund (GF)—sourced by the tax levy.
<br /> The 2012 amendments to the CPA expanded the range of recreation projects that are eligible for funding
<br /> under that Act; therefore, many recreational projects have since been submitted to our CPC with requests
<br /> for use of the CPF as the fund source. That continues this year; many of the recreation projects coming
<br /> before this ATM will request full or partial funding from the CPF rather than from the EF or GF.
<br /> This Town Meeting will consider requests from the Departments that manage the R&CP, Water, and
<br /> Wastewater, and R&CP EFs. (See Articles 11, 13, and 14.)
<br /> Revolving-Fund Projects
<br /> Revolving funds established under the provisions of Massachusetts General Laws (M.G.L.) Chapter 44,
<br /> Section 53E'/2, must be authorized annually by Town Meeting vote. (As the Schools Food Service
<br /> Revolving Fund was established, instead, under M.G.L. Ch. 548 of the Acts of 1948, it does not require
<br /> Town Meeting's annual authorization or appropriation to use it.)
<br /> Each fund is credited with only the departmental receipts received in connection with the programs
<br /> supported by such revolving fund, and expenditures may be made from the revolving fund, without
<br /> further appropriation, for those programs.
<br /> Revolving funds are usually expended to cover non-capital costs, and this Committee normally does not
<br /> report on their annual authorizations unless a capital expense is contemplated. Such an expense is not
<br /> contemplated in FY2023.
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