2023-03-27-CEC-ATM-rpt (corrected)

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CORRECTED CAPITAL EXPENDITURES COMMITTEE REPORT TO 2023 ATM attention to the large capital agenda that we face over the next decade. Not so long ago it was just the Police Station rebuild (in progress) and the Lexington High School rebuild (currently estimated at $400 million) on our radar screens. New to the 10 -year agenda are the East Lexington Fire Station, the Cary Memorial Library, the Stone Building, 173 Bedford Street, the Town Office Building, and recreation fields. Missing from these projections, but certainly worthy of mindshare are the Bridge and Bowman Elementary schools which will also need significant updates in that same 10 -year timeframe, if for no other reason than the community will demand physical plant and program parity with the other elementary schools in the district. So in less than a year, we have gone from a single, very -large, debt exclusion in (approximately) FY2027 for the LHS rebuild, to an even larger potential debt exclusion for all of the big-ticket projects that we face in approximately the same time frame. Maybe it is wise to be thinking of bundling all of those into one referendum. Maybe it's not. That's more of a policy decision for the Select Board to spearhead. But getting back to our comments above about creating a structurally sound budget, we may need to face the possible need for an operational override before that big FY2027 debt -exclusion, that will put the latter at risk because of the increased pressure it places on the taxpayer. There are some silver linings this year. In our report last year, regarding another source of uncertainty in capital planning, we said "The results of this [20 -year capital assets study] still have not been incorporated into the Town's long-term capital planning." We are happy to report that the DPF staff has done a fine job of incorporating the results of that study into their planning process. As a closing remark, we would be remiss if we didn't remind you that this Committee is appointed by the Town Moderator and chartered to advise Town Meeting, a mission we take seriously. While we work collegially with Town Departments and other Boards and Committees, our recommendations represent what we believe to be in the best interests of you, Town Meeting, and, therefore, Lexington citizens. We hope you will find this report useful. The Mission of the Capital Expenditures Committee From the Code of the Town of Lexington (§29-13): D. Each year the Capital Expenditures Committee shall request and receive from the Town Manager information on all capital expenditures requested by Town boards and departments that may be required within the ensuing five-year period. The Committee shall consider the relative need, timing and cost of these projects, the adequacy thereof and the effect these expenditures might have on the financial position of the Town. E. The Committee shall prior to each Town Meeting for the transaction of business prepare, publish and distribute by making copies available at the office of the Town Clerk and at Cary Memorial Library, and by mailing or otherwise distributing to each Town meeting member, a report of its findings, setting forth a list of all such capital expenditures together with the Committee's recommendations as to the projects that should be undertaken within the five-year period, the approximate schedule for the funding of each recommended project to the extent practical, and its recommendations on policies with either a direct or indirect effect on capital matters. This publication may be combined with and distributed at the same time as the Appropriation Committee report. From the Code of the Town of Lexington (§29-14): The term capital expenditures shall mean any and all expense of a nonrecurring nature not construed as an ordinary operating expense, the benefit of which will accrue to the Town over an extended period of time. Definition of Capital Projects (Select Board's Recommended Budget & Financing Plan, Page XI -1): A capital project is defined as a major, non-recurring expenditure that generally meets the following criteria: • Massachusetts General Law permits the Town to issue bonds to finance the expenditure; • The expenditure is $25,000 or more;