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October 21, 2004
Minutes
Meeting of the Appropriation Committee
October 21, 2004, 7:30 PM
Town Office Building, Room 111
The following list of background material and agenda was distributed prior to and at the
meeting.
BACKGROUND MATERIAL
Strawman letter (preliminary list of possible points) re hiring of town manager
Draft minutes of Oct. 7, 2004 meeting
PH's second version of charge etc. for a BoS committee on health insurance.
MINUTES
Members present: John Bartenstein, Deborah Brown, Rod Cole, Paul Hamburger, David
Kanter, Alan Levine, Eric Michelson, Ron Pawliczek
Also present: Sheila English, David Eisenthal
Sheila English introduced David Eisenthal who was invited by the Committee to explain
how Moody's determines a community's bond rating. Currently, Lexington has a triple A
rating but in the most recent review by Moody's in early 2004 Lexington was given this
rating with a negative outlook. At the time of this rating Moody's was concerned about
the low reserve balances (free cash and fund balances unreserved and undesignated) and
the fact that Lexington spent $3.4 million more than recurring revenue sources could
support to balance the FY2003 budget. In addition, the June 2003 override failed and the
Town took a $1,400,000 pension holiday (deferred payment to the Pension Trust Fund
until the future) approved at a special Town Meeting in the Fall of 2003.
DE stated that in the upcoming review, Moody's would see as positive the successful
passage of an override in June 2004 of over four million dollars for the FY 2005 budget
and the appropriation of modest sums to the Stabilization Fund by Town Meeting.
It was stated that the Town would be meeting with Moody's in the next few weeks.
There was general discussion about what the Town could do to maintain the Aaa rating.
SE and DE recommended that the Town 1) reexamine reserve policies, 2) estimate future
revenues conservatively, and 3) tighten control of expenditures.
The suggestion was made that the total of free cash and Stabilization Fund balance at the
end of Town meeting be kept at or above 3% of the budget. That this total was below
2.5% in FY2003 contributed to Moody's putting a negative outlook on the Town's rating.
October 21, 2004
DE indicated the rating agencies consider debt, finances, socioeconomic factors,
management quality, etc. in determining a bond rating.
The issues regarding the search for an acting town manager and also a regular town
manager were discussed. It was stated that the process of hiring an acting town manager
was progressing slowly. SE stated that the Town Manager must be able to earn trust
among multiple constituencies.
DK was directed to draft a letter with the Committee's input on the desired qualifications
of the new Town Manager with input from DB.
The meeting was adjourned at approximately 10:20 PM.
Respectfully submitted,
Ron Pawliczek with input from the Committee
Approved December 16, 2004