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2022 ATM,2022-1 STM APPROPRIATION COXMTTEE 21 MARCH 2022 funding goal is reached, and, assuming the full-funding status is maintained, the annual costs for contributory retirement will be significantly lower. Health insurance costs make up the bulk of the Employee Benefits budget. The FY2023 request for health insurance is $29,554,494, which represents a 4.5% increase over the estimate for FY2021. The Town remains a member of the State's Group Insurance Commission (GIC) health insurance program, which has helped hold down the rate of cost increases. Since joining the GIC program in FY2016, the FY2023 split of healthcare premiums between employer and subscribers is 82/18 or 75/25 depending on the health plan chosen by the employee (the town pays a larger share for employees who choose a lower cost plan). The Brown Book, on pp. IV-6 and IV-7, contains a discussion of health-benefit costs, including changes in the numbers of subscribers since FY2017. The projected number of subscribers used for the FY2023 budget represents a 2%increase over FY2022 and a 12%increase since FY2017. Solar Producer Payments (2300) This line item reflects payments for the installation and operating costs of the solar array at the Hartwell Ave compost facility. Against the annual cost of$390,000, which covers both the initial capital cost and maintenance costs, staff estimates that the array will generate net-metering credit payments from the electric utility Eversource, payments in lieu of taxes, and a small amount of lease income, so the array is projected to generate a net contribution to the General Fund of$336,400. Note this budget item does not include the Town's rooftop solar arrays and payments in lieu of taxes for the solar operations, which are recorded under personal property taxes per the Massachusetts Department of Revenue. The Brown Book includes tables on p. IV-11 that present a more complete set of estimates for the Town's solar installations,with projected net revenues of$492,900 in FY2023. Debt Service (2400) Line item 2400 covers annual payments for within-levy debt service. Gross within-levy debt service is projected to decrease by about 27%as indicated in the table above because the debt incurred for the purchases of real estate on Pelham Rd. and Bedford Street has been retired. When the set asides for the payments stemming from these real estate purchases as well as certain cemetery revenues are removed from the FY2022 gross debt service totals, the net amount debt service is projected to decrease by 6.2%, which is, of course, below the Town's target annual growth ceiling of 5.0%, so there is no recommendation to use the Capital Stabilization Fund as a funding source this year(FY2023). The Town also makes annual payments for exempt debt service, but these payments are not appropriated by Town Meeting. Every project funded with exempt debt must be approved by a majority of voters in a town-wide referendum, after which the Select Board sets the tax levy to provide sufficient funding. The portion of the tax levy raised for exempt debt service is exempt from the limits imposed by Proposition 2'/2. There is a recommendation to appropriate $800,000 from the Capital Stabilization Fund to mitigate the exempt debt portion of the property tax. See pp. IV-12 and IV-13 in the Brown Book for details on exempt debt. Staff estimates that the combined gross debt service for exempt and non-exempt debt will decrease by 13.4% from the prior fiscal year. For more details, see the Debt Service section in the Brown Book. Reserve Fund (2500) The Reserve Fund is a small fund reserved for time-critical, extraordinary and unforeseen expenses. Once appropriated, can be used during the fiscal year without further approval from town meeting. Requests for transfers from this fund require formal approval by the Appropriation Committee,but they are generally initiated by Town or LPS staff or the Select Board. The FY2023 requested appropriation for the Reserve Fund is $750,000, the same amount as appropriated in FY2022. In FY2019 the fund remained unused. In FY2020, $100,000 was transferred to the Fire Department to offset increases in spending due to the Town's response to the COVID-19 pandemic. In FY2021, $15,000 was transferred to the Conservation Department in response to a Letter of Map revision from the Town of Belmont, i.e., to potential changes in areas that are designated to be at high risk of flooding. As discussed in the preface, the Committee approved a transfer of$174,000 in FY2022 to the Recreation Enterprise Fund, which amount will be restored under Article 21 of this town meeting. At the end of the fiscal year any unused funds in the Reserve Fund flow to Free Cash. 14