2018-03-26-CEC-ATM-rpt - Laserfiche WebLink

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CAPITAL EXPENDITURES COMMITTEE REPORT TO 2018 ATM Capital Budget Lexington allocates appropriate resources to needed capital projects by considering them in three categories: • Capital Projects (by definition those that can be financed; greater than $25,000; and with a useful life of at least 5 years for vehicles and equipment and 10 years for buildings or building components); • Enterprise &Revolving Funds projects (greater than$25,000); and • Community Preservation Fund(CPF)projects (any dollar amount). The Capital Expenditures Committee: • Assesses capital needs brought forward by each department (municipal and schools) as well as the Community Preservation Committee(CPC)through the annual budgeting process; • Works with those departments and the CPC to identify likely capital needs for the next five years; • Independently considers public facilities, infrastructure systems, and prospective longer-teitn needs, as well as issues and facilities not being addressed within any department; and • Through this report and in presentations, advises Town Meeting about the necessary and prudent investments to maintain, improve, and create facilities required to serve Lexington citizens safely, effectively, and efficiently. During the year, Committee members also work with and advise staff members in various departments, consult with other public committees—notably in budget summits with the Board of Selectmen (BoS), the Appropriation Committee, and the School Committee—and advise in an effort to shape a responsible capital budget for Lexington. Please note these important caveats: All cost figures are estimates and often do not reflect the cost in then-year dollars. The degree of accuracy varies by project. Those projected several years into the future are the most uncertain. They are subject to refinement as projects are designed, bid, and built. Even relatively near-term work is subject to cost uncertainties until projects are bid and contracts signed as material, labor, and contract-management costs are often highly variable even over a period of just a few months. The scope of future projects is often highly uncertain. Accordingly, project budgets are subject to significant revision as the work is defined through the political and budgeting processes. Dates for appropriations and taxpayer impact of financing projects, unless otherwise specified, are given in fiscal years, beginning July 1. Capital Projects Capital projects require careful analysis, budgeting, and broad support. Generally, recommended capital projects over $1,000,000 have been funded through borrowing, consistent with their expected life and annual budgeting for operating needs. This debt service can be funded in one of three ways: 1. Any portion of the borrowing not covered by Community Preservation Act (CPA) funds is absorbed into the operating budget. This option has significant implications on financing other Town needs. 2. As financing whose costs are outside the Proposition 21/2 tax-levy limit if approved to be so by the Town voters in a debt-exclusion referendum—which then reinforces broad support. 3. When projects are funded under the CPA, a debt-exclusion vote is not required. Additional Capital projects that cost between $25,000, the minimum qualification for consideration as a non-CPF capital expenditure, and $1,000,000 and represent projects that should be funded on a regular, timely, basis to maintain Town infrastructure may be funded through tax-levy funds or borrowing. Since the creation of the Department of Public Facilities, emphasis has been on continual infrastructure maintenance and upgrades, a move that this Committee applauds. We continue to work closely with the stewards of our assets to prioritize, plan, and project the Capital work for a period of five years or more 5