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03/16/2017 AC Minutes Minutes Town of Lexington Appropriation Committee (AC) March 16, 2017 Place and time: Selectmen's Meeting Room (moved from Parker Room), Town Office Building, 7:30 p.m. Members present: John Bartenstein, Chair; Alan Levine, Vice -Chair & Secretary; Ellen Basch; Eric Michelson; Richard Neumeier; Andrei Radulescu-Banu; Sanjay Padaki; Lily Manhua Yan; Jian Helen Yang Members Absent: Carolyn Kosnoff, Assistant Town Manager, Finance (non-voting, ex officio) Other Attendees: Bob Cunha, Chair, Retirement Board The meeting was called to order at 7:35 p.m. 1. FY2018 Budget Issues and Report to 2017 Annual Town Meeting (ATM) on Financially Related Warrant Articles ATM articles were reviewed in preparation for votes on their merit and to determine whether additional information was necessary in preparation of the report. Discussion and/or actions were taken on the following articles: • Article 30: Adjust Retirement Cost of Living Adjustment (COLA) Base for Retirees: Mr. Cunha provided historical context regarding the application of COLAs to Town pensions, discussed average pension amounts received by retirees, and reviewed the process for determining the COLA percentage (up to 3% annually). He also reviewed the Town's effort to fully fund its pension liability using actuarial estimates that are calculated every two years. In recommending an increase from $13,000 to $14,000 in the base amount on which the COLA is calculated, the Retirement Board worked with Rob Addelson, recently retired Assistant Town Manager, Finance, to develop an acceptable annual amortization schedule for the pension liability. Although it cannot be changed for FY2018, it can be altered in future years. In response to questions, Mr. Cunha said that this is a good time to implement an increased base because the pension fund is doing well, this is an actuary review year, and it keeps Lexington comparable to similar towns in the area. This Committee discussed the need for a systematic process for deciding on such increases and the importance of increases in the base being considered when negotiating compensation packages. It was agreed to include such comments in this Committee's report to the 2017 ATM. ➢ A motion was made and seconded to support Article 30. Mr. Neumeier recused himself from the vote because of a potential conflict of interest. The motion passed. VOTE: 6-2 It was agreed that a minority position would be included in this Committee's report to the ATM. • Because of being unable to attend the last meeting, Mr. Neumeier was asked to vote on the following articles, changing the vote total as indicated: ➢ Article 5: Appropriate FY2018 Enterprise Funds Budgets: VOTE: 9-0 ➢ Article 7: Appropriate for Updating the Town's Comprehensive Plan: VOTE: 9-0 1