2019-06-05-CEC-min - Laserfiche WebLink

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Minutes of the Lexington Capital Expenditures Committee (CEC) Meeting June 5, 2019 • Page 4; ii: Other Post-Employment Benefits (OPEB) Funding: Mr. Kanter noted that the Town is not following policy guidelines that were identified in 2014 by the Board of Selectmen for funding this obligation. That policy was based on the Generally Accepted Accounting Principles, which are being changed. Currently there are no statutory requirements associated with funding OPEB obligations by a certain date, but the liability must be included in the Town's annual records, which could influence the Town's bond rating. The Committee discussed the impacts of the Town's actions related to this liability and recommendations that might be made. Options include paying off the Pension Fund before 2024 or paying off callable bonds, which would increase flexibility in the use of discretionary funds. It was agreed that more information is necessary, including information on what other towns are doing, before the Committee would take a position. • Page 5; iii: General Stabilization Fund: The Town is not meeting its stated policy for maintaining this Fund, but the financial landscape has changed since the policy was adopted. It was agreed that the policy should be updated with an attainable goal based on current practices. Mr. Kanter supported the concept of requiring a plan to correct shortfalls in maintaining the new goal, should they occur. • Page 6; iv: Capital Stabilization Fund (CSF): Allocating funds to the CSF has been touted as a method for off-setting large increases in the tax levy when exempt debt has been approved. It has also been used to keep the within-levy capital expenses to about 5%. This has required taxing to the levy limit. There was discussion about that 5% policy and whether that number should be increased. It was agreed that more information is needed to understand the consequences of changing the 5%. • Page 7; CSF continued: The Committee needed information on why, in the History of CSF table, the Ending Balance is shown as being left at the FY2025 level $5,085,527. • Pages 7-8; v; Other Stabilization Funds: ➢ Special Education Stabilization Fund: This fund has not been used since it was established, which prompted discussion about whether it would be advisable to leave it or withdraw some funds. Ms. Colburn commented that the Special Education is affected by Federal policy. ➢ Traffic Mitigation Fund: Mr. Kanter noted that the Town has not realized any large funding from developers on Hartwell Avenue, although access to Hartwell Avenue needs attention. ➢ Transportation Demand Management Fund: In two places, it needs to be identified by its full name by appending "/Public Transportation" so its primary use will be identified. • Page 9; vii: Continuing Accounts ➢ Uninsured Losses: Mr. Kanter expressed interest in understanding how the balance is made between the insurance covering more of the liability costs with small deductibles and higher deductibles with lower premiums. • Page 10; viii. Free Cash: Mr. Kanter noted that in the past the Town has produced conservative budgets that usually resulted in significant Free Cash at the end of the Page 2 of 4