2009-03-25-AC-rpt2 - Laserfiche WebLink

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APPROPRIATION COMMITTEE REPORT TO 2009 ATM —MARCH 2009 The Minuteman Regional High School assessment is 13% larger than last year's assessment, mainly because the number of Lexington students at the school is increasing while the overall school enrollment is going down. This year's assessment is examined in greater detail under Article 4 below. In regard to health insurance for Town and School employees, the Town's consultant and Blue Cross have recommended an appropriation sufficient to cover a 9.8% increase in health care prices. That, together with the projection that 55 additional employees will sign up for Town health insurance plans, yields an estimated increase of 10.6% in the budgeted FY2010 amount over the amount presently projected to be expended in FY2009. This large increase translates into a much smaller increase from the amount appropriated for FY2009 because the FY2009 appropriation was higher than necessary. See the discussion under the health insurance section of Article 4 for further information. The Town Manager is recommending the use of $2,768,577 of Free Cash, plus up to another $900,000 of Free Cash that may cover a drop in State aid, for FY2010 operating expenses. The amount that is appropriated must be voted upon by Town Meeting prior to the final adoption of a budget by the State. If Town Meeting allocates less than $900,000 to cover the anticipated reduction in State aid, the remainder will remain available in Free Cash. In addition, the recommended budget includes the use of $822,450 to support the recommended capital expenditures, the transfer of $350,000 from Free Cash to the SPED Stabilization Fund, and the transfer of $440,690 from Free Cash to the Post - Employment Insurance Liability Fund (for details see the discussion under Article 23 below). Given the Town's current financial situation, we do not expect any additions to the general - purpose Stabilization Fund. These changes to Free Cash are summarized in Table 1. Table 1: Anticipated Free Cash Changes-2009 Annual Town Meetin Certified Free Cash, July 1, 2008 $5,481,717 Set aside for FY2009 (Article 30) ($200 Set aside to cover State aid reduction (see text) ($900,000) Less use for operating budget (Article 4) ($2,768,577) Less use for capital (various articles) ($822 Less transfer to Post-Employment Fund Article 23 $440,690 Less transfer to SPED Stabilization Fund (Article 25) ($350,000) Less transfer to Stabilization Fund (Article 28) ($0) Remaining balance at end of Town Meeting (see text) $0 The recommended FY2010 budget includes approximately $11.8M for capital expenditures which is about $2M less than was appropriated for FY2009 (see the FY2010 Brown Book page XI -2 and the FY2009 Brown Book page XI -3). The funding sources include the tax levy, CPA funds, Free Cash, and state funding (Chap. 90). Last year the Public Facilities Department requested funds to conduct studies of facilities needs (Articles 18 and 19 of the 2008 Annual Town Meeting). This year additional studies are proposed, some of which are targeted at facilities, i.e., Town buildings, and others at storm water management and traffic mitigation. Some of the facilities studies may be funded through Community Preservation Act funds. While in the short term, it may seem that these studies take time and money and are only delaying needed work, in the long run completion of these studies in a highly competent manner is important both for the accuracy of projections of future needs for capital investments as well as for the quality of execution of each project. Such studies should be extended in future years as they are needed for other aspects of the Town's facilities and equipment. We reiterate our past statements of support for the use of Community Preservation Act (CPA) funds to maintain Town buildings and facilities to the extent that the proposed projects qualify and make sense. Page 9 of 59