2007 AC Rpt2 - Laserfiche WebLink

Browse Search

APPROPRIATION COMMITTEE 2 " REPORT, April 21, 2007, TO 2007 ATM appropriation at the 2005 Annual Town Meeting. The 2005 Annual Town Meeting also appropriated $150,000 for FY2006. The 2006 Annual Town Meeting increased the FY2007 appropriation to $400,000. The purpose of this Reserve Fund is to provide contingency funds in the budget to deal with unexpected and substantial cost overruns without impairing permanent reserves, such as the Stabilization Fund and Free Cash. Among such potential expenses are snow removal, overtime expenses for police and fire personnel, and special education (SPED) costs. Additionally, increasing the Reserve Fund relieves individual municipal and school departments from the need to include reserves in their respective individual budgets. This Committee unanimously (7 -0) supports this request. Project Description Amount Re Funding Source Committee Recommends (d) Municipal $26,214,556 Multiple $26,214,556 (7 -0) The municipal budget request is a 5.3% increase over FY2007. The health insurance costs (carried in the Shared Expenses Budget) attributable to current municipal employees are estimated by the Town Manager to be $3,256,000 for FY2008. A comparison of FY2007 and FY2008 municipal budgets with the corresponding health benefits for municipal employees follows: The Brown Book contains a wealth of information about each municipal department's recommended budget, including projected FY2008 and historical staffing levels (going back to FY2004), departmental initiatives, and programs and items requested, but not recommended, for funding in FY2008. This budget includes an estimate of the funds needed for FY2008 salaries as those contracts are still under negotiation at press time. This Committee unanimously (7 -0) supports this request. Article 37: FY2007 FY2008 % Increase Municipal Budget $24,895,327 $26,214,556 5.30% Health Insurance $ 2,950,000 $ 3,256,000 10.37% Total $27,845,327 $29,470,556 5.84% The Brown Book contains a wealth of information about each municipal department's recommended budget, including projected FY2008 and historical staffing levels (going back to FY2004), departmental initiatives, and programs and items requested, but not recommended, for funding in FY2008. This budget includes an estimate of the funds needed for FY2008 salaries as those contracts are still under negotiation at press time. This Committee unanimously (7 -0) supports this request. Article 37: Funds Requested Funding Committee Appropriate for Source Recommendation Post Employment GF Indefinitely Postpone Benefits ( -0 ) Retired Lexington employees receive two types of post - employment benefits: a pension and health insurance. Annual appropriations to the pension fund and to the health -care trust fund (under the Shared Expenses portion of the municipal Operating Budget Article) cover the costs of current retirees' benefits (with the exception of teachers, who receive their pension from the State pension fund; their health benefits, however, are provided by the Town). In the case of both types of benefits, there is a future liability (for current and past employees who have not yet reached retirement age) that is being incurred. The annual appropriation for the pension fund includes an amount for the funding of the future pension liability, but no similar provision is currently being made for the future health benefit liability. As reported last year, the new Government Accounting Standards Board (GASH) Statement 45 (GASH- 45) dictates that municipalities begin reporting the unfunded liability for retiree health benefits with deadlines based on their annual revenues. For Lexington, that means reporting beginning with FY2008. Page 14 of 24