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HomeMy WebLinkAbout2021-09-29-AC-min 09/29/2021 AC Minutes Minutes Town of Lexington Appropriation Committee (AC) September 29, 2021 Place and Time: Remote Participation: in accordance with Section 20 of Chapter 20 of the Acts of 2021 "An Act Relative to Extending Certain COVID-19 Measures Adopted During the State of Emergency", communication took place via a Zoom teleconferencing session that was open to the public; 7:30 p.m. Members Present: Glenn Parker, Chair; Sanjay Padaki, Vice-Chair; Alan Levine, Secretary; Anil Ahuja; John Bartenstein; Eric Michelson; Meg Muckenhoupt; Lily Manhua Yan; Carolyn Kosnoff, Assistant Town Manager, Finance (non-voting, ex officio) Member(s)Absent: None Other Attendees: David Kanter, Vice-Chair& Clerk, Capital Expenditures Committee; Eileen Jay, Vice-Chair, School Committee; Sara Arnold, Recording Secretary Mr. Parker reviewed the authorization for meeting remotely, noted that the meeting was being called to order at 7:34 p.m. on September 29, 2021, stated that the meeting was being recorded for the purpose of creating minutes, and confirmed attendance by roll call. Announcements and Liaison Reports Mr. Padaki expressed his appreciation for Mr. Parker's having prepared this Committee's submittal for Lexington's Annual Report. The draft was reviewed by Mr. Padaki and Mr. Levine before it was submitted. Town Budget Policy/Model Regarding Capital Stabilization Fund (CSF) Mr. Parker asked for comments or questions regarding a fiscal model that the Select Board (SB) may approve that would use extraordinary new growth funds to help build up the CSF in an effort to mitigate the tax impacts of large projects, such as a new high school. Mr. Bartenstein summarized his understanding of the associated goals/impacts, as follows: • It serves as a smoothing function that would help reduce the heights of peaks in the tax levy. • It is a pre-pay approach. • It disciplines the Town against over-spending, especially by avoiding new projects that might generate recurring costs. • It demonstrates the Town's efforts towards good fiscal responsibility. • If at some point it is no longer necessary to put aside funds and the revenue stream is increased, it could help avoid an override. Ms. Kosnoff noted that a downside associated with this model would be the extra expenditures needed when commercial growth requires additional infrastructure. Discussion included the following comments/questions: • Limiting projects to a five or ten-year horizon should address the concern that pre-paying for large projects may be unfair to today's taxpayers because they might not reap the benefits. • The concept of building the CSF before large projects commence has been used in the past, but there are current efforts in process to formalize it in the form of a guideline. • The CSF may also be augmented by the use of recurring revenue sources, in addition to free cash, debt and CSF funds. 1 09/29/2021 AC Minutes • The model has some similarities to Tax Increment Financing, which establishes funding over a period of time. • What if funds are collected for a project that gets delayed significantly? • This model means that the impact of the debt exclusion for a large project would be reduced, which would be positive for the taxpayer. Because a debt exclusion ballot question does not carry a dollar amount, an educational effort would be important to ensure residents understand this benefit. In response to questions, Ms. Kosnoff reported that the Town's actuary is meeting with the Retirement Board tomorrow, and she expects that new funding options will be presented. The previous expectation that the pension would be fully funded before bonding for a new high school would be necessary is no longer likely. Preparation of the Committee Report to Special Town Meeting (STM) 2021-1 Mr. Parker reported that he had prepared a chart identifying suggested committee members' assignments for the report. Ms. Kosnoff provided initial information about the articles on the draft warrant for the STM 2021-1, as follows: • Article 2: Appropriate for Prior Years' Unpaid Bills: This will likely be indefinitely postponed (IP'd). • Article 3: Establish, Dissolve and Appropriate to and from Specified Stabilization Funds: There will likely be requests to put funds into two stabilization funds, including $1.0 to $1.5 million in new growth that was in excess of projections into the CSF, as discussed earlier, as well as roughly $20,000 in new growth from in-process projects that required approval at town meetings. Ms. Kosnoff agreed to discuss with Jim Malloy, Town Manager, the importance of publicizing this model prior to the STM. It was agreed that this Committee's report would be one venue towards this effort. There will also be a transfer into the Transportation Demand Management(TDM) Stabilization Fund. Ms. Kosnoff added that, because TDM funds are received annually, staff is exploring the possibility of automating these transfers. She added that Lexington had received a $200,000 grant for transportation operating expenses. These funds cannot go directly into the TDM Stabilization Fund, but if they are used for operating the Lexpress system, the equivalent part of the usual tax levy appropriation for Lexpress could be appropriated into the stabilization fund. • Article 4: Rescind Prior Borrowing Authorizations: This is currently a placeholder. It is likely that this routine request will be postponed until the annual town meeting. • Article 5: Amend FY2021 Operating and Enterprise Budgets: The Town Manager is requesting funds to hire a management analyst, which would be funded through the tax levy, using some of the new growth. New staff positions are usually submitted at the annual town meeting (ATM)through the Program Improvement Request(PIR)process for the coming fiscal year, but it is preferable for this person to start in January 2022. This position would be in addition to a management fellow's position, a training program that runs for two-year increments. Ms. Kosnoff agreed to inform the Town Manager that this Committee would like a PIR or comparable documentation identifying financial impacts,justification, alternatives considered, and a job description. 