2007-10-10 Appropriation Committee Report

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APPROPRIATION COMMITTEE REPORT, OCTOBER 9, 2007 TO STM increase FY2008 expenses by $50,000. Adoption of this Article will appropriate that sum to line item 8500 (Town Clerk), split equally between Personal Services and Expenses. Reserve Fund The $50,000 appropriation to line item 8500 leaves $19,868 remaining from the increased amount of State Aid. That amount is to be appropriated to line item 2310, the Reserve Fund, a contingency fund available to respond to extraordinary and unforeseen expenditures. This appropriation will increase the Reserve Fund, transfers from which are authorized by the Appropriation Committee, to $469,868. The Appropriation Committee unanimously supports this Article. Article 4: Amend FY2007 Enterprise Funds Budgets Funds Requested Funding Source Committee Recommendation See Text EF Approve (9 -0) This article proposes several minor housekeeping adjustments to the appropriations made for the water and sewer enterprise funds at the Annual Town Meeting last spring. Adjustment to Reflect Final MWRA Charges In January of each calendar year, the Massachusetts Water Resources Authority (MWRA) provides its member towns with a preliminary estimate of their water and sewer assessments for the upcoming fiscal year. The Town uses these preliminary assessment figures to establish the MWRA component of the water and sewer enterprise fund appropriations at the annual town meeting. In June of each year, the MWRA completes its budget process and issues final assessments to its member towns. The final assessments are typically less than the preliminary estimates. When water and sewer rate - setting takes place in the late summer or early fall, the Town's practice has been to set rates in an amount projected to be sufficient to cover the actual, final MWRA assessments, as well as the other direct and indirect costs of the water and sewer enterprises. In effect, therefore, the Town raises in the rates and pays to the MWRA each year an amount that is somewhat less than the amount originally appropriated at the annual town meeting. The proposed adjustments will reduce the original appropriations made for the MWRA component of the FY2008 water and sewer enterprise budgets at last spring's Annual Town Meeting to reflect the actual, final assessments. The amounts appropriated at this year's annual town meeting for MWRA water and sewer charges and the actual, final assessments for FY07 are as follows: Adjustments for Debt Costs Following this year's Annual Town Meeting, it was determined that modest additions would be required to the amounts originally appropriated for the costs of debt service (interest and issuance costs) for water and sewer enterprise fund capital projects, including the fund's share of the new Public Works Facility. To cover those costs, adjustments to the original appropriations for debt costs Page 9 of 18 Appropriated Final Assessment Change Water $4,435,739 $4,117,775 $(317,964) Sewer $6,197,216 $5,630,863 $(566,353) Adjustments for Debt Costs Following this year's Annual Town Meeting, it was determined that modest additions would be required to the amounts originally appropriated for the costs of debt service (interest and issuance costs) for water and sewer enterprise fund capital projects, including the fund's share of the new Public Works Facility. To cover those costs, adjustments to the original appropriations for debt costs Page 9 of 18