2004-11-17-AC-min - Laserfiche WebLink

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November 17, 2004 Minutes of Appropriation Committee Meeting Wednesday, November 17, 2004, 6:30 PM Held at Lexington High School, Commons II, in connection with the Budget Collaboration Group Committee members present: John Bartenstein, Deborah Brown, Rod Cole, Richard Eurich, David Kanter, Paul Hamburger, Alan Levine, Eric Michelson, Ron Pawliczek Staff Present: Sheila English, Michael Young, Linda Vine, plus others This meeting was held together with the Board of Selectmen (BoS), School Committee, and Capital Expenditures Committee. Ms. Dawn McKenna, Chairman of the Board of Selectmen, ran the meeting. The meeting convened at 6:45 PM. Linda Vine noted that while there has been substantial staff turnover, the experience of Susan Bottan, Michael Young, and Candy McLaughlin provides needed stability. The issue of the Moody's rating of Lexington was a major discussion topic. Sheila English gave a short presentation. She stated that Moody's looks for the Town to craft a "structurally balanced" budget and to build up our financial reserves. The BoS posed four questions: 1) What do we need to do to maintain our bond rating? 2) What should our free cash policy be? 3) What guidelines re the budget should be given to the Town Manager and LPS Superintendent? 4) What should the override policy be for FY06? Deborah Brown raised the issues: 1) What do we need to do to put the budget in order? 2) What are the reserves for? Sheila English stated that the certified free cash is $2.3M as opposed to $1.3M a year ago. Later, in response to a question, she said that if our bond rating is lowered from Aaa to Aa1, we would pay 5 to 10 basis points more interest on debt that will be issued. [A basis point is 0.01%.] The general discussion of the Moody's rating revolved around its priority especially if maintaining it at Aaa means we will need to cut some services. The costs and benefits of a Aaa rating were discussed. Sheila E. stated that in terms of reserves, the Town has a $3.1M Undesignated Fund Balance of which $2.3M is free cash. There is about $800K in the Stabilization Fund.