2 09/29/2021 AC Minutes A reduction in the water and sewer enterprise budget and its personal services budget will be discussed at the SB's October 12 meeting. In order to accommodate a timely distribution of water sewer invoices, rates will be based on the reductions in the budget prior to Town Meeting approval. Several items that were originally identified as potential changes have been removed. Four capital items are likely to be included. • Article 6: Appropriate for Police Station Architectural Design and Swing Space Construction: Because of delays and changes in the scope, an additional $250,000 to $350,000 is needed to complete the design for the new police station and for construction at 173 Bedford Street. New growth in the tax levy is the likely source of the funds. Approval at the STM would allow the project to move forward in a timely fashion. In response to questions, Ms. Kosnoff reported that there are no plans for 173 Bedford Street beyond its use as swing space. • Article 7: Appropriate for Community Preservation Projects: Because of scope changes to a playground project, $75,000 in supplemental funding is being requested. The bids for the Parker Meadow project all were over the appropriated amount. Karen Mullins, Director of Community Development/Conservation, can provide additional information. A prefab structure that would be less expensive than the renovation that was previously approved is being considered for the Old Res bathhouse. The need for additional dollars is not anticipated, but the wording for the previous appropriation needs to be changed to allow for procurement of a new structure. Article 9: Appropriate for Center Recreation Complex Bathrooms and Maintenance Building could become a Community Preservation Act(CPA)project and be added to Article 7, because it is not only CPA eligible, but over$7.5 million in cash is currently available for CPA projects, plus another $8.0 million will be added as of July 1, 2022. This should be resolved before the warrant is published on October 12. The available CPA funds cannot be used to pre-pay CPA debt because the bonds are not callable in less than ten years, and they are ten-year bonds. There was discussion about other uses for these CPA funds. • Article 8: Appropriate for Westview Cemetery Building Construction: Bids exceeded the appropriation for this project. Additional funding, approximately $700,000, is needed and the project needs to be re-bid. Ms. Kosnoff agreed to update the cost analysis that identifies the funding sources. • Article 9: Appropriate for Center Recreation Complex Bathrooms and Maintenance Building: This article, for $915,000, was IP'd during the 2021 ATM. The projected costs are expected to increase somewhat, partially because the project has been expanded to include a side building for storage of high school track equipment. As discussed above, this may be shifted to Article 7, although it is late to be making this change. • Article 10: Sale of Land to Abutter: An abutter is interested in purchasing some Town - owned landlocked property. It is expected to be valued at considerably less than $35,000; therefore, it would not be necessary to go out to bid. • Article 11: Climate Action Plan: This is a request for a previous appropriation associated with implementing the Town's Net Zero Plan to be repurposed with a small additional amount requested. 3 09/29/2021 AC Minutes It was generally agreed that because the other articles are not budget-related, they do not need to be discussed in this Committee's report to the STM. Ms. Muckenhoupt agreed to prepare the material for Article 9 in addition to Article 7. Material for the AC report should be submitted in the next two weeks to allow voting on the report in three weeks. It was agreed that it would be best to wait until the ATM to use new computer software for creating this Committee's report. Minutes of Prior Meetings Mr. Levine noted that the executive session minutes for July 13, 2021 referenced an incorrect date, and both those minutes and the open session Minutes for that date need updated text regarding the use of teleconferencing via Zoom. A motion was made and seconded to approve both sets of draft minutes for July 13, 2021, with those minor technical edits and with the understanding that the executive session minutes cannot yet be released to the public. The motion was approved by a roll call vote. VOTE: 8-0. A motion was made and seconded to adjourn at 9:13 p.m. The motion was approved by roll call vote. VOTE: 8-0 Respectfully submitted, Sara Arnold Approved: October 13, 2021 Exhibits • Agenda, posted by Mr. Parker • Draft Town of Lexington Warrant, Special Town Meeting 2021-1 4