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06/23/2022 AC Minutes 1 Minutes Town of Lexington Appropriation Committee (AC) June 23, 2022 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; Anil Ahuja; John Bartenstein; Eric Michelson; Meg Muckenhoupt; Carolyn Kosnoff, Assistant Town Manager, Finance (non-voting, ex officio) Member(s) Absent: Alan Levine, Secretary; Lily Manhua Yan; Other Attendees: David Kanter, Capital Expenditures Committee; Kat Labrecque, Budget Officer; Sara Arnold, Recording Secretary Mr. Parker confirmed attendance, reviewed the authorization for meeting remotely, noted that the meeting was being called to order at 7:36 p.m. on June 23, 2022, and stated that the meeting was being recorded for the purpose of creating minutes. Announcements and Liaison Reports Mr. Bartenstein reported that Lexington's final MWRA water and sewer assessment, issued this week, reflected a 0% increase compared with the 0.4% increase in the preliminary assessments built into the FY2023 budget. This reduction will have a very small positive effect on the rates to be set for FY2023 next fall. Ms. Kosnoff explained that Lexington's assessment increase for FY2023 is unusually small because Lexington's usage decreased last year relative to other communities. Although the MWRA assessment represents a large portion of the water and sewer operating budgets, the overall budgets are increasing by a higher percentage, primarily due to increases in debt service costs. Ms. Kosnoff reported that the Department of Revenue recently certified Minuteman Technical High School’s (Minuteman Tech’s) excess and deficiency balance of $1,478,730, for FY2021. This “excess” is Minuteman Tech’s equivalent of Free Cash, a portion of which must be applied to the current year budget, thereby reducing the member towns’ obligations. Minuteman Tech informed the member towns today that instead of applying all of it to the current year budget, they would like to appropriate $500,000 of the excess into their Capital Stabilization Fund. This requires support from 2/3 of the member communities before the end of FY2022; thus, this item has been added to the Select Board’s (SB’s) June 27 agenda. Ms. Kosnoff noted that staff has not yet taken a position, but in general, she supports the concept of setting aside reserves for capital expenses, and the $500,000, when split among the member communities, does not represent a large amount. She noted that it would be useful to know the reasons for the surplus. Mr. Parker welcomed Ms. Labrecque, noting that this Committee looks forward to working with her. End-of-Year Adjustments to the FY2021 Operating Budget Using a handout, Ms. Kosnoff reviewed the four types of end-of-year financial adjustments that are being requested by staff: