2018-03-08-AC-min - Laserfiche WebLink

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03/08/2018 AC Minutes During subsequent discussion, it was agreed that there may be steps that can be taken during the pre-ATM process that would facilitate greater understanding of projects by Town Meeting members. 3. FY2019 Budget issues and Report to 2018 Annual Town Meeting (ATM) on Financially-Related Warrant Articles: Articles were reviewed by those preparing material for this Committee's report to the ATM, as follows: • Article 4, Appr'opr'iate FY2019 Operating Budget Shared Expenses and Municipal Expenses: Ms. Yan discussed the material that she is preparing for her written report. ➢ Shaved Expenses: There is an overall 4.6% increase in shared expenses. The actuarial process used to determine costs for active employees versus retirees is extremely complex. After discussion, a motion was made and seconded to support the shared expenses portion of Article 4. The motion passed. VOTE: 8-0 ➢ Municipal Expenses: A new contract for refuse and recycling collection is resulting in a noticeable increase in Department of Public Works expenses. Ms. Kosnoff explained that the increase in Information Services reflects a transition from hardware purchases (capital budget) to using software services (operating budget). After discussion, a motion was made and seconded to support the municipal portion of Article 4. The motion passed. VOTE: 8-0 Mr. Neumeier reported that he may want to re-visit his support of Article 4 once he has completed his report on costs associated with legal services. • Article 5, Appropriate FY2019 Enterprise Funds Budgets: Mr. Bartenstein discussed the material on Enterprise Funds that he is preparing for his written report. ➢ Water and Wastewater Enterprise Funds: Because of a combination of factors, including a substantial decrease in Lexington's water consumption compared with the rest of the MWRA community in calendar year 2017, fall 2018 water and sewer rate increases should be modest. Retained earnings were substantially lower than expected, particularly in the water enterprise fund, which raises some accounting questions that will be addressed with the Department of Revenue when the certification process is undertaken at the end of FY2018. Because the retained earnings levels are lower than the desired target of$1 million in each fund, the major annual water and sewer capital improvements under Articles 17 and 18 will be funded entirely with borrowing this year. Recreational Enterprise Fund: The debt service for the Lincoln Street playing fields is now fully paid off. There is approximately$1.0 million in retained earnings. It was noted that the $250,000 request under Article 20(f), Community Center Design, would come from these retained earnings, while Community Preservation Act funds are being requested for Article 10(f), Center Track and Field Reconstruction. After discussion, a motion was made and seconded to support Article 5. The motion passed. VOTE: 8-0 3