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HomeMy WebLinkAbout2005-04-27-AC-min April 27, 2005 Minutes Town of Lexington Appropriation Committee April 27, 2005 Place and time: Cary Memorial Hall, Estabrook Hall, 6:00 p.m. Members present: Al Levine, Deborah Brown, Rick Eurich, Rod Cole, David Kanter, Ron Pawliczek, Eric Michelson, John Bartenstein This meeting of the Appropriation Committee was held in conjunction with Budget Collaboration Group Meeting VII, which was convened primarily to discuss supplemental appropriations under Article 29 and school capital issues under Articles 30 and 31. Liberty Ride 1.. Board of Selectmen Chair Jeanne Krieger advised that a motion would be made at that evening’s Town Meeting to amend Article 37, Line 7300 (Economic Development) to eliminate reauthorization of the Liberty Ride Program Revolving Fund. Although the Liberty Ride has historically operated on a break-even basis by the end of the fiscal year, (residual deficits having been made up by contributions), it has not historically been able to operate on a pay-as-you-go basis throughout the year. As amended, the anticipated expenses of the Liberty Ride would be appropriated from the General Fund, to be offset by anticipated receipts. Additional Funding for Fiske Construction Project 2.. The first issue discussed under Article 29 was the need for a supplemental appropriation to fund cost overruns on the Fiske School construction project. School Facilities Manager Dana Ham reported that bids had been opened earlier in the day. The low bid was $14,245,000 (base bid) plus $655,000 (bid alternates) for a total of $14,900,000. The addition of FF&E, design and soft costs of $3,260,000, and a contingency of $750,000, would bring the total estimated project cost to $18,910,000. Although the final project cost was not as large as had been feared given recent severe inflationary trends in the construction industry, Dana reported that it still would exceed the $17,600,000 remaining under the Harrington/Fiske debt exclusion override by about $1,300,000, which is approximately 4% of the original $32,150,000 debt exclusion adopted in 2002. Therefore, the Schools would need authorization to borrow this additional amount in order to accept the bid. There ensued an extensive discussion about how best to handle the anticipated cost overrun. Options discussed included: (1) seeking authorization from the Department of Revenue to borrow the additional amount under the outstanding debt exclusion override (DOR policy permits a one-time addition of “a modest amount attributable to inflation, new regulatory requirements or minor project changes”); (2) putting out a new debt exclusion override to fund the additional costs; (3) funding the overrun with additional in-levy borrowing; or (4) cutting project costs. - 1 - April 27, 2005 Al Levine reported that the Appropriation Committee had previously voted to support an addition to the outstanding debt exclusion of up to 10%, or about $3.2 million, if the Fiske construction bids came in over budget, and that the 4% figure suggested was well within this range. He pointed out that to fund the overrun within the tax levy would put further pressure on the operating budget and require larger operating overrides in future years, and that operating overrides result in a permanent instead of a project- specific tax increase. He further pointed out that there had been no changes to the scope of the project originally approved by the voters, that the overruns resulted entirely from unforeseeable inflation, and that to cut corners on the project would be unwise and likely result in even greater costs later. There was general agreement to seek a supplemental appropriation under Article 29 for the amount of the cost overrun and to request DOR’s approval to add this amount to the outstanding debt exclusion. Because the DOR only permits a one-time increase to a debt exclusion, it was also agreed that the amount requested should be something more than $1.3 million in case there are additional unforeseen contingencies. Other Article 29 Supplemental Appropriations. 3. There ensued a discussion of other supplemental appropriations that would be proposed under Article 29 for capital improvement projects authorized in prior fiscal years, including emergency repairs to the Estabrook roof and the completion of certain improvements to the town office buildings that had gone over budget. There was also extensive discussion whether $83,000 of the amount requested for the Town Building Envelope Program was more properly treated as an operating expense or a capital expenditure. Article 30 School Capital Projects and Equipment. 4. School Committee Chair Tom Griffiths and Facilities Manger Dana Ham reported on the results of a recently completed energy audit of the Clarke Middle School, evolving plans for energy-related capital projects that would most effectively implement those recommendations, and the current state of the School Committee’s discussions with the Capital Expenditures Committee about the amounts that would be requested for school capital projects under Article 30 and the application of the cash capital policy. Mr. Griffiths also reported on the School Committee’s anticipated request under Article 30 for funds for architectural and engineering design funds for reconstructing and adding an addition to the School Administration Building and circulated a conceptual rendering of the proposed White House renovation. Article 31 School Technology Equipment. 5. Finally, there was a brief discussion of Article 31 and the funds requested by the School Committee for the maintenance and upgrade of school technology systems. Appropriation Committee’s First Supplemental Report. 6. Immediately following the Budget Collaboration Meeting, the Appropriation Committee voted 8-0 to approve its Supplemental Report to the 2005 Annual Town Meeting prepared by Paul Hamburger, and to be presented that evening by Deborah Brown. - 2 - April 27, 2005 The meeting concluded at approximately 7:20 p.m. Respectfully submitted, John Bartenstein Approved June 8, 2005 - 3 -