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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