HomeMy WebLinkAbout2003-01-16-CEC-min
Town of Lexington
Capital Expenditures Committee
Draft
Meeting Notes
January 16, 2003, 6:30 p.m.,
followed by Summit IV meeting
Harrington School
Committee members present: Bhatia, Burnell, Hornig,
Rosenberg, Stolz
Meetings Schedule (new items highlighted)
Wednesday, Jan. 22, CEC, 7:00, Special Town Meeting
preparation Lincoln Park; Special Town Meeting, 8:30, Clarke
Thursday, Jan. 23Summit V, 7:00, Bowman School gym
,
Cash Capital Priorities
Hornig presented a spread sheet listing committee priorities
for cash capital, and proposed funding: priorities 1-4
(landfill closure, Diamond gym floor [SBA reimbursable 59%],
Cary Hall retrofitting, and Harrington gym floor) totaling
$790,000, to be paid for by borrowing; and subsequent
priorities (fire engine, Buckman Tavern roof, DPW skywalker
equi;ent, fire department air compressor, and two DPW Ford
trucks) totalling $622,000 of cash. He then proposed
substituting the proposed building envelope study ($100,000)
for the two trucks, leaving cash at essentially the same
place, and better conforming the committee recommendations
to the Capital Budget Team’s.
Bhatia had discussed with DPW making the study cover
town and school buildings, and feed into the buildings
management information software system, a proposal DPW
thought it could accommodate.
Burnell felt DPW could and should know this kind of
information already, and that (unlike the schools) the town
had no one responsible for town property maintenance, making
the study and utilization of the software system
questionable. Discussion ensued about working with DPW and
the town administration to get a person or persons
responsible for building maintenance and information for
town-owned properties; and, if appropriate, using the
committee’s reports and jawboning power to reinforce the
importance of allocating human resources that way. (Bhatia
also suggested the need for performance audits and
productivity consulting to town departments, perhaps
beginning with DPW; but perhaps Appropriation needs to take
the lead?) The issue of encouraging the town to clarify
responsibility for town building management, and committee
support for that effort, was left open, and the committee
voted 4-1 to put the building envelope study on the
priorities list above the DPW trucks.
Burnell suggested adding Hastings roof repair ($88,000)
to the priorities list. It was decided to defer doing so,
since the schools felt that it was a next-year item, and
that a need for a school-system-wide roofing plan was the
first order of business.
This leaves the committee recommendations different
from the CBT recommendations because the committee took
elements of the Building Envelope (not the whole thing as
CBT did) and of the DPW vehicle requests (skywalker vs.
CBTessentially took none); the committee would spend less
money; the committee listed Buckman Tavern but CBT did not.
As to funding, CBT anticipated borrowing half for the
firetruck in the hope of not having to borrow because
delivery in FY ’05 would allow cash funding in that year’s
cash capital allocation.
How much spending and borrowing to recommend? If LHS
acoustical work proceeds in anticipation of SBA
reimbursement, that will be borrowed, and depending on
payback, could cut into available cash capital stiff
further. Countercyclically, one would like to borrow now and
pay back in better times, but the practice over the past few
years has been precisely opposite, squeezing matters now.
Short-term borrowing, with 3-5 year payback, depletes cash
especially quickly. Overall, the committee is leaning toward
less borrowing (Bhatia suggests up to $900,000 vs. the
current working assumption of $790,000) and less spending,
to preserve capacity for the next two years.
Other financing questions:
•CAN money be borrowed for the landfill closing (not
sure)?
•If the fire company is put at risk, is it worth buying
a new engine?
•What will the town pay on its upcoming large long-term
borrowing; if under the 4.5% assumed, can that money be
retained for capital spending? [But see below: the Summit
override agreement nominally calls for any further savings
from cost reductions or revenue enhancements to be used to
accumulate free cash, not to reduce the size of the override
or to recapture spending cuts!]
In light of tepid enthusiasm for most projects not
being funded, the committee is inclined to control spending.
Summit Meeting
Following nearly $2 million of school cuts and the narrowing
of the gap to $4.7 million, it was agreed to set a bundled
override at $4.957 million. That figure, with the
presumption noted above about directing further
economies/revenues to free cash, assumes a $100,000
reduction in cash capital (and $216,000 is on the at-risk
list).
Hornig inquired whether that $100,000 cut was intended
to be a permanent impairment to the cash capital policy?
Enrich suggestedusing borrowing, and also noted that the
cash capital policy is effectively not functioning; the
staff is working on alternatives, and he felt it important
to proceed on a path toward a functioning policy, and that
it could be done.
Horning said that if it is meant to be temporary, that
implied finding incremental dollars next year to make up the
cut, plus to fund additional borrowing, a chimera; the
committee therefore assumes it is permanent and will not be
made up; and therefore will recommend less spending.
He also said the policy is flawed and imperfect, but
the failure is not inherent in the policy; rather, it comes
from moving dollars out of the policy to balance the
operating budget [or to put in the debt-service costs for
large-ticket items which were supposed to be excluded but
have not been]. The policy works—when and if there is the
will to do. Absent closing buildings, which no one is
recommending, the needs remain, and have to be funded.
The Selectmen voted 4-1 (McKenna dissenting) to delete
the $100,000 cash for capital, to achieve the override
amount.
The School Committee will meet next Tuesday to
prioritize its at-risk list, the Selectmen will follow suit
next Wednesday after the Special Town Meeting, and Summit V
will convene on Thursday to bring togethter the at-risk
items, which currently total $8.3 million, roughly equally
divided, to fit vs. the $4.957 override amount.
Summit and committee meetings adjourned 9:15 p.m.
John S. Rosenberg