2019-03-25-AC-ATM-rpt - Laserfiche WebLink

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APPROPRIATION COMMITTEE-2019 ATM • We have illustrated projected transfers from the Capital Stabilization Fund to mitigate within-levy debt service keep its growth to 5%. Our projection currently shows large transfers of$5,086,000 in FY2021, $4,584,000 in FY2022, and$4,385,000 in FY2023. Additional appropriations from this fund are antic- ipated to mitigate the tax impact from excluded debt service for the school and public safety capital programs. • Revenue offsets include amounts from Cherry Sheet assessments that are assumed to grow by 3.5% annually, amounts for the Assessors' overlay($750,000 annually in FYs 2021 and 2022; and$900,000 in FY2023,a revaluation year),and$400,000 that is set aside annually for potential deficits in the snow and ice budget. • Water and Wastewater Enterprise Fund indirect expenses are assumed to increase by 3% annually. Recreation Enterprise Fund indirect expenses are assumed to increase by$7,000 per year.Additionally, in FY2020 Recreation Enterprise Fund expenses will be offset by $208,859 in tax levy funding for Community Center operations personnel. This expense will grow by 1.3% annually to accommodate step increases, and the tax levy funding will increase with at that pace also. Expense Assumptions • Line items for FY2021—FY2023 include settled cost-of-living adjustments (COLAs) for salaries and wages, as well as projected COLA's for unsettled contracts at rates similar to the settled contracts.For the school budget 80% of wage dollars are settled for FY2021 and 75% for FY2022. For the munici- pal/facilities budget 27%is settled for FY2021 and 23%for FY2023. • The Lexington Public Schools personnel costs are assumed to increase by 1.5% annually for step changes. Enrollment driven increases are based on the midpoint of school administration projections showing enrollment growth of 14 in FY2021, 103 in FY2022 and 54 in FY2023. An increase in enroll- ment of 100 students is estimated to require a staffing increase of 19.32 FTE's at$73,062 per FTE, an increase of approximately$1,412,000 in the operating budget. • The Lexington Public School expenses for programs other than special education are assumed to in- crease by 3%per year. Special education expenses for out-of-district tuition are net of the State Circuit Breaker reimbursement and are assumed to increase by 6% annually, while the expenses for special education consultants and out-of-district transportation are assumed to increase by 3%per year. • Municipal personnel costs are assumed to increase by 1.3% annually for step changes. • Municipal expenses are assumed to increase by 3%per year. • The assessment for Lexington's share of expenses for Minuteman Career and Technical High School is assumed to increase by 4.5% per year. It is assumed that the number of Lexington students will increase but remain as a similar proportion of in-district students. Debt service payments for the new Minuteman school building are projected to be level in FY2021,rise $100,000 in FY2022, and rise by over$200,000 in FY2023,when the last construction bonds are issued. • Appropriations for current and future contributory pension payments are assumed to follow the sched- ule set up by the Retirement Board following the most recent actuarial evaluation of pension costs. These costs are $6,755,537 in FY2021, $7,105,537 in FY2022 and$7,455,537 in FY2023. • Health insurance costs are assumed to increase annually by 5.5%.While this growth is primarily driven by anticipated increases in school staffing due to enrollment, the combination of inflation and other staffing growth also contribute. • Non-exempt debt service costs are assumed to support annual debt-funded project appropriations that will grow at the rate of 5% per year. Current projections already exceed that limit, translating into projected costs in FY2021 of$13,565,000, FY2022 of$12,982,000 and FY2023 of$9,683,000. How- ever, included in these costs arc final annual payments in FY2021 and FY2022 of$2,403,450 towards 49