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HomeMy WebLinkAbout2012-10-18-AC-min October 18, 2012 Minutes Town of Lexington Appropriation Committee October 18, 2012 Place and time Town Office Building, 7 30 p m Members present Glenn Parker, Chair, Joe Pato, Vice Chair, John Bartenstem, Vice Chair and Secretary, Alan Levine, Jomna Schonfeld, Robert Cohen, Mollie Garberg, Rob Addelson (non- voting, ex officio) Members Absent Eric Michelson, Richard Neumeier Also present Bill Hadley, Director of Public Works, and John Livsey, Town Engineer The meeting was called to order at 7 35 p m 1. Announcements Glenn Parker reported that he had attended the groundbreaking ceremonies for Estabrook School 2. Minutes John Bartenstein reported on the status of outstanding minutes VOTED Minutes for the Apnl 2, 2012 summit meeting were approved 7-0 VOTED Minutes for the Apnl 11 summit meeting were approved 6-0-1, Robert Cohen abstained because he was not present at the meeting 3. Member Reports • Vistapnnt TIF Robert Cohen reported that the Town's negotiating team has met with Vistapnnt regarding its TIF (tax increment financing) application requesting $3 5 million over 13 years Vistapnnt has outgrown its current facilities at the 95 Hayden Ave (Ledgemont 2)building but would like to stay in Lexington Vistapnnt is proceeding on an aggressive schedule and has targeted the beginning of 2013 for deciding on expansion at the Ledgemont site Hobbs Brook, owner of the Ledgemont 2 property, plans to build a Ledgemont 3 building whether Vistapnnt decides to lease it or take its expansion plans to another location It wasn't clear to Appropriation Committee members whether a TIF agreement would be ready for the fall special Town Meeting • School Committee Mollie Garberg reported on the Saturday morning, October 13, 2012, School Committee meeting where the Estabrook School project was discussed It was reported that at 60 percent construction design the cost estimates were over budget A list of"value engineered" items was presented that, if adopted, could close the budget gap Most were accepted, but those that weren't leave the project $1 2 million over budget Pat Goddard anticipates that, to cover this and other potential shortfalls, a request for an additional appropriation in the range of$2 0 to $2 8 million will be made at the special 1 October 18, 2012 town meeting Factors that warrant an appropriation higher than the current shortfall are variables in the cost of steel, potential unanticipated tear down costs for the old building, the guaranteed maximum price requirement, and an $800,000 difference in our two current total cost estimates There was some discussion at the School Committee meeting about addressing the shortfall by taking money out of the construction contingency fund but this did not receive support The School Committee wants to go out to bid in December before bid requests for a number of other known construction projects are issued within the state 4. Estabrook School Access Roads DPW Director Bill Hadley and Town Engineer John Livsey described the Estabrook School access road project and efforts to address neighborhood issues Most of the proposed changes are on Robinson Road, but Grove Street intersections are also included Based on 75 percent design estimates the project will require $1 5 million, which includes 20 percent contingency funding 20 percent is a typical contingency amount at this stage of design, contingency funding can be as low as 10 percent when the design work is at 100 percent Potential cost overruns for which the 20 percent contingency may be required include drainage design work, which is still being developed and may require special permitting Testing should determine whether soft soil or ledge is under the current asphalt, either condition could increase costs No takings for permanent easements are anticipated By taking this project to the special town meeting this fall, the work can be done during the summer of 2013 when the students are on vacation In response to questions about the use of free cash, rather than debt service, to fund this project, Rob Addelson explained that $1 6 million of free cash certified at the end of the previous fiscal year had been set aside for this purpose but was not ultimately appropriated at last spring's annual town meeting because the project was not yet ready The resulting surplus became part of the free cash balance at the end of FY2012, and so it is now appropriate to earmark it again for this purpose There are no implications for the rest of the budget 5. Discussion of Special Town Meeting Articles Glenn Parker reviewed his outline for the committee's report to the fall special Town Meeting and noted that articles 2, 3, 4, and 6 are related and involve positions of multiple committees He reported that the chairs of Capital Expenditures, Appropriations and Selectmen met to discuss the possibility of developing a consensus proposal on how to use excess funds and may continue those discussions It is understood that any proposal developed by the chairs would ultimately be subject to approval of their respective committees One of the options for disposition of unallocated funds is to increase the amount appropriated for the pension fund in FY2013 Rob Addelson suggested that such a recommendation may be made after the Retirement Board determines the annual amount the Town would need to allocate to reach its 2020 goal of a 100 percent funded pension fund He reported that the Retirement Board has received an updated actuarial report indicating that, beginning in FY2014, our annual contribution will need to be increased significantly from $4 2 million to $7 3 million This increase arises from an increase in life expectancy, a decrease in expected returns on investment accounts and the multi-year averaging of pension fund balance that now fully integrates the economic downturn Although the Retirement Board could require $7 3 million of the Town, the 2 October 18, 2012 Board understands the difficulties of such a large increase The Board has asked the actuary to calculate different scenarios by changing the goal from 2020 to 2025, 2030, 2035 or 2040 The actuary is also evaluating the impact of the Town making a one-time additional allocation of$1 million or $1 7 million in FY2013 The Retirement Board expects to get the results of those analyses next week 6. Article Assignments: Committee members agreed to write the committee opinions on the articles as follows • Article 2 Glenn Parker • Article 3 Jomna Schonfeld • Article 4 Alan Levine and Glenn Parker • Article 5 Dick Neumeier • Article 6 Mollie Garberg and Alan Levine • Article 7 John Bartenstem, if the article isn't indefinitely postponed • Article 8 Joe Pato and Robert Cohen ACTION ITEMS The committee will vote on the articles on November 1, and final draft reports need to be submitted to Glenn Parker by November 8 Glenn will produce 175 copies of the report for Town Meeting 7. Next Meetings: Pat Goddard and Margaret Coppe have been invited to the October 23rd meeting to discuss the Estabrook School project ACTION ITEM Joe Pato will attend the Selectmen's meeting on October 29th The meeting was adjourned at 9 03 p m A list of documents and other exhibits used at the meeting follows Respectfully submitted, Sara Arnold Recording Secretary Approved November 1, 2012 Exhibits 1 Meeting Agenda posted by Glenn Parker, Chair 2 Appropriation Committee Report to the November 2012 STM— [Outline] 3