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APPROPRIATION COMMITTEE-2018 ATM
<br /> Plans for replacement of the Fire Headquarters and adaptation of the former Liberty Mutual Building for
<br /> use as temporary swing space were also further developed and approved so that those projects could pro-
<br /> ceed to Town Meeting for further appropriation and a debt exclusion referendum as well. Attention was
<br /> also given to preliminary planning for future construction of a new police station, which might also use
<br /> the 171-173 Bedford Street space as either a temporary or permanent location, and a new Visitors' Center.
<br /> In the meantime, the Massachusetts School Building Authority (MSBA) approved, on August 16, 2017,
<br /> the final design plans for replacement of the Maria Hastings Elementary School and a partial reimburse-
<br /> ment of the construction costs for the new school building. The total approved project budget was about
<br /> $65,300,000, of which MSBA committed to reimburse approximately $16,500,000, with the balance of
<br /> $48,800,000 to be covered by the Town of Lexington.
<br /> October 2017 Special Town Meetings and December 2017 Debt Exclusion Referendum
<br /> On October 16, 2017, two special town meetings were convened. Because a special town meeting had
<br /> already been held earlier in the year on the first day of the Annual Town Meeting, the two fall special
<br /> town meetings were designated Special Town Meeting 2017-2 and Special Town Meeting 2017-3.
<br /> At Special Town Meeting 2017-2, Town Meeting made appropriations necessary to move forward each of
<br /> the three major capital projects described above, subject to approval by voters of debt exclusions for those
<br /> projects in a referendum later in the fall. In the case of the LCP and Fire Headquarters projects, only addi-
<br /> tional design and engineering funding were sought so that a final appropriation for construction could be
<br /> made at the Annual Town Meeting this spring, assuming approval in the referendum. In the case of the
<br /> Hastings and fire station swing space projects, funding was appropriated for the final design and construc-
<br /> tion costs necessary to complete the projects, contingent on the outcome of the referendum.
<br /> The financial articles of Special Town Meeting 2017-3 focused primarily on: (1) the allocation of addi-
<br /> tional FY2018 revenue resulting from increases in revenue estimates since the 2017 Annual Town Meet-
<br /> ing; and(2) adjustments to the FY2018 operating budget.
<br /> Following the close of the 2017 Annual Town Meeting, the Town's estimated General Fund revenue for
<br /> FY2018 had increased on a net basis by approximately$2.6 million. The primary reasons for this upward
<br /> revision were: (1) an increase of a little more than $2 million in Chapter 70 State Aid over the original
<br /> estimate attributable to continuing progress by the state in bringing Lexington up to the school "founda-
<br /> tion budget" funding formula; and (2) an upward revision in the estimate of new growth of $500,000,
<br /> from $2,500,000 to $3,000,000. (The final new growth figure determined by the Board of Assessors at
<br /> tax classification in December was $3,357,135; the additional increment will flow to Free Cash and be
<br /> available for appropriation after the books are closed, and Free Cash has been certified,for FY2019.)
<br /> Some of the additional estimated revenue was appropriated for minor operating adjustments, and
<br /> $150,000 was appropriated to fund design development documents for a new Visitors' Center. The bulk
<br /> was appropriated to make the first installment($2,351,487) of a planned five-year payoff,within the levy,
<br /> of short-term bond anticipation notes, in the amount of approximately $11 million, previously incurred
<br /> for the land acquisition costs at 20 Pelham Road and 171-173 Bedford Street.' The rationale for this pay-
<br /> off plan is discussed at length in our report to STM 2017-3, p. 7. Briefly summarized, by avoiding the
<br /> need for long-term bonding of these acquisition costs at a higher interest rate than could be earned in the
<br /> Capital Stabilization Fund(roughly a 2% spread between the True Interest Cost for bonds and the earning
<br /> potential of the CSF), significant interest costs could be saved. It also reduced the total amount of the an-
<br /> ticipated debt exclusion by$11 million,bringing that amount within the levy instead.
<br /> ' A second appropriation of Free Cash in a similar amount ($3,050,000) is proposed in the FY2019 budget as a
<br /> revenue set-aside,see Brown Book,p.II-5.
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