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09/29/2021 AC Minutes Minutes Town of Lexington Appropriation Committee (AC) September 29, 2021 Place and Time: Remote Participation: in accordance with Section 20 of Chapter 20 of the Acts of 2021 "An Act Relative to Extending Certain COVID-19 Measures Adopted During the State of Emergency", communication took place via a Zoom teleconferencing session that was open to the public; 7:30 p.m. Members Present: Glenn Parker, Chair; Sanjay Padaki, Vice-Chair; Alan Levine, Secretary; Anil Ahuja; John Bartenstein; Eric Michelson; Meg Muckenhoupt; Lily Manhua Yan; Carolyn Kosnoff, Assistant Town Manager, Finance (non-voting, ex officio) Member(s)Absent: None Other Attendees: David Kanter, Vice-Chair& Clerk, Capital Expenditures Committee; Eileen Jay, Vice-Chair, School Committee; Sara Arnold, Recording Secretary Mr. Parker reviewed the authorization for meeting remotely, noted that the meeting was being called to order at 7:34 p.m. on September 29, 2021, stated that the meeting was being recorded for the purpose of creating minutes, and confirmed attendance by roll call. Announcements and Liaison Reports Mr. Padaki expressed his appreciation for Mr. Parker's having prepared this Committee's submittal for Lexington's Annual Report. The draft was reviewed by Mr. Padaki and Mr. Levine before it was submitted. Town Budget Policy/Model Regarding Capital Stabilization Fund (CSF) Mr. Parker asked for comments or questions regarding a fiscal model that the Select Board (SB) may approve that would use extraordinary new growth funds to help build up the CSF in an effort to mitigate the tax impacts of large projects, such as a new high school. Mr. Bartenstein summarized his understanding of the associated goals/impacts, as follows: • It serves as a smoothing function that would help reduce the heights of peaks in the tax levy. • It is a pre-pay approach. • It disciplines the Town against over-spending, especially by avoiding new projects that might generate recurring costs. • It demonstrates the Town's efforts towards good fiscal responsibility. • If at some point it is no longer necessary to put aside funds and the revenue stream is increased, it could help avoid an override. Ms. Kosnoff noted that a downside associated with this model would be the extra expenditures needed when commercial growth requires additional infrastructure. Discussion included the following comments/questions: • Limiting projects to a five or ten-year horizon should address the concern that pre-paying for large projects may be unfair to today's taxpayers because they might not reap the benefits. • The concept of building the CSF before large projects commence has been used in the past, but there are current efforts in process to formalize it in the form of a guideline. • The CSF may also be augmented by the use of recurring revenue sources, in addition to free cash, debt and CSF funds. 1