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TOWN GOVERNMENT Board of Selectmen ELECTED by the FY03 FY02 voters at large to 3- Chair $673974 $64,475 year terms: Leo McSweeney, Jeanne Krieger, Dawn McKenna, Bill Kennedy, and Peter Kelley. Expenditures Payroll Expenses FY03 FY02 $80,086 $673974 $64,475 $551352 The year 2003 was marked by the failure of the operating override. Although the margin of difference between pass- ing and defeating the override was only 385 votes of the 11,653 votes cast, the loss marked a significant change for Lexington. The Board spent the second half of the year addressing implications of the vote and managing the reductions in service. Citizen participation continued to be the hallmark of the community as the various committees, Town Meeting, and residents worked together to try to understand and manage the changes. Fiscal Balancing the FY2004 budget was nearly a yearlong event. The tight economy and unanticipated expenses contributed to Lexington's fiscal problems. On the revenue side, the downturn in the economy resulted in a $1.7 million short- fall of State aid and a reduction in local receipts. Less free cash was available because of how the prior year's budget was balanced. On the expense side, a nearly 20% increase in health care benefits was forecasted. The Board made cuts in service such as asking town employees to contribute more to defray the cost of health insurance, but ultimately went to the voters recommending balancing the budget by advancing a $4.957 million operating override. The over- ride failed for the first time since the implementation of Proposition 2 -1/2 in 1981. The failed override had significant impact on services town - wide. With the beginning of the fiscal year on July 1, the East Lexington fire station was closed; 12 police positions were eliminated; library hours were reduced to accommo- date the elimination of 25 full- and part -time positions and book budgets were cut. In addition, social services were cut, DPW services limited, and LEXPRESS eliminated. The impact on the schools was felt as much as the reduction in municipal services. The depth of the cuts reflects the tight- ness of the budgeting process and how effectively every tax dollar has been used to provide necessary services. A July Special Town Meeting was called in response to a series of citizens' petitions to attempt to restore some of the lost services. Overall no changes in the budget resulted from this Town Meeting. Town Meeting did vote to appropriate bus fares to fund LEXPRESS outside the tax levy in order to preserve an $80,000 MBTA grant. As the summer pro- gressed, additional cuts in State aid occurred, a snow removal deficit of nearly half a million dollars was recog- L -R: Bill Kennedy, Jeanne Krieger, Leo McSweeney, Dawn McKenna, Peter Kelley. nized, and a shortfall in projected revenue became appar- ent. The Selectmen adopted the State's Early Retirement Incentive (ERI) program designed to provide relief for com- munities struggling with the downturn in the economy by allowing employees to retire early. A November Special Town Meeting was called to balance the budget. The Town took advantage of another new State program, the "Pension Holiday," to offset cuts in State aid allowing the Town to defer up to $1.4 million dollars of payments to the pension assessment. On November 17, about six months later in the year than normal, the FY 2004 budget was finalized. Balancing the FY 2005 budget promises to be as challeng- ing as this past year's efforts. To address the difficult fiscal situation projected for the next few years, the Selectmen established a number of advi- sory committees. These committees include a Public Safety Staffing Review Committee, a committee to examine the water and sewer rate structure, and an Energy Conservation Committee to identify tangible programs to reduce energy cost in municipal buildings. Citizens with expertise have been asked to serve on these committees and to work with the Selectmen to address our fiscal challenges. Additionally, the Building Finance Committee has been reconvened to examine our capital needs. Capital Projects Construction proceeded on a number of projects approved in prior years. The Lincoln Field complex opened in time for the fall soccer season. The complex is receiving rave reviews from residents of all ages. Three soccer fields have been cov- ered with synthetic turf and a playground installed. The baseball field is expected to be ready by the spring season. Construction of the new Cary Memorial Library is finally winding down. Delays in the project prevented a spring 2003 opening as originally planned, but construction is nearing completion. The Library will open in 2004 and res- idents will be able to enjoy an up -to -date and welcoming Page 4 2003 Annual Report, Town of Lexington O 0 rD 0 Lo