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August 18, 2011 Minutes Town of Lexington Appropriation Committee Meeting August 18, 2011 Time and Location: Legion Room, Cary Hall, 7:30 p.m. Members Present: Glenn Parker, Chair; John Bartenstein, Vice Chair and Secretary; Joe Pato, Vice Chair; Robert Cohen; Mollie Garberg; Alan Levine; Eric Michelson; Richard Neumeier; Rob Addelson (non- voting, ex officio) Others in Attendance: Theo Kalivas, Budget Officer; Jonina Schonfeld The meeting was called to order at 7:35 p.m. Mr. Parker welcomed Theo Kalivas, the new Budget Officer, and recognized Jonina Schonfeld who was attending as a prospective new member of the committee. 1. Minutes. The 9/22/10 and 11/3/10 minutes were approved by a vote of 6 -0 -1. Mr. Cohen abstained as he was not a member at the time of these meetings. The 6/21 /11 , 6/28/ 11 and 7/7/11 minutes were approved with minor, non - substantive edits by a vote of 7 -0 -0. 2. Officer Elections. The Committee discussed officer positions and took a poll of member interest in these positions for the upcoming year. Mr. Cohen nominated the current Chair, co- Vice - Chairs and Secretary to continue in their positions. Mr. Levine seconded the nomination. Vote approved: 7 -0 -0. 3. Moody's Credit Rating and Outlook for the Town. In response to a statement from Moody's Investors Service that it had assigned a "negative outlook" to a dozen Aaa -rated towns in Massachusetts (including Lexington), Mr. Addelson discussed the political considerations underlying the action, which followed the downgrading by Standard & Poor's of U.S. Treasury debt, and the factors determining the town's credit rating. The biggest concern is the ability of the Town to service its debt, and in this regard the Town continues to be in a strong position on all relevant factors. Not all Massachusetts towns with a Aaa rating were assigned a negative outlook, but towns that are located in regions where the local economy is heavily influenced by federal spending, were deemed to be at risk in the event of a federal default. Boston, Cambridge, and Winchester did not receive a negative outlook because they each maintain a financial reserve fund with at least 30% of their annual budget. Moody's will conduct an individualized review sometime during the next few months of the towns affected, including Lexington, and may then reconsider its position. The Committee discussed the federal debt -limit negotiations, town reserves, federal grants and the impact to the Town if there were cuts.