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Home My WebLink About2014-02-20-AC-min 2014-02-20 Minutes Minutes Town of Lexington Appropriation Committee February 20, 2014 Place and time Legion Room, Cary Memonal Building, 7 30 p.m. Members present Glenn Parker, Chair, John Bartenstem, Vice Chair and Secretary; Robert Cohen, Alan Levine, Susan McLeish, Eric Michelson, Jonma Schonfeld, Rob Addelson (non- voting, ex officio) Members Absent Mollie Garberg; Richard Neumeier Others Present Norm Cohen, Board of Selectmen (BoS), Joe Pato, BoS, Carl Valente, Town Manager, Kevin Mahoney, Assistant Superintendent, Minuteman Technical Institute (MTI), David Horton, MTI School Committee, Lexington Representative, Andrei Radulescu-Banu, Precinct 8 Town Meeting member The meeting was called to order at 7 35 p.m. 1 Amendments to MTI Regional Agreement(Article 23). Mr Mahoney reported on the 14-month effort to update the regional agreement that governs MTI's 16 member communities, which will be addressed under Article 23 at the Annual Town Meeting. The difficult process was considered necessary to move forward pending capital improvement projects as well as for the long-term sustainability of the programs offered by the institution. Using slides, he reviewed the eight changes that are being recommended, noting the following • Changing to a four-year rolling enrollment average for determining the operating cost allocations is expected to minimize financial spikes for the participating towns • Rather than only using the most recent enrollment figures for determining capital cost allocations, the recommendation is to use several formulas, as follows 16% to be shared equally by the 16 member towns, . 50% to be allocated to the member towns based on the four-year rolling enrollment average, The balance to be allocated using the state-generated Chapter 70 formula, which factors in income and property values, as well as enrollment figures for each town. • A 2/3 majonty vote of school committee members would be required for approving debt. If the debt is not approved by all member communities at town meeting, as currently required, there would be an alternative option for a referendum vote in a distract-wide election, and the debt could be approved by a majority of the aggregate votes cast. • The following recommended changes are included to incentivize towns to become members The School Committee can negotiate a gradual 4-year"buy-in"before a town assumes full responsibility of capital costs, assuming approval by the member towns . Cities as well as towns can become member communities The withdrawal process for a member community will be less onerous • Currently, withdrawal of a member requires approval by all member communities and the withdrawing member remains liable for its share of debt approved while it was a 1 2014-02-20 Minutes member The amended agreement would allow a member to withdraw, upon 60-days' notice, unless a majority of member communities, at a town meeting convened within that time penod, vote to disapprove, and the withdrawing member would not be responsible for any debt approved by a region-wide referendum vote that prompted its withdrawal • A 3/4 vote of school committee members, rather than a majonty, would be required to initiate amendments to the regional agreement. Ten percent of the registered voters in any member community could also petition for a change Unanimous approval by all member communities at a town meeting would still be required to make any change • Efforts are underway to implement a facility fee for non-member communities, by inter- governmental agreement, which would help cover capital costs, currently, non-member Towns only pay a state-set tuition rate for their students, which can only be used for educating the students The facility fee arrangement must be approved by the State and would be ground-breaking. Mr Mahoney further commented as follows • Currently, a town wanting to withdraw as a member can do so without mcurnng any debt, but the withdrawal must be approved by the other member towns • Thirty-five towns send students to MTI, and only 16 of those towns are members • Non-member towns send 45% of the students, this includes Watertown, which sends 75- 80 students • The State sets the tuition for out-of-distract students based on a formula. • In most cases, it is financially advantageous for non-member Towns to pay tuition for its MTI students, rather than join as a member • Other technological high schools have waiting lists, they do not have the same problems faced by MTI. • The current MTI building is 40 years old and needs to be completely renovated or replaced. The facility was designed to handle 800 students, there are questions about what size facility should be built to replace it. A facility study, including enrollment analysis, should be completed in June If the 16 member towns are exclusively responsible for the costs of a replacement facility (net of MSBA funding that should cover at least 40% of the cost), it is unlikely they will support a new building. • MTI currently has 716 students, 30-40 additional students are expected in the 2014-2015 freshman class Enrollment has been increasing because of a demand for MTI programs • Although the implementation of facility fees would address some of the problems associated with capital costs, the regional agreement needs to be amended with or without this component; changes to incentivize communities to join as members are important. There was discussion about this Committee's support of Article 23, which is asking for support of the recommended agreement. It was generally agreed that the recommended agreement is beneficial to Lexington. 2. Announcements and Liaison Reports. Mr Levine reported that he, Mr Parker, Mr Addelson and the Town Manager met with the Town's actuary regarding "other post- employment benefit" (OPEB) obligations, i e the health insurance obligations for retirees A new actuanal study was recently prepared, but is not yet publicly available because it is still in 2 2014-02-20 Minutes draft form and subject to revision. Mr Addelson explained that this study is required every two years and identifies an "annual required distribution", which is the amortized amount needed to fund the unfunded liability Although that amount has not yet been finalized, it will probably be in the ballpark of$11 0 million, which is more than the Town can realistically allocate for these purposes Funding of the obligation is not mandated, and it is unlikely that it will be The Town has been making contributions based on the availability of funds and currently has $4 0 million in the Town's OPEB trust fund. The recommended appropriation that will be presented to the 2014 Annual Town Meeting is $1 119 million. Rob Addelson added that the Government Accounting Standards Board (GASB) has mandated that the OPEB liability be included in a community's financial condition presented in the financial statements of the Town. Although not a cntical factor in the Town's bond rating, the topic does come up in calls with the rating agencies, who always ask about the OPEB liability and how much the Town has contributed. 3 Minutes. There was a motion, which was seconded, to approve the January 30, 2014 minutes The motion passed. VOTE 7-0 4 Report(s) to the Upcoming Annual and Special Town Meetings. Mr Parker asked that draft reports be sent to the assigned reviewers, then updated and distributed to this Committee prior to next week's meeting. They should be in a near final form when distributed. With respect to capital items, it was agreed that the Appropnation Committee report should not attempt to replicate all the information in the Capital Expenditure Committee's reports Mr Parker suggested that capital article wnte-ups focus on policy issues related to the projects in question and provide an overview of how the capital expenses impact the annual budget. He noted that the only significant new Community Preservation Act projects this year are the Cary Memonal Building and the Community Center It was agreed to discuss the Community Center project in more detail at next week's meeting. 5 Next Meetings. Mr Parker will post meetings for February 26`h, March 5th, March 12th and March 19th The meeting was adjourned at 9 37 p.m A list of documents and other exhibits used at the meeting are set forth below Respectfully submitted, Sara Arnold Recording Secretary Approved February 26, 2014 3 2014-02-20 Minutes Exhibits 1 Meeting Agenda posted by Glenn Parker, Chair 2 Proposed Amendments to the Minuteman Regional Agreement; presented by Kevin Mahoney, Assistant Supenntendent; January 20, 2014 (PowerPoint slides) 4