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APPROPRIATION COMMITTEE REPORT TO THE MARCH 2013 ATM choose among the various plans offered by the GIC. The total enrollment remains a critical variable, but the choices of plans by subscribers are also important. For estimating FY2014 expenses, the Town was able to use the FY2013 experience as a base. Enrollment numbers and projections are shown on page IV-6 of the Brown Book. The FY2014 budget is designed to accommodate an enrollment reaching 2286, an increase of 95 subscribers (4.3%). This in- crease allows for changes in enrollments due to new hires to fill currently open positions (9) or newly cre- ated positions (57) and provides a buffer for new subscribers among present employees/retirees (26). It also captures increases in numbers of subscribers coming from the movement of eligible employees from family plans to Medicare supplement plans that does not lead to cost increases. The health insurance amount in line 2130 reflects an increase of 5.4%, when discounting the one-time FY2013 mitigation payment of$1,120,000, due to the expected combined effects of changes in the num- ber of subscribers, and increases in the costs of medical services. The net effect relative to the total FY2013 health insurance appropriation is a small decrease in the overall budget for health benefits as stated above. Line 2100 in aggregate: The total amount budgeted for Line 2100 is $29,688,138. This amount is 1.2% less than the corresponding number for FY2013. Besides employee/retiree health insurance, line 2130 includes $910,832 for dental insurance, $1,305,421 for Medicare Tax, which the Town pays for all Town and School Department employees hired after 1986, and $20,400 for life insurance. The FY2014 budget includes the amount of$200,000 on line 2140, Unemployment Benefits, to fund the Town's estimated statutory liability for unemployment compensation payments for employees who were or may be laid off. This is a 31% reduction from FY2013 reflecting an anticipated reduction in the num- ber of employees eligible for unemployment insurance benefits and in the lengths of time that they will eligible for unemployment benefits. The Workers Compensation recommended appropriation in line 2150, $610,915, represents a 0.42% in- crease over FY2013 and continues the Town's response to actual experience and efforts to build a reserve balance in this continuing balance account. The second largest line in Shared Expenses is line 2110, Contributory Retirement, $4,805,537. This amount is based on an actuarial valuation of the Lexington Retirement System. It will be paid by the Town to the System, which is managed and overseen by the Lexington Retirement Board, to fund the Town's pension payments to retirees in FY2014 as well as to help fund liabilities for future payments due to current or past obligations. The recommended appropriation for FY2014 represents a $400,000 or 7.68% decrease from the total FY2013 appropriation. Note that the FY2013 total includes a one-time supplemental appropriation for Contributory Retirement of$1 million that was approved at the November 2012 special town meeting. If this supplemental appropriation is removed from the FY2013 base, the un- derlying change in costs between FY2013 and FY2014 is an increase of$600,000, or 14.3%. The major drivers of this increase are the final phase of capturing the losses attributable to the 2008 recession and a change in the mortality table used in the biennial valuation of plan liabilities, specifically the recognition that members are living longer. The Retirement Board's goal is to achieve full funding of the liabilities by the year 2030. Line 2200 Debt Service This line item includes within-levy debt service, i.e., it does not include exempt debt authorized by Proposition 2/2 debt service referenda. This line also does not include the request to appropriate $1,600,000 from the Capital Project/Debt Service Reserve/Building Renewal Stabilization Fund in order to pay a portion of the payments that would normally be covered by the FY2014 exempt debt service. That is covered under Article 20. Line 2300 Reserve Fund The Reserve Fund request is level funded at$900,000. 13