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Home My WebLink About2003-02-26-CEC-min Town of Lexington Capital Expenditures Committee Draft Meeting Notes February 26, 2003, 7:30 p.m., Town Offices Committee members present: Bhatia, Hornig, Rosenberg, Stolz. Absent: Burnell Also present: resident Charles Lamb; Appropriation liaison Sheldon Spector Meetings Schedule Thursday, March 6, 7:45 p.m., Town Offices, Room 111: informal participation in Appropriation Committee meeting to brief on CEC and Selectmen capital budgets (not an official, posted meeting) Wednesday, March 12 , 7:00 p.m., Clarke Middle School, before TMMA briefing on budget Wednesday, March 19, 7:00 p.m., Clarke Middle School, before TMMA briefing on capital items; prepare for Town Meeting presentations Monday, March 24, 7:00 p.m. and Wednesdays and Mondays thereafter, TOWN MEETING CEC vs. Selectmen’s Capital Budget The two sets of recommendations differ in that CEC endorses purchasing the DPW Skywalker equipment ($110,000) and the Selectmen do not; and the Selectmen endorse Hastings School roof repair ($88,000), Visitor Center rewiring ($97,000), ADA accessibility program ($50,000), and Town Offices lighting ($350,000)—all of which CEC rejects. Financially, the programs differ as well. CEC assumes that in light of lower than forecast debt service costs, the $100,000 or so of forecast savings can be applied to fund the DPW building envelope study (which CEC would otherwise not fund). Accommodating that variance and the difference in program elements (listed just above), the Selectmen’s budget would spend $480,000 more on capital than CEC would, and would fund that by borrowing approximately $600,000 more than CEC recommends. Both the Selectmen’s budget and CEC envision borrowing for the LHS acoustical retrofit ($1,500,000) and landfill closure ($450,000), the top priorities for both groups. Reconciliation 1: programatically, CEC would, pending further research on the Visitor Center and Skywalker by Bhatia, delete its support for the Skywalker and support the Visitor Center rewiring (completing that multiphase renovation program; and reducing total capital spending costs a n et $13,000). Reconciliation 2: financing differences. Pending discussion with Appropriation and Bhatia’s DPW research, at a meeting March 17 with the Selectmen, CEC will present this three-part argument: Apply the $100,000 savings from lower debt service to • current year capital spending (in CEC’s case, the building envelope study). Why? --Because the cash capital policy calls for that (and because cash available has been severely constrained by in-tax-levy borrowing for big-ticket items over the past several years); --because cash capital has already been cut $100,000 by the Selectmen to balance the operating budget; --because of the remaining cash capital, half has been put at risk (combining this point and the previous one, well over half of available cash capital has already been cut or put at risk, a disproportionate amount); and --because the Selectmen are already (see below) pursuing much more borrowing than CEC recommends to fund capital spending; here is a chance, appropriately, to apply cash to capital spending, and thereby to minimize borrowing, consistent with the Town Budget Report. Control borrowing •. With the LHS acoustical project, the Selectmen’s budget is $2.85 million of borrowing for capital spending, vs. $2.25 million recommended by CEC. [Charles: check borrowing notes here for borrowing figurevs. total spending; also, make clear that all the figures EXCLUDE spending on roads, from the $500,000 override plus Ch. 90, plus spending from the $7 mil. debt- exclusion!] Why? --Because the Town Budget Report recommends borrowing as little as possible; --b ecause FY ’04 would be the BEST year in the cycle, assuming passage of an override and the debt- service costs already in the pipeline and about to be incurred, which depress future cash for cash capital; --because the Town MUST maintain some flexibility to fund unexpected needs in the out years; and --because we already have too little cash capital available for KNOWN projects in the five-year projections, all of which CEC judges as higher priority than the items it decided NOT to fund in the current budget (examples: essential, very costly replacement of school roofs; deferral of essentially ALL vehicle replacement this year, even before we learn what the winter did to the stock of DPW equipment; no funding of school technology program this year, and budgeting of $250,000 per year in each of next three years) Reconciling program differences •. Given CEC’s preference for minimal borrowing and for funding only the absolutely most essential, high-priority projects in the current budget year, we arrived at different, and fewer, priority items to fund than the budget recommends. Reconciliation might possibly involve deferring Skywalker (DPW) and instead completing renovation of Visitor Center. But CEC found NO programmatic case made for the Town Offices lighting project, the ADA program as presented; and [verify!] we are now advised that Hastings roof repair can safely be deferred at least for this year. In other words, CEC would: fund only essentials; manage debt; and Hunker down to prepare for larger known needs (and some unknown ones) even as we expect more limited financial resources to pay for them. NOTE: in presentation to Town Meeting, Stolz will want to take note of what the Town is NOT funding this year: essentially zero vehicle replacement, no school technology, no routine building work. And of the known items on the agenda for the future, during what we expect to be tighter years for capital funds: school roofs, technology, etc., Those already recognized in our five-yuear plans. specifics, married to the above three points (essentials, limited debt, hunker down to prepare for tighter future and bigger needs) as centerpiece of oral Town Meeting presentation? Report, Other Items Article 13, electrical utility study. Committee finds interesting, although Bhatia and Rosenberg expressed concerns about payroll and benefit costs of municipal employees vs. utility employees; funding would be contingent on legislative approval of municipalization, but in any event, the committee cannot make even a contingent commitment to fund the study costs in a future budget at this point. Big-ticket capital costs: •Senior Center: leave at approximately $5 million. •DPW operations facility: until the real programmatic work is done, retain the committee’s position (redo garage, prefab, at 201 Bedford St., and lightly renovate and expand administration building) and estimate, in the $3-million range. The large difference between that estimate and the DPW/consultant estimate, $12 million, is meant to illustrate real differences in the program, which have to be resolved administratively and politically. No basis for changing estimate otherwise. •East Lexington Branch Library: Committee unwilling to justify a multimillion dollar renovation in the 2008 timeframe; carry at zero. Hornig taking lead this weekend on collating and revising report draft, with gratitude from all members! The meeting adjourned at 9:55 p.m. John S. Rosenberg