2013 Rpt of AC to ATM - Laserfiche WebLink

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APPROPRIATION COMMITTEE REPORT TO THE MARCH 2013 ATM propriation for rate relief in the first place — the availability of retained earnings for rate relief would eventually give out, leading to a major spike in rates. For this reason, the Committee advocated last year a reduction in the amount of the combined subsidy for FY2013 (a year in which overall combined cost in- creases were very small) from the originally proposed amount of$750,000 to the ultimately appropriated amount of$500,000,4 with the goal of ultimately "weaning off' the need for regular "rate relief' appro- priations from retained earnings altogether. This year's budget proposes a modest additional reduction in the combined annual retained earnings sub- sidy —a reduction in the water subsidy from $350,000 to $300,000 and a reduction in the sewer subsidy from $150,000 to $100,000. These reductions will help make additional progress toward the goal of elim- inating the annual subsidy while increasing the required combined FY2014 rate increase by only about 0.5%. At the same time, continuation of a substantial water rate subsidy this year is reasonable as it will allow the Town to offset the unusual spike in Lexington's FY2014 MWRA water assessment, attributable to excess water usage by Bedford in CY2012, with surplus 2012 revenues from Bedford that were specif- ically reserved for this purpose, Recreation This level-service budget represents a decrease of about $3,500 (42%) from last year. Wages and sala- ries are projected to increase moderately (5%) for five full-time staff and $175 +/- seasonal staff. Expens- es are decreasing by about 1% and debt service costs will decrease substantially by 23.4% to $100,000 (the Recreation Fund's annual commitment to contribute to the financing of the 2002 Lincoln Field resto- ration project). Indirect costs payable to the General Fund for Town services will increase slightly by $5,000, or 2.2%,based on the Town's most recent indirect cost analysis. All programs offered by the Recreation Department are designed to be revenue-neutral with charges to users matching the program's operating costs of approximately $2,000,000. Sources of revenue include user fees for fields and registration fees for programs, which total a little over $1,000,000; and revenue from golf course fees,which total a little under $1,000,000. The Recreation Enterprise Fund retained earnings were certified as of the end of FY2012 (6/30/2012) at $1,389,828. This year's operating budget, like last year's, includes a "working capital" appropriation of $375,000 from retained earnings that should be replenished by user fees received through the end of FY2013. More permanent draws from the Recreation Fund's retained earnings are also proposed for capi- tal purposes under Article 8(h) ($186,750 for Lincoln Park Field Improvements) and 9(a) ($75,000 for Pine Meadows Golf Club improvements). The Committee recommends approval of this request(9-0). Article 6: Appropriate for Senior Funds Funding Committee Service Program Requested Source Recommendation $20,000 GF Approve (9-0) This article proposes an appropriation for the Town's Senior Service Program of$20,000. This amount, together with an anticipated carryover balance from prior years of approximately $16,000, is expected to be sufficient to meet the needs of the program in FY2014. 4 Because the enterprise funds' cost increases were unusually small last year(about 2%) the rate increases required for FY2013 when rates were set in the fall of 2012, even with a significant reduction in the subsidy,were just 2.7% for water and 4.0%for sewer,for a combined rate increase of 3.6%. 19