2011-02-03-AC-min - Laserfiche WebLink

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February 3, 2011 Article 20 (Speclfred Stabilization Funds). This article includes a request to create a new specialized stabilization fund in which to place the funds that Avalon Bay agreed to pay if school enrollment resulting from its development exceeded certain thresholds. $418,000 of a potential maximum of $700,000 has been paid to date, and no funds have yet been expended. Placing these funds in a specialized stabilization fund would allow Town Meeting to appropriate them as needed. Article 21 (Appropriate to Stabilization Fund). Although there are no current plans to make any appropriations to the Stabilization Fund, such an appropriation could be part of a longer discussion about the use of unallocated free cash. The amount of as- yet unallocated free cash in the Town Manager's proposed budget now stands at $697,000. This item was originally $955,000 but it was agreed that $250,000 would be made available to support the school in their budget request. The remainder will hedge against a possible 5% cut in state aid. If the full $697,000 is not needed for this purpose, some or all of it might be appropriated to the Stabilization Fund. Rob discussed briefly potential sources of funds that could be used to help address what is likely to be a significant snow and ice deficit in FY2011. These include $300,000 in FY2012 revenue that has been set aside to offset snow and ice costs as is customary; $200,000 of free cash that has been set aside to fund unanticipated shortfalls in FY2011; and the reserve fund which now stands at $550,000 again after replenishment at the November 2010 Special Town Meeting. Rob explained that the $300,000 revenue offset in the FY2011 budget was ultimately not needed, since the deficit was retired by other means, and it became part of the surplus revenue that was appropriated to the Stabilization Fund at the Special Town Meeting in the fall of 2011. Rob reported that the Governor's budget proposal, if adopted, would significantly increase the SPED circuit breaker, which provides reimbursement of special education costs in excess of a certain threshold. Historically, reimbursement has been 75% of the excess costs but last year it dropped to about 40 %. The Governor's proposal of $80m in funding would bring the rate back up to about 70% for FY2012, which would mean about $700,000 in additional funds to the town. Rob informed the Committee that the Town is about to go to market to issue bonds in the amount of $4.7 million to fund various capital projects. There was a discussion of the uncertainty of current rates and the recent volatility of the municipal bond markets. Also, a bond anticipation note (BAN) will be issued at a little less than $3. lm for part of the costs of the acquisition of the Cotton Farm property. This will come due in early July and be retired in full, with an appropriation from CPA, instead of being converted to long -term debt. The amount may be reduced if the anticipated state grant of $500,000 for the Cotton Farm purchase is received in time. Rob reported that bids for the Town Office building renovation project came in lower than anticipated, and therefore no supplemental funding will be needed for furniture. The streetlight replacement project has been completed in a timely fashion, and NSTAR has agreed that the Town has met the conditions required to receive the promised rebate of $238,000. Non- functioning streetlights should be reported to Rob Addelson or directly to Bill Hadley at the DPW.