2011-08-18-AC-min - Laserfiche WebLink

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August 18, 2011 4. Town Year -end Budget Report for FYI I. Mr. Addelson gave a synopsis of the FYI I year -end budget report including results for the General Fund and various Enterprise Funds. Regarding the General Fund, approximately 96.5% of the total budget was expended or encumbered, leaving $4.9m returning to fund balance (a subset of these funds will revert to free cash and some will remain in continuing balance accounts). This included school department funds, $2m from the employee health insurance fund, the Reserve Fund, the Salary Transfer Account (see discussion in July 7, 2011 minutes, Item 1), and funds that had been set aside for a snow and ice deficit that will instead be covered from other sources (see discussion in July 7, 2011 minutes, Item 3). The bulk of the $2m balance coming from the employee health insurance fund arose from reductions due to earlier contract negotiations, i. e, an increase in employee contributions and savings from plan design changes. There were also savings from a double - counting of open positions (14), fewer employees electing coverage than anticipated, and generally lower health care costs attributable to fewer and less severe claims. On the revenue side, $2.3m was collected in excess of expectations due mostly to an increase in motor vehicle excise taxes, strong collections for building - related permits, and an increase in the local hotel and meals tax receipts. The FYI I end -of -year budget surplus will not impact the estimates of local receipts for FYI 2. Although there is no detailed estimate of the anticipated free cash balance yet as of the end of FYI I , it will likely be of a size commensurate with last year's, which will be helpful in preparing the FYI budget; however, concerns about the sustainability of free cash at these levels in future years continue. Regarding the Enterprise Funds, actual expenditures were below budget by $99k for water, $20k for sewer and $83k for recreation. Revenues exceeded expenses by about $360k for water, fell short of expenses by $460k for sewer, and exceeded expenses by $326k for recreation. Mr. Bartenstein questioned the accuracy of these numbers, particularly in view of an MWRA Lexington Water Consumption Chart that indicated a dramatic spike in usage last year due to the dry summer and heavy irrigation use and the report at the time of the Annual Town Meeting that water revenues were running approximately $1 million over budget. Mr. Addelson agreed that further investigation was in order. 5. Changes in State Health Insurance Options. Mr. Addelson and Mr. Pato gave an update regarding health insurance negotiations in view of recent legislation allowing municipalities to unilaterally make plan design changes within specified limits or, alternatively, join the state's Group Insurance Commission (GIC). Mr. Pato said Lexington is planning to open coalition bargaining negotiations for FY2013 contracts in October or November of this year. Given the state law's timing constraints, the earliest date the Town could join the GIC would be 7/1/2012, although there is no desire to short- circuit the existing coalition bargaining agreement. However, the town will need to make a decision by mid - January 2012 in order to resolve negotiations in time for the GIC notification deadline of 3/1/2012. 2