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APPROPRIATION COMMITTEE - ATM 2017
<br />September 2016 Special Town Meeting
<br />At a Special Town Meeting convened on September 21, 2016 (STM 2016 -5), an increase of approximately
<br />$2,000,000 in FY2017 revenue over the amount estimated at the 2016 Annual Town Meeting was recognized.
<br />The primary reasons for this revision were: (1) an increase of approximately $1,500,000 in Chapter 70 State
<br />Aid over the original estimate attributable to school enrollment increases and their impact on the school
<br />"foundation budget" funding formula; (2) a $200,000 upward revision in the estimate of new growth; and (3)
<br />the release of revenue previously set aside to cover a potential FY2016 snow and ice deficit, but which was
<br />not required as the deficit was resolved by intra- budget transfers. The bulk of the additional revenue recog-
<br />nized, $1,878,771, was appropriated to the Capital Stabilization Fund, bringing the balance of that fund to a
<br />little less than $24,000,000.
<br />The primary motivation for the Special Town Meeting was to respond to an opportunity which had arisen to
<br />acquire the property located at 171 -173 Bedford Street, the site of the former Liberty Mutual office building.
<br />The Board of Selectmen proposed that this property could be used temporarily as swing space by the Fire De-
<br />partment during a reconstruction of the Main Headquarters Fire Station, and then possibly used again as swing
<br />space during a subsequent reconstruction of the Police Station, or as a permanent new location for the Police
<br />Station. Town Meeting appropriated $4,300,000 to fund the agreed -upon purchase price of the property, and
<br />the Town thereafter acquired the property. An additional $143,000 was appropriated to fund planning and
<br />engineering studies and for legal costs.
<br />At the September 2016 Special Town Meeting, an appropriation was also made to fund an overrun of
<br />$1,430,000 in the costs of acquiring and installing six modular classrooms at the Bowman, Bridge, and Fiske
<br />elementary schools to help relieve overcrowding at those schools. The original amount appropriated was
<br />$3,000,000 but the lowest bid came in at $4,430,000. To meet the overrun, $520,000 of the borrowing author-
<br />ization previously appropriated for design of the Hastings School should MSBA not approve that project was
<br />redirected to offset the overrun, and the balance was funded by a supplemental appropriation of $910,000 by
<br />Town Meeting.
<br />Finally, a relatively small appropriation of $65,000 was made at the September 2016 Special Town Meeting
<br />to fund a feasibility study for a new police station. Preliminary conceptual plans for renovation and expansion
<br />of the existing police station or, alternatively, for the construction of a new building located at 171 -173 Bed-
<br />ford Street following the Fire Department's use of that property as swing space were presented to the Board of
<br />Selectmen by Tecton Architects on March 10, 2017.
<br />The Summit Process and Estimated FY2018 Revenue
<br />In the usual series of budget summits, joint meetings of the Board of Selectmen, the School Committee, the
<br />Appropriation Committee, and the Capital Expenditures Committee, held throughout the fall of 2016 and into
<br />early 2017, the Town Manager presented: (1) his FY2018 revenue estimates, including the certified Free Cash
<br />available for appropriation in FY2018; (2) the amounts proposed to be set aside for various special purposes,
<br />including a significant dedication of available free cash for further strengthening of the Capital Stabilization
<br />Fund and of the Post - Employment Insurance Liability (PEIL) fund; and (3) the proposed allocation of the bal-
<br />ance of this year's incremental revenue between the School Department and the municipal departments for
<br />use in developing their respective FY2018 operating budgets.
<br />Overall revenue growth, resulting from a combination of the annual allowed 2.5% increase in the tax levy,
<br />estimated new growth, state aid, and local receipts, continues to be healthy, increasing over FY2017 revenues,
<br />on a net basis after adjustments, by about 5% (compared with growth of 6.9% from FY2015- FY2016 and
<br />6.7% from FY2016- FY2017). It should be noted that the Governor's initial proposed FY2018 state budget
<br />again shows a material increase of Lexington's Chapter 70 aid — this year growing over $2 million, from
<br />$11.6 million to $13.7 million — which, if realized, would increase revenue growth to 5.6 %. Certified free
<br />cash is up this year by about $3 million, increasing from approximately $11 million at the end of FY2016 to
<br />approximately $14 million at the end of FY2017.
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