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APPROPRIATION COMMITTEE SPECIAL TOWN MEETINGS 2017-2&3 OCTOBER 10,2017
<br /> An increase in the property tax levy of$500,000 is attributed to a revised estimate of new growth, which
<br /> had been estimated at $2.5 million at the 2017 ATM, and is now estimated at$3.0 million. The final new
<br /> growth number could be somewhat higher,but the precise new-growth amount is still being determined by
<br /> the Assessing Department, and will be finalized when the FY2018 Tax Classification packet is released to
<br /> the Board of Selectmen in November—December 2017.Any additional new growth recognized at that time
<br /> will flow to Free Cash and be available for appropriation only after the books are closed, and Free Cash has
<br /> been certified, for FY2018.
<br /> State aid has increased by a little over$2 million based on the final Cherry Sheet numbers from the FY2018
<br /> State Budget approved by the Legislature in August. Most of that increase is attributable to an increase in
<br /> Chapter 70 Education Aid over what had been estimated at the prior Annual Town Meeting. In this regard,
<br /> it should be noted that there have been substantial annual increases in State Aid for several years now as
<br /> the State has made efforts to bring Lexington's share of Chapter 70 Education Aid, which is based on a
<br /> "foundation budget,"more in line with that of other communities;however,as Lexington approaches"par-
<br /> ity," such extraordinary increases are not expected to continue going forward.
<br /> Other,more minor adjustments to revenue estimates result from increases in parking revenues, which will
<br /> be offset by proposed appropriations for parking improvement projects as detailed in the discussion of
<br /> Article 2017-3.5 below. It should be noted that a decision by the Town's electricity supplier, Eversource,
<br /> to make monthly payments to the Town for electricity generated at the Hartwell Avenue solar facility,
<br /> estimated to total $600,000 in FY2018, as opposed to giving the Town credit on its monthly bills, has
<br /> technically increased the Town's local receipts by that amount; however, as set forth in the table under
<br /> Article 2017-3.5,this does not result in any net revenue increase to the Town as the proceeds will be applied
<br /> to expenses that would otherwise have been covered by the credits.
<br /> Debt Exclusion and Use of Capital Stabilization Fund
<br /> As noted above, the major purpose of this fall's Special Town Meeting is to authorize borrowing so that
<br /> the Town can move forward with three major capital projects: replacement of the Hastings School, which
<br /> is needed to correct significant deficiencies in the existing building and to provide additional elementary
<br /> school capacity as school enrollments have continued to grow; construction of a permanent facility for the
<br /> LCP, currently split between the new and old Harrington School buildings, to correct serious inadequacies
<br /> in that arrangement and also to free up four additional classrooms at new Harrington; and the long-planned
<br /> replacement of the Town's aging and increasingly obsolescent main fire station.
<br /> Because the price tag for these three projects will be very substantial, currently estimated at approximately
<br /> $85 million($48,765,695 for the Hastings School after MSBA reimbursement of$16,513,723; $14,879,342
<br /> for the LCP; and $22,140,000 for the fire station with swing space), and servicing of the associated debt
<br /> cannot practically be accommodated within the Town's existing revenue base,the Board of Selectmen has
<br /> elected to proceed with a town-wide debt exclusion referendum vote, anticipated to be held in late Novem-
<br /> ber or early December. In that referendum, Town voters will be asked to exclude from the limits of Propo-
<br /> sition 21/2 the debt service for each of these projects for the life of the debt, currently expected to be issued
<br /> for 30 years. The appropriations sought at the Special Town Meeting for each project will be contingent on
<br /> voter approval of a debt exclusion for that project.
<br /> Voter approval of debt exclusions for all of the projects to be considered in STM 2017-2 would have a
<br /> significant impact on residential(as well as commercial)tax bills. It would add in the early years, after all
<br /> of the debt has been issued, about $8 million a year in annual debt service costs, gradually tapering down
<br /> over the life of the debt as principal is paid off. Of particular concern is that,when the newly excluded debt
<br /> is combined with already outstanding excluded debt for previously approved projects —including the new
<br /> Estabrook School, the recent additions to the Clarke and Diamond Middle Schools, and the renovation of
<br /> the Bridge and Bowman Schools — the excluded debt service component would roughly double in a short
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