2006-07-26-AC-min - Laserfiche WebLink

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July 26, 2006 Minutes Town of Lexington Appropriation Committee July 26, 2006 Members Present: A. Levine (Chair), D. Brown (Vice Chair), D. Kanter, R. Cole, M. Kennealy, J. Bartenstein, E. Michelson, P. Hoffman, R. Addelson (non-voting) Additional Attendees: Paul Hamburger, John Fedorochko The meeting was called to order at 7:40 by Al L. in Room G-15, Town Office PM Building. 1. Rod C. agreed to take minutes. th 2. A minor correction to the May 18 minutes was accepted by a vote of 6-0. 3. Officers were selected by unanimous votes: Al L. for Chairman, Deborah B. for Vice Chairman, and John B. for Secretary. 4. The primary topic of discussion was the report of the Selectmen’s Ad Hoc Financial Policy Committee. The goals listed in the report were discussed and it was decided they were all reasonable goals. P. Hamburger noted that it might be useful to set priorities among the goals as there will be times when the town cannot meet each goal simultaneously. Further, as part of that process we may want to adopt an overarching goal, something like operate town finances in a way we’d be proud to have on the front page of the newspaper. The recommendations for capital-financing policies were discussed in detail. Some issues with the recommendations were noted, such as the desirability and feasibility of moving to a cash only policy, and the problem that the concept of “fully fund” is not defined. Despite these issues, there was a consensus that it is very important that detailed analyses of the existing capital assets and estimates of the required work and costs to properly maintain them need to be generated as a first step. Once the annualized cost to properly maintain the town’s assets is known, the policy should set this amount as the spending goal. This goal might be stated in a number of ways. There was a preference for a policy that tied the amount directly to the value of the Town’s assets such as “X percent of the total value of the Town’s capital assets”. While it was noted that in practice this might be little different than a policy like we have now of “X percent of town expenses”, some felt that there is an important philosophical difference in having the policy explicitly based on asset value. There was a general consensus that we then need a policy that the town spends this amount of money each year, through either debt or cash, and that it would be useful to have a policy that cash is generally preferable to debt. It was noted that there needs to be Page 1 of 2