2021-05-13-AC-min - Laserfiche WebLink

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05/13/2021 AC Minutes • If the Town reconstituted the Lexington Housing Assistance Board (LexHAB) as a Housing Development Corporation (HDC), that Corporation could manage the construction and maintenance of affordable housing in a manner comparable to LexHAB's current role, while the application of the procurement laws, such as requiring the prevailing wage, would be based on the source of the revenue and the degree of independence of the HDC from Town government. • The current process for developing affordable housing in Lexington can be cumbersome and costly because of requirements for Town Meeting and Select Board approval. • An Affordable Housing Summit is scheduled for May 17 to introduce these concepts to stakeholders and to provide an opportunity for Lexington to begin exploring the advisability of pursuing either or both of them. Comments during the discussion included the following: • Town Meeting would put money into the Affordable Housing Trust but the trustees would be responsible for withdrawing it. This takes away some of Town Meeting's present authority. • The HDC would be able to react quickly to opportunities and make financial decisions. • The advisability of increasing affordable housing for one population segment by circumventing the procurement law that mandates prevailing wages for construction workers was questioned. • Institutional changes may be in order because the current process is not effectively meeting Lexington's goals for affordable housing. • Community Preservation Act(CPA) contributions for affordable housing would continue to be subject to the rules regarding CPA funds. Questions included the following: • Who is responsible for hiring staff at an HDC? • How would decisions, e.g., on which projects to pursue, be made and does the Town have input into the process? • When would the prevailing wage still be applicable? • Why is the trust necessary? Is this necessary for being able to accept CPA funds? Does the trust hold the property? • Would the funds in the trust be transferred to the HDC? • What different models exist in Massachusetts and what can we learn from them? What are the pros and cons? Members of this Committee expressed general support for the concept but were interested in learning more. Impact of Reducing Free Cash on the Operating Budget Mr. Levine asked to further discuss the initiative led by the Town Manager to phase out the use of free cash for the operating budget over about five years. The result would be using the free cash to pay for capital projects for which the Town would otherwise be borrowing. In the long run, this would be a wash with respect to funds available for the operating budget vs. the capital budget, but during the transition, which could last ten or more years, it would put additional pressure on the operating budget, and he does not want to see the operating budget unreasonably impacted. In response, Ms. Kosnoff reported that the Town currently uses $3.0-3.5 million from free cash for operating expenses. After reviewing the sources of free cash, she noted that there are uncertainties 2