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STM 2023-1 APPROPRIATION COXMTTEE 31 OCTOBER 2023 Warrant Article Analysis and Recommendations SPECIAL TOWN MEETING 2023-1 Article 2 Appropriate for Prior Years' Unpaid Bills Funds Requested Funding Source Committee Recommendation $402,987 Tax Levy Approve (8-0) The final payment of the FY2023 annual assessment for the Minuteman Regional High School was not issued prior to the close of the fiscal year. All funds for the assessment were fully appropriated in the FY2023 operating budget, and this does not represent any additional payment to the Minuteman Regional High School beyond the annual assessment. Unfortunately, the FY2023 funds that were originally appropriated will not be available for re-appropriation until after the State Department of Revenue (DoR) certifies the Town's Free Cash,which we anticipate will happen later in November. In practice,those funds will not be available for appropriation until the 2024 Annual Town Meeting. Rather than waiting until next spring, staff recommends making the final payment now. The appropriation will be funded from the tax levy,which has the necessary funds now that the DoR has certified the Town's New Growth. Had the payment been made on schedule, this $402,987 from the tax levy would likely have been included in the appropriation to the Capital Stabilization Fund(CSF). The original funding that is currently unavailable will flow to Free Cash,and it could be appropriated into the CSF in the spring. Article 3 Establish, Amend, Dissolve and Appropriate To and From Specified Stabilization Funds Funds Requested Funding Source Committee Recommendation $2,699,381 Tax Levy Approve (8-0) This article requests an appropriation into the Capital Stabilization Fund (CSF). This size of the request is based on budget guidelines that are discussed in more detail below. The CSF was established as a repository of funds to mitigate debt service payments on future capital projects. In September 2021 at the Fall Fiscal Guidelines Summit, the Town Manager presented a proposed Capital Stabilization Funding Framework that would ensure regular and increasing annual appropriations into the CSF. Taking advantage of robust growth in the Town's commercial tax base, the framework dedicates incremental "new growth" revenue derived from certain new commercial developments (those in the Hartwell area and planned developments approved by Town Meeting). This is recurring revenue and it is added to a recurring annual appropriation into the CSF. This guideline has been applied from 2021 onward. At the 2023 ATM, $1,773,137 was appropriated into the CSF based on dedicated new growth revenue from FY2023 and FY2022. New growth in FY2024 includes $2,303,236 from developments flagged under the CSF guideline. This revenue will be added to the dedicated annual appropriation into the CSF in this year and in future years. In addition to the dedicated revenue, this article seeks to appropriate the remaining unused new revenue of $396,145 into the CSF on a one-time basis. The sources of this new revenue are discussed in the Introduction, and the Town routinely appropriates one-time revenue not needed for any other purpose into the CSF. The sum of the newly dedicated revenue and the one-time revenue is $2,699,381. 3