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02/08/2018 AC Minutes Minutes Town of Lexington Appropriation Committee (AC) February 8, 2018 Place and Time: Ellen Stone Room, Cary Memorial Building, 7:30 p.m. Members Present: John Bartenstein, Chair; Alan Levine, Vice-Chair & Secretary; Eric Michelson; Richard Neumeier; Sanjay Padaki; Andrei Radulescu-Banu; Lily Manhua Yan; Ran Helen Yang; Carolyn Kosnoff, Assistant Town Manager, Finance(non-voting, ex-officio) Members)Absent: Ellen Basch Other Attendees: David Kanter, Vice-Chair and Clerk, Capital Expenditures Committee (CEC) The meeting was called to order at 7:37 p.m. 1. Announcements and Liaison Reports Mr. Bartenstein reported the following: • The Budget Summit V, scheduled for February 13, has been canceled. Mr. Neumeier reported the following: • In the March 6, 2017 Lawyers' Weekly, there was an opening listed for an Assistant City Solicitor in Chelsea, MA; salary range: approximately $68,000 to $85,000. • In the January 28, 2018 Lawyers' Weekly, there was an opening listed for a Town Counsel in Milford, MA; salary range: approximately$90,000 to $128,000 • In the January 29, 2018 Lawyers' Weekly there was an opening listed for a City Solicitor in Newton, MA, who would manage 10 full-time employees; salary range approximately $145,000 to $150,000. Ms. Kosnoff reported the following: • Yesterday, the Town issued over $48.0 million in long term bonds. Seven bids were received—all competitive. The Town was required to select the bid with the lowest True Interest Cost(TIC). The selected bid included a 29-year term, a TIC of 2.996°/x, and a premium (an up-front payment) of$2.7 million. The premium will be used to offset issuance costs and reduce the par value of the bond. This will reduce principal payments during the first five years. The structuring of the low bid results in a coupon rate of 5.0% over the first 10 years, and then it drops to approximately 2.6% in year 11 and increases slightly for the remainder of the term. The financial modeling done by the Town estimated a 4.0% coupon rate; the debt service modeling will be updated to reflect the reduction in borrowing due to the premium received and the higher coupon rate. The Town also issued approximately$11.7 million in Bond Anticipation Notes (BANs) yesterday. The low bid has a TIC of 1.4%. • Both Standard&Poor and Moody's gave Lexington a Aaa rating. Mr. Bartenstein distributed Moody's report on Lexington's rating. 2. Review of FY2019 Budget Issues 1