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HomeMy WebLinkAbout2022-06-07-CEC-minMinutes of the Lexington Capital Expenditures Committee (CEC) Meeting June 7, 2022 Page 1 of 4 Location and Time: Remote Meeting; 8:00 A.M. CEC Members Present (remote participation): Charles Lamb, Chair; David Kanter, Vice−Chair & Clerk; Sandy Beebee; Mike Boudett (arrived 8:05 A.M.); Rod Cole; and Frank Smith CEC Members Absent: None Others Present (remote participation): Other Lexington Committees/Boards and Associated Staff: • Community Preservation Committee (CPC): Marilyn Fenollosa (Chair), Kevin Beutell (arrived 8:30 A.M.), Bob Creech, David Horton (arrived 8:35 A.M.), Jeanne Krieger, Joe Pato, Robert Pressman, Lisah Rhodes, and Melinda Walker • Affordable Housing Trust Study Committee (AHTSC): Kathryn Roy (Chair), Gretchen Reisig (Vice Chair), Jeri Foutter, Carol Marine, Tara Mizhari, Linda Prosnitz, and Betsey Weiss • Appropriation Committee: Glenn Parker, Chair • Lexington Housing Authority Board (LexHAB): Bob Burbidge (Chair); Sarah Morrison, Executive Director Town of Lexington Staff: • Land Use, Health and Development: Carol Kowalski, Assistant Town Manager for Development • Finance Department: Carolyn Kosnoff, Assistant Town Manager for Finance; Sara Arnold, Recording Secretary Other Entity: • Regional Housing Services Office: Liz Rust, Executive Director Documents Presented: • Notice of Public Meeting/Agenda CEC Meeting, June 7, 2022 • AHTSC Presentation prepared for the CEC, CPC, and Select Board (SB), Final, June 7, 2022 Call to Order Mr. Lamb called this Remote (Virtual) Meeting, which had been posted as such, to order at 8:00 A.M. As all those present had been previously advised of the special conditions of this meeting, he passed on repeating them (i.e., the authority to not require a physical presence of a quorum and other selected terms under the Open Meeting Law is legislation signed on June 16th of this year by Massachusetts Governor Charles D. Baker). Mr. Lamb advised that materials provided electronically to the Committee or presented at the meeting, would be available upon request and are those listed in the Minutes as Documents Presented. Any votes during this meeting would be taken by a roll call. Further, this meeting would be recorded to assist in preparing Minutes, and the recording would be deleted once the Minutes is approved. Mr. Lamb took a roll-call attendance, determining initially, that five, and then ultimately, six members were present. Minutes of the Lexington Capital Expenditures Committee (CEC) Meeting June 7, 2022 Page 2 of 4 Ms. Fenollosa called the CPC meeting to order at 8:04 A.M. Ms. Roy called the AHTSC meeting to order at 8:05 A.M. Public Comments on Matters Outside the Items on the Agenda Mr. Lamb called for any such comments and there were none. Presentation by members of the AHTSC Ms. Roy reported that the AHTSC is tasked with studying the creation of an Affordable Housing Trust (AHT) and an Affordable Housing Development Corporation (AHDC) for Lexington, but the study of the AHDC is currently on hold because LexHAB is exploring how it might transition into an AHDC. In addition to bringing this report to the CEC and CPC, the AHTSC plans to present it to the Select Board (SB) on the 27th of this month. Ms. Roy explained that there is currently a shortage of affordable housing in Lexington. The current process for increasing such housing requires Town Meeting approval and if requesting use of Community Preservation Act (CPA) funds, is also dependent on coordinating with the CPC’s schedule constraints. The result is the Town is most often unable to respond to many affordable housing opportunities in a timely manner. Using PowerPoint slides, Ms. Roy explained that an AHT is a well-established, flexible, funding mechanism that would facilitate efforts to meet Lexington’s affordable housing objectives. Using that mechanism, Town Meeting could put available funds, which could include CPA monies, into an AHT, and the SB could then authorize the use of the funds for a specific project as such opportunities arise. Massachusetts General Laws, Chapter 44, Section 55c, provides broad powers for those communities that establish an AHT. They include investing in new construction, purchasing and/or renovating properties, supporting the preservation of properties, and borrowing funds. Ms. Roy reviewed a flow chart demonstrating the funding process for the AHT and identified ways in which an AHT would eliminate some of the constraints associated with getting funds though the CPA process. Ms. Roy discussed the constraints associated with LexHAB, which is a municipal entity that manages the purchase and development of affordable housing in Lexington. The laws that regulate LexHAB undermine its ability to function efficiently, effectively, and cost-effective. Transitioning LexHAB to a non-profit organization—in this case an AHDC—appears advisable. Ms. Roy identified checks and balances associated with an AHT. After reviewing the qualifications being recommended for AHT trustees, Ms. Roy discussed the process and next steps for establishing an AHT. During question-and-answer discussions, CEC and CPC members made suggestions for improving the PowerPoint slides to better illustrate the way an AHT would function, particularly as it relates to CPA-funded processes. Additional information was requested on the experience of other towns with AHTs, both pros and cons, and how LexHAB might function as an AHDC. In response to questions asked by CEC and CPC members, AHTSC members, Ms. Kowalski, and