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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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