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APPROPRIATION COMMITTEE-2018 ATM Article 26: Establish, Dissolve, and Appropriate To and From Specified Stabilization Funds Funds Requested Funding Source Committee Recommendation $532,085 Free cash $2,883,246 GF Approve (9-0) $3,415,331 A specified stabilization fund holds monies that may be appropriated for the stated purposes but not for other purposes. Lexington's first specified stabilization funds were established at the 2007 Annual Town Meeting. A history and description of these funds can be found in Appendix E. An article similar to this one is now routinely included on the annual town meeting warrant to give Town Meeting the opportunity to act in relation to specified stabilization funds. Town Meeting may create or dissolve a specified stabilization fund, alter a fund's specified purpose, or make an appropriation into or out of a fund. An appropriation into a fund may be done by a majority vote while an appropriation from a fund requires a two-thirds majority vote. Appropriations into specified stabilization funds do not author- ize expenditures,but rather are transfers of funds into accounts to hold the funds for specified future uses. Dissolution and Creation of Funds Last year, small balances left in the Avalon Bay School Enrollment Mitigation Fund and the School Bus Transportation Stabilization Fund were transferred to the General Fund. There is no balance at this time in either fund. The motion will propose to dissolve these funds. This article will also seek approval of the creation of three new funds, the Visitor's Center Capital Stabi- lization Fund, the Water System Capital Stabilization Fund, and the Affordable Housing Capital Stabili- zation Fund. The Visitor's Center Capital Stabilization Fund will be established as a repository for grants, gifts, or special fees related to the Visitor's Center building capital project. The Water System Capital Stabilization Fund is to be established for the specific purpose of reserving monthly payments received from the Town of Bedford per an agreement for the sale of water(water from the MWRA goes to Bedford through Lexington's system). The agreement with Bedford has two compo- nents, 1) the cost of water used, and 2) a flat annual fee or "demand charge" that is split into monthly payments. The present agreement expires this year and is currently in the process of being renewed. Our understanding is that the annual fee is set so as to cover costs of future infrastructure improvements relat- ed to the Lexington-to-Bedford water connection. It is envisioned that the monthly payments would be put into this stabilization fund for future capital projects instead of being applied annually for rate reduc- tions. The annual fee for FY2018 is $62,175; each year it will increase by a CPI factor. Payments that will be forthcoming from Brookhaven for affordable housing, commencing in FY2020 per an agreement in regard to the rezoning article for Brookhaven's expansion at the 2017 Annual Town Meeting,will be transferred to the Affordable Housing Capital Stabilization Fund. 49