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2022-3 STM APPROPRIATION COXMTTEE 25 OCTOBER 2022 Introduction This report includes the Appropriation Committee's analysis and recommendations regarding all appropriations of Town funds that are anticipated at this special town meeting, and other municipal matters that may be considered. This report is distributed as an electronic document via the Town website. The Committee also makes presentations during Town Meeting, including recommendations on appropriations and other matters for which the Committee's formal position has been revised since the time of publication. The Committee published its Report for the 2022 Annual Town Meeting and 2022-1 Special Town Meeting on March 21, 2022. Please refer to the preface of that report for more details of how this report is prepared and the conventions used within. The Committee's goal is to publish its report at least one week prior to the date when the articles covered in this report may be taken up by Town Meeting. That date is typically the same night that the annual town meeting or a special town meeting is convened. Committee Membership Meg Muckenhoupt stepped down from the Committee at the end of her term on June 30, 2022. Sean Osborne was appointed to the Committee and began his first term on July 1, 2022. The Committee currently has one empty seat out of nine. Sara Arnold, our dedicated and steadfast Recording Secretary, resigned at the end of August 2022. Reserve Fund The Committee approved a Reserve Fund transfer of$750,000 on September 27, 2022, to fund the purchase and installation of a new Public Safety Communications system. This system is used by both the Police and Fire Departments for communication via radio between local public safety staff, and to coordinate service with other nearby towns. The existing system, which consists of an office switchboard with nine remote transceivers and antennas, has become less reliable since the Police Department relocated to its temporary station at 173 Bedford Street. This is due mainly to the lack of copper phone line service at the temporary station. The new system will use fiber optic phone lines and will provide significantly improved functionality with better radio coverage. The office components for the new system will be relocated to the new Police Headquarters in the future. Delivery time for the new system is in the six month range with an expected cost of $800,000 (including contingency). The Select Board requested the use of the full balance of the Reserve Fund to accelerate the purchasing cycle, and will supplement any remaining cost using other sources at their disposal, such as ARPA funds. Article 4 will appropriate a portion of the original balance back into the Reserve Fund using new growth funds. Developments Since Adoption of the FY2023 Budget The FY2022 budget was successfully closed out and the Town is awaiting its final certification of available funds ("free cash") from the State Department of Revenue. New growth revenue for the Town is now estimated to be at least $6,117,138, which exceeds the estimate in the original FY2023 budget of$2,807,138 by $3,310,000. Of this $3.3 million, $1.7 million results from increases in the assessed value of new developments governed by a Preliminary Site Development and Use Plan (PSDUP) that were approved by Town Meeting, in addition to new developments within the commercial zone at Hartwell Avenue. Just over$1 million of that amount is personal property tax revenue from Takeda Pharmaceuticals, which has opted not to use the manufacturing exemption for personal property at its Lexington facilities. In anticipation of the forthcoming Lexington High School construction project, the Town has adopted a policy to direct new growth revenue from PSDUP developments and the Hartwell Avenue commercial zone into the Capital Stabilization Fund. Accordingly, Article 3 will request an appropriation of$1.7 million from the tax levy into that fund. 1