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10/01/2019 AC Minutes Minutes Town of Lexington Appropriation Committee (AC) October 1, 2019 Place and Time: Town Office Building, Reed Room, 7:30 p.m. Members Present: Glenn Parker, Chair; Sanjay Padaki, Vice-Chair; Alan Levine, Secretary; Eric Michelson; Meg Muckenhoupt; Nick Nichols; Carolyn Kosnoff, Assistant Town Manager, Finance (non-voting, ex officio) Members)Absent: John Bartenstein; Lily Manhua Yan Other Attendees: None The meeting was called to order at 7:35 p.m. Announcements and Liaison Reports Ms. Kosnoff reported that the preliminary water/sewer rates are to be posted on the Town's website tomorrow. Staff plan to present the rates to the Board of Selectmen (BoS) on October 7, and the BoS expects to vote on them on October 21. Unlike in the past, there will not be a separate meeting reserved for public comment. The preliminary rates include a 3.5% increase for water usage and a 9.2%increase for wastewater, which results in an average increase of 7.3% steep compared to recent years. The increases are driven by an increase in the Massachusetts Water Resources Authority assessment; additionally, water usage continued to decline while irrigation increased. It was noted that previous Town Meeting discussions about the water/sewer rates should help increase the understanding of the need for the increases. Additionally, the homeowner may not experience a significantly higher bill if that homeowner's usage has declined. During discussion, Ms. Kosnoff reported that staff have estimated that $1.0 million a year for 100 years is needed to replace all the water pipes in town. Although retained earnings for the Water and Wastewater Enterprise Funds each exceed $1.0 million, she would like to see more capital funded directly with"cash" rather than through debt; however, Ms. Kosnoff suggested that the preliminary rate increase is such that this is not a good time to pursue that objective. 2019 Fall Special Town Meeting (STM) While explaining that more details would be available at this Committee's October 15 meeting, Ms. Kosnoff shared the following: • Article 2—Appropriate for Prior Year's Unpaid Bills: Currently, no unpaid bills have been identified. It is expected that this article will be indefinitely postponed. • Article 3—Appropriate To and From Specified Stabilization Funds: It is expected that three such funds will be addressed: ➢ Transportation Stabilization Fund: The Town has received funds to be allocated into this fund. ➢ Traffic Stabilization Fund: A recommended withdrawalpotentially between $200,000 and $500,000is likely to help fund the 25% design proposal included in Article 8 (see below). ➢ Capital Stabilization Fund (CSF): New growth receipts are approximately $3.6 million, i.e., greater than projected. Some of this could go into the CSF. Ms. Kosnoff noted that there is a meeting scheduled for October 16 during which the future use of the CSF will be considered. 1