Ms. Kosnoff provided comments including the following: • There are 128 communities with AHTs in Massachusetts. Minutes of the Lexington Capital Expenditures Committee (CEC) Meeting June 7, 2022 Page 3 of 4 • It is expected that the Trust would seek CPA funds annually for Town Meeting to approve; for some AHT communities, all of the funds that go into their AHT come from CPA requests, but that is unlikely to be the case in Lexington. • Funds for an affordable housing project can come from multiple sources, not just from AHT funds. • The Town would assume responsibility for the Trust, as authorized by the enabling legislation allowing AHTs; it would not be independent of the Town. • It is recommended that the Trust managers be selected based on their expertise rather than their committee affiliations. They would meet quarterly with all entities associated with affordable housing in Lexington. • If $1.5 million is put into the trust initially, the need for the Trust to assume debt should be minimized. • The specific logistics for borrowing funds still need to be clarified, but it is anticipated that property being purchased would be used as collateral rather than the Town supporting additional debt obligations. Therefore, the borrowing would not affect the Town’s borrowing limit. • Being able to borrow funds would allow the Town to respond to affordable housing opportunities in a timely manner. • As long as it is not given building authority, an AHT is an instrument for transferring funds to developers or to an AHDC, and it is not subject to bidding laws. An AHT provides flexibility. • An AHT cannot fund pre-existing obligations. • An AHDC is separate from an AHT, although if they both exist, they would work in conjunction with each other. The AHTSC is studying the advisability of creating an AHDC for Lexington, but recommendations are not yet available. • An AHDC can purchase land; it can build housing; it can access funds from different sources; and it is not subject to the procurement laws that require prevailing wage. • LexHAB was able to manage the affordable-housing needs adequately until six or seven years ago when the State adopted procurement laws that applied to LexHAB because it is a quasi-municipal entity. Those procurement requirements have increased costs for LexHAB considerably, making it impossible for the Town to compete with developers. If LexHAB transitions to being an AHDC, or if a new AHDC is created, it would not be subject to the procurement bidding requirements that include prevailing wage. • The CEC would be involved in the review of funds going into and out of the AHT. In addition to the questions asked during the discussion, concerns identified by CEC and CPC members included: • Lexington’s By-Laws and the CPA statute need to be reviewed to ensure compliance. • Available land in Lexington for affordable-housing development is limited and expensive, which may be different from other towns with AHTs. • There is interest in the good and bad experiences that other towns have had with an AHT. Minutes of the Lexington Capital Expenditures Committee (CEC) Meeting June 7, 2022 Page 4 of 4 • Towns with AHTs that include building authority would not be comparable to the process that is being recommended in Lexington. • Town Meeting has traditionally been very project specific; getting Town Meeting support for this change may be a challenge. Mr. Lamb asked for CEC comments on the proposal to create an AHT. Although responses were favorable, members expressed the need for additional information, particularly in terms of process, the issuance of debt, and the interaction between an AHT and an AHDC. It was noted that proceeding with an AHT without an AHDC appears to be unadvisable. To the same question, members of the CPC and Mr. Parker expressed comparable comments—all were generally in support of the concept. CPC members noted that the use of CPA funds for affordable housing has traditionally been project-specific, which would not be possible if appropriating funds to an AHT. Members of both the CEC and CPA wanted more information on how their Committees would be involved with the AHT process. AHTSC Business The AHTSC adjourned at 9:16 A.M. CPC Business The CPC approved two sets of CPC Minutes, briefly reviewed their meeting schedule, and adjourned at 9:20 A.M. Debt-Exclusion Referendum Mr. Lamb reported that, based on preliminary results, the Debt Exclusion Override for a new Police Station passed, but there was a very-low voter turnout; passing by only about 300 votes. [Certified results on June 8, 2022, are 2,853 voters (12.48% of the 22,802 registered voters) and passed by 379 votes.] Member Concerns and Liaison Reports Mr. Lamb reported that this was Mr. Smith’s last meeting on this Committee as he is resigning at the end of this month. Members expressed their appreciation for his contributions. Mr. Smith noted that the CEC is an impressive Committee. Mr. Lamb added that Ms. Rhodes would be joining this Committee on July 1, 2022 and welcomed her future participation. Ms. Kosnoff reported that Katharine Labrecque has been hired to fill the Budget Officer position previously held by Jennifer Hewitt. She is transitioning from the Town Manager’s office, where she has been a Management Analyst. CEC Supplement and/or Errata Report to this Committee’s Reports to the 2022 ATM and the STMs 2022-1 & -2 It was agreed that neither additional Report was necessary. A Motion was Moved and Seconded at 9:22 A.M. to adjourn. Roll-Call Vote: 6–0 This Minutes was approved by the CEC at its meeting on June 30, 2022