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?009 Annual Report Town Manager Personnel FY09 FY08 exclusions. FullTime ............................... 7...... ............................... 7 PartTime ............................... 2 ...... ............................... 2 ROLE: As the Chief Executive Officer of the Town, es- tablished in the Selectmen Town Manager Act, the Town Manager administers the policies and procedures of the Board of Selectmen, enforces bylaws and actions passed by Town Meeting, and prepares the budget and manages the daily operation of all Town departments. The Town Man- ager's Office also includes the Human Resources Office. APPOINTED by the Board of Selectmen: Carl Valente has served as Town Manager since July 2005. Budget The FY2010 budget process continued the collaborative effort among the Board of Selectmen, School Committee, Appropriation and Capital Expenditures Committees, and the staff. Five collaborative budget sessions resulted in con- sensus on a balanced budget for Town Meeting consider- ation that addressed many pressing needs and did not re- quire a Proposition 2 -1/2 override. All collective bargaining contracts expired on June 30, 2009. Finance In June, Moody's Investment Service reaffirmed Lexing- ton's Aaa bond rating, citing consecutive budget surpluses, low debt burden, and accumulation of adequate reserves among other factors. Lexington is one of only 26 Aaa com- munities in Massachusetts. The Selectmen's ad hoc Fiscal Task Force submitted a report of its findings and recommendations in July, and concluded its work with a second report in October. Major findings and recommendations included the following: • Town revenues have slowed markedly during the eco- nomic downturn. Although property tax revenues are relatively stable, their impact on taxpayers is greater as incomes and property values decline. • Controlling escalating employee health benefits costs is of the highest priority for Lexington's near -term and long -term financial position. This will likely require finding a way to coordinate bargaining over health ben- efits and other elements of compensation. • Discretionary cost restraint and cost reductions in other areas will also be required. • Demand for capital expenditures to maintain and re- place physical assets will continue. Recommendations include increased use of borrowing and some modest deferrals of capital maintenance. In addition, several large capital projects will require Proposition 2 1/2 debt • The Town should consider some modest deferrals in fund- ing of obligations for retiree pension and benefit costs. • The Town should adopt the new local - option taxes re- cently authorized by the legislature. • Continued action to expand the towns commercial prop- erty tax base will relieve pressure on residential taxpayers. • The Town has successfully set aside financial reserves in recent years, and some use of these reserves is appro- priate in the current economic conditions. Between $2 and 3 million might be used to maintain municipal and school services and facilities in FY 2011. During 2009 a number of actions were taken on the Task Force's recommendations. Department heads have restrict- ed discretionary spending, deferred some capital projects, and only selected vacant positions are being filled. The November Special Town Meeting adopted the new local - option taxes on meals and lodging, and approved zoning changes for projects that will generate increased revenues in future years. Also, $600,000 was added to the stabilization fund as a result of higher than projected new construction growth in the tax base, and new property taxes on telephone company poles and wires. Performance measures efforts continued in the Police De- partment and Library. The Fire Department began devel- oping performance measures and collecting data in 2009. The Selectmen voted to maintain the FY2010 real estate tax classification factor at 1.70. Because commercial prop- erty values have decreased more than residential values, the residential tax rate will increase by approximately 5 %. Wa- ter and sewer rates were reduced overall by 3.8 %, consis- tent with the Selectmen's goal of limiting increases in the current economic environment. The 1.8% water and 4.7% wastewater rate decreases were facilitated in large part by the use of water /sewer retained earnings voted at the 2009 Annual Town Meeting. Economic Development Economic development continues to be a top priority for the Town. Economic Development Officer Susan Yanof- sky continues to work with the Board of Selectmen, Town departments and committees, businesses and residents to facilitate business and job growth in Lexington Center and Route 128 business districts. At the 2009 Annual Town Meeting, a Commercial Dis- trict (CD) rezoning was approved for the Beal Companies' Hayden Avenue campus, also known as Ledgemont. A new 162,000 square -foot building will be constructed to LEED silver standards and will generate additional annual tax rev- enues of $600,000 once it is completed.