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APPROPRIATION COMMITTEE-2.020 ATM 25 March 2020 (d) That$111,000 be appropriated from the Affordable Housing Capital Stabilization Fund for reno- vations and capital improvements at properties managed by the Lexington Housing Assistance Board, Inc. (LexHAB). Items 19(a) and 19(b) may seem to be at cross purposes, with the first adding $1.8 million to the Capital Stabilization Fund and the second withdrawing $3.5 million from it, for a net withdrawal of$1.7 million. This fund was created to put aside money for future use to reduce the burden on taxpayers of significant expected increases in capital expenditures and their associated increases of exempt debt; and to reduce the pressure of such significant expenditures on within-levy debt service. The proposed $3.5 million withdrawal is to address higher exempt debt service cost associated with the New Hastings School, construction of the Lexington Children's Place School, and the new Fire Station. The appropriation into the fund recognizes that there will be significant increases in debt service for future projects, including the new Police Station and, further in the future,the likely very high costs of replacing or reconstructing Lexington High School. Item 19(c) will appropriate funds received from Brookhaven at Lexington into the Affordable Housing Capital Stabilization Fund.When Brookhaven at Lexington secured approval in 2017 for an addition to its facility, it signed an agreement with the Town under which it would make payments over 15 years to the Town to be used by LexHAB for"affordable housing purposes,"with the payments to start when a unit in the new addition first received a Certificate of Occupancy. Item (c) appropriates the first payment, $111,922, made by Brookhaven to the Affordable Capital Stabilization Fund. Prior to this payment, the fund had a zero balance. In the future,we expect these payments from Brookhaven at Lexington will be transferred into the Afford- able Housing Capital Stabilization Fund without appropriation. The Committee unanimously supports items 19(a), 19(b) and 19(c). Item 19(d) would appropriate $111,000 of the money deposited under item 19(c) to fund renovations and capital improvements in affordable units managed by LexHAB. This request is supported by a majority of the Committee,who believe that renovation of existing units is a legitimate use of the funds. Town Counsel has also opined that the proposed uses are permissible under both the agreement and the specified stabili- zation fund's statement of purpose. The Select Board originally suggested, and unanimously supports,this use of funds. Members in opposition believe that the spirit of the agreement with Brookhaven, under which payments were determined using the estimated cost of creating 5.5 affordable units, requires that these funds be de- voted to constructing new units,rather than renovations or improvements on existing units. The table below summarizes the various requests and shows recent balances in the funds involved. The third column shows requested additions or withdrawals(parenthesized).The last three rows of the table list, for information purposes, withdrawals from three other stabilization funds requested under Article 4 and Article 20. Stabilization Fund Deposit Committee Fund Balance (withdrawal) Source/Destination Recommendation 3/12/2020 $164,987 Tax Levy $1,608,075 General Fund unreserved balance Approve (8-0) Capital $25 158 929 $1,773,062 ($3,500,000) Exempt debt payments (Article 4) Approve (8-0) Affordable $0 $111,922 Payment from Brookhaven MOU Approve (8-0) Housing Capital ($111,000) LexHAB affordable housing Approve (6-2) 41