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HomeMy WebLinkAbout2015-01-29-AC-min 01/29/15 AC Minutes Minutes Town of Lexington Appropriation Committee January 29, 2015 Place and time- Parker Room, Town Office Building, 7 30 p.m Members present John Bartenstem, Vice Chair and Secretary; Mollie Garberg; Alan Levine, Enc Michelson, Andrei Radulescu-Banu, Rob Addelson (non-voting, ex officio) Members Absent Glenn Parker, Chair, Beth Masterman, Susan McLeish, Richard Neumeier, Other attendees Patty Moore, Budget Officer The meeting was called to order at 7 37 p.m. 1 Minutes. A motion was made and seconded to approve the November 20, 2014 Minutes, as previously distributed. The motion was approved. VOTE 5-0 2. Announcements. Mr Bartenstem reported that the Board of Selectmen (BoS)had voted on Monday night to support the smaller of two options presented by the Lexington Solar Task Force for installing solar panels on the Town's landfill on Hartwell Avenue but would be seeking input from the financial committees The Task Force had projected that a larger array of panels could save the Town as much as $20 0 million over 20 years but the Selectmen were reluctant to commit such a large proportion of the Hartwell landfill for this purpose The smaller option could generate savings of approximately $11 million. It is anticipated that the solar panels currently on the school and Town buildings will yield $3 0 to $5 0 million over 20 years The solar project may require a reconfiguration of the composting windrows Also the Town may need to purchase a windrow turner, bins may need to be removed, and piles of debns may need to be moved. The cost implications are being defined. Article 7 in the 2015 Annual Town Meeting (ATM) Warrant will likely include proposed funding for the solar project using the Compost Revolving Fund. If the funding is approved, the Town will enter into an agreement with a solar company It was suggested that Mr Parker invite Mark Sandeen, Chair, Sustainable Lexington Committee, Task Force member Dan Voss, and/or a knowledgeable person from the Department of Public Works to a future meeting to make a presentation. 3 Funding for School Expansion Projects and Municipal Building Replacements. Mr Levine presented a preliminary analysis of, and a number of questions about, about the financial implications of pending proposals for a number of large capital projects, including school expansions, new Fire Headquarters, and new Police Headquarters His comments included the following • This Committee needs to understand the financial implications associated with these projects • The Town doesn't know if the Massachusetts School Building Authonty (MSBA)will help fund a project to replace/rebuild the Hastings Elementary School (Hastings) Until this is known, financial models should assume Town funding without State assistance for Hastings 1 01/29/15 AC Minutes • If the Town were to receive MSBA approval for Hastings, it is anticipated that the State would provide approximately 32%, or approximately $19 million, for what is now estimated to be a $59 million project. • The financing model prepared by Mr Addelson and Carl Valente, Town Manager, and discussed at the recent Budget Summit contemplated an appropriation at the 2016 ATM for Hastings design funds and at the 2017 ATM for Hastings construction funds There are some School Committee members and others who would prefer to start this process at a spring 2015 Special Town Meeting. Mr Levine discussed his handout and questions about the data included in the financing model He noted that the model contemplates particularly dramatic property tax increases in 2019, 2020 and 2021 He suggested consideration of steps to offset these increases, such as • A ceiling on the percentage of exempt tax revenue in the total budget; • A ceiling on the annual tax rate increase, and/or • Increases in annual appropriations into the Capital Projects Stabilization Fund (Capitalization Fund). Mr Levine also suggested that consideration may need to be given to reducing in magnitude and/or stretching out the sequencing of some of the projects Mr Bartenstem commented that, prior to the establishment of the Capitalization Fund, the Town relied mainly on excluded debt to fund major projects, the Capitalization Fund is a vehicle for using tax levy revenue for major projects Mr Addelson noted that, in recent years, taxpayers have benefitted from new growth, reduced health care costs, and low inflation rates, all of which have helped control annual increases in tax rates There was discussion about the work done by the Ad hoc School Master Planning Committee (AhSMPC) and its consultant; conceptual ideas for addressing the space needs in the schools based on projected enrollment were identified. The next step is to develop schematic designs to understand which projects are the most realistic Debt exclusion referendums will be needed to fund the school expansion programs as they are now identified. It isn't clear whether it is preferable to have one large referendum or several small ones In response to the idea of waiting to see whether the enrollment projections are realistic, it was noted that there are immediate space needs without the projected additional students The middle schools already need additional space, and the projected increases at that level have narrow error bands Ms Garberg noted that, given the total size of the requests, it is going to be important to determine how to present them to the community She stated that phasing the requests might be a more pragmatic approach. She also suggested that a more robust discussion about setting ceilings be had at the next full committee meeting. Mr Addelson noted that his current financial model includes a new fire station and $10 0 million for a Lexington High School heating system upgrade He expects the commercial and residential relationship for tax purposes to remain stable He noted that the model is just a template, so can be used for a variety of scenarios He also stressed that the project costs used in the model are not design-based, they are soft numbers 2 01/29/15 AC Minutes There was general agreement that the issues are complex, with many "moving parts", and that this Committee will need to provide the School Committee with its input. Mr Michelson reported that Joe Pato, Chair, BoS, is setting up a meeting with representatives of the finance committees to discuss planning for Town Meeting. The meeting was adjourned at 9.27 p.m The documents used at the meeting are listed below Respectfully submitted, Sara Arnold Recording Secretary Approved February 5, 2015 Exhibits 1 Agenda, posted by John Bartenstem, Vice Chair and Secretary 2 Comments on Financing a Capital Master Plan, prepared by Alan Levine 3