2008 AC Rpt - Laserfiche WebLink

Browse Search

APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008 sources (casinos) in place of lottery proceeds. If the Town ultimately receives more than this, as indicated by recent actions of the State legislature, all or part of the additional amount may be needed to help cover the FY2008 snow removal deficit. In his "Report of the Town Manager" the Town Manager gives a good description of the development of the recommended budget. Among other parts of the process, he tells about the allocation of "new" revenue to the schools and municipal budgets in a 71.5/28.5 ratio. One comment is in order. This has now been the practice for two or three years in a row, and should continue to be regarded as a starting point for discussions and not as an inviolable end point. Indeed, if Town officials find that circumstances demand that the new revenue be allocated in a different way, e.g., because of differing priorities of unfunded programs, then the revenue allocation should be adjusted accordingly. The newly created Department of Public Facilities that combines the maintenance of all the school and municipal buildings is now largely funded through a single line in the operating budget (2400). Please see the relevant section in the Brown Book and the discussion herein under Article 4. The Minuteman Regional High School assessment has increased 25% since last year and 70% since FY 2007, due principally to an increase in the number of Lexington students at the school together with a decrease in the overall school enrollment. This year's increase is examined herein under Article 4. The Town Manager, with the support of the Board of Selectmen, has recommended the use of $2,618,766 of Free Cash for FY2009 operating expenses. In addition, the recommended budget includes the use of $842,000 to support the recommended capital expenditures (in Articles 9, 14, 15, 18, 19, and 28), the transfer of $1,000,000 from Free Cash to the Stabilization Fund, and the transfer of $400,000 from Free Cash to the Post - Employment Insurance Liability Fund. The transfer to the Stabilization Fund has no material effect upon the Town's fiscal condition because, from a reserves - balance perspective, the differences between Free Cash and a Stabilization Fund are minimal. Two of the procedural differences are: (1) Free cash is not available during the annual certification process from July 1 until the Town is notified by the Commonwealth of the certified value, whereas the Stabilization Fund provides a continuously available reserve with a definite value; and (2) The appropriation of funds from Free Cash requires a simple majority vote whereas that from the Stabilization Fund requires a 2/3 majority. The transfer of $400,000 to the Post - Employment Insurance Liability Fund includes about $300,000 that was received in FY2007 from reimbursements for Medicare Part D expenses of the Town's retirees. This Fund is the account set up within the last few years under State law to enable the Town to save funds to help cover its liability for future health insurance costs of retired employees. The liability is currently roughly of the magnitude of $100,000,000. The Town has been and is paying for current -year retiree health insurance liabilities through the health insurance line in the Shared Expenses section of the operating budget. Whether the Town really should change its current practice and start prefunding the liability is debatable; there is currently no compulsion to fund the future liabilities. Achievement of full funding over, e.g., 30 years would require putting perhaps $7M plus or minus a million or two into the Fund annually. Needless to say, this would have a huge impact on annual budgets until full funding is reached. The modest amount proposed is a sensible way to start building this fund. See the discussion under Article 22 below for further information. As noted above, the recommended budget includes the transfer of $350,000 from the FY2008 school budget surplus to the proposed Special Education Stabilization Fund. These changes to Free Cash, the Stabilization Funds, and the Post- Employment Insurance Liability Fund are summarized in Tables 14. Page 9 of 50