2016-03-21-CEC-ATM-rpt - Laserfiche WebLink

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CAPITAL EXPENDITURES COMMITTEE REPORT TO 2016 ATM Capital Budget Lexington allocates appropriate resources to needed capital projects by considering them in four categories: •! Big - ticket projects (greater than $1,000,000); •! Small- ticket projects (between $25,000 and $1,000,000); • Enterprise & Revolving Funds projects (greater than $25,000); and • Community Preservation Fund projects (any dollar amount). The Capital Expenditures Committee: • Assesses capital needs brought forward by each department (municipal and schools) as well as the Community Preservation Committee (CPC) through the annual budgeting process; • Works with those departments and the CPC to identify likely capital needs for the next five years; and • Independently considers public facilities, infrastructure systems, and prospective longer -term needs, as well as issues and facilities not being addressed within any department; • Through this report and in presentations, this Committee advises Town Meeting about the necessary and prudent investments to maintain, improve, and create facilities required to serve Lexington citizens safely, effectively, and efficiently. During the year, Committee members also work with and advise staff members in various departments, consult with other public committees — notably in budget summits with the Board of Selectmen, the Appropriation Committee, and the School Committee —and advise in an effort to shape a responsible capital budget for Lexington. Please note these important caveats: • All cost figures are estimates and generally do not reflect the cost in then -year dollars. The degree of accuracy varies by project. Those projected several years into the future are the most uncertain. They are subject to refinement as projects are designed, bid, and built. Even relatively near -term work is subject to cost uncertainties until projects are bid and contracts signed as material, labor, and contract - management costs are often highly variable even over a period of just a few months. • The scope of future projects is often highly uncertain. Accordingly, project budgets are subject to significant revision as the work is defined through the political and budgeting processes. • Dates for appropriations and taxpayer impact of financing projects are given in fiscal years, beginning July 1, unless otherwise specified. Big- Ticket Projects Big - ticket capital projects typically cost $1 million or more and satisfy the conditions under which the Town is permitted to borrow funds for at least 10 years. They require careful analysis, budgeting, and broad support. The Town Manager and BoS' capital policy has generally maintained that such big - ticket projects be funded through borrowing, consistent with their expected life and annual budgeting for operating needs. This borrowing can be done in one of two ways: 1.Through voter- approved debt exclusions that place the costs of financing outside the Proposition 2'/2 tax -levy limit and ensuring broad support, or 2. By absorbing into the operating budget any portion of the borrowing not covered by CPA funds. This option has significant implications for the financing of other Town needs. 4