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65-479 Budget Collaboration/Financial Summit 1 October 1, 2009 A joint meeting of the Board of Selectmen, School Committee and Finance Committees was held on Thursday, October 1, 2009, at 7:30 p.m. in the Selectmen Meeting Room, Town Office Building. Present: Chairman Cohen, Ms. Krieger, Mr. Kelley and Mr. Burnell; Mr. Valente, Town Manager, Mr. Addelson, Comptroller, Ms. Pease, Executive Clerk; Dr. Ash, Superintendent; Ms. Dunn, Assistant Superintendent; all members of the School Committee, except Mr. Cole; all members of the Appropriation Committee except Ms. Hoffman and Mr. Michelson; and Capital Expenditures Committee members Mr. Lamb and Mr. Hurley. Financial Indicator Analysis Mr. Valente presented an overview of the positive aspects: strong tax collections, stable balance between spending for personnel costs versus capital and expenses, strong funding of pension system, modest debt service levels and improving financial reserves. Concerns are: cost of employee benefits, especially health costs and state aid which is still below 2002 levels. State Aid has increased from FY2006 to FY2009 in nominal terms, but is still below the FY2002 levels. Declining state aid in FY2010 required use of one-time revenue for the budget. Uncollected Property Taxes - Tax collections still strong. Personnel Costs and Employee Benefits - Wages and benefits remain stable and the Town is maintaining a balance between personnel, maintenance and capital. Increases in the cost of health insurance benefits continue to be a significant challenge for the Town. Debt Service – Even with large capital projects in the last 10 years, the amount of debt service is modest and well within the credit rating standard for AAA communities. Reserves & Fund Balance - Lexington made good progress in building financial reserves to provide flexibility during this economic downturn. FY2011 Proposed Revenue Allocation Mr. Addelson, Comptroller, reviewed the preliminary projections for the FY2011 Revenue Allocation: $145,299,131 Projected FY2011 Revenues $(66,958,293) FY2010 school budget $(26,526.287) FY2010 municipal budget $ (1,882,709) FY2011 Minuteman (includes an estimated 10% increase) $ (3,781,302) FY2011 Contributory Retirement $ (42,000) FY2011 Non-Contributory Retirement $(25,484,310) FY2011 Benefits ($23.6 for health, the remaining for dental, life insurance and Medicare) – includes 9% increase in health benefits